United Pet Group, Inc. v. John Doe

Filing 19

MEMORANDUM AND ORDER... IT IS HEREBY ORDERED that Plaintiff's motion for entry of default judgment is GRANTED. (Doc. No. 18 .) IT IS FURTHER ORDERED that Plaintiff is entitled to recover statutory damages in the sum of $150,000. IT IS FURTHER ORDERED that a Permanent Injunction is entered in this case...(Please see attached Memorandum & Order for further details). Signed by District Judge Audrey G. Fleissig on 7/31/2014. (NEB)

UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF MISSOURI
EASTERN DIVISION

UNITED PET GROUP, INC.,
Plaintiff,
v.
SERGIY MOGYLEVETS,
Defendant.

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Case No. 4:13CV01053 AGF

MEMORANDUM AND ORDER
The matter is before the Court on the motion (Doc. No. 18) of Plaintiff United Pet
Group, Inc. for default judgment. Plaintiff, a pet product manufacturer, brings this action
alleging federal trademark counterfeiting and infringement (Count I), federal unfair
competition and false designation of origin (Count II), common law trademark
infringement and unfair competition (Count III), and unfair competition under Mo. Rev.
Stat. § 407.020 (Count IV).
Plaintiff alleges that Defendant Sergiy Mogylevets, an individual, unlawfully
distributed and sold counterfeit products and/or packaging using Plaintiff’s trademarks on
various websites. Upon consideration of the motion and the applicable law, the Court
will enter default judgment against Defendant on Plaintiff’s complaint.
Plaintiff filed suit on June 3, 2013, alleging that an unspecified number of John
Doe Defendants unlawfully sold counterfeit products and/or packaging using Plaintiff’s
trademarks and logos on various websites, including Amazon.com. (Doc. No. 1.)

Plaintiff also filed a motion for leave to take expedited discovery pursuant to Federal
Rule of Civil Procedure 26(d)(1) to attempt to identify the John Doe Defendants’
identities by serving Rule 45 subpoenas on Amazon.com. (Doc. No. 3.) On August 20,
2013, the Court granted Plaintiff’s motion. (Doc. No. 6.) On January 15, 2014, after
expiration of the time for completion of expedited discovery during which the Plaintiff
did not identify or serve a named party in place of John Doe, the Court, on its own
motion, entered an Order to Show Cause why the matter should not be dismissed for
failure to prosecute. (Doc. No. 7.) In response to that Order, Plaintiff filed a motion for
leave to file a first amended complaint identifying a John Doe Defendant as Sergiy
Mogylevets, and the Court granted Plaintiff leave to file its first amended complaint.
(Docs. No. 8 & 11.) On January 22, 2014, Plaintiff filed its first amended complaint
naming Sergiy Mogylevets as the sole defendant. (Doc. No. 12.)
Plaintiff served Defendant Sergiy Mogylevets with the summons and complaint on
January 27, 2014. (Doc. No. 14.) Defendant has not filed an answer or other responsive
pleading. On Plaintiff’s motion, the Clerk of Court entered default against Defendant on
February 24, 2014. (Doc. No. 17.) On May 1, 2014, Plaintiff filed the instant motion for
default judgment, seeking a permanent injunction and statutory damages under 15 U.S.C.
§ 1117(c) in the amount of $6,000,000. (Doc. No. 18.)
Facts
Plaintiff designs, manufactures, markets, advertises, distributes, and sells in
interstate commerce various pet products, including FURminator DeShedding Tools.
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Plaintiff began using the FURMINATOR trademark in connection with its grooming
tools as early as 2002. Plaintiff has three federally registered trademarks in the
FURminator name and/or “Paw” logo (“FURminator marks”), and has advertised and
promoted its grooming tools sold under the FURminator marks throughout the United
States.
In 2013, Plaintiff purchased products bearing the FURminator marks from
Amazon.com from eight seller accounts. The accounts are each associated with e-mails
ending in “[e-mail],” and share the same names as certain LLCs for which
Defendant is listed as the manager and registered agent. All of the seller accounts link to
Defendant’s address. Plaintiff determined that the products purchased from Amazon.com
were counterfeit products. Plaintiff alleges that Defendant sold goods bearing the
FURminator marks on Amazon.com; the products sold by Defendant are counterfeit;
Defendant purchased the counterfeit products from a source not authorized or licensed by
Plaintiff to manufacture, offer for sale, or sell products bearing the FURminator marks;
Plaintiff did not manufacture, inspect, or package the counterfeit products prior to the
unauthorized sale and did not approve the counterfeit products for sale or distribution;
and Defendant is not authorized by Plaintiff to manufacture, advertise, distribute, export,
import, ship, sell, offer to sell, or facilitate the sale of any products bearing the
FURminator marks that are not authentic products. Plaintiff alleges that Defendant’s use
of the FURminator marks caused, and is likely to cause in the future, confusion among
potential customers who will be deceived into believing that Defendant’s counterfeit
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products are authentic products, thus harming the consuming public and irreparably
harming Plaintiff’s reputation and goodwill. Finally, Plaintiff alleges that Defendant’s
actions were willful.
Standard for Default Judgment
Where default has been entered, the allegations of the complaint are taken as true,
except as to the amount of damages. Brown v. Kenron Aluminum & Glass Corp., 477
F.2d 526, 531 (8th Cir. 1973). It then “remains for the court to consider whether the
unchallenged facts constitute a legitimate cause of action, since a party in default does
not admit mere conclusions of law.” Murray v. Lene, 595 F.3d 868, 871 (8th Cir. 2010).
Discussion
Plaintiff’s federal trademark counterfeiting and infringement (Count I) and unfair
competition and false designation of origin (Count II) claims both require Plaintiff to
demonstrate that (1) it owns a valid and legally protectable mark, and (2) there is a
likelihood of confusion between its mark and Defendant’s mark. See B&B Hardware,
Inc. v. Hargis Indus., 569 F.3d 383, 389 (8th Cir. 2009); Cmty. of Christ Copyright Corp.
v. Devon Park Restoration Branch of Jesus Christ’s Church, 634 F.3d 1005, 1009 (8th
Cir. 2011).
Registration of a trademark is “prima facie evidence of a registrant’s exclusive
right to use the registered mark in commerce.” Lovely Skin, Inc. v. Ishtar Skin Care
Prods., LLC, 745 F.3d 877, 883 (8th Cir. 2014) (quoting 15 U.S.C. § 1115(a)). Under the
Lanham Act, “[a] ‘counterfeit’ is a spurious mark which is identical with, or substantially
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indistinguishable from, a registered mark.” 15 U.S.C. § 1127. “It may be presumed that
counterfeiting another's mark creates a likelihood of confusion.” George & Co., LLC v.
Xavier Enters., Inc., No. 09-2973 (DWF/RLE), 2009 U.S. Dist. LEXIS 112902, at *12
(D. Minn. Dec. 4, 2009); Phillip Morris USA Inc. v. Shalabi, 352 F. Supp. 2d 1067, 1073
(C.D. Cal. 2004). Defendant has failed to respond in this case to rebut these
presumptions. Accordingly, the Court will enter judgment on Counts I and II.
The “same facts which support a suit for trademark infringement support a suit for
unfair competition and common law infringement” under Missouri law. Cmty. of Christ
Copyright Corp., 634 F.3d at 1010; see also Mo. Rev. Stat. § 417.061.

In its motion for

default judgment, Plaintiff mentions the common law trademark infringement and
Missouri unfair competition claims in Counts III and IV but makes no specific request for
damages under either of these counts. Thus, the Court will enter judgment under these
counts, but the Court awards no additional damages under Counts III or IV.
Permanent Injunction
The Lanham Act permits courts to enter permanent injunctive relief to prevent
future trademark infringement. 15 U.S.C. § 1116. “To obtain a permanent injunction,
[Plaintiff is] required to show: (1) its actual success on the merits; (2) that it faces
irreparable harm; (3) that the harm to it outweighs any possible harm to others; and (4)
that an injunction serves the public interest.” Cmty. of Christ Copyright Corp., 634 F.3d
at 1012. “[I]n trademark law, injury is presumed once a likelihood of confusion has been
established.” Id. Moreover, the public interest is served in preserving intellectual
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property rights. West Coast Prods. v. Garrett, No. 4:12CV01551 AGF, 2014 U.S. Dist.
LEXIS 23236, at *11 (E.D. Mo. Feb. 25, 2014).
The Court concludes, particularly in light of Defendant’s failure to respond, that
Plaintiff has demonstrated a likelihood of success on the merits of its claims; that
Defendant’s infringement has irreparably harmed Plaintiff and will continue to
irreparably harm Plaintiff; the harm to Plaintiff from the infringement outweighs any
potential harm to Defendant from enjoining Defendant’s infringing activities; and the
public interest in preserving intellectual property rights will be served by an injunction.
Therefore, Plaintiff has established its right to a permanent injunction.
Damages
Plaintiff does not seek actual damages, alleging only its right to statutory damages
under the Lanham Act, 15 U.S.C. § 1117(c), which provides that in cases “involving the
use of a counterfeit mark,” the plaintiff may elect statutory damages in the amount of “(1)
not less than $1,000 or more than $200,000 per counterfeit mark per type of goods or
services sold, offered for sale, or distributed, as the court considers just; or (2) if the court
finds that the use of the counterfeit mark was willful, not more than $ 2,000,000 per
counterfeit mark per type of goods or services sold, offered for sale, or distributed, as the
court considers just.” The statute does not provide guidelines for determining an
appropriate award other than the limitation that the award be what the “court considers
just.” Coach, Inc. v. City Gear, LLC, No. 4:11CV1677 CDP, 2012 U.S. Dist. LEXIS
7341, at *2 (E.D. Mo. Jan. 23, 2012). However, courts have considered the following
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factors in fashioning an award: “(1) the expenses saved and the profits reaped; (2) the
revenues lost by the plaintiff; (3) the value of the trademark; (4) the deterrent effect on
others besides the defendant; (5) whether the defendant's conduct was innocent or willful;
(6) whether a defendant has cooperated in providing particular records from which to
assess the value of the infringing material produced; and (7) the potential for
discouraging the defendant.” Id. at *2-3.
Plaintiff has requested $6,000,000, representing the maximum statutory damages
of $2,000,000 per counterfeit mark, because Plaintiff alleges that it has identified several
different types of goods sold by Defendant bearing at least three of Plaintiff’s trademarks.
Plaintiff argues that enhanced damages are appropriate here because Defendant acted
willfully. Considering the factors noted above, and in light of the fact that Defendant’s
failure to respond gives the Court no information regarding Defendant’s sales and profits,
or revenues lost by the Plaintiff, the Court concludes that an award of $150,000,
representing $50,000 per counterfeit mark, is just. See, e.g., Coach, Inc., 2012 U.S. Dist.
LEXIS 7341, at *3 (awarding statutory damages in amount of $100,000 per counterfeit
mark, rather than Plaintiff’s requested $500,000); Purzel Video GmbH v. Martinez, No.
4:13-CV-1668 (CEJ), 2014 U.S. Dist. LEXIS 46720, at *3 (E.D. Mo. Apr. 4, 2014)
(finding request for $150,000 statutory damages, representing $30,000 per willful
copyright infringement under 17 U.S.C. § 504(c), “excessive” and awarding total of
$30,000 in statutory damages instead).
Upon review of the record, including Plaintiff’s proposed injunction and order,
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IT IS HEREBY ORDERED that Plaintiff’s motion for entry of default judgment
is GRANTED. (Doc. No. 18.)
IT IS FURTHER ORDERED that Plaintiff is entitled to recover statutory
damages in the sum of $150,000.
IT IS FURTHER ORDERED that a Permanent Injunction is entered in this case
as follows:
Defendant is immediately and permanently ENJOINED from:
a.

using Plaintiff’s FURminator marks, or any simulation, reproduction, copy,

colorable imitation, or confusingly similar variation of any of Plaintiff’s FURminator
marks, in connection with any goods or services or in connection with the importation,
promotion, advertisement, sale, offering for sale, manufacture, production, dissemination,
or distribution of any pet grooming products;
b.

processing, packaging, importing, or transporting any product that is not a

genuine product of Plaintiff bearing any of Plaintiff’s FURminator marks, or any
simulation, reproduction, copy, colorable imitation, or confusingly similar variation of
any of Plaintiff’s FURminator marks;
c.

using any false designation of origin or false description (including, without

limitation, any letters or symbols), or performing any act which can, or is likely to, lead
members of the consuming public or trade to believe that Defendant is associated with
Plaintiff or that any product imported, manufactured, distributed, or sold by the

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Defendant is in any manner associated or connected with Plaintiff, or is authorized,
licensed, sponsored, or otherwise approved by Plaintiff;
d.

assisting, aiding, or abetting any other person or business entity in engaging

in or performing any of the activities referred to in subparagraphs (a) through (c) above
or taking any action that contributes to any of the activities referred to in subparagraphs
(a) through (c) above, or any other activity that consists of or contributes to the sale of
counterfeit or infringing products bearing any of Plaintiff’s FURminator marks.
A separate judgment of default shall accompany this Memorandum and Order.

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AUDREY G. FLEISSIG
UNITED STATES DISTRICT JUDGE
Dated this 31st day of July, 2014.

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