Seiko Epson Corporation et al v. InkSystem LLC et al

Filing 370

ORDER that the Motions to Register and Enforce Judgment ECF Nos. 332 and 337 are GRANTED; that the Motion for Limited Stay Pending Appeal ECF No. 352 is DENIED. Signed by Judge Robert C. Jones on 11/7/2018. (Copies have been distributed pursuant to the NEF - KW)

1
2
3
4
5

UNITED STATES DISTRICT COURT
DISTRICT OF NEVADA

6
7
8

SEIKO EPSON CORP. et al.,
Plaintiffs,

9
10
11
12

vs.
INKSYSTEM LLC et al.,
Defendants.

)
)
)
)
)
)
)
)
)
)
)
)
)

3:16-cv-00524-RCJ-VPC
ORDER

13
14

This case arises out of alleged counterfeiting and other unauthorized use of trademarks in

15

relation to computer printer ink cartridges. Plaintiff Seiko Epson Corp. (“Seiko”) is a Japanese

16

corporation that owns eight registered trademarks (“the Marks”) at issue in the present case.

17

Plaintiff Epson America, Inc. is a California corporation and Seiko’s sole licensee for ink

18

cartridges using the Marks. Defendants are Nevada and California residents and business

19

entities. Plaintiffs alleged that Defendants imported, modified, repackaged, advertised,

20

distributed, and/or sold at least three types of infringing cartridge: (1) counterfeit ink cartridges

21

manufactured abroad bearing one or more of the Marks; (2) genuine Epson cartridges sold

22

abroad with printers that are not intended for resale; and (3) genuine Epson cartridges sold

23

abroad that are expired or nearly expired. As to the latter two categories, Defendants removed

24

them from their original packaging, reprogrammed or otherwise modified them to work in
1

1

American printers (they otherwise would not), and repackaged them with counterfeit Epson

2

labels. In the process, Defendants degraded the quality and lifespan of the ink, removed

3

instructions for use with the cartridges and other important consumer information such as the

4

expiration date, and added their own false advanced expiration dates. Defendants’ activities

5

infringed the Marks, deceived consumers, and damaged Plaintiffs’ goodwill.

6

Plaintiffs sued Defendants in this Court for trademark counterfeiting and infringement

7

under 15 U.S.C. § 1114 et seq. and unfair competition and false advertising under § 1125 et seq.

8

The Court granted a temporary restraining order (“TRO”), and after a hearing granted a

9

preliminary injunction, enjoining certain offending activity and ordering the seizure and

10

impoundment of the accused goods. Discovery was problematic. Plaintiffs asked the Magistrate

11

Judge to issue a report and recommendation for terminating sanctions against certain Defendants

12

for their continued intransigence. Several Defendant filed for bankruptcy protection. Plaintiffs

13

asked for another TRO seizing Defendants’ assets. The Court granted the motion and later

14

granted a preliminary injunction when Defendants failed to appear at the hearing. In the

15

meantime, the Magistrate Judge recommended that the sanction of default be entered against

16

Defendants Art LLC, AF LLC, Inkredible LLC, Andriy Kravchuk, Artem Koshkalda, Igor

17

Bielov, and Vitalii Maliuk. The Court adopted that recommendation. The Clerk had previously

18

entered the defaults of Defendants Veles LLC, Alado LLC, Karine LLC, Karine Vardanian,

19

Vladimir Slobodianiuk, Kristina Antonova, and Roman Taryanik for failure to answer or defend.

20

The Clerk later entered the defaults of InkSystem LLC, KBF LLC, and Lucky Print LLC.

21

The Court denied several motions to reconsider the preliminary injunction and to release

22

funds. When they failed to appear to show cause why they should be held in contempt for

23

violations of the preliminary injunction, the Court issued an order of contempt as to Defendants

24

Artem Koshkalda and Vladimair Westbrook. Bench warrants for their arrest issued. Koshkalda
2

1

appeared at a later hearing, and the Court ordered him to undergo a judgment debtor exam. The

2

Court later entered default judgment against Defendants and indicated an intent to grant a motion

3

for a receiver for Koshkalda’s assets, but he petitioned for bankruptcy protection in the Northern

4

District of California before the proposed written receivership order and a proposed amendment

5

thereto were approved.

6

The Court deferred ruling on the receivership motions and later denied them without

7

prejudice to refiling when it appeared the bankruptcy case had been converted to Chapter 7. The

8

parties recently submitted a joint status report indicating that three motions are pending in the

9

present case: (1) two motions by Plaintiffs relating to registration and enforcement of the

10

Judgment; and (2) a motion by ART, LLC and Koshkalda for a limited stay of the Judgment as

11

to destruction of certain seized items pending appeal. The parties do not appear to dispute that

12

the bankruptcy court has lifted the stay as to prosecution, defense, and enforcement of the

13

Judgment in the present case, and the motions for registration and enforcement of the Judgment

14

in other districts are not opposed. The Court therefore grants those motions. The motion for a

15

limited stay of the Judgment is contested. Despite the title of the motion, Defendants disavow

16

any challenge to this Court’s own orders. Rather, they argue that they wish to preserve the

17

seized items pending the litigation of a wrongful seizure action against Plaintiffs in the Central

18

District of California. Plaintiffs note, however, that the Chapter 7 Trustee immediately

19

dismissed the wrongful seizure action with prejudice upon learning of its filing. That putative

20

claim therefore provides no basis for a stay.

21

///

22

///

23

///

24

///
3

1
2

CONCLUSION
IT IS HEREBY ORDERED that the Motions to Register and Enforce Judgment (ECF

3

Nos. 332, 337) are GRANTED. Plaintiffs may register and enforce the Judgment (ECF No. 304)

4

against all Defendants in the Northern District of California and against AF, LLC in the Central

5

District of California and the Eastern District of California.

6
7
8
9

IT IS FURTHER ORDERED that the Motion for Limited Stay Pending Appeal (ECF No.
352) is DENIED.
IT IS SO ORDERED.
DATED: This 7th day of November, 2018.
Dated this 15th day of October, 2018.

10
11
12

_____________________________________
ROBERT C. JONES
United States District Judge

13
14
15
16
17
18
19
20
21
22
23
24
4