Chanel, Inc. et al v. Wrice et al

Filing 13

Memorandum Opinion: Plaintiffs' motion for default judgment as to Counts I and II of the complaint is granted. The Court awards statutory damages in the amount of $141,588.00 to Chanel, and in the amount of $154,500.00 to Tiffan y, against the Wrice defendants and the Apparel Empire defendants, jointly and severally, along with pre-judgment and post-judgment interest as allowed by law. Further, defendants are permanently restrained and enjoined from infringing Plaintiffs' Respective Marks, as outlined above. A Judgment Entry will be separately published. (Related Doc # 12 ). Judge Sara Lioi on 2/9/2015. (P,J)

UNITED STATES DISTRICT COURT
NORTHERN DISTRICT OF OHIO
EASTERN DIVISION

CHANEL, INC., et al.,

PLAINTIFFS,
vs.

JERMAINE WRICE, et al,

DEFENDANTS.

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CASE NO. 5:13-cv-891

JUDGE SARA LIOI

MEMORANDUM OPINION

Presently before the Court is the motion of Chanel, Inc. (“Chanel”) and
Tiffany (NJ), LLC (“Tiffany”) (collectively “plaintiffs”) for default judgment, statutory
damages, and permanent injunction against defendants Jermaine Wrice, aka Jermaine A.
Wrice, aka Jermaine “Rico” Wrice (collectively “Wrice”), and Apparel Empire, LLC,
dba Apparelempyre.com, dba Apparel Empyre (collectively “Apparel Empire”)
(collectively “defendants”), pursuant to Fed. R. Civ. P. 55(b)(2), for false designation of
origin, and for trademark infringement and counterfeiting, in violation of Sections 43(a)
and 32 of the Lanham Act. (Doc. No. 12 (Motion for Default Judgment [“Motion”]), and
Doc. No. 12-1 (Memorandum in Support of Motion [“Memorandum”]).)
Defendants have not responded to the motion. The Court has jurisdiction
over this case pursuant to 15 U.S.C. § 1121(a), and 28 U.S.C. §§ 1331 and 1338.

For the reasons that follow, plaintiffs’ motion is GRANTED.1
I. BACKGROUND
The following factual allegations from the plaintiffs’ complaint are
deemed admitted due to defendants’ default.2 (Doc. No. 1 (Complaint [“Compl.”]).)
Chanel is a New York corporation with its principal place of business in
New York, New York. Chanel manufactures and distributes throughout the world,
including this judicial district, high quality luxury goods under multiple common law and
federally registered trademarks. (Compl., ¶ 2 at 2.) Chanel owns the following United
States Federal Trademark Registrations, which are at issue in this case (the “Chanel
Marks”): U.S. Registration Nos. 1,501,898; 0,612,169; 0,902,190; 1,510,757; 1,654,252;
1,733,051; 1,734,822; 3,134,695; 3,025,934; and 3,025,936. (Compl., ¶ 8 at 3-4.) The
Chanel Marks are registered in International Classes 9, 14, 18, and 28, and are used in
connection with manufacture and distribution of, among other things, high quality
wallets, sunglasses, and costume jewelry including bracelets, earrings, and necklaces.
(Id.)

1

The John Doe defendants named in the complaint have not been identified or served. Therefore, the
Court’s conclusions herein regarding default judgment, statutory damages, and permanent injunction apply
only to the Wrice and Apparel Empire defendants. Sandoval v. Bluegrass Reg’l Mental Health-Mental
Retardation Bd., No. 99-5018, 2000 WL 1257040, at *5 (6th Cir. July 11, 2000) (without effective service
of process the district court lacks jurisdiction to enter default against a defendant pursuant to Fed. R. Civ. P.
55(a)).
2

Defendants were properly served with a summons and the complaint, but failed to file a responsive
pleading, or otherwise defend the lawsuit. (Doc. No. 12-11 (Declaration of Christopher Carney [“Carney
Decl.”], ¶ 3 at 382-83 (All page number references are to the page identification numbers generated by the
Court’s electronic filing system.).) Default was entered against defendants, and a copy of the entry was
mailed by the Clerk of Court to defendants at their address of record. (Doc. No. 9.) Once a default is
entered, the defaulting party is deemed to have admitted all of the well-pleaded allegations in the complaint
regarding liability, including jurisdictional averments. Ford Motor Co. v. Cross, 441 F. Supp. 2d 837, 846
(E.D. Mich. 2006) (citing Visioneering Constr. v. U.S Fid. & Guar., 661 F.2d 119, 124 (6th Cir. 1981)); see
also Fed. R. Civ. P. 8(b)(6) (“An allegation—other than one relating to the amount of damages—is
admitted if a responsive pleading is required and the allegation is not denied.”).

2

Tiffany is a Delaware limited liability company with its principal place of
business in Parsippany, New Jersey. Tiffany manufactures and distributes throughout the
world, including this judicial district, high quality luxury goods under multiple common
law and federally registered trademarks. (Compl., ¶ 3 at 2.) Tiffany owns the following
United States Federal Trademark Registrations, which are at issue in this case (the
“Tiffany Marks”): U.S. Registration Nos. 0,023,573; 0,133,063; 1,228,189; 1,228,409,
1,669,365; 1,807,381; and 3,433,239. (Compl., ¶ 9 at 4-6.) The Tiffany Marks are
registered in International Classes 9 and 14, and are used in connection with manufacture
and distribution of, among other things, high quality sunglasses and costume jewelry
including bracelets, earrings, and necklaces. (Id.)
The Chanel Marks and the Tiffany Marks (collectively, the “Plaintiffs’
Respective Marks” or “Respective Marks”) have been used in interstate commerce to
identify and distinguish plaintiffs’ high quality goods for an extended period of time.
Plaintiffs’ Respective Marks are symbols of plaintiffs’ quality, reputation, and goodwill,
and have never been abandoned. Plaintiffs have expended substantial time, money and
other resources developing, advertising and otherwise promoting their Respective Marks.
Plaintiffs’ Respective Marks qualify as famous marks as that term is used in 15 U.S.C. §
1125(c)(1). The plaintiffs have extensively used, advertised and promoted their
Respective Marks in the United States in association with the sale of high quality goods,
and have carefully monitored and policed the use of their Respective Marks. As a result
of the plaintiffs’ efforts, members of the consuming public readily identify merchandise
bearing the Plaintiffs’ Respective Marks, as being high quality merchandise sponsored

3

and approved by the plaintiffs. Plaintiffs’ Respective Marks have achieved secondary
meaning as identifiers of high quality goods. (Compl., ¶¶ 10, 12-16 at 6.)
Apparel Empire is an Ohio limited liability company with its principal
place of business in Akron and Cuyahoga Falls, Ohio. Wrice is an individual who resides
and conducts business in Akron and Cuyahoga Falls, Ohio. Apparel Empire and Jermaine
Wrice, jointly and individually, use the aliases “Apparelempyre.com” and “Apparel
Empyre” in connection with the operation of their business. The defendants are directly
and personally engaging in the sale of counterfeit products that infringe the Plaintiffs’
Respective Marks within this judicial district. (Compl., ¶¶ 4-5 at 2.)
Plaintiffs’ Respective Marks have never been assigned or licensed to any
of the defendants in this matter. Defendants have knowledge of the plaintiffs’ ownership
of their Respective Marks, including plaintiffs’ exclusive right to use and license such
intellectual property and the goodwill associated therewith. (Compl., ¶¶ 11, 17 at 6.)
Defendants are promoting and otherwise advertising, distributing, selling
and/or offering for sale counterfeit products, including high quality wallets, sunglasses,
bracelets, earrings, and necklaces, and other goods bearing trademarks which are exact
copies of the Plaintiffs’ Respective Marks (the “Counterfeit Goods”). Specifically, the
defendants are using the Plaintiffs’ Respective Marks in the same stylized fashion, for
different and inferior quality goods. Defendants’ Counterfeit Goods are of a quality
substantially different than that of the plaintiffs’ genuine goods. Despite the nature of
their Counterfeit Goods, and the knowledge they are without authority to do so, the
defendants, are actively using, promoting and otherwise advertising, distributing, selling
and/or offering for sale substantial quantities of their Counterfeit Goods with the

4

knowledge that such goods will be mistaken for the genuine high quality products offered
for sale by the plaintiffs. The net effect of the defendants’ actions will result in the
confusion of consumers who will believe that the defendants’ Counterfeit Goods are
genuine goods originating from and approved by plaintiffs. Defendants import and/or
manufacture their Counterfeit Goods and advertise those goods for sale to the consuming
public. In advertising the Counterfeit Products, the defendants use Plaintiffs’ Respective
Marks. Defendants misappropriated the plaintiffs’ advertising ideas and entire style of
doing business with regard to the advertisement and sale of the plaintiffs’ genuine
products bearing Plaintiffs’ Respective Marks. The misappropriation of the plaintiffs’
advertising ideas in the form of the Plaintiffs’ Respective Marks has occurred in the
course of defendants’ advertising activities and has been the proximate cause of damage
to the plaintiffs. As a result of defendants’ counterfeiting and infringing activities,
defendants are defrauding the plaintiffs and the consuming public for defendants’ own
benefit. (Compl., ¶¶ 18-22 at 7-8.)
The defendants’ use of Plaintiffs’ Respective Marks, including the
importation, promotion and advertising, reproduction, distribution, sale, and offering for
sale of their Counterfeit Goods, is without the plaintiffs’ consent or authorization.
Defendants are engaging in the above-described illegal counterfeiting and infringing
activities knowingly and intentionally, or with reckless disregard or willful blindness to
the plaintiffs’ rights, for the purpose of trading on the plaintiffs’ goodwill and reputation.
The defendants’ infringing activities are likely to cause confusion, deception, and mistake
in the minds of consumers, the public, and the trade. Moreover, the defendants’ wrongful
conduct is likely to create a false impression and deceive customers, the public, and the

5

trade into believing there is a connection or association between plaintiffs’ genuine goods
and the defendants’ Counterfeit Goods. (Compl., ¶¶ 22-24 at 8.)
The complaint alleges that the defendants’ actions constitute: (1)
trademark counterfeiting and infringement under Section 32 of the Lanham Act, 15
U.S.C. § 1114 (Count I) (Compl., ¶¶ 29-34 at 9); (2) false designation of origin under
Section 43(a) of the Lanham Act, 15 U.S.C. § 1125(a) (Count II) (Compl., ¶¶ 36-41 at
10); and (3) irreparable injury to plaintiffs warranting injunctive relief (Compl. ¶¶ 35, 46
at 9, 11.) The plaintiffs’ motion seeks statutory damages, and a permanent injunction
enjoining defendants from infringing and counterfeiting Plaintiffs’ Respective Marks,
pursuant to 15 U.S.C. §§ 1116 and 1117.
II. DISCUSSION
A. Default Judgment
Federal Rule of Civil Procedure 55 governs default and default judgment.
Default has been entered by the clerk against the Wrice and Apparel Empire defendants
pursuant to Rule 55(a). (Doc. No. 9.) After default has been entered, the Court may enter
default judgment against the defendants with or without a hearing. Fed. R. Civ. P. 55(b).
Based on the well-pleaded factual allegations in the complaint, and the declarations
submitted by the plaintiffs in support of the motion, the Court concludes that there is a
sufficient basis for determining defendants’ liability without the need for a hearing.
Finally, the plaintiffs have submitted evidence that defendant Wrice is not an infant, an
incompetent person, or on active duty in the military or otherwise exempted under the
Servicemembers’ Civil Relief Act. (Carney Decl., ¶¶ 6-7 at 383.)

6

Even though the well-pleaded factual allegations of the complaint are
accepted as true for purposes of liability, the Court must still determine whether those
facts are sufficient to state a claim for relief as to the causes of action for which the
plaintiffs seeks default judgment. J&J Sports Prods., Inc. v. Rodriguez, No. 1:08-CV1350, 2008 WL 5083149, at *1 (N.D. Ohio Nov. 25, 2008) (citation omitted). Plaintiffs
seek default judgment on both counts of the complaint. The undisputed allegations in the
complaint establish that defendants Wrice and Apparel Empire violated both 15 U.S.C. §
1114 (trademark infringement and counterfeiting) and 15 U.S.C. § 1125 (false
designation of origin) with respect to the Chanel Marks and the Tiffany Marks.
1. Trademark Infringement and Counterfeiting
15 U.S.C. § 1114(1)(a) and (b) provides that:
(1) Any person who shall, without the consent of the registrant-(a) use in commerce any reproduction, counterfeit, copy, or
colorable imitation of a registered mark in connection with
the sale, offering for sale, distribution, or advertising of any
goods or services on or in connection with which such use
is likely to cause confusion, or to cause mistake, or to
deceive; or
(b) reproduce, counterfeit, copy, or colorably imitate a
registered mark and apply such reproduction, counterfeit,
copy, or colorable imitation to labels, signs, prints,
packages, wrappers, receptacles or advertisements intended
to be used in commerce upon or in connection with the
sale, offering for sale, distribution, or advertising of goods
or services on or in connection with which such use is
likely to cause confusion, or to cause mistake, or to
deceive,
shall be liable in a civil action by the registrant for the remedies
hereinafter provided. Under subsection (b) hereof, the registrant shall not
be entitled to recover profits or damages unless the acts have been
committed with knowledge that such imitation is intended to be used to
cause confusion, or to cause mistake, or to deceive.
7

To establish trademark infringement under 15 U.S.C. § 1114, plaintiffs
must show that: (1) they own a valid trademark; (2) defendants used the trademark “in
commerce” without plaintiffs’ authorization; (3) defendants used Plaintiffs’ Respective
Marks, or an imitation thereof, “in connection with the sale, offering for sale, distribution,
or advertising” of goods and services; and (4) defendants’ use of the Respective Marks is
likely to cause consumer confusion. The Ohio State Univ. v. Skreened Ltd., 16 F. Supp.
3d 905, 910 (S.D. Ohio 2014) (citing 15 U.S.C. § 1114). The “touchstone of liability” for
trademark infringement under 15 U.S.C. § 1114 “is whether defendant’s use of the
disputed mark is likely to cause confusion among consumers regarding the origin of the
goods offered by the parties.” Id. (quoting Daddy’s Junky Music Stores, Inc. v. Big
Daddy’s Family Music Ctr., 109 F.3d 275, 280 (6th Cir. 1997)).
Counterfeiting, under 15 U.S.C. § 1114, is a subset of infringement—even
if a mark is infringing, it is not necessarily counterfeit. Id. at 910 (citations omitted). “‘To
recover on a federal trademark counterfeiting claim, a plaintiff must show that: (1) the
defendant infringed a registered trademark in violation of 15 U.S.C. § 1114; and (2) the
defendant intentionally used the mark knowing it was a counterfeit as the term counterfeit
is defined in 15 U.S.C. § 1116. . . . Section 1116 defines ‘counterfeit mark’ as ‘a mark
that is registered on the principal register in the United States Patent and Trademark
Office for such goods or services sold, offered for sale, or distributed and that is in use,
whether or not the person against whom relief is sought know such mark was so
registered.’ 15 U.S.C. § 1116(d)(1)(B)(i). Elsewhere, the statute provides additional
clarification, defining ‘counterfeit’ as ‘a spurious mark which is identical with, or

8

substantially indistinguishable from, a registered mark.’ 15 U.S.C. § 1127.’” Id. at 911
(quoting Laukus v. Rio Brands, Inc., 391 F. App’x, 416, 425 (6th Cir. 2010)).
Based on the allegations in the complaint, which the Court accepts as true,
plaintiffs have established the elements required to state a claim for relief for trademark
infringement and counterfeiting pursuant to 15 U.S.C. § 1114. Plaintiffs own their
Respective Marks, and defendants have violated the Lanham Act by producing,
advertising, distributing and/or selling products in commerce that bear identical copies of
Plaintiffs’ Respective Marks without plaintiffs’ consent or authorization.3 By defaulting,
defendants have admitted that their use of Plaintiffs’ Respective Marks is likely to cause
confusion among consumers regarding the origin and quality of the goods offered by
defendants.
Accordingly, plaintiffs are entitled to default judgment on Count I of their
complaint for trademark infringement and counterfeiting in violation of 15 U.S.C. §
1114.
2. False Designation of Origin
Under 15 U.S.C. § 1125(a):
(a) Civil action
(1) Any person who, on or in connection with any goods or
services, or any container for goods, uses in commerce any
word, term, name, symbol, or device, or any combination
thereof, or any false designation of origin, false or
3

In addition to the allegations in the complaint admitted by defendants’ default, plaintiffs have also
submitted declarations establishing that the plaintiffs own their Respective Marks, that defendants are
selling counterfeit goods bearing marks that are identical or substantially similar to Plaintiffs’ Respective
Marks without plaintiffs’ consent or authorization, and that the products bearing Plaintiffs’ Respective
Marks sold by defendants are not genuine Chanel and Tiffany products. (See Doc. No. 12-3 (Declaration of
Adrienne Hahn Sisbarro [“Hahn Decl.”]), ¶¶ 4, 6-11 at 90-94; and Doc. No. 12-4 (Declaration of Steven
Costello [“Costello Decl.”]), ¶¶ 4, 9-15 at 116-121.)
9

misleading description of fact, or false or misleading
representation of fact, which-(A) is likely to cause confusion, or to cause
mistake, or to deceive as to the affiliation,
connection, or association of such person
with another person, or as to the origin,
sponsorship, or approval of his or her goods,
services, or commercial activities by another
person, or
(B) in commercial advertising or promotion,
misrepresents the nature, characteristics,
qualities, or geographic origin of his or her
or another person's goods, services, or
commercial activities,
shall be liable in a civil action by any person who believes
that he or she is or is likely to be damaged by such act.

Under the Lanham Act, the same test is used for trademark infringement
and false designation of origin: likelihood of confusion. Audi AG v. D’Amato, 469 F.3d
534, 542 (6th Cir. 2006) (citing Two Pesos v. Taco Cabana, 505 U.S. 763, 780, 112 S.
Ct. 2753, 120 L. Ed. 2d 615 (1992)). Based on the undisputed allegations in plaintiffs’
complaint, the defendants are liable for false designation of origin. Defendants have used
identical copies of Plaintiffs’ Respective Marks in producing, advertising, distributing
and selling defendants’ products, and have done so without plaintiffs’ consent or
authorization. Defendants’ goods are likely to be mistaken for the genuine products
offered for sale by the plaintiffs, and to result in the confusion of consumers, who will
believe that defendants’ Counterfeit Goods are genuine goods originating from and
approved by plaintiffs.
Accordingly, plaintiffs are entitled to default judgment on Count II of their
complaint for false designation of origin in violation of 15 U.S.C. § 1125.
10

3. Statutory Damages
Well-pleaded allegations in the complaint as to liability are taken as true
when a defendant is in default, but not as to damages. Ford Motor Co., 441 F. Supp. 2d at
846 (citing Visioneering Constr., 661 F.2d at 124). “[W]here the damages sought are not
for a sum certain, the Court must determine the propriety and amount of the default
judgment.” J&J Sports Prods., Inc. v. Rodriguez, 2008 WL 5083149, at *1 (citing Fed. R.
Civ. P. 55(b)). Rule 55(b)(2) permits, but does not require, the district court to conduct an
evidentiary hearing to determine damages. Arthur v. Robert James & Assoc. Asset Mgmt.,
Inc., No. 3:11-cv-460, 2012 WL 1122892, at *1 (citing Vesligaj v. Peterson, 331 F.
App’x 351, 354-55 (6th Cir. 2009)).
The Court may rely on affidavits submitted by plaintiffs in support of
damages without the need for a hearing. Id. at *2 (citation omitted). In this case, reliance
on plaintiffs’ declarations in lieu of an evidentiary hearing is appropriate for at least two
reasons. First, plaintiffs seek statutory, rather than actual, damages, and there is a basis
for an award of statutory damages in this case. Second, defendants have been served with
plaintiffs’ complaint, the Court’s entry of default, and plaintiffs’ motion at their address
of record, but have failed to appear or otherwise defend this action, and thus would likely
not participate in an evidentiary hearing if it occurred. See id.
Plaintiffs seek statutory damages pursuant to 15 U.S.C. § 1117 instead of
actual damages, and statutory damages “are appropriate in default judgment cases
because the information needed to prove actual damages is within the infringers’ control
and is not disclosed.” Microsoft Corp. v. McGee, 490 F. Supp. 2d 874, 882 (S.D. Ohio
2007) (collecting cases)). Section 1117(c) permits statutory damages of not less than

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$1,000, or more than $200,000, per counterfeit mark per type of goods sold, offered for
sale, or distributed:
****
(c) Statutory damages for use of counterfeit marks
In a case involving the use of a counterfeit mark (as defined in section
1116(d) of this title) in connection with the sale, offering for sale, or
distribution of goods or services, the plaintiff may elect, at any time before
final judgment is rendered by the trial court, to recover, instead of actual
damages and profits under subsection (a) of this section, an award of
statutory damages for any such use in connection with the sale, offering
for sale, or distribution of goods or services 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 undisputed record reflects that the Chanel Marks and the Tiffany
Marks used by defendants are counterfeit marks as defined by 15 U.S.C. § 1116(d), and
that the defendants used those counterfeit marks on goods for which Plaintiffs’
Respective Marks are registered. Further, if the defendants have knowledge that their
action infringe Plaintiffs’ Respective Marks, their infringement is willful and 15 U.S.C. §
1117(c)(2) provides for enhanced statutory damages.
“A defendant’s continued infringement after notice of his wrongdoing is
probative evidence of willfulness.” Microsoft Corp., 490 F. Supp. 2d at 880 (citing Ford
Motor Co., 441 F. Supp. 2d at 852). “In addition, a court may infer willfulness from
defendant’s default.” Microsoft Corp., 490 F. Supp. 2d at 880 (citations omitted); Tiffany

12

(NJ) Inc. v. Luban, 282 F. Supp. 2d 123, 124 (S.D.N.Y. 2003) (“By virtue of the default,
[defendant’s] infringement is deemed willful[.]”).
In this case, the Court concludes that defendants’ infringement and
counterfeiting of Plaintiffs’ Respective Marks was willful. Defendants’ willfulness is not
only established by their defaults, but by their continued violations of the Lanham Act
even after notice that their actions infringed the Chanel Marks and the Tiffany Marks.4
Chanel seeks statutory damages in the amount of $141,588.00, and
Tiffany seeks statutory damages in the amount of $154,500.00. The Court has broad
discretion in awarding statutory damages within the limits established by Congress “as
the court considers just.” Ford Motor Co., 441 F. Supp. 2d at 852 (citing Peer Int’l Corp.
v. Pausa Records, Inc., 909 F.2d 1332, 1336 (9th Cir. 1990)); 15 U.S.C. § 1117(c)(1).
a. Chanel’s damages analysis
At defendants’ place of business, plaintiffs’ investigator inventoried a total
of 114 sunglasses, wallets, earrings, bracelets and necklaces bearing the Chanel Marks in
violation of the Lanham Act. (Forder Decl., ¶ 6 at 133-34.) However, plaintiffs are not
seeking damages in connection with counterfeit wallets because plaintiffs’ investigator
was unable to obtain photographs of defendants’ counterfeit wallets. (Memorandum at
4

Even after being served with the summons and complaint, and receiving the Clerk’s entry of default,
defendants continued to infringe the Chanel Marks, and use Chanel’s “famous CC Monogram” in an
offensive and vulgar manner. (Doc. No. 12-10 (Declaration of Stephen M. Gaffigan [“Gaffigan Decl.”]), ¶
3 at 300.) Further, plaintiffs’ investigator spoke with Jermaine Wrice by telephone, “who provided [the
investigator] with numerous different accounts of how and where he obtained his trademarked products.”
(Doc. No. 12-5 (Declaration of Kevin Forder [“Forder Decl.”], ¶ 6 at 133-34.) Wrice agreed that the
investigator could inventory the trademarked products, and although he would not surrender the counterfeit
products, he authorized his employee to remove certain products bearing the Tiffany Marks but refused to
authorize removal of the Chanel branded products. Id. A subsequent visit by plaintiffs’ investigator to
defendants’ place of business revealed that the Tiffany branded products previously removed had been
returned to the display area, and that the defendants continued to sell and offer for sale Counterfeit Goods
bearing Plaintiffs’ Respective Marks. Defendants’ website also continued to sell and offer for sale
Counterfeit Goods bearing the Chanel Marks and the Tiffany Marks. (Forder Decl., ¶¶ 7-11 at 134-36.)
13

62, n. 1.) Chanel seeks $5,056.71 in damages for each of the seven (7) Chanel Marks
infringed and counterfeited that are registered for sunglasses, earrings, necklaces and
bracelets, multiplied by four (4) for the number of types of infringing and counterfeit
goods sold (sunglasses, earrings, necklaces, and bracelets), for a total statutory damages
award of $141,588.00.5
Chanel’s requested statutory damages are well below the maximum that
Chanel could recover under the statute, even without a showing of willfulness. Given the
Court’s conclusion that the defendants’ infringing and counterfeiting conduct was willful,
the statute permits a recovery of up to $2,000,000 per counterfeit mark per type of goods
or services sold, offered for sale, or distributed. For these reasons, the Court concludes
that Chanel’s requested statutory damage award of $5,056.71 per counterfeit mark per
type of counterfeit product, for a total award of $141,588.00, is just.
Accordingly, the Court awards statutory damages to Chanel in the amount
of $141,588.00 against defendants, jointly and severally, for defendants’ liability under
Counts I and II of plaintiffs’ complaint. (See Memorandum at 82 (The scope of monetary
damages for false designation of origin (Count II) is encompassed by the statutory award
under 15 U.S.C. § 1117.).)
b. Tiffany’s damages analysis
At defendants’ place of business, plaintiff’s investigator inventoried a total
of 103 sunglasses, earrings, necklaces and bracelets bearing the Tiffany Marks in
violation of the Lanham Act. (Forder Decl., ¶ 6 at 133-34.) Tiffany seeks $5,517.86 in
damages for each of the seven (7) Tiffany Marks registered for sunglasses, earrings,
5

See Memorandum at 64-65 for the details of Chanel’s statutory damages calculation.
14

necklaces and bracelets infringed and counterfeited, multiplied by four (4) for the number
of types of infringing and counterfeit goods sold (sunglasses, earrings, necklaces, and
bracelets), for a total statutory damages award of $154,500.00.6
Tiffany’s requested statutory damages are well below the maximum that
Tiffany could recover under the statute even without a showing of willfulness. For the
same reasons as above, the Court concludes that Tiffany’s requested statutory damage
award of $5,517.86 per counterfeit mark per type of counterfeit product, for a total award
of $154,500.00, is just.
Accordingly, the Court awards statutory damages to Tiffany in the amount
of $154,500.00 against defendants, jointly and severally, for defendants’ liability under
Counts I and II of plaintiffs’ complaint.
B.

Injunctive Relief
In addition to statutory damages, the Lanham Act authorizes a court to

grant injunctive relief “according to the principles of equity and upon such terms as the
court may deem reasonable” to prevent violations of trademark law. 15 U.S.C. § 1116(a);
Ford Motor Co., 441 F. Supp. 2d at 852 (citing 15 U.S.C. §§ 1116, 1125(c)(2)).
To obtain a permanent injunction, plaintiffs must show that: (1) they have
suffered irreparable injury; (2) remedies at law are not adequate to compensate for that
injury; (3) the balance of hardship between the plaintiffs and defendants weighs in favor
of a permanent injunction; and (4) it is in the public interest to issue an injunction. Audi
AG, 469 F. 3d at 550 (citing eBay Inc. v. MercExchange, LLC, 547 U.S. 388, 391, 126 S.
Ct. 1837, 164 L. Ed. 2d 641 (2006)). The decision whether to grant a permanent

6

See Memorandum at 65-66 for the details of Tiffany’s statutory damages calculation.
15

injunction lies within the Court’s discretion. eBay Inc., 547 U.S. at 391; List v. Ohio
Elections Comm’n, Case No. 1:10-cv-720, --F. Supp. 3d--, 2014 WL 4472634, at *5
(S.D. Ohio Sept. 11, 2014) (citations omitted). An evidentiary hearing is not required
prior to issuing a permanent injunction in the case of a default judgment because there are
no factual issues in dispute. Chanel v. Cong, No. 10-2086, 2011 WL 6180029, at *9
(W.D. Tenn. Dec. 8, 2011) (citing Gibson Guitar Corp. v. Paul Reed Smith Guitars, LP,
423 F.3d 539, 546 (6th Cir. 2005)).
In this case, defendants’ liability has been established. The defendants
have infringed and counterfeited Plaintiffs’ Respective Marks at both their physical and
on-line business locations even when defendants were on notice of their unlawful
conduct.
In addition to the monetary loss to plaintiffs resulting from the sale of
counterfeit products, defendants’ Counterfeit Goods are substantially inferior to
plaintiffs’ high quality genuine goods, and consumer confusion regarding the origin
defendants’ counterfeit products causes irreparable damage to the goodwill and
reputation of quality associated with Plaintiffs’ Respective Marks.7 See Circuit City
Stores, Inc. v. CarMax, Inc., 165 F.3d 1047, 1056 (6th Cir. 1999) (irreparable injury that
cannot be remedied by money damages follows from the likelihood of consumer
confusion and risk to plaintiffs’ reputation (citing Wynn Oil Co. v. American Way Serv.
Corp., 943 F. 2d 595, 608 (6th Cir. 1991))).

7

See Compl., ¶¶ 24-26 at 8; Hahn Decl., ¶¶ 6-12 at 91-94; Costello Decl., ¶¶ 6-16 at 117-121; Forder Decl.,
¶¶ 6-9 at 133-35. In addition, defendants’ use of the Chanel Marks in an offensive and vulgar manner
enhances the irreparable harm to Chanel. (See Gaffigan Decl., ¶ 3 at 300.)
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It is in the public interest to enforce federal trademark laws and to prevent
consumers from being misled regarding the origin of products bearing Plaintiffs’
Respective Marks. The defendants face no hardship as a consequence from being
enjoined from violating the Lanham Act. Plaintiffs, on the other hand, will continue to
suffer from lost income and damage to the reputation and goodwill of their Respective
Marks if defendants are not permanently enjoined from their illegal conduct.
The Court concludes that the balance of these considerations weighs in
favor of granting a permanent injunction, and injunctive relief is appropriate to prevent
the defendants from infringing and counterfeiting Plaintiffs’ Respective Marks. See Audi
AG v. D’Amato, 469 F. 3d at 550.
Accordingly, the Wrice defendants and the Apparel Empire defendants,
and their respective officers, agents, servants, employees and attorneys, and persons
acting in concert or participation with them who receive actual notice of such order or
injunction by personal service or otherwise, are permanently restrained and enjoined from
engaging in any of the following acts or omissions:
(a) manufacturing or causing to be manufactured, importing, advertising,
or promoting, distributing, selling or offering to sell counterfeit and infringing goods
using the “Chanel Marks”: U.S. Registration Nos. 1,501,898; 0,612,169; 0,902,190;
1,510,757; 1,654,252; 1,733,051; 1,734,822; 3,134,695; 3,025,934; and 3,025,936, and/or
the “Tiffany Marks”: U.S. Registration Nos. 0,023,573; 0,133,063; 1,228,189; 1,228,409,
1,669,365; 1,807,381; and 3,433,239;
(b) using the Tiffany and/or Chanel Marks in connection with the sale of
any unauthorized goods;
(c) using any logo, and/or layout which may be calculated to falsely
advertise the services or products of defendants offered for sale or sold by the defendants,
individually or via any associated business, as being sponsored by, authorized by,
endorsed by, or in any way associated with plaintiffs;

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(d) falsely representing themselves as being connected with plaintiffs,
through sponsorship or association;
(e) engaging in any act which is likely to falsely cause members of the
trade and/or of the purchasing public to believe any goods or services of defendants
offered for sale or sold by the defendants, individually or via any associated business, are
in any way endorsed by, approved by, and/or associated with plaintiffs;
(f) using any reproduction, counterfeit, copy, or colorable imitation of the
Plaintiffs’ Respective Marks in connection with the publicity, promotion, sale, or
advertising of any goods sold by defendants, individually or via any business associated
with the Defendants, including, without limitation, wallets, sunglasses, and costume
jewelry, including bracelets, earrings, and necklaces;
(g) affixing, applying, annexing or using in connection with the sale of any
goods, a false description or representation, including words or other symbols tending to
falsely describe or represent goods offered for sale or sold by defendants, individually or
via any associated business, as being those of plaintiffs or in any way endorsed by
plaintiffs;
(h) otherwise unfairly competing with plaintiffs; and
(i) effecting assignments or transfers, forming new entities or associations
or utilizing any other device for the purpose of circumventing or otherwise avoiding the
prohibitions set forth above.
III. CONCLUSION
For the reasons contained herein, plaintiffs’ motion for default judgment
as to Counts I and II of the complaint is GRANTED. The Court awards statutory
damages in the amount of $141,588.00 to Chanel, and in the amount of $154,500.00 to
Tiffany, against the Wrice defendants and the Apparel Empire defendants, jointly and
severally, along with pre-judgment and post-judgment interest as allowed by law.
Further, defendants are permanently restrained and enjoined from
infringing Plaintiffs’ Respective Marks, as outlined above.

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A Judgment Entry will be separately published.

IT IS SO ORDERED.
Dated: February 9, 2015
HONORABLE SARA LIOI
UNITED STATES DISTRICT JUDGE

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