Gillette Company v. Save and Discount LLC
Filing
17
ORDER GRANTING PLAINTIFF'S MOTION FOR DEFAULT JUDGMENT (Doc. 16 ). Signed by Judge Timothy S. Black on 7/13/2016. (mr)
UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF OHIO
WESTERN DIVISION
THE GILLETTE COMPANY,
Case No. 1:15-cv-636
Plaintiff,
Judge Timothy S. Black
vs.
SAVE AND DISCOUNT LLC,
Defendant.
ORDER GRANTING
PLAINTIFF’S MOTION FOR DEFAULT JUDGMENT (Doc. 16)
This civil action is before the Court on Plaintiff’s motion for default judgment.
(Doc. 16). Defendant did not respond.
I.
PROCEDURAL HISTORY
Plaintiff filed a complaint on September 29, 2014. (Doc. 1). Defendant’s
registered agent was personally served with the summons and complaint on November
30, 2015. (Doc. 10). Defendant failed to answer or otherwise file a responsive pleading
within the time allowed by the Federal Rules of Civil Procedure. Accordingly, on
January 12, 2016, Plaintiff filed a request with the Clerk’s office seeking an entry of
default. (Doc. 12). Default was entered against Defendant on January 13, 2016. (Doc.
13). Now, Plaintiff seeks an award of damages. (Doc. 16).
II.
FACTUAL BACKGROUND
Plaintiff alleges that Defendant infringed several of its trademarks and design
patents related to its Fusion® and Mach® lines of shaving products from sales made
through www.ebay.com, under the seller name “thepeddlershoppe.” (Doc. 1 at ¶¶ 45-92).
The infringed trademarks are U.S. Registration No. 0,767,865 (the “Gillette Mark”), U.S.
Registration No. 2,300,839 (the “Mach3 Mark”), and U.S. Registration No. 3,099,224
(the “Fusion Mark”) (collectively, the “Infringed Marks”). (Doc. 16 at 2). The infringed
design patents are D730,578 S (the “’578 Patent”), D737,511 S (the “’511 Patent”),
D737,512 S (the “’512 Patent”), D531,518 S (the “’518 Patent”), and D533,684 (the
“’684 Patent) (collectively, the “Infringed Patents”). (Id.) Defendant infringed the
Marks by a reproduction, counterfeit, copy, or colorable imitation of such Marks in
connection with the offering for sale, distribution, and/or advertising of goods in
interstate commerce in a way that is likely to cause confusion, mistake, or deceive
consumers in violation of 15 U.S.C. §1114. (Id.) Defendant infringed the Patents by
selling and/or offering for sale razor blade cartridges that reflect the design, or colorable
imitation thereof, of one or more of the Patents, in violation of 35 U.S.C. § 271(a).
Plaintiff never granted Defendant a license, authorizing it to use any of the Infringed
Marks or Infringed Patents.
Specifically, Defendant used the Infringed Marks in connection with the sale of
razor blade cartridges described as “authentic OEM” Gillette Fusion® and Gillette
Mach3® razor blade cartridges. (Doc. 1 at ¶ 31). These products presented the designs
of the Infringed Patents, which protect ornamental designs incorporated into Fusion®
razor blade cartridges and dispensers (’518 Patent and ’684 Patent) and Mach3® razor
blade cartridges (’578 Patent, ’511 Patent, and ’512 Patent). (Id. at ¶¶ 23-26). Defendant
offered the infringing products in all fifty states and possibly internationally through
2
www.ebay.com. (Id. at ¶ 31). Defendant also offered the products for sale at their retail
location, located at 2374 Foxon Road, North Branford, Connecticut. (Id.)
Defendant further violated Plaintiff’s rights by illegally obtaining the products.
Plaintiff purchased and tested samples of the Fusion® and Mach3® razor blade
cartridges sold by Defendant through www.ebay.com, and determined that the Mach3®
products were stolen. (Doc. 16 at 3). Plaintiff has reason to believe that the Fusion®
products sold by Defendant were also stolen, based on the low sale price and lack of
external Gillette retail packaging. (Doc. 1 at ¶¶ 35-38). The Fusion® and Mach3®
products were stolen by one or more unknown third party(ies), and Defendant obtained
the products with the intent to resell those products without the consent of, and without
paying value to Plaintiff. (Id. at ¶ 43). Defendant knew or should have known that the
products were stolen. (Id.) Therefore, Defendant is also liable for converting these
products, and for being unjustly enriched through its sales of such products. 1 (Id. at
¶¶ 93-103).
III.
STANDARD OF REVIEW
Applications for default judgment are governed by Fed. R. Civ. P. 55(b)(2).
Following the clerk’s entry of default pursuant to Fed. R. Civ. P. 55(a) and the party’s
application for default under rule 55(b), “the complaint’s factual allegations regarding
liability are taken as true, while allegations regarding the amount of damages must be
proven.” Morisaki v. Davenport, Allen & Malone, Inc., No. 2:09cv298, 2010 U.S. Dist.
1
Since Gillette has been able to obtain actual sales information for at least a portion of
Defendant’s infringing sales via subpoenas to eBay and PayPal, Gillette has limited its damage
request to Defendant’s profits.
3
LEXIS 86241, at *1 (E.D. Cal. Aug. 23, 2010) (citing Dundee Cement Co. v. Howard
Pipe & Concrete Products, 722 F.2d 1319. 1323 (7th Cir. 1983)).
Although liability may be shown by well-pleaded allegations, this Court is
required to “conduct an inquiry in order to ascertain the amount of damages with
reasonable certainty.” Osbeck v. Golfside Auto Sales, Inc., No. 07-14004, 2010 U.S.
Dist. LEXIS 62027, at *5 (E.D. Mich. June. 23, 2010). To do so, the civil rules “require
that the party moving for a default judgment must present some evidence of its damages.”
Mill’s Pride, L.P. v. W.D. Miller Enter., No. 2:07cv990, 2010 U.S. Dist. LEXIS 36756, at
*1 (S.D. Ohio Mar. 12, 2010).
IV.
ANALYSIS
Defendant having defaulted, the factual allegations in the complaint are deemed
true. Antoine v. Atlas Turner, Inc., 66 F.3d 105, 110 (6th Cir. 1995). To determine an
undefined sum of damages, Rule 55(b)(2) “allows but does not require the district court
to conduct an evidentiary hearing.” Vesligaj v. Peterson, 331 F. App’x 351, 354-55 (6th
Cir. 2009). An evidentiary hearing is not required if the Court can determine the amount
of damages by computation from the record before it. HICA Educ. Loan Corp. v. Jones,
No. 4:12cv962, 2012 U.S Dist. LEXIS 116166, at *1 (N.D. Ohio Aug. 16, 2012). The
Court may rely on affidavits submitted on the issue of damages. Schilling v. Interim
Healthcare of Upper Ohio Valley, Inc., No. 206-cv-487, 2007 U.S. Dist. LEXIS 3118, at
*2 (S.D. Ohio Jan. 16, 2007).
As established by the facts set forth in the complaint as well as Plaintiff’s
affidavits, Plaintiff is entitled to damages for Defendant’s default.
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A. Injunctive Relief
First, Plaintiff requests that the Defendant be permanently enjoined from violating
the Infringed Patents during the remainder of each patent’s enforceable life, and
permanently enjoined from violating the Infringed Marks. 2 In determining whether to
grant a permanent injunction, the Court considers the following four-factor test:
(1) whether the plaintiff suffered an irreparable harm; (2) whether the remedies available
at law are inadequate; (3) whether the balance of hardships favors granting an injunction;
and (4) whether the public interest would be served in granting an injunction. Wynn Oil
Co. v. Am. Way Service Corp., 943 F.2d 595, 608 (6th Cir. 1991).
1. Irreparable injury
Courts routinely find irreparable harm when the infringer and patent holder are
direct competitors. Bendix Comer. Vehicle, Sys., LLC v. Haldex Brake Prod. Corp., No.
1:09cv176, 2011 U.S. Dist. LEXIS 312, at *16 (N.D. Ohio Jan. 3, 2011). Here, Plaintiff
is Defendant’s direct competitor. Plaintiff offers for sale, and sells, replacement razor
blade cartridges for use with its reusable razor handles, in direct competition with
Defendant’s sales of the same, illegally-obtained goods. (Doc. 16 at 11). Also,
Defendant uses the Infringed Marks to sell its illegally-obtained goods, without license or
permission from the Plaintiff, implying an endorsement of its sales of these goods by
Plaintiff. (Id.) These facts show that Plaintiff will likely suffer irreparable harm if
2
Gillette is not seeking an injunction with regard to the ’023 Patent, the ’751 Patent, or the ’315
Patent, each of which has now expired.
5
Defendant is not legally enjoined from violating the Infringed Patents and Infringed
Marks.
2. Remedies available at law
By defaulting, Defendant admits that it used the Gillette Marks for the purpose of
capitalizing on Plaintiff’s goodwill and reputation. Chanel, Inc. v. Huang Cong, No. 102086, 2011 U.S. Dist. LEXIS 141177, at *32 (W.D. Tenn. Dec. 8, 2011). There are no
assurances, absent a permanent injunction, that the Defendant will not sell infringing
products again in the future.
3. Balance of hardships
Furthermore, the injunction will not unfairly harm Defendant, as it will simply be
prohibited from continuing to deliberately infringe Plaintiff’s intellectual property. “One
who elects to build a business on a product found to infringe cannot be heard to complain
if an injunction against continuing infringement destroys the business so elected.”
Broadcom Corp. v. Qualcomm Inc., 543 F.3d 683, 704 (Fed. Cir. 2008).
4. Public interest
Finally, there is no harm to the public interest in protecting Plaintiff’s ability to
prevent Defendant from continued infringement of the Infringed Patents and Infringed
Marks. The public has a strong interest in maintaining the integrity of patents by
enjoining patent infringement. See, e.g., Smith & Nephew, Inc. v. Synthes (U.S.A.), 466
F. Supp. 2d 978, 985 (W.D. Tenn. 2006).
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The four-factor test for granting a permanent injunction weighs heavily in favor of
such relief. Accordingly, Defendant is enjoined and restrained from infringing, in any
manner, the Infringed Patents and Infringed Marks.
B. Statutory Damages
Next, Plaintiff seeks damages from Defendant’s sales through www.ebay.com
under the name “thepeddlershoppe.” See 35 U.S.C. § 289.
When determining the proper amount of statutory damages, courts consider
whether the infringement was willful. Specifically: (1) whether the infringer deliberately
copied the ideas or design of another; (2) whether the infringer, when he knew of the
other’s patent protection, investigated the scope of the patent and formed a good faith
belief that it was invalid or that it was not infringed; and (3) the infringer’s behavior as a
party to the litigation. Bott v. Four Star Corp., 807 F.2d 1567, 1572 (Fed. Cir. 1986).
Here, the evidence establishes that Plaintiff attempted to negotiate with Defendant by
sending a cease and desist letter before initiating the lawsuit and negotiated in good faith
with Defendant’s counsel during the pendency of this litigation. 3 Plaintiff only moved
for default judgment when it became clear that Defendant was no longer responding to
attempts to settle the matter. Based on Defendant’s conduct in this case, the Court finds
that the Patents and Marks were willfully infringed.
3
Gillette’s counsel engaged in discussions and emails with an attorney who purported to
represent Defendant, although no attorney has ever made an appearance on behalf of Defendant
in this case.
7
Defendant had at least $18,349.14 in sales of infringing products between January
1, 2015 and September 13, 2015. (Doc. 16, Ex. B at 3-36). However, since Defendant
also operates a retail location, it is possible that sales are even more significant.
Accordingly, Plaintiff seeks trebling the damage amount pursuant to 35 U.S.C. § 284 and
15 U.S.C. § 1117(b). Given Defendant’s willful infringement, the Court finds that
Plaintiff is entitled to recover three times its conservative estimate of damages, or
$55,047.42. 4
C. Attorney’s Fees and Costs
Plaintiff requests that the Court find that this case is “exceptional” and award costs
and attorney’s fees pursuant to 15 U.S.C §1117(a). A trademark infringement case may
be found exceptional when, as in this case, the defendant has disregarded the proceedings
and the underlying claims of trademark infringement. See, e.g., Lien v. Compusoft of
Kalamazoo, Inc., No. 1:89cv104, 1991 U.S. Dist. LEXIS 3218, at *13 (W.D. Mich. Mar.
13, 1991). Defendant’s non-responsiveness and complete failure to address the case in
Court renders this case exceptional and merits an award of attorney’s fees. Moreover,
willful patent infringement also merits an award of fees. See, e.g., Avia Group Int’l, Inc.
v. L.A. Gear Cal., Inc., 853 F.2d 1557, 1567 (Fed. Cir. 1988) (finding of willful
infringement is sufficient to find a case exceptional).
4
Gillette notes that pursuant to 15 U.S.C. § 1117(c), it is entitled to pursue statutory damages of
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, which could easily result in millions of dollars in statutory
damages given the significant number of sales products sold. (Doc. 16, Ex. B at 3-56). Plaintiff’s
request for profits based on Defendant’s eBay sales is a conservative approach to the damages
Plaintiff could pursue.
8
The requested award of attorney’s fees represents the amount expended on fees to
the law firm of Dinsmore & Shohl, LLP for work performed in this case. This includes
legal work related to investigating the Defendant, drafting a cease and desist letter,
drafting the complaint and related documents, serving the complaint and related
documents, negotiating with Defendant’s counsel, drafting, service of, negotiation, and
review of information provided in response to subpoenas to third parties eBay and
PayPal, seeking an entry of default, and drafting a motion for default judgment and
supporting documents. (Doc. 16, Ex. A at ¶ 9).
Accordingly, in light of Defendant’s willful infringement, the Court concludes that
Plaintiff is entitled to attorney’s fees. To date, Plaintiff has incurred attorney’s fees in the
amount of $21,489.45. (Doc. 16, Ex. A at ¶¶ 3-8). This amount represents a reasonable
fee in light of the experience of counsel, the nature of the case, and the services provided.
D. Pre and Post Judgment Interest
In addition to attorneys’ fees and costs, Plaintiff also seeks an award of prejudgment and post-judgment interest. See 28 U.S.C. 1961(a). Here, Plaintiff discovered
Defendant’s infringement of the Infringed Patents less than one year after Defendant
began infringing. Plaintiff sought to protect its rights, first by notifying the Defendant
with an infringement letter, and then by filing suit. Accordingly, an award of prejudgment interest from the date of the cease and desist letter, September 10, 2015,
through the date of judgment, is appropriate in this case. See Informatica Corp. v. Bus.
Objects Data Integration, Inc., 489 F. Supp.2d 1075, 1086-1087 (N.D. Cal. 2007) (pre-
9
judgment interest is ordinarily awarded from the date of the infringement to the date of
judgment).
Additionally, an award of post-judgment interest is also appropriate pursuant to 28
U.S.C. §1961(a), since Defendant defaulted and Plaintiff is likely to seek to attach assets
or take other steps to secure payment of the judgment, which will likely delay the
payment. In calculating pre-judgment and post-judgment interest, the rate of the 52 week
Treasury Bill is an appropriate rate pursuant 28 U.S.C. § 1961. See also Isaac Ford v.
Uniroyal Pension Plan, 154 F.3d 613, 619 (6th Cir. 1998). As of April 27, 2016, this rate
was 0.60%. 5 Compounded annually, this yields $0.30 in interest per day. 6 Accordingly,
Plaintiff is entitled to pre-judgment interest from September 10, 2015 through the date the
judgment is entered at a rate of $0.30 per day, and post-judgment interest at the same
daily rate from the date of judgment until the judgment is paid. 7
V.
CONCLUSION
For these reasons, Plaintiff’s motion for default judgment (Doc. 16) is
GRANTED. Judgment shall be entered in favor of the Plaintiff and against Defendant
Save and Discount LLC as follows:
5
See http://www.treasury.gov/resource-center/data-chart-center/interestrates/Pages/TextView.aspx?data=billrates, accessed on April 27, 2016.
6
0.0060/365 x $18,349.14= $0.30
7
Since an award of pre-judgment interest is not punitive, it can only be assessed against actual
damages. Saint- Gobain Autover USA, Inc. v. Glass N. Am., Inc., No. 1:06cv2781, 2010 U.S.
Dist. LEXIS 30906, at *75 (N.D. Ohio Mar. 31, 2010).
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(1)
Save and Discount LLC is hereby ENJOINED and
RESTRAINED from infringing, in any manner, Gillette’s
Infringed Patents during the remainder of each patent’s
enforceable life, and Infringed Marks pursuant to 35 U.S.C.
§ 283;
(2)
Save and Discount LLC shall pay damages in the amount of
$55,047.42, which represents an award three times the conservative
estimate of damages pursuant 35 U.S.C. § 284 and 15 U.S.C.
§1117(b);
(3)
Save and Discount LLC shall pay Plaintiff’s costs, including
reasonable attorney’s fees, in the amount of $21,489.45
pursuant 15 U.S.C. § 1117(a); and
(4)
Save and Discount LLC shall pay interest on the statutory award at
an amount of $0.30 per day from September 10, 2015 until the date
judgment is paid pursuant to 28 U.S.C. § 1961(a).
IT IS SO ORDERED.
Date: 7/13/16
s/ Timothy S. Black
Timothy S. Black
United States District Judge
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