LUTRON ELECTRONICS CO., INC. v. LEETRONICS CORPORATION et al

Filing 12

MEMORANDUM AND/OR OPINION. SIGNED BY JUDGE: JOSEPH F. LEESON JR ON 3/26/24. 3/27/24 ENTERED AND COPIES E-MAILED. (DT)

UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF PENNSYLVANIA
__________________________________________
LUTRON ELECTRONICS CO., INC.,
A PENNSYLVANIA CORPORTATION,
Plaintiff,
v.

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LEETRONICS CORPORATION, A NEW YORK
CORPORATION, ELIRAN YADID, A NATURAL
PERSON, & JOHN DOES 1-10, INDIVIDUALLY
OR AS CORPORATIONS/BUSINESS ENTITIES,
Defendants.
__________________________________________

No.

5:23-cv-3318

OPINION
Plaintiff’s Motion for Default Judgment, ECF No. 9 – Granted
Joseph F. Leeson, Jr.
United States District Judge
I.

March 26, 2024

INTRODUCTION
This case arises out of Defendants’ purported sale of non-genuine goods bearing Plaintiff

Lutron Electronics Co., Inc.’s (hereinafter “Lutron”) registered trademarks. Plaintiff filed an
unopposed motion for default judgment against Defendants Leetronics Corporation (hereinafter
“Leetronics”) and Eliran Yadid (hereinafter “Yadid”). For the reasons set forth below, the
Motion is granted.
II.

BACKGROUND
The following facts are alleged in the Complaint. Lutron is a Pennsylvania based

company that markets and sells electronic lighting control products under several different word
marks registered with the United States Patent and Trademark Office. Compl., ECF No. 1, ¶¶ 1,
15, 18. Yadid is the chief executive officer of Leetronics, a New York based company that
operates an online Amazon storefront called “Fannys Gifts.” Id. ¶ 2, 4.
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Lutron contracts authorized sellers to sell its products to consumers. Id. ¶ 16. These
authorized sellers are required to follow Lutron’s quality control procedures when handling,
storing, and selling Lutron products. Id. ¶ 16, 17, 59. For instance, authorized sellers are
required to, inter alia, store products in a particular way, to sell products in their original,
unaltered packaging, and to inspect all Lutron products for damage, defects, alterations or
evidence of tampering. Id. ¶ 60-63. Authorized sellers are prohibited from selling damaged or
defective Lutron products and are required to remove any non-conforming products from their
inventory and report any discovered defects directly to Lutron. Id. ¶ 60. Additionally,
authorized sellers are prohibited from selling products to unauthorized sellers that intend to resell
the products. Id. ¶ 56. Authorized sellers that operate online are subject to additional
requirements, such as, inter alia, selling Lutron products only on websites owned and operated
by the authorized seller, having a mechanism to process and catalogue customer feedback,
sharing that feedback on Lutron products with Lutron, and not using third-party fulfillment
services like Amazon. Id. ¶¶ 74-82. Lutron products sold by unauthorized sellers, which do not
comply with all of the above quality control procedures, are not covered by Lutron’s limited
warranty agreement. Id. ¶¶ 88-92.
Leetronics, an unauthorized seller of Lutron products, has sold approximately 2,500
Lutron products using an online Amazon storefront. Id. ¶ 100. After sending multiple
unanswered cease-and-desist letters, Lutron filed a Complaint on August 25, 2023, asserting
trademark infringement, unfair trade practices under Pennsylvania law, common law tortious
interference, and violations of federal and Pennsylvania unfair competition laws. See Compl.
The Complaint and Summons were served on September 1, 2023. See ECF No. 6. Defendants
have failed to answer or otherwise appear before the Court. On September 28, 2023, the Clerk

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entered Default against Defendants for failure to plead or otherwise defend. See ECF No. 8.
Thereafter, Lutron filed the instant Motion for Default Judgment against Defendants. See Mot.,
ECF No. 9.
III.

LEGAL STANDARDS
A.

Default Judgment – Standard of Review

Federal Rule of Civil Procedure 55(b)(2) provides that a district court may enter default
judgment against a properly served defendant when a default has been entered by the Clerk of
Court. See Fed. R. Civ. P. 55(b)(2); see also Anchorage Assocs. v. Virgin Is. Bd. of Tax Rev., 922
F.2d 168, 177 n.9 (3d Cir. 1990). “It is well settled in this Circuit that the entry of a default
judgment is left primarily to the discretion of the district court.” Hritz v. Woma Corp., 732 F.2d
1178, 1180 (3d Cir. 1984). The Court considers three factors in determining whether to enter
default judgment: “(1) prejudice to the plaintiff if default is denied, (2) whether the defendant
appears to have a litigable defense, and (3) whether defendant’s delay is due to culpable
conduct.” Chamberlain v. Giampapa, 210 F.3d 154, 164 (3d Cir. 2000). In considering these
factors, the “court should accept as true the well-pleaded factual allegations of the complaint, but
the court need not accept the moving party’s legal conclusions[.]” Polidoro v. Saluti, 675 F.
App’x 189, 190 (3d Cir. 2017). Because “a party in default does not admit mere conclusions of
law[,]” the district court must “ascertain whether ‘the unchallenged facts constitute a legitimate
cause of action,’” before granting default judgment. Broad. Music, Inc. v. Spring Mt. Area
Bavarian Resort, LTD, 555 F. Supp. 2d 537, 541 (E.D. Pa. May 21, 2008) (citation omitted).

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B.

Trademark Infringement and Unfair Competition under the Lanham Act, 15
U.S.C. §§ 1114 and 1125(a)(1)(A) – Review of Applicable Law

To prevail on a trademark infringement or unfair competition claim under the Lanham
Act, a plaintiff must prove that “(1) the mark is valid and legally protectable; (2) the mark is
owned by the plaintiff; and (3) the defendant’s use of the mark to identify goods or services is
likely to create confusion concerning the origin of the goods or services.” Fisons Horticulture,
Inc. v. Vigoro Indus., 30 F.3d 466, 472 (3d Cir. 1994) (citing Ford Motor Co. v. Summit Motor
Products, Inc., 930 F.2d 277, 291 (3d Cir. 1991)).
C.

Common Law Unfair Competition – Review of Applicable Law

“Pennsylvania courts have recognized a cause of action for the common law tort of unfair
competition where there is evidence of, among other things, trademark, trade name, and patent
rights infringement, misrepresentation, tortious interference with contract, improper inducement
of another's employees, and unlawful use of confidential information.” Synthes (U.S.A.) v.
Globus Med., Inc., No. 04-CV-1235, 2005 WL 2233441 at *8, 2005 U.S. Dist. LEXIS 19962 at
*24-25 (E.D. Pa. Sep. 14, 2005). When analyzing a common law unfair competition claim in the
context of trademark law, courts treat this claim identically to a federal Lanham Act claim for
unfair competition. See, e.g., Flynn v. Health Advocate, Inc., 169 F. App’x 99, 101 (3d Cir.
2006) (“[T]he analysis for the federal and common law trademark infringement and the unfair
competition claims is virtually the same.”); R.J. Ants, Inc. v. Marinelli Enters., LLC, 771 F.
Supp. 2d 475, 489 (E.D. Pa. 2011) (“A Pennsylvania common law cause for unfair competition
is identical to the Lanham Act, without the federal requirement of interstate commerce.”).
D.

Unfair Trade Practices – Review of Applicable Law

Pennsylvania’s Unfair Trade Practices and Consumer Protection Law (“UTPCPL”)
provides a private cause of action for any “person who purchases or leases goods or services
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primarily for personal, family or household purposes and thereby suffers any ascertainable loss
of money or property, real or personal” due to a defendant’s unfair or deceptive acts, as defined
by the Act. 73 P.S. § 201-9.2(a). The overarching purpose of the Act is to protect consumers
from unfair or deceptive business practices in commercial transactions. Corsale v. Sperian
Energy Corp., 374 F. Supp. 3d 445, 459 (W.D. Pa. 2019) (explaining that the Act was enacted
“to even the bargaining power between consumers and sellers” (internal marks and citation
omitted)). The Act prohibits, among other things, unfair or deceptive acts that include
“fraudulent or deceptive conduct which creates a likelihood of confusion or of
misunderstanding.” 73 P.S. § 201-2(4)(xxi). To establish a UTPCPL claim for a “deceptive”
act, a plaintiff must allege “(1) a deceptive act [by the defendant], that is conduct that is likely to
deceive a consumer acting reasonably under similar circumstances; (2) the plaintiff[’s] justifiable
reliance on that deceptive act; and (3) that the plaintiff’s justifiable reliance resulted in
ascertainable loss.” Corsale, 374 F. Supp. 3d 445, 459. Because “[t]he Pennsylvania Supreme
Court requires plaintiffs who seek to establish a claim under [the UTPCPL catchall] provision to
prove the elements of common law fraud[,]” DeHart v. HomEq Servicing Corp., 679 Fed. Appx.
184, 188 (3d Cir. 2017), a UTPCPL claim is subject to the same heightened pleading standard as
a fraud claim. See Butakis v. NVR, Inc., No. 22-2971, 2023 U.S. Dist. LEXIS 59712, at *17
(E.D. Pa. April 5, 2023) (citation omitted).
E.

Tortious Interference – Review of Applicable Law

Under Pennsylvania law, to prevail on a claim for tortious interference with existing or
prospective contractual relationships, a party must prove: (1) the existence of a contractual or
prospective contractual or economic relationship between the plaintiff and a third party; (2)
purposeful action by the defendant, specifically intended to harm an existing relationship or

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intended to prevent a prospective relation from occurring; (3) the absence of privilege or
justification on the part of the defendant; (4) legal damage to the plaintiff as a result of the
defendant’s conduct, and (5) for prospective contracts, a reasonable likelihood that the
relationship would have occurred but for the defendant's interference. Acumed LLC v. Advanced
Surgical Servs., 561 F.3d 199, 212 (3d Cir. 2009) (citation omitted).
IV.

DISCUSSION
The Chamberlain factors support entering default judgment against Defendants

Leetronics and Yadid, whom this Court may appropriately exercise personal jurisdiction over,1
on the trademark infringement, unfair competition, and tortious interference claims, all of which
state legitimate causes of action. However, the Complaint does not state a legitimate cause of
action under the UTPCPL, and the unfair trade practice claim is dismissed sua sponte for lack of
standing. Therefore, and as further explained below, the Motion for Default Judgment is granted,
and Defendants Leetronics and Yadid are enjoined from the further sale of Lutron products.
A.

Trademark Infringement and Unfair Competition Claims
Lutron has alleged sufficient facts to constitute a legitimate cause of action for trademark

infringement and unfair competition under federal and Pennsylvania law. As an initial matter,
Lutron has shown that the marks at issue are valid, legally protectable, and owned by Lutron.
Lutron has its trademarks registered with the USPTO, which is sufficient evidence to show they

1

Although extensive discussion is not necessary in this case, the Court finds that Lutron
has sufficiently pled facts regarding Defendants’ purposeful sales and activities in and directed to
Pennsylvania in order for this Court to exercise personal jurisdiction over Defendants. Compl.
¶¶ 10-12, 101, 145-48 (alleging that Defendants have sold goods in Pennsylvania, specifically
even selling goods directly to Lutron, which is located in Pennsylvania, as well as alleging that
Defendants had knowledge that their goods were being shipped to and stored in Pennsylvania
through Leetronics’ online Amazon storefront and participation in the “Fulfillment by Amazon”
service).
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are valid as well as owned by Lutron. See 15 U.S.C. § 1115(b) (“[R]egistration shall be
conclusive evidence of the validity of the registered mark and of the registration of the mark, of
the registrant’s ownership of the mark, and of the registrant’s exclusive right to use the registered
mark in commerce.”). Therefore, the first two elements of Lutron’s claims for trademark
infringement and unfair competition are satisfied.
As to the third element, in cases such as this where the defendant is reselling products
manufactured by the plaintiff and bearing the plaintiff’s actual marks, a likelihood of consumer
confusion may be demonstrated by showing that the products sold by the defendant are
“materially different” from the plaintiff’s genuine products. See Iberia Foods Corp. v. Romeo,
150 F.3d 298, 303 (3d. Cir. 1998) (“When the products sold by the alleged infringer and the
trademark owner contain identical marks but are materially different, consumers are likely to be
confused about the quality and nature of the trademarked goods . . . In such circumstances, the
alleged infringer’s goods are considered ‘non-genuine’ and the sale of the goods constitutes
infringement.”). See also Spectrum Brands v. Arrow Merchs. LLC, No. 22-992, 2023 U.S. Dist.
LEXIS 21792, at *8 (D.N.J. Feb. 7, 2023) (explaining that, while typically the resale of products
is protected under the “first sale doctrine,” the sale of non-genuine products is not a defense to
trademark infringement) (citing Iberia Foods Corp., 150 F.3d at 301-02). Some courts have
found products to be materially different, and therefore non-genuine, if they do not meet the
plaintiff’s substantial, legitimate quality controls. See, e.g., General Nutrition Inv. Co. v. Laurel
Season, Inc., No. 20-691, 2020 U.S. Dist. LEXIS 154857, at *11 (W.D. Pa. Aug. 26, 2020)
(“The trademark holder must demonstrate only that: (i) it has established legitimate, substantial,
and nonpretextual quality control procedures, (ii) it abides by these procedures, and (iii) the nonconforming sales will diminish the value of the mark.” (citation omitted)); Spectrum Brands,

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2023 U.S. Dist. LEXIS 21792, at *10-12 (holding that “material differences in Defendant's
quality control, customer service, and warranty inclusion threaten to damage Plaintiff’s goodwill
with its customers. Such inferences are capable of sustaining a claim that Defendant’s products
are not ‘genuine’ because they are materially different from Plaintiff’s Products”).
Here, the third element for Lutron’s trademark and unfair competition claims is also
satisfied, because Lutron has adequately alleged that Defendants’ use of the Lutron trademarks is
likely to create consumer confusion due to the material differences from Lutron’s genuine
products and the products sold by Defendants. First, the Lutron products being sold by
Leetronics through its Amazon storefront are not subject to Lutron’s substantial quality control
measures, which are designed to ensure that Lutron products received by consumers are high
quality, non-defective, undamaged, and untampered with. Second, the Lutron products being
sold by Leetronics are ineligible for Lutron’s limited warranty agreement. The warranty is
material to consumers, particularly in this case where the consumers are online Amazon shoppers
unable to inspect the product before receipt, because consumers are more likely to purchase a
product when they know they can receive a refund for an unsatisfactory product. These facts
alleging material differences from genuine Lutron products suffice to demonstrate a likelihood of
consumer confusion.
B.

Tortious Interference Claim
Lutron has also sufficiently pled a tortious interference claim against Defendants. Lutron

has alleged the following facts: (1) Lutron has agreements with authorized sellers that prohibit
these sellers from selling Lutron products to any non-authorized sellers that intend to re-sell the
products; see Compl. ¶¶ 15-16, 55-58, 219-232, (2) Lutron sent several cease-and-desist letters to
Defendants which informed Defendants of these agreements, and nevertheless, Defendants
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continued to induce authorized sellers to sell them Lutron products, despite being on notice that
this caused the agreements to be breached; see Compl. ¶¶ 97-99, 225-227, (3) Defendants acted
without justification; see Compl. ¶¶ 138, 228, and (4) Lutron suffered damages and injury,
including the loss of sales and damage to its reputation and existing business relationships,
because of Defendants’ conduct. See Compl. ¶¶ 230-231. These allegations constitute a
legitimate cause of action for tortious interference.
C.

Unfair Trade Practices
The unchallenged facts do not constitute a legitimate cause of action for unfair trade

practices under the UTPCPL. The UTPCPL “is a remedial statute intended to protect consumers
from unfair or deceptive practices or acts[.]” Baldston v. Medtronic Sofamor Danek, Inc., 152 F.
Supp. 2d 772, 776 (E.D. Pa. 2001) (citing Commonwealth by Creamer v. Monumental Props.,
Inc., 329 A.2d 812, 816 (Pa. 1974)). Therefore, to bring a private action under the UTPCPL, the
plaintiff must be a “person” who made a purchase for “primarily . . . personal, family, or
household purposes.” Id. (cleaned up) (holding that the plaintiff, a doctor running a medical
practice, could not state a claim under the UTPCPL because the surgical screws purchased from
the defendants were for his business, and not personal use) (citing Valley Forge Towers S.
Condo. Ass’n v. Ron-Ike Foam Insulators, Inc., 574 A.2d 641, 645 (Pa. Super. 1990)); 73 Pa.
Stat. Ann. § 201-9.2(a).
Here, Lutron is not pursuing this litigation on behalf of its customers, nor does Lutron
allege that it purchased products from Leetronics for personal, family, or household purposes.
Lutron initiated this lawsuit for itself, seeking injunctive relief for business-related losses
sustained as a result of Defendants’ infringing conduct. Lutron has not even alleged any facts to
suggest that Lutron had any commercial dealings with Defendants, or that Lutron was misled
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into making a purchase from Leetronics because of misrepresentations made by Defendants.2
Therefore, given that Lutron does not have standing to bring this claim, the Court dismisses the
UTPCPL claim sua sponte for lack of jurisdiction. See Mohanan v. Liberty Mut. Pers. Ins. Co.,
No. 22-2956, 2023 U.S. Dist. LEXIS 207191, at *7 (E.D. Pa. Nov. 20, 2023) (“The Court can
raise challenges to standing sua sponte.”).
D.

Chamberlain Factors
Here, application of the three Chamberlain factors supports entry of default judgment

against Defendants on the trademark, unfair competition, and tortious interference claims. First,
denying the Motion would prejudice Lutron. Defendants’ utter failure to respond to the
Complaint in this case creates a potentially indefinite delay to Lutron’s ability to litigate its
claims, thereby establishing prejudice. See Spring Valley Produce, Inc. v. Stea Bros., No. 15193, 2015 WL 2365573, at *1 (E.D. Pa. May 18, 2015). See also Grove v. Rizzi, No. 04–2053,
2013 WL 943283, at *2 (E.D. Pa. March 12, 2013) (explaining that a plaintiff suffers prejudice
when denial of default judgment would “impair the plaintiff’s ability to effectively pursue his or
her claim”).
Second, Defendants do not appear to have a litigable defense. The Court may presume
that an absent defendant who has failed to answer has no meritorious defense, because “[i]t is not
the court’s responsibility to research the law and construct the parties’ arguments for

2

Although Lutron alleges that Lutron purchased an infringing product from Leetronics on
Amazon, the factual averments in the Complaint suggest that Lutron at all times knew Leetronics
was not an authorized seller and believed Leetronics to be selling infringing Lutron products
prior to that purchase. Therefore, the facts regarding the purchase in the Complaint suggest that
a purchase was made either to investigate this infringing conduct or to bolster Lutron’s personal
jurisdiction argument in preparation for this lawsuit, neither of which are purchases made
primarily for personal, family, or household purposes. This transaction is not of the type
contemplated by the UTPCPL.
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them[.]” Joe Hand Promotions, Inc. v. Yakubets, 3 F. Supp. 3d 261, 271-72 (E.D. Pa. 2014)
(quoting Econ. Folding Box Corp. v. Anchor Frozen Foods Corp., 515 F.3d 718, 721 (7th Cir.
2008)). Nonetheless, the Court has considered potentially applicable defenses to the trademark,
unfair competition, and tortious interference claims herein and has not found any applicable
defense to the facts at hand.
Third, Defendants’ delay in this case is due to culpable conduct. Despite receiving
several cease-and-desist letters and advance notice of this lawsuit, including a draft of the
complaint before this case was filed, Defendants have completely failed to respond, appear, or
otherwise defend against any of Lutron’s allegations. Therefore, Defendants’ “failure or refusal
to engage in the litigation process and to offer no reason for this failure or refusal may qualify as
culpable conduct with respect to the entry of a default judgment[.]” Joe Hand, 3 F. Supp. 3d at
272 (cleaned up) (citing E. Elec. Corp. of N.J. v. Shoemaker Constr. Co., 657 F. Supp. 2d 545,
554 (E.D. Pa. 2009)). See also Amerisourcebergen Drug Corp. v. Greenwall Pharm. Disc., Inc.,
No. 14-5812, 2016 U.S. Dist. LEXIS 172958, at *10 (E.D. Pa. Dec. 13, 2016) (holding that
“[t]here is nothing in the record to indicate that [the defendants’] failure to act in this case is due
to anything other than deliberate inaction, which should constitute culpable conduct and weigh in
favor of a default judgment”).
E.

Request for Injunctive Relief
A plaintiff seeking a permanent injunction must demonstrate: (1) that the moving party

has shown actual success on the merits; (2) that denial of injunctive relief will result in
irreparable harm to the moving party; (3) that granting the permanent injunction will result in
even greater harm to the defendant; and (4) that the injunction serves the public interest. See
Shields v. Zuccarini, 254 F.3d 476, 482 (3d Cir. 2001).
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Here, first, Lutron has shown a likelihood of success on the merits because it has
obtained a default judgment against Defendants for the reasons already given above. Second,
Lutron has also shown that it will suffer irreparable harm without an injunction because it alleges
that Defendants’ sale of infringing products has interfered with its ability to exercise quality
control over its products, caused consumers to receive poor-quality Lutron products, and has
resulted in negative reviews of Lutron’s products on Amazon, which hurt the goodwill of the
brand. Compl. ¶¶ 41-49, 149-143. Any continued infringement by Defendants will result in
further harm to Lutron’s reputation among consumers, as well as further interference with
Lutron’s business relationships. Third, granting an injunction will not harm Defendants, as it
will only prevent them from continuing to infringe on Lutron’s trademarks. Lastly, protecting
trademark owners’ rights against infringement serves the public interest. Cosmetic Warriors Ltd.
v. Nailush LLC, No. 17-1475, 2017 U.S. Dist. LEXIS 183886, at *19 (D.N.J. Nov. 6, 2017)
(comparing the public interest in protecting copyright holders to the similar public interest in
protecting trademark owners, holding that “the public has an interest in trademark protection so
that the public interest will not be disserved by issuing a permanent injunction that protects a
trademark from infringement”) (citing Apple Comput., Inc. v. Franklin Comput. Corp., 714 F.2d
1240, 1255 (3d Cir. 1983) (“Since Congress has elected to grant certain exclusive rights to the
owner of a copyright in a protected work, it is virtually axiomatic that the public interest can only
be served by upholding copyright protections[.]”)). Therefore, this Court finds that Lutron is
entitled to permanent injunctive relief.
V.

CONCLUSION
For the reasons discussed above, the Chamberlain factors support entering default

judgment against Defendants Leetronics and Yadid on the trademark infringement, unfair

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competition, and tortious interference claims, all of which state legitimate causes of action.
However, the Complaint does not state a legitimate cause of action under the UTPCPL, and
therefore the unfair trade practice claim is dismissed for lack of standing. Lutron’s Motion for
Default Judgment is granted, and Defendants are hereby enjoined from all future activity
infringing on Lutron’s trademarks.
A separate Order follows.
BY THE COURT:

/s/ Joseph F. Leeson, Jr._______
JOSEPH F. LEESON, JR.
United States District Judge

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