Cornwell Quality Tools v. Woods et al

Filing 22

MEMORANDUM DECISION AND ORDER granting in part and denying in part 20 Motion for Default Judgment. Signed by Judge Jill N. Parrish on 6/3/24. (dle)

IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF UTAH
CORNWELL QUALITY TOOLS
COMPANY,

MEMORANDUM DECISION AND ORDER
GRANTING IN PART AND DENYING IN
PART MOTION FOR DEFAULT
JUDGMENT

Plaintiff,
v.
SHANE WOODS, MARYLOU WOODS,
and WOODS FAMILY TOOLS, LLC,

Case No. 2:24-cv-00138-JNP-DBP
District Judge Jill N. Parrish

Defendants.

Before the court is plaintiff Cornwell Quality Tools Company’s motion for a default
judgment against two of the three defendants in this case: Shane Woods and Woods Family Tools,
LLC (the defaulting defendants). ECF No. 20. The relief that Cornwell seeks is a permanent
injunction prohibiting the defaulting defendants from using its trademarks and requiring these
defendants to remove the trademarks from a business vehicle and to “surrender for destruction all
decals, labels, stationery, business cards, invoices, packaging, containers, advertising materials,
uniforms or any other business equipment or marketing materials in their possession which
displays Cornwell’s Marks.” The court GRANTS IN PART and DENIES IN PART Cornwell’s
motion for a default judgment.
BACKGROUND
Cornwell is a company that manufactures and sells automotive tools. Since 1920, it has
used in commerce variations of the trade name “Cornwell,” as well as other trademarks associated
with its products. Cornwell’s trademarks are registered with the U.S. Patent and Trademark Office
(PTO).

In June 2022, Conwell entered into a franchise agreement with the defaulting defendants.
Under the agreement, the defaulting defendants obtained a limited license to use the Cornwell
trademarks to sell Cornwell’s products. In October 2023, Cornwell terminated the agreement. As
a result, the defaulting defendants were no longer authorized to use the trademarks. The defaulting
defendants, nonetheless, continued to use the trademarks by failing to remove them from a tool
truck owned and operated by the defendants in their business.
In February 2024, Cornwell sued Shane Woods, Marylou Woods, and Woods Family Tools,
LLC. Cornwell asserted a number of causes of action, including a claim for trademark
infringement under the Lanham Act. Cornwell served the complaint on Shane Woods and Woods
Family Tools, who defaulted by failing to file a timely answer. Cornwell did not file a return of
service for Marylou Woods. Cornwell then moved for a default judgment against the defaulting
defendants on its Lanham Act trademark infringement claim. Cornwell does not seek damages in
its motion for a default judgment. Instead, it requests a permanent injunction prohibiting the
defaulting defendants from using its trademarks.
LEGAL STANDARD
In evaluating a motion for default judgment, the court accepts all of the well-pled factual
allegations of the complaint as true. Equal Emp. Opportunity Comm’n v. Roark-Whitten Hosp. 2,
LP, 28 F.4th 136, 157 (10th Cir. 2022). “[E]ntry of a default judgment is committed to the sound
discretion of the district court . . . .” Tripodi v. Welch, 810 F.3d 761, 764 (10th Cir. 2016); accord
10A CHARLES ALAN WRIGHT & ARTHUR R. MILLER, FEDERAL PRACTICE AND PROCEDURE § 2685
(4th ed. 2022) (“[T]he district judge is required to exercise sound judicial discretion in determining
whether [a default] judgment should be entered.”).

2

ANALYSIS
Cornwell argues that it is entitled to a default judgment on its Lanham Act trademark
infringement claim. “To prevail under Section 43(a) [of the Lanham Act], a plaintiff must show
‘(1) that the plaintiff has a protectable interest in the mark; (2) that the defendant has used an
identical or similar mark in commerce; and (3) that the defendant’s use is likely to confuse
customers.’” Underwood v. Bank of Am. Corp., 996 F.3d 1038, 1052 (10th Cir. 2021) (citation
omitted). The allegations of the complaint satisfy these elements. Cornwell asserts that it has
registered a number of trademarks with the PTO. Cornwell further alleges that the defaulting
defendants used several of these trademarks in commerce by failing to remove them from a work
truck that is used in their business of selling tools. Finally, this use is likely to confuse customers.
By displaying the protected trademarks on the truck, customers will likely assume that the
defaulting defendants continue to be authorized dealers of Cornwell’s products despite the
termination of the franchise agreement.
The only remedy that Cornwell seeks for the defaulting defendant’s infringement of its
trademark rights is a permanent injunction. The Lanham Act authorizes courts to grant injunctive
relief to prevent further violations of a trademark holder’s rights. 15 U.S.C. § 1116(a). “For a party
to obtain a permanent injunction, it must prove: ‘(1) actual success on the merits; (2) irreparable
harm unless the injunction is issued; (3) the threatened injury outweighs the harm that the
injunction may cause the opposing party; and (4) the injunction, if issued, will not adversely affect
the public interest.’” Prairie Band Potawatomi Nation v. Wagnon, 476 F.3d 818, 822 (10th Cir.
2007) (citation omitted). As noted above, Cornwell has succeeded on the merits of its trademark
infringement claim. Additionally, Cornwell is “entitled to a rebuttable presumption of irreparable
harm upon a finding of a violation” of the Lanham Act. 15 U.S.C. § 1116(a). Because it has not
3

been rebutted, the presumption of irreparable harm stands. Moreover, the threatened injury caused
by the defaulting defendants’ continued unauthorized use of the trademarks outweighs any harm
that an injunction may cause to the defendants. A permanent injunction would only require the
defaulting defendants to cease its infringement of Cornwell’s trademark rights. Any incidental
costs to the defaulting defendants would not override the threatened injury to Cornwell. See Core
Progression Franchise LLC v. O’Hare, No. 21-1151, 2022 WL 1741836, at *4 (10th Cir. May 31,
2022) (unpublished) (“Harms that a party brings on himself generally bear less weight in this
balancing analysis.”). Finally, a permanent injunction will not adversely affect the public interest.
To the contrary, an injunction will benefit the public by helping to avoid customer confusion.
Accordingly, Cornwell is entitled to a permanent injunction because it has satisfied all of the
requirements for injunctive relief.
The court must, of course, determine the appropriate scope of a permanent injunction.
Cornwell seeks a broad injunction prohibiting the defaulting defendants from using its trademarks
and requiring these defendants to remove the trademarks from a business vehicle and to “surrender
for destruction all decals, labels, stationery, business cards, invoices, packaging, containers,
advertising materials, uniforms or any other business equipment or marketing materials in their
possession which displays Cornwell’s Marks.” But the allegations of the complaint do not support
the full scope of the requested injunction. The complaint alleges that after Cornwell terminated the
franchise agreement, the defaulting defendants continued to use a work truck baring Cornwell’s
trademarks. Based on this allegation, Cornwell is entitled to an injunction generally prohibiting
the defaulting defendants from using its trademarks in commerce and requiring the defendants to
remove the trademarks from the truck and to refrain from selling the truck until the trademarks are
removed. The complaint, however, is devoid of any assertion that the defaulting defendants made
4

any other commercial use of the trademarks. Absent allegations that the defaulting defendants
made any other commercial use of the trademarks, Cornwell is not entitled to the broader
injunction that it requests.
Thus, based on the facts alleged in the complaint, the court permanently enjoins the
defaulting defendants as follows:
Shane Woods and Woods Family Tools, LLC (the defendants) are
hereby permanently enjoined from using in commerce Cornwell
Quality Tools Company’s trademarks (U.S. Trademark Registration
Numbers 747,209; 747,210; 1,139,026; 1,150,695; 1,163,457;
1,276,492; 1,276,565; 2,497,549; 2,514,179; 2,533,695; 3,456,834;
3,470,727; 3,494,755; 3,548,901; 3,855,015; 3,920,502; 4,449,249;
4,645,512; 4,649,553; 4,898,747 and 4,926,021). The defendants
must remove these trademarks from their work vehicle and may not
sell the vehicle before removing the marks.
Finally, the court notes that Cornwell seeks entry of judgment against fewer than all of the
defendants in this case because Cornwell did not serve the complaint on Marylou Woods. Pursuant
to Rule 54(b) of the Federal Rules of Civil Procedure, the court finds that there is no just reason
for delay and will enter a final default judgment against defendants Shane Woods and Woods
Family Tools, LLC without further notice.
CONCLUSION
For the above reasons, the court grants in part and denies in part Cornwell’s motion for a
default judgment. The court will enter a default judgment permanently enjoining the defaulting
defendants from using Cornwell’s trademarks in commerce.
DATED June 3, 2024.
BY THE COURT
______________________________
Jill N. Parrish
United States District Court Judge
5