FINDINGS AND RECOMMENDATION REGARDING PLAINTIFF'S MOTION FOR DEFAULT JUDGMENT

(Document 9)

DENNIS L. BECK, Magistrate Judge.

On June 1, 2012, Plaintiff Exxon Mobil Corporation filed the instant motion for default judgment against Defendant Future Group LLC. The motion was referred to this Court pursuant to 28 U.S.C. § 636(b)(1)(B) and Local Rule 304. The matter was heard on June 29, 2012, before the Honorable Dennis L. Beck, United States Magistrate Judge. Aaron Davidson appeared telephonically on behalf of Plaintiff Exxon Mobil Corporation. Defendant Future Group LLC did not appear.

PROCEDURAL BACKGROUND

Plaintiff Exxon Mobil Corporation ("Plaintiff") filed this trademark infringement, unfair competition and dilution action on March 26, 2012, against Defendant Future Group LLC ("Defendant"). By its complaint, Plaintiff seeks injunctive relief, treble damages, an accounting and reasonable attorney fees and costs.

On March 27, 2012, Plaintiff personally served Defendant's registered agent for service, Speigel & Utrera, P.A. The process server provided David Wright, a clerk authorized to accept service, a copy of the summons, complaint and related documents. Doc. 7. Defendant did not file an answer to the complaint or any other responsive pleading.

On June 1, 2012, Plaintiff filed the instant motion for entry of default and default judgment. Defendant has not filed an opposition or otherwise contacted the Court.

FACTUAL BACKGROUND1

Since 1934, Plaintiff has continuously used the trademark and service mark MOBIL in connection with a variety of products and services, including the sale and promotion of motor oils, lubricant, motor fuels, chemical products and automotive lubrication services. Since 1966, Plaintiff has presented its MOBIL mark in a distinctive stylized format. Additionally, Plaintiff has used its MOBIL 1 mark in connection with its motor oil product and has used its MOBIL 1 LUBE EXPRESS mark to promote the sale of engine lubricants and automotive lubrication services. Plaintiff owns several federal trademark registrations for these MOBIL marks (collectively "MOBIL Marks").

Defendant is displaying signs bearing the MOBIL Marks at its quick lube facility located at 6611 Rosedale Highway, Bakersfield, California 93308. Defendant's use of the MOBIL Marks is without Plaintiff's permission or authority.

On July 5, 2011, Plaintiff sent Defendant notice of its intellectual property rights and Defendant's trademark violations. Plaintiff demanded that Defendant cease and desist from using and infringing the MOBIL Marks. When Defendant failed to respond, Plaintiff's counsel sent cease and desist letters to Defendant on November 8, 2011, and January 6, 2012. Defendant failed to respond to the cease and desist letters. Instead, after the November 8, 2011 letter, Defendant modified its signs to add an "L" to the end of the MOBIL mark. Defendant continues to display signs bearing the MOBIL Mark.

DISCUSSION

I. Entry of Default

Federal Rule of Civil Procedure 55(a) provides:

Fed. R. Civ. P. 55(a). Here, Plaintiff served Defendant on March 27, 2012, through Defendant's registered agent for service of process. Defendant's answer or responsive pleading was due on April 17, 2012. Defendant did not serve or file an answer or otherwise respond to the complaint. Declaration of Kevin Cadwell ("Cadwell Dec.") ¶¶ 4-5. Therefore, the Court recommends that the Clerk of the Court be directed to enter Defendant Future Group LLC's default.

II. Default Judgment

A. Legal Standard

Pursuant to Federal Rule of Civil Procedure 55(b)(2), a plaintiff can apply to the court for a default judgment against a defendant that has failed to plead or otherwise defend against the action. Fed. R. Civ. P. 55(b)(2). "Upon default, the well-pleaded allegations of a complaint relating to liability are taken as true." Dundee Cement Co. v. Howard Pipe & Concrete Products, Inc., 722 F.2d 1319, 1323 (7th Cir. 1983); TeleVideo Systems, Inc. v. Heidenthal, 826 F.2d 915, 917-18 (9th Cir. 1987). Thus, "[a]t the time of entry of default, the facts alleged by the plaintiff in the complaint are deemed admitted." 10 J. Moore, Moore's Federal Practice § 55.11 (3d ed. 2000).

Factors which may be considered by courts in exercising discretion as to the entry of a default judgment include: (1) the possibility of prejudice to the plaintiff; (2) the merits of plaintiff's substantive claim; (3) the sufficiency of the complaint; (4) the sum of money at stake in the action; (5) the possibility of a dispute concerning material facts; (6) whether the default was due to excusable neglect; and (7) the strong policy underlying the Federal Rules of Civil Procedure favoring decisions on the merits. Eitel v. McCool, 782 F.2d 1470, 1471-1472 (9th Cir. 1986).

B. Eitel Factors

1. Possibility of Prejudice to the Plaintiff

Defendant has failed to respond or appear in this action. As a result, Plaintiff will be without options for defending its trademark rights if a default judgment and a permanent injunction are not entered in its favor. Accordingly, this factor weighs in favor of granting default judgment.

i. Federal Trademark Infringement, Federal Unfair Competition and Unfair Competition under California law

To prevail on its claims of trademark infringement and unfair competition, Plaintiff must show that: (1) it has a valid, protectable trademark, and (2) that Defendant's use of the mark is likely to cause confusion. See Applied Info. Scis. Corp. v. eBAY, Inc., 511 F.3d 966, 969 (9th Cir. 2007); see also Century 21 Real Estate Corp. v. Sandlin, 846 F.2d 1175, 1178-80 (9th Cir. 1988) ("ultimate test for unfair competition is exactly the same for trademark infringement: whether the public is likely to be deceived or confused by the similarity of the marks") (internal quotations and citation omitted); Jada Toys, Inc. v. Mattel, Inc., 518 F.3d 628, 631-32 (9th Cir. 2008).

Here, Plaintiff alleges the facts necessary to establish trademark infringement and unfair competition by Defendant's use of the MOBIL Marks. First, Plaintiff owns valid and protectable registered trademarks. Complaint ¶¶ 11-21, 22 and Exhibit A. Registration of a mark on the principal register is prima facie evidence of the validity of the marks. Applied Info., 511 F.3d at 970.

Second, Defendant's continued use of the MOBILL mark on its storefront is likely to cause confusion, mistake and deception of customers and potential customers. Complaint ¶¶ 23, 35, 38 44, and Exhibit B3; Declaration of Michael O'Leary ("O'Leary Dec.") ¶ 2 and Exhibit A. In the Ninth Circuit, courts review eight so-called Sleekcraft factors when considering whether to find a likelihood of confusion: (1) the similarity of the marks; (2) the relatedness of the two parties' goods or services; (3) the marketing channels used; (4) the strength of the mark; (5) the defendant's intent in selecting the mark; (6) any evidence of actual confusion; (7) the likelihood of expansion into other markets; and (8) the degree of care likely to be exercised by purchasers. AMF Inc. v. Sleekcraft Boats, 599 F.2d 341, 348-49 (9th Cir. 1979). This "eight-factor test for likelihood of confusion is pliant" and "[s]ome factors much more important than others, and the relative importance of each individual factor will be case-specific." Brookfield Commc'ns, Inc. v. West Coast Entm't Corp., 174 F.3d 1036, 1045 (9th Cir. 1999).

As to similarity, the marks are nearly identical, i.e., MOBIL v. MOBILL, and the addition of a letter is not sufficient to remove any likelihood of confusion. See, e.g., Brookfield, 174 F.3d at 1055 ("moviebuff.com" likely to be confused with "MovieBuff"); Park `n Fly, Inc. v. Dollar Park and Fly, Inc., 782 F.2d 1508, 1509 (9th Cir. 1986) ("two marks, "Park `N Fly" and "Park and Fly," are virtually identical"). As to relatedness of good or services, the products and services are nearly identical since Plaintiff sells and promotes motor oils and lubricants in connection with automotive lubrication services and Defendant operates a quick lube facility offering oil changes. As to marketing channels, both Plaintiff and Defendant sell their products directly to the public at the retail level. As to strength of marks, the MOBIL Marks are strong, with registered trademarks and continuous use. As to intent, an inference of bad faith is warranted given Defendant's use of the marks after receipt of cease and desist letters. As to confusion, this factor is not dispositive. See Park `n Fly, 782 F.2d at 1509. As to likelihood of expansion, this factor is insignificant because the goods and services provided by the parties are identical. Brookfield, 174 F.3d at 1060 ("likelihood of expansion in product lines factor is relatively unimportant where two companies already compete to a significant extent"). As to the degree of care of consumers, it is likely that potential purchasers will not exercise a high degree of care because motor oil and automotive lubrication services are not generally high priced items. Plaintiff demonstrates a likelihood of confusion under the Sleekcraft factors.

Accordingly, taking the factual allegations in the complaint as true, Plaintiff has stated claims for trademark infringement under federal law and for unfair competition under federal and state law.

ii. Federal and State Dilution

Plaintiff brings dilution claims under both federal and California law. The analysis under each is the same. Jada Toys, 518 F.3d at 634. To prevail on its dilution claims, Plaintiff must show that (1) the mark is famous and distinctive; (2) Defendant is making use of the mark in commerce; (3) Defendant's use began after the mark became famous; and (4) Defendant's use of the mark is likely to cause dilution by blurring or dilution by tarnishment. Id. Here, Plaintiff alleges that the MOBIL Marks are famous, Defendant is making use of the MOBIL Marks in commerce, Defendant's use began after the MOBIL Marks became famous and Defendant's unauthorized use is likely to cause dilution of the famous MOBIL Marks. Complaint ¶¶ 18-20, 23, 26, 28, 35. Taking the allegations in the complaint as true, the Court finds that Plaintiff has stated a claim for dilution under federal and state law.

Based on the above, the Court finds that the merits of substantive claims and sufficiency of the complaint weigh in favor of granting default judgment.

2. Remainder of Eitel Factors

With regard to the amount of money at stake, Plaintiff is not now seeking monetary damages for its infringement claims, only an injunction. As to a dispute over material facts, Defendant has not appeared to suggest a dispute. There also is no evidence that Defendant's default was due to excusable neglect. Thus, the Court finds that the remaining Eitel factors favor default judgment.

C. Injunctive Relief

Plaintiff seeks injunctive relief to enjoin Defendant's use of the MOBIL Marks. Under the Lanham Act, injunctive relief is available to prevent future trademark infringement. See 15 U.S.C. § 1116(a) (court has power to grant injunctions to prevent violation of any right of the registrant of a registered mark); Century 21 Real Estate Corp., 846 F.2d at 1180-81 ("Injunctive relief is the remedy of choice for trademark and unfair competition cases, since there is no adequate remedy at law for the injury caused by a defendant's continuing infringement."). A plaintiff seeking a permanent injunction must demonstrate: (1) that it has suffered an irreparable injury; (2) that remedies available at law, such as monetary damages, are inadequate to compensate for that injury; (3) that, considering the balance of hardships between the plaintiff and defendant, a remedy in equity is warranted; and (4) that the public interest would not be disserved by a permanent injunction. Reno Air Racing Ass'n., Inc. v. McCord, 452 F.3d 1126, 1138 n. 11 (9th Cir. 2006). Here, Plaintiff contends that it has suffered irreparable injury by Defendant's unauthorized use of the MOBIL Marks, there are no remedies at law to compensate Plaintiff, injunctive relief would not harm Defendant because it could continue to operate a quick lube facility, and a permanent injunction will prevent consumer deception or confusion. The Court recommends entry of a permanent injunction to prevent Defendant from any future infringement of Plaintiff's marks and to enjoin unauthorized use of Defendant's Mobil Marks.

D. Attorneys' Fees and Costs

Finally, Plaintiff seeks an award attorneys' fees and costs pursuant to the Lanham Act. Attorneys' fees may be awarded to the prevailing party under the Lanham Act in exceptional cases. See 15 U.S.C. § 1117(a). A case is exceptional where the defendant is found to have acted maliciously, fraudulently, deliberately or willfully. See Earthquake Sound Corp. v. Bumper Indus, 352 F.3d 1210, 1216 (9th Cir. 2003). In the Complaint, Plaintiff alleges that Defendant knowingly infringed on the MOBIL Marks and willfully intended to trade on Plaintiff's reputation. Complaint ¶¶ 35-36. Plaintiff requests attorney fees in the amount of $15,496.34. Cadwell Dec. ¶ 3.

Plaintiff also requests legal expenses in the amount of $42.14 and court costs in the amount of $619.00. Cadwell Dec. ¶ 13. The Lanham Act permits a plaintiff to recover the costs of the action. 15 U.S.C. § 1117(a); see also World Triathalon Corp. v. Dunbar, 539 F.Supp.2d 1270 (D.Haw. 2008) (court adopted special master's report that included finding that costs and out of pocket expenses such as postage and messenger service are recoverable under Lanham Act); Levi Strauss & Co. v. Fox Hollow Apparel Group, LLC, 2007 WL 1140648 (N.D.Cal. 2007) (finding amount for costs of $874.66 reasonable in light of the funds expended for court filings, service of process, and collecting evidence in trademark infringement action). The Court recommends that Plaintiff be awarded its attorneys' fees and costs.

RECOMMENDATION

For the reasons discussed above, the Court HEREBY RECOMMENDS that:

These Findings and Recommendations are submitted to the Honorable Anthony W. Ishii, United States District Court Judge, pursuant to the provisions of 28 U.S.C. § 631(b)(1)(B) and Rule 304 of the Local Rules of Practice for the United States District Court, Eastern District of California. Within fourteen (14) days after being served with a copy, any party may serve on opposing counsel and file with the court written objections to such proposed findings and recommendations. Such a document should be captioned "Objections to Magistrate Judge's Findings and Recommendations." Replies to the objections shall be served and filed within fourteen (14) days after service of the objections. The Court will then review the Magistrate Judge's ruling pursuant to 28 U.S.C. § 636 (b)(1).

IT IS SO ORDERED.