ROBIN S. ROSENBAUM, District Judge.
This cause is before the Court upon Plaintiff's Motion for Entry of Final Default Judgment against Defendants [ECF No. 31]. The Court has carefully considered the Motion and the entire case file, including the entry of default against Defendants [ECF No. 29], and is otherwise fully advised in the premises.
In the pending Motion [ECF No. 31], Plaintiff seeks the entry of default final judgment against Defendants
Plaintiff brought the instant action against Defendants for trademark counterfeiting and infringement under section 32(a) of the Lanham Act, 15 U.S.C. § 1114; false designation of origin under section 43(a) of the Lanham Act, 15 U.S.C. § 1125(a); and common-law unfair competition. ECF No. 1. The Complaint alleges that Defendants are promoting, advertising, distributing, offering for sale and selling counterfeit and infringing Plaintiff's branded products within the Southern District of Florida through fully interactive commercial Internet websites and commercial Internet iOffer auction stores operating under their partnership and/or association names identified on Schedule "A" to Plaintiff's Motion for Entry of Final Default Judgment (collectively the "Subject Domain Names and iOffer Auction Stores"). See ECF No. 31 at 16-17.
Plaintiff further asserts that Defendants' unlawful activities have caused and will continue to cause irreparable injury to Plaintiff because Defendants have (1) deprived Plaintiff of its right to determine the manner in which its trademarks are presented to the public through merchandising, (2) defrauded the public into thinking Defendants' goods are goods authorized by Plaintiff, (3) deceived the public as to Plaintiff's association with Defendants' goods and the websites that market and sell the goods, and (4) wrongfully traded and capitalized on Plaintiff's reputation and goodwill, as well as the commercial value of Plaintiff's trademarks.
Plaintiff, Under Armour, Inc., is the registered owner of the following valid trademark registrations, issued by the United States Patent and Trademark Office (collectively, the "Under Armour Marks"):
The Under Armour Marks are used in connection with the manufacture and distribution of goods in the categories identified above. See ECF No. 4-1 at ¶ 5; ECF No. 4-2 (containing Certificates of Registrations for the Under Armour Marks at issue).
Defendants, through the fully interactive commercial Internet websites and commercial iOffer Auction Stores, have advertised, promoted, offered for sale, or sold at least pants, shorts, t-shirts, shirts, polo shirts, tank tops, sports jerseys, sleeveless jerseys, wind-resistant jackets, underwear, socks, wristbands, hats, including baseball caps and visors, sports bags, backpacks, and toiletry bags, bearing what Plaintiff has determined to be counterfeits, reproductions, or colorable imitations of the Under Armour Marks. See ECF 4-1, ¶¶ 5, 9-14. Defendants are not now, nor have they ever been authorized or licensed to use, reproduce, or make counterfeits, reproductions, or colorable imitations of the Under Armour Marks. See ECF No. 4-1 at ¶ 9.
Plaintiff retained AED Investigations, Inc., a licensed private investigative firm, to investigate the sale of counterfeit and infringing Under Armour-branded products by Defendants. See ECF No. 4-1 at ¶ 10; ECF No. 4-4 at ¶ 4; ECF No. 4-10 at ¶ 3. Eric Rosaler ("Rosaler"), an officer of AED Investigations, Inc., accessed the Internet website operating under the Subject Domain Name,
Further, Rosaler accessed Internet websites operating under the Subject Domain Names identified on the table below and went through the purchasing process
See ECF Nos. 4-10 at ¶ 6; 4-13.
Rosaler also accessed the commercial Internet iOffer Auction Stores operating under the iOffer Auction Stores identified in the table below and went through the purchasing process
See ECF Nso. 4-10 at ¶ 7; 4-14.
Thereafter, the detailed web page listings, including images of the Under Armour-branded products purchased by Rosaler from the commercial Internet website operating under the Subject Domain Name, efeelsports.com, and the commercial Internet auction store operating under the iOffer Auction Store, hongtai8888, were reviewed by Plaintiff's representative, who determined the products to be non-genuine, unauthorized Under Armour products. See ECF No. 4-1 at ¶¶ 10-11. Plaintiff's representative also reviewed and visually inspected Defendants' websites and iOffer auction stores, as well as pictures of items bearing the Under Armour Marks offered for sale by Defendants via their Subject Domain Names and iOffer Auction Stores and likewise determined that the products offered for sale were non-genuine Under Armour products. See ECF No. 4-1 at ¶¶ 12-14.
On December 29, 2013, Plaintiff filed its Complaint against Defendants. See ECF No. 1. On December 30, 2013, Plaintiff filed its Ex Parte Application for Entry of Temporary Restraining Order, Preliminary Injunction, and Order Restraining Transfer of Assets Tied to the Counterfeiting Operation ["Application for Temporary Restraining Order"]. See ECF No. 4. On December 31, 2013, the Court entered an Order granting Plaintiff's Application for Temporary Restraining Order, see ECF No. 9, and subsequently converted the temporary restraining order into a preliminary injunction on January 14, 2014, see ECF No. 18. On February 14, 2014, Plaintiff filed its Motion for Order Authorizing Alternate Service of Process on Defendants Pursuant to Federal Rule of Civil Procedure 4(f)(3) ["Motion for Alternate Service of Process"]. See ECF No. 21. The Court entered an Order granting Plaintiff's Motion for Alternate Service of Process on February 19, 2014. See ECF No. 22. Pursuant to the Court's Order Authorizing Alternate Service of Process, on February 21, 2014, Plaintiff served each Defendant with their respective Summons and a copy of the Complaint via electronic mail ("e-mail") and via publication service. See ECF No. 31-1 at ¶ 7; ECF Nos. 25-27 (containing Proofs of Service as to Defendants).
As of the date of this Order, Defendants have failed to respond to the Complaint, despite the fact that the record reflects that Defendants were served in this case on February 21, 2014. See ECF Nos. 25-27. On April 1, 2014, Plaintiff filed its Request for Clerk's Entry of Default [ECF No. 28], and the Clerk subsequently entered default against each Defendant on April 2, 2014, for failure to appear, plead, or otherwise defend pursuant to Rule 55(a), Fed. R. Civ. P. See ECF No. 29. Plaintiff then moved for entry of Final Default Judgment. See ECF No. 31. On April 15, 2014, the Court issued an Order directing counsel for Plaintiff to serve a copy of the Order and the Motion for Default Judgment on Defendants so that they could respond to the motion if they wished to do so. ECF No. 33. The Court provided Defendants with seven days from the date of service to respond to the Motion for Default Judgment and directed Plaintiff to file a notice with the Court certifying the date upon which such service had been accomplished. Id. The Order also specifically warned that Defendants' "failure to timely respond may result in the granting of Plaintiff's Motion and the immediate entry of a default judgment against Defendants." Id. Plaintiff certified that it served Defendants with the Motion for Default Judgment on April 15, 2014. See ECF Nos. 34, 35. To date, however, Defendants have not responded to the Motion for Default Judgment, nor have Defendants responded to the Complaint.
Under Rule 55(a), Fed. R. Civ. P., if a defendant fails to plead or otherwise defend a complaint filed against it, the Clerk of Court may enter a default against that party. Once a default is entered, a plaintiff may seek entry of a default judgment against the defaulting defendant. Fed. R. Civ. P. 55(b).
By defaulting, a defendant is taken to admit the well-pleaded allegations of fact in a plaintiff's complaint. Eagle Hosp. Physicians, LLC v. SRG Consulting, Inc., 561 F.3d 1298, 1307 (11th Cir. 2009) (quoting Nishimatsu Const. Co., Ltd v. Houston Nat'l Bank, 515 F.2d 1200, 1206 (5th Cir. 1975)). Although facts are admitted as true, conclusions of law are not; a sufficient basis must still exist in the pleadings to state a claim before a court may enter a default judgment. Nishimatsu, 515 F.2d at 1206.
Section 32 of the Lanham Act, 15 U.S.C. § 1114, provides liability for trademark infringement if, without the consent of the registrant, a defendant uses "in commerce any reproduction, counterfeit, copy, or colorable imitation of a registered mark: which is likely to cause confusion, or to cause mistake, or to deceive." 15 U.S.C. § 1114. In order to prevail on its trademark infringement claim under Section 32 of the Lanham Act, Plaintiff must demonstrate that (1) it had prior rights to the mark at issue; and (2) Defendants adopted a mark or name that was the same, or confusingly similar to Plaintiff's trademark, such that consumers were likely to confuse the two. Planetary Motion, Inc. v. Techsplosion, Inc., 261 F.3d 1188, 1193 (11th Cir. 2001) (citing Lone Star Steakhouse & Saloon, Inc. v. Longhorn Steaks, Inc., 106 F.3d 355, 360 (11th Cir. 1997)).
To prevail on a claim for false designation of origin under Section 43(a) of the Lanham Act, 15 U.S.C. § 1125(a), Plaintiff must prove that Defendants used in commerce, in connection with any goods or services, any word, term, name, symbol or device, or any combination thereof, or any false designation of origin, that is likely to deceive as to the affiliation, connection, or association of Defendants with Plaintiff, or as to the origin, sponsorship, or approval, of Defendants' goods by Plaintiff. 15 U.S.C. § 1125(a)(1). The test for liability for false designation of origin under 15 U.S.C. § 1125(a) is the same as for a trademark counterfeiting and infringement claim—i.e., whether the public is likely to be deceived or confused by the similarity of the marks at issue. See Two Pesos, Inc. v. Taco Cabana, Inc., 505 U.S. 763, 780 (1992).
Whether a defendant's use of a plaintiff's trademarks created a likelihood of confusion between the plaintiff's and the defendant's products is also the determining factor in the analysis of unfair competition under Florida common law. Rolex Watch U.S.A., Inc. v. Forrester, No. 83-8381-Civ-Paine, 1986 WL 15668, at *3 (S.D. Fla. Dec. 9, 1987) ("The appropriate test for determining whether there is a likelihood of confusion, and thus trademark infringement, false designation of origin, and unfair competition under the common law of Florida, is set forth in John H. Harland, Inc. v. Clarke Checks, Inc., 711 F.2d 966, 972 (11th Cir. 1983)."); see also Boston Prof'l Hockey Ass'n v. Dallas Cap & Emblem Mfg., Inc., 510 F.2d 1004, 1010 ("As a general rule . . . the same facts which would support an action for trademark infringement would also support an action for unfair competition.").
The well-pled factual allegations of Plaintiff's Complaint properly allege the elements for each of the claims described above. See ECF No. 1 at ¶¶ 7-15, 25-33, 35-36, 38-40, 45-49, 53-55. Moreover, the factual allegations in Plaintiff's Complaint have been substantiated by sworn declarations and other evidence and establish Defendants' liability under each of the claims asserted in the Complaint. Accordingly, default judgment pursuant to Rule 55, Fed. R. Civ. P., is appropriate.
Pursuant to the Lanham Act, a district court is authorized to issue an injunction "according to the principles of equity and upon such terms as the court may deem reasonable," to prevent violations of trademark law. See 15 U.S.C. § 1116(a). Indeed, "[i]njunctive 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." Burger King Corp. v. Agad, 911 F.Supp. 1499, 1509-10 (S.D. Fla. 1995) (citing Century 21 Real Estate Corp. v. Sandlin, 846 F.2d 1175, 1180 (9th Cir. 1988)). Moreover, even in a default judgment setting, injunctive relief is available. See e.g., Petmed Express, Inc. v. Medpets.com, Inc., 336 F.Supp.2d 1213, 1222-23 (S.D. Fla. 2004). Defendants' failure to respond or otherwise appear in this action makes it difficult for Plaintiff to prevent further infringement absent an injunction. See Jackson v. Sturkie, 255 F. Supp. 2d. 1096, 1103 (N.D. Cal. 2003) ("[D]efendant's lack of participation in this litigation has given the court no assurance that defendant's infringing activity will cease. Therefore, plaintiff is entitled to permanent injunctive relief.")
Permanent injunctive relief is appropriate where a plaintiff demonstrates that (1) it has suffered irreparable injury; (2) there is no adequate remedy at law; (3) the balance of hardship favors an equitable remedy; and (4) an issuance of an injunction is in the public's interest. eBay, Inc. v. MercExchange, LLC, 547 U.S. 388, 392-93 (2006). Plaintiff has carried its burden on each of the four factors. Accordingly, permanent injunctive relief is appropriate.
Specifically, in trademark cases, "a sufficiently strong showing of likelihood of confusion. . . may by itself constitute a showing of a substantial threat of irreparable harm." McDonald's Corp. v. Robertson, 147 F.3d 1301, 1306 (11th Cir. 1998); see also Levi Strauss & Co. v. Sunrise Int'l Trading Inc., 51 F.3d 982, 986 (11th Cir. 1995) ("There is no doubt that the continued sale of thousands of pairs of counterfeit jeans would damage LS & Co.'s business reputation and might decrease its legitimate sales."). Plaintiff's Complaint alleges that Defendants' unlawful actions have caused Plaintiff irreparable injury and will continue to do so if Defendants are not permanently enjoined. See ECF No. 1 at ¶¶ 35, 43, 51, 56. Further, the Complaint alleges, and the submissions by Plaintiff show, that the goods promoted, advertised, offered for sale, and sold by Defendants are nearly identical to Plaintiff's genuine products and that consumers viewing Defendants' counterfeit goods post-sale would actually confuse them for Plaintiff's genuine products. See ECF No. 1 at ¶ 33. "The net effect of Defendants' actions will cause confusion of consumers who will believe Defendants' Counterfeit Goods are genuine goods originating from, associated with, and approved by Under Armour." See ECF No. 1 at ¶ 26.
Plaintiff has no adequate remedy at law so long as Defendants continue to operate the Subject Domain Names and iOffer Auction Stores because Plaintiff cannot control the quality of what appears to be its products in the marketplace. See ECF No. 1 at ¶¶ 34, 41, 51, 56. An award of money damages alone will not cure the injury to Plaintiff's reputation and goodwill that will result if Defendants' infringing and counterfeiting actions are allowed to continue. Moreover, Plaintiff faces hardship from loss of sales and its inability to control its reputation in the marketplace. By contrast, Defendants face no hardship if they are prohibited from the infringement of Plaintiff's trademarks, which is an illegal act.
Finally, the public interest supports the interest in the issuance of a permanent injunction against Defendants to prevent consumers from being misled by Defendants' products. See Nike, Inc. v. Leslie, No. 85-960-15, 1985 WL 5251, at *1 (M.D. Fla. June 24, 1985) ("[A]n injunction to enjoin infringing behavior serves the public interest in protecting consumers from such behavior.").
The Court's broad equity powers allow it to fashion injunctive relief necessary to stop the Defendants' infringing activities. See, e.g., Swann v. Charlotte-Mecklenburg Bd. of Educ., 402 U.S. 1, 15 (1971) ("Once a right and a violation have been shown, the scope of a district court's equitable powers to remedy past wrongs is broad, for . . . [t]he essence of equity jurisdiction has been the power of the Chancellor to do equity and to mold each decree to the necessities of the particular case." (internal quotation marks omitted; citation omitted)); United States v. Bausch & Lomb Optical Co., 321 U.S. 707, 724 (1944) ("Equity has power to eradicate the evils of a condemned scheme by prohibition of the use of admittedly valid parts of an invalid whole."). District courts are expressly authorized to order the transfer or surrender of domain names in an in rem action against a domain name. See 15 U.S.C. § 1125(d)(1)(C), (d)(2). However, courts have not limited the remedy to that context. See, e.g., Philip Morris USA v. Otamedia Ltd., 331 F.Supp.2d 228, 230-31 (S.D.N.Y. 2004) (transferring Yesmoke.com domain name to plaintiff despite the fact that plaintiff did not own a trademark in the term "Yesmoke" and noting that 15 U.S.C. § 1125 "neither states nor implies that an in rem action against the domain name constitutes the exclusive remedy for a plaintiff aggrieved by trademark violations in cyberspace"); Ford Motor Co. v. Cross, 441 F.Supp.2d 837, 853 (E.D. Mich. 2006) (ordering the defendants to disclose all other domain registrations held by them and to transfer registration of a particular domain name to plaintiff in part under authority of 15 U.S.C. § 1116(a)).
Defendants have created an Internet-based counterfeiting scheme in which they are profiting from their deliberate misappropriation of Plaintiff's rights. Accordingly, the Court may fashion injunctive relief to eliminate the means by which Defendants are conducting their unlawful activities. Ordering the cancellation or transfer of the Subject Domain Names identified on Schedule "B" of Plaintiff's Motion for Entry of Final Default Judgment [ECF No. 31 at 18-21] to Plaintiff, where they may be disabled from further use as platforms for the sale of counterfeit goods, is appropriate to achieve this end.
In a case involving the use of counterfeit marks in connection with a sale, offering for sale, or distribution of goods, 15 U.S.C. § 1117(c) provides that a plaintiff may elect an award of statutory damages at any time before final judgment is rendered in the sum of not less than $1,000.00 nor more than $200,000.00 per counterfeit mark per type of good. 15 U.S.C. § 1117(c)(1). In addition, if the Court finds that Defendants' counterfeiting actions were willful, it may impose damages above the maximum limit up to $2,000,000.00 per mark per type of good. 15 U.S.C. § 1117(c)(2). Pursuant to 15 U.S.C. § 1117(c), Plaintiff has elected to recover an award of statutory damages as to Count I of the Complaint.
The Court has wide discretion to determine the amount of statutory damages. Petmed Express, Inc., 336 F. Supp. 2d at 1219 (citing Cable/Home Commc'n Corp. v. Network Prod., Inc., 902 F.2d 829, 852 (11th Cir. 1990)). An award of statutory damages is appropriate despite a plaintiff's inability to provide actual damages caused by a defendant's infringement. Ford Motor Co. v. Cross, 441 F.Supp.2d 837, 852 (E.D. Mich. 2006) ("[A] successful plaintiff in a trademark infringement case is entitled to recover enhanced statutory damages even where its actual damages are nominal or non-existent."); Playboy Enter., Inc. v. Universal Tel-A-Talk, Inc., et al., No. Civ. A. 96-6961, 1998 WL 767440, at *8 (E.D. Pa. Nov. 3, 1998) (awarding statutory damages where plaintiff failed to prove actual damages or profits). Indeed, Congress enacted a statutory damages remedy in trademark counterfeiting cases because evidence of a defendant's profits in such cases is almost impossible to ascertain. See, e.g., S. REP. NO. 104-177, pt. V(7) (1995) (discussing purposes of Lanham Act statutory damages); see also Petmed Express, Inc., 336 F. Supp. 2d at 1220 (statutory damages are "especially appropriate in default judgment cases due to infringer nondisclosure"). This case is no exception.
Here, the allegations in the Complaint, which are taken as true, clearly establish that Defendants intentionally copied the Under Armour Marks for the purpose of deriving the benefit of Plaintiff's international reputation. Regardless, Defendants have defaulted on Plaintiff's allegations of willfulness. See ECF No. 1 at ¶ 32; see also Arista Records, Inc. v. Beker Enter., Inc., 298 F.Supp.2d 1310, 1313 (S.D. Fla. 2003) (finding that a court may infer willfulness from the defendants' default); Petmed Express, Inc., 336 F. Supp. 2d at 1217 (upon default, well-pled allegations are taken as true)). The Lanham Act permits the Court to award up to $2,000,000.00 dollars per infringing mark on each type of good as statutory damages to ensure that Defendants do not continue their intentional and willful counterfeiting activities.
The only available evidence in this case demonstrates that Defendants distributed, advertised, offered for sale, or sold at least seventeen types of goods—pants, shorts, t-shirts, shirts, polo shirts, tank tops, sports jerseys, sleeveless jerseys, wind-resistant jackets, underwear, socks, wristbands, baseball caps, visors, sports bags, backpacks, and toiletry bags—bearing marks that were in fact counterfeits of the Under Armour Marks protected by six federal trademark registrations for such goods. See ECF Nos. 1, ¶¶ 16, 25-33, 38-40; 4-1 at ¶¶ 5, 9-14. Based on the above considerations, Plaintiff has asked the Court to begin with the baseline statutory minimum award of $3,000.00 per trademark infringed, treble that amount in light of Defendants' willful infringement, and again double it for purposes of deterrence. This yields $18,000.00 in statutory damages per trademark infringed. Six marks were infringed across the seventeen types of goods counterfeited, so Plaintiff is entitled to $1,836,000.00 in statutory damages. The award should be sufficient to deter Defendants and others from continuing to counterfeit or otherwise infringe Plaintiff's trademarks, compensate Plaintiff, and punish Defendants, all stated goals of 15 U.S.C. § 1117(c). The Court finds that this award of statutory damages is just.
Plaintiff also requests the Court award costs in the total amount of $750.00, consisting of the filing fee ($400.00) and the process server fee ($350.00). See ECF No. 31-1 ¶¶ 13-14). Plaintiff is entitled to these costs. See 15 U.S.C. § 1117(a); 28 U.S.C. § 1920.
For the foregoing reasons, it is
