MARTIN REIDINGER, District Judge.
The Plaintiff Migun Life, Inc. commenced this action against the Defendants Larry Cox, Massage Energy, LLC, and Immunity for Life, LLC (collectively, "Defendants") on August 14, 2017, asserting claims for trademark infringement and false designation of origin under the Lanham Act, 15 U.S.C. §§ 1114 and 1125(a); a claim for reverse passing off, under the Anticybersquatting Consumer Protection Act, 15 U.S.C. § 1125(d)(1)(A) ("ACPA"); and a claim for unfair and deceptive trade practices under North Carolina law, N.C. Gen. Stat. § 75-1.1 ("Chapter 75"). [Doc. 1].
Each Defendant was properly served with the Summons and Complaint but failed to answer or otherwise defend. Accordingly, the Court entered default against all Defendants on January 2, 2018. [Doc. 12]. The Plaintiff now moves for entry of a default judgment pursuant to Rule 55 of the Federal Rules of Civil Procedure. [Doc. 17]. The Court held a hearing on the Plaintiff's motion on June 1, 2018, at which time the Court requested supplemental briefing from the Plaintiff. The Plaintiff's supplemental brief was filed on June 15, 2018. [Doc. 20]. Having been fully briefed, this matter is ripe for disposition.
Rule 55 of the Federal Rules of Civil Procedure provides for the entry of a default when "a party against whom a judgment for affirmative relief is sought has failed to plead or otherwise defend." Fed. R. Civ. P. 55(a). Once a defendant has been defaulted, the plaintiff may then seek a default judgment. If the plaintiff's claim is for a sum certain or can be made certain by computation, the Clerk of Court may enter the default judgment. Fed. R. Civ. P. 55(b)(1). In all other cases, the plaintiff must apply to the Court for a default judgment. Fed. R. Civ. P. 55(b)(2).
"The defendant, by his default, admits the plaintiff's well-pleaded allegations of fact . . . ."
The well-pleaded factual allegations of the Plaintiff's Complaint having been deemed admitted by virtue of the Defendants' default, the following is a summary of the relevant facts.
The Plaintiff Migun Life, Inc. ("Migun Life") is a corporation organized and existing under the laws of the State of North Carolina, with its principal office located in Fletcher, North Carolina. [Doc. 1 at ¶1]. The Defendant Larry Cox ("Cox") is a citizen and resident of the State of Michigan, residing at 107 Park Avenue, Apartment 7, Charlevoix, Michigan 49720. [
Migun Medical Instrument Co., Ltd. ("Migun Medical"), owns all rights to the MIGUN word mark and other MIGUN logo marks (collectively, "the MIGUN Marks"), including at common law and federally registered. One of the MIGUN Marks is a federally registered trademark, U.S. Reg. No. 2,967,438, which was registered to Migun Medical in 2001 and is now incontestable in connection with infrared ray lamp for therapeutic use, ultraviolet lamp for therapeutic use, mercury lamp for therapeutic use, carbon lamp for therapeutic use, electric massage apparatus, physical treatment instruments, namely, beds, mats and belts which apply heat, friction, and pressure, heat treatment bed, electric vibration massage apparatus as well as independent sales representatives in the field of medical treatments and physical treatment instruments, wholesale stores featuring medical instruments and physical treatment instruments, independent sales representatives in the field of massage apparatus, wholesale stores featuring massage apparatus, and import and export agency. [
The MIGUN Marks have been in continuous and exclusive use throughout the United States since at least as early as 2000 by Migun Medical and its licensees. [
The Plaintiff Migun Life is the sole authorized distributor of Migun Medical products in North America, including having the exclusive right to import and distribute Migun Medical products as well as having the exclusive license to use and sublicense and enforce the Migun Marks in the United States. [
Migun Medical's signature product is its Physical Therapy Table ("the Therapy Table"), which is an FDA approved Class II medical device. The intended use of this product is to provide patients with muscle relaxation therapy by delivering heat and soothing massage using far infrared lights to provide topical heating for the temporary relief of minor muscle and joint pain and stiffness, the relaxation of muscles, and the temporary increase of local circulation where applied. Migun Medical's patented jade massage heads are placed in a specific measurement to help stimulate better blood flow and nerve conduction along the user's spine which helps to stimulate the user's autonomic nervous system, which controls things such as blood pressure, blood glucose regulation, digestion, bladder function, breathing, and other automatic body functions. [
All of the Migun Medical products prominently display the MIGUN Marks. [
From the early 1998 through 2016, Migun Medical had an agreement with Migun Medical Instruments Inc. ("MMI") to allow MMI to serve as the sole authorized distributor of Migun Medical products in North America. [
In May 2016, Migun Life contacted the Defendants and updated them regarding Migun Life's agreement with Migun Medical. Migun Life also provided the Defendants with information regarding certain FDA regulations as Defendants were not complying with such regulations in their provision of maintenance services and re-sale of used Migun Medical products. In addition, Migun Life requested that the Defendants cease all use of the MIGUN Marks except to refer specifically to Migun Medical products. [Doc. 1 at ¶ 30]. The Defendants, however, refused to comply with Migun Life's requests and continued to use the MIGUN Marks in their business name. For example, the Defendants continued to advertise products for sale and lease on their Facebook page listed under the name "Migun MassageEnergy." [
In May 2017, Migun Life's counsel, wrote to Defendant Cox, reiterating that the Defendants must cease their improper use of the MIGUN Marks. [Doc. 1 at ¶¶ 33, 34; Doc. 1-8]. Despite this communication, Defendant Cox continues to: advertise Migun Medical products on a Facebook under the name "Migun MassageEnergy"; represents himself as the Owner of "MIGUN Massage Energy" and as a Migun Dealer on LinkedIn; and post Migun Products for sale on eBay under the "Migun Massage Energy" brand. [Doc. 1 at ¶ 35; Docs. 1-6, 1-10, 1-11].
In addition, the Defendants continue to use their website,
The Defendants also took control of a Google listing for Migun Life's predecessor, MMI, in a manner that is likely to confuse medical professionals and/or consumers as to the affiliation, connection, or association of Defendants and Migun Medical and/or Migun Life. MMI was located at 3700 Wilshire Blvd., Los Angeles, CA 90010, the address that continues to be shown in the Google listing. MMI's phone number as shown in the listing, (213) 388-3055, was transferred to Migun Life. The Defendants, however, edited the listing to redirect MMI's website to www.migunhealth.com, a URL owned by Immunity for Life, which then automatically redirected to the Defendants' www.massageenergy.com website. [Doc. 1 at ¶ 40; Doc. 1-13].
Section 32 of the Lanham Act provides that the registrant of a mark may bring a civil action against:
15 U.S.C. § 1114(1)(a). Section 43(a) of the Act provides that a registrant may bring a civil action against:
15 U.S.C. § 1125(a)(1)(A).
To prevail on a claim for trademark infringement under the Lanham Act, a plaintiff must prove the following:
Here, the Plaintiff has successfully made out a claim for trademark infringement. First, considering the well-pleaded factual allegations of the Complaint as admitted by the Defendants by virtue of the default, the Plaintiff has established that it has the sole authority to use the MIGUN Marks, to sublicense their use in the United States, and to file suit based on Migun Medical's ownership of the MIGUN Marks. As such, the Plaintiff has shown that it has standing to sue for trademark infringement of the MIGUN Marks.
Second, the Plaintiff has established that the Defendants have used the MIGUN Marks in commerce and in connection with the sale, offering for sale, distribution, or advertising of goods or services. The Plaintiff has established that the Defendants do not have permission from the Plaintiff or Migun Medical to utilize the MIGUN Marks except to specifically describe the products they offer for sale as fair use, and that the Defendants are aware that they lack such permission. The Plaintiff has established that the Defendants continue to utilize the MIGUN Marks beyond the scope of fair use in advertising products utilizing the MIGUN Marks in such a way as to appear to represent themselves as Migun Medical representatives, and offering their store services by utilizing the MIGUN Marks as their own trademarks under which they do business.
With respect to the final element of trademark infringement, the Fourth Circuit has identified a number of factors to determine the likelihood of confusion. Those factors include:
Here, the allegations that are deemed admitted show a strong likelihood of confusion. The MIGUN Marks have been used since the early 2000's and are strong and distinctive marks. Migun Life has shown that the Defendants offer similar goods and services and advertise to the same customers, such as chiropractors, fitness centers, holistic care centers, massage therapists, and physical therapists as well as the general public, in overlapping geographic areas of trade, while continuing to make use of the MIGUN Marks and to hold themselves out as a "Migun dealer." For all these reasons, the Court concludes that the Defendants' use of the MIGUN Marks in the advertising of their goods and services (beyond the permissible fair use) is likely to cause confusion, mistake, or to deceive as to the affiliation, connection, or association of the Defendants with the Plaintiff and/or Migun Medical.
Accordingly, the Court finds that the Plaintiff's well-pleaded factual allegations establish its claim for trademark infringement against the Defendants.
The Lanham Act prohibits a "false designation of origin" that is "likely to cause confusion, or to cause mistake, or to deceive as to the affiliation, connection, or association ... or as to the origin" of "goods, services, or commercial activities by another person[.]" 15 U.S.C. § 1125(a)(1)(A). To prove a claim for false designation of origin, a plaintiff must prove the same elements that are required to establish a trademark infringement claim.
One type of false designation of origin that may occur is commonly known as a "reverse passing off." A "reverse passing off" occurs when a "producer misrepresents someone else's goods or services as his own."
Here, the Court has concluded that the Plaintiff has successfully made out a claim for trademark infringement. As the elements of a general false designation of origin claim are identical to the elements of a claim for trademark infringement, the Court concludes that the Plaintiff has successfully made out a claim for false designation of origin as well.
With respect to the Plaintiff's specific claim for reverse passing off, the Court concludes that this claim also has been established. First, the Plaintiff has established that while certain of the Defendants' advertisements using the MIGUN Marks to describe the Migun Medical products the Defendants offer for sale were proper and constitute fair use, the Defendants also described Migun Medical products as "Massage Energy Thermal Massage System," "the M.E. Bed," and "Massage Energy PT Pro." The Defendants listed a Migun Medical Therapy Table on eBay with the brand listed as "Migun Massage Energy" and the model as "MassageEnergy." The Defendants also offer for sale a Migun Medical Therapy Table on eBay under the trademark "MassageEnergy System." The admitted allegations establish that the Defendants had no authorization from the Plaintiff or Migun Medical to pass off Migun Medical products under another trademark, namely the "Massage Energy" trademark. The Plaintiff has further shown that the Defendants' use of the "Massage Energy" mark in connection with Migun Medical products is likely to cause confusion, mistake, or to deceive as to the source of origin of these Migun Medical products.
For these reasons, the Court concludes that the Plaintiff has successfully made out a claim for reverse passing off under the Lanham Act against the Defendants.
To establish its claim under the ACPA, the Plaintiff is required to prove that (1) the Defendants "had a bad faith intent to profit from using" the domain names
Here, the Plaintiff has established that the Defendants' domain names are confusingly similar to the registered MIGUN Marks. The undisputed allegations of the Complaint further establish that the Defendants offer goods and services in direct competition with Migun Medical, the Plaintiff, and the Plaintiff's sublicensees through their URLs containing the MIGUN mark. The Defendants' conduct in this regard demonstrates a bad faith intent to profit from the distinctive MIGUN mark by registering and using these domain names. Accordingly, the Court concludes that the Defendants' use of these URLs amounts to cybersquatting under the Lanham Act.
To establish a claim under Chapter 75, a plaintiff must demonstrate that "(1) the defendant engaged in conduct that was in or affecting commerce, (2) the conduct was unfair or had the capacity or tendency to deceive, and (3) the plaintiff suffered actual injury as a proximate result of defendant's deceptive statement or misrepresentation."
Having determined that the Plaintiff has established its claims by alleging sufficient facts that the Defendants have admitted, the Court now turns to the issue of whether the Plaintiff has demonstrated entitlement to the relief requested. In its motion, the Plaintiff seeks the following remedies:
The Court will address each of these requests for relief in turn.
Under the Lanham Act, the Court is authorized to issue an injunction "according to principles of equity and upon such terms as the court may deem reasonable" to prevent further violations of trademark law.
The Plaintiff has satisfied all four factors in this case. The factual allegations in the Plaintiff's Complaint, which are deemed admitted in light of the Plaintiffs' default, sufficiently prove that the Defendants infringed the Plaintiff's Marks. As the Fourth Circuit has recognized, "irreparable injury regularly follows from trademark infringement."
As for the second factor, the Court concludes that the Plaintiff would have no adequate remedy at law if the Defendants are not enjoined from continuing their infringing and counterfeiting actions. Without an injunction, the Plaintiff would continue to suffer injury and would be forced to bring successive actions for monetary damages.
Third, the Plaintiff has shown that the balance of hardships weighs in its favor. The Plaintiff has demonstrated that it possesses a protectable interest in the MIGUN Marks, while the Defendants have no legal right to continue their infringing activities. Finally, the public interest is served by the issuance of a permanent injunction to prevent consumers from being misled by the Defendants' actions.
For these reasons, the Court concludes that the entry of a permanent injunction is appropriate. The Court therefore will enter a permanent injunction enjoining the Defendants and all those acting in concert with the Defendants from making any use of the MIGUN Marks and any other marks confusingly similar thereto; requiring the Defendants to transfer to Migun Life the www.migunmedical.com and any other URL owned by the Defendants that includes the letter string "Migun"; and requiring the Defendants to delete all social media accounts and other online references through which the Defendants have made improper use of the MIGUN Marks, including but not limited to inclusion of the MIGUN Marks in the page or account name, which shall include Defendants' Facebook page located at
The Court may award attorney fees to the prevailing party in a Lanham Act case, but only if such case is deemed "exceptional." 15 U.S.C. § 1117(a). The Supreme Court has explained that "an `exceptional' case is simply one that stands out from others with respect to the substantive strength of a party's litigating position (considering both the governing law and the facts of the case) or the unreasonable manner in which the case was litigated," and that "[d]istrict courts may determine whether a case is `exceptional' in the case-by-case exercise of their discretion, considering the totality of the circumstances."
In the present case, the Defendants have failed to defend this action and thus have not offered any justification for their infringing actions. Furthermore, the factual allegations of the Plaintiff's Complaint, which are deemed admitted in light of the Defendants' default, establish that the Defendants' use of the MIGUN Marks was done willfully and deliberately. As such, there does not appear to be any objectively reasonable position to justify the Defendants' actions. "Willful defiance of the judicial process lends sufficient grounds for finding that an exceptional case under § 1117(a) exists."
The Plaintiff requests attorneys' fees and costs in the amount of $10,892.64, consisting of a total number of 37.10 hours of work performed by attorney Rebecca Crandall at a rate of $295.00 per hour and by attorney Will Jamison at a rate of $190.00 per hour. In support of this request, the Plaintiff has submitted the Declaration of Rebecca Crandall, which contains itemized invoices showing the legal services provided and fees incurred, as well as the 2015 Report of the Economic Survey completed by the American Intellectual Property Law Association, which provides statistics, such as the average hourly rates of associates and partner based upon experience and region. [Doc. 20-1].
Upon careful review of Ms. Crandall's Affidavit, as well as the materials filed in support thereof, the Court finds that the amount of fees and costs requested is reasonable compensation for work necessarily expended to enforce the Plaintiff's rights. Accordingly, the Court will award the Plaintiff a total of $10,892.64 in fees and costs under the Lanham Act.
Accordingly,
1. Defendants, including all officers, members, directors, agents, employees, representatives, and all persons acting in concert or participation with them who receive actual notice of the Default Judgment and Permanent Injunction Order are permanently enjoined and restrained from:
2. Defendants shall transfer to Plaintiff all domain registrations containing the Migun Marks, including but not limited to
3. Defendants shall delete all social media accounts and other online references, including websites, through which Defendants have made improper use of the Migun Marks, including but not limited to the past or present inclusion of the Migun Marks in the page or account name, or improper references to Migun Medical products.
4. Defendants' conduct relating to this matter has made this an exceptional case, and, thus, Defendants are jointly and severally liable for the payment of Plaintiff's reasonable attorney fees and costs in this action in the amount of $10,892.64 pursuant to 15 U.S.C. § 1117(a).
5. This Court shall retain jurisdiction over the parties and the subject matter of this litigation for the purpose of interpreting and enforcing this Default Judgment and Permanent Injunction Order.