Opinion
Case No. 2:22-cv-05574-FLA (MRWx)
2024-01-05
SIMPLE DESIGN LTD., Plaintiff, v. ENERJOY LIMITED, Defendant.
David Samuel Silver, Bayramoglu Law Offices LLC, Henderson, NV, for Plaintiff.
David Samuel Silver, Bayramoglu Law Offices LLC, Henderson, NV, for Plaintiff.
ORDER GRANTING PLAINTIFF'S MOTION FOR DEFAULT JUDGMENT [DKT. 35]
FERNANDO L. AENLLE-ROCHA, United States District Judge
RULING
Before the court is Plaintiff Simple Design Ltd.'s ("Plaintiff") Renewed Motion for Default Judgment ("Motion") against Defendant Enerjoy Limited ("Defendant"). Dkt. 35 ("Mot."). Defendant did not file an opposition or otherwise appear in this action.
For the reasons stated herein, the court GRANTS the Motion and ENTERS Default Judgment in Plaintiff's favor. Plaintiff is ORDERED to serve a copy of this Order on Defendant via electronic mail within five (5) days from the date of this Order.
BACKGROUND
Plaintiff filed this action against Defendant on August 8, 2022, alleging claims for: (i) federal trademark infringement, in violation of Section 32(1) of the Lanham Act, 15 U.S.C. § 1114(1); (ii) California common law trademark infringement; (iii) federal copyright infringement, in violation of the Copyright Act, 17 U.S.C. § 501, et seq.; (iv) federal unfair competition, in violation of Section 43(a) of the Lanham Act, 15 U.S.C. § 1125; (v) California unfair competition, in violation of the California Unfair Competition Law ("UCL"), Cal. Bus. & Prof. Code § 17200, et seq.; and (vi) unjust enrichment. Dkt. 1 ("Compl.").
On August 8, 2022, Plaintiff filed an ex parte application for an order authorizing alternative service, stating it was unable to ascertain a physical or mailing address for Defendant. Dkt. 9. The court granted the application and authorized Plaintiff to effectuate service by electronic mail and publication, as set forth in Cal. Code Civ. Proc. § 415.40(b). Dkt. 18. Plaintiff served the Summons and Complaint on Defendant through electronic mail and by publication through a notice published in the regular edition of the Los Angeles Sentinel newspaper on August 25, September 1, September 8, and September 15, 2022. Dkt. 19.
The court clerk entered default against Defendant on November 13, 2023. Dkts. 31, 33. Plaintiff filed the instant Motion on November 22, 2023. Mot.
DISCUSSION
I. Procedural Requirements
This district requires an application for default be accompanied by a declaration in compliance with Federal Rule of Civil Procedure 55(b)(1) and (2) ("Rule 55(b)"), and include the following:
(a) When and against what party the default was entered;
(b) The identification of the pleading to which default was entered;
(c) Whether the defaulting party is an infant or incompetent person, and if so, whether that person is represented by a general guardian, committee, conservator or other representative;
(d) That the Servicemembers Civil Relief Act (50 U.S.C. App. § 521) does not apply; and
(e) That notice has been served on the defaulting party, if required by [Rule] 55(b)(2).
Local Rule 55-1.
The Motion and supporting materials state: (a) default was entered against Defendant on November 13, 2023; (b) default was entered by the clerk of the court on the operative Complaint; (c) Defendant is not a minor or legally incompetent person; and (d) the Servicemembers Civil Relief Act does not apply to this action. See Dkt. 35-2 ¶¶ 7-8. As Defendant has not appeared in the action, Plaintiff was not required to serve Defendant with written notice of the Motion. See Fed. R. Civ. P. 55(b)(2) ("If the party against whom a default judgment is sought has appeared personally or by representative, that party or its representative must be served with written notice of the application at least 7 days before the hearing."). Plaintiff, nevertheless, chose to do so via electronic mail. Dkt. 35-1 ("Mot. Br.") at 27.
The court cites documents by the page numbers added by the court's CM/ECF system, rather than any page numbers that appear within the documents natively.
Accordingly, the court finds Plaintiff has met the procedural requirements of Local Rule 55-1.
II. Default Judgment Legal Standard
The court clerk is generally authorized to enter a default judgment at a plaintiff's request against a defendant without a court hearing or judicial action if the claim is for "a sum certain or a sum that can be made certain by computation." Fed. R. Civ. P. 55(b)(1). In all other cases, the plaintiff must apply to the court for a default judgment. Id.
The court has considerable discretion regarding what it may require as a prerequisite to the entry of default judgment. TeleVideo Sys., Inc. v. Heidenthal, 826 F.2d 915, 917 (9th Cir. 1987). "The court may conduct hearings or make referrals— preserving any federal statutory right to a jury trial—when, to enter or effectuate judgment, it needs to: (A) conduct an accounting; (B) determine the amount of damages; (C) establish the truth of any allegation by evidence; or (D) investigate any other matter." Fed. R. Civ. P. 55(b)(2) (paragraph breaks omitted). "The general rule of law is that upon default[,] the factual allegations of the complaint, except those relating to the amount of damages, will be taken as true." TeleVideo, 826 F.2d at 917-18 (citation and quotation marks omitted). However, facts which are not established by the pleadings or claims and are not well-pleaded cannot support a default judgment. Alan Neuman Prods., Inc. v. Albright, 862 F.2d 1388, 1393 (9th Cir. 1988).
"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, 1471-72 (9th Cir. 1986). The court considers the Eitel factors in turn below.
III. The Eitel Factors
A. Possibility of Prejudice to Plaintiff
Plaintiff contends it will face prejudice if the Motion is not granted, as Defendant has failed to appear or otherwise defend this action. See Mot. Br. at 15. The court agrees. Taking the factual allegations
of the Complaint as true, Defendant created and marketed on the Apple Store a mobile application using a mark "confusingly similar" to Plaintiff's mobile application and utilizing code "deliberately cop[ying]" Plaintiff's copyrighted Extensible Markup Language ("XML") code. Compl. ¶¶ 15-16, 27-28; Dkt. 4 ("Compl. Ex. 1"). Without entry of default judgment, Plaintiff is likely to be without recourse due to Defendant's lack of response. See PepsiCo, Inc. v. Cal. Sec. Cans, 238 F. Supp. 2d 1172, 1177 (C.D. Cal. 2002) (granting default judgment and permanent injunction where plaintiffs otherwise "will likely be without other recourse for recovery"). Thus, the first Eitel factor favors entry of default judgment.
B. Merits of Plaintiff's Claims and Sufficiency of the Complaint
The next two Eitel factors are the merits of Plaintiff's substantive claims and the sufficiency of the Complaint. Eitel, 782 F.2d at 1471-72. The Ninth Circuit instructs these two factors require a plaintiff to "state a claim on which the [plaintiff] may recover." Danning v. Lavine, 572 F.2d 1386, 1388 (9th Cir. 1978).
1. Trademark Infringement and Unfair Competition
Plaintiff's first, second, fourth, and fifth causes of action relate to, respectively, federal trademark infringement, common law trademark infringement, federal unfair competition, and violation of the UCL. Compl. ¶¶ 30-50, 56-67.
To state a claim for trademark infringement, Plaintiff must establish: (i) a protected ownership interest in its trademark; and (ii) that Defendant's use of its competing trademark is likely to cause consumer confusion. Pom Wonderful LLC v. Hubbard, 775 F.3d 1118, 1124-25 (9th Cir. 2014). "The courts have uniformly held that common law and statutory trademark infringements are merely specific aspects of unfair competition." New West Corp. v. NYM Co. of Cal., Inc., 595 F.2d 1194, 1201 (9th Cir. 1979).
Proof of Plaintiff's claim for federal unfair competition requires an identical analysis—that is, whether the public is likely to be deceived about the source of goods or services by Defendant's product. See Hokto Kinoko Co. v. Concord Farms, Inc., 810 F. Supp. 2d 1013, 1031-32 (C.D. Cal. 2011) (citing Acad. of Motion Picture Arts and Scis. v. Benson, 15 Cal. 2d 685, 690, 104 P.2d 650 (1940)). The UCL prohibits persons and businesses from engaging in unfair competition, which includes "any unlawful, unfair or fraudulent business act or practice[.]" Cal. Bus. & Prof. Code §§ 17200-17203. "By proscribing 'any unlawful' business practice, [the UCL] borrows violations of other laws and treats them as unlawful practices that the unfair competition law makes independently actionable." Cel-Tech Commc'ns, Inc. v. L.A. Cellular Tel. Co., 20 Cal. 4th 163, 180, 83 Cal.Rptr.2d 548, 973 P.2d 527 (1999) (quotation marks omitted).
Plaintiff alleges it owns a registration in its application icon (the "Fork Icon"), for use of the mark in connection with, inter alia, downloadable mobile applications for providing tips and tools related to health and dieting. Compl. ¶¶ 10-13. Plaintiff also alleges Defendant uses an application icon "confusingly similar" to the Fork Icon to "cause mistake, and/or deceive consumers and the purchasing public as to an affiliation, connection, or association of Plaintiff and Defendant and as to the origin, sponsorship, or approval of Defendant's goods by Plaintiff." Id. ¶ 34. Plaintiff additionally presents images of the Fork Icon and Defendant's allegedly infringing mark. Id. ¶¶ 10, 16.
As the court must accept the factual allegations in the Complaint as true, the court finds Plaintiff has established Defendant's use of the allegedly infringing mark
is likely to cause consumer confusion. The court further finds that, because the Complaint establishes Defendant has engaged in this unlawful practice, Plaintiff has also demonstrated Defendant's violation of the UCL.
Nothing in this Order shall be interpreted to suggest the court has determined the allegedly infringing mark to be "confusingly similar" as a matter of law.
2. Copyright Infringement
Plaintiff's third cause of action is for federal copyright infringement. Compl. ¶¶ 51-55. Copyright infringement claims have two basic elements: (1) ownership of a valid copyright, and (2) copying of constituent, original elements of the work. Skidmore v. Led Zeppelin, 952 F.3d 1051, 1064 (9th Cir. 2020) (en banc).
The second prong of the infringement analysis contains two separate components: "copying" and "unlawful appropriation." Id. To prove the second prong, a plaintiff must either show (1) direct evidence of copying, or (2) prove copying circumstantially by showing that the defendant had access to the plaintiff's work and that the two works share similarities probative of copying. Id. (citing Rentmeester v. Nike, Inc., 883 F.3d 1111, 1117 (9th Cir. 2018)); Funky Films, Inc. v. Time Warner Entm't Co., L.P., 462 F.3d 1072, 1076 (9th Cir. 2006).
Here, Plaintiff alleges it owns "valid United States copyrights for Extensible Markup Language (XML) code relating to" its application, which were registered as United States Copyright Registration Nos. TX 8-928-541 and TX 8-953-585. Compl. ¶ 52. Plaintiff further alleges "Defendant's mobile application provides identical functions and uses numerous examples of identical text, as Plaintiff's copyrighted XML code[.]" Id. ¶ 53. Plaintiff provides, as an example, screen captures of what it alleges are its own application juxtaposed with Defendant's. Dkt. 5. One such comparative screen capture is as follows: Image materials not available for display.
Id. at 9. For purposes of the subject Motion, the court accepts as true Plaintiff's allegation that the specific text identified was included within the scope of Plaintiff's copyright registration of the XML code. See Compl. Ex. 1.
Plaintiff further alleges Defendant "had constructive notice of Plaintiff's copyright registrations, had direct access to the copyrighted material through Plaintiff's Intermittent Fasting mobile application, and deliberately and intentionally copied Plaintiff's copyrighted material for Defendant's own commercial gain." Compl. ¶ 29.
Accepting the allegations in the Complaint as true, the court finds Plaintiff has adequately pleaded a claim for copyright infringement. While Plaintiff does not provide direct evidence of copying, the Complaint provides sufficient circumstantial evidence of copying by (1) claiming Defendant had access to Plaintiff's copyrighted material, and (2) demonstrating the two applications are remarkably similar, including through use of the exact same text. See Skidmore, 952 F.3d at 1064.
3. Unjust Enrichment
Plaintiff's sixth cause of action is for unjust enrichment. Compl. ¶¶ 68-73. "Under California law, the elements of unjust enrichment are: (1) receipt of a benefit; and (2) unjust retention of the benefit at the expense of another." Baggett v. Hewlett-Packard Co., 582 F. Supp. 2d 1261, 1270 (C.D. Cal. 2007) (citing Lectrodryer v. SeoulBank, 77 Cal. App. 4th 723, 726, 91 Cal.Rptr.2d 881 (2000)).
Plaintiff alleges Defendant has wrongfully obtained "gains, profits, and advantages" based on its infringement of Plaintiff's marks and copyrights. Compl. ¶¶ 10-29, 72. Treating these allegations as true, the court finds Plaintiff has adequately pleaded a claim for unjust enrichment. 4. Summary
Based on the foregoing, the court is satisfied the Complaint is sufficiently pleaded. The second and third Eitel factors weigh in favor of entering default judgment.
C. Sum of Money at Stake
Next, the court considers "the amount of money at stake in relation to the seriousness of the [d]efendant's conduct." PepsiCo, 238 F. Supp. 2d at 1176; see also Eitel, 782 F.2d at 1471-72. This requires the court to assess whether the recovery sought is proportional to the harm caused by Defendant's conduct. See Walters v. Statewide Concrete Barrier, Inc., Case No. 3:04-cv-02559-JSW, 2006 WL 2527776, at *4 (N.D. Cal. Aug. 30, 2006) ("If the sum of money at issue is reasonably proportionate to the harm caused by the defendant's actions, then default judgment is warranted.").
While the Complaint requests damages (Compl., Prayer for Relief ¶¶ 4-9), Plaintiff's Motion states it will "forego a damages calculation in favor of seeking permanent injunctive relief and is not requesting any damages" (Mot. at 14). The court, therefore, interprets the Motion to seek only equitable, and not monetary, relief. The fourth Eitel factor, thus, weighs in favor of entry of default judgment.
D. Possibility of a Dispute Concerning Material Facts
The court may also consider whether there is a possibility of a dispute between the parties concerning material facts. Eitel, 782 F.2d at 1471-72. Defendant did not respond to the Complaint. Plaintiff, in turn, pleaded sufficient facts to state its claims. Therefore, there is no basis upon which the court can find a genuine dispute of material fact. This factor also favors entering default judgment against Defendant.
E. Whether Default Was Due to Excusable Neglect
Plaintiff served Defendant with a copy of the Summons and Complaint via electronic mail on August 25, 2022. Dkt. 19-1. Plaintiff also provided service by publication through the Los Angeles Sentinel newspaper from August 25, 2022 until September 15, 2022. Dkt. 19-2. In both cases, Plaintiff warned Defendant that failure to respond would result in entry of default judgment. See Dkt. 19. On September 29, 2023, Plaintiff served Defendant with additional notice of the Summons and Complaint (Dkt. 29), in compliance with the court's Order Vacating Entry of Default and Denying Motion for Default Judgment (Dkt. 28).
Excusable neglect is unlikely to be present where a defendant is properly served and, therefore, aware of the pending action. WeCosign, Inc. v. IFG Holdings, Inc., 845 F. Supp. 2d 1072, 1082 (C.D. Cal. 2012). As Plaintiff completed service of process and Defendant has not provided any evidence of circumstances constituting excusable neglect, this Eitel factor favors entering default judgment.
F. Policy Favoring Decisions on the Merits
"Cases should be decided upon their merits whenever reasonably possible." Eitel, 782 F.2d at 1472. But "[t]he very fact that [Fed. R. Civ. P.] 55(b) exists shows that this preference, standing alone, is not dispositive." Kloepping v. Fireman's Fund, Case No. 3:94-cv-02684-TEH, 1996 WL 75314, at *3 (N.D. Cal. Feb. 13, 1996).
Defendant's decision not to defend this action makes it impracticable, if not impossible, for the court to render a decision on the merits. Accordingly, while the final Eitel factor will always disfavor the
entry of default judgment, it alone does not outweigh the other factors.
G. Conclusion
In sum, six of the seven Eitel factors favor entering default judgment against Defendant. The court, therefore, finds it appropriate to enter default judgment in Plaintiff's favor and against Defendant.
The court now turns to the appropriateness of the relief Plaintiff seeks.
IV. Plaintiff's Relief
The Lanham Act provides the court may "grant injunctions, according to principles of equity." 15 U.S.C. § 1116(a). The Copyright Act, similarly, authorizes courts to "grant temporary and final injunctions on such terms as it may deem reasonable to prevent or restrain infringement of copyright." 17 U.S.C. § 502(a). The court may grant injunctive relief where a plaintiff demonstrates: (i) it has suffered an irreparable injury; (ii) remedies available at law, such as monetary damages, are inadequate to compensate for the injury; (iii) considering the balance of hardships, a remedy in equity is warranted; and (iv) the public interest would not be disserved by a permanent injunction. eBay Inc. v. MercExchange, L.L.C., 547 U.S. 388, 391, 126 S.Ct. 1837, 164 L.Ed.2d 641 (2006).
The court finds Plaintiff has met its burden to demonstrate its entitlement to injunctive relief. First, under the Lanham Act, Plaintiff is "entitled to a rebuttable presumption of irreparable harm" upon a finding of infringement. 15 U.S.C. § 1116(a); see also Tempur Sealy Int'l, Inc. v. Seltyk Mattress, Inc., Case No 2:22-cv-06194-ODW (PVCx), 2023 WL 3075881, at *5 (C.D. Cal. Apr. 25, 2023) (applying this presumption in the context of a default judgment). Upon default, the presumption is conclusive. Tempur Sealy, 2023 WL 3075881, at *5.
Second, the Ninth Circuit has held that "[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." Century Real Estate Corp. v. Sandlin, 846 F.2d 1175, 1180 (9th Cir. 1988). Given the nature of Plaintiff's claim, the court, therefore, may presume monetary damages are inadequate.
Third, the balance of hardships between Plaintiff and Defendant favors granting an injunction. As alleged in the Complaint, Plaintiff will be irreparably harmed by Defendant's continued infringement. Compl. ¶ 37. In contrast, an infringing defendant faces no hardship from being enjoined from violating the law. See Amini Innovation Corp. v. KTY Int'l Mktg., 768 F. Supp. 2d 1049, 1057 (C.D. Cal. 2011).
Finally, the public interest favors an injunction. The public has a strong interest in "avoiding confusion between two companies' products." WeCosign, 845 F. Supp. 2d at 1084. As stated, Plaintiff adequately alleges that Defendant's use of its trademark and copyright is likely to cause consumer confusion.
The court, therefore, finds Plaintiff is entitled to a permanent injunction enjoining Defendant from the continued use of the Fork Icon trademark and its copyrighted code.
CONCLUSION
For the foregoing reasons, the court GRANTS Plaintiff's Motion and ENTERS Default Judgment as follows:
1. Final Judgment is entered in favor of Plaintiff and against Defendant on all claims in the Complaint.
2. Defendant, its affiliates, officers, agents, successors, and assigns, and all others in active concert or participation with any of them who receive actual notice of the injunction, shall be forthwith permanently enjoined from:
a. using the infringing mark described in Plaintiff's Complaint, or any other logo, icon, or other identifying mark that is substantially similar to Plaintiff's U.S. Trademark Registration No. 6084828, relating to Plaintiff's intermittent fasting mobile application, and remove any mobile application or other product using that infringing mark or other substantially similar image from the Google Play, Apple Store, or any other online platform;
b. committing any acts calculated to cause consumer confusion to believe that Defendant's mobile applications are sold and/or offered for download under the authorization and/or sponsorship of Plaintiff;
c. further infringing U.S. Trademark Registration No. 6084828 relating to Plaintiff's intermittent fasting mobile application; and
d. creating, providing, or offering for sale or download a substantially similar intermittent fasting mobile application not created or authorized by Plaintiff which bears any of Plaintiff's trademarks and/or utilizes any of Plaintiff's copyrighted XML code, including U.S. Trademark Registration No. 6084828 and U.S. Copyright Registration Nos. TX 8-928-541 and TX 8-953-585.
3. Plaintiff is ORDERED to serve a copy of this Order on Defendant via electronic mail within five (5) days from the date of this Order.
4. Defendant is ORDERED, within ten (10) days of receipt of such notice, to remove its infringing mobile applications from any other online platform on which Defendant's mobile application may be available.
5. Should Defendant's infringing mobile application remain active on any online platform twenty (20) days following service of this Order, such third party online platform shall remove Defendant's infringing mobile applications from that third party's online platform within ten (10) days of receipt of a request from Plaintiff for the removal of said mobile applications.
IT IS SO ORDERED.