Opinion
22-cv-3033-RJD
02-22-2024
JASON KAY Plaintiff, v. INDIVIDUAL DEFENDANTS, PARTNERSHIPS, and UNINCORPORATED ASSOCATIONS, Defendants.
REPORT AND RECOMMENDATION
Hon. Reona J. Daly United States Magistrate Judge.
This matter comes before the Court on Plaintiff's Motion for Default Judgment. Doc. 37. Plaintiff's suit seeks damages and injunctive relief under the Lanham Act for counterfeiting, trademark infringement, and false designation of origin, as well as various common law claims. Doc. 1. This case was assigned to the undersigned Magistrate Judge pursuant to Administrative Order 257. Defendants were served but never appeared and therefore have not had the opportunity to consent to magistrate judge jurisdiction. Accordingly, the undersigned issues this Report and Recommendation for consideration by a District Judge. As explained further, it is RECOMMENDED that Plaintiff's Motion for Default Judgment and Permanent Injunction (Doc. 37) be GRANTED.
FINDINGS OF FACT
The Court previously entered a temporary restraining Order after reviewing affidavits and documentary evidence submitted by Plaintiff. Docs. 19 and 23. The Court also held a hearing on Plaintiff's Motion for Preliminary Injunction, which was ultimately granted. Docs. 32 and 34.
Plaintiff's documentary evidence and affidavits establish that he owns the following trademarks, which are valid and registered on the Principal Register of the United States Patent and Trademark Office:
Trademark
Registration Number
Registration Date
Class / Goods
JAMIROQUAI
2,359,128
06/20/2000
IC 009: Motion picture films; prerecorded video [cassettes], tapes and discs, phonograph records; prerecorded audio cassettes, tapes and discs; [and computer software]; all featuring music and entertainment in the nature of comedy, drama, action, adventure, and/or animation [interactive video and multimedia game programs] IC 016: [Stationery] printed matter, namely, songbooks, [annuals, newsletters,] [newspapers,] [periodicals,] [journals,] [catalogues,] [manuals,] [pamphlets, leaflets,] posters, [books and magazines,] all of the foregoing dealing with music and/or entertainment in the nature of comedy, drama, action adventure [and/or animation] [stickers; photographs;] [paper bags;] [prints;] [photo albums; note cards and greeting cards] IC 025: Articles of outer clothing, namely, sweatshirts, jackets, coats [shorts, trousers, socks, suits, gloves]; t-shirts; [clothing accessories, namely, scarves and belts] [being clothing accessories]; footwear;] hats and headwear IC 041: [Film production;] presentation of live performances in the nature of the provision of music, musical performances and concerts; [music publishing services and book publishing services and the publication of textbooks; sound recording services;] entertainment services, namely, performances of music and singing by a group, band or an individual; audio visual performances inthe nature of entertainment in the nature of comedy, drama, action, adventure, and/or animation, music and singing
Doc. 6-1 ¶3; Doc. 6-2. Plaintiff owns the following logo:
(Image Omitted)
(the “Jamiroquai Logo”). Doc. 17.
The Jamiroquai trademarks and the Jamiroquai Logo (collectively, the “Jamiroquai marks”) are used in connection with the design, marketing, and distribution of goods in the categories identified in the above table. Doc. 6-1, ¶4; Doc. 6-2. Defendants are e-commerce stores that sell products displaying marks similar to the Jamiroquai marks. Doc. 1, ¶1. Plaintiff retained a third-party to investigate the suspected sales of counterfeit Jamiroquai branded products by Defendants' ecommerce stores. Doc. 6-1, ¶11. The third-party investigator initiated orders for products from each Defendant's Seller ID that bear counterfeits, infringements, reproductions, or colorable imitations of the Jamiroquai marks. Doc. 6-4, ¶¶10-13; Doc. 6-5. The orders were designated to be shipped to an address within the Southern District of Illinois. Doc. 6-5. Plaintiff filed a complete list of Defendants' Seller IDs as an attachment to his Complaint. Doc. 1-2.
At the hearing on Plaintiff's Motion for Preliminary Injunction and in an affidavit, Plaintiff's attorney explained that the Defendants did not provide any type of a physical address to the third-party platforms in which they operate (e.g., wish.com). Doc. 7-1, ¶10. As for the Defendants that do provide a physical address, “it is not a reliable means for identifying and locating Defendants.” Id., ¶13. Plaintiff''s attorney further explained that shipping and payment data gathered in connection with Defendants' Seller IDs indicate that most Defendants are residing and/or operating in China and/or redistributing products from sources in China. Doc. 7-1, ¶17.
CONCLUSIONS OF LAW
Rule 55(a) requires the Clerk of Court to enter default when a party against whom a judgment for affirmative relief is sought has failed to plead or otherwise defend against the opposing party's claims, and that failure is shown by affidavit or otherwise. FED. R. CIV. P. 55(a). The Clerk's entry of default “is merely a formal matter and does not constitute an entry of judgment.” 10A Charles Alan Wright & Arthur R. Miller, Federal Practice and Procedure § 2682 (4th ed. 2023). When a defendant is found in default, all factual allegations in the complaint are deemed admitted and not subject to challenge. E360 Insight v. The Spamhaus Project, 500 F.3d 594, 605 (7th Cir. 2007).
After default has been established, the moving party must then seek entry of a default judgment. In re Catt, 368 F.3d 789, 793 (7th Cir. 2004). The party moving for default judgment must introduce evidence to establish an entitlement to the relief sought. Id. The district court must then “conduct an inquiry in order to ascertain the amount of damages with reasonable certainty.” Id.
Here, the Clerk's default entry was proper under Rule 55(a). Plaintiff served Defendants with the Complaint and instant Motion for Default Judgment pursuant to this Court's Order authorizing service by alternate means. Docs. 16, 29; Doc. 37, p. 22; Doc. 37-1. Defendants have not contested the motion for default judgment filed by Plaintiff, nor did they otherwise appear or contest any other previously-filed motion in this case. Accordingly, a default judgment against Defendants is proper. After considering the evidence presented at the hearing on Plaintiff's Motion for Preliminary Injunction, and reviewing the documentary evidence in the record and cited by Plaintiff in his Motion for Default Judgment, the undersigned can reasonably determine Plaintiff's damages. E360 Insight, 500 F.3d at 602.
Lanham Act and Common Law Unfair Competition and Trademark Infringement
To establish a prima facie claim for trademark infringement, the plaintiff must show that (1) “its marks are distinctive enough to be worthy of protection and (2) the defendant's use of those marks is likely to cause consumers to be confused as to the source of the product.” Coach, Inc. v. 3D Designers Inspirations, 70 F.Supp.3d 942, 946 (C.D. Ill. 2014) (internal citations and quotations omitted). 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' services by Plaintiff. See 15 U.S.C. § 1125(a)(1).
The elements of a claim for Illinois common law trademark infringement are the same as the Lanham Act. Eagle Forum v. Phyllis Schlafly's American Eagles, 451 F.Supp.3d 910, 919 (S.D. Ill. 2020) citing Poneman v. Nike, Inc., 161 F.Supp.3d 619, 631 (N.D. Ill. 2016). The claimant must allege “(1) that its mark is protectable, and (2) that the defendant's use of that mark is likely to cause confusion among consumers.'” Id., citing Phoenix Ent. Partners v. Rumsey, 829 F.3d 817, 821 (7th Cir. 2016).
The allegations in Plaintiff's Complaint, as well as evidence presented to support Plaintiffs' Motions for Temporary Restraining Order and Preliminary Injunctive Relief, establish that the
Jamiroquai marks are sufficiently distinctive, that each of the Defendants used the Jamiroquai marks in commerce at least once, and that Defendants' use of those marks likely causes confusion as to the origin of those marks. Docs. 1 and 6; see also Docs. 19, 23, 32, and 34.
Damages
The Lanham Act provides the following statutory damages:
In a case involving the use of a counterfeit mark (as defined in section 1116(d) of this title) in connection with the sale, offering for sale, or distribution of goods or services, the plaintiff may elect, at any time before final judgment is rendered by the trial court, to recover, instead of actual damages and profits under subsection (a), an award of statutory damages for any such use in connection with the sale, offering for sale, or distribution of goods or services in the amount of-
(1) not less than $1,000 or more than $200,000 per counterfeit mark per type of goods or services sold, offered for sale, or distributed, as the court considers just; or
(2) if the court finds that the use of the counterfeit mark was willful, not more than $2,000,000 per counterfeit mark per type of goods or services sold, offered for sale, or distributed, as the court considers just.15 U.S.C. §1117(c).
Plaintiff asks the Court to award him $20,000 in statutory damages against each Defendant.
Plaintiff contends that the Court should find each Defendant's infringement was willful, but has not provided any evidence for the undersigned to make such a finding. Regardless, Plaintiff's proposal falls well within the available statutory range. The undersigned compared default judgment orders in three similar cases filed in the Northern District of Illinois and notes that Plaintiff's request for $20,000.00 in statutory damages per Defendant is considerably less than the awards ordered in those cases, ranging from $100,000-$500,000 per Defendant.
See Benefit Cosmetics LLC v. The Partnerships and Unincorporated Associations Identified on Schedule “A”, 20-cv-2552, ECF No. 58 (N.D. Ill. Oct. 15, 2020); Pink Floyd (1987) Limited v. The Partnerships and Unincorporated Associations Identified on Schedule “A”, 20-cv-7802, ECF No. 43, (N.D. Ill. Feb. 1, 2021); MERCIS B.V. v. The Partnerships and Unincorporated Associations Identified on Schedule “A”, 20-cv- 6422, ECF No. 44, (N.D. Ill. Jan. 6, 2021). These judgments included a finding that the Defendants acted willfully, but the available record is unclear as to how the Court made that determination.
As Plaintiff notes, the District Court has wide discretion in determining a damages award under the Lanham Act. Chi-Boy Music v. Charlie Club, Inc., 930 F.2d 1224, 1292 (7th Cir. 1992). The Court may consider the “difficulty or impossibility of proving actual damages, the circumstances of the infringement, and the efficacy of the damages as a deterrent to future copyright infringement.” The individuals who have infringed upon Plaintiff's trademarks do so anonymously, making it impossible for Plaintiff or any other trademark holder to prove their actual damages. Moreover, an award of $20,000.00 per Defendant is reasonable to deter future copyright infringement. Accordingly, the undersigned recommends that an award of $20,000.00 be assessed against each Defendant.
Regarding Plaintiff's common law claims, Plaintiff avers that he is limited to the amounts awarded to him under the Lanham Act.
Injunctive Relief
Pursuant to the Lanham Act, a permanent injunction may be entered “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); see ExeGI Pharma v. Brookfield Pharmaceuticals, LLC, 663 F.Supp.3d 880 (E.D. Wis. 2023). Permanent injunctive relief is appropriate here because has Plaintiff has demonstrated the following (1) success on the merits; (2) he sustained irreparable injury; (3) the benefits of an injunction outweigh the harm to Defendants; and (4) the injunction is not countervailing to public interest. Id. (internal citations and quotations omitted).
As evidenced by this Order, Plaintiff has succeeded on the merits of this case. Defendants are in default, and Plaintiff provided documentary evidence showing that (1) consumers are likely confused by Defendants' advertisement, promotion, sale, offer for sale, or distribution of goods bearing and/or using counterfeits, reproductions, or colorable imitations of the Jamiroquai Marks, and that (2) the products Defendants are selling and promoting for sale are copies of Plaintiff's products which bear the Jamiroquai Marks.
Defendants profit from counterfeit products while retaining the ability to quickly vanish and leave no trace of their true identities or information sufficient for Plaintiff to seek damages from them through traditional legal remedies. Docs. 6-1, 6-4, 7-1. Accordingly, Plaintiff is likely to suffer irreparable injury if a permanent injunction is not granted. Id. (quoting Abbott Laboratories v. Mead Johnson & Co., 971 F.2d 6, 18 (7th Cir. 1992) (there is a “well-established.. .presumption that Lanham Act injuries are irreparable”)). The Court can reasonably expect more counterfeit and infringing products bearing the Jamiroquai marks will appear in the marketplace, misleading consumers and affecting the sales of Plaintiff's genuine products, and causing an unnatural erosion of the legitimate marketplace in which he operates. The potential harm to Defendants-restraint of their trade in counterfeit and infringing branded goods-is far outweighed by potential harm to Plaintiff, his reputation, and his goodwill if the permanent injunction is not issued. Moreover, the public interest is served by restraining trade of counterfeit and infringing branded product.
Recommendations
Accordingly, the undersigned RECOMMENDS that Plaintiff's Motion for Default Judgment and Permanent Injunction be granted and, in a separate entry, the proposed Final Default Judgment and Permanent Injunction (attached to this Report and Recommendation) be entered. Pursuant to 28 U.S.C. §636(b)(1) and SDIL-LR 73.1(b), the parties shall have (14) days after service of this Report and Recommendation to file any written objection(s). Generally, the failure to file a timely objection may result in the waiver of the right to challenge a Report and Recommendation before either the District Court or the Court of Appeals. See, e.g., Snyder v. Nolen, 380F.3d 279, 284 (7th Cir. 2004).
The Clerk of Court is DIRECTED to assign a District Judge for consideration of the undersigned's Report and Recommendation.
IT IS SO ORDERED.