Opinion
21-CV-4311 (PGG) (RWL)
05-26-2022
MOONBUG ENTERTAINMENT LIMITED, Plaintiff, v. 6383702, et al., Defendants.
REPORT AND RECOMMENDATION TO HON. PAUL G. GARDEPHE: DAMAGES INQUEST
ROBERT W. LEHRBURGER, UNITED STATES MAGISTRATE JUDGE.
This is a trademark infringement case in which Plaintiff Moonbug Entertainment Limited (“Plaintiff” or “Moonbug”) seeks relief against entities that have marketed and sold counterfeit versions of Plaintiff's children's show products sold under the “Blippi” trademark. The Court previously entered a temporary restraining order, preliminary injunction, permanent injunction, and default by 35 Defendants (the “Defaulting Defendants”), and the matter is now before me for an inquest on damages. Plaintiff seeks (1) statutory damages pursuant to 15 U.S.C. § 1117(c) in the amount of $50,000 against each Defaulting Defendant along with post-judgment interest, and (2) leave to serve restraining order notices on Defaulting Defendants and third parties holding assets of the Defaulting Defendants pursuant to Fed.R.Civ.P. 69(a)(1) and N.Y. C.P.L.R. § 5222. For the reasons set forth below, I recommend that the Court award the relief requested.
A list of the Defaulting Defendants appears in Attachment A to this Report and Recommendation. The Defaulting Defendants do not include any defendant previously dismissed voluntarily or over whom the Court found it did have personal jurisdiction. (See Dkt. 17 (voluntarily dismissing toyschina2011) and Dkt. 34 at 3-4 (dismissing claims against Defendant luomeikit for lack of personal jurisdiction).)
The facts are drawn from the Complaint (Dkt. 4), the Declaration of Karine Ahton, General Counsel of Plaintiff, dated May 5, 2021 (Dkt. 11) (“Ahton Decl.”); and the Affidavit of Danielle Futterman, Plaintiff's counsel, dated April 4, 2022 (Dkt. 27) (“Futterman Aff.”).
A. Moonbug's Business And Its Blippi Products
Plaintiff is a private limited company established in the United Kingdom. (Ahton Decl. ¶ 2.) It creates and distributes children's content, both under its own brands, such as Cocomelon, Arpo, and The Sharksons, as well as in partnership with prominent brands such as Mattel Inc., Nickelodeon, and LEGO. (Id. ¶ 3.) Plaintiff recently acquired the intellectual property assets for the children's program featuring the main character Blippi - “a fun, energetic entertainer known for his goofy mannerisms, signature blue and orange outfit and educational videos.” (Id. ¶ 4.)
Blippi content appears on popular streaming platforms, including YouTube (where Blippi has 12.4 million subscribers and over 9 billion views), Hulu, Roku, and Amazon Prime Video. (Id. ¶ 5.) In addition to streaming content, Plaintiff has also developed a variety of consumer products using the Blippi brand, such as t-shirts, backpacks, and other gear. (Id. ¶ 6 and Ex. A.) The success of Blippi products is due in part to the marketing and promotional efforts of Plaintiff and its predecessor. Those efforts include advertising and promotion, both domestically and abroad, through social media, other internet-based advertising, and the Blippi YouTube channel. (Id. ¶ 12.) Plaintiff's success is also due to its use of high-quality materials and processes in making Blippi products. (Id. ¶ 13.) Additionally, Plaintiff owes a substantial amount of the success of the Blippi products to its consumers, and word-of-mouth buzz that its consumers have generated. (Id. ¶ 14.)
As a result of Plaintiff's and its predecessor's efforts, the quality of Plaintiff's Blippi products, and the interest generated by its consumers, the Blippi brand and products have become prominently placed in the minds of the public. Members of the public have become familiar with Blippi trademarks and products and have come to associate them exclusively with Plaintiff. (Id. ¶ 15.) Plaintiff has acquired a valuable reputation and goodwill among the public as a result of such association. (Id.)
While Plaintiff has acquired common law trademark and other rights in the Blippi brand and Blippi products, Plaintiff also has federal trademark registrations for Blippi. (Id. ¶¶ 9-10; Compl. Ex. B.) For example, Plaintiff owns U.S. Trademark Registrations for BLIPPI in two different classes of goods. (Ahton Decl. ¶ 10.) Plaintiff also owns the application for a Blippi mark featuring the name Blippi adorned by the Blippi character's glasses and bowtie. (Id.) Collectively, Plaintiff's common law and federally registered Blippi trademarks are referred to herein as the Blippi Marks.
No one other than Plaintiff and its authorized licensees and distributors is authorized to manufacture, import, export, advertise, offer for sale, or sell any good using the Blippi Marks without Plaintiff's express permission. (Id. ¶ 16.)
B. The Defaulting Defendants' Unlawful Conduct
Through investigation, Plaintiff has determined that the Defaulting Defendants were and/or are currently manufacturing, importing, exporting, advertising, marketing, promoting, distributing, displaying, offering for sale and/or selling counterfeit Blippi products. (Ahton Decl. ¶ 18 and Compl. Ex. C.) The Defaulting Defendants' counterfeit Blippi products are virtually indistinguishable from Plaintiff's authentic Blippi products. (Compl. ¶ 32, 35-37 and Ex C.) And, each of the Defaulting Defendants displays marks that are virtually indistinguishable from the Blippi Marks in order to market and sell their counterfeit Blippi products. (Ahton Decl. ¶ 20; Compl. ¶¶ 35-37 and Ex. C.) The Defaulting Defendants are located primarily in China but conduct their counterfeit Blippi business in the United States, including within this judicial district, and other countries through various user accounts with, and merchant storefronts on, online marketplace and e-commerce platforms, particularly eBay. (Ahton Decl. ¶¶ 18-19; Compl. ¶¶ 25, 34-35.)
C. Plaintiff's Damages
The Defaulting Defendants' failure to appear has deprived Plaintiff of the ability to confirm whether or not the Defaulting Defendants have ceased manufacturing, importing, exporting, advertising, marketing, promoting, distributing, displaying, offering for sale, and/or selling counterfeit Blippi products. (Futterman Aff. ¶ 22.) Plaintiff also was unable to engage in any discovery with the Defaulting Defendants regarding the scope of their sales, profits, and costs, among other discoverable issues. (Id. ¶ 23.)
Because of the difficulty in ascertaining with precision the full extent of the Defaulting Defendants' sale of and profit from counterfeit products, Plaintiff has elected to receive statutory damages pursuant to the Lanham Act as compensation for the Defaulting Defendants' sale of counterfeit products and infringement of Plaintiff's Blippi Marks. (Id. ¶ 25.)
The statutory damages requested by Plaintiff are based upon an analysis of the Defaulting Defendants' wrongful use of the Blippi Marks. (Id. ¶ 26 and Ex. E.) A chart setting forth each Defaulting Defendant's wrongful use of the Blippi Marks appears in Attachment A. Supporting material for each Defaulting Defendant is cited within the chart.
Procedural Background
Plaintiff commenced this action on May 13, 2021, alleging several causes of action: trademark infringement of Plaintiff's federally registered trademarks in violation of the Federal Trademark Act (the “Lanham Act”), 15 U.S.C. §§ 1051 et seq.; counterfeiting of Plaintiff's federally registered trademarks in violation of 15 U.S.C. §§ 1114(1)(a)-(b), 1116(d), and 1117(b)-(c); false designation of origin, passing off, and unfair competition in violation of Section 43(a) of the Lanham Act, 15 U.S.C. § 1125(a); and related state and common law claims. (Compl. ¶ 1.) Plaintiff also moved ex parte for a temporary restraining order (“TRO”), expedited discovery, and other relief. (Dkts. 8-11.)
On June 3, 2021, the Court granted the TRO. (Futterman Aff. ¶ 11 and Ex. B.) In addition to injunctive relief against the Defendants, the TRO included an asset restraining order on each Defendant's financial accounts. (Id. Ex. B at 12-13.) The TRO also required Defendants to appear on June 18, 2021, at a hearing to show cause why a preliminary injunction should not be issued. (Id. at 12.) On November 5, 2021, Plaintiff served each of the Defaulting Defendants with the summons against them, the Complaint, the TRO, and all papers filed in support of the TRO pursuant to the methods authorized by the TRO. (Dkt. 15.)
Plaintiff appeared at the preliminary injunction show cause hearing on June 18, 2021. (Futterman Aff. ¶ 16.) None of the Defaulting Defendants appeared. (Id.) The Court then entered a preliminary injunction order (the “PI Order”) against all Defaulting Defendants mirroring the terms of the TRO and extending through the pendency of the action. (Dkt. 12.) On June 24, 2021, pursuant to the methods of service authorized in the TRO and PI Order, Plaintiff served each Defaulting Defendant with the PI Order. (Dkt. 18.)
On November 22, 2021, Plaintiff requested an entry of default against the Defaulting Defendants. (Dkts. 21-22.) That same day, the Clerk of Court entered a Certificate of Default against each Defaulting Defendant. (Dkt. 23.) On April 4, 2022, Plaintiff filed its motion, by order to show cause, for default judgment against the Defaulting Defendants. (Dkts. 26-29.) On April 8, 2022, the Court entered the order to show cause why default judgment should not be entered, setting a hearing for April 19, 2022. (Dkt. 30.) Plaintiff served each Defaulting Defendant with the order to show cause on April 11, 2022. (Dkt 31.) None of the Defaulting Defendants submitted any response to the order to show cause or appeared at the show cause hearing. (Dkt. 34 at 3.)
On May 6, 2022, the Court entered an order of default against the Defaulting Defendants. (Dkt. 34.) The Court also entered a permanent injunction against the Defaulting Defendants enjoining them from any use of the Blippi Marks. (Dkt. 36.) The same day, the matter was referred to me for an inquest on damages. (Dkt. 35.)
Legal Standards On Inquest
At an inquest on damages following a default judgment, all well-pled factual allegations of the complaint, except those relating to damages, are accepted as true and all reasonable inferences are drawn in favor of the plaintiff. City of New York v. Mickalis Pawn Shop, LLC, 645 F.3d 114, 137 (2d Cir. 2011) (“It is an ‘ancient common law axiom' that a defendant who defaults thereby admits all ‘well-pleaded' factual allegations contained in the complaint.”) (quoting Vermont Teddy Bear Co., Inc. v. 1-800 Beargram Co., 373 F.3d 241, 246 (2d Cir. 2004)). “A factual allegation will be deemed not well-pled only in very narrow, exceptional circumstances.” Ideavillage Products Corp. v. Bling Boutique Store, No. 16-CV-9039, 2018 WL 3559085, at *2 (S.D.N.Y. July 24, 2018) (internal quotation marks omitted). That said, a court “must still satisfy itself that the plaintiff has established a sound legal basis upon which liability may be imposed.” Jemine v. Dennis, 901 F.Supp.2d 365, 373 (E.D.N.Y. 2012) (citing Au Bon Pain Corp. v. Artect, Inc., 653 F.2d 61, 65 (2d Cir. 1981)); accord Finkel v. Romanowicz, 577 F.3d 79, 84 (2d Cir. 2009) (“[A district court] is also required to determine whether [plaintiff's] allegations establish [defendant's] liability as a matter of law”).
The plaintiff also bears the burden of establishing an amount of damages with reasonable certainty. RGI Brands LLC v. Cognac Brisset-Aurige, S.A.R.L., No. 12-CV-1369, 2013 WL 1668206, at *6 (S.D.N.Y. April 18, 2013) (collecting cases), R. & R. adopted, 2013 WL 4505255 (S.D.N.Y. Aug. 23, 2013); see also Transatlantic Marine Claims Agency, Inc. v. Ace Shipping Corp., 109 F.3d 105, 111 (2d Cir. 1997). In conducting the inquest, the court is charged with “‘determining the proper rule for calculating damages on such a claim, and assessing plaintiff's evidence supporting the damages to be determined under this rule.'” Tiffany (NJ) Inc. v. Luban, 282 F.Supp.2d 123, 124 (S.D.N.Y. 2003) (quoting Credit Lyonnais Securities (USA), Inc. v. Alcantara, 183 F.3d 151, 155 (2d Cir. 1999)). Further, the damages award on a default judgment “must not differ in kind from, or exceed in amount, what is demanded in the pleadings.” Fed.R.Civ.P. 54(c).
The Court has determined that no hearing is necessary to determine damages (no party has requested one), and that determination of damages can be resolved on the submissions and prior proceedings. See Tamarin v. Adam Caterers, Inc., 13 F.3d 51, 5354 (2d Cir. 1993); Fustok v. ContiCommodity Services, Inc., 873 F.2d 38, 40 (2d Cir. 1989).
Discussion
I. Jurisdiction
The Court has both subject matter jurisdiction over this case and personal jurisdiction over the Defaulting Defendants. Federal subject matter jurisdiction exists over Plaintiff's federal trademark claims pursuant to 28 U.S.C. § 1331 (federal question jurisdiction) and § 1338 (jurisdiction over trademark, copyright, and patent claims), 15 U.S.C. § 1121 (jurisdiction over federal trademark claims), and supplemental jurisdiction over related state claims pursuant to 28 U.S.C. § 1367(a).
The Court implicitly already made this determination in entering the Permanent Injunction against the Defaulting Defendants.
The Court has personal jurisdiction over the Defaulting Defendants pursuant to NY CPLR §§ 302(a)(1), (3). As set forth in the procedural background above, Plaintiff served all Defaulting Defendants with the requisite pleadings pursuant to the methods of service previously authorized by the Court. Accordingly, Plaintiff has established personal jurisdiction over the Defaulting Defendants.
III. Defaulting Defendants' Liability
Plaintiff's Complaint and other submissions establish a sound legal basis for finding the Defaulting Defendants liable for willful counterfeiting and infringement of Plaintiff's Blippi Marks.
A. Liability For Trademark Infringement And Counterfeiting
Plaintiff alleges that the Defaulting Defendants engaged in trademark counterfeiting and infringement in violation of the Lanham Act, 15 U.S.C. §§ 1114(1)(a)-(b). The Lanham Act imposes liability on any person who in connection with the sale, offering for sale, or distribution of a good either uses a counterfeit of a registered mark or counterfeits such mark in advertising or packaging materials when such use or counterfeiting is likely to cause confusion. 15 U.S.C. §§ 1114(1)(a)-(b). To establish liability for trademark infringement, a plaintiff thus must show that (1) its marks are valid and entitled to protection, and (2) defendants' use of the plaintiff's marks is likely to cause confusion as to the origin or sponsorship of the defendants' goods. Tiffany (NJ) Inc. v. eBay, Inc., 600 F.3d 93, 102 (2d Cir. 2010). A counterfeit mark is a “spurious mark which is identical with, or substantially indistinguishable from, a registered mark.” 15 U.S.C. § 1127.
Here, Plaintiff's well-pled allegations easily satisfy those elements. First, Plaintiff has pled and demonstrated through the declaration of its General Counsel, and copies of trademark registrations, that Plaintiff owns all rights, title, and interest to the Blippi Marks. See Faram 1957 S.P.A. v. Faram Holding & Furniture, Inc., No. 16-CV-2430, 2018 WL 1394178, at *10 (S.D.N.Y. March 19, 2018) (certificates of registration “are prima facie evidence that ‘the mark is registered and valid (i.e., protectible), that the registrant owns the mark, and that the registrant has the exclusive right to use the mark in commerce'”) (quoting Lane Capital Management, Inc. v. Lane Capital Management, Inc., 192 F.3d 337, 345 (2d Cir. 1999)).
Second, “the standard for consumer confusion is easily satisfied in the case of counterfeits ‘because counterfeits, by their very nature, cause confusion.'” Off-White LLC v. 5HK5584, No. 19-CV-672, 2020 WL 1646692 at *5 (S.D.N.Y. April 3, 2020) (quoting Coach, Inc. v. Horizon Trading USA Inc., 908 F.Supp.2d 426, 433 (S.D.N.Y. 2012)). Plaintiff's well-pled allegations establish that the trademarks deployed by the Defaulting Defendants are counterfeit as they are virtually indistinguishable from Plaintiff's Blippi Marks. Accordingly, the Court finds that default judgment on Plaintiff's trademark counterfeiting and infringement claims is warranted.
B. Willful Misconduct
The Defaulting Defendants are deemed to have acted willfully, merely by virtue of their default and consequent failure to controvert the evidence of willful misconduct alleged in the Complaint. North Face Apparel Corp. v. Moler, No. 12-CV-6688, 2015 WL 4385626, at *6 (S.D.N.Y. July 16, 2015) (citing Lane Crawford LLC v. Kelex Trading (CA) Inc., No. 12-CV-9190, 2013 WL 6481354, at *3 (S.D.N.Y. Dec. 3, 2013) (collecting cases), R. & R. adopted, 2014 WL 1338065 (S.D.N.Y. April 3, 2014)), R. & R. adopted, 2015 WL 5472939 (S.D.N.Y. Sept. 16, 2015).
Even putting the fact of default aside, the conduct set forth in the Complaint and supporting evidence demonstrate that the Defaulting Defendants engaged in willful counterfeiting. See, e.g., Coach, Inc. v. Melendez, No. 10-CV-6178, 2011 WL 4542971, at *5 (S.D.N.Y. Sept. 2, 2011) (“Because the marks used by defendants on their products are virtually identical to the [Plaintiff's] Registered Trademarks, the conclusion is inescapable that defendants' infringement and counterfeiting is intentional.”), R. & R. adopted, 2011 WL 4542717 (S.D.N.Y. Sept. 30, 2011); see generally N.A.S. Import, Corp. v. Chenson Enterprises, Inc. 968 F.2d 250, 252 (2d Cir. 1992) (holding that for “the purpose of awarding enhanced statutory damages,” the knowledge component of willfulness “need not be proven directly but may be inferred from the defendant's conduct”).
Plaintiff has established the Defaulting Defendants' legal liability for willful counterfeiting and infringement of Plaintiff's registered Blippi Marks.
III. Statutory Damages
As noted previously, Plaintiff seeks statutory damages in connection with Defaulting Defendants' trademark violations. Plaintiff is entitled to statutory damages against each of the Defaulting Defendants.
A. Law Applicable To Statutory Damages Under The Lanham Act
The Lanham Act permits plaintiffs to elect as a remedy either actual or statutory damages for the marketing, sale, and distribution of goods with counterfeit marks. 15 U.S.C. § 1117. The range of available statutory damages is determined by whether or not the defendant's conduct was willful. Thus, statutory damages may be awarded 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). Statutory damages against a defendant who acted willfully are intended to serve the dual role of compensating a plaintiff for injuries and deterring wrongful conduct by the defendant and others. Malletier v. Carducci Leather Fashions, Inc., 648 F.Supp.2d 501,504 (S.D.N.Y. 2009) (“where ... a defendant is shown to have acted willfully, a statutory award should incorporate not only a compensatory, but also a punitive component to discourage further wrongdoing by the defendants and others”).
Section 1117(c) was enacted to address the type of scenario presented here - the difficulty of calculating actual damages caused by counterfeiters. See, e.g., Rodgers v. Anderson, No. 04-CV-1149, 2005 WL 950021, at *2 (S.D.N.Y. April 26, 2005) (“The rationale for this section is the practical inability to determine profits or sales made by counterfeiters.”); Gucci America, Inc. v. Duty Free Apparel, Ltd., 315 F.Supp.2d 511, 520 (S.D.N.Y. 2004) (“Congress added the statutory damages provision of the Lanham Act in 1995 because ‘counterfeiters' records are frequently nonexistent, inadequate, or deceptively kept ..., making proving actual damages in these cases extremely difficult if not impossible'”) (omission in original) (quoting S. Rep. No. 104-177, at 10 (1995)), amended by 328 F.Supp.2d 439 (S.D.N.Y. 2004).
Section 1117(c), however, “does not provide guidelines for courts to use in determining an appropriate award, as it is only limited by what the court considers just.” Duty Free Apparel, 315 F.Supp.2d at 520 (internal quotation marks and citation omitted). Many courts thus have looked to the analogous provision in the Copyright Act for guidance, 17 U.S.C. § 504(c), “and have considered the following factors in setting statutory damage awards under the Lanham Act: (1) the expenses saved and the profits reaped; (2) the revenues lost by the plaintiff; (3) the value of the [trademark]; (4) the deterrent effect on others besides the defendant; (5) whether the defendant's conduct was innocent or willful; (6) whether a defendant has cooperated in providing particular records from which to assess the value of the infringing material produced; and (7) the potential for discouraging the defendant.” Philip Morris USA Inc. v. A & V Minimarket, Inc., 592 F.Supp.2d 669, 673 (S.D.N.Y. 2009) (internal quotation marks and citations omitted); accord Sream, Inc. v. West Village Grocery Inc., No. 16-CV-2090, 2018 WL 4735706, at *3 (S.D.N.Y. Sept. 14, 2018), R. & R. adopted, 2018 U.S. Dist. LEXIS 169444 (S.D.N.Y. Oct. 1., 2018); Cengage Learning, Inc. v. Bhargava, No. 14-CV- 3174, 2017 WL 9802833, at *4 (S.D.N.Y. Aug. 22, 2017), R. & R. adopted, 2018 WL 1989574 (S.D.N.Y. April 25, 2018); Deckers Outdoor Corp. v. TKM Forest Hills, LLC, No. 12-CV-5986, 2014 WL 4536715, at *7-8 (E.D.N.Y. Sept. 11, 2014). The Court finds it appropriate to consider those factors here.
B. Analysis Of The Relevant Factors
The factors relevant to determining statutory damages collectively point to a substantial award of statutory damages.
With respect to the first, second, and sixth factors, the Defaulting Defendants' conduct - including their failure to appear, answer, or otherwise respond to the Complaint, or comply with the expedited discovery ordered in the TRO and PI Order - have made it impossible to determine the Defaulting Defendants' profits, quantify any expenses that the Defaulting Defendants may have saved by infringing Plaintiff's Blippi Marks, or assess revenues lost by Plaintiff as a result of the Defaulting Defendants' infringing and counterfeiting activities. As such, the Court may, and does, infer that the Defaulting Defendants financially benefitted to a significant degree by marketing and selling counterfeit Blippi products. See AW Licensing, LLC v. Bao, No. 15-CV-1373, 2016 WL 4137453, at *3 (S.D.N.Y. Aug. 2, 2016) (“courts have supported an inference of a broad scope of operations in cases dealing specifically with websites that ship and sell to a wide geographic range”).
The third factor - the value of Plaintiff's Blippi Marks - also weighs in favor of increased statutory damages. Again taking the allegations of the Complaint as true, together with the affidavit evidence and exhibits thereto, Plaintiff has established that the Blippi Marks have achieved global recognition and success as a result of Plaintiff's efforts in building up and developing consumer recognition, awareness, and goodwill in those products. By virtue of the foregoing, the Blippi Marks are of substantial value to Plaintiff and identify Plaintiff as the exclusive source of the Blippi products to which it is applied.
The remaining factors - willfulness and deterrence - further support significant statutory damages awards against the Defaulting Defendants. The Defaulting Defendants are hardly innocent infringers; to the contrary, their conduct was willful as set forth above. Statutory damages thus should be substantial enough to deter both the Defaulting Defendants and others who may be inclined to engage in similar conduct. “The need to deter other counterfeiters is particularly compelling given the apparent extent of counterfeit activity” committed by the Defaulting Defendants. Bumble & Bumble, LLC v. Pro's Choice Beauty Care, Inc., No. 14-CV-6911, 2016 WL 658310, at *5 (S.D.N.Y. Feb. 17, 2016), R. & R. adopted, 2016 WL 1717215 (S.D.N.Y. April 27, 2016); see also Carducci Leather Fashions, 648 F.Supp.2d at 504 (“a statutory award should incorporate not only a compensatory, but also a punitive component to discourage further wrongdoing by the defendants and others”).
C. The Amount Awarded
Plaintiff has requested statutory damages in the amount of $50,000 against each Defaulting Defendant. The Court finds that amount to be proper and warranted.
Other courts have considered statutory damages awards in cases similar to this one and awarded statutory damages for trademark counterfeiting in the range of $25,000 to $250,000 per mark or per infringer. See, e.g., Moonbug Entertainment Ltd. v. A20688, No. 21-CV-4313, 2022 WL 1239586, at *3 (awarding statutory damages of $50,000 against each of 211 defaulting defendants); Shenzhen Smoore Technology Ltd. v.Anuonuo International Trade Company, No. 19-CV-9896, 2020 WL 7390518, at *9 (S.D.N.Y. Oct. 23, 2020), R. & R. adopted, 2020 U.S. Dist. LEXIS 217063 (S.D.N.Y. Nov. 20, 2020) (awarding statutory damages of $50,000 against each of 86 defaulting defendants); WowWee Group Ltd. v. Haoqin, No. 17-CV-9893, 2019 WL 1316106, at *6 (S.D.N.Y. March 22, 2019) (awarding statutory damages of $25,000 against each of 62 defaulting defendants); Cartier International B.V. v. Ben-Menachem, No. 06-CV-3917, 2008 WL 64005, at *15 (S.D.N.Y. Jan. 3, 2008) ($50,000 statutory damages for each of 19 counterfeited marks is “sufficient to meet the goals of [15 U.S.C. § 1117(c)], including compensating the Plaintiffs and deterring future violations”); see also All-Star Marketing Group, LLC v. Media Brands Co, Ltd., 775 F.Supp.2d 613, 624-26 (S.D.N.Y. 2011) (collecting cases awarding between $25,000 and $250,000 per mark, and awarding $25,000 per mark for one set of marks and $50,000 for others).
Given that the Lanham Act provides for statutory damages of up to “$2,000,000 per counterfeit mark per types of goods or services sold, offered for sale, or distributed, as the court considers just,” 15 U.S.C. § 1117(c)(2), an award of $50,000 for each Defaulting Defendant's willful violations is entirely reasonable. In sum, the Court finds that an amount of $50,000 per Defaulting Defendant is a reasonable and appropriate amount for statutory damages in light of the requisite factors discussed above and as a commensurate deterrent to future violations by both the Defaulting Defendants and others. Accordingly, the Court recommends an award of $50,000 against each Defaulting Defendant.
D. Post-Judgment Interest
Federal law also permits a plaintiff to receive post-judgment interest “on any money judgment in a civil case recovered in a district court ... [to] be calculated from the date of the entry of the judgment, at a rate equal to the weekly average 1-year constant maturity Treasury yield, as published by the Board of Governors of the Federal Reserve System, for the calendar week preceding the date of the judgment.” 28 U.S.C. § 1961(a). Accordingly, Plaintiff should be awarded post-judgment interest on the money judgment entered in this action. See, e.g., WowWee v. Haoqin, 2019 WL 1316106 at *4 (granting post-judgment interest on inquest following default by defendants who counterfeited plaintiff's marks and products); Bumble & Bumble, 2016 WL 658310 at *12 (granting postjudgment interest after plaintiff's success on the merits of trademark infringement claim).
IV. Restraining Order Notices
To further its prospects of recovering damages, Plaintiff seeks leave to serve restraining notices pursuant to N.Y. C.P.L.R. § 5222 on the Defaulting Defendants and third parties who hold the assets of Defaulting Defendants. Those third parties include financial services, such as PayPal, and marketplace account services, such as eBay, which Defaulting Defendants use to facilitate their unlawful conduct.
As Plaintiff implicitly recognizes, the Court cannot impose an asset freeze by permanent injunction in this context and must instead pursue procedures provided by state law. See Allstar Marketing Group, LLC v. 158, No. 19-CV-4101, 2019 WL 3936879, at *2-4 (S.D.N.Y. Aug. 20, 2019) (denying request to include asset restraints and turnover requirements in injunction issued on default judgment but explaining that such measures can and should be pursued under Fed.R.Civ.P. 69 and state law procedural mechanisms); WowWee Group Ltd. v. Meirly, No. 18-CV-706, 2019 WL 1375470, at *11 (S.D.N.Y. March 27, 2019) (“To the extent Plaintiffs are concerned about the risk that Defaulting Defendants will dispose of, transfer, or hide their assets, it should turn to the remedies ordinarily applicable to enforcement of judgments at law under Rule 69 and N.Y. C.P.L.R. § 5222”). Recently, in Off-White LLC v. 2017pingan, and two related actions, the plaintiffs did just that, and Judge Failla allowed the plaintiff to serve restraining notices on third-party service provider PayPal pursuant to N.Y. C.P.L.R. § 5222. 20-CV-5191, Dkt. 40 at 5 (S.D.N.Y. May 7, 2021).
The two related actions are Off-White LLC v. 24 Hours Delivery Store, 20-CV-5194, and Off-White LLC v. A9660, 20-CV-5196.
Pursuant to Fed.R.Civ.P. 69(a), “postjudgment efforts to execute on a money judgment [must] comply with the procedural law of the forum state - unless a federal statute dictates to the contrary. The Lanham Act contains no such instruction. Accordingly, the applicable statute is [the New York C.P.L.R.].” Tiffany (NJ) LLC v. Dong, No. 11-CV-2183, 2013 WL 4046380, at *10 (S.D.N.Y. Aug. 9, 2013); see also Blue v. Cablevision Systems, New York City Corp., No. 00-CV-3836, 2007 WL 1989258, at *2 n.1 (E.D.N.Y. July 5, 2007) (finding that judgment creditor's employment of judgmentenforcement procedures authorized by New York law, including N.Y. C.P.L.R. § 5222, and as incorporated by Fed.R.Civ.P. 69, was proper).
Under New York's statute governing enforcement of judgments, once a money judgment is rendered against a defendant, a federal district court in New York has the power to, among other things, restrain the defendant's assets until the judgment is satisfied. N.Y. C.P.L.R. § 5222; see Cruz v. TD Bank, N.A., 711 F.3d 261, 264 (2d Cir. 2013); Interpool Ltd. v. Patterson, No. 89-CV-8501, 1995 WL 105284, at *1 (S.D.N.Y. March 13, 1995) (“A New York judgment creditor is entitled to a restraining notice on the debtor as a matter of right”). A restraining notice may be served on both the judgment debtor and third parties who hold asserts of the judgment debtor. N.Y. C.P.L.R. §§ 5222(a) (restraining notice “may be served on any person ...”); 5222(b) (addressing restraining notices served both on judgment debtor and on “a person other than the judgment debtor”).
Based on the foregoing, pursuant to Fed.R.Civ.P. 69(a), the Court should permit Plaintiff to serve restraining notices on both the Defaulting Defendants and their service and financial providers who hold assets of the Defaulting Defendants.
Under the Federal Rules, “execution on a judgment and proceedings to enforce it are stayed for 30 days after its entry, unless the court orders otherwise.” Fed.R.Civ.P. 62(a). A plaintiff may request that the automatic 30-day stay be dissolved to prevent defaulting defendants from potentially hiding their assets during that period. See Allstar, 2019 WL 3936879 at *4 n.6 (“if a plaintiff is concerned that defendants might attempt to conceal assets during the pendency of the automatic stay, it should include a dissolution of that stay as part of the relief requested in its proposed judgment.”). Although Plaintiff has not explicitly requested for dissolution of the stay here, the Court finds such relief appropriate as have other courts in similar cases. See, e.g., Moonbug Entertainment, 2022 WL 1239586 at * 5 (dissolving 30-day stay and permitting plaintiff to immediately enforce judgment); Mattel, Inc. v. Agogo Store, No. 21-CV-1507, 2022 WL 525698, at *11 (S.D.N.Y. Jan. 31, 2022) (same), R. & R. adopted, 2022 WL 524057 (S.D.N.Y. Feb. 22, 2022).
Conclusion
For the foregoing reasons, I recommend that the Court enter judgment in favor of Plaintiff against each Defaulting Defendant that: (1) awards Plaintiff statutory damages pursuant to 15 U.S.C. § 1117(c) in the amount of $50,000 against each Defaulting Defendant along with post-judgment interest; and (2) grants permission to serve asset restraining order notices pursuant to N.Y. C.P.L.R. § 5222 and dissolves the 30-day stay that would otherwise delay Plaintiff's ability to serve the notices.
Procedure For Filing Objections
Pursuant to 28 U.S.C. § 636(b)(1) and Rules 72, 6(a), and 6(d) of the Federal Rules of Civil Procedure, the parties shall have fourteen (14) days to file written objections to this Report and Recommendation. Such objections shall be filed with the Clerk of Court, with extra copies delivered to the Chambers of the Honorable Paul G. Gardephe, United States Courthouse, 40 Foley Square, New York, New York 10007, and to the Chambers of the undersigned, United States Courthouse, 500 Pearl Street, New York, New York 10007. FAILURE TO FILE TIMELY OBJECTIONS WILL RESULT IN A WAIVER OF OBJECTIONS AND WILL PRECLUDE APPELLATE REVIEW.
Plaintiff shall effect service of this Report and Recommendation on the Defaulting Defendants through the same means of service provided for under the TRO and PI Order.
21-CV-4311-ATTACHMENT A - DEFAULTING DEFENDANTS
DEFENDANT WRONGFUL USE DAMAGES 1 6383702 Two (2) infringing uses of Plaintiff's Blippi Marks. (Complaint, Ex. C, p. 3). $50,000.00 2 9654956 Two (2) infringing uses of Plaintiff's Blippi Marks. (Complaint, Ex. C, p. 10). $50,000.00 3 airina4u-airina4u Five (5) infringing uses of Plaintiff's Blippi Marks. (Complaint, Ex. C, p. 17). $50,000.00 4 bingohere4u Two (2) infringing uses of Plaintiff's Blippi Marks. (Complaint, Ex. C, p. 24). $50,000.00 5 blessernn Three (3) infringing uses of Plaintiff's Blippi Marks. (Complaint, Ex. C, p. 31). $50,000.00 6 ciaociaostore_1 Two (2) infringing uses of Plaintiff's Blippi Marks. (Complaint, Ex. C, p. 40). $50,000.00 7 classy*missy One (1) infringing use of Plaintiff's Blippi Marks. (Complaint, Ex. C, p. 47). $50,000.00 8 creat_kelly One (1) infringing use of Plaintiff's Blippi Marks. (Complaint, Ex. C, p. 54). $50,000.00 9 dreamaker1201 Two (2) infringing uses of Plaintiff's Blippi Marks. (Complaint, Ex. C, pp. 61-62). $50,000.00 10 fzshengmaoxin One (1) infringing use of Plaintiff's Blippi Marks. (Complaint, Ex. C, p. 69). $50,000.00 11 gathering-retail Eighteen (18) infringing uses of Plaintiff's Blippi Marks. (Complaint, Ex. C, pp. 76-79). $50,000.00 12 gkever2016 One (1) infringing use of Plaintiff's Blippi Marks. (Complaint, Ex. C, p. 86). $50,000.00 13 jackinthebox02 One (1) infringing use of Plaintiff's Blippi Marks. (Complaint, Ex. C, p. 93). $50,000.00 14 jfbchupmei One (1) infringing use of Plaintiff's Blippi Marks. (Complaint, Ex. C, p. 100). $50,000.00 15 johlevi94 Three (3) infringing uses of Plaintiff's Blippi Marks. (Complaint, Ex. C, p. 109). $50,000.00 16 lazycorner One (1) infringing use of Plaintiff's Blippi Marks. (Complaint, Ex. C, p. 116). $50,000.00 17 longjfli-1 Two (2) infringing uses of Plaintiff's Blippi Marks. (Complaint, Ex. C, p. 123). $50,000.00 18 lvxingjiatravel2016 Seven (7) infringing uses of Plaintiff's Blippi Marks. (Complaint, Ex. C, p. 137). $50,000.00 22 19 mariocostume Three (3) infringing uses of Plaintiff's Blippi Marks. (Complaint, Ex. C, p. 144). $50,000.00 20 mark-condor One (1) infringing use of Plaintiff's Blippi Marks. (Complaint, Ex. C, p. 151). $50,000.00 21 meilianduotoa Seven (7) infringing uses of Plaintiff's Blippi Marks. (Complaint, Ex. C, p. 158). $50,000.00 22 mwzuk Two (2) infringing uses of Plaintiff's Blippi Marks. (Complaint, Ex. C, pp. 165-166). $50,000.00 23 naturalift_beauty One (1) infringing use of Plaintiff's Blippi Marks. (Complaint, Ex. C, p. 173). $50,000.00 24 prettyclotha Two (2) infringing uses of Plaintiff's Blippi Marks. (Complaint, Ex. C, p. 180). $50,000.00 25 shengxinyide2021new Five (5) infringing uses of Plaintiff's Blippi Marks. (Complaint, Ex. C, p. 187). $50,000.00 26 shihengtrad Three (3) infringing uses of Plaintiff's Blippi Marks. (Complaint, Ex. C, p. 194). $50,000.00 27 spring-2010 Eight (8) infringing uses of Plaintiff's Blippi Marks. (Complaint, Ex. C, pp. 201-203). $50,000.00 28 thinkingtimew Four (4) infringing uses of Plaintiff's Blippi Marks. (Complaint, Ex. C, p. 210). $50,000.00 29 tianchuangbuild04 Two (2) infringing uses of Plaintiff's Blippi Marks. (Complaint, Ex. C, p. 219). $50,000.00 30 tomasocostume Two (2) infringing uses of Plaintiff's Blippi Marks. (Complaint, Ex. C, p. 226). $50,000.00 31 toycity-02 Ten (10) infringing uses of Plaintiff's Blippi Marks. (Complaint, Ex. C, p. 233). $50,000.00 32 xueme-28 One (1) infringing use of Plaintiff's Blippi Marks. (Complaint, Ex. C, p. 247). $50,000.00 33 yhzb520 Two (2) infringing uses of Plaintiff's Blippi Marks. (Complaint, Ex. C, p. 254). $50,000.00 34 yiheyh Two (2) infringing uses of Plaintiff's Blippi Marks. (Complaint, Ex. C, p. 261). $50,000.00 35 zbyh1314 Two (2) infringing uses of Plaintiff's Blippi Marks. (Complaint, Ex. C, p. 268). $50,000.00 23