Opinion
22 Civ. 7077 (CS) (AEK)
07-26-2024
OTTER PRODUCTS, LLC, Plaintiff, v. COREY HARGROVE and “JOHN DOES” 1-5, Defendants.
HONORABLE CATHY SEIBEL, U.S.D.J.
REPORT AND RECOMMENDATION
ANDREW E. KRAUSE, UNITED STATES MAGISTRATE JUDGE
Plaintiff Otter Products, LLC (“Otter”) commenced this action against Defendant Corey Hargrove (“Hargrove”) on August 19, 2022, asserting claims under the Lanham Act for (1) counterfeiting and/or infringement of trademarks in violation of 15 U.S.C. § 1114; (2) unfair competition, false designation of origin, and false description in violation of 15 U.S.C. § 1125(a); and (3) trademark dilution in violation of 15 U.S.C. § 1125(c). ECF No. 1 (“Complaint” or “Compl.”). The Complaint also includes a state law claim for unfair and deceptive business practices in violation of New York General Business Law § 349. On September 29, 2022, based on Hargrove's failure to answer or otherwise move in response to the Complaint, the Clerk of Court issued a certificate of default. ECF No. 11.
On December 29, 2022, Your Honor ordered Otter to seek a default judgment by order to show cause. ECF No. 12. Otter filed a proposed order to show cause and proposed default judgment, along with supporting documents, on February 9, 2023. ECF Nos. 15-20. On February 10, 2023, Your Honor signed the order to show cause and scheduled a show cause hearing for March 10, 2023. ECF No. 21. Otter served the order to show cause and all supporting documents on Hargrove on February 13, 2023. ECF No. 22. Hargrove failed to appear at the show cause hearing; at the hearing, Your Honor found Hargrove liable for willful infringement and referred the matter to the undersigned for an inquest on damages after default. Docket Sheet, Minute Entry dated 03/10/2023; see ECF No. 23. This Court subsequently scheduled a conference, see ECF No. 24, and despite being served with a copy of the scheduling order, see ECF No. 25, Hargrove failed to appear, see Docket Sheet, Minute Entry dated 04/10/2023. As directed by this Court, Otter thereafter filed additional papers in support of its damages request and served them on Hargrove. ECF Nos. 26, 28. To date, Hargrove has neither filed any papers in connection with the damages inquest nor otherwise contacted this Court.
For the reasons stated below, I respectfully recommend that a default judgment be entered against Hargrove (1) awarding Otter (i) statutory damages of $875,000, (ii) costs of $564.56, and (iii) post-judgment interest calculated in accordance with 28 U.S.C. § 1961; and (2) issuing a permanent injunction barring Hargrove from engaging in any further counterfeiting or infringing activity.
BACKGROUND
The following facts are drawn from the Complaint and additional documents submitted by Otter in support of its application for damages.
Otter sells a line of “functional, durable, and award-winning personal electronics cases” under the brand name OtterBox®. Compl. ¶¶ 10-11. Otter owns various trademarks registered with the United States Patent and Trademark Office (the “Registered Trademarks”). Id. ¶ 12. Otter's Registered Trademarks have been used “to identify and distinguish [Otter's] high-quality merchandise including, but not limited to, dirt resistant mobile phone cases, dirt resistant tablet cases, shock resistant mobile phone cases, shock resistant tablet cases, drop resistant mobile phone cases, drop resistant tablet cases, mobile phone accessories, tablet accessories, and other goods.” Id. ¶ 14.
Using the eBay website and operating under the username “corehargrov4,” Hargrove was selling products bearing marks that counterfeited and infringed on Otter's Registered Trademarks. Id. ¶¶ 17-18. On or about January 11, 2022, Otter purchased a purported “OtterBox” phone case from the “corehargrov4” eBay account (the “First Purchase”). Id. ¶ 19. Otter reviewed the First Purchase and confirmed that it was not authentic Otter merchandise, but rather bore counterfeits and infringements of the Registered Trademarks. Id. ¶ 20. On or about March 8, 2022, Otter sent Hargrove a cease-and-desist letter, putting him on notice of his illegal activities and demanding that he immediately stop selling any products that infringed on the Registered Trademarks. Id. ¶ 21; see ECF No. 18 (“Lee Decl.”) Ex. D.
Following multiple attempts to communicate with Hargrove, Otter's counsel received email correspondence from him on or about March 21, 2022, which denied the claims of counterfeiting. Compl. ¶¶ 21-22. On or about May 25, 2022, Otter discovered that Hargrove was again selling merchandise bearing the Registered Trademarks. Id. ¶ 23. That same day, Otter made another purchase from the “corehargrov4” eBay account of a purported “OtterBox” phone case (the “Second Purchase”). Id. Otter reviewed the Second Purchase and confirmed that it was not authentic Otter merchandise, but instead bore counterfeits and infringements of the Registered Trademarks. Id. ¶ 24.
On or about June 13, 2022, Otter's counsel emailed Hargrove to inform him that Otter would be filing suit to address his illegal activities unless the matter could be resolved. Id. ¶ 25. Otter's counsel never received a response. Id.
As of the date the Complaint was filed, Hargrove was still offering infringing products for sale on eBay. Id. ¶ 26. The products offered for sale by Hargrove were not manufactured, authorized, or sponsored by Otter. Id. ¶ 29.
DISCUSSION
I. Legal Standard
“A default judgment that is entered on the well-pleaded allegations in a complaint establishes a defendant's liability, and the sole issue that remains before the court is whether the plaintiff can show, with reasonable certainty, entitlement to the amount of damages [he or she] seeks.” Trinity Biotech, Inc. v. Reidy, 665 F.Supp.2d 377, 380 (S.D.N.Y. 2009) (cleaned up). “When assessing damages, a court cannot rely on the plaintiff's statement of the damages; rather, damages must be established with reasonable certainty.” Negrin v. Kalina, No. 09-cv-6234 (LGS) (KNF), 2013 WL 6671688, at *4 (S.D.N.Y. Dec. 17, 2013) (quotation marks omitted), adopted by 2014 WL 67231 (S.D.N.Y. Jan. 7, 2014); see Credit Lyonnais Sec. (USA), Inc. v. Alcantara, 183 F.3d 151, 155 (2d Cir. 1999). Rule 54(c) of the Federal Rules of Civil Procedure requires that “a default judgment must not differ in kind from, or exceed in amount, that [which] is demanded in the pleadings.” Fed.R.Civ.P. 54(c). A court need not hold an inquest hearing to determine damages “as long as it [has] ensured that there [is] a basis for the damages specified in the default judgment.” Transatlantic Marine Claims Agency, Inc. v. Ace Shipping Corp., 109 F.3d 105, 111 (2d Cir. 1997) (quotation marks omitted).
II. Damages
Otter seeks an award of damages against Hargrove in the amount of $2,800,564.56. ECF No. 17 (Statement of Damages). Specifically, Otter requests statutory damages for infringement of seven of the Registered Trademarks in the amount of $400,000 per mark, plus costs of $564.56. See ECF No. 20 (“Mem. of Law”) at 10-20.
Although Otter's counsel states in his declaration that Otter is seeking $400,000 in statutory damages for each of eight Registered Trademarks, for a total of $3.2 million, see Lee Decl. ¶ 26, in all other documents submitted in support of its damages request, Otter states that it seeks statutory damages for only seven Registered Trademarks.
A. Statutory Damages
Section 1117(c) of the Lanham Act provides that
[i]n a case involving the use of a counterfeit mark . . . 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 . . . 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)(1)-(2). Otter maintains that it must pursue statutory damages because Hargrove has failed to appear in this action and has failed to disclose any records concerning his sales of counterfeit Otter products. Mem. of Law at 10.
“District courts have wide discretion in awarding statutory damages under § 1117(c).” Mattel, Inc v. www.power-wheels-outlet.com, No. 21-cv-8108 (PAE) (GWG), 2022 WL 2900763, at *2 (S.D.N.Y. July 22, 2022) (quotation marks omitted) (“Power-Wheels-Outlet”), adopted by 2022 WL 3159317 (S.D.N.Y. Aug. 8, 2022). “Because a key purpose of § 1117(c) is to provide a monetary remedy in cases of amorphous damage, courts assessing statutory damages must exercise discretion in examining whatever facts and considerations are available in a setting of limited information.” Id. (quotation marks omitted).
“To determine an appropriate award of statutory damages under the Lanham Act, courts rely on seven factors: (1) expenses saved and profits reaped by the infringer/defendant; (2) the plaintiff's lost revenues; (3) the value of the trademark; (4) the need to deter other potential infringers; (5) whether the defendant's conduct was innocent or willful; (6) the cooperativeness of the defendant in providing records relevant to profits and losses; and (7) the need to deter the defendant from future misconduct.” Id. at *3 (quotation marks omitted).
The first two factors weigh in Otter's favor. While there has been no discovery due to Hargrove's default, leaving Otter without information as to Hargrove's expenses and profits or Otter's lost revenues, Otter has provided evidence that Hargrove was offering for sale, and selling, counterfeit Otter products on the internet, and the Court “may draw upon the ‘inference of a broad scope of operations in cases dealing specifically with websites that ship and sell to a wide geographic range.'” Id. (quoting Spin Master Ltd. v. Alan Yuan's Store, 325 F.Supp.3d 413, 426 (S.D.N.Y. 2018)).
With respect to the third factor, Otter has not provided any objective evidence from which this Court could determine the value of its trademarks. Instead, Otter's submissions on this point are limited to declarations from Brand Protection Manager John McKinney, in which he notes that “OtterBox cases stand as one of the best-selling brands of mobile phone and tablet cases worldwide . . .”; that Otter has “expended great amounts of time, money, and effort advertising and promoting its trademarks globally . . .”; and that Otter “has developed considerable goodwill and a reputation for the highest quality products.” ECF No. 19 (“McKinney Decl.”) ¶¶ 4-5; see also ECF No. 26-2 (“McKinney Suppl. Decl.”) ¶¶ 5-6 (“OtterBox is the most popular and successful brand of cell phone protection cases in the United States .... Since Plaintiff is so successful and the ‘OtterBox' trademark and related Plaintiff's Registered Trademarks have so much goodwill associated with them, they are invaluable to Plaintiff.”). Where only limited evidence has been presented as to the value of a trademark, “courts have made either neutral findings as to factor three, or have found that the factor weighs against a substantial damages award.” Power-Wheels-Outlet, 2022 WL 2900763, at *3 (internal citation omitted). That said, courts also have found, even in circumstances where the only information concerning the value of a plaintiff's brands was that they were “high quality products” and were “widely advertised and promoted,” that it is possible to “infer from the well-known reputations of most or all of the trademarks and the sea of advertising that presses them on the consciousness of the buying public that they are indeed valuable.” Lane Crawford LLC v. Kelex Trading (CA) Inc., No. 12-cv-9190 (GBD) (AJP), 2013 WL 6481354 at *4 (S.D.N.Y. Dec. 3, 2013) (quotation marks omitted), adopted by 2014 WL 1338065 (S.D.N.Y. Apr. 3, 2014). Given these conflicting considerations, this Court finds the third factor to be neutral as to the question of whether a substantial damages award is warranted.
As to the fourth factor, “the goal of deterring similar conduct by other enterprises requires a substantial award.” Id. (quotation marks omitted) (collecting cases). With respect to the fifth factor, because Hargrove defaulted, Your Honor deemed him to be a willful infringer. See Docket Sheet, Minute Entry dated 03/10/2023; see Lane Crawford LLC, 2013 WL 6481354 at *3 (“by virtue of their default [the defendants] are deemed to be willful infringers”) (citing cases). This factor therefore weighs in favor of a substantial damages award. Factor six, the cooperativeness of the defendants, also supports a substantial award of damages, as Hargrove has not provided any records relevant to his profits and losses that would have aided in the calculation of damages. See Kelly Toys Holdings, LLC v. Guangzhou Lianqi Tech. Co., Ltd., No. 21-cv-8111 (AS) (GWG), 2024 WL 1360919 at *5 (S.D.N.Y. Apr. 1, 2024), adopted by 2024 WL 1908435 (S.D.N.Y. May 1, 2024).
For the seventh factor, it is noteworthy that even after Hargrove received the cease-and-desist letter and a subsequent email from Otter's counsel informing him that Otter would be filing suit unless the parties could reach a resolution, Hargrove continued to sell products on eBay that infringed the Registered Trademarks. Compl. ¶¶ 21-26; see also Lee Decl. ¶¶ 14-19 & Ex. D. The need to deter Hargrove from future misconduct thus weighs in favor of a substantial damages award. See Kelly Toys Holdings, LLC, 2024 WL 1360919, at *5 (“[T]he Defaulting Defendants' willful misconduct and failure to appear in this litigation merit a finding that a slight damage award is unlikely to deter them from continuing their illegal business.”) (quotation marks omitted).
Overall, the balance of factors weighs in favor of Otter's request for an award of statutory damages significantly greater than the statutory minimum of $1,000 per counterfeit mark. Because the defendant's infringement was willful, the maximum amount of statutory damages per counterfeit mark is $2,000,000. 15 U.S.C. § 1117(c)(2). Otter seeks statutory damages of $400,000 per mark, or $2,800,000 total for seven Registered Trademarks, in order to punish Hargrove and deter further counterfeiting of its products. Mem. of Law at 16-18. But Otter's requested award of $400,000 in statutory damages per mark would be excessive based on awards in analogous cases in this District. Where, as here, a plaintiff has not presented evidence regarding either the value of the trademarks at issue or the extent of the defendant's business, courts have rejected such large damage requests. See Power-Wheels-Outlet, 2022 WL 2900763, at *4 (citing cases). “While defendants certainly should not benefit from their failure to provide information about their profits or otherwise participate in this action, neither should [a plaintiff] reap a windfall in the absence of any information about the potential amount of [the plaintiff's] lost revenues or the scale of its operation in comparison to the market.” Lane Crawford LLC, 2013 WL 6481354 at *5 (collecting cases). Moreover, “considerable damage awards are often obtained only after showing that the defendant's sales were substantial.” Power-Wheels-Outlet, 2022 WL 2900763, at *5 (quotation marks omitted); but see id. (“Nonetheless, [plaintiff] does identify several decisions where $250,000 or more per mark was awarded even without evidence of a significant number of sales.”).
In support of its damages request, Otter cites cases, not all of which involved defaulting defendants, where significantly higher damages amounts were awarded, but all of the cited cases involved substantially more elaborate and widespread counterfeiting schemes and/or higher numbers of infringed trademarks. See Mem. of Law at 17. Otter provides no explanation of how these cases are at all analogous to the instant case, and although it is unclear to this Court how Otter arrived at its assessment of the “estimated” per mark awards in certain cases, it is notable that even in some of these exemplar cases, courts awarded far less than $400,000 on a per-mark basis. See id. (citing, e.g., Burberry Ltd. v. Doe, No. 11-cv-8306 (TPG) (S.D.N.Y. filed May 17, 2012) (Otter estimated that the award was $158,102.76 per mark in a case involving the infringement of 22 trademarks through the sale of at least 22 distinct types of counterfeit products over a network of infringing websites using 82 infringing domain names), and the related case of Burberry Ltd. v. Doe, No. 12-cv-479 (TPG) (S.D.N.Y. filed May 17, 2012) (Otter estimated that the award was $197,628.46 per mark in a case involving the infringement of 22 trademarks through the sale of at least 22 distinct types of counterfeit products over a network of infringing websites using 154 infringing domain names)). Simply put, the cited cases do not provide adequate support for the requested award of $400,000 per mark.
“[C]ourts in this District and beyond have found [that] the sale of counterfeit items over the internet suggests a broad scope of operations, and access to a virtually limitless number of customers.” All-Star Mktg. Grp., LLC v. andnov73, No. 20-cv-9069 (PKC), 2023 WL 5208008, at *7 (S.D.N.Y. Aug. 14, 2023) (cleaned up) (“andnov73”). Here, the evidence shows that Hargrove sold counterfeit Otter products on eBay under the seller username “corehargrov_4.” See McKinney Decl. ¶¶ 8, 11, 13. But beyond that, the scope of Hargrove's counterfeiting activities is unknown. And even if the Court assumes a broad scope of operations, Otter's requested award of $400,000 in statutory damages per mark is still high relative to amounts awarded in other cases involving internet sales. See, e.g., Kelly Toys Holdings, LLC, 2024 WL 1360919 at *5 (awarding $125,000 per mark); andnov73, 2023 WL 5208008, at *7 (awarding $50,000 per defaulting defendant); Roku, Inc. v. Individuals, Corps., LLCs, P 'ships & Uninc. Ass'ns, No. 22-cv-2168 (PKC), 2023 WL 137747, at *3 (S.D.N.Y. Jan. 9, 2023) (awarding $130,000 per defaulting defendant); Power-Wheels-Outlet, 2022 WL 2900763, at *4 (“$300,000 [per counterfeit mark] would be excessive in light of the case law within this district[,]” which “suggests that $50,000 to $75,000 is a far more common award for infringing products such as toys,” and awarding $125,000 per counterfeit mark).
In sum, even though Hargrove's counterfeiting and infringing activities occurred over the internet, this Court finds that Otter should be awarded $125,000 per counterfeit mark. This figure is a substantial award that accounts for the importance of general deterrence of other potential infringers and specific deterrence of Hargrove, who engaged in willful infringing conduct here. The recommended award is also consistent, however, with cases in this District involving defaulting defendants where there is a lack of evidence as to the value of the trademarks at issue and the extent of the defendant's business.
Accordingly, I respectfully recommend that Otter be awarded a total of $875,000 ($125,000 x 7) in statutory damages.
B. Costs
Otter requests an additional award of costs, but does not request attorneys' fees. See Mem. of Law at 19-20. “The Lanham Act allows prevailing parties to recover the costs of the action.” Lane Crawford LLC, 2013 WL 6481354 at *11 (quotation marks omitted) (citing 15 U.S.C. § 1117(a)). Otter seeks an award of $564.56 in costs, comprised of filing fees and process server fees. Lee Decl. ¶ 27; ECF No. 26-1 (Lee Supplemental Declaration) ¶ 4 & Ex. A. “Generally, out of pocket litigation costs are recoverable if they are necessary for the representation of the client.” Lane Crawford LLC, 2013 WL 6481354 at *11 (cleaned up). Otter's counsel has provided appropriate documentation of the costs incurred in this litigation, and these costs were, without question, necessary for the representation of Otter in this matter.
I therefore respectfully recommend that Otter be awarded costs of $564.56.
C. Post-Judgment Interest
While Otter does not specifically request post-judgment interest in the Complaint, Otter includes in its “Proposed Final Judgment and Injunction by Default,” ECF No. 16, that the award of statutory damages “shall bear interest from the date of this judgment at the rate provided by law,” id. ¶ 16, and that costs shall be awarded “with interest thereon at the rate provided by law,” id. ¶ 17. Under federal law, “[i]nterest shall be allowed on any money judgment in a civil case recovered in a district court.” 28 U.S.C. § 1961(a). The Second Circuit has “consistently held that an award of post-judgment interest is mandatory” and should be awarded at the statutory rate prescribed by section 1961. Schipani v. McLeod, 541 F.3d 158, 165 (2d Cir. 2008) (citing Westinghouse Credit Corp. v. D'Urso, 371 F.3d 96, 100 (2d Cir. 2004)).
I therefore respectfully recommend that Otter be awarded post-judgment interest at the statutory rate from the date final judgment is entered to the date the judgment is satisfied. See Power-Wheels-Outlet, 2022 WL 2900763, at *5.
III. Injunctive Relief
In the prayer for relief in the Complaint, Otter seeks an injunction barring Hargrove from, among other things, “using any counterfeit or infringement of the Otter Products Registered Trademarks to identify any goods not authorized by Plaintiff.” Compl. at pgs. 13-14. “Under the Lanham Act, a court may grant injunctive relief ‘according to the principles of equity and upon such terms as the court may deem reasonable' to prevent further violations of a plaintiff's trademark.” andnov73, 2023 WL 5208008, at *5 (quoting 15 U.S.C. § 1116). “A court may grant a permanent injunction on a motion for default judgment.” Id. (quotation marks omitted).
Section I of the Complaint's “Prayer for Relief” requests as follows:
That the Court enter an injunction ordering that Defendants, their agents, servants, employees, and all other persons in privity or acting in concert with them be enjoined and restrained from:
a) using any counterfeit or infringement of the Otter Products Registered Trademarks to identify any goods not authorized by Plaintiff;
b) counterfeiting or infringing the Otter Products Registered Trademarks by importing, manufacturing, distributing, selling, offering for sale, advertising, promoting, displaying any products bearing any simulation, reproduction, counterfeit, or copy of the Otter Products Registered Trademarks;
c) using any simulation, reproduction, counterfeit, or copy of the Otter Products Registered Trademarks in connection with the importation, promotion, advertisement, display, sale, offering for sale, manufacture, production, circulation, or distribution of any unauthorized products in such fashion as to relate or connect, or tend to relate or connect, such products in any way to Plaintiff, or to any goods sold, manufactured, sponsored, or approved by, or connected with Plaintiff;
d) making any statement or representation whatsoever, or using any false designation of origin or false description, or performing any act, which can or is likely to lead the trade or public, or individual members thereof, to believe that any services provided, products manufactured, distributed, sold or offered for sale, or rented by Defendants are in any way associated or connected with Plaintiff;
e) engaging in any other conduct constituting an infringement of the Otter Products Registered Trademarks, of Plaintiff's rights in, or to use or to exploit, said trademark, or constituting any weakening of Plaintiff's names, reputations, and goodwill.Compl. at pgs. 13-14.
“The Court may issue a permanent injunction when a plaintiff has succeeded on the merits and has demonstrated that (1) it suffered irreparable harm; (2) that remedies available at law are inadequate to compensate for that injury; (3) that the balance of hardships between the parties warrants such a remedy; and (4) that the public interest would not be disserved by the issuance of an injunction.” 3M Co. v. Performance Supply, LLC, No. 20-cv2949 (JLR) (JW), 2023 WL 3481608, at *5 (S.D.N.Y. Apr. 26, 2023) (quotation marks omitted), adopted by 2023 WL 3480927 (S.D.N.Y. May 16, 2023). Because Your Honor has entered a default judgment as to liability, Otter has succeeded on the merits. This Court therefore considers whether Otter has satisfied the four factors necessary to allow for the grant of a permanent injunction.
First, the Lanham Act provides that “a plaintiff seeking any such injunction to prevent the violation of a registered mark shall be entitled to a rebuttable presumption of irreparable harm upon the finding of a trademark violation.” Id. (cleaned up) (quoting 15 U.S.C. § 1116(a)). “Further, the loss of reputation and goodwill constitutes irreparable harm.” Id. (cleaned up) (quoting Really Good Stuff, LLC v. BAP Investors, L.C., 813 Fed.Appx. 39, 44 (2d Cir. 2020)). Here, Otter asserts that counterfeiters like Hargrove cause immeasurable damage to Otter's Registered Trademarks and associated goodwill because “they fool consumers to think that the [cell phone] case bearing [Otter's] Registered Trademarks is real and will provide the utmost level of protection but this is sadly not the case”; “[t]hese tricked consumers often complain to [Otter] when their electronics are broken because they could not survive a fall”; and “[t]his trickery may lead consumers to never purchase an ‘OtterBox' case ever again and tell other people not to do so.” McKinney Suppl. Decl. ¶¶ 6-8. This damage to Otter's reputation and goodwill constitutes irreparable harm. See 3M Co., 2023 WL 3481608, at *5 (irreparable harm found where, inter alia, “Defendant purported that his products were manufactured by Plaintiff; yet, Plaintiff had no control over their manufacture or any insight into what was being sold under their Mark”); see also Kelly Toys Holdings, LLC, 2024 WL 1360919 at *8 (“In a trademark case, irreparable injury is established where there is any likelihood that an appreciable number of ordinarily prudent purchasers are likely to be misled, or indeed simply confused, as to the source of the goods in question.” (quotation marks omitted)).
Second, remedies available at law are inadequate to compensate for the injury to Otter's reputation and goodwill. See 3M Co., 2023 WL 3481608, at *6. Because “[a] defaulting defendant may be presumed to be willing to continue their infringement of a mark,” “there is no guarantee that money damages will suffice to protect [Otter's Registered Trademarks] moving forward.” Id.; see Compl. ¶ 26 (“As of the date of the filing of this Complaint, Defendants are still offering for sale Infringing Products on eBay.”).
Third, the balance of hardships militates in favor of the grant of a permanent injunction. There is no hardship to Hargrove in enjoining him from continuing to infringe Otter's Registered Trademarks. Rather, “it is generally accepted that an infringer cannot claim hardship due to the loss of ability to offer its infringing product.” 3M Co., 2023 WL 3481608, at *6 (quotation marks omitted). In contrast, Otter “has suffered and will continue to suffer irreparable harm to its goodwill and reputation as a result of [Hargrove's] sale of [counterfeit Otter products].” andnov73, 2023 WL 5208008, at *6.
Fourth and finally, the public interest would be served by the grant of a permanent injunction because “[t]he public has an interest in receiving the products that they think they are receiving.” 3M Co., 2023 WL 3481608, at *6; see andnov73, 2023 WL 5208008, at *6 (“the public has an interest in not being deceived - in being assured that the mark it associates with a product is not attached to goods of unknown origin and quality”) (quotation marks omitted).
“The permanent injunction is the most effective safeguard for the public against confusion.” 3M Co., 2023 WL 3481608, at *6.
Because Otter has satisfied all four factors necessary for a permanent injunction, I respectfully recommend that such an injunction be granted.
CONCLUSION
For the foregoing reasons, I respectfully recommend that a judgment be entered awarding Otter statutory damages and costs on its claims against Hargrove in the total amount of $875,564.56, plus post-judgment interest in accordance with 28 U.S.C. § 1961, and that a permanent injunction be issued, barring Hargrove from any further infringement of Otter's Registered Trademarks.
As part of its submissions in support of its damages request, Otter explained that it “does not seek the entry of judgment against the ‘John Doe' defendants and dismisses its claims, without prejudice, in the proposed Final Judgement [sic],” Lee Decl. ¶ 28; see Proposed Final Judgment and Injunction by Default ¶ 24. Accordingly, I respectfully recommend that the final judgment also reflect Otter's stated intention to dismiss the John Doe defendants.
Otter must serve Hargrove with a copy of this Report and Recommendation, including copies of any unpublished decisions cited herein, at his last known address, and must file appropriate proof of service on or before August 1, 2024.
NOTICE
Pursuant to 28 U.S.C. § 636(b)(1) and Rule 72(b) of the Federal Rules of Civil Procedure, the parties have 14 days from service of this Report and Recommendation to file written objections. See also Fed.R.Civ.P. 6(a), (d) (adding three additional days when service is made by mail). A party may respond to another party's objections within 14 days after being served with a copy. Fed.R.Civ.P. 72(b)(2). Such objections, and any responses to such objections, must be filed with the Clerk of Court, with courtesy copies delivered to the chambers of the Honorable Cathy Seibel, United District Court, Southern District of New York, 300 Quarropas Street, White Plains, New York, 10601, and to the chambers of the Honorable Andrew E. Krause at the same address.
Any request for an extension of time for filing objections or responses to objections must be directed to Judge Seibel, and not to the undersigned.
Failure to file timely objections to this Report and Recommendation will result in a waiver of objections and will preclude appellate review. See Thomas v. Arn, 474 U.S. 140 (1985); Smith v. Campbell, 782 F.3d 93, 102 (2d Cir. 2015).