Opinion
CIVIL ACTION No. 01-2522-CM
May 6, 2002
MEMORANDUM AND ORDER Pending before the court is Plaintiff's Motion for Default Judgment (Doc. 13).
I. Procedural Background
Defendant was served with the Summons and Complaint in this matter on November 5, 2001. Defendant was given twenty (20) days in which to answer the Complaint. Defendant failed to answer the Complaint within the allotted period of time. On December 4, 2001, Plaintiff applied for entry of default against Defendant. The Clerk of the Court filed an Entry of Default pursuant to Fed.R.Civ.P. 55(a) against Defendant on December 12, 2001. Subsequently, on March 7, 2002, Plaintiff filed the pending Motion for Default Judgment, seeking the entry of default judgment against Defendant. On March 29, 2002, the court issued to Defendant an order to show cause why the court should not enter a default judgment against him. Defendant has now responded.
In his response, Defendant notes that he does not oppose an entry of judgment against him, as requested by Plaintiff. Defendant does object, however, to the assessment of any attorneys' fees against him. Plaintiff has filed a reply to Defendant's response. Following a review of all submitted filings and relevant precedent, the court grants Plaintiff's motion in part.
A. Evidentiary Record
The following facts are established by the record.
"Because the court has determined that Defendant is in default, the factual allegations of plaintiff's complaint, except those relating to the amount of damages, will be taken as true." Beck v. Atlantic Contracting Co., Inc., 157 F.R.D. 61, 64 (D.Kan. 1994).
1. Plaintiff Ticket Solutions, Inc. ("Ticket Solutions") is a corporation, organized and existing under the laws of the State of Kansas, with its principal place of business at Overland Park, Kansas.
2. Defendant Dan Banks is an individual residing in Hickory, North Carolina, doing business on the World Wide Web as TicketSolution.com.
3. Ticket Solutions is engaged in the business of providing ticketing services for concerts, theatrical performances and sporting and entertainment events through interstate commerce across the United States and offers those services in part through its Internet website ticketsolutions.com.
4. Ticket Solutions registered the mark "Ticket Solutions" (" the registered mark"), under which Plaintiff conducts its ticket servicing activities, with the United States Trademark and Patent Office on September 26, 2000.
5. Plaintiff's registration of the aforementioned registered mark with the United States Trademark and Patent Office is in full force and effect as of the date of this Judgment, and will remain so until September 26, 2010, unless terminated earlier by law.
6. Plaintiff has expended large sums of money in advertising and promoting its services under the aforementioned registered mark and in building up public recognition and demand therefore; and over the years, Plaintiff has built up a valuable business and reputation by reason of the quality of its services, which is widely identified in the minds of the purchasing public with the Plaintiff and its registered mark.
7. In November or December of 2000, Plaintiff became aware that Defendant Banks, without the consent of Plaintiff, was infringing Plaintiff's aforementioned registered mark within this judicial district by registering the Internet domain name ticketsolution.com, (the "infringing domain name") a domain name that is substantially similar to and a colorable imitation of Plaintiff's registered mark, and by offering said domain name for sale in interstate commerce for Banks' own profit.
8. Defendant further infringed Plaintiff's aforementioned registered mark within this judicial district by offering in interstate commerce in connection with the sale, offering for sale, distribution or advertising of goods and services for its own profit, Defendant's own ticketing services at his Internet website located at ticketsolution.com (the "infringing website"), which was substantially similar to and a colorable imitation of Plaintiff's registered mark.
In the Affidavit Defendant submitted with his Response to Order to Show Cause, Defendant attests that there was "a ticket broker that desired to use the domain name `ticketsolution.com' for its web site offering its ticket brokering services [that] contacted [Defendant]. [Defendant] agreed to allow the ticket broker to use the domain name `ticketsolution.com' and change the technical contact for that domain name to the ticket broker's server. . . The ticket broker agreed to pay [Defendant] an amount based upon the success of its website for its use of the domain name." (Def.'s Aff. at ¶ 4) Defendant further attests that he has received "no payment from the ticket broker." ( Id.)
9. Defendant intentionally used the aforementioned infringing domain name and website in a manner that caused confusion, mistake and deceived the purchasing public as to the affiliation, connection or association of its website and the goods and services offered therein with the goods and services of Plaintiff, or caused confusion, mistake or deceived the purchasing public as to the origin, sponsorship, or approval of Defendant's website and the goods and services offered therein by Plaintiff.
10. Defendant used the aforementioned infringing domain name and website in interstate commercial advertising or promotion in such a way as to misrepresent the nature, characteristics, qualities or geographical origin of its goods and services.
11. The unauthorized and infringing use by Defendant of Plaintiff's registered mark caused irreparable harm, damage and injury to Plaintiff in that the interstate sale and marketing of the Defendant's services under the infringing mark confused customers and diminished the value of Plaintiff's ticketing services.
12. Counsel for Ticket Solutions contacted Defendant on or about October 1, 2001 to demand that Defendant cease and desist from using the name ticketsolution.com. Defendant refused to cease and desist from using the name, indicated his intent to continue doing business through theticketsolution.com website, and offered to entertain a bid from Ticket Solutions for purchase of the domain name.
13. Ticket Solutions does business in part through its own websiteticketsolutions.com.
14. Since the filing of the lawsuit, Dan Banks has taken his website down but continues to own the infringing domain name ticketsolution.com and may recommence marketing activities under that domain name at any time.
In the Affidavit Defendant submitted with his Response to Order to Show Cause, Defendant attests that he does "not intend to renew" the registration of the domain name "ticketsolution.com," which is set to expire on June 1, 2002. (Def.'s Aff. at ¶ 2)
B. Legal Standard
Federal Rule of Civil Procedure 55(b) provides that a party shall apply to the Court for a judgment of default upon the entry of default pursuant to Fed.R.Civ.P. 55(a) by the clerk. Plaintiff has filed its Motion for Default Judgment and it is that motion which is currently before the Court for determination.
When considering a motion for default judgment, the Court must first determine that plaintiff has made a prima facie showing of the Court's personal jurisdiction over the defaulting party. Dennis Garberg Assoc. v. Pack-Tech Int'l Corp., 115 F.3d 767, 772-73 (D.Kan. 1997). While the Court may hold a hearing to make this determination, it is not necessary to do so if the plaintiff's entitlement to relief is evident from the record. Hamstein Music Co. v. Bait Shack, Inc., 2001 WL 709402, *2 (D.Kan. 2001).
After prima facie evidence of the Court's personal jurisdiction is determined, the Court must turn its attention to the plaintiff's entitlement to the relief it seeks. Fed.R.Civ.P. 55(b).
II. Discussion
C. Personal Jurisdiction
Plaintiff has established this Court's personal jurisdiction over Defendant because the evidence in the record establishes that Defendant had sufficient minimum contacts with the State of Kansas to confer jurisdiction upon Kansas courts.
Kansas Courts determine whether they have personal jurisdiction over a party by examining (1) whether the Court has jurisdiction over the party under the Kansas long-arm statute, and, if so, (2) whether the party in question has sufficient minimum contacts with the state to comport with the protections of constitutional due process. Dennis Garberg, 115 F.3d at 773. In actuality, the two elements merge into the latter one because Kansas' long arm statute allows Kansas courts to assert personal jurisdiction to the full extent permitted by the due process clause. Hodgdon Powder Co., Inc. v. Clean Shot Techs., Inc., 92 F. Supp.2d 1170, 1173, (D.Kan. 2000). Kansas courts have previously recognized that where a defendant conducts business over the Internet soliciting contracts with residents of Kansas, personal jurisdiction is proper. 2000 Int'l Ltd. v. Chambers, 2000 WL 1801835, *5 (D.Kan. 2000).
The evidence in the record shows that Defendant Banks solicited contracts over the Internet with a Kansas resident when he sent Plaintiff Ticket Solutions an e-mail message offering to sell Ticket Solutions the domain name www.ticketsolution.com, which Banks owned. The record further shows that Defendant Banks offered ticketing services over the Internet, which services could be and were accessed by Kansas residents.
Because the record shows that Defendant Banks solicited business over the Internet from Kansas residents, it is established that Banks had sufficient minimum contacts with Kansas to confer personal jurisdiction over Banks upon this Court. Thus, the Court must now proceed to determine whether Plaintiff has also produced evidence establishing that it is entitled to the relief it seeks.
1. Plaintiff's Entitlement to the Relief It Seeks.
Plaintiff's Complaint presents three claims for relief. The first is a claim for trademark infringement under 15 U.S.C. § 1114(1)(a). Plaintiff's second claim is dilution of Plaintiff's registered mark under 15 U.S.C. § 1125(a). Plaintiff's final claim is for cyberpiracy of its registered mark under 15 U.S.C. § 1125(d)(1)(A). The evidentiary record establishes Plaintiff's entitlement to relief on all of its claims.
2. The § 1114(1)(a) Trademark Infringement Claim.
The record shows that Plaintiff is entitled to relief on its claim under 15 U.S.C. § 1114(1)(a). Consequently, a judgment of default will be entered against Defendant Banks on Plaintiff's § 1114(1)(a) claim.
The prima facie elements of a claim under § 1114(1)(a) are: 1) use in commerce of any reproduction, counterfeit, copy or colorable imitation of a registered mark; 2) in connection with the sale, offering for sale, distribution, or advertising of any goods or services; 3) which is likely to cause confusion, or to cause mistake or to deceive. 15 U.S.C. § 1114(a)(1).
The evidence in the record establishes that Banks sold ticketing services on the Internet under the name ticketsolution.com which is virtually identical to Plaintiff's validly and duly registered mark "Ticket Solutions." Thus, Banks used a colorable imitation of a registered mark, in connection with the sale of goods or services. The evidence further establishes that Defendant's actions confused the purchasing public, members of which called Plaintiff on numerous occasions seeking customer service for products they had actually purchased from Banks.
The evidence establishes all of the prima facie elements of Plaintiff's claim under § 1114(a)(1). Consequently, the Court will enter a judgment of default against Defendant Banks on this claim.
With regard to relief, statutory language provides that Plaintiff may recover injunctive relief in addition to the payment of any damages it sustained, the costs of the action determining the violation, and the amount of the defendant's profits accrued by reason of the violation. 15 U.S.C. § 1114, 1117.
While plaintiff's Complaint seeks all of the relief allowed by the statutes, plaintiff's Motion for Default Judgment limits its request to an order 1) enjoining Banks from any further use of the domain name ticketsolution.com; 2) transferring the domain name ticketsolution.com to plaintiff; 3) directing Banks to turn over all articles infringing Plaintiff's registered mark to Plaintiff; and 4) directing Banks to pay Plaintiff's costs and attorneys' fees in the amount of $5,916.96.
The court finds plaintiff has proven entitlement to all relief requested, except the request for attorneys' fees. Although § 1117(a) provides that where a violation is established "the plaintiff shall be entitled . . . to recover (1) defendant's profits, (2) any damages sustained by the plaintiff, and (3) the costs of the action," the statute provides no similar entitlement to attorneys' fees. Instead, § 1117(a) provides that the court " in exceptional cases may award reasonable attorney fees to the prevailing party." Id. § 1117(a) (emphasis added).
Exceptional circumstances exist where the trademark infringement at issue "can be characterized as malicious, fraudulent, deliberate, or willful." Bishop v. Equinox Int'l Corp., 154 F.3d 1220, 1224 (10th Cir. 1998) (internal quotations omitted), cert denied, 122 S.Ct. 1069 (2002). Considering the record before the court, the court finds no exceptional circumstances are present justifying an award of attorneys' fees. Plaintiff's motion is denied on this basis.
Accordingly, the relief requested by Plaintiff (absent an award of attorneys' fees) shall be granted. Plaintiff's motion is granted on this basis.
3. The § 1125(a) Dilution of Registered Mark Claim.
The record shows that Plaintiff is also entitled to relief on its claim under 15 U.S.C. § 1125(a). Consequently, a judgment of default will be entered against Defendant Banks on Plaintiff's § 1125(a) claim as well.
The prima facie elements of a claim under § 1125(a) are: 1) use in connection with any goods or services of any word, term, name, symbol, device, or any combination thereof; 2) which is likely to cause confusion, or to cause mistake, or to deceive as to the affiliation, connection, or association of such person with plaintiff, or as to the origin, sponsorship, or approval of his or her goods, services, or commercial activities by plaintiff; and 3) which has caused or is likely to cause damage to plaintiff. See 15 U.S.C. § 1125(a).
Again, the evidence in the record establishes that Banks sold ticketing services on the Internet under the name ticketsolution.com which is virtually identical to Plaintiff's validly and duly registered mark "Ticket Solutions." Thus, Banks used a colorable imitation of Plaintiff's registered mark, in connection with the sale of goods or services. The evidence further establishes that Defendant Banks' actions confused the purchasing public, members of which called Plaintiff on numerous occasions seeking customer service for products they had actually purchased from Banks.
The evidence establishes all of the prima facie elements of Plaintiff's claim under § 1125(a). Consequently, the Court will enter a judgment of default against Defendant Banks on this claim.
Again, with regard to damages, statutory language provides that Plaintiff may recover injunctive relief plus payment of any damages it sustained, the costs of the legal action determining the violation, and the amount of the defendant's profits accrued by reason of the violation. 15 U.S.C. § 1114, 1117, 1125(a).
While Plaintiff's Complaint seeks all of the relief allowed by the statutes, Plaintiff's Motion for Default Judgment limits its request to an order 1) enjoining Banks from any further use of the domain name ticketsolution.com; 2) transferring the domain name ticketsolution.com to Plaintiff; 3) directing Banks to pay Plaintiff's costs and attorneys' fees in the amount of $5,916.96; and 4) directing Banks to turn over all articles infringing Plaintiff's registered mark to Plaintiff.
Again, the court finds plaintiff has proven entitlement to all relief requested, except the request for attorneys' fees. As noted above, to justify an award of attorneys' fees, plaintiff must show "exceptional circumstances" exist. 15 U.S.C. § 1117(a). Considering the record before the court, the court finds no exceptional circumstances are present justifying an award of attorneys' fees. See Bishop, 154 F.3d at 1224 (noting exceptional circumstances exist where the trademark infringement at issue "can be characterized as malicious, fraudulent, deliberate, or willful"). Plaintiff's motion is denied on this basis.
Accordingly, the relief requested by Plaintiff (absent an award of attorneys' fees) shall be granted. Plaintiff's motion is granted on this basis.
4. The § 1125(d)(1)(A) Cyberpiracy Claim.
The record shows that Plaintiff is also entitled to relief on its claim under 15 U.S.C. § 1125(d)(1)(A). Consequently, a judgment of default will be entered against Defendant Banks on Plaintiff's § 1125(d)(1)(A) claim as well.
The prima facie elements of a claim under § 1125(d)(1)(A) are: 1) registration, trafficking in or use of a domain name; 2) which is confusingly similar to a distinctive mark, or which is a trademark, word or name at the time of registration of the domain name; 3) with bad faith intent to profit from that mark. See 15 U.S.C. § 1125(d)(1)(A). Bad faith intent is evidenced by, among other things: 1) the presence of plaintiff's trademark name in the domain name; 2) the person's offer sell the domain name to the mark owner for financial gain without having used the domain name in the bona fide offering of any goods or services; and 3) the person's intent to divert customers from the mark owner's online location to a site accessible under the domain name that could harm the goodwill represented by the mark, either for commercial gain or with the intent to tarnish or disparage the mark, by creating a likelihood of confusion as to the source, sponsorship, affiliation, or endorsement of the site. 15 U.S.C. § 1125(d)(1)(B).
The evidence in the record establishes that Banks registered the domain name ticketsolution.com which is virtually identical to Plaintiff's validly and duly registered mark "Ticket Solutions." The evidence further establishes that Defendant's actions confused the purchasing public, members of which called Plaintiff on numerous occasions seeking customer service for products they had actually purchased from Banks. Finally, the evidence establishes Banks' bad faith because it shows he offered to sell the domain name to Ticket Solutions for profit before he had engaged in the bona fide offering of any goods or services under the name, and that he intended to profit from the confusion created by the similarity of his website's name to that of Ticket Solutions' after Ticket Solutions refused to purchase the domain name from Banks.
The evidence establishes all of the prima facie elements of Plaintiff's claim under § 1125(d)(1)(A). Consequently, the Court will enter a judgment of default against Defendant Banks on this claim.
Again, with regard to damages, statutory language provides that Plaintiff may recover injunctive relief plus payment of any damages it sustained, the costs of the legal action determining the violation, and the amount of the defendant's profits accrued by reason of the violation. 15 U.S.C. § 1125(d)(1)(A).
While Plaintiff's Complaint seeks all of the relief allowed by the statutes, Plaintiff's Motion for Default Judgment limits its request to an order 1) enjoining Banks from any further use of the domain name ticketsolution.com; 2) transferring the domain name ticketsolution.com to Plaintiff; 3) directing Banks to pay Plaintiff's costs and attorneys' fees in the amount of $5,916.96; and 4) directing Banks to turn over all articles infringing Plaintiff's registered mark to Plaintiff.
Again, the court finds plaintiff has proven entitlement to all relief requested, except the request for attorneys' fees. As noted above, to justify an award of attorneys' fees, plaintiff must show "exceptional circumstances" exist. 15 U.S.C. § 1117(a). Considering the record before the court, the court finds no exceptional circumstances are present justifying an award of attorneys' fees. See Bishop, 154 F.3d at 1224 (noting exceptional circumstances exist where the trademark infringement at issue "can be characterized as malicious, fraudulent, deliberate, or willful"). Plaintiff's motion is denied on this basis.
The court notes that the "finding" of bad faith made with respect to plaintiff's § 1125(d)(1)(A) cyberpiracy claim is mandated based upon the allegations in plaintiff's complaint. Where a defendant is found to be in default, " the factual allegations of plaintiff's complaint . . . will be taken as true." Beck, 157 F.R.D. at 64 (emphasis added). In contrast, a plaintiff's allegation of damages is specifically exempted from this default rule. The Beck court specified that upon a finding of default, "the factual allegations of plaintiff's complaint, except those relating to the amount of damages, will be taken as true." Id (emphasis added). Recognizing this distinction, the court does not find an inconsistency in its denial of attorneys' fees, even in light of its granting of default judgment on plaintiff's § 1125(d)(1)(A) cyberpiracy claim.
Accordingly, the relief requested by Plaintiff (absent an award of attorneys' fees) shall be granted. Plaintiff's motion is granted on this basis.
III. Order
IT IS HEREBY ORDERED THAT Plaintiff's Motion for Default Judgment (Doc. 13) is granted in part.
IT IS FURTHER ORDERED THAT default judgment shall be entered against Defendant Banks on all claims against him in Plaintiff's Complaint.
IT IS FURTHER ORDERED THAT Defendant and all those holding with, through, or under Defendant, or acting on his behalf, be enjoined from infringing on Plaintiff's registered mark in any way, including but not limited to, doing business in any manner under the infringing domain name of Ticketsolution.com.
IT IS FURTHER ORDERED THAT Defendant and all those holding with, through, or under Defendant, or acting on his behalf be ordered to transfer the infringing domain name of Ticketsolution.com to Plaintiff.
IT IS FURTHER ORDERED THAT Defendant and all those holding with, through, or under Defendant or acting on his behalf, be ordered to deliver all articles alleged to infringe Plaintiff's registered mark "Ticket Solutions" to Plaintiff.
IT IS FURTHER ORDERED THAT Defendant be ordered to pay Plaintiff's costs incurred in bringing this action. Plaintiff shall, within 20 days of the date of this order, submit an accounting of the costs associated with the present action to the court for approval. Upon approval, the court will issue an order assessing the amount of costs approved against defendant.