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Coach, Inc. v. Pure MLK Last Stop, Inc.

United States District Court, Seventh Circuit

November 4, 2013

COACH, INC. and COACH SERVICES, INC., Plaintiffs,
v.
PURE MLK LAST STOP, INC. a/k/a MLK LAST STOP, Defendant.

OPINION

MICHAEL P. McCUSKEY, District Judge.

Plaintiffs, Coach Inc., and Coach Services, Inc., filed a Complaint (#1) against Defendant Pure MLK Last Stop, Inc., a/k/a MLK Last Stop, on September 28, 2012. Defendant never entered an appearance or responded to the Complaint. On April 30, 2013, default was entered against Defendant. On October 4, 2013, Plaintiffs filed a Motion for Entry of Default Judgment (#12) against Defendant. Defendant's response was due October 21, 2013. Defendant has not filed a response. For the following reasons, Plaintiffs' Motion for Entry of Default Judgment (#12) is GRANTED.

BACKGROUND

Plaintiffs' Complaint (#1) claims that Defendant was engaged in selling counterfeit merchandise bearing Plaintiffs' trademarks and alleges (1) trademark and trade dress infringement;

(2) false designation of origin and false advertising; (3) trademark dilution under the Lanham Act (15 U.S.C. § 1051); (4) copyright infringement; and (5) related state law claims. The docket sheet shows that a summons (#4) was issued to Defendant on October 1, 2012, and that the summons was served (#6) on an authorized individual of Defendant's company willing and able to accept on behalf of Defendant on October 5, 2012. Defendant has not appeared or made any filings with this court at any point during the course of this litigation. On April 10, 2013, Plaintiffs filed a Motion for Entry of Default (#7), which was granted on April 30, 2013. Plaintiffs filed the instant Motion for Entry of Default Judgment (#12) on October 4, 2013.

ANALYSIS

Federal Rule of Civil Procedure 55 states:

"When a party against whom a judgment for affirmative relief is sought has failed to plead or otherwise defend, and that failure is shown by affidavit or otherwise, the clerk must enter the party's default." Fed.R.Civ.P. 55(a).

The party seeking default judgment must apply to the court for the judgment. Fed.R.Civ.P. 55(b)(2). Defendant is not a minor or incompetent person. Defendant has not appeared personally or responded in any way, despite being properly served with a summons on October 5, 2012. Therefore, this court GRANTS Plaintiffs' Motion for Entry of Default Judgment (#12) and enters judgment against Defendant and in favor of Plaintiffs.

The court further finds that Defendant willfully used counterfeit marks. "In most cases when a defendant fails to appear and answer the allegations in a properly pleaded complaint, those allegations are deemed admitted and default judgment is entered for the plaintiff." O'Rourke v. Palisades Acquisition XVI, LLC, 635 F.3d 938, 940 (7th Cir. 2011). Plaintiffs' Complaint alleges that Defendant is well aware of the stature of the Coach brand and trademarks and the goodwill associated therewith. The Complaint also alleges that Defendant had no license, authority, or other permission from Plaintiffs to use any of the trademarks in connection with the designing, manufacturing, advertising, promoting, distributing, selling or offering for sale any products. The Complaint alleges that Defendant has been engaging in the illegal counterfeiting and infringing activities knowingly and intentionally with reckless disregard or with willful blindness to Plaintiffs' rights, or with bad faith, for the purposes of trading on the goodwill and reputation of Plaintiffs' trademarks and products. Plaintiffs allege that Defendant's activities are likely to create a false impression and deceive consumers, the public, and the trade into believing that there is a connection or association between Defendant and Plaintiffs. The court finds no reason to disagree with the allegations in Plaintiffs' Complaint, which must now be deemed admitted. Therefore, the court finds that Plaintiffs are entitled to a finding that Defendant willfully used counterfeit marks as defined in § 1116(d) of the Lanham Act. 15 U.S.C. § 1116(d)(1)(B) ("As used in this subsection the term counterfeit mark' means a counterfeit of a mark that is registered on the principal register in the United States Patent and Trademark Office for such goods or services sold, offered for sale, or distributed and that is in use, whether or not the person against whom relief is sought knew such mark was so registered; or a spurious designation that is identical with, or substantially indistinguishable from, a designation as to which the remedies of this chapter are made available by reason of section 220506 of Title 36[.]").

The court must now decide the relief to be granted to Plaintiffs. Plaintiffs request (1) statutory damages in the amount of $500, 000 and (2) a permanent injunction against Defendant. "Once the default is established, and thus liability, the plaintiff must still establish his entitlement to the relief he seeks." In re Catt, 368 F.3d 789, 793 (7th Cir. 2004). "Even when a default judgment is warranted based on a party's failure to defend, the allegations in the complaint with respect to the amount of damages are not deemed true. The district court must instead conduct an inquiry in order to ascertain the amount of damages with reasonable certainty.'" Catt, 368 F.3d at 793, quoting Credit Lyonnais Securities (USA), Inc. v. Alcantara, 183 F.3d 151, 155 (2nd Cir. 1999).

First, with regard to statutory damages, Plaintiffs have elected to recover statutory damages under § 1117(c) of the Lanham Act. That section states:

"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) of this section, 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 ...

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