Cisco Systems, Inc. et al v. Shenzhen Usource Technology Co., et al, No. 5:2020cv04773 - Document 62 (N.D. Cal. 2021)

Court Description: Order Granting 58 Motion for Default Judgment. Signed by Judge Edward J. Davila on 12/21/2021. (ejdlc1, COURT STAFF) (Filed on 12/21/2021)

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Cisco Systems, Inc. et al v. Shenzhen Usource Technology Co., et al Doc. 62 Case 5:20-cv-04773-EJD Document 62 Filed 12/21/21 Page 1 of 11 1 2 3 4 UNITED STATES DISTRICT COURT 5 NORTHERN DISTRICT OF CALIFORNIA 6 SAN JOSE DIVISION 7 CISCO SYSTEMS, INC., et al., 8 Plaintiffs, 9 v. 10 SHENZHEN USOURCE TECHNOLOGY CO., et al., United States District Court Northern District of California 11 12 Defendants. Case No. 5:20-cv-04773-EJD ORDER GRANTING MOTION FOR DEFAULT JUDGMENT AND ISSUANCE OF PERMANENT INJUNCTION Re: Dkt. No. 58 13 14 Plaintiffs Cisco Systems, Inc., Cisco Technology, Inc., (together, “Cisco”) and Ciena 15 Corporation (“Ciena”) filed this action asserting trademark infringement and counterfeiting against 16 Defendants Shenzhen Usource Technology Co., Warex Technologies Limited, and Shenzhen 17 Warex Technologies, Co., Ltd. Am. Compl., Dkt. No. 16. Plaintiffs now move for default 18 judgment and a permanent injunction. Mot. for Default Judg. and Issuance of Perm. Inj. (“Mot.”), 19 Dkt. No. 58. The Court finds the motion appropriate for decision without oral argument pursuant to 20 21 Civil Local Rule 7-1(b). Having considered Plaintiffs’ moving papers, the Court GRANTS 22 Plaintiffs’ motion. 23 I. BACKGROUND 24 Plaintiffs Cisco and Ciena have sold networking equipment, including transceiver 25 modules, since 1992. Am. Compl. ¶¶ 18, 20. Cisco owns the relevant trademarks, registered with 26 the U.S. Patent and Trademark Office, for use in connection with Cisco’s products. Id. ¶ 21; 27 Cisco Decl. of First Witness in Supp. of Pls.’ Emerg. Ex Parte Mot. for TRO, Asset Freeze Order, 28 Case No.: 5:20-cv-04773-EJD ORDER GRANTING MOT. FOR DEFAULT JUDG. AND PERM. INJ. 1 Dockets.Justia.com Case 5:20-cv-04773-EJD Document 62 Filed 12/21/21 Page 2 of 11 1 Expedited Disc., Order Permitting Alt. Serv. of Process, and Order to Show Cause Re: Prelim. Inj. 2 (“Cisco First Witness Decl.”), Dkt. No. 10-1 ¶¶ 5-10, Ex. 1A. Ciena also owns the relevant 3 trademarks, registered with the U.S. Patent and Trademark Office, for use in connection with 4 Ciena’s products. Am. Compl. ¶ 24; Ciena Decl. of First Witness in Supp. of Pls.’ Emerg. Ex 5 Parte Mot. for TRO, Asset Freeze Order, Expedited Disc., Order Permitting Alt. Serv. of Process, 6 and Order to Show Cause Re: Prelim. Inj. (“Ciena First Witness Decl.”), Dkt. No. 19-1 ¶¶ 5-10, 7 Ex. 1A. 8 United States District Court Northern District of California 9 Defendants Shenzhen Usource Technology Co., Warex Technologies Limited, and Shenzhen Warex Technologies, Co., Ltd have their principal places of business in China. Am. 10 Compl. ¶¶ 10-11. Defendants engaged in advertising, selling, and distributing transceiver 11 products that are infringing Plaintiffs’ trademarks on transceiver products in this District and the 12 State of California. Id. ¶ 43. 13 Plaintiffs assert that Defendants are intentionally deceiving customers into believing that 14 they are purchasing and receiving products that are developed, manufactured, and screened by 15 Plaintiffs or another party legitimately associated with Plaintiffs. Id. ¶¶ 6, 43-46; Cisco Decl. of 16 Third Witness in Supp. of Pls.’ Emerg. Ex Parte Mot. for TRO, Asset Freeze Order, Expedited 17 Disc., Order Permitting Alt. Serv. of Process, and Order to Show Cause Re: Prelim. Inj. (“Cisco 18 Third Witness Decl.”), Dkt. No. 10-6 ¶¶ 7-31. Ciena Decl. of Third Witness in Supp. of Pls.’ 19 Emerg. Ex Parte Mot. for TRO, Asset Freeze Order, Expedited Disc., Order Permitting Alt. Serv. 20 of Process, and Order to Show Cause Re: Prelim. Inj.; (“Ciena Third Witness Decl.”), Dkt. No. 21 19-4 ¶¶ 7-31. 22 Plaintiffs discovered that Defendants advertised and sold similar types of transceiver 23 products using unauthorized representations of Plaintiffs’ trademarks. Am. Compl. ¶¶ 63-76; 24 Cisco Third Witness Decl. ¶¶ 7-31; Ciena Third Witness Decl. ¶¶ 7-31. Plaintiffs hired 25 investigators and consultants to purchase Defendants’ products through their websites and by 26 email communication. Am. Compl. ¶¶ 54-63; Cisco Third Witness Decl. ¶¶ 7-10, 16-20; Ciena 27 Third Witness Decl. ¶¶ 7-10, 16-20. After analyzing the products purchased from Defendants, 28 Case No.: 5:20-cv-04773-EJD ORDER GRANTING MOT. FOR DEFAULT JUDG. AND PERM. INJ. 2 Case 5:20-cv-04773-EJD Document 62 Filed 12/21/21 Page 3 of 11 1 Plaintiffs’ engineers concluded that Defendants’ products were inauthentic and had a high 2 probability of malfunctioning. Am. Compl. ¶¶ 44, 57, 75; Cisco Third Witness Decl. ¶¶ 10-31; 3 Ciena Third Witness Decl. ¶¶ 10-31. Accordingly, Plaintiffs allege that Defendants have been 4 advertising, offering, selling, using and/or distributing products that bear confusingly similar 5 imitations of the Cisco and Ciena trademarks. Am. Compl. ¶ 43. Plaintiffs filed this action on July 16, 2020, asserting the following claims: (1) trademark United States District Court Northern District of California 6 7 infringement and counterfeiting in violation of the Lanham Act, 15 U.S.C. § 1114; (2) false 8 designation of origin and false advertising in violation of the Lanham Act, 15 U.S.C. § 1125(a); 9 (3) dilution of Plaintiffs’ marks under the Lanham Act, 15 U.S.C. § 1125(c); (4) violation of 10 California’s False Advertising Law (“FAL”), Cal. Bus. & Prof. Code § 17500; and (5) violation of 11 California’s Unfair Competition Law (“UCL”), Cal. Bus. & Prof. Code § 17200. Id. ¶¶ 77-104. 12 Plaintiffs have served Defendants with the original complaint, summonses, and the operative 13 Amended Complaint by court-ordered substitute service via e-mail. Dkt. No. 12. The Court 14 granted Plaintiffs’ requests for a temporary restraining order and a preliminary injunction 15 prohibiting Defendants and others acting in concert with them from engaging in the alleged 16 counterfeiting and infringing behavior. Dkt. Nos. 12, 23, 29. No Defendant has ever appeared in this action. The Clerk of the Court entered default 17 18 against Defendants on July 12, 2021. Dkt. No. 56. On August 17, 2021, Plaintiffs filed the 19 motion for default judgment now before the Court and served a copy on Defendants. Dkt. Nos. 20 58, 60. To date, Defendants have not responded to or otherwise defended this action. 21 II. 22 LEGAL STANDARD Courts may grant default judgment if a party fails to plead or otherwise defend against an 23 action for affirmative relief. Fed. R. Civ. P. 55(a). Discretion to enter default judgment rests with 24 the district court. Aldabe v. Aldabe, 616 F.2d 1089, 1092 (9th Cir. 1980). When deciding whether 25 to enter default judgment, the court considers: 26 27 28 (1) the possibility of prejudice to the plaintiff, (2) the merits of plaintiff's substantive claim, (3) the sufficiency of the complaint, (4) the sum of money at stake in the action, (5) the possibility of a Case No.: 5:20-cv-04773-EJD ORDER GRANTING MOT. FOR DEFAULT JUDG. AND PERM. INJ. 3 Case 5:20-cv-04773-EJD Document 62 Filed 12/21/21 Page 4 of 11 dispute concerning material facts, (6) whether the underlying default was due to excusable neglect, and (7) the strong policy underlying the Federal Rules of Civil Procedure favoring decisions on the merits. 1 2 3 Eitel v. McCool, 782 F.2d 1470, 1471–72 (9th Cir. 1986). In evaluating these factors, all factual 4 allegations in the complaint are taken as true, except those relating to damages. TeleVideo Sys., 5 Inc. v. Heidenthal, 826 F.2d 915, 917–18 (9th Cir. 1987). 6 III. 7 A. 8 Before entering default judgment, a court must determine whether it has subject matter 9 10 Jurisdiction and Service of Process jurisdiction over the case and personal jurisdiction over the defendant. See In re Tulli, 172 F.3d 707, 712 (9th Cir. 1999). 11 United States District Court Northern District of California DISCUSSION 1. Subject matter jurisdiction District courts have original jurisdiction to hear civil cases arising under the Constitution, 12 13 laws, or treaties of the United States. 28 U.S.C. § 1331. In addition, in any civil action where the 14 district court has original jurisdiction, the court will also have supplemental jurisdiction over all 15 other claims that are so related to claims in the action with original jurisdiction such that they form 16 part of the same case or controversy. 28 U.S.C. § 1367. 17 Here, Plaintiffs allege that Defendants engaged in trademark infringement and 18 counterfeiting, false designation of origin and false advertising, and dilution in violation of the 19 Lanham Act. Because Plaintiffs’ claims arise under federal law, the Court has original federal 20 question jurisdiction over Plaintiffs’ federal law claims. 28 U.S.C. §§ 1331, 1338. 21 Further, Plaintiffs’ FAL and UCL claims under California law involve the same products 22 at issue and therefore arise out of the same “case or controversy” as the Lanham Act claims. 28 23 U.S.C. § 1367(a). Accordingly, the Court has supplemental jurisdiction over Plaintiffs’ state law 24 claims. 25 26 2. Personal jurisdiction and service of process The Court must exercise personal jurisdiction over the defaulting defendant if its activities 27 in the state are sufficient to show that it enjoys the benefits and protections of the laws in that 28 Case No.: 5:20-cv-04773-EJD ORDER GRANTING MOT. FOR DEFAULT JUDG. AND PERM. INJ. 4 Case 5:20-cv-04773-EJD Document 62 Filed 12/21/21 Page 5 of 11 1 state. See Int’l Shoe Co. v. Washington, 326 U.S. 310, 319 (1945). Moreover, serving a summons 2 establishes personal jurisdiction over a defendant, who is subject to the jurisdiction of a court of 3 general jurisdiction in the state where the district court is located. Fed. R. Civ. P. 4(k)(1). United States District Court Northern District of California 4 Here, Defendants have engaged in business activities by advertising, selling, and 5 distributing the products at issue in this district and the State of California. Am. Compl. ¶ 9. The 6 Court has personal jurisdiction over Defendants under the California long arm statute, Cal. Civ. 7 Proc. Code § 410.10, or alternatively under the federal long-arm statute, Fed. R. Civ. P. 4(k)(2). 8 Oomph Innovations LLC v. Shenzhen Bolsesic Elecs. Co., No. 5:18-CV-05561-EJD, 2020 WL 9 5847505, at *2 (N.D. Cal. Sept. 30, 2020) (finding that defendants’ sales of products to California 10 residents through interactive Internet websites was sufficient to confer personal jurisdiction). 11 Additionally, Plaintiffs have served the complaints and summons via e-mail pursuant to the 12 Court’s order. Dkt. Nos. 12, 24, 25, 39. 13 14 15 16 17 The Court is satisfied that Plaintiffs have established that the Court has subject matter and personal jurisdiction, and that service was properly effected. B. Eitel Factors 1. Possibility of prejudice to Plaintiffs Under the first Eitel factor, the Court considers whether the plaintiff will suffer prejudice if 18 default judgment is denied. Bd. of Trustees, I.B.E.W. Local 332 Pension Plan Part A v. Delucchi 19 Elec., Inc., No. 5:19-CV-06456-EJD, 2020 WL 2838801, at *2 (N.D. Cal. June 1, 2020) (citing 20 PepsiCo, Inc. v. Cal. Sec. Cans, 283 F. Supp. 2d 1172, 1177 (C.D. Cal. 2002)). A plaintiff is 21 prejudiced if it would be “without other recourse for recovery” because the defendant failed to 22 appear or defend against the suit. JL Audio, Inc. v. Kazi, No. 516CV00785CASJEM, 2017 WL 23 4179875, at *3 (C.D. Cal. Sept. 18, 2017). 24 Here, Plaintiffs allege that Defendants’ infringing acts divert Plaintiffs’ sales and harm 25 their reputations by providing inferior products under the Plaintiffs’ marks. Am. Compl. ¶¶ 77- 26 104. Since Defendants have not appeared in this matter, Plaintiffs will be without any other 27 recourse for recovery unless default judgment is granted. Oomph Innovations, 2020 WL 5847505, 28 Case No.: 5:20-cv-04773-EJD ORDER GRANTING MOT. FOR DEFAULT JUDG. AND PERM. INJ. 5 Case 5:20-cv-04773-EJD Document 62 Filed 12/21/21 Page 6 of 11 1 2 3 at *2. The first Eitel factor weighs in favor of entering default judgment. Id. 2. Substantive merits and sufficiency of the claims Courts often consider the second and third Eitel factors together. I.B.E.W. Local 332, 2020 4 WL 2838801, at *2 (citing PepsiCo, Inc., 283 F. Supp. 2d at 1177). These factors assess the 5 substantive merits of the movant’s claims and the sufficiency of the pleadings. The movant must 6 “state a claim on which [it] may recover.” Id. Here, Plaintiffs assert claims for trademark 7 infringement, false designation of origin, false advertising, and dilution under the Lanham Act, as 8 well as claims under the UCL and FAL. Id. ¶¶ 77-104. 9 10 a. Lanham Act trademark infringement and false designation of origin The Court begins with Plaintiffs’ trademark infringement claim. A trademark 11 United States District Court Northern District of California infringement claim requires that a trademark holder to demonstrate (1) ownership of a valid mark, 12 and (2) that the alleged infringer’s use of the mark is likely to cause confusion, mistake, or deceive 13 consumers. Reno Air Racing Ass’n., Inc. v. McCord, 452 F.3d 1126, 1134 (9th Cir. 2006). Here, 14 Plaintiffs own the federal trademark registrations for the Cisco and Ciena marks. Am. Compl. ¶¶ 15 21, 24; Cisco First Witness Decl. ¶¶ 5-10, Ex. 1A; Ciena First Witness Decl. ¶¶ 5-10, Ex. 1A. 16 Thus, Plaintiffs have demonstrated ownership of valid trademarks. 17 Having established that the marks are valid and protectable, the Court addresses whether 18 the marks create a likelihood of confusion. Vietnam Reform Party v. Viet Tan - Vietnam Reform 19 Party, 416 F. Supp. 3d 948, 965 (N.D. Cal. 2019). Assessing the likelihood of confusion normally 20 involves a non-exhaustive eight-factor test. AMF Inc. v. Sleekcraft Boats, 599 F.2d 341, 349 (9th 21 Cir. 1979), abrogated on other grounds by Mattel, Inc. v. Walking Mountain Prods., 353 F.3d 792 22 (9th Cir. 2003). However, the Court need not perform the full eight-factor analysis in cases 23 involving counterfeit marks, because counterfeits are inherently confusing. Ubiquiti Networks, 24 Inc. v. Kozumi USA Corp., No. C 12-2582 CW, 2012 WL 2343670, at *14 (N.D. Cal. June 20, 25 2012); Phillip Morris USA Inc. v. Shalabi, 352 F. Supp. 2d 1067, 1073 (C.D. Cal. 2004); Nestle 26 USA, Inc. v. Gunther Grant, Inc., No. CV-13-6754 MMM (ASX), 2014 WL 12558008, at *8 27 28 Case No.: 5:20-cv-04773-EJD ORDER GRANTING MOT. FOR DEFAULT JUDG. AND PERM. INJ. 6 Case 5:20-cv-04773-EJD Document 62 Filed 12/21/21 Page 7 of 11 1 (C.D. Cal. May 13, 2014); Gucci Am., Inc. v. Duty Free Apparel, Ltd., 286 F.Supp.2d 284, 287 2 (S.D.N.Y. 2003). A counterfeit mark is: “(1) a non-genuine mark identical to the registered, 3 genuine mark of another, where (2) the genuine mark was registered for use on the same goods to 4 which the infringer applied the mark.” Louis Vuitton Malletier, S.A. v. Akanoc Sols., Inc., 658 5 F.3d 936, 946 (9th Cir. 2011). As discussed above, Plaintiffs have adequately pled ownership of 6 the marks that they use on their own transceivers. They further demonstrate that the products they 7 received from Defendants were not genuine Cisco/Ciena products, despite bearing what appear to 8 be the Cisco/Ciena marks. Am. Compl. ¶¶ 44, 54-76; Cisco Third Witness Decl. ¶¶ 7-31; Ciena 9 Third Witness Decl. ¶¶ 7-31. Accordingly, Plaintiffs have sufficiently pled that Defendants United States District Court Northern District of California 10 infringed Plaintiffs’ trademarks. 11 The elements of false designation of origin are similar to trademark infringement. See 12 Brookfield Commc’ns, Inc. v. W. Coast. Ent’mt Corp., 174 F.3d 1036, 1046 nn.6 & 8 (9th Cir. 13 1999); Int’l Order of Job’s Daughters v. Lindeburg & Co., 633 F.2d 912, 917 (9th Cir. 1980). 14 Therefore, courts have treated them as claims that rise and fall together. Freecycle Network, 505 15 F.3d at 902–04; New W. Corp. v. NYM Co. of Cal., 595 F.2d 1194, 1201 (9th Cir. 1979); 16 Amazon.com, Inc. v. Expert Tech Rogers Pvt. Ltd., No. 20CV07405PJHJSC, 2021 WL 4461601 17 (N.D. Cal. Sept. 22, 2021) (listing cases), report and recommendation adopted, No. 20-CV- 18 07405-PJH, 2021 WL 4896120 (N.D. Cal. Oct. 20, 2021). Because Plaintiffs have adequately 19 pled trademark infringement, the Court finds they have also adequately pled false designation of 20 origin under the Lanham Act. 21 b. Lanham Act false advertising and dilution 22 Plaintiffs do not specifically address the false advertising and dilution claims in their 23 motion. See Mot. at 6–8. As to false advertising, Plaintiffs plead false advertising and false 24 designation of origin together as a single claim under the Lanham Act, but they are separate claims 25 to be analyzed separately. Amazon.com, 2021 WL 4461601, at *6. Plaintiffs’ motion focuses 26 primarily on false designation of origin, see Mot. at 6–8 (describing complaint as “alleging both 27 federal law claims for trademark infringement and false designation of origin” but not false 28 Case No.: 5:20-cv-04773-EJD ORDER GRANTING MOT. FOR DEFAULT JUDG. AND PERM. INJ. 7 Case 5:20-cv-04773-EJD Document 62 Filed 12/21/21 Page 8 of 11 1 advertising under the Lanham Act), therefore the Court understands Plaintiffs to move for default 2 only on false designation of origin and not false advertising. Amazon.com, 2021 WL 4461601, at 3 *6. Similarly, the Court interprets Plaintiffs’ total omission of dilution from its analysis as not 4 seeking default judgment on that claim. See Mot. at 6–8. United States District Court Northern District of California 5 c. UCL and FAL claims 6 Finally, a UCL claim is “substantially congruent” to a Lanham Act trademark infringement 7 claim under the Lanham Act. Acad. of Motion Picture Arts & Scis. v. Creative House Promotions, 8 Inc., 944 F.2d 1446, 1457 (9th Cir. 1991). Both claims ask “whether the public is likely to be 9 deceived or confused by the similarity of the marks.” Id. (internal quotation marks omitted). 10 Because Plaintiffs have stated a claim for trademark infringement, the Court finds they have also 11 stated a claim under the UCL. 12 The FAL is also “substantially congruent” to Lanham Act claims for false advertising. 13 L.A. Taxi Coop., Inc. v. Uber Techs., Inc., 114 F. Supp. 3d 852, 860 (N.D. Cal. 2015); Kwan 14 Software Eng’g, Inc. v. Foray Techs., LLC, No. 12-cv-03762-SI, 2014 WL 572290, at *3 (N.D. 15 Cal. Feb 11, 2014); see also Williams v. Gerber Prods. Co., 552 F.3d 934, 938 (9th Cir. 16 2008) (“The California Supreme Court has recognized that [the UCL and the FAL] prohibit not 17 only advertising which is false, but also advertising which[,] although true, is either actually 18 misleading or which has a capacity, likelihood or tendency to deceive or confuse the public.”). As 19 discussed above, Plaintiffs do not seek default judgment on their Lanham Act claim for false 20 advertising. See Mot. at 6–8. Nevertheless, the Court finds that Plaintiffs state a claim under the 21 FAL under the facts presented here because they have stated a claim for trademark infringement 22 and false designation of origin for the reasons described above. See Faberge, Inc. v. Saxony 23 Prods., Inc., 605 F.2d 426, 428 (9th Cir. 1979) (stating that use of a trademark or trade name that 24 is likely to cause confusion constitutes a violation of the FAL); Conifer Sec. LLC v. Conifer 25 Capital LLC, No. C02-05611 WHA, 2003 WL 1873270 at *2 (N.D. Cal. Apr. 2, 2003) (finding 26 that a defendant’s use of a trade name similar to plaintiff’s in a manner likely to cause confusion 27 as to the relationship between plaintiff and defendant and as to the origin, sponsorship, and 28 Case No.: 5:20-cv-04773-EJD ORDER GRANTING MOT. FOR DEFAULT JUDG. AND PERM. INJ. 8 Case 5:20-cv-04773-EJD Document 62 Filed 12/21/21 Page 9 of 11 1 approval of defendant’s goods and services constituted false advertising under the FAL). 2 In conclusion, Plaintiffs have sufficiently pled claims for trademark infringement, false 3 designation of origin, and violation of the UCL and FAL. Id. Thus, the second and third Eitel 4 factors favor granting default judgment for Plaintiffs on those claims. 5 United States District Court Northern District of California 6 3. Sum of money in dispute “When the money at stake in the litigation is substantial or unreasonable, default judgment 7 is discouraged.” Bd. of Trustees v. Core Concrete Cost., Inc., No. C 11-02532 LB, 2012 WL 8 380304, at *4 (N.D. Cal. Jan. 17, 2012), report and recommendation adopted, No. C 11-02532 9 JSW, 2012 WL 381198 (N.D. Cal. Feb. 6, 2012). However, “where the sum of money at stake is 10 tailored to the specific misconduct of the defendant, default judgment may be appropriate.” Id. 11 Here, Plaintiffs do not seek monetary damages; rather, they seek a declaration from this 12 Court that Defendants are liable for the pertinent violations and an order permanently enjoining 13 Defendants from any further infringement. Mot. at 8. Accordingly, there are no measures of 14 damages to assess in this case. This Eitel factor weighs in favor of entering in default judgment. 15 Intel Corp. v. Intelsys Software, LLC, No. C 08-03578 JW, 2009 WL 347239, at *3 (N.D. Cal. 16 Feb. 6, 2009). 17 4. Possibility of dispute concerning material facts 18 Eitel requires the Court to consider whether there is a possibility of a dispute over material 19 facts. Eitel, 782 F.2d at 1471–72. Defendants have neither appeared nor defended this action, and 20 Plaintiffs’ allegations stand undisputed. Upon entry of default by the Clerk of the Court, the 21 factual allegations of the complaint related to liability are taken as true. Shaw v. Five M, LLC, No. 22 16-cv-03955-BLF, 2017 WL 747465, at *4 (N.D. Cal. Feb. 27, 2017). Moreover, Plaintiffs have 23 submitted evidence of the alleged infringing features of Defendants’ products in question by 24 directly purchasing the products and obtaining public information from Defendants’ websites. 25 Am. Compl. ¶¶ 63-76; see Dkt. Nos. 10, 19. Based on these facts and evidence, the possibility of 26 dispute concerning material facts is minimal and does not weigh against default judgment. Oomph 27 Innovations, 2020 WL 5847505, at *4. 28 Case No.: 5:20-cv-04773-EJD ORDER GRANTING MOT. FOR DEFAULT JUDG. AND PERM. INJ. 9 Case 5:20-cv-04773-EJD Document 62 Filed 12/21/21 Page 10 of 11 1 5. Excusable neglect The Court next considers whether Defendants’ default is the result of excusable neglect. 2 Eitel, 782 F.2d at 1472. Plaintiffs served the Defendants with the complaints, summonses, and the 3 Court’s temporary restraining order. Dkt. Nos. 24, 25, 39. There is no indication that Defendants’ 4 default is due to excusable neglect. 5 6. 6 Strong policy favoring decisions on the merits Although public policy strongly favors deciding each case on its merits, default judgment 7 is appropriate where a defendant refuses to litigate a case and where default judgment is the 8 plaintiff’s only recourse against the defendant. See Core Concrete, 2012 WL 380304, at *4; 9 Carlson Produce, LLC v. Clapper, No. 18-cv-07195-VKD, 2020 WL 533004, at *5 (N.D. Cal. 10 Feb. 3, 2020); see also United States v. Roof Guard Roofing Co., Inc., No. 17-cv-02592-NC, 2017 United States District Court Northern District of California 11 12 WL 6994215, at *3 (N.D. Cal. Dec. 14, 2017) (“When a properly adversarial search for the truth is rendered futile, default judgment is the appropriate outcome.”). Here, Defendants have not 13 appeared and apparently refuse to litigate. Oomph Innovations, 2020 WL 5847505, at *4. Thus, 14 this Eitel factor also favors default judgment. 15 Overall, the Eitel factors support default judgment. Therefore, the Court GRANTS 16 Plaintiffs’ motion for default judgment. 17 18 C. Relief Requested Because this Court concludes that default judgment is warranted, it now considers 19 Plaintiffs’ request for a permanent injunction. 20 Under the Lanham Act, a district court has the power to grant injunctions according to the 21 rules of equity and to prevent the violation of a trademark holder’s rights. 15 U.S.C. §§ 1116(a), 22 1125(a); see also Levi Strauss & Co. v. Shilon, 121 F.3d 1309, 1314 (9th Cir. 1997); Interstellar 23 Starship Servs., Ltd. v. Epix, Inc., 304 F.3d 939, 948 (9th Cir. 2002). Injunctive relief is available 24 even in a default judgment setting. See, e.g., Philip Morris USA, Inc., v. Castworld Products, Inc., 25 219 F.R.D. 494 (C.D. Cal. 2003). 15 U.S.C. § 1116(a) entitles a trademark owner to an injunction 26 if the owner’s rights are being violated. Penpower Tech. Ltd. v. S.P.C. Tech., 627 F. Supp. 2d 27 28 Case No.: 5:20-cv-04773-EJD ORDER GRANTING MOT. FOR DEFAULT JUDG. AND PERM. INJ. 10 Case 5:20-cv-04773-EJD Document 62 Filed 12/21/21 Page 11 of 11 1 1083, 1094 (N.D. Cal. 2008); see also Century 21 Real Estate Corp. v. Sandlin, 846 F.2d 1175, 2 1180–81 (9th Cir. 1988) (“Injunctive relief is the remedy of choice for trademark and unfair 3 competition cases, since there is no adequate remedy at law for the injury caused by a defendant’s 4 continuing infringement.”). Here, Plaintiffs allege that Defendants have infringed Plaintiffs’ trademarks, damaged United States District Court Northern District of California 5 6 Plaintiffs’ business reputations, and caused confusion as to the connection and origin of 7 Defendants’ products. Am. Compl. ¶¶ 77-104. In light of these allegations, which the Court takes 8 as true, the Court finds good cause to convert the preliminary injunction entered in this action into 9 a permanent injunction. Intel Corp., 2009 WL 347239, at *3; Penpower Tech., 627 F. Supp. 2d at 10 1094; Conifer Sec., 2003 WL 1873270, at *3. 11 IV. CONCLUSION 12 For the foregoing reasons, the Court GRANTS Plaintiffs’ motion for default judgment and 13 a permanent injunction as to Plaintiff’s trademark infringement, false designation of origin, UCL, 14 and FAL claims. 15 The February 24, 2022 hearing is VACATED. 16 IT IS SO ORDERED. 17 Dated: December 21, 2021 18 19 20 EDWARD J. DAVILA United States District Judge 21 22 23 24 25 26 27 28 Case No.: 5:20-cv-04773-EJD ORDER GRANTING MOT. FOR DEFAULT JUDG. AND PERM. INJ. 11

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