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Sweet People Apparel, Inc. D/B/A Miss Me, A California Corporation and v. Zipper Clothing

May 31, 2012

SWEET PEOPLE APPAREL, INC. D/B/A MISS ME, A CALIFORNIA CORPORATION AND DEODAR BRANDS, LLC D/B/A MEK DENIM, A CALIFORNIA LIMITED LIABILITY COMPANY, PLAINTIFFS,
v.
ZIPPER CLOTHING, A BUSINESS ENTITY OF UNKNOWN STATUS; ZIPPER AND DENIM, A BUSINESS ENTITY OF UNKNOWN STATUS; INY TRADING, INC., A CALIFORNIA CORPORATION, DEFENDANTS.



The opinion of the court was delivered by: Hon. Otis D. Wright, II United States District Judge

ORDER GRANTING IN PART AND DENYING IN PART MOTION FOR DEFAULT JUDGMENT [27]

I.INTRODUCTION

Before the Court is the May 7, 2012 Motion for Default Judgment by Plaintiffs Sweet People Apparel, Inc. d/b/a Miss Me ("Sweet People") and Deodar Brands, LLC d/b/a/ MEK Denim ("MEK Denim") (collectively "Plaintiffs") against Defendants Zipper Clothing, Zipper and Denim, and INY Trading, Inc. (collectively "Defendants"). (ECF No. 27.) Having carefully considered the papers filed in support of the instant Motion, the Court deems this matter appropriate for decision without oral argument. See Fed. R. Civ. P. 78; C.D. Cal. L.R. 7-15. For the following reasons, the Court GRANTS in part and DENIES in part Plaintiffs' Motion.

II.FACTUAL BACKGROUND

On March 29, 2012, Plaintiffs filed a Complaint in this Court alleging five claims against Defendants for (1) copyright infringement in violation of 17 U.S.C. § 501; (2) trademark counterfeiting and trademark infringement in violation of 15 U.S.C. § 1114; (3) trademark infringement in violation of 15 U.S.C. § 1125(a); (4) common law trademark infringement and unfair competition; and (5) unfair competition in violation of California Business and Professions Code sections 17200 et seq. (Compl. 1.) After Defendants failed to appear or otherwise respond to the Complaint, Plaintiffs requested entry of default against Defendants, which the clerk entered pursuant to Federal Rule of Civil Procedure Rule 55(a) on April 25, 2012. (ECF Nos. 20, 21.) Pending now before the Court is Plaintiffs' Motion For Default Judgment. (ECF No. 27.)

This action arises out of Defendants' alleged wrongful appropriation of Plaintiffs' copyrighted and trademarked designs. Plaintiffs Sweet People and MEK Denim are manufacturers, promoters, sellers, and distributors of high-quality jeanswear and denim products throughout the United States. (Compl. ¶¶ 12, 44.) Sweet People's and MEK Denim's jeans have received extensive media coverage and are sold by fashion retailers and department stores. (Compl. ¶¶ 12, 49.) Plaintiffs' unique and distinctive designs distinguish their jeans from their competitors'. (Compl. ¶¶ 14--15, 51.)

Sweet People has copyrighted several of its designs, including: Sweet People's Wing Design, Fleur de Lis Design, JP5117 Cross Wing Design, JP5335 Ivy Cross Design, and Wide M Design. (Compl. Ex. A--E.) Sweet People also holds registered trademarks for its Fabric Cut Out Design (Compl. Ex. F) and its Wide M Design (Compl. Ex. G), as well as an unregistered trademark for its Wing Design (Compl. ¶ 36). MEK Denim holds a registered trademark for its M Design. (Compl. Ex. H.)

Defendants are manufacturers, promoters, sellers, and distributors of jeanswear products that bear substantially similar designs to Plaintiffs' copyrighted and trademarked designs. (Compl. ¶ 52.) According to Plaintiffs, Defendants have deliberately and knowingly replicated Plaintiffs' designs. (Compl. ¶ 54.) Defendants' products are therefore likely to cause consumer confusion, leading consumers to believe that the infringing jeans are associated with Plaintiffs' jeans. (Compl. ¶ 54.)

III.LEGAL STANDARD

Federal Rule of Civil Procedure 55(b) permits a court-ordered default judgment following the Clerk's entry of default under Rule 55(a). Federal Rule of Civil Procedure 55(b) and Local Rule 55-1 require that applications for default judgment set forth (1) when and against what party the default was entered; (2) the identification of the pleadings to which the default was entered; (3) whether the defaulting party is an infant or incompetent person, and if so, whether that person is represented by a general guardian, committee, conservator, or other representative; (4) that the Service Member's Relief Act does not apply; and (5) that notice has been served on the defaulting party, if required by Rule 55(b)(2).

The district court is given discretion to decide whether to enter a default judgment. Aldabe v. Aldabe, 616 F.2d 1089, 1092 (9th Cir. 1980). Upon default, the defendant's liability generally is conclusively established, and the well-pleaded factual allegations in the complaint-except those pertaining to damages-are accepted as true. Televideo Sys., Inc. v. Heidenthal, 826 F.2d 915, 917-19 (9th Cir. 1987) (per curiam) (citing Geddes v. United Fin. Group, 559 F.2d 557, 560 (9th Cir. 1977)). However, in exercising its discretion regarding entry of default, a court must consider several factors, including: (1) the possibility of prejudice to plaintiff; (2) the merits of plaintiff's substantive claim; (2) the sufficiency of the complaint; (4) the sum of money at stake in the action; (5) the possibility of a dispute concerning material facts; (6) whether the defendant's default was due to excusable neglect; and (7) the strong policy underlying the Federal Rules of Civil Procedure favoring decisions on the merits. Eitel v. McCool, 782 F.2d 1470, 1471--72 (9th Cir. 1986).

IV.DISCUSSION

Plaintiffs' Motion for Default Judgment seeks judgment comprising a permanent injunction, $1,050,000 in statutory damages, $25,278.92 in attorney's fees and costs, interest on the judgment, and seizure and impoundment of the infringing jeans. The Court considers each in turn.

A. Liability

Plaintiffs have satisfied the procedural requirements for default judgment pursuant to Federal Rule of Civil Procedure 55(a) and Local Rule 55-1. Specifically, Plaintiffs have established that (1) the clerk entered default against Defendants on April 25, 2012; (2) the default is based on Defendants' failure to respond to Plaintiffs' Complaint served on March 30, 2012; (3) Defendants are neither infants nor incompetent persons; (4) Defendants are neither members of the U.S. Military nor otherwise exempted under the Soldiers' and Sailors' Civil Relief Act of 1940; and (5) Plaintiffs served Defendants ...


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