United States District Court, C.D. California
CIVIL MINUTES - GENERAL
PROCEEDINGS: ORDER RE: STATUTE OF LIMITATIONS & MARK-GOOD COMBINATIONS
GARY ALLEN FEESS, District Judge.
Several owners of luxury brands ("Plaintiffs") brought this trademark action against: (1) eighteen individuals and corporations who sold counterfeit versions of Plaintiffs' goods (the "Defaulting Defendants"); (2) two offshore internet companies that promoted and facilitated the sale of these goods (the "Tradekey Defendants"); and (3) two individual executives of the internet companies (the "Individual Defendants"). Over the past several years, Plaintiffs' claims against each of these Defendants have progressed substantially. Judgment was entered against the last of the Defaulting Defendants in December 2013, and partial summary judgment concerning liability has been granted as to both the Tradekey and Individual Defendants. With liability apparently established, it seemed that the only thing left for trial was a damages determination.
As the case marched on, however, the Parties sussed out two unresolved issues. First, the Tradekey and Individual Defendants (collectively, the "Moving Defendants") assert that some portion of the damages sought against them should be barred by applicable statutes of limitations. (Docket No. 730 [Def. Statute of Limitations Brief ("Def. SoL Mem.")].) Plaintiffs naturally disagree, indicating that the particular offers to sell the counterfeit goods at issue here were: (1) continuing violations, with end-dates inside the statutory period; and (2) discovered just before the action was filed, with the late discovery tolling any statute of limitations. (Docket No. 731 [Pl. Statute of Limitations Brief ("Pl. SoL Mem.")].)
Second, while the Court previously made a general finding of trademark infringement and contributory counterfeiting, no individualized inquiry into the pertinent mark-good combinations has yet been conducted. The Moving Defendants now ask that 56 of the 75 combinations claimed by Plaintiffs be thrown out for lack of actual infringement. (Docket No. 737 [Def. Mark-Good Combination Brief ("Def. Mark Mem.")].) Plaintiffs oppose, pointing to specific evidence of infringement for all 75 combinations. (Docket No. 738 [Pl. Mark-Good Combination Brief ("Pl. Mark Mem.")].)
Both issues will be treated as motions in limine, used for determining the extent of the upcoming damages trial. After evaluating the Parties' theories, the Court agrees that the at-issue offers to sell counterfeit goods represented continuing wrongs. Plaintiffs' claims are therefore timely as to all 75 instances of alleged infringement. The Moving Defendants' attempt to limit the scope of the case on this basis must therefore be DENIED. The Court also finds that there is undisputed evidence of infringement for all but one of the 75 mark-good combinations. The pending request that the combinations be excluded from a damages trial will therefore be DENIED in large measure, but GRANTED in part. The Court sets forth its reasoning, in further detail, below.
A. HISTORY OF THE CASE
Plaintiffs Chloe SAS, Alfred Dunhill Limited, Officine Panerai AG, Montblanc-Simplo GmbH, Cartier International A.G., and Lange Uhren GmbH-collectively, Plaintiffs-each manufacture trademarked luxury goods. They filed this suit following an investigation into the activities of internet merchants who sold infringing, counterfeit versions of their products. The operative complaint makes claims against three different sets of Defendants. (Docket No. 153 [First Amended Compl. ("FAC")].)
The first set of Defendants-the Defaulting Defendants-are the actual sellers of infringing products. None of these Defendants ever appeared in the case, and default judgments have been entered against them. (Docket No. 261 [4/6/12 Order]; Docket No. 618 [12/6/13 Order].)
The second set of Defendants-the Tradekey Defendants-are two companies that facilitated the sales of infringing products by providing an online medium used by the Defaulting Defendants. The Court previously granted Plaintiffs' motion for partial summary judgment against the Tradekey Defendants, finding both of them liable for contributory counterfeiting, contributory trademark infringement, and federal and state unfair competition. (Docket No. 582 [10/8/13 Order].) However, it deferred ruling at that time on the issue of damages. (Id.)
The third set of Defendants-the Individual Defendants-are executives working for the Tradekey Defendants. Much as the Tradekey Defendants facilitated the Defaulting Defendants' counterfeiting, the Individual Defendants guided the Tradekey Defendants' actions. Like their claims against the Tradekey Defendants, Plaintiffs' causes of action against the Individual Defendants are for contributory counterfeiting, contributory infringement, and federal and state unfair competition. Also like the Tradekey Defendants, the Individual Defendants have already been found liable on each of these claims. (Docket No. 700 [3/18/13 Order].)
B. THE PRESENT BRIEFING
While both the Tradekey and the Individual Defendants have already been found liable, the extent of that liability has not yet been established. Specifically, the Court has not considered whether every single purportedly illicit offer for sale identified by Plaintiffs can actually be pursued as an infringement upon their trademarks.
Plaintiffs have submitted images from the Tradekey Defendants' website that supposedly substantiate their claims of infringement. (Docket No. 739 [Tradekey Website Screenshots ("Screenshots")].) These screenshots depict every offer upon which Plaintiffs' 75 infringement claims depend. (Id. at Ex. 2-Ex. 77.) That is, they reveal hundreds of offers to sell goods, each of which ostensibly infringes upon one of 75 different trademarks. Although many marks were infringed upon by multiple offers-for instance, Exhibit 2 includes three separate offers to sell three different "Dunhill" watches-only one claim of infringement per mark is before the Court. (Id. at Ex. 2.)
Most of the images provided by Plaintiffs include both the dates on which illicit offers were originally made, and the dates the screenshots were taken. (See, e.g., id. at 308.) A review of these dates reveals that all of the readily dateable screenshots were taken after May 17, 2008-the statute of limitations cutoff date-but some of the offers were originally made several years earlier. (E.g., id.) (where the original offer was made in 2006, but recorded by Plaintiffs in 2011.) Moreover, some of the offers provide an "expiry date, " and a subset of these expirations had passed long before May 2008. (See, e.g., id. at 310) (listing an offer date of Jaunary 21, 2006, and an "expiry date" of February 21, 2006.) That is to say, even though these offers were accessible during the statutory period, the terms of the offers suggest that they may have expired before that time.
Further complicating matters, a handful of exhibits include images with neither offer, nor expiration, nor screenshot dates. (Id. at Ex. 14, 19, 24, 28, 29, 56.) However, even these more deficient instances can be dated directly. Each of the images in these exhibits-and, for that matter, the images in every other exhibit too-includes a website copyright date, providing an alternative method of identifying the year in which a screenshot was taken. (Id.) For almost every image, this copyright identification reveals that the offer was accessible online after May 2008. (Id. at Ex. 2-55, 57-77.) And even the one exception to this rule-the lone screenshot in Exhibit 56, which cuts off before copyright information has been provided-indicates that the offer was made by a third-party that had only been a "Member Since Apr 2009." (Id. at Ex. 56.) That is, the seller had only been using the Tradekey Defendants' website since 2009, and thus the posting of even this offer must have been made after 2009. (Id. at Ex. 56.)
Finally, as noted briefly above, many exhibits include multiple images of infringing offers. (See, e.g., Ex. 2) (including screenshots of three separate offers to sell infringing products.) In each such exhibit, only one trademark is at issue. (Id.) Thus, even if one of the offers to sell is outside the statutory period, another offer inside the period might independently redeem that particular trademark.
Both the statute of limitations briefing and the mark-good combination briefing rely almost exclusively upon the website screenshots offered by Plaintiffs. Pertinent to the statute of limitations briefing, these exhibits reveal that several offers to sell counterfeit goods were originally made long before this litigation began. For instance, Exhibit 2 includes an offer first made in 2006, while the case was filed in 2011. (Screenshots at 308.) At the Moving Defendants request, the Court will consider whether the applicable statute of limitations bars damages on such offers.
The screenshots also form the basis of Plaintiffs' 75 infringement claims. That is, they reveal offers to sell a multitude of goods that infringe upon 75 of Plaintiffs' trademarks. The Court will consider whether-based on these images-it would be appropriate to conduct a damages trial for all 75 infringement claims.
A. STATUTE OF LIMITATIONS DEFENSE
Plaintiffs' claims are based principally on violations of the Lanham Act, 15 U.S.C. §§ 1114, 1116 and 1125. (FAC ¶¶ 184-219.) Because the Lanham Act does not include its own statute of limitations, federal courts borrow from analogous state law in order to provide one. Jarrow Formulas, Inc. v. Nutrition Now, Inc. , 304 F.3d 829, 836 (9th Cir. 2002). In California, this means that "Lanham Act claims are subject to a three-year statute of limitations which [begins] to run upon [a plaintiff's] actual or constructive knowledge of the wrong." Karl Storz Endoscopy-Am., Inc. v. Surgical Techs., Inc. , 285 F.3d 848, 857 (9th Cir. 2002) (citing Gen. Bedding Corp. v. Echevarria , 947 F.2d 1395, 1397 (9th Cir. 1991) and Cal. Civ. Proc. Code § 338(d)). This case was filed on May 17, 2011, so if Plaintiffs knew of any injuries prior to May 2008, a claim arising out of those injuries would be untimely.
While the Parties agree as to the length of statutory period, they disagree about its effect. (Pl. SoL Mem. at 3, 5-6; Def. SoL Mem. at 3-5.) The Moving Defendants believe that "the claims at issue here are subject to the Uniform Single Publication Act." (Def. SoL Mem. at 3.) This act specifies that "[n]o person shall have more than one cause of action for damages for libel or slander or invasion of privacy or any other tort founded upon any single publication or exhibition or utterance." Cal. Civ. Code § 3425.3. Relying on this language, the Moving Defendants maintain that Plaintiffs completely incurred their injuries as to each mark as soon as a counterfeit version was first offered for sale-and the screenshots provided by Plaintiffs indicate that some offers for counterfeit goods, infringing 28 of the 75 alleged marks, were initially made prior to May 2008. (Def. SoL Mem. at 8-9) (citing Screenshots at Ex. 2, 6-8, 16, 32-33, 35, 39-41, 43, 47, 51-52, 57-58, 64-65, 68-69, 71-77.)
On first glance, this argument appears to have some slight merit. "The single-publication rule limits tort claims premised on mass communications to a single cause of action that accrues upon the first publication of the communication." Yeager v. Bowlin , 693 F.3d 1076, 1081 (9th Cir. 2012) (quoting Roberts v. McAfee, Inc. , 660 F.3d 1156, 1166-67 (9th Cir. 2011). If the totality of Plaintiffs' injuries occurred when an initial offer to sell counterfeit goods was made, the single-publication rule may well be applicable.
Unfortunately for the Moving Defendants, the injury Plaintiffs suffered cannot be isolated to initial offers for sale. Courts throughout this Circuit have been quite clear: "trademark infringement is a continuing wrong, and the statute of limitations is no bar except as to damages beyond the statutory period.'" Novell, Inc. v. Unicom Sales, Inc. , 2004 U.S. Dist. LEXIS 16861, at *13 (N.D. Cal. Aug. 17, 2004) (quoting Jarrow , 304 F.3d at 837). That is to say, if a defendant infringes a trademark, he does not escape all liability simply by saying that he has infringed for more than three years. Accordingly, "even assuming a statute of limitations defense may bar some portion of [Plaintiffs'] trademark infringement claim, [they] would still be entitled to pursue damages based on the infringement activity that occurred within the statute of limitations period." Sonoma Foods v. Sonoma Cheese Factory, 2007 U.S. Dist. LEXIS 96733, at *9 (N.D. Cal. Apr. 3, 2007).
In this case, there is every indication that all 28 of the trademarks infringed upon prior to May 2008 were still being infringed within the statutory period. Specifically, the screenshot and copyright dates for virtually every instance or image of infringement in the 28 contested exhibits falls sometime after 2008. (See Screenshots at 308-309, 310-311, 312-313, 332-333, 335-336, 337-338, 339-340, 341-342, 343-344, 346-347, 348-349, 350-351, 352-353, 458-459, 644-645, 646 C, 647 C, 649, 651, 653, 655, 658, 660, 662, 664, 666, 668, 670, 678, 681, 683, 686, 687-688, 691, 693, 696, 698, 701, 704, 706, 708, 711, 712-714, 716, 718, 720, 743, 745, 747, 748, 752-753, 756, 760, 769, 788, 791, 792-793, 796, 799, 810, 813, 816, 818, 820, 823, 837, 839, 840-842, 861, 862, 863, 864, 870, 871, 874, 877, 905, 906-907, 911, 920-921, 922-924, 925-927, 928-930, 931-933, 934-936, 938-939, 940-942, 943-945, 946-947, 948-949, 950-951, 952-953, 954-955, 962-963, 964-965, 966-967, 968-969, 970-971, 972-973, 975, 977-978, 979-980, 981-982, 983-984, 985, 986, 987-989, 990-992, 993-994, 995-996, 997-998, 999-1000, 1001-1002, 1003-1004, 1005-1006, 1008-1009, 1010-1011, 1012-1014, 1015-1016, 1017-1018, 1019-1021, 1022-1023, 1024-1026, 1027-1028, 1029-1030, 1031-1032, 1034-1035, 1036-1037, 1038-1039, 1040-1041, 1042-1044, 1045-1046, 1047-1048, 1049-1050, 1051-1052, 1053-1054, 1056-1057, 1058-1059, 1060-1061, 1062-1063, 1064-1065, 1066-1067, 1068-1069, 1070-1071, 1072-1073, 1074-1075, 1076-1077, 1079-1080, 1081-1082, 1084-1085, 1087-1088.) That is to say, each of these offers was apparently available online within 3 years of the filing of this action.
Admittedly, no screenshot or copyright date can be found for a handful of offers. (Id. at 749, 750, 757, 758, 770, 797, 824, 825, 826, 827, 828, 829, 830, 831, 832, 833, 859-860, 865, 866, 875-876, 902-903, 909-910.) But most of these have another easily discernable date that puts them within the statutory period. (See id. at 749, 757, 758, 770, 797, 825, 826, 827, 828, 829, 833, 865) (each of which has either a posting or expiration date later than May 17, 2008.) They too may therefore be said to have caused some injury within the statutory period.
Only the slim remainder-page numbers 750, 824, 830, 831, 832, 859-860, 866, 875-876, 902-903, and 909-910-cannot be definitively linked to some time after May 2008. These particular screenshots must therefore be rejected as a basis for conducting a damages inquiry. However, while the screenshots shall not be considered any further, every exhibit with such a stale screenshot-specifically, Exhibits 39, 51, 57, 58, 64, and 65-has at least one other screenshot that adequately documents an infringement within the statutory period. (See, e.g., id. at 748, 825, 861, 877, 904, 911.) Accordingly, even after the May 2008 cutoff date, infringement was still occurring on the Tradekey Defendants' website for all ...