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Curtis v. ShinSachi Pharmaceutical Inc.

United States District Court, C.D. California

September 9, 2014

OLGA CURTIS, Plaintiff,
v.
SHINSACHI PHARMACEUTICAL INC.; SEUNGWOO SHIN; DOES 1-10, inclusive, Defendants

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[Copyrighted Material Omitted]

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[Copyrighted Material Omitted]

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For Olga Curtis, an individual, Plaintiff: Alex D Patel, Paulo A de Almeida, LEAD ATTORNEYS, Patel and Almeida PC, Encino, CA.

OPINION

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ORDER GRANTING IN PART PLAINTIFF'S MOTION FOR DEFAULT JUDGMENT [24]

OTIS D. WRIGHT, II, UNITED STATES DISTRICT JUDGE.

I. INTRODUCTION

Plaintiff Olga Curtis and Defendants ShinSachi Pharmaceutical Inc. and Seungwoo Shin are competitors in the rather niche tattoo-numbing-cream market. Curtis has purchased products for resale from Defendants in the past and also sold her own products under the names TATTOONUMB, SUPERNUMB, AND DEEPNUMB.

But after Curtis started using those marks, Defendants registered them with the United States Patent and Trademark Office and then sent Curtis's service providers takedown notices alleging copyright and trademark infringement. Curtis brought this action to determine her superior rights to the NUMB marks, cancel Defendants' trademark registrations, and adjudicate the takedown notices and Defendants' interference with her service-provider contracts. Defendants failed to respond, and the Court entered default. For the reasons discussed below, the Court GRANTS IN PART Curtis's Application for Default Judgment.[1] (ECF No. 24.)

II. FACTUAL BACKGROUND

Curtis has her principal place of business in Moscow, Idaho. (FAC ¶ 1.) ShinSachi

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is a Canadian corporation with its principal place of business in Vancouver, British Columbia, Canada. ( Id. ¶ 2.) Seungwoo Shin is a Vancouver resident. ( Id. ¶ 3.)

1. Curtis's NUMB Marks

Curtis first used the term TATTOONUMB on June 25, 2011, SUPERNUMB on June 12, 2011, and DEEPNUMB on June 16, 2011. ( Id. ¶ 10; Curtis Decl. Ex. C.) On February 15, 2014, she obtained a federal trademark registration for NUMBFAST® from the United States Patent and Trademark Office. (FAC ¶ 12.) She has continued to use these marks (collectively, the " NUMB Marks" ) since their first-use dates. ( Id. ¶ 13.)

Curtis primarily sells her topical anesthetics bearing the NUMB Marks on the Internet through eBay listings. ( Id. ¶ 15.) She also promotes and sells her skin creams bearing the NUMB Marks via her website located at www.numbcreams.com. ( Id. ¶ 16.)

2. Defendants'

Defendants produce a competing topical anesthetic under the trademark DR. NUMB. ( Id. ¶ 18.) Shin, a ShinSachi director, registered the DR. NUMB trademark with the USPTO. ( Id. ¶ 19.) Curtis has purchased DR. NUMB products directly from Defendants and then resold them through her website www.numbcreams.com. ( Id. ¶ 21.) Defendants did not retain ownership of the DR. NUMB creams they sold to Curtis. ( Id. ¶ 23.)

On February 16, 2012, ShinSachi filed three federal trademark applications with the USPTO for TATTOONUMB, SUPERNUMB, and DEEPNUMB. ( Id. ¶ 25.) ShinSachi listed the first-use dates for each alleged mark as August 11, 2011. ( Id.) In February and April 2013, the USPTO issued trademark registrations for each of these marks. ( Id. ¶ ¶ 26-28.)

3. Defendants' takedown notices

Between 2011 and 2013, Defendants submitted 30 Notices of Claimed Infringement via eBay's Verified Rights Owner Program, alleging that Curtis had committed copyright and trademark infringement via her various eBay listings. ( Id. ¶ 36.) Curtis alleges that these listings either involved her own NUMB marks or products bearing Defendants' DR. NUMB mark that she purchased from them. ( Id. ¶ 39.) These listings did not include any of Defendants' copyrighted text or graphics. ( Id. ¶ 40.) In total, eBay removed at least 140 of Curtis's listings. ( Id. ¶ 47.) eBay also issued " strikes" against her selling account, resulting in less desirable listing placement. ( Id. ¶ 49; Curtis Decl. Ex. A.)

eBay notified Curtis of each instance of alleged infringement and then removed her listings. (FAC ¶ 42.) After Curtis contacted Defendants to inquire about the takedown notices, they informed her that they believed she had engaged in copyright infringement. ( Id. ¶ 43.)

Curtis submitted several takedown counter-notices to eBay. ( Id. ¶ 44.) When Defendants did not file an action challenging the counter-notices, eBay restored some listings. ( Id. ¶ 45.)

In November 2012, Defendants sent a complaint to Google's AdWords program alleging that Curtis was selling counterfeit goods. ( Id. ¶ 50; Curtis Decl. Ex. A.) As a result, Google terminated Curtis's account, and she is still unable to advertise via AdWords. (FAC ¶ 50.)

In 2013, Defendants submitted two complaints to Serversea, the company that hosts Curtis's website. ( Id. ¶ ¶ 51-52.) Defendants complained of copyright and trademark infringement and that Curtis

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had engaged in " spamming." ( Id. ¶ 51.) Serversea took down Curtis's website twice and requested that she explain her actions. ( Id. ¶ ¶ 51-52; Curtis Decl. Ex. A.)

4. Defendants' websites

Defendants also registered the domain names www.numbfast.com, www.supernumb.com, and www.deepnumb.com. (FAC ¶ ¶ 54-57.) On www.numbfast.com, Defendants write, " Numbfast is no longer available[]" and " Numbfast is now discontinued! If you need a health-certified numbing cream, use Dr. Numb!" (Curtis Decl. Ex. B.) On www.deepnumb.com and www.supernumb.com, Defendants state that DeepNumb and SuperNumb are " under an FDA recall" and subject to an injunction. ( Id.) Curtis alleges that these products are not in fact under an FDA recall or subject to an injunction. (FAC ¶ 57.)

5. Curtis files suit

On January 24, 2014, Curtis filed this action against Defendants. (ECF No. 1.) She subsequently amended her complaint, alleging declaratory and injunctive relief; copyright-infringement misrepresentations under 17 U.S.C. § 512(f); federal-trademark cancellation; federal cyberpiracy under 15 U.S.C. § 1125(d); trade libel; intentional interference with contract; and intentional interference with prospective economic advantage. (ECF No. 7.)

After Curtis served Defendants in Vancouver (ECF Nos. 13, 14), Defendants failed to answer or otherwise respond. This Court subsequently entered default, and Curtis moved entry of default judgment. (ECF No. 24.) That Application is now before the Court for decision.

III. LEGAL STANDARD

Federal Rule of Civil Procedure 55(b) authorizes a district court to grant default judgment after the Clerk enters default under Rule 55(a). Local Rule 55-1 requires that the movant submit a declaration establishing (1) when and against which party default was entered; (2) identification of the pleading to which default was entered; (3) whether the defaulting party is a minor, incompetent person, or active service member; and (4) that the defaulting party was properly served with notice.

A district court has discretion whether to enter 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 are accepted as true. Televideo Sys., Inc. v. Heidenthal, 826 F.2d 915, 917-18 (9th Cir. 1987) (per curiam) (citing Geddes v. United Fin. Grp., 559 F.2d 557, 560 (9th Cir. 1977)).

In exercising its discretion, a court must consider several factors, including (1) the possibility of prejudice to plaintiff; (2) the merits of plaintiff's substantive claim; (3) the sufficiency of the complaint; (4) the sum of money at stake; (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

The Court finds that Shin and ShinSachi received proper notice of this action, are subject to specific personal jurisdiction in California, and are liable on all of Curtis's claims except for trade libel.

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A. Notice

On April 29, 2014, and May 15, 2014, Curtis served Shin and ShinSachi, respectively, in British Columbia, Canada. (ECF Nos. 13, 14.) On June 12, 2014, Curtis requested that the Clerk of Court enter default against Defendants. (ECF No. 16.) Since the Clerk is not authorized to enter default when foreign service is involved, the Clerk referred the Application to this Court. (ECF No. 19.) The Court subsequently authorized the Clerk to enter default against Shin and ShinSachi, finding that Curtis properly served Defendants under the Hague Convention on the Service Abroad of Judicial and Extrajudicial Documents and Canadian law. (ECF No. 21.)

Since this Court has already extensively analyzed whether Curtis provided Defendants with proper notice of this action, the ...


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