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Sanrio, Inc. v. Ronnie Home Textile Inc.

United States District Court, C.D. California

March 10, 2015

SANRIO, INC., and DISNEY ENTERPRISES, INC., Defendants' Plaintiffs,
v.
RONNIE HOME TEXTILE INC., KENNETH K. DOEING, and QINQIN PAN, Defendants.

Order re: Defendants' Motion for Stay of Action [34]

RONALD S.W. LEW, Senior District Judge.

INTRODUCTION

Currently before the Court is Defendants Ronnie Home Textile, Inc., Kenneth J. Doeing, and QinQin Pan's (collectively, "Defendants") Motion for Stay of Action [34] ("Motion"). Plaintiffs Sanrio, Inc. and Disney Enterprises, Inc. (collectively, "Plaintiffs") assert claims of copyright infringement, trademark infringement, and unfair competition against Defendants. Compl., ECF No. 1. Defendants' Motion requests that this Action be stayed "in its entirety pending the resolution of a possible criminal prosecution against Defendants." Mot. for Stay of Action ("Mot.") 1:28-2:2, ECF No. 34.

The Court, having reviewed all papers submitted and pertaining to this Motion, NOW FINDS AND RULES AS FOLLOWS: The Court DENIES Defendants' Motion for Stay of Action [34].

I. BACKGROUND

Plaintiff Sanrio, Inc. ("Sanrio") manufactures, distributes, and sells, among other things, character artwork. Compl. ¶¶ 4-5, ECF No. 1. Sanrio has produced and licensed characters such as Hello Kitty, Bad Badtz Maru, Chococat, and KeroKeroKeroppi. Id . ¶ 6. Plaintiff Disney Enterprises, Inc. ("DEI") licenses and merchandises characters, including Mickey Mouse, Minnie Mouse, Aladdin, Beauty and the Beast, Cinderella, and Sleeping Beauty. Id . ¶¶ 14-16. Defendant RHT is a California corporation. Id . ¶ 24; Answer ¶ 24. Defendants Doeing and Pan are individuals and are allegedly principals or supervisory employees of RHT. Compl. ¶¶ 25-26; see Answer ¶¶ 25-26.

Plaintiffs Sanrio and DEI claim to own the copyright and trademark registrations for their respective character artwork. Compl. ¶ 28. Plaintiffs allege that Defendants used Plaintiffs' copyrighted works and registered trademarks on Defendants' infringing products without Plaintiffs' consent. Id.

Plaintiffs filed this Action in August 2014. In December 2013, law enforcement personnel obtained a search warrant to "search several locations at which Defendants were allegedly storing, distributing and/or selling certain counterfeit goods and merchandise." Mot. 4:17-20. During the search in December, law enforcement personnel seized Defendants' computers and computer servers, as well as goods, merchandise, and other items, related to the criminal counterfeiting investigation. Mot. 5:1-3. The criminal investigation is currently under review, and the prosecuting authority has not yet filed any charges against Defendants. Mot. 5:7-10.

Defendants' Motion for Stay of Action was filed on February 3, 2015 [34]. Plaintiffs' Opposition was timely filed on February 10, 2015 [35]. No Reply was filed.

II. LEGAL STANDARD

A district court has "discretionary power to stay proceedings in its own court." Lockyer v. Mirant Corp., 398 F.3d 1098, 1109 (9th Cir. 2005) (citing Landis v. N. Am. Co., 299 U.S. 248, 254 (1936)). Although the Court has the discretion to "stay civil proceedings pending the outcome of parallel criminal proceedings, such action is not required by the Constitution." Fed. Sav. & Loan Ins. Corp. v. Molinaro, 889 F.2d 899, 902 (9th Cir. 1989). In deciding whether to stay a civil proceeding in such a context, a court should consider how the defendant's Fifth Amendment rights will be affected. Id . In addition, the following five factors guide courts in deciding whether to stay a civil proceeding pending the outcome of a related criminal proceeding:

(1) the plaintiff's interest in proceeding expeditiously with this litigation or any particular aspect of it, and the potential prejudice to plaintiff of a delay;

(2) the burden that any particular aspect of the proceedings may impose on defendants;

(3) the convenience of the court in the management of its cases and the efficient ...


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