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Twitch Interactive, Inc. v. Johnston

United States District Court, N.D. California, San Jose Division

July 26, 2019

TWITCH INTERACTIVE, INC., Plaintiff,
v.
JUSTIN JOHNSTON, et al., Defendants.

          ORDER GRANTING PLAINTIFF'S MOTION FOR DEFAULT JUDGMENT AGAINST DEFENDANTS ERIC BOUCHOUEV AND JARED KELLY AKA ALEX RENFROW [RE: ECF 68]

          BETH LABSON FREEMAN UNITED STATES DISTRICT JUDGE.

         Plaintiff Twitch Interactive, Inc. (“Twitch”) brings this action against Erik Bouchouev, Justin Johnston, Michael and Katherine Anjomi, Pooria Sharaffodin, Marco Pelagatti, and Alex Renfrow, whose true name is Jared Kelly, for allegedly providing bot services that artificially inflate broadcaster popularity statistics in Twitch's video streaming services, thereby harming Twitch and its user community. Complaint ¶¶ 1-6, ECF 1. On March 1, 2017, the Court entered a stipulated judgment in favor of Twitch and against Defendant Johnston. ECF 38. On March 8, 2017, the Clerk of Court entered default as to Bouchouev, the Anjomis, and Renfrow/Kelly. ECF 41. Twitch dismissed this action against Sharaffodin and Pelagatti without prejudice on May 19, 2017. ECF 46. On January 18, 2018, the Court entered an order of default judgment against the Anjomis, ordering them to pay actual damages and statutory damages. ECF 55. The same day, the Court issued a judgment and permanent injunction against the Anjomis. ECF 56; ECF 57.

         Before the Court is Twitch's Motion for Default Judgment against Eric Bouchouev and Jared Kelly AKA Alex Renfrow (together, “Defendants”), whereby Twitch seeks default judgment on the following claims: (1) trademark infringement in violation of 15 U.S.C. § 1114; (2) unfair competition in violation of 15 U.S.C. § 1125(a); (3) violation of the Anti-Cybersquatting Consumer Protection Act[1] (“ACPA”), 15 U.S.C. § 1125(d); and (4) breach of contract.[2] Motion for Default Judgment (“Motion”) at 13-18, ECF 68. Twitch also requests an award of Bouchouev's profits, statutory damages from Renfrow/Kelly and Bouchouev, attorney's fees and costs, and injunctive relief. See Motion at 19-25. Defendants have neither appeared nor filed an opposition. The Court previously found this matter suitable for submission without oral argument. ECF 73. Having carefully considered Twitch's submissions, the Court hereby GRANTS Twitch's Motion for Default Judgment.

         I. BACKGROUND

         A. Twitch's Business and Trademarks

         Founded in 2011, Twitch provides an online service through which users can broadcast themselves playing video games and other content. Complaint ¶ 21. The broadcasters interact with their audiences by participating in activities such as chatting and running promotions. Id. ¶ 22. Each broadcaster has a distinct “broadcaster channel” which consists of a chat window and a Twitch video player through which other Twitch users can view the broadcaster's video. Id. ¶ 24. Viewers who have registered a Twitch account can participate in “chat” and “follow” broadcasters. Id. ¶¶ 25-26.

         Twitch measures certain statistics about a broadcaster's stream, including the (1) current number of viewers watching the stream; (2) total number of viewers who have watched the stream; and (3) total number of followers. Complaint ¶ 27. The statistics are used to calculate the popularity of the content provided by the broadcaster. Id. ¶ 28. For example, higher viewership numbers may lead to a higher position in the directory of channels and provide monetization opportunities to the broadcaster. Id. ¶ 29.

         Broadcasters can earn money directly through Twitch's Partnership Program. Through that program, Twitch shares revenues with "Partners." Complaint ¶¶ 2, 30. While any broadcaster may apply to become a Partner, Twitch accepts only broadcasters who meet certain qualifications. Id. ¶ 30. The qualifications include a consistently high number of viewers and followers. Id.

         Twitch owns rights in the TWITCH trademark (U.S. Registration No. 4, 275, 948) and TWITCHTV trademark (U.S. Registrations Nos. 4, 087, 877 and 4, 230, 874) and has applied for registration of its "Glitch Logo" (U.S. App. Serial No. 86, 485, 295). Complaint ¶ 32; Ex. H to Complaint. The TWITCH mark "consists of standard characters without claim to any particular font, style, size, or color." Ex. Hto Complaint; Ex. A to Decl. in Supp. of Mot. ("Hall Decl."), ECF 69-1. Twitch owns common law rights in the TWITCH trademark and the Glitch Logo. Complaint ¶ 32. When providing its services, Twitch uses a purple and white color scheme with a distinct font and logo. Id. ¶ 33. Presented below is an example of Twitch's font and logo and the Glitch Logo (the stylized comment bubble above "twitch"). Id.

         (Image Omitted.)

         B. Bouchouev and Renfrow/Kelly's Use of Twitch's Trademarks

         Bouchouev operates websites located at twitch-viewerbot.com, twitch-buddy.com, twitchviewerbot.net, streambot.com, andblackdesertbot.com. Complaint ¶ 52. According to Twitch, Bouchouev entices broadcasters to use bot services to artificially inflate the usage associated with the broadcasters' channels. See Id. ¶ 54. For example, on www.twitch-viewerbot.com, Bouchouev offers, among other things, "Viewer Bot," "Chat Bot," "Follower Bot," and "Twitch Partnership" services. Id. ¶ 53. On various websites, Bouchouev offers numerous bot services packages that he claims will help the customers gain more viewers. See Id. ¶¶ 56-57, 59-60, 62-64. Bouchouev advertises his bot services on TwitchViewerbot.Net, StreamBot, and Twitch Viewer Bot Facebook accounts, as well as his Twitch Viewer Bot Twitter, Twitch Viewer Google Plus, and Streambot YouTube accounts. Complaint ¶ 67; Ex. B-III to Complaint.

         Alex Renfrow/Jared Kelly operates websites located at www.streamhomies.com and www.famehomies.com, which links to www.streamhomies.com. Complaint ¶ 114; Ex. G to Complaint. Similar to Bouchouev, Renfrow/Kelly entices broadcasters to use bot services to artificially inflate the usage associated with the broadcasters' channels. Complaint ¶ 115. On various websites, Renfrow/Kelly offers numerous bot services packages that he claims will help the customers gain more viewers. See Id. ¶¶ 116-17. Twitch also claims that “Renfrow[/Kelly] uses the TWITCH mark in commerce without Twitch's permission, ” and that this usage will likely deceive consumers. Id. ¶ 120.

         To register an account or use Twitch's services, a user must agree to Twitch's Terms of Service, Rules of Conduct, API Terms of Service, and Trademark and Brand Asset Guidelines (collectively, the “Terms”). Complaint ¶ 34. The Terms prohibit various activities, including the use of any “robot . . . or other automated means to access the Twitch Service for any purpose”; “impersonat[ing] any person or entity . . . misrepresent[ing] the source, identity, or content of information transmitted via the Twitch Service”; “manipulat[ing] identifiers in order to disguise the origin of any Content transmitted through the Twitch Service”; “mak[ing] unsolicited offers, advertisements”; and “us[ing] the Twitch Service in any manner that would . . . negatively affect or inhibit other users from fully enjoying the Twitch Service or that could damage[] the functioning of the Twitch Service in any manner.” Id. ¶ 37 (alterations in original); see also Ex. A to Complaint at 8-9.[3] The Terms also prohibit the use of Twitch's trademarks without prior written permission of Twitch. Complaint ¶ 40.

         According to Twitch, Defendants “agreed to abide by the Terms by registering an account with Twitch, using the Twitch services, and/or by accessing the Twitch services to, among other things, develop, test, or use their bots.” Complaint ¶ 42. Twitch contends that Defendants violate the Terms by offering and advertising their bot services. Id. ¶¶ 45-48, 155-64.

         II. JURISDICTION

         Before turning to the merits, the Court must first address its jurisdiction to enter default judgment against Defendants. Subject matter jurisdiction is indisputably available under 28 U.S.C. §§ 1331, 1338, and 1367, as some of Twitch's claims arise under federal law. The Court must also have personal jurisdiction over a defendant, or else the entry of default judgment is void. Veeck v. Commodity Enterprises, Inc., 487 F.2d 423, 426 (9th Cir. 1973). Here, as discussed below, the Court is satisfied that (1) Defendants have been served and that (2) this Court has personal jurisdiction over Defendants because they consented to Twitch's Terms which contain a California forum selection clause.

         A. Amending the Caption to Include Kelly as a Defendant

         Twitch requests that the Court amend the caption of the complaint to include Jared Kelly as a Defendant on the basis that Jared Kelly is the true name of Alex Renfrow. See Motion at 12. Twitch argues that Jared Kelly is the true name of the person who operated the bot websites at www.streamhomies.com and www.famehomies.com. Id. Twitch presents evidence that “Alex Renfrow” is a pseudonym for the defendant providing the bot services available at www.streamhomies.com and www.famehomies.com and that the individual operating these websites is actually named Jared Kelly. See Decl. in Supp. of Mot. (“Simpkins Decl.”) ¶ 4, ECF 70; Ex. C to Simpkins Decl., ECF 70-1.

         Rule 15 encourages courts to “freely give leave [to amend] when justice so requires.” Fed.R.Civ.P. 15(a)(2). The Court considers whether an amendment would prejudice Mr. Kelly. Eminence Capital, LLC v. Aspeon, Inc., 316 F.3d 1048, 1052 (9th Cir. 2003) (explaining that prejudice is the critical factor when examining whether amendment is appropriate). Here, Kelly has received notice of this lawsuit and all of the pleadings filed herein given that Twitch successfully emailed him at the email address sexygurl1505@gmail.com. Further, there is no doubt that Mr. Kelly is aware of his own pseudonym. See Order at 3; Proof of Service at 1, ECF 34. The Court finds that it would be in the interest of justice to include Kelly because it will ensure that the correct person is named and properly held accountable. Accordingly, the Court GRANTS Plaintiff's request to amend the caption of the complaint to include Jared Kelly as a Defendant. All allegations in the complaint against “Alex Renfrow” shall be deemed to be allegations against Jared Kelly.

         B. Service of Process

         “A federal court is without personal jurisdiction over a defendant unless the defendant has been served in accordance with Federal Rule of Civil Procedure 4.” Travelers Cas. & Sur. Co. of Am. v. Brenneke, 551 F.3d 1132, 1135 (9th Cir. 2009). However, “Rule 4 is a flexible rule that should be liberally construed so long as a party receives sufficient notice of the complaint.” United Food & Comm. Workers Union v. Alpha Beta Co., 736 F.2d 1371, 1382 (9th Cir. 1984). What is required is “substantial compliance” with Rule 4, with “neither actual notice nor simply naming the defendant in the complaint” being sufficient. Direct Mail Specialists, Inc. v. Eclat Computerized Techs., Inc., 840 F.2d 685, 688 (9th Cir. 1988) (quoting Benny v. Pipes, 799 F.2d 489, 492 (9th Cir. 1986), cert. denied, 484 U.S. 870 (1987)).

         The Court is satisfied that Twitch has “substantially complied” with Rule 4. Twitch initially attempted to personally serve Defendants. See Motion to Serve Via Alternative Means at 4-6, ECF 29. Twitch engaged private investigators to locate Defendants but to no avail. Id. at 6, 8. Twitch subsequently sent the complaint and summons to Defendants via FTP and confirmed that none of the emails were returned as undeliverable. Id. at 3. The Court was satisfied by Twitch's showing. In its Order Granting Twitch's Motion to Serve Via Alternative Means (“Order, ” ECF 33), the Court found that service by e-mail would be “reasonably calculated to give actual notice” to Defendants because Twitch's multiple emails were successfully delivered to Defendants' email addresses. See Order at 2-4. On January 24, 2017, Twitch filed a Proof of Service, ECF 34, demonstrating compliance with the Court's Order along with service of the complaint and associated documents to Defendants.

         Additionally, the Court finds that Kelly has been effectively served with notice of the amended complaint, which adds him as a defendant here. Kelly received email notice of Twitch's motion requesting to amend the complaint to add him at three of his email accounts. See Motion at 33. Service on Kelly of the motion and the request to add him substantially complied with Rule 4 and this Court's prior order allowing service on Defendants by email. Insofar as service can only be accomplished by email to Kelly, the Court finds that Kelly has received notice of the amendment to the complaint and, thus, further service of the amendment to the complaint is waived. See Order at 2-4. Kelly did not oppose the motion. Therefore, under these circumstances, the Court concludes that Defendants have been appropriately served and afforded fair notice of this action.

         C. Personal Jurisdiction

         The Complaint includes allegations directed to the jurisdiction issue. See Complaint ¶¶ 10-11, 16. Particularly, the Complaint pleads that “by using Twitch's services and website, Defendants have agreed to jurisdiction within Santa Clara County. Twitch's Terms of Service provide ‘that the state or federal courts in Santa Clara County, California have exclusive jurisdiction . . . over any suit between the parties not subject to arbitration.'” Id. ¶ 11. Indeed, Twitch's Terms of Service include such a forum selection clause. Ex. A to Complaint at 14. Hence, users of Twitch's services are subject to a forum selection clause that chooses California.

         “[P]arties to a contract may agree in advance to submit to the jurisdiction of a given court.” National Equip. Rental, Ltd. v. Szukhent, 375 U.S. 311, 316 (1964). “[T]he court need not embark on a ‘minimum contacts' analysis where the defendants have consented to California jurisdiction.” Craigslist, Inc. v. Kerbel, No. 11-CV-3309-EMC, 2012 WL 3166798, at *6 (N.D. Cal. Aug. 2, 2012) (citing Zenger-Miller, Inc. v. Training Team, GmbH, 757 F.Supp. 1062, 1069 (N.D. Cal. 1991)). Forum selection clauses in contracts are presumptively valid. M/S Bremen v. Zapata Off- Shore Co., 407 U.S. 1, 10 (1972). The Ninth Circuit has recognized that accepting a forum selection clause demonstrates consent to personal jurisdiction in that forum. See SEC v. Ross, 504 F.3d 1130, 1149 (9th Cir. 2007). As such, courts have found personal jurisdiction based on consent to forum selection clauses contained in internet websites' terms of use. See, e.g., Kerbel, 2012 WL 3166798, at *6. Accordingly, the Court may enforce the forum selection clause unless it is unreasonable. See Id. (citing Zenger-Miller, 757 F.Supp. at 1069).

         Here, the forum selection clause in Twitch's Terms of Service provides that “courts in Santa Clara County, California have exclusive jurisdiction.” Complaint ¶ 11; Ex. A to Complaint at 14. To have their bots participate in the chat and follow broadcasters, Defendants agreed to Twitch's Terms of Service. See Complaint ¶¶ 25-26, 34, 42. There is no indication that Twitch's Terms of Service is either unfair or unreasonable. Defendants have not appeared to raise any challenge to the Terms of Service's forum selection clause. The Court, therefore, concludes that the forum selection clause is enforceable and that the Court may properly exercise personal jurisdiction over Defendants based on their consent to Twitch's Terms of Service. Because Defendants consented to personal jurisdiction, the Court need not consider the analysis for general and specific jurisdiction.

         III. ANALYSIS OF TWITCH'S MOTION FOR DEFAULT JUDGMENT

         Pursuant to Federal Rule of Civil Procedure 55(b), the Court may enter default judgment against a defendant who has failed to plead or otherwise defend an action. “The district court's decision whether to enter a default judgment is a discretionary one.” Aldabe v. Aldabe, 616 F.2d 1089, 1092 (9th Cir. 1980).

         In exercising its discretion to enter default judgment, a district court considers seven factors set forth by the Ninth Circuit in Eitel v. McCool, 782 F.2d 1470, 1471-72 (9th Cir. 1986) (“Eitel factors”): (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 dispute concerning material facts; (6) whether default was due to excusable neglect; and (7) the strong policy underlying the Federal Rules of Civil Procedure favoring decisions on the merits. In considering these factors after a clerk's entry of default, the court takes all well-pleaded factual allegations in the complaint as true, except those with regard to damages. Televideo Sys., Inc. v. Heidenthal, 826 F.2d 915, 917-18 (9th Cir. 1987). “The Court may, in its discretion, consider competent evidence and other papers submitted with a motion for default judgment to determine damages.” Bittorrent, Inc. v. Bittorrent Mktg. GMBH, No. 12-CV-2525-BLF, 2014 WL 5773197, at *8 (N.D. Cal. Nov. 5, 2014) (citing Televideo, 826 F.2d at 917-18). Only the merits and sufficiency of Twitch's claims (second and third factors) and the amount of money at stake (fourth factor) warrant in-depth analysis.

         A. Merits of Twitch's Claims and Sufficiency of the Complaint

         i. Trademark Infringement (15 U.S.C. § 1114)

         To prove infringement of a registered trademark, a plaintiff must demonstrate that it “owns a valid mark, and thus a protectable interest” and that the defendant's “use of the mark ‘is likely to cause confusion, or to cause mistake, or to deceive.'” Lahoti v. VeriCheck, Inc., 586 F.3d 1190, 1196 (9th Cir. 2009) (quoting KP Permanent Make-Up, Inc. v. Lasting Impression I, Inc., 408 F.3d 596, 602 (9th Cir. 2005)); see 15 U.S.C. § 1114(1)(a), (b). Here, Twitch has properly alleged and demonstrated that it owns a valid mark and protectable interest in the TWITCH mark and the “Glitch” logo by supplying evidence that the marks are federally registered by the United States Patent and Trademark Office. Complaint ¶ 32; Ex. H to Complaint; 15 U.S.C. § 1115(a) (stating that registration on principal register is prima facie evidence of validity, ownership, and exclusive right to use registered mark).

         Taking the allegations in the Complaint as true, Twitch has also sufficiently demonstrated that Defendants' use of Twitch's marks is likely to cause confusion under the factors identified in AMF Inc. v. Sleekcraft Boats, 599 F.2d 341, 349 (9th Cir. 1979) (identifying eight factors including (1) strength of the mark; (2) proximity of the goods; (3) similarity of the marks; (4) evidence of actual confusion; (5) marketing channels used; (6) type of goods and degree of care likely to be exercised by the purchaser; (7) defendant's intent in selecting the mark; and (8) likelihood of expansion of the product lines). The Sleekcraft test is “a fluid one and the plaintiff need not satisfy every factor, provided that strong showings are made with respect to some of them.” Surfvivor Media, Inc. v. Survivor Prods., 406 F.3d 625, 631 (9th Cir. 2005). Applying these factors ...


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