GS Holistic LLC v. Cigarworld Inc
2:23-cv-00701-JPS
| E.D. Wis. | Nov 28, 2023Background
- GS Holistic, LLC (Plaintiff) sued Cigarworld Inc. d/b/a Milwaukee Vapor East and its owner Chirag A. Patel (Defendants) for willful trademark infringement (15 U.S.C. § 1114) and false designation of origin/unfair competition (15 U.S.C. § 1125(a)).
- Defendants were served but failed to appear or defend; the court treated the complaint’s factual allegations as true for liability purposes and directed a default-judgment motion.
- Plaintiff owns incontestable federal registrations for the “Stündenglass” marks and alleges Defendants sold counterfeit Stündenglass glass infusers; an investigator purchased an alleged counterfeit at Defendants’ store for $369.59.
- The court found the marks protectable and that Defendants’ use of identical/substantially indistinguishable marks on identical goods supports a presumption of likelihood of confusion in a counterfeiting context.
- Plaintiff sought $150,000 in statutory damages and $931.59 in costs and requested injunctive relief; the court reduced statutory damages to $25,000 per mark (total $75,000), awarded costs, ordered destruction of infringing materials, and entered a permanent injunction; the case was dismissed.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Validity/protectability of marks | Stündenglass marks are federally registered and incontestable | No response (default) | Marks are entitled to a rebuttable presumption of validity and satisfied the protectability element |
| Liability for trademark infringement/false designation | Defendants sold counterfeit goods bearing identical/substantially indistinguishable Stündenglass marks, causing confusion and diversion of sales | No response (default) | Liability found: allegations suffice to show use likely to cause confusion; counterfeiting supports presumption of confusion |
| Willfulness of infringement | Conduct was deliberate; failure to purchase from Plaintiff suggests knowledge of counterfeits; requested higher statutory damages | No response (default) | Willfulness not proven by detailed facts but may be presumed in light of default; court treated willfulness as arguable but focused on appropriate statutory award |
| Remedies: statutory damages, costs, injunction, destruction | Requested $50,000 per mark (total $150,000), costs $931.59, permanent injunction, destruction of infringing materials | No response (default) | Court awarded statutory damages of $25,000 per mark (total $75,000), costs $931.59, permanent injunction, and ordered surrender/destruction of infringing items; entered default judgment and dismissed case |
Key Cases Cited
- Phoenix Entm’t, LLC v. Rumsey, 829 F.3d 817 (7th Cir. 2016) (defines Lanham Act claims and elements for infringement and false designation)
- Uncommon, LLC v. Spigen, Inc., 926 F.3d 409 (7th Cir. 2019) (confirms registration plus likelihood of confusion framework)
- CAE, Inc. v. Clean Air Eng’g, Inc., 267 F.3d 660 (7th Cir. 2001) (registration affords presumption of validity)
- Sorensen v. WD-40 Co., 792 F.3d 712 (7th Cir. 2015) (lists multi-factor likelihood-of-confusion test)
- Packman v. Chicago Tribune Co., 267 F.3d 628 (7th Cir. 2001) (discusses trademark/unfair competition standards)
- eBay Inc. v. MercExchange, L.L.C., 547 U.S. 388 (2006) (four-factor test for permanent injunctions)
- H-D U.S.A., LLC v. SunFrog, LLC, 311 F. Supp. 3d 1000 (E.D. Wis. 2018) (discusses presumption of irreparable harm and statutory-damages considerations in counterfeiting cases)
- Louis Vuitton S.A. v. Pun Yang Lee, 875 F.2d 584 (7th Cir. 1989) (willful blindness as sufficient for knowledge/willfulness)