954 F. Supp. 2d 927
D. Ariz.2013Background
- HTS, Inc. sues David Boley and NuVision Systems for trademark infringement, misappropriation of trade secrets, breach of fiduciary duty, and unfair competition.
- HTS seeks default judgment after Boley failed to answer; NuVision dismissed for lack of service under Rule 4(m).
- Boley formed NuVision while employed at HTS, used HTS confidential information and mark to compete.
- HTS asserts ownership of the eye-design Mark through long-standing use in commerce and internet marketing.
- HTS requests monetary damages, injunctive relief, and attorneys’ fees/costs; court grants in part and imposes injunctions.
- The court adopts the Magistrate Judge’s Report and Recommendations and awards damages, exemplary damages, fees, and costs, with injunctive relief and post-judgment interest.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Liability for default judgment under Eitel factors | HTS seeks judgment due to Boley’s default and willful misconduct | Boley did not participate; no defense | Default judgment appropriate under Eitel factors |
| Trademark infringement and false designation of origin | Boley’s eye-design Mark is confusingly similar and used in commerce | NuVision marks not at issue; denied involvement | HTS validly owns mark; likelihood of confusion shown; §1125(a) violated |
| AUTSA preemption and scope of misappropriation claims | AUTSA preempts common-law misappropriation/unfair competition; some claims survive | Misappropriation allegations barred by AUTSA preemption | AUTSA preempts common-law misappropriation/unfair competition; loyalty breach survives |
| Damages and exemplary damages | Lost opportunity, misappropriated products, compensation, and exemplary damages warranted | Damages speculative; insufficient proof | Award detailed damages for lost opportunity, products, compensation; exemplary damages awarded under AUTSA; some items denied |
Key Cases Cited
- Eitel v. McCool, 782 F.2d 1470 (9th Cir. 1986) (factors for evaluating default judgments)
- GoTo.com, Inc. v. Walt Disney Co., 202 F.3d 1199 (9th Cir. 2000) (Sleekcraft factors for likelihood of confusion)
- Brookfield Communications, Inc. v. West Coast Entm’t Corp., 174 F.3d 1036 (9th Cir. 1999) (eight-factor test for likelihood of confusion (Sleekcraft))
- Jada Toys, Inc. v. Mattel, Inc., 518 F.3d 628 (9th Cir. 2008) (ownership/priority of use in trademark)
- Lindy Pen Co., Inc. v. Bic Pen Corp., 982 F.2d 1400 (9th Cir. 1993) (damages framework for trademark/unfair competition)