498 F.Supp.3d 1282
S.D. Cal.2020Background
- Daimler AG owns the MERCEDES‑BENZ and Three‑Point Star trademarks and design patent D542,211 and alleges unauthorized manufacture/sale of replica wheels and center caps.
- Defendants (A‑Z Wheels/USArim, Galaxy Wheels, Infobahn, Rasool Moalemi) sold wheels/center caps that Daimler contends are counterfeit; some sampled wheels are stamped "NOT OEM."
- Court previously granted partial summary judgment on liability (trademark infringement and design patent infringement) for Daimler.
- After that ruling, Defendants modified marketing/labeling (adding "replica" and stamping "NOT OEM") and assert they now sell genuine caps or clearly labeled replicas.
- Daimler moved for partial summary judgment seeking (1) maximum statutory damages for willful counterfeiting, (2) a permanent injunction and destruction order, and (3) attorney’s fees as an "exceptional" case.
- Court denied summary judgment on statutory damages and attorney’s fees (triable factual issues remain, including willfulness and authenticity of caps), granted a permanent injunction against Defendants, and denied without prejudice Daimler’s requested destruction order.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Willfulness of counterfeiting (statutory max damages) | Defendants continued to sell products bearing Daimler marks after liability finding—seek $2,000,000 per mark for willful conduct | Defendants changed labeling to "replica"/"NOT OEM" and contend some caps are genuine, creating doubt about intent | Not decided on summary judgment; genuine dispute of material fact exists as to willfulness (for jury) |
| Who decides statutory damages amount | Daimler asks court to award up to $600,000 or $6,000,000 (depending on willfulness) on summary judgment | Defendants contend damages quantum (above statutory minimum) is for the jury | Denied: court refuses to set statutory damages on summary judgment; amount (if elected) for jury to decide |
| Attorney's fees under 15 U.S.C. § 1117(a) ("exceptional" case) | Daimler: discovery abuses and infringement justify fees | Defendants: conduct does not make the case exceptional; factual disputes persist | Denied without prejudice: Daimler failed to show by preponderance that case is exceptional now |
| Permanent injunction and destruction of infringing items | Daimler seeks permanent injunction plus destruction of infringing goods/materials | Defendants argue labeling as replicas and alleged genuineness mitigate need for broad relief | Court granted permanent injunction (broad prohibitions, removal of listings within 30 days) but denied destruction order without prejudice |
Key Cases Cited
- Celotex Corp. v. Catrett, 477 U.S. 317 (summary judgment burden on movant)
- Anderson v. Liberty Lobby, 477 U.S. 242 (reasonable inference standard; nonmovant evidence credited)
- Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574 (nonmoving party must show specific facts; metaphysical doubt insufficient)
- eBay Inc. v. MercExchange, 547 U.S. 388 (four-factor test for permanent injunctions)
- Octane Fitness, LLC v. ICON Health & Fitness, 572 U.S. 545 ("exceptional"‑case fee inquiry is totality‑of‑circumstances)
- SunEarth, Inc. v. Sun Earth Solar Power Co., 839 F.3d 1179 (9th Cir.: apply Octane Fitness factors; preponderance standard for fees)
- Dream Games of Ariz., Inc. v. PC Onsite, 561 F.3d 983 (jury has wide discretion to determine statutory damages)
- NEC Electronics, Inc. v. CAL Circuit Abco, 810 F.2d 1506 (first‑sale doctrine limits trademark reach over genuine goods)
- Sebastian Int'l, Inc. v. Longs Drug Stores Corp., 53 F.3d 1073 (first‑sale doctrine can shield reseller of genuine goods)
- Moroccanoil, Inc. v. Groupon, Inc., 278 F. Supp. 3d 1157 (willfulness is fact‑intensive; triable issues may preclude summary judgment)