2:21-cv-13915
D.N.J.Apr 14, 2022Background
- Plaintiff Prime Hookah owns registered trademarks "Zebra Smoke" and "Tanya" and sells related hookah charcoal and accessories nationally.
- Defendants FCM Online LLC and JMR Online LLC (New Jersey corporations) and their registered agents/operators Mahmut Kurt and John Yavuz operated Amazon storefronts listing at least five product types labeled as Zebra or Tanya without authorization.
- Plaintiff sent communications asserting infringement, then filed suit (Am. Compl.) alleging Lanham Act and New Jersey common-law claims; Defendants did not answer and the Clerk entered defaults.
- Plaintiff moved for default judgment under Fed. R. Civ. P. 55(b)(2); Court treated factual allegations as true but required sufficiency of causes of action.
- The Court found Lanham Act and state-law claims established, held the individual officers potentially personally liable, denied Plaintiff’s extreme statutory damages request, awarded statutory damages of $30,000 jointly and severally, and entered a permanent injunction barring any use of the Zebra and Tanya marks.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Properness of default judgment | Default and pleadings warrant entry of default judgment under Rule 55(b)(2) | No responsive pleading; no defense asserted | Default judgment appropriate; factual allegations taken as true and causes of action sufficient (court exercised discretion) |
| Lanham Act claims (infringement, counterfeiting, false designation, false advertising) | Defendants used counterfeit Zebra and Tanya marks on Amazon, causing consumer confusion and injury | No response / default | Plaintiff established trademark validity, ownership, and likelihood of confusion; federal claims (Counts I–IV) sustained |
| Personal liability of corporate officers | Kurt and Yavuz operated, directed, shared profits, and thereby are liable individually | No response / default | Officers may be held personally liable where they knowingly participate; allegations suffice to impose individual liability |
| Remedies: injunction and statutory damages (willfulness) | Seeks injunction and $2,000,000 per mark per product type (willful max) totaling $1.2B | No response; court must assess willfulness and proportional statutory award | Permanent injunction granted; willfulness not established; statutory damages set at $3,000 per counterfeit mark per product type ($30,000 total) |
Key Cases Cited
- Hritz v. Woma Corp., 732 F.2d 1178 (3d Cir. 1984) (district court has discretion to enter default judgment)
- Chamberlain v. Giampapa, 210 F.3d 154 (3d Cir. 2000) (factors to consider before entering default judgment)
- Comdyne I, Inc. v. Corbin, 908 F.2d 1142 (3d Cir. 1990) (allegations in complaint deemed true after default except as to damages)
- Checkpoint Sys., Inc. v. Check Point Software Tech., Inc., 269 F.3d 270 (3d Cir. 2001) (elements and analysis for trademark infringement and unfair competition)
- Fisons Horticulture, Inc. v. Vigoro Indus., Inc., 30 F.3d 466 (3d Cir. 1994) (relation of unfair competition factors to trademark claims)
- eBay Inc. v. MercExchange LLC, 547 U.S. 388 (2006) (standards for permanent injunctive relief)
- SecuraComm Consulting Inc. v. Securacom Inc., 166 F.3d 182 (3d Cir. 1999) (willfulness standard in trademark cases)
- Columbia Pictures Indus., Inc. v. Redd Horne, Inc., 749 F.2d 154 (3d Cir. 1984) (corporate officers may be personally liable for unfair competition when they authorize or participate)
- Chanel, Inc. v. Matos, 133 F. Supp. 3d 678 (D.N.J. 2015) (guide to statutory damages assessment in internet counterfeit cases)