Stark Carpet Corp. v. Stark Carpet & Flooring Installations, Corp.
954 F. Supp. 2d 145
E.D.N.Y2013Background
- Stark Carpet Corp., a long-established New York seller of high-end interior design products, sued Stark Carpet & Flooring Installations, Corp. and an individual (Roxana Valenzuela) for trademark infringement, dilution and unfair competition under the Lanham Act and New York law. The individual defendant was later dismissed without prejudice.
- Defendant was properly served, failed to appear, and the Clerk entered default; district court earlier entered default judgment on liability and referred damages and relief to the magistrate judge.
- Plaintiff alleged Defendant incorporated under the name containing the word “Stark” and was or intended to be in the same carpet/flooring installation business, risking consumer confusion and harm to plaintiff’s goodwill; plaintiff’s own investigation, however, could not confirm actual marketplace use beyond the certificate of incorporation and some hearsay about equipment at the address.
- Magistrate Judge Scanlon reviewed liability and, on the record (default and plaintiff submissions), recommended statutory Lanham Act damages of $10,000 (an enhanced amount based on a tenfold multiple of the statutory minimum), denial of prejudgment interest, costs of $350 (filing fee), and a permanent injunction barring defendant from using “Stark” or “Stark Carpet” in connection with interior design goods/services.
- The district judge adopted the Report and Recommendation in full, entered judgment against the corporate defendant for $10,000 plus $350 costs, dismissed the individual, and entered the permanent injunction as recommended.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Liability / Default consequences | Stark argued defendant adopted and used a confusingly similar trade name to trade on plaintiff's goodwill; sought default judgment and injunctive relief | Defendant did not appear or contest; no factual rebuttal | Default entered; liability treated as established for purposes of relief; individual defendant dismissed without prejudice |
| Statutory damages under 15 U.S.C. §1117(c) | Requested $25,000 in statutory damages as deterrent; alternatively sought willful-enhanced damages | No response | Court awarded $10,000 (ten times the $1,000 statutory minimum) as a reasonable enhanced statutory award given limited record but default and apparent bad faith |
| Prejudgment interest | Requested interest from incorporation to judgment | No response | Denied—statutory damages here serve deterrent/punitive purposes and prejudgment interest reserved for exceptional cases; plaintiff proved minimal actual monetary loss |
| Permanent injunction | Requested broad permanent injunction preventing use of “Stark”/“Stark Carpet” in related goods/services | No response | Granted: injunction prohibits defendant and affiliates from using Stark/Stark Carpet or confusingly similar marks in interior design goods/services and from holding out affiliation or causing likelihood of confusion or dilution |
Key Cases Cited
- Priestley v. Headminder, Inc., 647 F.3d 497 (2d Cir. 2011) (default-judgment liabilities and treatment of well-pleaded allegations)
- Finkel v. Romanowicz, 577 F.3d 79 (2d Cir. 2009) (damages determination on papers where no hearing requested)
- Transatlantic Marine Claims Agency, Inc. v. Ace Shipping Corp., 109 F.3d 105 (2d Cir. 1997) (court obligation to ensure damages are appropriate on default)
- Credit Lyonnais Sec., Inc. v. Alcantara, 183 F.3d 151 (2d Cir. 1999) (allegations of damages not deemed true on default)
- Gucci Am., Inc. v. Duty Free Apparel Ltd., 315 F. Supp. 2d 511 (S.D.N.Y. 2004) (applying copyright statutory-damages considerations to Lanham Act awards)
- eBay Inc. v. MercExchange, L.L.C., 547 U.S. 388 (U.S. 2006) (traditional equitable injunction factors required post-infringement)
- Polaroid Corp. v. Polarad Elecs. Corp., 287 F.2d 492 (2d Cir. 1961) (Polaroid factors for likelihood of confusion analysis)
- Star Indus., Inc. v. Bacardi & Co., 412 F.3d 373 (2d Cir. 2005) (applying Polaroid factors in trademark disputes)
- Patsy's Brand, Inc. v. I.O.B. Realty, Inc., 317 F.3d 209 (2d Cir. 2003) (consumer sophistication considerations)