SWEET PEOPLE APPAREL, INC. dba MISS ME, v. CHANG GROUP LLC; KENCO FASHION INC.; XYZ COMPANIES 1-10; and DOES 1-10
CV 16-3139-RSWL-JPRx
UNITED STATES DISTRICT COURT CENTRAL DISTRICT OF CALIFORNIA
June 6, 2017
HONORABLE RONALD S.W. LEW
ORDER re Plaintiff’s Motion for Entry of Default Judgment Against Defendant Kenco Fashion Inc. [75]
I. BACKGROUND
A. Factual Background
Plaintiff is a California corporation with its principal place of business in Los Angeles. First Am. Compl. (“FAC“) ¶ 6, ECF No. 15. Plaintiff manufactures and sells high-quality jeanswear and denim products under the “Miss Me” brand name. Id. at ¶ 10. Plaintiff’s “Miss Me” jeanswear is sold through its own website and through major fashion retailers, both online and in department stores. Id. Defendant is a California corporation with its principal place of business in the City of Industry. Id. at ¶ 8.
In 2011, Plaintiff created the JP5498B Design, which it has used on the rear pockets of its jeanswear products since at least July 23, 2012. Id. at ¶¶ 1, 12. On December 23, 2013, the United States Copyright Office issued Plaintiff Copyright Registration No. VA 1-885-014 for the JP5498B Design. Id. at ¶ 11, Ex. A.
Plaintiff alleges that Defendant wilfully infringed the JP5498B Design by creating and selling a substantially similar design. Id. at ¶¶ 14, 20-21, 23;
B. Procedural Background
Plaintiff filed its Complaint on May 6, 2016 against Defendant Chang Law Group LLC, alleging that they willfully infringed the federally registered copyright for its JP5498B Design pursuant to
On December 12, 2016, the Court granted Counsel for Defendant’s Motion to Withdraw so long as Counsel provided the Court with Defendant’s last-known address. Order re: Mot. for Leave to Withdraw as Counsel (“December 12 Order“), 6:24-7:4, ECF No. 60. Counsel filed a Proof of Service that it mailed the December 12 Order to Defendant at its City of Industry address on December 20, 2016 [61]. On December 22, 2016, the Court ordered Defendant to obtain new counsel within thirty (30) days after being served with the Order [63]. The Court warned Defendant that, as a corporation, it could not appear pro se in the
Plaintiff’s counsel mailed the December 22 Order to Defendant’s last-known address on January 9, 2017. Decl. of Eric D. Mason (“Mason Decl.“) Ex. C, ECF No. 68-1. Defendant failed to timely obtain counsel pursuant to the Court’s December 22 Order. As such, on February 14, 2017, Plaintiff requested the Clerk to enter default against Defendant and moved to strike Defendant’s Answer [68]. On March 16, 2017, the Court granted Plaintiff’s Motion to Strike and entered default against Defendant on March 22, 2017 [71, 72].
Defendant Chang Law Group LLC was dismissed from the action on March 31, 2017 [74], and Defendant Kenco was the only remaining defendant. Plaintiff filed its Motion for Default Judgment on the same day [75]. No Opposition was filed. Plaintiff’s counsel mailed the Motion to Defendant, mot. 15:16-18, but the mail was returned on April 5, 2017 [76].
Plaintiff currently seeks the following relief: (1) a permanent injunction enjoining Defendant from continuing to infringe Plaintiff’s JP5498B Design; (2) an award of statutory damages in the amount of $75,000
II. DISCUSSION
A. Legal Standard
The granting of default judgment is within the discretion of the district court. Aldabe v. Aldabe, 616 F.2d 1089, 1092 (9th Cir. 1980); see
Procedurally, the requirements set forth in
Courts should also consider the following factors in determining whether to grant a motion for default judgment: “(1) the possibility of prejudice to plaintiff, (2) the merits of plaintiff‘s substantive claims, (3) the sufficiency of the complaint, (4) the sum of money at stake in the action, (5) the possibility of a dispute concerning the material facts, (6) whether defendant‘s default was the product of excusable neglect, and (7) the strong public policy favoring decisions on the merits.” Eitel v. McCool, 782 F.2d 1470, 1471-72 (9th Cir. 1986).
If the court determines that the defendant is in default, “‘the factual allegations of the complaint, other than those relating to damages, are taken as true.‘” Televideo Sys., Inc. v. Heidenthal, 826 F.2d 915, 917-18 (9th Cir. 1987) (quoting Geddes v. United Fin. Group, 559 F.2d 557, 560 (9th Cir. 1977)). Additionally, “[w]hen entry of judgment is sought against a party who has failed to plead or otherwise defend, a district court has an affirmative duty to look into its jurisdiction over both the subject matter and the parties.” In re Tuli, 172 F.3d 707, 712 (9th Cir. 1999).
If the Court determines that the allegations in the complaint are sufficient to establish liability, the plaintiff must provide proof of all damages sought in the complaint, and the Court must determine the “amount
B. Analysis
1. Jurisdiction and Service of Process
In considering whether to enter default judgment against Defendant, the Court must first determine whether it has jurisdiction over the subject matter and the parties to the case. In re Tuli, 172 F.3d at 712.
a. Subject Matter Jurisdiction and Personal Jurisdiction are Proper
The Court has subject matter jurisdiction over this action. Plaintiff’s claim for copyright infringement arises under the Copyright Act of 1976,
Personal jurisdiction is also satisfied. Defendant is a California corporation with its principle place of business in the City of Industry, California. FAC ¶ 8. Moreover, specific jurisdiction is demonstrated from the face of the FAC, as Plaintiff alleges that the copyright infringement giving rise to this action took place in this forum. See id. at ¶ 5.
b. Service of Process is Proper
Service of process is met because Plaintiff served Defendant with the Summons and FAC on May 27, 2016, as evidenced by the Proof of Service. Salzmann Decl. Ex. B. Plaintiff served the Summons and FAC by substitute service on Defendant’s alleged manager, in compliance with
2. Procedural Requirements
Plaintiff has satisfied the procedural requirements for default judgment pursuant to
Under
Plaintiff has satisfied each of these requirements. The Court Clerk entered default judgment against Defendant as to the entire FAC on March 22, 2017 [72]. Ntc. of Mot. for Default J. 1:6-8; Salzmann Decl. ¶ 5. Defendant is neither a minor, nor an incompetent person nor in the military service or otherwise exempted under the Soldier’s and Sailor’s Civil Relief Act of 1940, the predecessor to the Servicemembers Civil Relief Act. Salzmann Decl. ¶ 6. Finally, Defendant was served with notice of this Motion on March 31, 2017. Mot. 15:3-14.
3. Eitel Factors
In support of its Motion, Plaintiff has sufficiently set forth “(1) the possibility of prejudice to the plaintiff; (2) the merits of plaintiff’s substantive claims; (3) the sufficiency of the complaint; (4) the sum of money at stake in the action; (5) the possibility of a dispute concerning the material facts; (6) whether the default was due to excusable neglect; and (7) the strong public policy underlying the Federal Rules of Civil Procedure favoring decisions on the merits.” Eitel, 782 F.2d at 1471-72.
a. Risk of Prejudice to Plaintiff
The first Eitel factor considers whether a plaintiff will suffer prejudice if a default judgment is not entered. Vogel, 992 F. Supp. 2d at 1007. Plaintiff argues that it would suffer prejudice without default judgment because it will be denied a remedy until Defendant participates in this action. Mot. 6:13-14. Given Defendant’s failure to secure counsel—in spite of the Court’s repeated requests to do so—and to defend this suit, it is unlikely that Defendant will right its behavior, thus denying Plaintiff the chance to resolve its claims and leaving Plaintiff without a recourse for recovery. Elektra Entm’t Grp. Inc. v. Crawford, 226 F.R.D. 388, 392 (C.D. Cal. 2005). This factor weighs towards entering default.
b. Sufficiency of the Complaint and Likelihood of Success on the Merits
The second and third Eitel factors consider the merits of the plaintiff’s substantive claims and the sufficiency of the complaint. “Under an [Eitel] analysis, [these factors] are often analyzed together.” Dr. JKL Ltd. v. HPC IT Educ. Ctr., 749 F. Supp. 2d 1038, 1048 (N.D. Cal. 2010). Plaintiff has asserted a meritorious claim for willful infringement of its copyright in the JP5498B Design.
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i. Plaintiff has Sufficiently Pled a Copyright Infringement Claim
To plead a viable copyright infringement claim pursuant to
First, Plaintiff owns a validly registered copyright in the JP5498B Design. The copyright, Registration No. VA 1-885-014, was issued on December 23, 2013. FAC ¶ 11. Moreover, the certificate of registration was made within five years after the JP5498B Design’s first publication in at least 2011 or 2012, which “constitute[s] prima facie evidence of the validity of the copyright . . . .” See FAC ¶¶ 11-12;
Second, Defendant copied original elements of Plaintiff’s JP5498B Design. Although Plaintiff lacks express, direct evidence of Defendant’s copying,
The two designs’ substantial similarity also shows copying. “Even without proof of access, a plaintiff can still prove copying if he can show that the two works are not only substantially similar, but are so strikingly similar as to preclude the possibility of independent creation.” Meta-Film Ass’n, Inc. v. MCA, Inc., 586 F. Supp. 1346, 1355 (C.D. Cal. 1984). The
[A plaintiff] must prove both substantial similarity under the “extrinsic test” and substantial similarity under the “intrinsic test.” The “extrinsic test” is an objective comparison of specific expressive elements. The “intrinsic test” is a subjective comparison that focuses on whether the ordinary, reasonable audience would find the works substantially similar in the total concept and feel of the works.
Antonick v. Elec. Arts, Inc., 841 F.3d 1062, 1065-66 (9th Cir. 2016) (citation omitted). Plaintiff proffers a side-by-side comparison of its JP5498B Design and the allegedly infringing AdiktD design.
| Sweet People‘s JP5498B Design | Kenco‘s Infringing Design |
|---|---|
Image in original document | Image in original document |
FAC ¶ 15; Mot. 1:16-23. The comparison passes the extrinsic test, as Plaintiff’s JP5498B Design and Defendant’s AdiktD design include similar artistic expressions that are protectable. Apple Computer, Inc. v. Microsoft Corp., 35 F.3d 1435, 1442 (9th Cir. 1994). For instance, both are located on the denim jeans’ rear pocket; both have rhinestone-embellished flowers in the pocket’s upper right-hand corner; and both use the same sweeping feather design below the fleur-de-lis sign in
c. The Sum of Money at Stake
“Under the [fourth] Eitel factor, the court must consider the amount of money at stake in relation to the seriousness of Defendant’s conduct.” PepsiCo, 238 F. Supp. 2d at 1176. “While the allegations in a complaint are taken to be true for the purposes of default judgment, courts must make specific findings of fact in assessing damages.” Moroccanoil, Inc. v. Allstate Beauty Prod., Inc., 847 F. Supp. 2d 1197, 1202 (C.D. Cal. 2012). The Court will review declarations, calculations, and other damages documentation to determine whether the sum of money at stake is appropriate. HICA Educ. Loan Corp. v. Warne, No. 11-CV-04287-LHK, 2012 WL 1156402, at *3 (N.D. Cal. Apr. 6, 2012).
Plaintiffs seek (1) $75,000 in statutory damages for willful copyright infringement under
d. The Possibility of a Dispute Concerning the Material Facts
The fifth Eitel factor examines the likelihood of a dispute between the parties regarding the material
This factor weighs in favor of granting this Motion for Default Judgment. Plaintiff filed a well-pleaded FAC alleging the facts necessary to establish its willful copyright infringement claim. After the Court struck Defendant’s Answer for its failure to timely obtain counsel, the Clerk entered default against Defendant, Defendant has failed to appear in its own defense, and the Court thus accepts the material facts in the FAC as true. See Live Face on Web, LLC v. AZ Metroway, Inc., No. 5:15-cv-01701-CAS(KKx), 2016 WL 4402796, at *4 (C.D. Cal. Aug. 15, 2016) (no excusable neglect where defendant failed to set aside its default or defend the lawsuit after the court struck the answer for failure to attend court-ordered hearings). Even turning to the substantive facts, a dispute over the copyright infringement claim is unlikely, considering the substantial similarities between the JP5498B Design and the AdiktD design and the widespread dissemination of Plaintiff’s JP5498B Design. See supra Part II.B.3.b.
e. The Possibility of Excusable Neglect
Excusable neglect takes into account factors like “prejudice . . . , the length of the delay and its potential impact on judicial proceedings, the reason
The possibility of excusable neglect is remote here, as Defendant was properly served with the summons, FAC, and instant Motion, indicating that it had proper notice of the action. Salzmann Decl. ¶ 3, Ex. B; see Shanghai Auto. Instrument Co. v. Kuei, 194 F. Supp. 2d 995, 1005 (N.D. Cal. 2001) (finding no excusable neglect because defendants were properly served with the FAC, notice of entry of default, and papers in support of motion for default judgment). Moreover, Defendant has made no attempt to appear or otherwise defend itself in this action, let alone advance a reason for its failure to respond to the Court’s orders and to various motions since its prior counsel was relieved in December 2016. This factor weighs in favor of granting default judgment.
f. Policy Favoring a Decision on the Merits
The Ninth Circuit has stated that “[c]ases should be decided upon their merits whenever reasonably possible.” Eitel, 782 F.2d at 1472. However, “this preference, standing alone, is not dispositive.” PepsiCo, 238 F. Supp. 2d at 1177. In deciding to grant default judgment, the court in PepsiCo noted:
“Defendant’s failure to answer the Complaint makes a decision on the merits impractical, if not impossible.”
Id. Here, the substantive copyright infringement claim cannot be adjudicated, as the Court struck Defendant’s Answer and Defendant failed to respond. Thus, the seventh factor does not preclude entry of default judgment. Accordingly, because all Eitel factors weigh in favor of entering default judgment, the Court GRANTS Plaintiff’s Motion as to the sole claim for copyright infringement.
4. Character and Amount of Plaintiff’s Recovery
Plaintiff requests statutory damages under
a. Injunctive Relief
Plaintiff seeks a permanent injunction enjoining Defendant from continued infringement of its JP5498B Design. Mot. 3:6-7. Pursuant to section 502 of the Copyright Act, courts may grant permanent injunctive relief, where reasonably appropriate, to prevent copyright infringement.
The balance of factors favors granting Plaintiff’s request for a permanent injunction. First, Plaintiff has suffered an irreparable injury in the form of lost profits and reputation because Defendant has positioned itself as a direct competitor in the jeanswear market. See FAC ¶¶ 17, 24. Second, Defendant’s failure to appear in and defend this lawsuit and its repeated disobedience of the Court’s orders suggest Defendant is likely to repeat its infringement; thus, injunctive relief is preferable to compensatory damages in deterring Defendant’s behavior. Courts have determined that permanent injunctions, as opposed to monetary damages, best remedy a defendant’s repeated future copyright infringement activity. See Mai Sys. Corp. v. Peak Comp., Inc., 991 F.2d 511, 520 (9th Cir. 1993); see also Jackson v. Sturkie, 255 F. Supp. 2d 1096, 1103 (N.D. Cal. 2003) (finding injunctive relief was appropriate because of “defendant’s past behavior and on-going ability to infringe plaintiff’s copyright . . . .“). Third, the balance of hardships tips in favor of Plaintiff. Were the Court to grant the injunction, Plaintiff would be protected from Defendant’s continued
b. Statutory Damages
Plaintiff also seeks $75,000 in statutory damages for Defendant’s willful infringement. Mot. 3:4-5. Upon entry of default judgment under
Plaintiff seeks $75,000, half the maximum amount permitted under
c. Attorneys’ Fees & Litigation Costs
Plaintiff seeks $5,115 in combined attorneys’ fees and costs. Mot. 3:8-9. The Court, in its discretion, may award costs and reasonable attorneys’ fees to the prevailing party, pursuant to section 505 of the Copyright Act.
Plaintiff also seeks $515 in litigation costs. These costs were incurred in bringing this action, and
d. Prejudgment Interest
Plaintiff lastly seeks prejudgment interest on the entire judgment under
III. CONCLUSION
Based on the foregoing, the Court GRANTS Plaintiff’s Motion for Default Judgment [75] against Defendant Kenco for the sole claim of copyright infringement under
IT IS SO ORDERED.
DATED: June 6, 2017
s/ RONALD S.W. LEW
HONORABLE RONALD S.W. LEW
Senior U.S. District Judge
