Amazon.com v. Expert Tech Rogers Pvt. Ltd., 20-cv-07405-PJH (JSC)

• Decision Date: 22 September 2021
• Docket Number: 20-cv-07405-PJH (JSC)
• Court: U.S. District Court — Northern District of California
• Parties: AMAZON.COM, INC., Plaintiff, v. EXPERT TECH ROGERS PVT. LTD., et al., Defendants.

AMAZON.COM, INC., Plaintiff,
v.
EXPERT TECH ROGERS PVT. LTD., et al., Defendants.

No. 20-cv-07405-PJH (JSC)

United States District Court, N.D. California

September 22, 2021

REPORT AND RECOMMENDATION RE: MOTION FOR DEFAULT JUDGMENT

Re: Dkt. No. 39

Jacqueline Scott Corley, United States Magistrate Judge

Amazon.com, Inc. alleges that nine Defendants perpetrated a fraudulent scheme infringing on its trademarks. (Dkt. No. I.)^[1] The Clerk entered default against two Defendants, Swatanter Gupta and Expert Tech Rogers Pvt. Ltd. ("ETR"), on February 11, 2021 after they failed to appear or otherwise defend against this matter. (Dkt. Nos. 29, 31.) Amazon now moves for default judgment against Mr. Gupta and ETR pursuant to Federal Rule of Civil Procedure 55(b)(2). (Dkt. No. 39.) District Judge Phyllis J. Hamilton referred the motion to the undersigned for a report and recommendation. (Dkt. No. 48.) After carefully considering the motion, which is unopposed, and supporting documents, the Court concludes that oral argument is unnecessary, see N.D. Cal. Civ. L.R. 7-l(b), VACATES the September 23, 2021 hearing, and RECOMMENDS that the District Judge GRANT the motion.

BACKGROUND

I.Complaint Allegations

Amazon is a Washington-based corporation whose products include the Alexa virtual assistant and Echo and Echo Dot smart speakers, which are compatible with Alexa. (Dkt. No. 1 ¶¶

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1, 6, 21-22.) Mr. Gupta is a resident of India and a director of ETR, an Indian company incorporated in 2015. (Id. ¶¶ 9, 15, 41.) Defendants Bharat Aggarwal and Heena Aggarwal are residents of California and are affiliated with two California corporations, Defendants Sleja, Inc., and Alexa Web Services Inc. (Id. ¶¶ 7-8, 11-12.) Defendants Chetan Parkash, Neelam Rani, and Rajinder Singh are corporate officers of Sleja. (Id. ¶¶ 10, 13-14.) No Defendant has any legitimate connection with Amazon. (Id. ¶ 1.)

To set up an Alexa-enabled device, a user must download Amazon's Alexa app and follow the setup instructions there. (Id. ¶ 23.) Amazon alleges that all Defendants participated in a fraudulent scheme to target purchasers of genuine Amazon products, including Alexa, Echo, and Echo Dot devices, and sell fake customer support and set-up services using Amazon's trademarks. (Id. ¶¶ 2, 7-15.) Defendants used at least eight websites, and three social media pages to attract users to the websites. (Id. ¶¶ 3, 45, 66-69.) The websites are: downloadappalexaecho.com, dotcausa.com, downloadalexaappecho.com, smartspeakerappsetup.com, downloadappsetup.com, downloadalexaappechosetup.com, downloadalexaappsetup.com, and downloadappsetupwifi.com. (Id. ¶ 45.) The websites claim to provide "Guides for Alexa App & Amazon Alexa Setup," "Get Amazon Alexa App for Alexa Setup," "Download Alexa App and Amazon Echo," "Download Alexa App," "Download Alexa App and Echo Dot Setup," and "Alexa App." (Id. ¶¶ 49, 52, 54, 56, 58, 60, 62, 64.) Each of the websites prompts users to click a link for download and then to enter their name, email address, and phone number. (Id. ¶¶ 49, 52, 54, 56, 58, 60, 62, 64, 72.) Then, the websites show an error message with instructions to call a phone number or wait to receive a phone call from Defendants. (Id. ¶¶ 73-75.) When a user calls the phone number, Defendants take remote control of the consumer's computer, try to convince them that technical problems are preventing the Amazon devices from working, and offer paid services to fix the fake problems. (ta¶¶4, 33.)

Investigators working for Amazon's counsel called four of the phone numbers provided in the website error messages. (Id. ¶¶ 78-79, 89-90, 99-100; Dkt. No. 43 ¶¶ 3-12; Dkt. No. 44 ¶¶ 5-13, 15-23.) They spoke with purported technicians offering support with setting up Alexa devices. (Dkt. No. 1 ¶¶ 79-80, 90, 100-101.) After taking remote control of the investigators'

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computers, (id. ¶¶ 81, 91-92, 102-03), the technicians told the investigators that technical hurdles prevented them from setting up Alexa and offered paid services to fix the problems, (id. ¶¶ 83-84, 93-94, 102). The investigators agreed and completed the following test purchases: $99.99 for "network security lifetime protection," $49.99 for a "one-year subscription" for an "Alexa software account," and $149.99 for a "lifetime update." (Id. ¶¶ 84-87, 93-94, 96-97, 102-04; Dkt. No. 43 ¶¶ 8-9; Dkt. No. 44 ¶¶ 11-13, 22-23.) Amazon represents that the purchased services were fake and no genuine services were provided after payment. (Dkt. No. 1 ¶¶ 88, 98, 106-07.) Amazon represents that it provides legitimate customer support free of charge to purchasers of Alexa devices, and that Defendants' scheme wrongfully trades on Amazon's goodwill and reputation. (Id. ¶¶ 4, 23-24, 123.)

Amazon's complaint alleges infringement of eight trademarks in violation of 15 U.S.C. § 1114, (id. ¶¶ 26, 108-117); false designation of origin, sponsorship, approval, or association and false advertising in violation of 15 U.S.C. § 1125(a), (id. ¶¶ 118-27); trademark dilution in violation of 15 U.S.C. § 1125(c), (id. ¶¶ 128-132); and cybersquatting in violation of 15 U.S.C. § 1125(d), (id. ¶¶ 133-139). In the motion for default judgment, Amazon seeks $4, 150, 000 in damages: $1, 000, 000 in statutory damages for each of four trademarks (the AMAZON mark, the Amazon smiling arrow logo mark, the ALEXA mark, and the ECHO mark) and $50, 000 for each of three cybersquatting violations (for the domain names downloadalexaappechosetup.com, downloadappalexaecho.com, and downloadalexaappecho.com). (Dkt. No. 39 at 9, 11 n.2, 29 n.7; Dkt. No. 46 at 2-3 ¶¶ 1-7.) Amazon also seeks a permanent injunction against Mr. Gupta and ETR. (Dkt. No. 39 at 2; Dkt. No. 46 at 3 ¶¶ 1-6.) Amazon does not seek default judgment as to the other four trademarks nor the claim of trademark dilution. (Dkt. No. 39 at 9, 11 n.2, 29 n.7; see Dkt. No. 46 at 2.)

II. Non-Defaulting Defendants

Amazon's complaint names nine Defendants. (Dkt. No. 1.) The Clerk entered default against Mr. Gupta and ETR after they failed to appear or defend this matter. (Dkt. Nos. 29, 31.) Amazon reached a settlement with four Defendants: Bharat Aggarwal, Heena Aggarwal, Sleja, Inc., and Alexa Web Services Inc. (Dkt. No. 38; Dkt. No. 39 at 13; see Dkt. No. 51.) Amazon

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intends to dismiss the remaining three Defendants after resolution of its motion for default judgment against Mr. Gupta and ETR. (Dkt. No. 39 at 13 n.4.) Those three Defendants are Chetan Parkash, Neelam Rani, and Rajinder Singh-Mr. Aggarwal's father, mother, and friend, respectively, each of whom is a corporate officer of Sleja. (Dkt. No. 41 ¶¶ 5-6, 8-9.)

III. Supporting Evidence in Declarations

In support of its motion for default judgment, Amazon submits declarations from now-dismissed Defendants Mr. and Ms. Aggarwal. (Dkt. Nos. 41, 42.) Because these declarations bear on the merits of Amazon's claims and the sufficiency of its complaint for purposes of default judgment, the Court summarizes the declarations alongside the complaint. See Eitel v. McCool, 782 F.2d 1470, 1471-72 (9th Cir. 1986).

The declarations indicate that Mr. Gupta and ETR were the driving force behind the scheme. Mr. Gupta reached out to Mr. and Ms. Aggarwal after learning, from Mr. Aggarwal's parents Mr. Parkash and Ms. Rani, that the Aggarwals lived in the U.S. (Dkt. No. 41 ¶ 11; Dkt. No. 42 ¶ 5.) Mr. Gupta told the Aggarwals about his business, ETR, and recruited them to expand the business in the U.S. (Dkt. No. 41 ¶¶ 11-12; Dkt. No. 42 ¶¶ 5-6.) The Aggarwals agreed to use Sleja, their preexisting business entity, for the venture and to pay taxes, open bank accounts, and wire money from the U.S. to India. (Dkt. No. 41 ¶ 12-16; Dkt. No. 42 ¶¶ 7-8.) They later created another entity, Alexa Web Services Inc., and allowed Mr. Gupta to use that as well. (Dkt. No. 41 ¶¶ 24-25; Dkt. No. 42 ¶¶ 14-15.) The Aggarwals wired about 85% of the funds to Mr. Gupta. (Dkt. No. 41 ¶ 22; Dkt. No. 42 ¶ 7.) They kept 15% to pay customer refunds, bank fees, taxes, and administrative expenses, and earned as profit what was leftover, usually about 5%. (Dkt. No. 41 ¶ 22; Dkt. No. 42 ¶ 7.) Between 2017 and 2020, the Aggarwals wired about $712, 546 to Mr. Gupta and ETR. (Dkt. No. 41 ¶¶ 28-34; see also Id. ¶¶ 23, 26.)^[2] The Aggarwals were not involved in the day-to-day operations run by Mr. Gupta and believed the venture was legitimate until they were served with process in this case. (Id. ¶¶ 18-21, 35-36; Dkt. No. 42 ¶¶ 8-12, 16-17.)

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DISCUSSION

I. Jurisdiction and Service of Process

A. Subject Matter Jurisdiction and Personal Jurisdiction

Courts have a duty to examine both subject matter and personal jurisdiction when default judgment is sought against a non-appearing party. In re Tuli, 172 F.3d 707, 712 (9th Cir. 1999). Here, the Court may exercise subject matter jurisdiction because of the federal questions presented in the complaint, (Dkt. No. 1 ¶¶ 108-39). 15 U.S.C. §§ 1114, 1125(a), 1125(c), 1125(d); see Id. § 1121(a); 28 U.S.C. §§ 1331, 1338(a).

The Court may find nationwide personal jurisdiction over Mr. Gupta and ETR if "three requirements are met. First, the claim against the defendant must arise under federal law .... Second, the defendant must not be subject to the personal jurisdiction of any state court of general jurisdiction. Third, the federal court's exercise of personal jurisdiction must comport with due process." Holland Am. Line Inc. v. WartsilaN. Am., Inc., 485 F.3d 450, 461 (9th Cir. 2007) (citations omitted); see Fed. R. Civ. P. 4(k)(2).

Here, the first requirement is met because all of Amazon's claims arise under federal law. As to the second requirement, "the test for general jurisdiction asks whether a corporation is essentially 'at home' in the forum state." Williams v. Yamaha Motor Co. Ltd., 851 F.3d 1015, 1021 (9th Cir. 2017) (citing Daimler AG v. Bauman, 571 U.S. 117, 127 (2014)). The complaint...