Amazon.com v. Kurth

• Decision Date: 31 July 2019
• Docket Number: Case No. 2:18-cv-00353-RAJ
• Parties: AMAZON.COM, a Delaware corporation; and VERA BRADLEY DESIGNS, INC., an Indiana corporation, Plaintiff, v. LINDA KURTH, Defendant.
• Court: U.S. District Court — Western District of Washington

AMAZON.COM, a Delaware corporation;and VERA BRADLEY DESIGNS, INC., an Indiana corporation, Plaintiff, v. LINDA KURTH, Defendant.

Case No. 2:18-cv-00353-RAJ

UNITED STATES DISTRICT COURT WESTERN DISTRICT OF WASHINGTON AT SEATTLE

July 31, 2019

HONORABLE RICHARD A. JONES

ORDER GRANTING PLAINTIFFS' MOTION FOR DEFAULT JUDGMENT

I. INTRODUCTION

Before the Court is Plaintiffs' Motion for Default Judgment. Dkt. # 12. Defendant Linda Kurth was properly served with a Complaint and Summons, but has not filed a response or otherwise appeared in this action. Dkt. # 9. For the following reasons, the Motion is GRANTED.

II. BACKGROUND

Plaintiffs Amazon.com ("Amazon") and Vera Bradley Designs, Inc. ("Vera Bradley") allege Defendant Kurth owns and operates an Amazon Seller Account where she sells counterfeit Vera Bradley products. Dkt. # 1 at 9. On or around June 29, 2017, Vera Bradley received letters from U.S. Customs and Border Protection (CBP) concerning a seizure of four imported shipments. Dkt. # 13 at 4-7. The shipments allegedly contained products with counterfeit Vera Bradley trademarks and identified Defendant as the importer on record. Id. Soon thereafter, Vera Bradley informed Amazon that Kurth was advertising and selling purportedly genuine Vera Bradley products on Amazon's online platform. Dkt. # 14. On or around August 4, 2017, Amazon ordered a "Vera Bradley Midnight with Mickey Campus Backpack" through Kurth's Amazon Seller Account and, upon inspection, confirmed the purchased bag was a counterfeit. Dkt. # 13, ¶ 5; Dkt. # 14, ¶ 5 . In April 2018, Vera Bradley ordered a "Vera Bradley Campus Backpack" from eBay seller Linda Kurth that was also a counterfeit. Dkt. # 13, ¶ 6. Amazon's records reflect that Kurth sold $613,818.77 dollars of Vera Bradley products before Amazon blocked her account from further sales. Dkt. # 14, ¶ 6.

On March 8, 2018, Plaintiffs filed a Complaint against Defendant for advertising, marketing, selling, and distributing counterfeit Vera Bradley products and for breach of contract. Dkt. # 1. On March 16, 2018, Kurth was served. Dkt. # 9. On or around April 3, 2018, Kurth responded to Plaintiffs' counsel by letter and admitted to purchasing the majority of the accused products from other sellers on eBay. Dkt. # 16. She claimed that she did know the products were counterfeits. Id. at 10. Since April 2018, Kurth has not communicated with Plaintiffs' counsel or appeared in this litigation. Dkt. # 12 at 3. On July 17, 2018, Plaintiffs moved for default against Kurth. Dkt. # 11. On September 12, 2018, Plaintiffs moved to enter default judgment against Kurth on all claims, seeking actual and statutory damages, a permanent injunction and attorney's fees. Dkt. # 12.

III. LEGAL STANDARD

At the default judgment stage, the court presumes all well-pleaded factual allegations are true, except those related to damages. TeleVideo Sys., Inc. v. Heidenthal, 826 F.2d 915, 917-18 (9th Cir.1987); see also Fair House. of Marin v. Combs, 285 F.3d 899, 906 (9th Cir. 2002). Although the entry of default judgment under Rule 55(b) is "an extreme measure," disfavored cases should be decided upon their merits whenever reasonably possible. Cmty. Dental Servs. v. Tani, 282 F.3d 1164, 1170 (9th Cir. 2002); also see Westchester Fire Ins. Co. v. Mendez, 585 F.3d 1183, 1189 (9th Cir. 2009).

In addition, Federal Rule of Civil Procedure 55(b)(1) permits the court to enter default judgment when the plaintiff's claim "is for a sum certain or a sum that can be made certain by computation." Fed. R. Civ. P. 55(b)(1). In moving the court for default judgment, a plaintiff must submit evidence supporting the claims for a particular sum of damages. Fed. R. Civ. P. 55(b)(2)(B). If the plaintiff cannot prove that the sum it seeks is "a liquidated sum or capable of mathematical calculation," the court must hold a hearing or otherwise ensure that the damage award is appropriate, reasonable and demonstrated by evidence. Davis v. Fendler, 650 F.2d 1154, 1161 (9th Cir. 1981); see also Getty Images (US), Inc. v. Virtual Clinics, 2014 WL 358412 (W.D. Wash. 2014). In determining damages, a court can rely on the declarations submitted by the plaintiff. Dr. JKL Ltd. v. HPC IT Educ. Ctr., 749 F. Supp. 2d 1046 (N.D. Cal. 2010). Where there is evidence establishing a defendant's liability, the court has discretion, not an obligation, to enter a default judgment. Aldabe v. Aldabe, 616 F.2d 1089, 1092 (9th Cir. 1980); see also Alan Neuman Productions, Inc. v. Albright, 862 F.2d 1388, 1392 (9th Cir. 1988). Since deciding for or against default judgment is within the court's discretion, a defendant's default does not de facto entitle a plaintiff to a court-ordered judgment. Curtis v. Illumination Arts, Inc., 33 F. Supp. 3d 1200, 1210-11 (W.D. Wash. 2014).

IV. DISCUSSION

In exercising its discretion, the Court considers the "Eitel" factors: (1) the substantive merits of plaintiff's claims, (2) the sufficiency of the claims raised in the complaint, (3) the possibility of prejudice to the plaintiff if relief is denied, (4) the sum of money at stake, (5) the possibility of a dispute concerning material facts, (6) whether the default was due to excusable neglect, and (7) the strong policy favoring decisions on the merits when reasonably possible. Eitel v. McCool, 782 F.2d 1470, 1471-72 (9th Cir. 1986).

As discussed below, the Court has considered each of the Eitel factors and finds they weigh in favor of granting default judgment.

A. Application of Eitel Factors

i. Merits of the Claims, Sufficiency of the Complaint, and Prejudice to Plaintiffs

The substantive merits of the claims and the sufficiency of the Complaint are often analyzed together. Curtis, 33 F. Supp. 3d. at 1211. Additionally, while prejudice to the plaintiff is a factor to be analyzed independently under Eitel, it is discussed in this section because Plaintiffs' recourse flows from their ability to demonstrate merit to their claims. Dr. JKL Ltd. v. HPC IT Educ. Ctr., 749 F. Supp. 2d at 1048. As discussed below, the Court finds that Plaintiffs have invoked a cognizable legal theories and alleged sufficient facts for the Court to conclude they have stated claims upon which relief may be granted.

1. Trademark Infringement

Vera Bradley bases its trademark infringement claim on 15 U.S.C. § 1114 and 15 U.S.C. § 1127. To prevail, Vera Bradley must show that Kurth used (1) a reproduction, counterfeit, copy or colorable imitation of plaintiff's registered trademark, (2) without its consent, (3) in commerce, (4) in connection with the sale, offering for sale, distribution or advertising of any goods, (5) where such use is likely to cause confusion, or to cause a mistake or to deceive. 15 U.S.C. § 1114(1)(a); Southern California Darts Ass'n v. Zaffina, 762 F.3d 921, 929 (9th Cir. 2014). The test of likelihood of confusion is "whether a reasonably prudent consumer in the marketplace is likely to be confused as to the origin of the goods or service bearing one of the marks." Dreamwerks Prod. Grp., Inc. v. SKG Studio, dba Dreamworks SKG, 142 F.3d 1127, 1129 (9th Cir. 1998); Jada Toys, Inc. v. Mattel, Inc., 518 F.3d 628, 632 (9th Cir. 2008). Here, Vera Bradley alleges it owns the registered trademarks in this complaint. See Dkt. # 1-1 at 2-6 (copies of Vera Bradley trademark registrations). Vera Bradley has also set forth facts demonstrating that Kurth has and continues to advertise, market, sell, offer to sell and distribute counterfeit bags as genuine Vera Bradley products. Dkt. # 1 at 11. Therefore, Vera Bradley has stated a claim for trademark infringement.

2. False Designation of Origin

Vera Bradley's false designation of origin claim requires it show (1) the terms or logos in question are valid and protectable trademarks, (2) the plaintiff own these marks as trademarks, (3) the plaintiff used these marks in commerce, and (4) the defendant used false or misleading descriptions of fact or "terms or designs similar to plaintiff's marks without the consent of the plaintiff in a manner that is likely to cause confusion among ordinary purchasers as to the source of the goods." 15 U.S.C. § 1125(a); Dr. JKL Ltd. v. HPC IT Educ. Ctr., 749 F. Supp. 2d 1041. As with the trademark infringement claim, Vera Bradley alleges that it owned and used the trademarks in question for its commercial products, that those trademarks are valid and registered, and that Kurth advertised counterfeit products as genuine Vera Bradley merchandise. Dkt. # 1, ¶ 35; Dkt. # 1-1 at 2-6. Therefore, Vera Bradley has sufficiently pled a false designation of origin claim.

3. Copyright Infringement

To prove its claim for copyright infringement, Vera Bradley must show (1) ownership of the allegedly infringed work and (2) copying of the protected elements of the work by the Defendant. 17 U.S.C. § 501. However, it need not prove that Defendant copied a copyrighted work in its entirety, as substantial similarity suffices. Shaw v. Lindheim, 919 F.2d 1353, 1356 (9th Cir. 1990) (finding that copying may be established by showing the infringer had access to the protected work and that the two works are substantially similar). Here, Vera Bradley alleges to be the sole owner of the copyrights at issue and that Defendant infringed on its rights by reproducing, distributing copies of, publicly displaying, and creating derivative works of its designs and artistic creations without authorization. Dkt. #1 at 12; Dkt. # 1-1 at 7-16 (copies of Vera Bradley copyright registrations). The Court finds Vera Bradley has adequately pled that the Defendant infringed upon its copyrights.

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4. Breach of Contract

Finally, Amazon brings a claim for breach of contract. Amazon must show: (1) the existence of a contractual duty, (2) breach, (3) causation, and (4) damages. Larson v. Union Investment & Loan Co., 168 Wash. 5, 10 P.2d 557 (1932); Alpine Industries, Inc. v. Gohl, 30 Wash.App. 750, 637 P.2d 998 (1981). Here, Amazon alleges Defendant signed an Amazon Business...