Amini Innovation Corp.. v. Kty Int'l Mktg. Dba M Pac. Furniture

• Decision Date: 01 March 2011
• Docket Number: No. CV 07–4823 SVW (MANx).,CV 07–4823 SVW (MANx).
• Parties: AMINI INNOVATION CORPORATION, a California corporation, Plaintiff,v.KTY INTERNATIONAL MARKETING dba M Pacific Furniture, a California corporation, Fine Living Furniture, a California business entity, Collezione Europa USA, Inc., a New Jersey corporation, Tom's Farms, LLC, a California limited liability Company, and Does 1–9, inclusive, inclusive, Defendants.
• Court: U.S. District Court — Central District of California

768 F.Supp.2d 1049

AMINI INNOVATION CORPORATION, a California corporation, Plaintiff,

v.KTY INTERNATIONAL MARKETING dba M Pacific Furniture, a California corporation, Fine Living Furniture, a California business entity, Collezione Europa USA, Inc., a New Jersey corporation, Tom's Farms, LLC, a California limited liability Company, and Does 1–9, inclusive, inclusive, Defendants.

No. CV 07–4823 SVW (MANx).

United States District Court, C.D. California.

March 1, 2011.

Daniel Miles Cislo, Mark D. Nielsen, Cislo and Thomas LLP, Santa Monica, CA, for Plaintiff.

ORDER GRANTING IN PART PLAINTIFF'S MOTION FOR DEFAULT JUDGMENT; JUDGMENT AGAINST DEFENDANT KTY INTERNATIONAL MARKETING dba M PACIFIC FURNITURE [50]

STEPHEN V. WILSON, District Judge.I. Introduction

On September 4, 2010, Plaintiff Amini Innovation Corporation (“Plaintiff” or “AICO”) filed a motion for default judgment against Defendant KTY International Marketing dba M Pacific Furniture. The motion was originally set for a hearing on February 7, 2011. The Court found the matter suitable for resolution without oral argument. Local Rule 7–15.

For the reasons stated below, Plaintiff's Motion for Default Judgment against Defendant KTY International Marketing dba M Pacific Furniture is GRANTED IN PART. JUDGMENT SHALL BE ENTERED against Defendant KTY International Marketing dba M Pacific Furniture in the total amount of $176,427.66.

II. Facts

Amini Innovation Corporation (“AICO”) initiated this action against Collezione Europa U.S.A., Inc. (“Collezione”), KTY International Marketing dba M Pacific Furniture (“Defendant”), Fine Living Furniture (“FLF”), and Tom's Farms on July 26, 2007, alleging copyright infringement (Count I) and design patent infringement (Count II). AICO is a designer and marketer of home furnishings. Defendant is a distributor that allegedly, without AICO's permission, sold furniture that AICO believes to be within the scope its copyrights and design patents. Specifically, AICO alleges that Defendant was selling furniture that violated copyrights for its B40000 and D40000 collections, as well as its E6500 entertainment wall.

AICO properly served Defendant with a copy of the Summons and the Complaint on July 27, 2007. On August 27, 2007, the defendants moved to stay this action in favor of an earlier filed New Jersey action between AICO and Collezione. In support of the motion to stay, Defendant KTY agreed to be bound by the final judgment relating to Collezione's liability for infringement of AICO's copyrights and design patents, and on October 10, 2007, the Court granted the defendants' motion to stay the proceedings.

In early 2010, AICO and Collezione settled their dispute pursuant to a confidential settlement agreement, which included a dismissal of Collezione from the instant case. AICO subsequently filed a motion to lift the stay, which the Court granted on April 16, 2010.

Since April 16, 2010, AICO has attempted to communicate with Defendant on at least six separate occasions via letters containing settlement proposals for Defendant to consider. However, Defendant has not responded appropriately to any of AICO's settlement offers. Defendant's only responses involved phone calls, in which Tawny Lam, the Executive Vice President of Defendant, Lam Decl. I at ¶ 1, has repeatedly asserted that KTY is not a dba of M Pacific and that they are separate entities. Despite AICO's numerous requests for documentary evidence of Ms. Lam's assertion, Defendant has been non-responsive.

Default was entered against Defendant on September 9, 2010. AICO now moves the Court to grant Final Default Judgment against KTY.

AICO seeks a permanent injunction against Defendant from continuing infringement, $250,000,000 in statutory damages pursuant to 17 U.S.C. § 504(c)(2),$1,000 in statutory damages pursuant to 35 U.S.C. § 101, and $25,428.35 in attorneys' fees and costs.

III. AnalysisA. Legal Standard

“A party seeking a default judgment must state a claim upon which it may recover.” Philip Morris USA, Inc. v. Castworld Prods., Inc., 219 F.R.D., 494, 498 (C.D.Cal.2003) (citing PepsiCo Inc. v. Cal. Sec. Cans, 238 F.Supp.2d 1172 (C.D.Cal.2002)). When reviewing a motion for default judgment, the Court must accept the well-pleaded allegations of the complaint relating to liability as true. TeleVideo Systems Inc. v. Heidenthal, 826 F.2d 915, 917 (9th Cir.1987). If the plaintiff is seeking money damages, however, the plaintiff must “prove-up” its damages. See Schwarzer, Tashima, and Wagstaffe, Federal Civil Procedure Before Trial § 6:81 (Rutter Group) (2009); Federal R. Civ. Proc. 55(b). The plaintiff is required to provide evidence of its damages, and the damages sought must not be different in kind or amount from those set forth in the complaint. Philip Morris USA, Inc., 219 F.R.D. at 498. When “proving-up” damages, admissible evidence (including witness testimony) supporting ... damage calculations is usually required. See Schwarzer, Tashima, and Wagstaffe, Federal Civil Procedure Before Trial § 6:94.1 (Rutter Group) (2010) (citing Stephenson v. El–Batrawi, 524 F.3d 907, 917 (8th Cir.2008)).

The Ninth Circuit has enumerated seven factors that the Court should consider in deciding whether to grant default judgment: (1) the possibility of prejudice to the Plaintiff, (2) the merits of Plaintiff's substantive claim, (3) the sufficiency of the complaint, (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 underlying the Federal Rules of Civil Procedure favoring decisions on the merits. See Eitel v. McCool, 782 F.2d 1470, 1471–72 (9th Cir.1986).

B. Application

On balance, the Eitel factors weigh in favor of granting default judgment.

1. Possibility of Prejudice to Plaintiff

As the Defendant has not appeared in this action, a default judgment is the only means available for compensating Plaintiff for Defendants' violations under the Copyright Act of 1976 and the United States Patent Act. If the Court does not enter a default judgment, it will allow Defendant to avoid liability by not responding to Plaintiff's claims.

2. Merits of Plaintiff's Claims

As stated above, the Court must accept the well-pleaded allegations in the Complaint as true for purposes of a default judgment. As discussed in the next section, Plaintiff's Complaint is sufficient to succeed on the merits of these claims.

3. Sufficiency of the Complaint

Count I of Plaintiff's Complaint alleges that Defendant willfully infringed Plaintiff's copyrights under the Copyright Act of 1976. For its copyright infringement claim, Plaintiff must prove: (1) ownership of the copyright; and (2) that Defendant copied protected elements of AICO's work. Smith v. Jackson, 84 F.3d 1213, 1218 (9th Cir.1996). Absent direct evidence of copying, Plaintiff must demonstrate through fact based showings that Defendant had “access” to AICO's work and that the two works are “substantially similar.” Id. Further, to show that Defendant infringed Plaintiff's copyrights willfully, Plaintiff must prove that Defendant knew that its conduct constituted an act of infringement. Peer Int'l Corp. v. Pausa Records, Inc., 909 F.2d 1332 (9th Cir.1990) (finding that a showing of reckless disregard may also suffice).

AICO has satisfied the requirements for copyright infringement in its Complaint. AICO attached to its Complaint copyright registration certificates demonstrating that it owns valid copyrights for the furniture pieces at issue. Additionally, AICO alleges in the Complaint that Defendant copied the original elements of AICO's copyrighted works. Compl. ¶¶ 45, 47, 49, 58–60.

However, AICO's complaint has not adequately alleged that Defendant's copyright infringement was willful. AICO asserts the legal conclusion that Defendant has “knowingly, willingly, and/or deliberately infringed, and/or acted in reckless disregard in infringing, AICO's copyrights,” Compl. ¶ 60, but fails to provide any factual allegations regarding Defendant's knowledge, willfulness, or recklessness, which, if accepted as true, would entitle AICO to relief. Warner Bros. Ent., Inc. v. Duhy, 2009 U.S. Dist. LEXIS 123332, at *4 (C.D.Cal. Nov. 30, 2009) (finding willfulness in a default judgment where plaintiff pled defendant's willfulness in its complaint and buttressed this assertion with evidence of defendant's knowledge of the unlawfulness of their actions); Ashcroft v. Iqbal, ––– U.S. ––––, 129 S.Ct. 1937, 1949, 173 L.Ed.2d 868 (2009) (quoting Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 570, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007)) (“A claim has facial plausibility when the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged.”). AICO's allegation that Defendant had access to AICO's furniture designs, while necessary to support a finding of non-willful copyright infringement, is insufficient to satisfy the heightened standard of knowledge or reckless disregard for willful copyright infringement.¹ Thus, in light of Warner Bros. Ent., Inc. and Iqbal, Plaintiff fails to state a claim that is plausible on its face.

Count II of Plaintiff's Complaint alleges that Defendant has infringed Plaintiff's design patents under 35 U.S.C. § 101. In order to establish design patent infringement, AICO must prove that an ordinary observer familiar with the patented product would be deceived into believing that the accused product is the same as the patented design. Egyptian Goddess, Inc. v. Swisa, Inc., 543 F.3d 665, 681 (Fed.Cir.2008).

AICO has satisfied the requirements to demonstrate design patent infringement in its Complaint. AICO has established that it held at all relevant times enforceable patents for each furniture design at issue. Compl. ¶ 64. AICO also alleges that Defendant has infringed its patents by “using, importing, offering to sell, and/or selling, and...