Daimler AG v. A-Z Wheels LLC, Case No.: 16-CV-875-JLS (MDD)

• Decision Date: 02 November 2020
• Docket Number: Case No.: 16-CV-875-JLS (MDD)
• Citation: 498 F.Supp.3d 1282
• Parties: DAIMLER AG, a German corporation, Plaintiff, v. A-Z WHEELS LLC d/b/a USARim.com, et al., Defendants.
• Court: U.S. District Court — Southern District of California

498 F.Supp.3d 1282

DAIMLER AG, a German corporation, Plaintiff,

v.A-Z WHEELS LLC d/b/a USARim.com, et al., Defendants.

Case No.: 16-CV-875-JLS (MDD)

United States District Court, S.D. California.

Signed November 2, 2020

Joanna Lee Cohn, Pro Hac Vice, Shauna Wertheim, Pro Hac Vice, Timothy William Johnson, Pro Hac Vice, The Marbury Law Group, PLLC, Reston, VA, Michael J. St. Denis, Michael St. Denis PC, Rancho Palos Verdes, CA, for Plaintiff.

Stephen M. Lobbin, Sml Avvocati P.C., La Jolla, CA, for Defendants.

ORDER GRANTING IN PART AND DENYING IN PART PLAINTIFF'S MOTION FOR PARTIAL SUMMARY JUDGMENT

(ECF No. 120)

Janis L. Sammartino, United States District Judge

Presently before the Court is Plaintiff Daimler AG's Motion for Partial Summary Judgment ("Mot.," ECF No. 120). Also before the court is Defendants A-Z Wheels LLC d/b/a USArim, USArim.com, and Eurotech Wheels; Galaxy Wheels & Tires, LLC; Infobahn International, Inc. d/b/a Infobahn, Eurotech, Eurotech Luxury Wheels, Eurotech Wheels, and USArim (collectively, the "Entity Defendants"); and Rasool Moalemi's (collectively, "Defendants")¹ Opposition to ("Opp'n," ECF No. 122) and Plaintiff's Reply in Support of ("Reply," ECF No. 123) the Motion. The Court took the matter under submission without oral argument. See ECF No. 124. Having carefully considered the Parties’ arguments and evidence and the relevant law, the Court GRANTS IN PART AND DENIES IN PART the Motion.

BACKGROUND

Plaintiff Daimler AG produces "premier luxury automotive vehicles and parts," including wheels. First Amended Complaint ("FAC," ECF No. 33) ¶ 3. Plaintiff produces and sells worldwide "its vehicles and related parts under the distinctive Mercedes-Benz brand." Id. ¶ 17. Plaintiff owns federal trademark and service mark registrations for various marks; the marks relevant to the present Motion are the MERCEDES-BENZ and the "Three-Point Star" marks:

Id. ¶¶ 19, 22. Plaintiff states that it uses the mark MERCEDES-BENZ in connection with advertising and selling vehicles and goods. Id. ¶ 19. Plaintiff also uses the Three-Point Star marks "in connection with advertising and selling Mercedes-Benz vehicles and/or related goods and services." Id. Plaintiff further owns various design patents, including, as relevant to the present Motion, U.S. Design Patent No. D542,211 ("the ‘D211 patent"). Id. ¶ 35.

Plaintiff claims Defendants are using Plaintiff's trademarks "in connection with the manufacture, offer for sale, sale and distribution of wheels which are not manufactured, authorized or sold by" Plaintiff. Id. ¶ 1. Plaintiff also claims Defendants are reproducing, manufacturing, selling, and distributing wheels "which blatantly copy issued design patents in various distinctive and artistic wheel designs owned by" Plaintiff. Id.

On January 5, 2018, Plaintiff moved for partial summary judgment against Defendants on its trademark infringement and counterfeiting claim and its design patent infringement claim. See generally ECF No. 58. Following briefing and oral argument on the motion, see ECF No. 90, on August 13, 2018, the Court granted Plaintiff's motion for partial summary judgment in its entirety, see generally ECF No. 91. In light of the Court's ruling, Plaintiff subsequently filed the present Motion, for partial summary judgment for statutory damages, injunctive relief, and attorney's fees. See generally ECF No. 120.

LEGAL STANDARD

Under Federal Rule of Civil Procedure 56(a), a party may move for summary judgment as to a claim or defense or part of a claim or defense. Summary judgment is appropriate where the Court is satisfied that there is "no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law." Fed. R. Civ. P. 56(a) ; Celotex Corp. v. Catrett , 477 U.S. 317, 322, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986). Material facts are those that may affect the outcome of the case. Anderson v. Liberty Lobby, Inc. , 477 U.S. 242, 248, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986). A genuine dispute of material fact exists only if "the evidence is such that a reasonable jury could return a verdict for the nonmoving party." Id. When the Court considers the evidence presented by the parties, "[t]he evidence of the non-movant is to be believed, and all justifiable inferences are to be drawn in his favor." Id. at 255, 106 S.Ct. 2505.

The initial burden of establishing the absence of a genuine issue of material fact falls on the moving party. Celotex , 477 U.S. at 323, 106 S.Ct. 2548. The moving party may meet this burden by identifying the "portions of ‘the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any,’ " that show an absence of dispute regarding a material fact. Id. When a plaintiff seeks summary judgment as to an element for which it bears the burden of proof, "it must come forward with evidence which would entitle it to a directed verdict if the evidence went uncontroverted at trial." C.A.R. Transp. Brokerage Co. v. Darden Rests. , Inc., 213 F.3d 474, 480 (9th Cir. 2000) (quoting Houghton v. South , 965 F.2d 1532, 1536 (9th Cir. 1992) ).

Once the moving party satisfies this initial burden, the nonmoving party must identify specific facts showing that there is a genuine dispute for trial. Celotex , 477 U.S. at 324, 106 S.Ct. 2548. This requires "more than simply show[ing] that there is some metaphysical doubt as to the material facts." Matsushita Elec. Indus. Co. v. Zenith Radio Corp. , 475 U.S. 574, 586, 106 S.Ct. 1348, 89 L.Ed.2d 538 (1986). Rather, to survive summary judgment, the nonmoving party must "by her own affidavits, or by the ‘depositions, answers to interrogatories, and admissions on file,’ designate ‘specific facts’ " that would allow a reasonable fact finder to return a verdict for the non-moving party. Celotex , 477 U.S. at 324, 106 S.Ct. 2548 ; Anderson , 477 U.S. at 248, 106 S.Ct. 2505. The non-moving party cannot oppose a properly supported summary judgment motion by "rest[ing] on mere allegations or denials of his pleadings." Anderson , 477 U.S. at 256, 106 S.Ct. 2505.

ANALYSIS

In its Motion, Plaintiff requests that the Court: (1) find Defendants’ conduct willful and award the maximum amount of statutory damages under 15 U.S.C. § 1117(c)(2) of $6,000,000 ($2,000,000 for each of the three counterfeit marks), or, alternatively, award the maximum amount of statutory damages under 15 U.S.C. § 1117(c)(1) of $600,000 ($200,000 for each of the three counterfeit marks); (2) grant a permanent injunction against Defendants; and (3) grant attorney's fees in favor of Plaintiff because the case is "exceptional" under 15 USC § 1117(a). See generally Pl.’s Br. in Support of Mot. ("Br.," ECF No. 120-31). The Court addresses below each of Plaintiff's requests.

I. Statutory Damages

In a case involving goods sold with a counterfeit trademark, a plaintiff may elect to recover statutory damages instead of profits and actual damages. 15 U.S.C. § 1117(c). When the counterfeiting is not willful, statutory damages should be awarded in the amount of "not less than $1,000 or more than $200,000 per counterfeit mark per type of goods or services sold, offered for sale, or distributed." 15 U.S.C. § 1117(c)(1). If the use of the counterfeit mark is willful, however, the court should award "not more than $2,000,000 per counterfeit mark per type of goods or services sold, offered for sale, or distributed." Id. § 1117(c)(2). "District courts have discretion in determining the amount of statutory damages, subject only to the statutory minimum and maximum" outlined under section 1117(c). Coach Services, Inc. v. YNM , Inc. , 2011 WL 1752091, at *5 (C.D. Cal. May 6, 2011) ; see also Harris v. Emus Records Corp. , 734 F.2d 1329, 1335 (9th Cir. 1984) (stating that district courts have "wide discretion in determining the amount of statutory damages to be awarded, constrained only by the specified maxima and minima" while interpreting a similarly-worded copyright infringement provision).

"While a plaintiff in a trademark or copyright infringement suit is entitled to damages that will serve as a deterrent, it is not entitled to a windfall." Adobe Sys., Inc. v. Tilley , No. 09-01085-PJH, 2010 WL 309249, at *5 (N.D. Cal. Jan. 19, 2010). An award of the statutory maximum "should be reserved for trademark infringement that is particularly egregious, involves large amounts of counterfeit goods, or is otherwise exceptional." Ill. Tool Works Inc. v. Hybrid Conversions, Inc. , 817 F. Supp. 2d 1351, 1356 (N.D. Ga. 2011) (citing Microsoft Corp. v. Gordon , No. 1:06-CV-2934-WSD, 2007 WL 1545216 (N.D. Ga. May 24, 2007) ).

A defendant acts willfully "if he knows his actions constitute an infringement." Rolex Watch USA Inc. v. Meece , 158 F.3d 816, 826 (5th Cir. 1998) (quoting Broad. Music, Inc. v. Xanthas, Inc. , 855 F.2d 233, 236 (5th Cir. 1988) ). Willfulness is established when there is evidence that the defendant acted knowingly or "willfully blinded himself to facts that would put him on notice that he was infringing another's trademarks." Philip Morris USA Inc. v. Liu , 489 F. Supp. 2d 1119, 1123 (C.D. Cal. 2007) ; see also Herman Miller, Inc. v. Alphaville Design, Inc. , No. C 08-03437 WHA, 2009 WL 3429739, at *9 (N.D. Cal. Oct. 22, 2009) ("Willful infringement occurs when the defendant knowingly and intentionally infringes on a trademark."); Hard Rock Cafe Licensing Corp. v. Concession Servs. , 955 F.2d 1143, 1149 (7th Cir. 1992) ("To be willfully blind, a person must suspect wrongdoing and deliberately fail to investigate."). Whether infringement is willful is a heavily fact-dependent inquiry. See Moroccanoil, Inc. v. Groupon, Inc. , 278 F. Supp. 3d 1157, 1165 (C.D. Cal. 2017) (finding a triable issue of material fact as to whether the defendant acted willfully because "all of these issues concerning [defendant's] state of mind are highly fact-intensive, and there [was] sufficient evidence to create a triable issue").

Courts have considered the...