Summit Tool Co. v. Xinkong USA, Inc., 5:20-cv-1182

CourtUnited States District Courts. 6th Circuit. United States District Court of Northern District of Ohio
Writing for the CourtHONORABLE SARA LIOI UNITED STATES DISTRICT JUDGE
PartiesSUMMIT TOOL COMPANY dba KEN-TOOL PLAINTIFF, v. XINKONG USA, INC., DEFENDANT.
Docket Number5:20-cv-1182
Decision Date28 July 2021

SUMMIT TOOL COMPANY dba KEN-TOOL PLAINTIFF,
v.

XINKONG USA, INC., DEFENDANT.

No. 5:20-cv-1182

United States District Court, N.D. Ohio, Eastern Division

July 28, 2021


MEMORANDUM OPINION AND ORDER

HONORABLE SARA LIOI UNITED STATES DISTRICT JUDGE

Presently before the Court is the motion of Summit Tool Company d/b/a Ken-Tool (“Ken-Tool” or “plaintiff”) for default judgment, statutory damages, injunctive relief, and attorney fees and costs against defendant Xinkong USA Inc. (“XK” or “XK USA” or “defendant”) pursuant to Fed.R.Civ.P. 55(b)(2) on Ken-Tool's complaint for trademark infringement, counterfeiting, and unfair competition in violation of the Lanham Act, and for deceptive trade practices and unfair competition under Ohio law. (Doc. No. 1; Doc. No. 14.) Despite having been served with process (see Doc. No. 10), defendant neither filed an answer nor responded to the motion and did not seek an extension of time to do either.

The Court has subject matter jurisdiction over this case pursuant to 28 U.S.C. §§1331, 1332, and 1338, and supplemental jurisdiction over Ken-Tool's state law claims pursuant to 28 U.S.C. § 1367. Venue is proper within this judicial district pursuant to 28 U.S.C. § 1391(b) and (c).

For the reasons that follow, Ken-Tool's motion is granted in part and denied in part.

I. BACKGROUND

Default having previously been entered against defendant by the Clerk pursuant to Fed.R.Civ.P. 55(a) (Doc. No. 13), the following factual allegations from the plaintiff's complaint are deemed admitted (Doc. No. 1).

Ken-Tool is a corporation organized and existing under the laws of the State of Ohio, having its principal place of business located in Akron, Ohio. Ken-Tool has been in operation for a century and is a leading manufacturer, seller, and supplier of tire service tools, including tubeless tire irons. (Doc. No. 1 ¶¶ 2, 9.) Plaintiff owns United States Federal Trademark Registration No. 1, 368, 682 for the word “Ken-Tool” in connection with automotive tools, including tire irons (“Word Mark”) (id. ¶ 10; Doc. No. 1-1), and United States Trademark Registration No. 1, 808, 834 for the design of a tubeless tire iron (“Product Design Mark”) (Doc. No. 1 ¶ 11; Doc. No. 1-2) (collectively the “Ken-Tool Marks”).

Plaintiff uses the Ken-Tool Marks in connection with the manufacture and sale of tire service tools. Ken-Tool has expended significant resources promoting and marketing its products bearing the Ken-Tool Marks and those marks have come to be known by the purchasing public and those in the trade as an indicator of high-quality products from Ken-Tool. (Doc. No. 1 ¶¶ 14-16.) Ken-Tool sells tubeless truck tire irons bearing the Ken-Tool Marks under the T45A, T45AC, T45A-2000K, T45AS, T45HD, T46A, and T47A names and marks. Ken-Tool's T45A is sold using the Ken-Tool product number 34645 through a variety of channels, including online sellers, at an average price of about $60.00. (Id. ¶¶ 17, 18; Doc. No. 1-3.)

XK is a California corporation with its principal place of business in California. XK's address is identified by the California Secretary of State as 2875 S. Reservoir St., Pomona, CA. (See Doc. No. 1 ¶ 3.) XK's address on its website-xkautotools.com-is identified as 4451 Eucalyptus Ave 310, Chino, CA. (See id. ¶¶ 3, 31.) Plaintiff alleges that defendant intentionally, willfully, and knowingly, manufactures, promotes, markets and/or sells tire irons bearing the Ken-Tool Marks that are not genuine Ken-Tool products (collectively, “Counterfeit Tire Irons”) and does business in Ohio through Amazon.com and on eBay as XK USA. (Id. ¶¶ 3, 19, 30.) The Court has personal jurisdiction over defendant under Fed.R.Civ.P. 4 and Ohio's long-arm statute, Ohio Rev. Code § 2307.382(A).[1]

In May 2020, defendant, using the eBay seller name “autoequipman” a/k/a Mi Yu, offered for sale on eBay a tire iron advertised as “Ken-Tool 34645.” A long-time Ken-Tool customer from Texas purchased the product, believing that it was a genuine Ken-Tool tire iron. (See Doc. No. 1 ¶ 22; Doc. No. 14-2 ¶¶ 6, 7.) When the customer received the product, it did not appear to be a genuine Ken-Tool product and the customer shipped the tire iron to Ken-Tool for inspection. Upon inspection, Ken-Tool determined that the tire iron was not a genuine Ken-Tool product because it lacked the markings found on a genuine product and because the round knob piece was welded on the tire iron, as opposed to a single-forged product. The return label for the counterfeit tire iron purchased on eBay from seller autoequipman was directed to “Simon” of XK of 4451 Eucalyptus Ave. in Chino, CA 91710. (Doc. No. 1 ¶¶ 22-24.)

Plaintiff then purchased two tire irons from defendant on eBay advertised as “Ken-Tool 34645, ” one from an eBay seller using the name “xkautorepair” and another from an eBay seller using the name “autoequipman.” The shipping labels on both products purchased by Ken-Tool identified “Simon” of XK at 4451 Eucalyptus Ave. in Chino, CA 91710 as the shipper. Neither of the tire irons purchased by plaintiff from xkautorepair and autoequipman were genuine Ken-Tool products. (Id. ¶¶ 25-28.)

In addition to the seller names identified above, defendant also sells Counterfeit Tire Irons under seller names: 2016tonyyu1224, funwebsurfer, and autorepairequipments. (Id. ¶¶ 29, 30; see also Doc Nos. 1-5, 1-6, 1-7, 1-8.) Based upon XK's eBay listings, XK has sold more than 400 Counterfeit Tire Irons to customers in the United States, including Ohio, and its known eBay sales revenue for sales of Counterfeit Tire Irons is $22, 353.58. (Doc. No. 1 ¶ 31; Doc. No. 14-5 ¶ 17.)

The Counterfeit Tire Irons are cheaply made and imported from China, and the Better Business Bureau has received multiple complaints from consumers regarding XK. (Doc. No. 1 ¶¶ 20, 35, 36; see also Doc. No. 1-4.) Genuine Ken-Tool tire irons are made in the United States using a forging process that produces a stronger and more reliable and long-lasting tool. Defendant, without authorization, is intentionally copying the Ken-Tool Marks, selling Counterfeit Tire Irons in Ohio and other states, and could not “reasonably believe it was selling genuine Ken-Tool tire irons.” (Doc. No. 1 ¶ 32.) Defendant is profiting from the success and reputation of Ken-Tool, which will result in monetary loss and damage to Ken-Tool's reputation and goodwill, and defendant is causing mistake, confusion, and deception among customers who believe they are purchasing genuine Ken-Tool products. (Id. ¶¶ 31-39.)

Based upon these facts, deemed admitted by defendant's default, plaintiff asserts the following causes of action: (1) trademark counterfeiting under 15 U.S.C. § 1114 for each of the Ken-Tool Marks (id. ¶¶ 40-53); (2) unfair competition and trademark infringement of the Ken-Tool Marks under 15 U.S.C. § 1125 (id. ¶¶ 54-58); (3) violation of Ohio's Deceptive Trade Practices Act, Ohio Rev. Code § 4165.02 (id. ¶¶ 59-64); and (4) common law unfair competition (id. ¶¶ 65-69). As a result of defendant's violations of federal and state laws concerning the Ken-Tool Marks, plaintiff's complaint seeks injunctive relief against defendant, monetary damages, attorney fees, and costs. (Id. at 13- 15.[2])

Defendant failed to answer or otherwise respond to the complaint and, upon application by plaintiff, the Clerk entered default against defendant. (Doc. No. 13.) Thereafter, plaintiff filed the motion for default judgment now before the Court, seeking an injunction prohibiting further acts of infringement by defendant, statutory damages in the amount of $100, 000.00, and attorney fees and costs. (Doc. No. 14.) Plaintiff filed a memorandum and twelve exhibits in support of the motion. (Doc. Nos. 14-1 through 14-13.) Although the motion for default judgment was served on defendant at its address of record (see Doc. No. 14 at 3), the motion has not been opposed.

II. DISCUSSION

A. Default Judgment-Liability

Fed. Rule Civ. P. 55 governs default and default judgment. Default was entered by the clerk against defendant XK pursuant to Rule 55(a), and plaintiff moved for default judgment pursuant to Rule 55(b)(2). (See Doc. Nos. 13 and 14.) After default has been entered, the Court may enter default judgment against the defendant with or without a hearing. Fed.R.Civ.P. 55(b). Based upon the well-pleaded factual allegations in the complaint, and the declarations submitted by the plaintiff in support of the motion, the Court concludes that there is a sufficient basis for determining defendant's liability without the need for a hearing.

While the well-pleaded factual allegations of the complaint are accepted as true for the purpose of determining liability, the Court must still determine whether those facts are sufficient to state a claim for relief with respect to plaintiff's claims for counterfeiting, trademark infringement, deceptive trade practices, and unfair competition, for which the plaintiff seeks default judgment. Zinganything, LLC v. Imp. Store, 158 F.Supp.3d 668, 672 (N.D. Ohio 2016) (citing J & J Sports Prods., Inc. v. Rodriguez, No. 1:08-cv-1350, 2008 WL 5083149, at *1 (N.D. Ohio Nov. 25, 2008) (citation omitted)); see also Ultimate Home Protector Pans, Inc. v. Rev-A-Shelf Co., LLC, No. 3:19-cv-165, 2021 WL 2283770, at *1 (W.D. Ky. Apr. 5, 2021) (“But, ‘[e]ven if a default has been entered against a party, it remains for the court to consider whether the unchallenged facts constitute a legitimate cause of action, since a party in default does not admit mere conclusions of law.'”) (quoting Hicks v. Smith, No. 3:17-cv-251, 2020 WL 5824030, at *1 (W.D. Ky. Sept. 30, 2020) (quoting Anderson v. Johnson, 194 F.3d 1311 (Table), 1999 WL 1023753, at *2 (6th Cir. Nov. 4, 1999))). Here, the undisputed allegations in the complaint establish that defendant violated federal and state law with respect to the Ken-Tool Marks.

1. Federal trademark counterfeiting (Counts one and two)

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