ICU Indus. v. Copper State Glass & Screen LLC

1

ICU Industries Incorporated, Plaintiff, v. Copper State Glass and Screen LLC, Defendant.

No. CV-23-00298-TUC-AMM

United States District Court, D. Arizona

May 7, 2024

REPORT AND RECOMMENDATION

ANGELA M. MARTINEZ, UNITED STATES MAGISTRATE JUDGE

Pending before the Court is Plaintiff's Motion for Entry of Default Judgment. (Doc. 19.) Plaintiff has consented to Magistrate Judge jurisdiction. (Doc. 15.) However, because Defendant has failed to appear in this matter, and therefore, has not consented to Magistrate Judge jurisdiction, the assigned Magistrate Judge submits a Report and Recommendation to Senior District Judge Raner C. Collins pursuant to Gen. Ord. 21-25. For the reasons set forth herein, the Court recommends granting Plaintiff default judgment and injunctive relief on its trademark infringement claims.

I. Factual and Procedural Background

On June 29, 2023, Plaintiff ICU Industries, Inc., doing business as Copperstate Glass & Mirror, filed a Complaint against Defendant Copper State Glass and Screen LLC alleging four causes of action: trademark infringement under 15 U.S.C § 1051 et seq., false designation of origin/false advertising under 15 U.S.C. § 1125(a), common law trademark infringement, and common law unfair competition. (Doc. 1.) The allegations supporting these claims are as follows.

Plaintiff is in the business of installing, repairing, and replacing glass, mirrors, and screens. (Doc. 1 at ¶ 6.) Plaintiff serves primarily commercial enterprises such as Circle K, Starbucks, and Sheraton, and has been doing business in Arizona under the name “Copperstate Glass & Mirror” since 1989. (Id.) Plaintiff has both an Arizona tradename registration and a trademark registration from the United States Patent and Trademark Office (USPTO) for “Copperstate Glass & Mirror.” (Id. at ¶¶ 8-9; see also Exh. A.) The trademark is currently active and has been used continuously in Arizona commerce since 1989 and in interstate commerce since 2006. (Id. at ¶¶ 8-10.)

Plaintiff has invested significant amounts of money to advertise and promote its business and to provide quality service to commercial and residential customers. (Id. ¶ 11.) Due to its advertising and continuous use of the trademark “Copperstate Glass & Mirror,” customers in Arizona and throughout the United States associate “Copperstate,” “Copperstate Glass,” and “Copperstate Mirror” with Plaintiff's business. (Id.)

Defendant Copper State Glass and Screen LLC has been advertising and providing glass, mirror, and screen installation and repair services in Tucson, Arizona since March 19, 2019. (Id. ¶ 11.)^[1] Plaintiff alleges that the infringing mark, “Copper State Glass and Screen,” is “almost exactly identical to, is a colorable imitation of, and is confusingly similar to” Plaintiff's registered mark, “Copperstate Glass & Mirror.” (Id. ¶ 13.) Plaintiff further alleges that Defendant offers the same or similar glass, mirror, and screen installation, repair, and replacement services to commercial and residential customers as does Plaintiff. (Id.) In support of these allegations, Plaintiff attaches as Exhibit B to the Complaint images of Defendant's website, https://copperstategs.com, and Facebook page. (Id. at 13-17.)

Plaintiff avers that Defendant has actual notice of this lawsuit. (Id. ¶ 14.) Plaintiff's counsel has sent Defendant's principal, Luis R. Garcia, at least two cease and desist letters since October 27, 2022. (Id.) Plaintiff's counsel further avows that she discussed the facts of the case with Mr. Garcia and asked Mr. Garcia to provide evidence supporting his position that the infringing mark had been used continuously in the Tucson area prior to Plaintiff's use, which he did not do. (Id.) Mr. Garcia has now ceased communicating with Plaintiff's counsel, and Defendant continues to use and advertise the infringing mark. (Id. ¶ 14-15.)

Plaintiff's Complaint requests (1) injunctive relief prohibiting Defendant from further use of the “Copper State Glass and Screen” mark, or any other similar mark, word, or name; (2) injunctive relief prohibiting Defendant from further use of the “Copper State Glass and Screen” mark on its vehicles, website, social media, promotional materials, or any other form of advertising; (3) an Order requiring Defendant to undertake a corrective advertising campaign; (4) cancellation of Defendant's domain name https://copperstategs.com; (5) damages for unjust enrichment; and (6) Plaintiff's costs and attorneys' fees. (Doc. 1 at 9-10); see 15 U.S.C. § 1117(a) (assessment of damages for violations of 15 U.S.C. § 1125(a)).^[2]

Plaintiff executed service in accordance with A.R.S. § 29-3119(B) on or about August 12, 2023.^[3] (Doc. 12; doc. 17 ¶¶ 4-6.)) On August 31, 2023, Plaintiff consented to Magistrate Judge jurisdiction. (Doc. 15.) On December 1, 2023, after no further action had been taken by either party, the Court issued an Order to Show Cause why the action should not be dismissed for failure to prosecute. (Doc. 16.) On December 5, 2023, Plaintiff filed an Application for Entry of Default. (Doc. 17.) On January 18, 2024, the Clerk of Court entered default. (Doc. 18.) On February 6, 20204, Plaintiff filed the pending Motion for Default Judgment. (Doc. 19.) Defendant has not answered, entered an appearance, or otherwise defended itself against the allegations.

II. Legal Standard

“When a party against whom a judgment for affirmative relief is sought has failed to plead or otherwise defend, and that failure is shown by affidavit or otherwise, the clerk must enter the party's default.” Fed.R.Civ.P. 55(a). The plaintiff may thereafter apply for entry of default judgment by the Court. Fed.R.Civ.P. 55(b)(2); Truong Giang Corp. v. Twinstar Tea Corp., 2007 WL 1545173, at *3 (N.D. Cal. May 29, 2007) (citing Fed.R.Civ.P. 55). In deciding whether to grant default judgment, the Court considers:

(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 in the action; (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)). “In considering the above factors, the Court takes all factual allegations in [the plaintiff's] complaint as true, except for those relating to damages.” Truong Giang Corp., 2007 WL 1545173, at *3 (citing TeleVideo Systems, Inc. v. Heidenthal, 826 F.2d 915, 917-18 (9th Cir. 1987)); see also Fair Hous. of Marin v. Combs, 285 F.3d 899, 906 (9th Cir. 2002) (“With respect to the determination of liability and the default judgment itself, the general rule is that well-pled allegations in the complaint regarding liability are deemed true.”).

III. Discussion

Having considered each of the Eitel factors, the Court finds that the factors weigh in favor of granting default judgment, as set forth herein:

A. There is a strong possibility of prejudice to Plaintiff.

As discussed below in Section B, Plaintiff's claim of trademark infringement is likely meritorious. Were the Court to deny Plaintiff's request for default judgment, Plaintiff would have no other recourse. See Amerifresh Inc. v. So Ono Food Prod. LLC, No. CV-19-01331-PHX-DJH, 2019 WL 3532156, at *2 (D. Ariz. Aug. 2, 2019); see also Eitel, 782 at 1471-72 (9th Cir. 1986)); Truong Giang Corp., 2007 WL 1545173, at *3.

Furthermore, unless the Court grants the requested injunctive relief, Plaintiff would likely be prejudiced because it continues to suffer harm from the violation of its trademark rights. See id.

B. All but one of Plaintiff's claims have merit, and the Complaint is sufficient.

Plaintiff alleges four causes of action in the Complaint, as follows:

1. Plaintiff establishes a claim for Trademark Infringement under 15 U.S.C. §§ 1051 et seq.

First, Plaintiff alleges trademark infringement under the Lanham Act, 15 U.S.C. §§ 1051 et seq.^[4] (Doc. 1 at 5-6.) To establish trademark infringement under the Lanham Act, a plaintiff must demonstrate that (1) it has a protectible ownership interest in the mark and (2) defendant's use of the mark is likely to cause consumer confusion. Network Automation, Inc. v. Advanced Sys. Concepts, Inc., 638 F.3d 1137, 1144 (9th Cir. 2011); see also Dep't of Parks & Recreation for State of California v. Bazaar Del Mundo Inc., 448 F.3d 1118, 1124 (9th Cir. 2006) (federal registration of a mark is prima facie evidence of ownership of the mark). Here, Plaintiff has established an ownership interest in the mark in Exhibit A to the Complaint, which documents its registration of the mark “Copperstate Glass & Mirror.” (Doc. 1 at 12.)

Whether a mark is likely to cause consumer confusion is subject to evaluation of eight factors: “(1) strength of the mark; (2) proximity of the goods; (3) similarity of the marks; (4) evidence of actual confusion; (5) marketing channels used; (6) type of goods and the degree of care likely to be exercised by the purchaser; (7) defendant's intent in selecting the mark; and (8) likelihood of expansion of the product lines.” Network Automation, Inc., 638 F.3d at 1145 (citation omitted). This list is not exhaustive and other variables may be relevant, depending on the facts. Id. These factors are “intended as an adaptable proxy for consumer confusion, not a rote checklist.” Id. (citing Fortune Dynamic, Inc. v. Victoria's Secret Stores Brand Mgmt., Inc., 618 F.3d 1025, 1030 (9th Cir. 2010) (eight-factor analysis is “best understood as simply providing helpful guideposts”)).

Here the Court finds that Defendant's use of the infringing mark “Copper State Glass and Screen...