RooR Int'l BV v. Muncie Petroleum Inc.

ROOR INTERNATIONAL BV, et al. Plaintiffs, v. MUNCIE PETROLEUM INC d/b/a PHILLIPS FOOD MART, et al., Defendants.

No. 1:18-cv-03959-SEB-DML

UNITED STATES DISTRICT COURT SOUTHERN DISTRICT OF INDIANA INDIANAPOLIS DIVISION

May 27, 2020

ORDER ON PLAINTIFFS' MOTION FOR DEFAULT JUDGMENT AGAINST DEFENDANT MUNCIE PETROLEUM, INC.

Plaintiffs RooR International BV ("RooR International") and Sream, Inc. ("Sream") filed this action against Defendant Muncie Petroleum, Inc. ("Muncie Petroleum") alleging claims for trademark infringement, counterfeiting, and false designation of origin/unfair competition under the Lanham Act, 15 U.S.C. § 1051 et seq. Muncie Petroleum filed no answer to the complaint or other responsive pleading nor defended this action in any way. A Clerk's default was entered against Muncie Petroleum on May 6, 2019. Now before the Court is Plaintiffs' Motion for Default Judgment [Dkt. 25] as to Muncie Petroleum. For the reasons detailed below, Plaintiffs' motion is GRANTED. Plaintiffs are awarded statutory damages and injunctive relief as set forth below.

Facts Established by the Complaint

The following facts are set forth in the Complaint and taken as true in light of the entry of default.

RooR is a designer and manufacturer of glass products for smokers and is widely recognized and acclaimed for its products, including its borosilicate jointed-glass water pipes, parts, and related accessories. RooR has received numerous awards for its glass products and has a significant following among consumers in the United States based on the quality and innovation of its designs. Compl. ¶¶ 9-10. Since at least August 2013, Sream has been the exclusive licensee of the RooR trademark in the United States. Id. ¶ 13. Pursuant to the trademark licensing agreement, Sream has manufactured water pipes under the RooR trademarks and also advertises, markets, and distributes water pipes, water pipe parts, and other smoker's articles in association with the RooR trademarks. Sream performs these activities with RooR's consent and approval and in accordance with RooR's strictly enforced policies. Id. ¶ 15.

RooR owns several federally registered and common law trademarks, including, inter alia, the following:

a. U.S. Trademark Registration Number 3,675,839 for the word mark "RooR" and its logo in association with goods further identified in registration in international class 034.

b. U.S. Trademark Registration Number 2,307,176 for the word mark "RooR" and its logo identified below in association with goods further identified in the registration in international classes 025 and 034.

c. U.S. Trademark and Registration Number 2,235,638 for the word mark "RooR" and its logo identified below in association with goods further identified in the registration in international class 021.

d. Common law and unregistered state law rights in the following variants of the RooR marks:

Image materials not available for display.

Id. ¶ 12.

RooR, in collaboration with Sream, has spent substantial time, money, and effort developing consumer recognition and awareness of the RooR trademarks. Through the extensive use of the mark, Plaintiffs have developed significant goodwill in the entire RooR product line. The RooR product line is advertised in a wide array of websites, magazines, and specialty shops and is easily identifiable. Id. ¶ 19.

The superior quality of RooR products compared to other glass products on the market is readily apparent both to consumers and industry professionals. As a result, consumers are willing to pay higher prices for RooR products. For example, a RooR-branded 45-centimeter water pipe retails for $300 or more, while a non-RooR product of equal size typically sells for less than $100. Id. ¶ 20.

Defendant Muncie Petroleum has engaged in the unlawful manufacture, retail sale, and/or wholesale sales of counterfeit RooR-branded water pipes and related parts in Indiana. Muncie Petroleum has engaged in willful trademark infringement by selling goods with many marks, including those alleged to be trademarks registered to RooR. Id. ¶¶ 23, 34-35; Exhibit E to Compl. These infringing acts have caused and are likely to cause confusion, mistake, and deception among consumers regarding the source or origin of the goods sold by Muncie Petroleum as the counterfeit products use images and names identical to or confusingly similar to the RooR marks. Id. ¶¶ 28-29, 33.

Plaintiffs filed their complaint in this action on December 17, 2018, alleging claims for trademark infringement, counterfeiting, and false designation of origin/unfair competition under the Lanham Act, 15 U.S.C. § 1051 et seq. A Clerk's default was entered against Muncie Petroleum on May 6, 2019, based on its failure to answer thecomplaint or otherwise defend this action in any way. Now before the Court is Plaintiffs' motion for default judgment against Muncie Petroleum.

Legal Analysis

I. Default Judgment

A. Liability

As noted above, an entry of default was entered against Muncie Petroleum on May 6, 2019. Plaintiffs now seek a default judgment against Muncie Petroleum pursuant to Federal Rule of Civil Procedure 55. "As a general rule, a default judgment establishes, as a matter of law, that defendants are liable to plaintiff for each cause of action alleged in the complaint." O'Brien v. R.J. O'Brien & Assocs., Inc., 998 F.2d 1394, 1404 (7th Cir. 1993) (citation omitted). "Upon default, the well-pleaded allegations of a complaint relating to liability are taken as true." Dundee Cement Co. v. Howard Pipe & Concrete Prods., Inc., 722 F.2d 1319, 1323 (7th Cir. 1983).

Here, Plaintiffs seek judgment in their favor against Muncie Petroleum for (1) willful infringement of the RooR trademark in violation of 15 U.S.C. § 1114; (2) trademark counterfeiting of the RooR trademark in violation of 15 U.S.C. § 1116(d); and (3) willful trademark infringement (false designation of origin) in violation of 15 U.S.C. § 1125(a). Plaintiffs are seeking statutory damages in the amount of $15,000 for these violations as well as a permanent injunction restraining and enjoining Muncie Petroleum and all persons acting in concert or participation with it from infringing upon the RooR marks.

To prove a trademark infringement claim, including a false designation claim, under the Lanham Act, a plaintiff must show that (1) its marks are distinctive enough to be worthy of protection and (2) the defendant's use of those marks is likely to cause confusion among consumers. See Packman v. Chicago Tribune Co., 267 F.3d 628, 638 (7th Cir. 2001); Forum Corp. of N. Am. v. Forum, Ltd., 903 F.2d 434, 439 (7th Cir. 1990). In determining if a likelihood of confusion exists, courts consider the following seven factors: (1) the similarity between the marks in appearance and suggestion; (2) the similarity of the products; (3) the area and manner of concurrent use; (4) the degree and care likely to be exercised by consumers; (5) the strength of the plaintiff's mark; (6) any actual confusion; and (7) the intent of the defendant to "palm off" his product as that of another. Packman, 267 F.3d at 643. In addition to these elements, trademark counterfeiting requires proof that the infringing mark "is identical with, or substantially indistinguishable from, a registered mark." 15 U.S.C. § 1127.

Plaintiffs allege that they design, market, manufacture, and sell high quality glassware under the RooR marks and market their products extensively through print and online advertising. They have expended considerable resources in building the goodwill associated with the well-known and well-recognized RooR marks in connection with their glassware products. Plaintiffs further allege that Muncie Petroleum has sold copies of RooR's glass products bearing an identical, or at the very least, a substantially indistinguishable mark to RooR's registered trademarks that is likely to cause confusion. The Court has reviewed the RooR marks and compared them to the photographs attached as Exhibit E to the Complaint of the products sold by Muncie Petroleum. The logos are,if not identical, virtually indistinguishable. These factual allegations, when taken as true, are sufficient to establish Muncie Petroleum's liability for trademark infringement, false designation, and trademark counterfeiting. Plaintiffs are therefore entitled to a default judgment in their favor on these claims.

B. Statutory Damages

We turn next to address the relief to which Plaintiffs are entitled. "[O]nce the default has been established, and thus liability, the plaintiff still must establish his entitlement to the relief he seeks." In re Catt, 368 F.3d 789, 793 (7th Cir. 2004). Here, in lieu of actual damages, Plaintiffs have elected to pursue statutory damages for the trademark violations, a right they are entitled to exercise based on Muncie Petroleum's use of a counterfeit mark. See 15 U.S.C. § 1117 (authorizing statutory damages for trademark counterfeiting). A plaintiff can seek statutory damages between $1,000 and $200,000 per counterfeit mark per type of goods or services sold, offered for sale, or distributed. 15 U.S.C. § 1117(c)(1). The damages limit increases to $2,000,000 per counterfeit mark per type of goods or services sold, offered for sale, or distributed if the court finds that the defendant acted willfully. 15 U.S.C. § 1117(c)(2). Plaintiffs assert that Muncie Petroleum's trademark counterfeiting in this case was willful and they seek a statutory damages award of $15,000 for Muncie Petroleum's sale of at least one product bearing a counterfeit RooR trademark.

"A court may attribute willful infringement to a defendant's actions when the defendant 'had knowledge that [its] conduct constituted infringement or where [it] showed a reckless disregard for the owner's rights.'" Entertainment One UK Ltd. v.2012Shiliang, 384 F. Supp. 3d 941, 952 (N.D. Ill. 2019) (citing Luxottica Grp. S.p.A. v. Li Chen, No. 16 C 6850, 2017 WL 836228, at *2 (N.D. Ill. Mar. 2, 2017)). A defendant's...