Cisco Systems, Inc. v. Shenzhen Usource Technology Co.

District Court, N.D. California·Decided December 21, 2021·No. 5:20-cv-04773·Unknown

Opinion

1 2 3 7 8 CISCO SYSTEMS, INC., et al., Case No. 5:20-cv-04773-EJD

9 Plaintiffs, ORDER GRANTING MOTION FOR DEFAULT JUDGMENT AND 10 v. ISSUANCE OF PERMANENT INJUNCTION CO., et al., 12 Re: Dkt. No. 58 Defendants.

13 14 Plaintiffs Cisco Systems, Inc., Cisco Technology, Inc., (together, “Cisco”) and Ciena 15 Corporation (“Ciena”) filed this action asserting trademark infringement and counterfeiting against 16 Defendants Shenzhen Usource Technology Co., Warex Technologies Limited, and Shenzhen 17 Warex Technologies, Co., Ltd. Am. Compl., Dkt. No. 16. Plaintiffs now move for default 18 judgment and a permanent injunction. Mot. for Default Judg. and Issuance of Perm. Inj. (“Mot.”), 19 Dkt. No. 58. 20 The Court finds the motion appropriate for decision without oral argument pursuant to 21 Civil Local Rule 7-1(b). Having considered Plaintiffs’ moving papers, the Court GRANTS 22 Plaintiffs’ motion. 24 Plaintiffs Cisco and Ciena have sold networking equipment, including transceiver 25 modules, since 1992. Am. Compl. ¶¶ 18, 20. Cisco owns the relevant trademarks, registered with 26 the U.S. Patent and Trademark Office, for use in connection with Cisco’s products. Id. ¶ 21; 27 Cisco Decl. of First Witness in Supp. of Pls.’ Emerg. Ex Parte Mot. for TRO, Asset Freeze Order, 1 Expedited Disc., Order Permitting Alt. Serv. of Process, and Order to Show Cause Re: Prelim. Inj. 2 (“Cisco First Witness Decl.”), Dkt. No. 10-1 ¶¶ 5-10, Ex. 1A. Ciena also owns the relevant 3 trademarks, registered with the U.S. Patent and Trademark Office, for use in connection with 4 Ciena’s products. Am. Compl. ¶ 24; Ciena Decl. of First Witness in Supp. of Pls.’ Emerg. Ex 5 Parte Mot. for TRO, Asset Freeze Order, Expedited Disc., Order Permitting Alt. Serv. of Process, 6 and Order to Show Cause Re: Prelim. Inj. (“Ciena First Witness Decl.”), Dkt. No. 19-1 ¶¶ 5-10, 7 Ex. 1A. 8 Defendants Shenzhen Usource Technology Co., Warex Technologies Limited, and 9 Shenzhen Warex Technologies, Co., Ltd have their principal places of business in China. Am. 10 Compl. ¶¶ 10-11. Defendants engaged in advertising, selling, and distributing transceiver 11 products that are infringing Plaintiffs’ trademarks on transceiver products in this District and the 12 State of California. Id. ¶ 43. 13 Plaintiffs assert that Defendants are intentionally deceiving customers into believing that 14 they are purchasing and receiving products that are developed, manufactured, and screened by 15 Plaintiffs or another party legitimately associated with Plaintiffs. Id. ¶¶ 6, 43-46; Cisco Decl. of 16 Third Witness in Supp. of Pls.’ Emerg. Ex Parte Mot. for TRO, Asset Freeze Order, Expedited 17 Disc., Order Permitting Alt. Serv. of Process, and Order to Show Cause Re: Prelim. Inj. (“Cisco 18 Third Witness Decl.”), Dkt. No. 10-6 ¶¶ 7-31. Ciena Decl. of Third Witness in Supp. of Pls.’ 19 Emerg. Ex Parte Mot. for TRO, Asset Freeze Order, Expedited Disc., Order Permitting Alt. Serv. 20 of Process, and Order to Show Cause Re: Prelim. Inj.; (“Ciena Third Witness Decl.”), Dkt. No. 21 19-4 ¶¶ 7-31. 22 Plaintiffs discovered that Defendants advertised and sold similar types of transceiver 23 products using unauthorized representations of Plaintiffs’ trademarks. Am. Compl. ¶¶ 63-76; 24 Cisco Third Witness Decl. ¶¶ 7-31; Ciena Third Witness Decl. ¶¶ 7-31. Plaintiffs hired 25 investigators and consultants to purchase Defendants’ products through their websites and by 26 email communication. Am. Compl. ¶¶ 54-63; Cisco Third Witness Decl. ¶¶ 7-10, 16-20; Ciena 27 Third Witness Decl. ¶¶ 7-10, 16-20. After analyzing the products purchased from Defendants, 1 Plaintiffs’ engineers concluded that Defendants’ products were inauthentic and had a high 2 probability of malfunctioning. Am. Compl. ¶¶ 44, 57, 75; Cisco Third Witness Decl. ¶¶ 10-31; 3 Ciena Third Witness Decl. ¶¶ 10-31. Accordingly, Plaintiffs allege that Defendants have been 4 advertising, offering, selling, using and/or distributing products that bear confusingly similar 5 imitations of the Cisco and Ciena trademarks. Am. Compl. ¶ 43. 6 Plaintiffs filed this action on July 16, 2020, asserting the following claims: (1) trademark 7 infringement and counterfeiting in violation of the Lanham Act, 15 U.S.C. § 1114; (2) false 8 designation of origin and false advertising in violation of the Lanham Act, 15 U.S.C. § 1125(a); 9 (3) dilution of Plaintiffs’ marks under the Lanham Act, 15 U.S.C. § 1125(c); (4) violation of 10 California’s False Advertising Law (“FAL”), Cal. Bus. & Prof. Code § 17500; and (5) violation of 11 California’s Unfair Competition Law (“UCL”), Cal. Bus. & Prof. Code § 17200. Id. ¶¶ 77-104. 12 Plaintiffs have served Defendants with the original complaint, summonses, and the operative 13 Amended Complaint by court-ordered substitute service via e-mail. Dkt. No. 12. The Court 14 granted Plaintiffs’ requests for a temporary restraining order and a preliminary injunction 15 prohibiting Defendants and others acting in concert with them from engaging in the alleged 16 counterfeiting and infringing behavior. Dkt. Nos. 12, 23, 29. 17 No Defendant has ever appeared in this action. The Clerk of the Court entered default 18 against Defendants on July 12, 2021. Dkt. No. 56. On August 17, 2021, Plaintiffs filed the 19 motion for default judgment now before the Court and served a copy on Defendants. Dkt. Nos. 20 58, 60. To date, Defendants have not responded to or otherwise defended this action. 22 Courts may grant default judgment if a party fails to plead or otherwise defend against an 23 action for affirmative relief. Fed. R. Civ. P. 55(a). Discretion to enter default judgment rests with 24 the district court. Aldabe v. Aldabe, 616 F.2d 1089, 1092 (9th Cir. 1980). When deciding whether 25 to enter default judgment, the court considers:

26 (1) the possibility of prejudice to the plaintiff, (2) the merits of plaintiff's substantive claim, (3) the sufficiency of the complaint, (4) 27 the sum of money at stake in the action, (5) the possibility of a dispute concerning material facts, (6) whether the underlying default 1 was due to excusable neglect, and (7) the strong policy underlying the Federal Rules of Civil Procedure favoring decisions on the 2 merits. 3 Eitel v. McCool, 782 F.2d 1470, 1471–72 (9th Cir. 1986). In evaluating these factors, all factual 4 allegations in the complaint are taken as true, except those relating to damages. TeleVideo Sys., 5 Inc. v. Heidenthal, 826 F.2d 915, 917–18 (9th Cir. 1987). 7 A. Jurisdiction and Service of Process 8 Before entering default judgment, a court must determine whether it has subject matter 9 jurisdiction over the case and personal jurisdiction over the defendant. See In re Tulli, 172 F.3d 10 707, 712 (9th Cir. 1999). 11 1. Subject matter jurisdiction 12 District courts have original jurisdiction to hear civil cases arising under the Constitution, 13 laws, or treaties of the United States. 28 U.S.C.

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Cisco Systems, Inc. v. Shenzhen Usource Technology Co., (N.D. Cal. 2021).

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