GS Holistic LLC v. Imam Corporation Inc

CourtDistrict Court, W.D. Washington
DecidedMarch 8, 2024
Docket2:23-cv-00315
StatusUnknown

This text of GS Holistic LLC v. Imam Corporation Inc (GS Holistic LLC v. Imam Corporation Inc) is published on Counsel Stack Legal Research, covering District Court, W.D. Washington primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
GS Holistic LLC v. Imam Corporation Inc, (W.D. Wash. 2024).

Opinion

1 2

3 4 5 6 7 UNITED STATES DISTRICT COURT WESTERN DISTRICT OF WASHINGTON 8 AT SEATTLE

9 10 GS HOLISTIC, LLC, CASE NO. C23-0315JLR 11 Plaintiff, ORDER v. 12 IMAM CORPORATION INC., et al, 13 Defendants. 14

15 I. INTRODUCTION 16 Before the court is Plaintiff GS Holistic, LLC’s (“GS Holistic”) motion for entry 17 of default judgment against Defendants Imam Corporation Inc., d/b/a Mukilteo Smoke 18 Shop (“Mukilteo Smoke Shop”) and Ayaz Ahmed (together, “Defendants”). (Mot. (Dkt. 19 # 26); see Prop. Judgment (Dkt. # 26-3).) Neither Defendant has appeared in this action, 20 and the Clerk has entered default against both Defendants. (See Dkt.; 12/13/23 Entry of 21 Default (Dkt. # 22).) The court has considered GS Holistic’s motion, the materials it 22 submitted in support of its motion, the relevant portions of the record, and the governing 1 law. Being fully advised, the court GRANTS in part and DENIES in part GS Holistic’s 2 motion for entry of default judgment.

3 II. BACKGROUND 4 GS Holistic is a Delaware limited liability corporation (“LLC”) that has its 5 principal place of business in California. (Am. Compl. (Dkt. # 8) ¶ 4.) It alleges that it is 6 the owner of the “STÜNDENGLASS” trademark, has worked to distinguish the 7 Stündenglass brand as “the premier manufacturer of glass infusers,” and has devoted 8 significant time and resources promoting and protecting its trademark. (Id. ¶¶ 4, 7-9, 14.)

9 GS Holistic has registered the following trademarks: (1) U.S. Trademark Registration 10 No. 6,633,884 “for the standard character mark ‘Stündenglass’ in association with goods 11 further identified in registration in international class 011”; (2) U.S. Trademark 12 Registration No. 6,174,292 “for the design plus words mark ‘S’ and its logo in 13 association with goods further identified in the registration in international class 034”;

14 and (3) U.S. Trademark Registration No. 6,174,291 “for the standard character mark 15 ‘Stündenglass’ in association with goods further identified in registration in international 16 class 034” (together, the “Stündenglass Marks”). (Id. ¶ 10; see also Mot., Ex. A 17 (screenshots of pages from the United States Patent and Trademark Office’s Trademark 18 Electronic Search System that describe each trademark).) GS Holistic asserts that

19 consumers are willing to pay more for “the recognized quality and innovation associated 20 with the Stündenglass Marks.” (Am. Compl. ¶ 20.) Thus, genuine Stündenglass glass 21 infusers are priced at $599.95, while non-Stündenglass infusers sell for between $199.00 22 and $600.00. (Id.) 1 Defendant Mukilteo Smoke Shop is a Washington corporation that has its 2 principal place of business in Washington. (Id. ¶ 5.) Defendant Ayaz Ahmed is a

3 resident and citizen of Washington. (Id. ¶ 6.) GS Holistic asserts that Defendants sold 4 counterfeit products bearing the Stündenglass Marks. (Id. ¶¶ 24-27.) On December 5, 5 2022, according to GS Holistic, its investigator visited Mukilteo Smoke Shop’s location; 6 observed that the shop had “an excess” of glass infusers that displayed the Stündenglass 7 Marks; purchased a glass infuser “with a Stündenglass Mark affixed to it” for $420.28; 8 and determined the glass infuser was a counterfeit product that displayed “the Infringing

9 Marks.” (Id. ¶ 29; see also id. ¶ 25 (defining the “Infringing Marks” as “reproductions, 10 counterfeits, copies, and/or colorable imitations of one or more of the Stündenglass 11 Marks”).) 12 GS Holistic filed its complaint on March 6, 2023. (See Compl. (Dkt. # 1) at 1.) It 13 amended its complaint on April 10, 2023. (See Am. Compl.) It alleges claims under the

14 Lanham Act against both Defendants for counterfeiting and trademark infringement in 15 violation of 15 U.S.C. § 1114 and for false designation of origin and unfair competition 16 in violation of 15 U.S.C. § 1125(a). (Id. ¶¶ 51-68.) Among other relief, it seeks 17 damages, costs of suit, a permanent injunction prohibiting Defendants from continuing to 18 infringe its Stündenglass trademarks, and an order requiring Defendants to deliver all

19 infringing products to GS Holistic for destruction. (Id. at 12-14.) 20 GS Holistic served Mukilteo Smoke Shop on May 9, 2023, and Mr. Ahmed on 21 September 6, 2023. (See Service Affs. (Dkt. ## 12, 19).) The Clerk entered default on 22 1 December 13, 2023. (Entry of Default.) GS Holistic filed this motion for entry of default 2 judgment on March 7, 2024. (Mot.)

3 III. ANALYSIS 4 Below, the court sets forth the relevant legal standard and then evaluates GS 5 Holistic’s motion for entry of default judgment. 6 A. Legal Standard 7 Federal Rule of Civil Procedure 55(b)(2) authorizes the court to enter default 8 judgment against a defaulting defendant upon the plaintiff’s motion. Fed. R. Civ. P.

9 55(a), (b)(2). After default is entered, well-pleaded factual allegations in the complaint, 10 except those related to damages, are considered admitted and are sufficient to establish a 11 defendant’s liability. TeleVideo Sys., Inc. v. Heidenthal, 826 F.2d 915, 917-18 (9th Cir. 12 1987) (citing Geddes v. United Fin. Grp., 559 F.2d 557, 560 (9th Cir. 1977)). 13 Entry of default judgment is left to the court’s sound discretion. Aldabe v. Aldabe,

14 616 F.2d 1089, 1092 (9th Cir. 1980). In exercising its discretion, the court considers 15 seven factors (the “Eitel factors”): (1) the possibility of prejudice to the plaintiff if relief 16 is denied; (2) the substantive merits of the plaintiff’s claims; (3) the sufficiency of the 17 claims raised in the complaint; (4) the sum of money at stake in relationship to the 18 defendant’s behavior; (5) the possibility of a dispute concerning material facts;

19 (6) whether default was due to excusable neglect; and (7) the preference for decisions on 20 the merits when reasonably possible. Eitel v. McCool, 782 F.2d 1470, 1471-72 (9th Cir. 21 1986). After the court determines that default judgment is appropriate, it must then 22 1 determine the amount and character of the relief that should be awarded. See TeleVideo, 2 826 F.2d at 917-18.

3 B. Whether the Eitel Factors Favor Default Judgment 4 The court preliminarily determines that default judgment is warranted in this case 5 because, on balance, the Eitel factors weigh in favor of such judgment. The court 6 discusses each factor in turn. 7 1. Possibility of Prejudice to Plaintiff 8 The first Eitel factor considers whether the plaintiff will suffer prejudice if default

9 judgment is not entered. See PepsiCo, Inc., v. Cal. Sec. Cans, 238 F. Supp. 2d 1172, 10 1177 (C.D. Cal. 2002). Without default judgment, GS Holistic will suffer prejudice 11 because it will “be denied the right to judicial resolution” of its claims and will be 12 “without other recourse for recovery.” Elektra Entm’t Grp. Inc. v. Crawford, 226 F.R.D. 13 388, 392 (C.D. Cal. 2005). Thus, the first Eitel factor weighs in favor of entering default

14 judgment. 15 2. Substantive Merits and Sufficiency of the Complaint 16 The second and third Eitel factors—the substantive merits of the plaintiff’s claim 17 and the sufficiency of the plaintiff’s complaint—are frequently analyzed together. 18 PepsiCo, 238 F. Supp.

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