GS Holistic LLC v. Mitchell & Mitchell Enterprises Inc

District Court, W.D. Washington·Decided August 9, 2024·No. 3:23-cv-05214·Unknown

Opinion

UNITED STATES DISTRICT COURT WESTERN DISTRICT OF WASHINGTON AT SEATTLE

GS HOLISTIC, LLC, CASE NO. C23-5214JLR Plaintiff, ORDER v. MITCHELL & MITCHELL ENTERPRISES INC., et al., Defendants. I. INTRODUCTION Before the court is Plaintiff GS Holistic, LLC’s (“GS Holistic”) motion for entry of default judgment against Defendants Mitchell & Mitchell Enterprises Inc., d/b/a The Greenroom (“The Greenroom”), and Timothy Mitchell (together, “Defendants”).1 (Mot. (Dkt. # 25); see Prop. Judgment (Dkt. # 25-4).) Neither Defendant has appeared in this

1 GS Holistic voluntarily dismissed its claims against former Defendant Rozalynn Fernandez. (4/29/24 Notice (Dkt. # 21).) action, and the Clerk has entered default against both Defendants. (See Dkt.; Entry of Default (Dkt. # 10).) The court has considered GS Holistic’s motion, the materials it

submitted in support of its motion, the relevant portions of the record, and the governing law. Being fully advised, the court GRANTS in part and DENIES in part GS Holistic’s motion for entry of default judgment. GS Holistic is a Delaware limited liability corporation (“LLC”) that has its principal place of business in California. (Compl. (Dkt. # 1) ¶ 4.) It alleges that it is the

owner of the “G PEN” trademarks, has worked to distinguish the G Pen brand as “the premier manufacturer of vaporizers,” and has devoted significant time and resources to promoting and protecting its trademark. (Id. ¶¶ 4, 8-10, 17.) In 2016, Grenco Science, Inc. assigned to GS Holistic all rights associated with the G PEN trademark and other trademarks associated with products sold by GS Holistic. (Id. ¶ 11.) As a result, GS

Holistic is now the owner of 21 registered trademarks—including word marks, standard character marks, and design plus words marks—related to its G Pen products (together, the “G Pen Marks”2). (Id. ¶¶ 12(a)-(u).) GS Holistic asserts that consumers are willing to pay more for “the recognized quality and innovation associated with the G Pen Marks.” (Id. ¶ 21.) Thus, genuine G Pen brand vaporizers are priced between $70.00

and $250.00 while equivalent non-G Pen products usually sell for between $11.00 and $20.00. (Id.)

2 GS Holistic uses the terms “G Pen Marks” and “G Pen Trademarks” interchangeably in its complaint. (See generally Compl.) The court uses the term “G Pen Marks” in this order. Defendant The Greenroom is a Washington corporation that has its principal place of business in Washington. (Id. ¶ 5.) Defendant Timothy Mitchell is a resident and

citizen of Washington and is one of the owners of The Greenroom. (Id. ¶¶ 7, 22, 24.) GS Holistic alleges that Defendants have offered for sale counterfeit goods bearing “reproductions, counterfeits, copies and/or colorable imitations of one or more” of the following G Pen Marks: (a) U.S. Trademark Registration No. 4,390,645 “for the standard character mark ‘G Pen’ in association with goods further identified in [the] registration in international class 010”; (b) U.S. Trademark No. 5,368,594 “for the word

mark ‘G Pen’ and its logo in association with goods further identified in the registration in international class 010”; (c) U.S. Trademark Registration No. 4,462,090 “for the standard character mark ‘MicroG’ in association with goods further identified in the registration in international class 010”; and (d) U.S. Trademark Registration No. 4,466,586 “for the word mark ‘G’ and its logo in association with goods further identified

in the registration in international class 010” (together, the “Infringing Marks”). (Id. ¶¶ 26(a)-(d); see Mot., Ex. A (screenshots of pages from the United States Patent and Trademark Office’s Trademark Electronic Search System that describe these trademarks).) On February 2, 2023, according to GS Holistic, its investigator visited The Greenroom’s location; observed that the shop had “an excess of vaporizers” that

displayed the G Pen Marks; purchased “a Micro G Vaporizer with a G Pen Mark affixed to it” for $63.77; and determined the vaporizer “was a [c]ounterfeit product in that it displayed the Infringing Marks.” (Compl. ¶ 30.) GS Holistic filed its complaint on March 14, 2023. (Id. at 1.) It alleges claims under the Lanham Act against both Defendants for counterfeiting and trademark

infringement in violation of 15 U.S.C. § 1114 and for false designation of origin and unfair competition in violation of 15 U.S.C. § 1125(a). (Id. ¶¶ 52-69.) Among other relief, it seeks damages, costs of suit, a permanent injunction prohibiting Defendants from continuing to infringe its G Pen trademarks, and an order requiring Defendants to deliver all infringing products to GS Holistic for destruction. (Id. at 14-16.) GS Holistic served The Greenroom and Mr. Mitchell on April 12, 2023. (See

Service Affs. (Dkt. ## 7-8).) The Clerk entered default against Defendants on June 8, 2023. (Entry of Default.) GS Holistic filed this motion for entry of default judgment on August 8, 2024. (Mot.) Below, the court sets forth the relevant legal standard and then evaluates GS

Holistic’s motion for entry of default judgment. A. Legal Standard Federal Rule of Civil Procedure 55(b)(2) authorizes the court to enter default judgment against a defaulting defendant upon the plaintiff’s motion. Fed. R. Civ. P. 55(a), (b)(2). After default is entered, well-pleaded factual allegations in the complaint,

except those related to damages, are considered admitted and are sufficient to establish a defendant’s liability. TeleVideo Sys., Inc. v. Heidenthal, 826 F.2d 915, 917-18 (9th Cir. 1987) (citing Geddes v. United Fin. Grp., 559 F.2d 557, 560 (9th Cir. 1977)). Entry of default judgment is left to the court’s sound discretion. Aldabe v. Aldabe, 616 F.2d 1089, 1092 (9th Cir. 1980). In exercising its discretion, the court considers

seven factors (the “Eitel factors”): (1) the possibility of prejudice to the plaintiff if relief is denied; (2) the substantive merits of the plaintiff’s claims; (3) the sufficiency of the claims raised in the complaint; (4) the sum of money at stake in relationship to the defendant’s behavior; (5) the possibility of a dispute concerning material facts; (6) whether default was due to excusable neglect; and (7) the preference for decisions on the merits when reasonably possible. Eitel v. McCool, 782 F.2d 1470, 1471-72 (9th Cir.

1986). After the court determines that default judgment is appropriate, it must then determine the amount and character of the relief that should be awarded. See TeleVideo, 826 F.2d at 917-18. B. Whether the Eitel Factors Favor Default Judgment The court preliminarily determines that default judgment is warranted in this case

because, on balance, the Eitel factors weigh in favor of such judgment. The court discusses each factor in turn. 1. Possibility of Prejudice to Plaintiff The first Eitel factor considers whether the plaintiff will suffer prejudice if default judgment is not entered. See PepsiCo, Inc., v. Cal. Sec. Cans, 238 F. Supp. 2d 1172,

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