GS Holistic LLC v. Sai Limited Liability Company

District Court, W.D. Washington·Decided November 13, 2023·No. 2:23-cv-00324·Unknown

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. C23-0324JLR 11 Plaintiff, ORDER v. 12 SAI LIMITED LIABILITY 13 COMPANY, et al., 14 Defendants. 15 I. INTRODUCTION 16 Before the court is Plaintiff GS Holistic, LLC’s (“GS Holistic”) motion for entry 17 of default judgment against Defendants Sai Limited Liability Company d/b/a Sams 18 Smoke (“Sams Smoke”), Ash Ohri, Kunal Thapar, Raghav Ohri, and Swati Thapa 19 (together, “Defendants”). (Mot. (Dkt. # 17); see Prop. Judgment (Dkt. # 17-3).) None of 20 these Defendants have appeared in this action, and the Clerk has entered default against 21 all Defendants. (See Dkt.; 6/23/23 Entry of Default (Dkt. # 11); 10/19/23 Entry of 22 1 Default (Dkt. # 14).) The court has considered GS Holistic’s motion, the materials it 2 submitted in support of its motion, the relevant portions of the record, and the governing

3 law. Being fully advised, the court GRANTS in part and DENIES in part GS Holistic’s 4 motion for entry of default judgment. 5 II. BACKGROUND 6 GS Holistic is a Delaware limited liability corporation (“LLC”) that has its 7 principal place of business in California. (Compl. (Dkt. # 1) ¶ 4.) It alleges that it is the 8 owner of the “Stündenglass” trademark, has worked to distinguish the Stündenglass

9 brand as “the premier manufacturer of glass infusers,” and has devoted significant time 10 and resources to promoting and protecting its trademark. (Id. ¶¶ 4, 10-12, 17.) GS 11 Holistic has registered the following trademarks: (1) U.S. Trademark Registration No. 12 6,633,884 “for the standard character mark ‘Stündenglass’ in association with goods 13 further identified in registration in international class 011”; (2) U.S. Trademark

14 Registration No. 6,174,292 “for the design plus words mark ‘S’ and its logo in 15 association with goods further identified in the registration in international class 034”; 16 and (3) U.S. Trademark Registration No. 6,174,291 “for the standard character mark 17 ‘Stündenglass’ in association with goods further identified in registration in international 18 class 034” (together, the “Stündenglass Marks”). (Id. ¶ 13; see also Mot., Ex. A

19 (screenshots of pages from the United States Patent and Trademark Office’s Trademark 20 Electronic Search System that describe each trademark).) GS Holistic asserts that 21 consumers are willing to pay more for “the recognized quality and innovation associated 22 with the Stündenglass Marks.” (Compl. ¶ 23.) Thus, genuine Stündenglass glass infusers 1 are priced at $599.95, while non-Stündenglass infusers sell for between $199.00 and 2 $600.00. (Id.)

3 Defendant Sams Smoke is a Washington LLC that has its principal place of 4 business in Washington. (Id. ¶ 5.) Its owners, Defendants Ash Ohri, Kunal Thapar, 5 Raghav Ohri, and Swati Thapa, are residents and citizens of Washington. (See id. at 1 6 (identifying these Defendants as the owners of Sams Smoke); id. ¶¶ 6-9.) GS Holistic 7 asserts that Defendants sold counterfeit products bearing the Stündenglass Marks. (Id. 8 ¶¶ 27-31.) On December 11, 2022, according to GS Holistic, its investigator visited

9 Sams Smoke’s location; observed that the shop had “an excess” of glass infusers that 10 displayed the Stündenglass Marks; purchased a glass infuser “with a Stündenglass Mark 11 affixed to it” for $441.54; and determined the glass infuser was a counterfeit product that 12 displayed “the Infringing Marks.” (Id. ¶ 29; see also id. ¶ 25 (defining the “Infringing 13 Marks” as “reproductions, counterfeits, copies, and/or colorable imitations of one or more

14 of the Stündenglass Marks”).) 15 GS Holistic filed its complaint on March 6, 2023. (See id. at 1.) It alleges claims 16 under the Lanham Act against both Defendants for counterfeiting and trademark 17 infringement in violation of 15 U.S.C. § 1114 and for false designation of origin and 18 unfair competition in violation of 15 U.S.C. § 1125(a). (Id. ¶¶ 54-71.) Among other

19 relief, it seeks damages, costs of suit, a permanent injunction prohibiting Defendants 20 from continuing to infringe its Stündenglass trademarks, and an order requiring 21 Defendants to deliver all infringing products to GS Holistic for destruction. (Id. at 22 12-14.) 1 GS Holistic served Sams Smoke and Swati Thapar on April 17, 2023; Kunal 2 Thapar on April 29, 2023; and Raghav Ohri and Ash Ohri on May 2, 2023. (See Service

3 Affs. (Dkt. ## 6-9, 12).) The Clerk entered default against Sams Smoke at Swati Thapar 4 on June 23, 2023, and against the remaining Defendants on October 19, 2023. (6/23/23 5 Entry of Default; 10/19/23 Entry of Default.) GS Holistic filed this motion for entry of 6 default judgment on November 9, 2023. (Mot.) 7 III. ANALYSIS 8 Below, the court sets forth the relevant legal standard and then evaluates GS

9 Holistic’s motion for entry of default judgment. 10 A. Legal Standard 11 Federal Rule of Civil Procedure 55(b)(2) authorizes the court to enter default 12 judgment against a defaulting defendant upon the plaintiff’s motion. Fed. R. Civ. P. 13 55(a), (b)(2). After default is entered, well-pleaded factual allegations in the complaint,

14 except those related to damages, are considered admitted and are sufficient to establish a 15 defendant’s liability. TeleVideo Sys., Inc. v. Heidenthal, 826 F.2d 915, 917-18 (9th Cir. 16 1987) (citing Geddes v. United Fin. Grp., 559 F.2d 557, 560 (9th Cir. 1977)). 17 Entry of default judgment is left to the court’s sound discretion. Aldabe v. Aldabe, 18 616 F.2d 1089, 1092 (9th Cir. 1980). In exercising its discretion, the court considers

19 seven factors (the “Eitel factors”): (1) the possibility of prejudice to the plaintiff if relief 20 is denied; (2) the substantive merits of the plaintiff’s claims; (3) the sufficiency of the 21 claims raised in the complaint; (4) the sum of money at stake in relationship to the 22 defendant’s behavior; (5) the possibility of a dispute concerning material facts; 1 (6) whether default was due to excusable neglect; and (7) the preference for decisions on 2 the merits when reasonably possible. Eitel v. McCool, 782 F.2d 1470, 1471-72 (9th Cir.

3 1986). After the court determines that default judgment is appropriate, it must then 4 determine the amount and character of the relief that should be awarded. See TeleVideo, 5 826 F.2d at 917-18. 6 B. Whether the Eitel Factors Favor Default Judgment 7 The court preliminarily determines that default judgment is warranted in this case 8 because, on balance, the Eitel factors weigh in favor of such judgment. The court

9 discusses each factor in turn. 10 1. Possibility of Prejudice to Plaintiff 11 The first Eitel factor considers whether the plaintiff will suffer prejudice if default 12 judgment is not entered. See PepsiCo, Inc., v. Cal. Sec. Cans, 238 F. Supp. 2d 1172, 13 1177 (C.D. Cal. 2002). Without default judgment, GS Holistic will suffer prejudice

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