Philip Morris USA Inc. v. Castworld Products, Inc.

219 F.R.D. 494, 2003 U.S. Dist. LEXIS 24707, 2003 WL 23109807
CourtDistrict Court, C.D. California
DecidedDecember 31, 2003
DocketNo. CV 03-4045-GAF
StatusPublished
Cited by398 cases

This text of 219 F.R.D. 494 (Philip Morris USA Inc. v. Castworld Products, Inc.) is published on Counsel Stack Legal Research, covering District Court, C.D. California primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Philip Morris USA Inc. v. Castworld Products, Inc., 219 F.R.D. 494, 2003 U.S. Dist. LEXIS 24707, 2003 WL 23109807 (C.D. Cal. 2003).

Opinion

ORDER GRANTING MOTION FOR DEFAULT JUDGMENT and PERMANENT INJUNCTION

FEESS, District Judge.

I.

INTRODUCTION

On June 9, 2003, Plaintiff filed this action against Defendant Castworld Products Inc. (“Defendant”), after Defendant was identified by the United States Bureau of Customs and Border Protection (“Customs”) as the importer of 8,000,000 counterfeit MARLBORO® and MARLBORO Red Label® cigarettes in violation of state and federal laws. Plaintiffs Complaint contains the following six claims: (1) infringement of registered trademarks in violation of Lanham Act § 32, 15 U.S.C. § 1114(1); (2) false designation of origin and trademark and trade dress infringement in violation of Lanham Act § 43(a)(1)(A), 15 U.S.C. § 1125(a)(1)(A); (3) unlawful importation of goods bearing infringing marks in violation of § 42 of the Lanham Act, 15 U.S.C. § 1124; (5) unlawful importation of goods bearing infringing marks in violation of § 1526(a) of the Tariff Act, 19 U.S.C. § 1526(a); (5) unfair competition in violation of the common law of the State of California; (6) unfair competition in violation of the California Unfair Competition Law, Cal. Bus. & Prof. Code §§ 17200, et seq.

[497]*497Defendant, although properly served with the summons and complaint, has failed to respond to the complaint or otherwise participate in any aspect of this litigation. Indeed, although Plaintiff requested and obtained entry of default, and has now moved for entry of default judgment, Defendant has filed no opposition to either the request or the motion. Accordingly, because Plaintiff has satisfied the procedural requirements for obtaining a default judgment and because the allegations of the complaint establish all of the necessary elements of Plaintiffs Lanham Act and state law claims, the Court GRANTS Plaintiffs motion for a default judgment, entry of a permanent injunction, and an award or statutory damages, attorney’s fees and costs.

II.

STATEMENT OF FACTS1

Plaintiff, the U.S. owner of the famous Marlboro Marks under which MARLBORO cigarettes are sold, has spent substantial time, effort, and money advertising and promoting its mark throughout the United States. (Complaint, ¶ 27.) Consequently, the marks have developed significant good will, have become distinctive, have acquired secondary meaning, are among the most valuable trademarks in the world, and are among the most widely recognized product symbols by consumers in the United States. (Id. ¶¶ 5, 27). Plaintiff is the registered owner of all the marks in question and Plaintiff has filed a copy of the certificates of registration and recorded them with the Secretary of the Treasury and Customs in accordance with § 1526(a) of the Tariff Act, 19 U.S.C. § 1526(a) and § 42 of the Lanham Act, 15 U.S.C. § 1124. (Id. ¶¶ 7, 28; Exhs. 2-9 thereto).

Customs periodically conducts sample inspections of a fraction of merchandise imported into the United States. (Id. ¶ 8). On June 10, 2002, pursuant to one such inspection at the Port of Los Angeles in Long Beach Harbor, Defendant was named in a Notice of Seizure of Infringing Merchandise issued by Customs as the importer of a commercial quantity of 40,000 cartons of counterfeit cigarettes, each containing 200 counterfeit cigarettes, bearing imitation MARLBORO® and MARLBORO Red Label® trademarks. (Id. ¶¶ 9, 18; Exh. 1 to Compl.). The notice further indicated that the counterfeit cigarettes were imported by Defendant from an exporter located in China (Jia Yong Industry Company limited, Room 11M 7th, Yonghui Building, Shanghai, China). (Id. ¶ 19). Neither Plaintiff nor any of its affiliates manufactures or sells any MARLBORO® or MARLBORO Red Label® products which are authorized by any of them to be re-exported from Asia, including China and the Special Administrative Regions, thereof. (Id.).

Plaintiff asserts that Defendants are engaged in an ongoing and unrestrained commercial importation of counterfeit cigarettes into the United States, and that the importation of these counterfeit cigarettes bearing spurious Marlboro Marks was done intentionally and knowingly in connection with the unlawful sale, offering for sale, or distribution, which constitutes an illegal use in commerce of Plaintiffs marks. (Id. ¶¶ 9, 10, 23-25). In fact, Plaintiff maintains that such sale and distribution in the U.S. was imminent but for Customs’ interceding seizure of these counterfeit cigarettes. (Id. ¶ 23).

The counterfeit cigarettes seized are not the same or of the same quality as those manufactured and sold by Plaintiff under the same brand names. (Id. ¶ 26). For these reasons, consumers who purchase the counterfeit cigarettes, likely will be confused as to the source of origin of the cigarettes (believing them to be genuine) and are likely to be disappointed by the lower quality of the faux Marlboros, the blame of which will fall upon Philip Morris. (Id. ¶¶ 11, 26). Consequently, Plaintiff is suffering a loss of the enormous goodwill Plaintiff has created in its [498]*498marks and is losing profits from lost sales of genuine products. (Id. ¶ 26).

III.

LEGAL STANDARD

Federal Rule of Civil Procedure (“FRCP”) 55(b) provides for a court ordered default judgment following entry of default by the court clerk under Rule 55(a). See Kloepping v. Fireman’s Fund, No. C 94-2684 TEH, 1996 WL 75314, at *2 (N.D.Cal.1996). The FRCP and the local rules in the Central District of California require that applications for default judgment set forth the following information: (1) when and against which party default was entered; (2) the identification of the pleadings to which default was entered; (3) whether the defaulting party is an infant or incompetent person, and if so, whether that person is adequately represented; (4) that the Soldiers’ and Sailors’ Civil Relief Act of 1940 does not apply; and (5) that notice of the application has been served on the defaulting party, if required. FED. R. CIV. P. 55(b)(2); C.D. Cal. L.R. 55-1.2

Entry of default judgment is governed by FRCP 55 and is left to the trial court’s sound discretion. Aldabe v. Aldabe, 616 F.2d 1089, 1092 (9th Cir.1980). Because granting or denying relief is entirely within the court’s discretion, a defendant’s default does not automatically entitle a plaintiff to a court ordered judgment. Id. The Ninth Circuit holds that a district court may consider the following factors in exercising its discretion to award a default judgment:

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219 F.R.D. 494, 2003 U.S. Dist. LEXIS 24707, 2003 WL 23109807, Counsel Stack Legal Research, https://law.counselstack.com/opinion/philip-morris-usa-inc-v-castworld-products-inc-cacd-2003.