1 2 3 4 UNITED STATES DISTRICT COURT 5 NORTHERN DISTRICT OF CALIFORNIA 6 7 RESTORATION HARDWARE, INC., et Case No. 23-cv-00948-HSG (KAW) al., 8 Plaintiffs, REPORT AND RECOMMENDATION 9 TO GRANT IN PART AND DENY IN v. PART MOTION FOR DEFAULT 10 JUDGMENT ALIMIA LIGHT, et al., 11 Re: Dkt. No. 44 Defendants. 12 13 On March 3, 2023, Plaintiffs Restoration Hardware, Inc. and RH US, LLC (collectively, 14 “RH”) filed the instant lawsuit against Defendants (1) Alimia Light (“Alimia Light”); (2) 15 Zhongshan Zhuosai Lighting, Co., Ltd., dba Yami Lighting and Pop Lamps (“Zhuosai Lighting”); 16 (3) Shanghai ZeroTai Industrial Co., dba Grand Lamps (“Grand Lamps”); (4) Zhonshan Yuyi Co. 17 dba Wing Lighting (“Wing Lighting”); (5) Zhongshan Laiting Lighting Co., dba Oasis Lamps 18 (“Oasis Lamps”); (6) Zhongshan Momo Lighting Co., dba Momo (“Momo Chandelier”); (7) Fanci 19 Light; (8) Cure Lighting, LLC (“Cure Lighting”); (9) Clouds Lights; (10) Kushigo Limited, dba 20 Eric Light and Emma Lighting (“Kushigo Limited”); (11) Lighting Forever; (12) Zhongshan 21 Reborn Lighting Co., Ltd. (“Reborn”); (13) Showsun Lighting and Sunny Wang, dba Showsun 22 Lighting; (14) Jinhua Sigma Industrial & Trading Co., Ltd. (“Sigma Living”); (15) Ineffable 23 Lighting; (16) Nimo LLC (“Zenduce”); (17) Oclolli Limited, dba Mooni Lighting (“Oclolli”); and 24 (18) Kevin Studio.1 (Compl., Dkt. No. 1.) RH alleges Defendants have violated RH’s intellectual 25 property rights by using RH’s copyrighted photographs of its lighting products and brand names to 26 1 The case was also brought against other Defendant-Entities who have since entered into a 27 stipulated consent judgment and permanent injunction with RH. (See Dkt. No. 40.) The Court 1 sell knockoffs of RH’s lighting products on websites targeting consumers in the United States. 2 (Compl. ¶ 2.) 3 On July 11, 2024, the Court held a hearing, but Defendants did not appear. (Dkt. No. 57.) 4 Having reviewed the moving papers and relevant legal authorities, the Court RECOMMENDS 5 that RH’s motion for default judgment be GRANTED IN PART AND DENIED IN PART. 6 I. BACKGROUND 7 A. Factual Background 8 RH, a Delaware corporation whose principal place of business is located in California, is a 9 luxury retailer in the home furnishings marketplace. (Compl. ¶¶ 1, 4-5.) RH offers a wide variety 10 of home furnishings, including furniture and lighting products, through its retail stores, catalogs, 11 and website. (Compl. ¶ 57.) 12 RH spends substantial time, money, and effort staging and photographing its products. 13 (Compl. ¶ 58.) RH uses thousands of photographs featuring its products in RH’s catalogs and 14 website. (Compl. ¶ 58.) RH also owns copyrights in the product photographs. (Compl. ¶ 59.) 15 RH currently owns more than 90 U.S. copyright registrations, including registrations for catalogs 16 and websites, which collectively cover all of the photographs at issue in this case (collectively, 17 “Copyrighted Works”). (Compl. ¶ 59.) Based on these registrations, RH owns the exclusive right 18 to copy, distribute, and publicly display the Copyrighted Works. (Compl. ¶ 59.) 19 RH also owns common law rights in the product names it uses for the lighting products at 20 issue in this case: AQUITAINE, ARCACHON, BOULE DE CRISTAL, CAMINO, CANNELE, 21 CASCADA, ECLATANT, FULCRUM, HARLOW, MACHINIST, MARIGNAN, PAUILLAC, 22 PEARL, RAIN, RAVELLE, RHYS, SAN MARCO, SAVILE, SPIRIDON, UTILITAIRE, and 23 WRIGHT. (Compl. ¶ 60.) Additionally, RH owns common law and federal trademark 24 registrations for its RESTORATION HARDWARE Mark (collectively, with the product names, 25 “RH Marks”). (Compl. ¶ 60.) 26 Defendants are foreign companies operating online stores that are using RH’s Copyrighted 27 Works and RH Marks to sell knockoffs of RH products to the U.S. market. (Compl. ¶ 2.) On 1 Copyrighted Works under the Copyright Act of 1976, 15 U.S.C. § 501; (2) unfair competition with 2 respect to the RH Marks under the Lanham Act, 15 U.S.C. § 1125(a), and (3) violation of 3 California’s Unfair Competition Law, Cal. Bus. & Prof. Code § 17200. (Compl. ¶ 3.) In its 4 complaint, RH identified the following instances of copyright infringement by Defendants: 5 i. Alimia Light 6 Defendant Alimia Light is a Chinese company which owns and operates the website, 7 alimialight.com. (Compl. ¶ 6.) Defendant Alimia Light used the following on its website: (1) 8 RH’s photograph of its Arcachon Led Round Chandelier, infringing on Registration No. VA 2- 9 298-977; (2) RH’s photograph of its Lambeth Knurled Grand Sconce, infringing on Registration 10 No. VA 2-195-419; and (3) RH’s photograph of its Fulcrum Sconce, infringing on Registration 11 No. 2-298-977. (Compl., Exh. C at 5-6.) Defendant Alimia Light used the specified copyrighted 12 photographs and RH’s Marks to advertise and sell knockoff RH products to consumers in 13 California, shipped infringing products to consumers in California, and used California-based 14 service providers such as payment providers and processors to support its infringing conduct. 15 (Compl. ¶ 32.) 16 ii. Zhuosai Lighting 17 Defendant Zhuosai Lighting is a Chinese company which owns and operates the websites, 18 winglights.com, yami-lighting.com, and poplamps.com. (Compl. ¶¶ 7, 33.) Since the filing of the 19 complaint, Defendant Zhuosai Lighting used the following on its website: (1) RH’s photograph of 20 its Rain Rectangular Chandelier, infringing on Registration No. VA 2-315-654; (2) RH’s 21 photograph of its Emile Round Chandelier, infringing on Registration No. VA 2-195-419; (3) 22 RH’s photograph of its Boule de Cristal Clear Glass Round Chandelier, infringing on Registration 23 No. VA 2-315-654; (4) RH’s photograph of its Pauillac Round Chandelier, infringing on 24 Registration No. VA 2-315-654; (5) RH’s photograph of its Éclatant Grand Pendant, infringing on 25 Registration No. VA 2-315-654; and (6) RH’s photograph of its Ravelle Sconce, infringing on 26 Registration No. VA 2-195-419. (Compl., Exh. C at 17-19, 57-58.) Defendant Zhuosai Lighting 27 used the specified copyrighted photographs and RH’s Marks to advertise and sell knockoff RH 1 used California-based service providers such as payment providers and processors to support its 2 infringing conduct. (Compl. ¶ 33.) 3 iii. Grand Lamps 4 Defendant Grand Lamps is a Chinese company which owns and operates the website 5 grandlamps.com. (Compl. ¶¶ 8, 34.) Defendant Grand Lamps used the following on its website: 6 (1) RH’s photograph of its Crystal Halo Clear Round Led Chandelier, infringing on Registration 7 No. VA 2-315-654; (2) RH’s photograph of its Savile Rectangular Linear Sconce, infringing on 8 Registration No. VA 2-315-654; and (3) RH’s photograph of its Ravelle Sconce, infringing on 9 Registration No. VA 2-195-419. (Compl., Exh. C at 27-29.) Defendant Grand Lamps used the 10 specified copyrighted photographs and RH’s Marks to advertise and sell knockoff RH products to 11 consumers in California, shipped infringing products to consumers in California, and used 12 California-based service providers such as payment providers and processors to support its 13 infringing conduct. (Compl. ¶ 34.) 14 iv. Wing Lighting 15 Defendant Wing Lighting is a Chinese company that owns and operates the website 16 winglightings.com. (Compl. ¶¶ 9, 35.) Defendant Wing Lighting used the following on its 17 website: (1) RH’s photograph of its Arcachon Led Round Chandelier, infringing on Registration 18 No. VA 2-298-977; (2) RH’s photograph of its Pearl Sconce, infringing on Registration No. VA 2- 19 298-977; and (3) RH’s photograph of its Éclatant Grand Pendant, infringing on Registration No. 20 VA 2-298-977. (Compl., Exh. C at 36-37.) Defendant Wing Lighting used the specified 21 copyrighted photographs and RH’s Marks to advertise and sell knockoff RH products to 22 consumers in California, shipped infringing products to consumers in California, and used 23 California-based service providers such as payment providers and processors to support its 24 infringing conduct. (Compl. ¶ 35.) 25 v. Oasis Lamps 26 Defendant Oasis Lamps is a Chinese company that owns and operates the website 27 oasislamps.com. (Compl. ¶¶ 10, 36.) Defendant Oasis Lamps used the following on its website: 1 (2) RH’s photograph of its Lambeth Hexagonal Sconce, infringing on Registration No. VA 2-195- 2 419; and (3) RH’s photograph of its Fulcrum Pendant, infringing on Registration No. VA 2-315- 3 654. (Compl., Exh. C at 45-46.) Defendant Oasis Lamps used the specified copyrighted 4 photographs and RH’s Marks to advertise and sell knockoff RH products to consumers in 5 California, shipped infringing products to consumers in California, and used California-based 6 service providers such as payment providers and processors to support its infringing conduct. 7 (Compl. ¶ 36.) 8 vi. Momo Chandelier 9 Defendant Momo Chandelier is a Chinese company that owns and operates the website 10 momochandelier.com, and operates the Alibaba storefront at momolight.en.alibaba.com. (Compl. 11 ¶¶ 11, 37.) Defendant Momo Chandelier used the following on its website: (1) RH’s photograph 12 of its Arcachon Led Round Chandelier, in violation of Registration No. VA 2-315-654; (2) RH’s 13 photograph of its Boule De Cristal Clear Glass Linear Chandelier, in violation of Registration No. 14 VA 2-315-654; and (3) RH’s photograph of its Crystal Halo Clear Round Led Chandelier, 15 infringing on Registration No. VA 2-315-654. (Compl., Exh. C at 63-64.) Defendant Oasis 16 Lamps used the specified copyrighted photographs and RH’s Marks to advertise and sell knockoff 17 RH products to consumers in California, shipped infringing products to consumers in California, 18 and used California-based service providers such as payment providers and processors to support 19 its infringing conduct. (Compl. ¶ 37.) 20 vii. Fanci Light 21 Defendant Fanci Light is allegedly a Chinese company that owns and operates the website 22 fancilight.com. (Compl. ¶¶ 12, 38.) Defendant Fanci Light used the following on its website: (1) 23 RH’s photograph of its Rain Rectangular Chandelier, infringing on Registration No. VA 2-298- 24 977; (2) RH’s photograph of its Pearl Sconce, infringing on Registration No. VA 2-298-977; and 25 (3) RH’s photograph of its Boule De Cristal Clear Glass Linear Chandelier, infringing on 26 Registration No. VA 2-298-977. (Compl., Exh. C at 211-12.) Defendant Fanci Light used the 27 specified copyrighted photographs and RH’s Marks to advertise and sell knockoff RH products to 1 California-based service providers such as payment providers and processors to support its 2 infringing conduct. (Compl. ¶ 38.) 3 viii. Cure Lighting 4 Defendant Cure Lighting is allegedly a Chinese company that owns and operates the 5 website curelighting.com. (Compl. ¶¶ 13, 39.) Defendant Cure Lighting used the following on its 6 website: (1) RH’s photograph of its Arcachon Led Round Two-Tier Chandelier, infringing on 7 Registration No. VA 2-298-977; (2) RH’s photograph of its Fulcrum Sconce, infringing on 8 Registration No. VA 2-298-977; and (3) RH’s photograph of its Arpège Cylinder Pendant, 9 infringing on Registration No. VA 2-298-977. (Compl., Exh. C at 222-23.) Defendant Cure 10 Lighting used the specified copyrighted photographs and RH’s Marks to advertise and sell 11 knockoff RH products to consumers in California, shipped infringing products to consumers in 12 California, and used California-based service providers such as payment providers and processors 13 to support its infringing conduct. (Compl. ¶ 39.) 14 ix. Clouds Lights 15 Defendant Clouds Lights is allegedly a Chinese company that owns and operates the 16 website cloudslights.com. (Compl. ¶¶ 14, 40.) Defendant Clouds Lights used the following on its 17 website: (1) RH’s photograph of its Pearl Sconce, infringing on Registration No. VA 2-298-977; 18 (2) RH’s photograph of its Marbuzet Linear Sconce, infringing on Registration No. VA 2-298- 19 977; and (3) RH’s photograph of its Éclatant Grand Pendant, infringing on Registration No. VA 2- 20 298-977. (Compl., Exh. C at 231-33.) Defendant Clouds Lights used the specified copyrighted 21 photographs and RH’s Marks to advertise and sell knockoff RH products to consumers in 22 California, shipped infringing products to consumers in California, and used California-based 23 service providers such as payment providers and processors to support its infringing conduct. 24 (Compl. ¶ 40.) 25 x. Kushigo Limited 26 Defendant Kushigo Limited is allegedly a Chinese company that owns and operates the 27 websites ericlightus.com and emmalighting.com. (Compl. ¶¶ 15, 41.) Defendant Kushigo 1 infringing on Registration No. VA 2-315-654; (2) RH’s photograph of its Arcachon Led Round 2 Chandelier, infringing on Registration No. VA 2-315-654; (3) RH’s photograph of its Pearl Triple 3 Sconce, infringing on Registration No. VA 2-315-654; (4) RH’s photograph of its Harlow Crystal 4 Sconce, infringing on Registration No. VA 2-195-419; (5) RH’s photograph of its Emile Round 5 Chandelier, infringing on Registration No. VA 2-195-419; and (6) RH’s photograph of its Éclatant 6 Grand Pendant, infringing on Registration No. VA 2-298-977. (Compl., Exh. C at 247-49, 263- 7 64.) Defendant Kushigo Limited used the specified copyrighted photographs and RH’s Marks to 8 advertise and sell knockoff RH products to consumers in California, shipped infringing products 9 to consumers in California, and used California-based service providers such as payment providers 10 and processors to support its infringing conduct. (Compl. ¶ 41.) 11 xi. Lighting Forever 12 Defendant Lighting Forever is allegedly a Chinese company that owns and operates the 13 website lighting-forever.com. (Compl. ¶¶ 16, 42.) Defendant Lighting Forever used the following 14 on its website: (1) RH’s photograph of its Lambeth Knurled Grand Sconce, infringing on 15 Registration No. VA 2-195-419; (2) RH’s photograph of its Crystal Halo Clear Round Led 16 Chandelier, infringing on Registration No. VA 2-298-977; and (3) RH’s photograph of its 17 Arcachon Led Round Chandelier, infringing on Registration No. VA 2-298-977. (Compl., Exh. C 18 at 257-58.) Defendant Lighting Forever used the specified copyrighted photographs and RH’s 19 Marks to advertise and sell knockoff RH products to consumers in California, shipped infringing 20 products to consumers in California, and used California-based service providers such as payment 21 providers and processors to support its infringing conduct. (Compl. ¶ 42.) 22 xii. Reborn 23 Defendant Reborn is a Chinese company that owns and operates the website 24 rebornlighting.com. (Compl. ¶¶ 18, 44.) Defendant Reborn used the following on its website: (1) 25 RH’s photograph of its Boule De Cristal Clear Glass Round Chandelier, infringing on Registration 26 No. VA 2-298-977; (2) RH’s photograph of its Emile Round Chandelier, infringing on 27 Registration No. VA 2-195-419; and (3) RH’s photograph of its Crystal Halo Clear Round Led 1 Defendant Reborn used the specified copyrighted photographs and RH’s Marks to advertise and 2 sell knockoff RH products to consumers in California, shipped infringing products to consumers 3 in California, and used California-based service providers such as payment providers and 4 processors to support its infringing conduct. (Compl. ¶ 44.) 5 xiii. Showsun Lighting and Sunny Wang 6 Defendant Showsun Lighting is a Chinese company that owns and operates the website 7 showsunlights.com, while Defendant Sunny Wang is the contact for Showsun Lighting. (Compl. 8 ¶¶ 19, 20.) Defendant Showsun Lighting used the following on its website: (1) RH’s photograph 9 of its Crystal Halo Clear Round Led Chandelier, infringing on Registration No. VA 2-315-654; (2) 10 RH’s photograph of its Arcachon Led Round Two-Tier Chandelier, infringing on Registration No. 11 VA 2-315-654; and (3) RH’s photograph of its Emile Round Chandelier, infringing on 12 Registration No. VA 2-195-419. (Compl., Exh. C at 294-95.) Defendant Showsun Lighting used 13 the specified copyrighted photographs and RH’s Marks to advertise and sell knockoff RH products 14 to consumers in California, shipped infringing products to consumers in California, and used 15 California-based service providers such as payment providers and processors to support its 16 infringing conduct. (Compl. ¶ 45.) 17 xiv. Sigma Living 18 Defendant Sigma Living is a Chinese company that owns and operates the website 19 jhsigmafurniture.com, as well as operates the Alibaba storefront at cnsigma.en.alibaba.com. 20 (Compl. ¶ 21.) Defendant Sigma Living used the following on its website: (1) RH’s photograph 21 of its Rain Rectangular Chandelier, infringing on Registration No. VA 2-298-977; and (2) RH’s 22 photograph of its Rain Round Chandelier, infringing on Registration No. VA 2-298-977. (Compl., 23 Exh. C at 310-11.) Defendant Sigma Living used the specified copyrighted photographs and RH’s 24 Marks to advertise and sell knockoff RH products to consumers in California, shipped infringing 25 products to consumers in California, and used California-based service providers such as payment 26 providers and processors to support its infringing conduct. (Compl. ¶ 46.) 27 xv. Ineffable Lighting 1 website ineffablelighting.com. (Compl. ¶¶ 23, 48.) Defendant Ineffable Lighting used the 2 following on its website: (1) RH’s photograph of its Boule De Cristal Clear Glass Round 3 Chandelier, infringing on Registration No. VA 2-298-977; (2) RH’s photograph of its Pearl 4 Double Sconce, infringing on Registration No. VA 2-298-977; and (3) RH’s photograph of its 5 Arcachon Led Round Two-Tier Chandelier, infringing Registration No. VA 2-298-977. (Compl., 6 Exh. C at 563-64.) Defendant Ineffable Lighting used the specified copyrighted photographs and 7 RH’s Marks to advertise and sell knockoff RH products to consumers in California, shipped 8 infringing products to consumers in California, and used California-based service providers such 9 as payment providers and processors to support its infringing conduct. (Compl. ¶ 48.) 10 xvi. Zenduce 11 Zenduce is allegedly a Chinese company that owns and operates zenduce.com. (Compl. ¶¶ 12 25, 50.) Defendant Zenduce used the following on its website: (1) RH’s photograph of its Rain 13 Sconce, infringing on Registration No. VA 2-298-977; and (2) RH’s photograph of its Fulcrum 14 Sconce, infringing on Registration No. VA 2-298-977. (Compl., Exh. C at 576-77.) Defendant 15 Zenduce used the specified copyrighted photographs and RH’s Marks to advertise and sell 16 knockoff RH products to consumers in California, shipped infringing products to consumers in 17 California, and used California-based service providers such as payment providers and processors 18 to support its infringing conduct. (Compl. ¶ 50.) 19 xvii. Oclolli 20 Defendant Oclolli is allegedly a Chinese company that owns and operates 21 moonilighting.com. (Compl. ¶¶ 27, 52.) Defendant Oclolli used the following on its website: (1) 22 RH’s photograph of its Pearl Sconce, infringing on Registration No. VA 2-298-977; (2) RH’s 23 photograph of its Pauillac Round Chandelier, infringing on Registration No. VA 2-298-977; and 24 (3) RH’s photograph of its Arcachon Led Round Two-Tier Chandelier, infringing on Registration 25 No. VA 2-298-977. (Compl., Exh. C at 581-82.) Defendant Oclolli used the specified 26 copyrighted photographs and RH’s Marks to advertise and sell knockoff RH products to 27 consumers in California, shipped infringing products to consumers in California, and used 1 infringing conduct. (Compl. ¶ 52.) 2 xviii. Kevin Studio 3 Finally, Defendant Kevin Studio is a Chinese company that owns and operates the website 4 kevinstudioinc.com. (Compl. ¶¶ 28, 53.) Defendant Kevin Studios used the following on its 5 website: (1) RH’s photograph of its Pearl Sconce, infringing on Registration No. VA 2-298-977; 6 (2) RH’s photograph of its Boule De Cristal Clear Glass Round Chandelier, infringing on 7 Registration No. VA 2-298-977; and (3) RH’s photograph of its Rain Round Chandelier, 8 infringing on Registration No. VA 2-298-977. (Compl., Exh. C at 588-89.) Defendant Kevin 9 Studio used the specified copyrighted photographs and RH’s Marks to advertise and sell knockoff 10 RH products to consumers in California, shipped infringing products to consumers in California, 11 and used California-based service providers such as payment providers and processors to support 12 its infringing conduct. (Compl. ¶ 53.) 13 B. Procedural Background 14 On March 3, 2023, RH filed the instant complaint and a motion for a temporary restraining 15 order (“TRO”). On March 6, 2023, the presiding judge issued an order requiring that RH serve 16 the complaint and motion for a TRO on Defendants by e-mail. (Dkt. No. 9.) After RH failed to 17 do so by the deadline set, the presiding judge denied the motion for a TRO. (Dkt. No. 11.) 18 On May 5, 2023, RH filed a renewed motion for a TRO, as well as a certificate of service 19 stating that Defendants had been served by e-mail. (Dkt. Nos. 16, 16-2.) On May 8, 2023, the 20 presiding judge acknowledged the service by e-mail, and set a deadline for Defendants’ response. 21 (Dkt. No. 17.) On May 24, 2023, the presiding judge granted the renewed motion for a TRO, 22 which: (1) enjoined Defendants from using RH’s Copyrighted Works and RH’s Marks, (2) froze 23 certain PayPal accounts, and (3) authorized RH to serve the summons, complaint, and all other 24 pleadings or documents filed in the case on Defendants by e-mail. (TRO Order, Dkt. No. 23 at 6- 25 8.) The presiding judge further ordered a bond of $10,000, and set a preliminary injunction 26 hearing for July 7, 2023. (Id. at 5, 8.) 27 Defendants did not appear at the July 7, 2023 hearing. (Dkt. No. 32.) The presiding judge 1 Works and RH’s Marks. (Prelim. Inj. Order at 7, Dkt. No. 34.) The presiding judge further 2 ordered that Defendants’ domain names be temporarily disabled. (Id. at 7-8.) 3 On August 24, 2023, RH filed a motion for entry of default as to Defendants, based on 4 service by e-mail of the complaint on May 25, 2023 and the summons on May 30, 2023. (Dkt. 5 No. 41; see Dkt. Nos. 26, 28.) On August 29, 2023, the Clerk of the Court entered default as to 6 Defendants. (Dkt. No. 42.) 7 On January 2, 2024, RH filed the instant motion for default judgment. (Mot. for Default J., 8 Dkt. No. 44.) RH originally sought statutory damages of $330,000 per Defendant, as well as the 9 disabling of websites not listed in the complaint. (Id. at 13, 14.) After the motion for default 10 judgment was referred to the undersigned for a report and recommendation, the Court issued an 11 order requiring supplemental briefing based on RH’s failure to address how each Defendant 12 allegedly infringed on all 11 copyrighted works. (Dkt. No. 50.) On April 19, 2024, RH responded 13 by reducing its damages request to the specific examples of infringement listed in the complaint. 14 (Supp. Br., Dkt. No. 51.) On June 28, 2024, the Court issued a second order requiring 15 supplemental briefing as to: (1) how individual Defendant Sunny Wang was liable for the alleged 16 infringement, and (2) a demonstration that the websites not listed in the complaint were related to 17 Defendants. (Dkt. No. 55.) On July 5, 2024, RH responded by agreeing to dismiss the claims 18 against Defendant Wang without prejudice, and by providing side-by-side comparison of the 19 newly created websites at issue. (Second Supp. Br., Dkt. No. 56.) 20 II. LEGAL STANDARD 21 Federal Rule of Civil Procedure 55(b)(2) permits a court to enter a final judgment in a case 22 following a defendant’s default. Shanghai Automation Instrument Co. v. Kuei, 194 F. Supp. 2d 23 995, 999 (N.D. Cal. 2001). Whether to enter a judgment lies within the court’s discretion. Id. at 24 999 (citing Draper v. Coombs, 792 F.2d 915, 924-25 (9th Cir. 1986)). 25 Before assessing the merits of a default judgment, a court must confirm that it has subject 26 matter jurisdiction over the case and personal jurisdiction over the parties, as well as ensure the 27 adequacy of service on the defendant. See In re Tuli, 172 F.3d 707, 712 (9th Cir. 1999). If the 1 determine whether it should grant a default judgment:
2 (1) the possibility of prejudice to the plaintiff, (2) the merits of plaintiff’s substantive claim, (3) the sufficiency of the complaint, (4) 3 the sum of money at stake in the action[,] (5) the possibility of a dispute concerning material facts[,] (6) whether the default was due 4 to excusable neglect, and (7) the strong policy underlying the Federal Rules of Civil Procedure favoring decision on the merits. 5 6 Eitel v. McCool, 782 F.2d 1470, 1471-72 (9th Cir. 1986) (citation omitted). Upon entry of default, 7 all factual allegations within the complaint are accepted as true, except those allegations relating to 8 the amount of damages. TeleVideo Sys., Inc. v. Heidenthal, 826 F.2d 915, 917-18 (9th Cir. 1987). 9 Where a default judgment is granted, the scope of relief “must not differ in kind from, or exceed in 10 amount, what is demanded in the pleadings.” Fed. R. Civ. P. 54(c). 11 III. DISCUSSION 12 A. Jurisdiction and Service of Process 13 In considering whether to enter default judgment, a district court must first determine 14 whether it has jurisdiction over the subject matter and the parties to the case. In re Tuli, 172 F.3d 15 707, 712 (9th Cir. 1999) (“When entry of judgment is sought against a party who has failed to 16 plead or otherwise defend, a district court has an affirmative duty to look into its jurisdiction over 17 both the subject matter and the parties.”). 18 i. Subject Matter Jurisdiction 19 This is a civil action that arises under the Copyright Act, 17 U.S.C. § 101 et seq. and the 20 Lanham Act, 15 U.S.C. § 1051 et seq. Thus, the Court has subject matter jurisdiction. 21 ii. Personal Jurisdiction and Venue 22 This Court has personal jurisdiction over Defendants purposely directed their actions to 23 California, including this District. “Willful infringement of protected intellectual property is 24 ordinarily sufficient to subject a defendant to the jurisdiction of the plaintiff’s home state 25 consistent with the Constitution’s guarantee of due process, so long as the infringing activity 26 targets a broad audience, is engaged in for profit, and places the infringing defendant in 27 competition with the plaintiff.” Mode Media Corp. v. Doe, No. 16-cv-00244-RS, 2016 U.S. Dist. 1 intellectual property of RH, whose principal place of business is in this district. (Compl. ¶¶ 4, 5.) 2 Defendants’ infringing activity consists of using RH’s intellectual property to advertise and sell 3 knockoffs of RH products to a broad range of consumers, including those in California. (Compl. 4 ¶¶ 32-42, 44-46, 48, 50, 52-53.) Defendants also use California-based service, providers, 5 including payment providers and processors, to support their infringing conduct. (Id.) 6 Accordingly, personal jurisdiction and venue are proper in this district. 7 iii. Service of Process 8 RH was given leave to serve Defendants by e-mail, and served the complaint and summons 9 upon them accordingly. (TRO Order at 5; Dkt. Nos. 26, 27.) After RH moved for entry of 10 default, default was entered on August 29, 2023. (Dkt. Nos. 41, 42.) 11 B. Application of Eitel Factors to the Case at Bar 12 i. First Factor: Possibility of Prejudice to Plaintiff 13 The first Eitel factor considers whether the plaintiff will suffer prejudice if a default 14 judgment is not entered. See PepsiCo, Inc. v. California Sec. Cans, 238 F. Supp. 2d 1172, 1177 15 (C.D. Cal. 2002). Taking all of the factual allegations in the complaint as true, the first Eitel factor 16 weighs in favor of granting default judgment on RH’s claims because otherwise RH would be left 17 without a remedy or means to prevent Defendants’ infringement. Accordingly, the first Eitel 18 factor weighs in favor of granting default judgment. 19 ii. Second and Third Factors: Merits of Plaintiff’s Claims and the Sufficiency of the Complaint 20 21 The second and third Eitel factors address the merits and sufficiency of RH’s claims pled 22 in the complaint. “These two factors are often analyzed together.” Li v. A Perfect Day Franchise, 23 Inc., Case No. 10-cv-1189-LHK, 2012 WL 2236752, at *6 (N.D. Cal. June 15, 2012). In 24 considering the second and third factors, the Court takes all factual allegations in RH’s complaint 25 as true, except for those relating to damages. Televideo Sys., 826 F.2d at 917-18. 26 a. Sunny Wang 27 Per RH’s second supplemental brief, RH consents to dismissing its claims against 1 that default judgment against Defendant Wang be DENIED, and that the claims against Defendant 2 Wang be dismissed without prejudice. 3 b. Copyright Infringement 4 RH’s first claim is for copyright infringement. “Plaintiffs must satisfy two requirements to 5 present a prima facie case of direct infringement: (1) they must show ownership of the allegedly 6 infringed material and (2) they must demonstrate that the alleged infringers violate at least one 7 exclusive right granted to copyright holders under 17 U.S.C. § 106.” A&M Records v. Napster, 8 239 F.3d 1004, 1013 (9th Cir. 2001). 9 RH satisfies both requirements. First, the Copyright Office has issued certificates of 10 registration to RH that encompass the infringed works at issue. (See Compl., Exh. A.) Second, 11 Defendants have reproduced and distributed RH’s Copyrighted Works on their websites in order 12 to sell knock-of products. (Compl. ¶¶ 32-42, 44-46, 48, 50, 52-53, 61-104 Exh. C.) 13 c. Trademark Infringement 14 RH’s second claim is for trademark infringement. To prevail on a claim for trademark 15 infringement under the Lanham Act, RH “must demonstrate that it owns a valid mark, and thus a 16 protectable interest, and it must show that [Defendants’] use of the mark is likely to cause 17 confusion, or to cause mistake, or to deceive.” Lahoti v. VeriCheck, Inc., 586 F.3d 1190, 1196 18 (9th Cir. 2009) (internal quotation omitted). 19 Here, RH owns common law rights in the product names it uses for the lighting products at 20 issue in this case. (Compl. ¶ 60, Exh. B.) RH pleads in its complaint that Defendants are using 21 these product names or confusingly similar variations to sell knockoffs of RH products. (Compl. 22 ¶¶ 62, 64, 66, 68, 70, 72, 74, 76, 78, 80, 82, 86, 88, 90, 94, 98, 102, 104.) Defendants’ use of these 23 product names is likely to cause confusion, particularly when combined with the use of RH’s 24 Copyrighted Works to advertise and sell the knockoff products. 25 d. UCL 26 RH’s final claim is for unfair competition under the UCL. The Ninth Circuit “has 27 consistently held that state common law claims of unfair competition and actions pursuant to [the 1 30 F.3d 1255, 1262-63 (9th Cir. 1994) (internal quotation omitted). Thus, because RH has 2 demonstrated a Lanham Act claim, it has sufficiently stated a UCL claim. 3 Accordingly, with the exception of Defendant Wang, the Court finds that the second and 4 third Eitel factors weigh in favor of granting RH’s motion for default judgment. 5 iii. Fourth Factor: Sum of Money at Stake 6 The fourth Eitel factor addresses the amount of money at stake in relation to the 7 seriousness of Defendants’ conduct. PepsiCo, Inc., 238 F. Supp. 2d at 1176. Default judgment is 8 disfavored when the amount at stake is substantial or unreasonable in light of the allegations in the 9 complaint. See Eitel, 782 F.2d at 1472 (affirming denial of default judgment where the plaintiff 10 sought $3 million in damages and the parties disputed material facts in the pleadings). 11 Following supplemental briefing, RH now seeks the statutory maximum of $30,000 from 12 each Defendant. With the exception of Defendant Wang (as discussed above), the Court finds that 13 RH is entitled to recover these amounts. Thus, this factor weighs in favor of default judgment. 14 iv. Fifth Factor: Possibility of Dispute Concerning Material Facts 15 The fifth Eitel factor examines the likelihood of dispute concerning material facts in the 16 case. Eitel, 782 F.2d at 1471-72. Upon entry of default, the defendant is “deemed to have 17 admitted all well-pleaded factual allegations” in the complaint. DirectTV, Inc. v. Hoa Huynh, 503 18 F.3d 847, 851 (9th Cir. 2007) (citing to Fed. R. Civ. P. 55(a)). 19 Given the factual allegations in the complaint, as well as the side-by-side comparisons of 20 the alleged infringing activity, there does not appear to be a possibility of dispute concerning 21 material facts. Accordingly, this factor weighs in favor of default judgment. 22 v. Sixth Factor: Whether Default was a Result of Excusable Neglect 23 The sixth Eitel factor contemplates the possibility that Defendant’s default was the result 24 of excusable neglect. Under this analysis, the Court considers whether the defendant was put on 25 adequate notice to apprise it of the pendency of the action brought against it. Phillip Morris USA, 26 Inc. v. Castworld Prod., Inc., 219 F.R.D. 494, 500 (C.D. Cal. 2003). In addition, the Court also 27 considers whether the circumstances surrounding Defendant’s failure to answer the complaint are 1 Supp. 2d 995, 1005 (N.D. Cal. 2001) (default cannot be attributed to excusable neglect where 2 defendants were properly served with the complaint, the notice of entry of default, and the papers 3 in support thereof.). 4 Here, Defendants were served with the complaint and summons via the e-mail address they 5 used to conduct business, as authorized by the presiding judge. In permitting service by e-mail, 6 the presiding judge specifically found that such service was “reasonably calculated to give 7 [Defendants] notice.” (TRO Order at 5.) There is nothing to suggest service was not successful 8 and that Defendants were unaware of this action. This factor weighs in favor of default judgment. 9 vi. Seventh Factor: Policy Favoring a Decision on the Merits 10 In Eitel, the Ninth Circuit stated that “[c]ases should be decided on the merits whenever 11 reasonably possible.” Eitel, 782 F.2d at 1472. The courts have recognized, however, that “this 12 preference, standing alone, is not dispositive.” PepsiCo, Inc., 238 F. Supp. 2d at 1177 (internal 13 quotation omitted). The existence of Federal Rule of Civil Procedure 55(b) indicates that the 14 “termination of a case before hearing the merits is allowed whenever a defendant fails to defend an 15 action.” Id. Defendant has not participated in the proceedings and so a decision on the merits 16 would not otherwise be possible. In this situation, Rule 55(b) permits the court to grant default 17 judgment. 18 After an examination of the Eitel factors in the aggregate, the Court finds that Eitel factors 19 one through six outweigh the preference for a decision on the merits. The undersigned, therefore, 20 recommends the entry of default judgment for all Defendants except Defendant Wang. 21 IV. DAMAGES 22 After entry of default, well-pleaded factual allegations in the complaint are taken as true, 23 except as to the amount of damages. Fair Hous. of Marin v. Combs, 285 F.3d 899, 906 (9th Cir. 24 2002). To recover damages after securing a default judgment, a plaintiff must prove the relief it 25 seeks through testimony or written affidavit. Bd. of Trs. of the Boilermaker Vacation Trust v. 26 Skelly, Inc., 389 F. Supp. 2d 1222, 1226 (N.D. Cal. 2005); see PepsiCo, Inc., 238 F. Supp. 2d at 27 1175. A. Injunctive Relief 1 RH seeks a permanent injunction to: (1) prohibit Defendants from using RH’s Copyrighted 2 Works and RH Marks, or any marks confusingly similar thereto; and (2) disable the websites used 3 to infringe on RH’s intellectual property rights. (Mot. for Default J. at 11-12.) A party seeking a 4 permanent injunction must establish: (1) actual success on the merits; (2) a likelihood of 5 irreparable injury to the moving party if injunctive relief is not granted; (3) a balance of hardships 6 favoring the moving party; and (4) advancement of the public interest. See Winter v. Natural Res. 7 Def. Council, 555 U.S. 7, 20 (2008); Amoco Prod. Co. v. Vill. of Gambell, 480 U.S. 531, 546 n.12 8 (1987). 9 First, as discussed above, RH has demonstrated actual success on the merits. 10 Second, as previously explained by the presiding judge, RH is likely to suffer irreparable 11 harm without injunctive relief. (TRO Order at 3-4; Prelim. Inj. Order at 3.) Specifically, RH has 12 alleged that it has “poured substantial resources into developing their brands and products since 13 1980. Given the risk that consumers will believe they are purchasing authentic RH lighting 14 products, [RH’s] loss of control over business reputation and potential damage to goodwill 15 constitutes an irreparable injury.” (Id.) Likewise, with respect to the disabling of websites, the 16 presiding judge has already ordered Defendants to cease using the RH Copyrighted Works and RH 17 Marks, but many Defendants have continued to do so by simply creating new websites after their 18 original websites were shut down. (Prelim. Inj. Order at 7; Second Supp. Br. at 3-12.) 19 Specifically, Defendants Yami Lighting, Wing Lighting, Kushigo Limited , Alimia Light, Oasis 20 Lamps, Fanci Light, Ineffable Lighting, Kevin Studio, and Clouds Lights have new websites with 21 almost identical links (e.g., winglightings.com vs. wing-lighting.com, alimialight.com vs. 22 alimialighting.com); screenshot comparisons of the websites show identical logos and very similar 23 layouts. (Second Supp. Br. at 3-11.) Defendant Sigma Living, in turn, operates new storefronts 24 on Alibaba under the same name, using the same company contact named “Sophie King,” and the 25 sane incorporation date. (Second Supp. Br. at 11-12.) This further demonstrates a likelihood of 26 irreparable injury because Defendants will only continue to create new websites in order to 27 infringe on RH’s intellectual property rights. 1 Third, the balance of hardships favors RH. Again, as the presiding judge explained, RH 2 risks damage to their reputation and goodwill. (TRO Order at 4; Prelim. Inj. Order at 4.) In 3 contrast, “[w]here the only hardship that the defendant will suffer is lost profits from an activity 4 which has been shown likely to be infringing, such an argument in defense merits little equitable 5 consideration. Any hardship on Defendants from the imposition of a[n] injunction would be the 6 result of their own infringement.” (Id. (internal quotation omitted).) 7 Finally, it is in the public interest to issue a preliminary injunction. “Public policy strongly 8 supports stopping infringement to protect consumers where there is a likelihood of confusion.” 9 (TRO Order at 4; Prelim. Inj. Order at 4.) Further, “[i]t is virtually axiomatic that the public 10 interest can only be served by upholding copyright protections, and correspondingly, preventing 11 the misappropriation of the skills, creative energies, and resources which are invested in the 12 protected work.” CNC Software, Ltd. Liab. Co. v. Glob. Eng'g Ltd. Liab. Co., No. 22-cv-02488- 13 EMC, 2023 U.S. Dist. LEXIS 83880, at *20-21 (N.D. Cal. May 12, 2023) (internal quotation 14 omitted). 15 Accordingly, the undersigned finds that injunctive relief is warranted, and recommends 16 that a permanent injunction be entered. 17 B. Statutory Damages 18 RH seeks an award of statutory damages under the Copyright Act. (Mot. for Default J. at 19 8.) 17 U.S.C. § 504(a) provides: “Except as otherwise provided by this title, an infringer of 20 copyright is liable for either—(1) the copyright owner’s actual damages and any additional profits 21 of the infringer, as provided by subsection (b); or (2) statutory damages[.]” Under copyright law, 22 a Plaintiff may elect to recover an award of statutory damages at any time before final judgment is 23 rendered. 17 U.S.C. § 504(c)(1). A court, in its discretion, can award not less than $750 but not 24 more than $30,000 per copyright infringed. Enhanced damages of up to $150,000 per copyright 25 infringed may be granted on a finding of willful infringement. 17 U.S.C. § 504(c)(2). 26 Statutory damages are intended to serve as a deterrent rather than a windfall, and the court 27 has wide discretion to determine the amount of statutory damages between the statutory maxima 1 following supplemental briefing, RH seeks the statutory maximum of $30,000 per copyright 2 infringed as identified in the complaint. (Supp. Br. at 1.) While RH does not seek enhanced 3 damages based on willful infringement, the infringement likely appears to be willful given that the 4 Copyrighted Works and RH Marks are being used together to sell knockoffs of RH’s lighting 5 products. Moreover, many Defendants have created new websites that continue to infringe on 6 RH’s Copyrighted Works in order to sell knockoffs. (See 1/2/24 Zhong Decl., Exh. A; Second 7 Supp. Br. at 2-12.) Under such circumstances, the statutory maximum of $30,000 per copyright 8 infringed is appropriate. 9 Accordingly, the Court recommends the following statutory damages: 10 (1) Alimia Light: $60,000, based on infringement of two registrations (VA 2-298-977 and VA 11 2-195-419); 12 (2) Zhuosai Lighting: $60,000, based on infringement of two registrations (VA 2-315-654 and 13 VA 2-195-419); 14 (3) Grand Lamps: $60,000, based on infringement of two registrations (VA 2-315-654 and VA 15 2-195-419); 16 (4) Wing Lighting: $30,000, based on infringement of one registration (VA 2-298-977); 17 (5) Oasis Lamps: $60,000, based on infringement of two registrations (VA 2-315-654 and VA 18 2-195-419); 19 (6) Momo Chandelier: $30,000, based on infringement of one registration (VA 2-315-654); 20 (7) Fanci Light: $30,000, based on infringement of one registration (VA 2-298-977); 21 (8) Cure Lighting: $30,000, based on infringement of one registration (VA 2-298-977); 22 (9) Clouds Lights: $30,000, based on infringement of one registration (VA 2-298-977); 23 (10) Kushigo Limited: $90,000, based on infringement of three registrations (VA 2-315-654, 24 VA 2-195-419, and VA 2-298-977); 25 (11) Lighting Forever: $60,000, based on infringement of two registrations (VA 2-195-419, and 26 VA 2-298-977); 27 (12) Reborn Lighting: $90,000, based on infringement of three registrations (VA 2-298-977, 1 (13) Showsun Lighting: $60,000, based on infringement of two registrations (VA 2-315-654 2 and VA 2-195-419); 3 (14) Sigma Living: $30,000, based on infringement of one registration (VA 2-298-977); 4 (15) Ineffable Lighting: $30,000, based on infringement of one registration (VA 2-298-977); 5 (16) Zenduce: $30,000, based on infringement of one registration (VA 2-298-977); 6 (17) Oclolli: $30,000, based on infringement of one registration (VA 2-298-977); and 7 (18) Kevin Studio: $30,000, based on infringement of one registration (VA 2-298-977). 8 V. CONCLUSION 9 For the reasons stated above, the undersigned RECOMMENDS that RH’s motion for 10 default judgment be DENIED as to Defendant Wang, and that the claims against Defendant Wang 11 be DISMISSED WITHOUT PREJUDICE. The undersigned RECOMMENDS that RH’s motion 12 for default judgment be GRANTED as to the remaining Defendants as follows: 13 1. RH shall have and recover from Defendants statutory damages in the amounts stated 14 above; 15 2. PayPal, Inc. shall release any money contained in the PayPal account previously frozen 16 by the Court for Defendant Zenduce using the support@zenduce.com e-mail account to 17 be paid to RH in partial satisfaction of the aforementioned judgment; 18 3. Defendants and their respective officers, agents, servants, employees, and all other 19 persons acting in active concert and participation with them shall be enjoined from: 20 a. Copying, distributing, or publicly displaying any of the RH Copyrighted 21 Works, including removing or disabling all website links in violation, and 22 b. Using any of the RH marks, or any marks confusingly similar thereto, in 23 commerce in connection with the manufacturing for sale or sale of any lighting 24 products; 25 4. Within three business days of receipt of this order, the following registrars and the 26 registry Verisign, Inc. shall disable the following domain names, through a registry 27 hold or otherwise, and make them inactive and non-transferable pending further order: Domain Name Registrar 1 Alimialight.com eName Technology Co., Ltd. 2 3 Puslighting.com Hong Kong Juming Network Technology Co., Ltd. 4 Alimialighting.com eName Technology Co., Ltd. 5 Yami-lighting.com Alibaba Cloud Computing (Beijing) Co., Ltd. 6 7 Yamilightings.com Alibaba Cloud Computing Ltd. d/b/a HiChina 8 (www.net.cn) Grandlamps.com eName Technology Co., Ltd. 9 10 Winglightings.com NameSilo, LLC 11 Wing-lighting.com NameCheap, Inc. 12 Oasislamps.com Alibaba Cloud Computing Ltd. d/b/a HiChina 13 (www.net.cn) 14 Oasislampus.com Alibaba Cloud Computing Ltd. d/b/a HiChina 15 (www.net.cn) Momochandelier.com Alibaba Cloud Computing Ltd. d/b/a HiChina 16 (www.net.cn) 17 Poplamps.com GoDaddy.com, LLC 18 Fancilight.com NameCheap, Inc. 19 Fancilighting.com NameCheap, Inc. 20 21 Curelighting.com NameSilo, LLC 22 Cloudslights.com Alibaba Cloud Computing Ltd. d/b/a HiChina 23 (www.net.cn) 24 Cloudslamps.com Alibaba Cloud Computing Ltd. d/b/a HiChina (www.net.cn) 25 Ericlightus.com Alibaba Cloud Computing Ltd. d/b/a HiChina 26 (www.net.cn) 27 Ericlights.com Alibaba Cloud Computing Ltd. d/b/a HiChina Domain Name Registrar 1 (www.net.cn) 2 3 Emmalighting.com Alibaba Cloud Computing Ltd. d/b/a HiChina (www.net.cn) 4 Emmalightings.com Alibaba Cloud Computing Ltd. d/b/a HiChina 5 (www.net.cn) 6 Lighting-forever.com Hosting Concepts B.V. d/b/a Registrar.eu 7
8 Rebornlighting.com FastDomain Inc. 9
10 Showsunlights.com Xin Net Technology Corporation 11 JHSigmafurniture.com Alibaba Cloud Computing Ltd. d/b/a HiChina 12 Ineffablelighting.com NameSilo, LLC 13 Ineffable-lighting.com NameCheap, Inc. 14 15 Zenduce.com IONOS SE 16 Moonilighting.com Hostinger, UAB 17 Kevinstudioinc.com NameCheap, Inc. 18 Kevinstudiolives.com NameCheap, Inc. 19 20 5. Within three business days of receipt of this order, the following Internet store or 21 online marketplace platforms shall remove or disable the following storefronts:
22 Defendants’ Online Internet Store/Online Marketplace Platform 23 Marketplace 24 cnsigma.en.alibaba.com Alibaba.com Singapore 25 E-Commerce Private Limited sigmafurniture.en.alibaba.com 26 sigmaliving.en.alibaba.com 27 momolight.en.alibaba.com Alibaba.com Singapore 1 6. RH shall serve this report and recommendation on each Defendant in accordance with the 2 TRO order, and shall immediately file a proof of service certifying service and describing 3 the means of service; 4 7. The presiding judge shall retain jurisdiction for the purpose of making any further orders 5 necessary or proper for the construction or modification of this judgment and permanent 6 injunction, the enforcement thereof, and/or punishment for any violations thereof; and 7 8. The Clerk of the Court shall release and disburse the bond previously posted by RH in the 8 amount of $10,000, along with any accrued interest less the Court’s registry fee to RH’s 9 counsel, Lewis Roca Rothgerber Christie, LLP, 100 Pine Street, Suite 1750, San Francisco, 10 CA 94111. 11 IT IS SO RECOMMENDED. 12 Dated: August 26, 2024 '
ANDIS A. WESTMORE 14 United States Magistrate Judge
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