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Case 2:12-cv-02759-ODW-CW Document 36 Filed 05/31/12 Page 1 of 12 Page ID #:433
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`UNITED STATES DISTRICT COURT
`CENTRAL DISTRICT OF CALIFORNIA
`
`
`Case No. CV 12-02759-ODW(CWx)
`
`ORDER GRANTING IN PART AND
`DENYING IN PART MOTION FOR
`DEFAULT JUDGMENT [27]
`
`
`
`Plaintiffs,
`
`
`
`
`SWEET PEOPLE APPAREL, INC. d/b/a
`Miss Me, a California corporation and
`DEODAR BRANDS, LLC d/b/a MEK
`Denim, a California limited liability
`company,
`
`v.
`
`
`ZIPPER CLOTHING, a business entity of
`unknown status; ZIPPER AND DENIM, a
`business entity of unknown status; INY
`TRADING, INC., a California corporation,
`
`Defendants.
`
`
`
`
`
`
`
`I.
`INTRODUCTION
`Before the Court is the May 7, 2012 Motion for Default Judgment by Plaintiffs
`Sweet People Apparel, Inc. d/b/a Miss Me (“Sweet People”) and Deodar Brands, LLC
`d/b/a/ MEK Denim (“MEK Denim”) (collectively “Plaintiffs”) against Defendants
`Zipper Clothing, Zipper and Denim, and INY Trading, Inc. (collectively
`“Defendants”). (ECF No. 27.) Having carefully considered the papers filed in
`support of the instant Motion, the Court deems this matter appropriate for decision
`without oral argument. See Fed. R. Civ. P. 78; C.D. Cal. L.R. 7-15. For the following
`reasons, the Court GRANTS in part and DENIES in part Plaintiffs’ Motion.
`
`

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`Case 2:12-cv-02759-ODW-CW Document 36 Filed 05/31/12 Page 2 of 12 Page ID #:434
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`II. FACTUAL BACKGROUND
`On March 29, 2012, Plaintiffs filed a Complaint in this Court alleging five
`
`claims against Defendants for (1) copyright infringement in violation of 17 U.S.C.
`§ 501; (2) trademark counterfeiting and trademark infringement in violation of
`15 U.S.C. § 1114; (3) trademark infringement in violation of 15 U.S.C. § 1125(a);
`(4) common law trademark infringement and unfair competition; and (5) unfair
`competition in violation of California Business and Professions Code sections 17200
`et seq. (Compl. 1.) After Defendants failed to appear or otherwise respond to the
`Complaint, Plaintiffs requested entry of default against Defendants, which the clerk
`entered pursuant to Federal Rule of Civil Procedure Rule 55(a) on April 25, 2012.
`(ECF Nos. 20, 21.) Pending now before the Court is Plaintiffs’ Motion For Default
`Judgment. (ECF No. 27.)
`
`This action arises out of Defendants’ alleged wrongful appropriation of
`Plaintiffs’ copyrighted and trademarked designs. Plaintiffs Sweet People and MEK
`Denim are manufacturers, promoters, sellers, and distributors of high-quality
`jeanswear and denim products throughout the United States. (Compl. ¶¶ 12, 44.)
`Sweet People’s and MEK Denim’s jeans have received extensive media coverage and
`are sold by fashion retailers and department stores. (Compl. ¶¶ 12, 49.) Plaintiffs’
`unique and distinctive designs distinguish their jeans from their competitors’.
`(Compl. ¶¶ 14–15, 51.)
`
`Sweet People has copyrighted several of its designs, including: Sweet People’s
`Wing Design, Fleur de Lis Design, JP5117 Cross Wing Design, JP5335 Ivy Cross
`Design, and Wide M Design. (Compl. Ex. A–E.) Sweet People also holds registered
`trademarks for its Fabric Cut Out Design (Compl. Ex. F) and its Wide M Design
`(Compl. Ex. G), as well as an unregistered trademark for its Wing Design (Compl.
`¶ 36). MEK Denim holds a registered trademark for its M Design. (Compl. Ex. H.)
`
`Defendants are manufacturers, promoters, sellers, and distributors of jeanswear
`products that bear substantially similar designs to Plaintiffs’ copyrighted and
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`Case 2:12-cv-02759-ODW-CW Document 36 Filed 05/31/12 Page 3 of 12 Page ID #:435
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`trademarked designs. (Compl. ¶ 52.) According to Plaintiffs, Defendants have
`deliberately and knowingly replicated Plaintiffs’ designs. (Compl. ¶ 54.) Defendants’
`products are therefore likely to cause consumer confusion, leading consumers to
`believe that the infringing jeans are associated with Plaintiffs’ jeans. (Compl. ¶ 54.)
`III. LEGAL STANDARD
`Federal Rule of Civil Procedure 55(b) permits a court-ordered default judgment
`following the Clerk’s entry of default under Rule 55(a). Federal Rule of Civil
`Procedure 55(b) and Local Rule 55-1 require that applications for default judgment set
`forth (1) when and against what party the default was entered; (2) the identification of
`the pleadings to which the default was entered; (3) whether the defaulting party is an
`infant or incompetent person, and if so, whether that person is represented by a
`general guardian, committee, conservator, or other representative; (4) that the Service
`Member’s Relief Act does not apply; and (5) that notice has been served on the
`defaulting party, if required by Rule 55(b)(2).
`The district court is given discretion to decide whether to enter a default
`judgment. Aldabe v. Aldabe, 616 F.2d 1089, 1092 (9th Cir. 1980). Upon default, the
`defendant’s liability generally is conclusively established, and the well-pleaded factual
`allegations in the complaint—except those pertaining to damages—are accepted as
`true. Televideo Sys., Inc. v. Heidenthal, 826 F.2d 915, 917-19 (9th Cir. 1987) (per
`curiam) (citing Geddes v. United Fin. Group, 559 F.2d 557, 560 (9th Cir. 1977)).
`However, in exercising its discretion regarding entry of default, a court must consider
`several factors, including: (1) the possibility of prejudice to plaintiff; (2) the merits of
`plaintiff’s substantive claim; (2) the sufficiency of the complaint; (4) the sum of
`money at stake in the action; (5) the possibility of a dispute concerning material facts;
`(6) whether the defendant’s default was due to excusable neglect; and (7) the strong
`policy underlying the Federal Rules of Civil Procedure favoring decisions on the
`merits. Eitel v. McCool, 782 F.2d 1470, 1471–72 (9th Cir. 1986).
`/ / /
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`Case 2:12-cv-02759-ODW-CW Document 36 Filed 05/31/12 Page 4 of 12 Page ID #:436
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`IV. DISCUSSION
`Plaintiffs’ Motion for Default Judgment seeks judgment comprising a
`
`permanent injunction, $1,050,000 in statutory damages, $25,278.92 in attorney’s fees
`and costs, interest on the judgment, and seizure and impoundment of the infringing
`jeans. The Court considers each in turn.
`A.
`Liability
`
`Plaintiffs have satisfied the procedural requirements for default judgment
`pursuant to Federal Rule of Civil Procedure 55(a) and Local Rule 55-1. Specifically,
`Plaintiffs have established that (1) the clerk entered default against Defendants on
`April 25, 2012; (2) the default is based on Defendants’ failure to respond to Plaintiffs’
`Complaint served on March 30, 2012; (3) Defendants are neither infants nor
`incompetent persons; (4) Defendants are neither members of the U.S. Military nor
`otherwise exempted under the Soldiers’ and Sailors’ Civil Relief Act of 1940; and (5)
`Plaintiffs served Defendants with notice of their application for default judgment by
`delivering a copy of the Motion and all supporting documents to Defendants’ business
`addresses.
`The Court also finds that consideration of the Eitel factors weigh in favor of
`
`granting the motion. See Eitel, 782 F.2d at 1471–72 Specifically, Plaintiffs would
`suffer prejudice if default judgment is not entered because Plaintiffs “would be denied
`the right to judicial resolution of the claims presented, and would be without other
`recourse for recovery.” Electra Entm’t Grp., Inc. v. Crawford, 226 F.R.D. 388, 392
`(C.D. Cal. 2005). Further, because the “well-pled allegations in the complaint
`regarding liability are deemed true” upon entry of default, Fair Housing of Marin v.
`Combs, 285 F.3d 899, 906 (9th Cir. 2002), Plaintiffs have established the merits of
`their claims and the sufficiency of the Complaint. The sum of money is not
`disproportionately large because the damages awarded are governed by statute. See
`15 U.S.C § 1117(c)(2) (establishing under the Lanham Act a statutory limit of “not
`more than $2,000,000 for counterfeit mark per type of goods” if use of the counterfeit
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`Case 2:12-cv-02759-ODW-CW Document 36 Filed 05/31/12 Page 5 of 12 Page ID #:437
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`mark is willful); 17 U.S.C. § 504(c) (establishing under the Copyright Act a statutory
`limit of not more than $150,000 per Copyright infringed if the infringement is
`committed willfully). Finally, the Court finds that Defendants’ failure to answer or
`file a responsive pleading was not the result of excusable neglect because Defendants
`failed to respond despite repeated notice of this action and their infringing conduct.
`(ECF Nos. 9, 12, 14–17, 23–25, 32–34.)
`Accordingly, Plaintiffs’ Motion for Default Judgment is GRANTED as to
`
`liability for (1) copyright infringement in violation of 17 U.S.C. § 501; (2) trademark
`counterfeiting and trademark infringement in violation of 15 U.S.C. § 1114; (3)
`trademark infringement in violation of 15 U.S.C. § 1125(a); (4) common law
`trademark infringement and unfair competition; and (5) unfair competition in violation
`of California Business and Professions Code sections 17200 et seq.
`B.
`Injunctive Relief
`
`Plaintiffs seek permanent injunctive relief to prevent Defendants’ further
`infringement of its copyrights and trademarks. Both the Copyright Act and the
`Lanham Act authorize courts to grant permanent injunctions on reasonable terms to
`prevent future violations. 17 U.S.C. § 502(a); 15 U.S.C. § 1116. The Court concludes
`that Plaintiffs have demonstrated facts supporting the grant of a permanent injunction
`under eBay Inc. v. MercExchange, L.L.C., 547 U.S. 388, 391 (2006) (“A plaintiff must
`demonstrate: (1) that it has suffered an irreparable injury; (2) that remedies available
`at law, such as monetary damages, are inadequate to compensate for that injury; (3)
`that, considering the balance of hardships between the plaintiff and defendant, a
`remedy in equity is warranted; and (4) that the public interest would not be disserved
`by a permanent injunction.”).
`
`Plaintiffs adequately argue that absent injunctive relief, their businesses,
`goodwill, and reputation will be irreparably damaged. (Mot. 21.) This concern is
`particularly salient in light of the difficulty of fully remedying these intangible injuries
`with only a financial award. Considering the balance of hardships between Plaintiffs
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`Case 2:12-cv-02759-ODW-CW Document 36 Filed 05/31/12 Page 6 of 12 Page ID #:438
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`and Defendants, a remedy in equity is warranted—while Plaintiffs would suffer an
`irreparable injury without an injunction, the Court perceives no potential harm to
`Defendants, as an injunction would still allow Defendants to operate their businesses,
`albeit without the infringing jeans. See Cadence Design Sys., Inc. v. Avant! Corp.,
`125 F.3d 824, 830 (9th Cir. 1997) (“[A] defendant who knowingly infringes another’s
`copyright cannot complain of the harm that will befall it when properly forced to
`desist from its infringing activities.” (internal quotation marks omitted)).
`
`Injunctive relief serves the public interest by preventing confusion as to the
`validity of a product and in preventing the “misappropriation of the skills, creative
`energies, and resources which are invested in the protected work.” Apple Computer,
`Inc. v. Franklin Computer Corp., 714 F.2d 1240, 1255 (3rd Cir. 1983).
`
`Finally, the Court has reviewed the language Plaintiffs propose to be included
`in the injunction and is satisfied that it is narrowly tailored such that it prohibits only
`the continued sale of the infringing jeans. See Price v. City of Stockton, 390 F.3d
`1105, 1117 (9th Cir. 2004). The Court therefore GRANTS Plaintiffs’ request for a
`permanent injunction consistent with the language set forth on page 31 of Plaintiffs’
`Complaint.
`C.
`Statutory Damages
`
`Plaintiffs seek an award of statutory damages under 15 U.S.C § 1117(c) for
`Defendants’ violations of the Lanham Act and under 17 U.S.C § 504(c)(2) for
`Defendants’ violations of the Copyright Act.
`A plaintiff may elect statutory damages “regardless of the adequacy of the
`
`evidence offered as to his actual damages and the amount of the defendant’s profits.”
`Columbia Pictures Television, Inc. v. Krypton Broad. of Birmingham, Inc., 259 F.3d
`1186, 1194 (9th Cir. 2001) (quoting Melville B. Nimmer & David Nimmer, Nimmer
`on Copyright, § 14.04[A] (2000)). Courts have wide discretion in determining the
`amount of statutory damages to award, and are constrained only by the specific
`minimum and maximum. Peer Int’l Corp. v. Pausa Records, Inc., 909 F.2d 1332,
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`Case 2:12-cv-02759-ODW-CW Document 36 Filed 05/31/12 Page 7 of 12 Page ID #:439
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`1336 (9th Cir. 1990). In measuring damages, the Court is guided by “what is just in
`the particular case, considering the nature of the copyright, the circumstances of the
`infringement and the like.” Id. (quoting F.W. Woolworth Co. v. Contemporary Arts,
`Inc., 344 U.S. 228, 232 (1952)).
`1.
`Statutory Damages Under 15 U.S.C § 1117(c)
`
`
`Plaintiffs contend that Defendants violated the Lanham Act by willfully
`counterfeiting Sweet People’s Fabric Cut Out Design and MEK Denim’s M Design
`trademarks. Section 1117(c) permits an award in an amount up to $200,000.00 per
`counterfeit mark or up to $2,000,000.00 per counterfeit mark if the use of the mark
`was willful. The Court finds that Plaintiffs’ requested award of $300,000.00, or
`$150,000.00 per counterfeit mark, is a conservative award and appropriate under the
`circumstances in this case.
`
`Plaintiffs’ Motion and accompanying declarations clearly establish that
`Defendant’s infringement was willful. Further, the award is not a windfall, but rather
`bears a “plausible relationship” to the plaintiffs’ actual damages. See Beachbody, LLC
`v. Johannes, No. 11-1148PSG (RZx), 2011 WL 3565226, at *3 (C.D. Cal. Aug. 12,
`2011). Although the total extent of damages cannot be ascertained, as Defendants
`have failed to participate in this litigation, the effect of Defendants’ infringing conduct
`has been to siphon off sales from Plaintiffs’ popular lines of jeanswear products.
`(Compl. ¶ 5.) Given that Plaintiffs’ jeans retail for approximately $100 and that
`Plaintiffs’ sales of jeans have totaled tens of millions of dollars, (Compl. ¶¶ 40, 41),
`the Court finds that the statutory damages requested by Plaintiffs bear a “plausible
`relationship” to Defendants’ infringing activities and the profits Defendants may have
`realized from those activities. See Coach, Inc. v. Diana Fashion, No. 11-2315 SC,
`2011 WL 6182332, at *5 (N.D. Cal. Dec. 13, 2011) (slip copy).
`/ / /
`/ / /
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`Case 2:12-cv-02759-ODW-CW Document 36 Filed 05/31/12 Page 8 of 12 Page ID #:440
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`“Where, as here, a defendant is shown to have acted willfully, a statutory award
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`should incorporate not only a compensatory, but also a punitive component to
`discourage further wrongdoing by the defendants and others.” Malletier v. Carducci
`Leather Fashions, Inc., 648 F. Supp. 2d 501, 504 (S.D.N.Y. 2009); see Beachbody,
`LLC, 2011 WL 3565226, at *3 (requiring that statutory damage inquiries examine
`both compensatory and punitive considerations). An award of statutory damages not
`only “compels restitution of profit and reparation for injury but also is designed to
`discourage wrongful conduct.” F.W. Woolworth Co. 344 U.S. at 233.
`Therefore, the Court awards Plaintiffs $300,000.00 in statutory damages under
`
`15 U.S.C. § 1117(c).
`2. Statutory Damages Under 17 U.S.C. § 504(c)(2)
`
`
`Plaintiffs contend that Defendants violated the Copyright Act by willfully
`infringing on Plaintiffs’ copyrights. Under the Copyright Act, a copyright owner who
`sustains the burden of proving that the infringement was committed willfully may seek
`damages up to $150,000.00 per copyright violated. 17 U.S.C. § 504(c)(2). Plaintiffs
`claim that Defendants violated Sweet People’s copyrights for the Wing Design, Fleur
`de Lis Design, JP5117 Cross Wing Design, JP5335 Ivy Cross Design, and Wide M
`Design. Plaintiffs seek the statutory maximum ($150,000.00) for each of the five
`copyrights infringed.1
`
`The Court finds that Defendant’s actions were willful. Courts frequently infer
`willfulness where a defendant defaults. See Derek Andrew, Inc. v. Poof Apparel
`Corp., 528 F.3d 696, 702 (9th Cir. 2008) (“All factual allegations in the complaint are
`deemed true, including the allegation of [defendants’] willful infringement . . . .”);
`Autodesk, Inc. v. Flores, No. 10-CV-01917-LHK, 2011 WL 337836, at *8 (N.D. Cal.
`Jan 31, 2011) (slip copy) (“Willfulness may also be inferred or admitted based on a
`defendant’s failure to defend.”). In addition, Plaintiffs here have pleaded that
`Defendants were aware of Plaintiffs’ copyrights and “deliberately, knowingly and
`
`1 Total damages under 17 U.S.C. § 504(c)(2) come out to $750,000.00 ($150,000.00 x 5).
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`Case 2:12-cv-02759-ODW-CW Document 36 Filed 05/31/12 Page 9 of 12 Page ID #:441
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`faithfully replicated” the copyrights. (Compl. ¶ 54); see Peer Int’l Corp., 909 F.2d at
`1335-36 (requiring for willfulness to be established that the defendant actually be
`aware of or willfully blind to the infringing activity). Accordingly, Plaintiffs have
`adequately established that Defendants’ violations of Plaintiffs’ copyrights were
`willful.
`
`The Court finds that statutory damages of $150,000.00 is appropriate for each
`of the five copyrights infringed because the conduct at issue is particularly egregious.
`See Warner Bros. Entm’t, Inc. v. Caridi, 346 F.Supp. 1068, 1074 (C.D. Cal. 2004).
`Nearly all the products offered for sale on Defendants’ website consisted of
`infringements of Plaintiffs’ protected designs. Additionally, that Defendants infringed
`multiple copyrights owned by Plaintiffs supports a finding that the violations were
`egregious.
`
`The Supreme Court has stated that “[e]ven for uninjurious and unprofitable and
`unprofitable invasions of copyright the court may, if it deems it just impose a liability
`within [the] statutory limits to sanction and vindicate the statutory policy” of
`discouraging infringement. F.W. Woolworth Co., 344 U.S. at 233. Here, an award for
`the maximum statutory damage will serve the statutory policy of discouraging
`infringement by punishing the Defendants and deterring other copyright infringers
`from engaging in this illegal conduct.
`The Court awards Plaintiffs $750,000.00 in statutory damages under 17 U.S.C.
`
`§ 504(c)(2).
`D. Attorney’s Fees and Costs
`
`Plaintiffs seek an award of reasonable attorney’s fees and costs. The Lanham
`Act and the Copyright Act grant courts discretion to allow recovery of Plaintiffs’ full
`costs and to award reasonable attorney’s fees as part of Plaintiffs’ costs. Local Rule
`55-3 further provides that where a statute allows for the recovery of reasonable
`attorney’s fees, those fees shall be calculated according to the schedule provided
`under the Rule. C.D. Cal. L.R. 55-3. This schedule establishes that a reasonable
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`Case 2:12-cv-02759-ODW-CW Document 36 Filed 05/31/12 Page 10 of 12 Page ID #:442
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`attorney’s fee where the judgment is over $100,000.00 is equal to $5,600.00 plus 2%
`of the amount over $100,000.00. Id. As both the Lanham Act, 15 U.S.C. § 1117(a),
`and the Copyright Act, 17 U.S.C. § 505, allow for recovery of attorney’s fees for
`willful trademark counterfeiting and willful copyright infringement, respectively, the
`Court finds the application of Local Rule 55-3 to be proper. Calculated pursuant to
`Local Rule 55-3, Plaintiffs’ reasonable attorney’s fees in this case are $24,600.00.2
`
`Additionally, Plaintiffs may collect costs actually incurred in prosecuting this
`action. 15 U.S.C. § 1117(a); 17 U.S.C. § 505. Plaintiffs have clearly articulated the
`costs of bringing this action, and the Court awards $678.92.3
`The Court therefore GRANTS Plaintiffs’ request for attorney’s fees in the
`
`amount of $24,600.00 and costs in the amount of $678.92.
`E.
`Interest
`
`Plaintiffs seek post-judgment interest on the aggregate sum of statutory
`damages, attorney's fees, and costs awarded. “Interest shall be allowed on any money
`judgment in a civil case recovered in a district court.” 28 U.S.C. 1961(a).
`Accordingly, the Court shall award post-judgment interest, which will be calculated
`“at a rate equal to the weekly average 1-year constant maturity Treasury yield, as
`published by the Board of Governors of the Federal Reserve System, for the calendar
`week preceding the date of the judgment.” Id.
`The Court GRANTS an award of post-judgment interest.
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`/ / /
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`2 The Court arrives at $24,600.00 by adding $19,000.00 (2% of $950,000.00) to $5,600.00.
`3 The Court arrives at $678.92 by adding the fee for filing the complaint ($350.00) and the expenses
`associated with serving Defendants with the Complaint and default papers ($328.92).
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`Case 2:12-cv-02759-ODW-CW Document 36 Filed 05/31/12 Page 11 of 12 Page ID #:443
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`Seize and Impound
`F.
`
`Plaintiffs request the seizure of the counterfeit goods and the impoundment of
`the infringing copyrighted products. The Lanham Act permits a Court, “upon ex parte
`application,” to grant an order providing for the seizure of goods and counterfeit
`marks involved in the violation of the Lanham Act. 15 U.S.C. § 1116(d)(1)(A). But §
`1116 provides several safeguards to protect against wrongful seizure. Specifically, the
`Court may not entertain an application for seizure unless Plaintiffs demonstrate that
`they have provided the United States Attorney with reasonable notice of their
`application for an ex parte seizure order. 15 U.S.C. § 116(d)(2).
`
`In addition, the Court shall not grant an application unless “the person obtaining
`an order under this subsection provides that security determined adequate by the court
`for the payment of such damages as any person entitled to recover as a result of a
`wrongful seizure or wrongful attempted seizure.” 15 U.S.C. § 1116(d)(4)(A). Courts
`must also make findings of facts that indicate that an order of seizure is an appropriate
`remedy, including, inter alia, that the applicant has not publicized the requested
`seizure, and that if such seizure were publicized, the person against whom seizure
`would be ordered would destroy, move, or hide the materials to be seized. 15 U.S.C.
`§ 1116(d)(4)(B).
`
`With respect to their request for seizure and impoundment of the infringing
`products, Plaintiffs contend only that “in the Complaint, Plaintiffs requested that
`Defendants be required to deliver up for impoundment, seizure and destruction all
`infringing jeans.” (Mot. 25.) This is insufficient to meet the stringent demands of
`§ 1116(d). See Quidgeon v. Olsen, No. 10-CV-116, 2011 WL 98938, at *4 n.3 (C.D.
`Ill. Jan. 11, 2011). Accordingly, the Court DENIES Plaintiffs’ request for seizure and
`impoundment of the infringing products. Plaintiffs may file a renewed application
`addressing all necessary elements of § 1116(d) within 10 days; any later-filed requests
`will be denied.
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`Case 2:12-cv-02759-ODW-CW Document 36 Filed 05/31/12 Page 12 of 12 Page ID #:444
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`V. CONCLUSION
`For the foregoing reasons, the Court GRANTS Plaintiffs’ Motion for Default
`Judgment, issuance of a permanent injunction, statutory damages, attorney’s fees,
`costs, and post-judgment interest. A judgment will issue. Plaintiffs’ request for a writ
`of impound and seizure is DENIED.
`IT IS SO ORDERED.
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`May 31, 2012
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` ____________________________________
` HON. OTIS D. WRIGHT, II
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` UNITED STATES DISTRICT JUDGE
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`12

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