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explaining that service on a corporate defendant's registered agent was adequate
Summary of this case from Cooper Zietz Eng'rs v. The Akana Grp.Opinion
Case No. 3:19-cv-01587-YY
08-10-2020
DECKERS OUTDOOR CORPORATION, a Delaware corporation Plaintiff, v. PACIFIC HARBORS, LLC, an Oregon limited liability company; and DOES 1-10, inclusive, Defendants.
FINDINGS AND RECOMMENDATIONS :
FINDINGS
Plaintiff Deckers Outdoor Corporation ("Deckers") alleges claims for federal and common law trade dress infringement, unlawful trade practices, unfair competition, and design patent infringement. Defendant Pacific Harbors, LLC ("Pacific Harbors") failed to appear or answer the complaint, and this court issued an order of default on January 10, 2020. ECF #10. Before the court is Deckers' motion for entry of default judgment (ECF #13), which seeks only permanent injunctive relief. For the reasons that follow, Deckers' motion for entry of default judgment should be granted.
I. Subject Matter Jurisdiction
"Federal courts are courts of limited jurisdiction." Kokkonen v. Guardian Life Ins. Co. of Am., 511 U.S. 375, 377 (1994). "It is to be presumed that a cause lies outside this limited jurisdiction, . . . and the burden of establishing the contrary rests upon the party asserting jurisdiction." Id. "If the court determines at any time that it lacks subject-matter jurisdiction, the court must dismiss the action." FED. R. CIV. P. 12(h)(3); see also Fiedler v. Clark, 714 F.2d 77, 78-79 (9th Cir. 1983) (per curiam) (recognizing that the court may sua sponte dismiss an action if it finds that subject matter jurisdiction is lacking).
Here, the court has subject matter jurisdiction because the plaintiff's claim arises under federal law pursuant to 28 U.S.C. §§ 1331 and 1338.
II. Personal Jurisdiction
A district court "has an affirmative duty" to determine whether it has personal jurisdiction over a defendant before entering a default judgment. In re Tuli, 172 F.3d 707, 712 (9th Cir. 1999). "A judgment entered without personal jurisdiction over the parties is void." Id.
The Supreme Court has recognized two types of personal jurisdiction: general (or all-purpose) jurisdiction and specific (or conduct-linked) jurisdiction. Daimler AG v. Bauman, 571 U.S. 117, 126-28, 132 (2014). "With respect to a corporation, the place of incorporation and principal place of business are 'paradig[m] . . . bases for general jurisdiction.'" Id. at 137 (citation omitted) (alteration in original). "Those affiliations have the virtue of being unique—that is, each ordinarily indicates only one place—as well as easily ascertainable." Id. "These bases afford plaintiffs recourse to at least one clear and certain forum in which a corporate defendant may be sued on any and all claims." Id.
Here, Pacific Harbors is organized under Oregon law, and its principal place of business is in Beaverton, Oregon. Compl. ¶ 6, ECF #1. Accordingly, this court has general personal jurisdiction over Pacific Harbors.
III. Service of Process
Before entering a default judgment, the court must "assess the adequacy of the service of process on the party against whom default is requested." Bank of the West v. RMA Lumber Inc., No. C 07-06469 JSW, 2008 WL 2474650, at *2 (N.D. Cal. June 17, 2008) (citation omitted). "[I]n the absence of proper service of process, the district court has no power to render any judgment against the defendant's person or property unless the defendant has . . . waived the lack of process." S.E.C. v. Ross, 504 F.3d 1130, 1138-39 (9th Cir. 2007).
Plaintiff served the defendant with a true and correct copy of the summons and complaint to "Sen Shen, Registered Agent, who is designated by law to accept service of process on behalf of Pacific Harbors, LLC" on October 18, 2019. Aff. Service, ECF #7. Under Federal Rule of Civil Procedure 4(h)(1)(B), service may be made on a corporation by delivering a copy of the summons and complaint to an agent authorized by law to receive service of process. Thus, service of process on Pacific Harbors is adequate.
IV. Plaintiff's Claims
Deckers designs, markets, distributes, offers for sale, and sells footwear identified by its many famous trademarks, including the UGG trademark. Compl. ¶¶ 5, 9-12 ECF #1. In 2009, Deckers introduced the UGG Bailey Button boot, which features a nonfunctional, visually distinctive, unique trade dress ("Bailey trade dress"). Id. ¶ 21. That same year, the USPTO issued to Deckers U.S. Patent No. D599,999 ("'999 patent"), which covers the Bailey trade dress. Id. ¶ 56.
The complaint alleges that Pacific Harbors designs, markets, distributes, offers for sale, and sells footwear products named the "Barberry Button Bomber," which infringe Deckers' rights in the Bailey trade dress and the '999 patent. Deckers seeks permanent injunctive relief enjoining Pacific Harbors from manufacturing, distributing, advertising, offering for sale, or selling products featuring products with designs that infringe upon the Bailey trade dress and '999 patent. V. Eitel Analysis
Upon entry of default, the court must take the well-pleaded factual allegations of the complaint as true, except those relating to the amount of damages. Geddes v. United Fin. Grp., 559 F.2d 557, 560 (9th Cir. 1977); see Cripps v. Life Ins. Co. of N. Am., 980 F.2d 1261, 1267 (9th Cir. 1992) (holding that "necessary facts not contained in the pleadings, and claims which are legally insufficient, are not established by default"). However, "the district court's decision whether to enter a default judgment is a discretionary one." Aldabe v. Aldabe, 616 F.2d 1089, 1092 (9th Cir. 1980). In exercising its discretion, the court may consider the following factors:
(1) the possibility of prejudice to the plaintiff, (2) the merits of plaintiff's substantive claim, (3) 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 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) (citing 6 MOORE'S FEDERAL PRACTICE ¶ 55-05[2], at 55-24 to 55-26).
As discussed in detail below, the Eitel factors weigh strongly in favor of the court exercising its discretion to enter a default judgment.
A. Factor One: Possibility of Prejudice to Plaintiff
In assessing this factor, courts consider whether the plaintiff would be without recourse if the motion for default judgment is not granted. E.g., J & J Sports Prods., Inc. v. Cardoze, 2010 WL 2757106, at *5 (N.D. Cal. July 9, 2010); PepsiCo, Inc. v. California Sec. Cans, 238 F. Supp. 2d 1172, 1177 (C.D. Cal. 2002). Despite adequate service, Pacific Harbors has not appeared or answered the complaint. Currently, plaintiff has no recourse to obtain relief on its claims other than through this action. Failure to enter the default judgment would prejudice Deckers.
B. Factors Two and Three: Merits of Claims and Sufficiency of Complaint
Deckers alleges five claims against Pacific Harbors for introducing the accused products into the stream of commerce: trade dress infringement under the Lanham Act, 15 U.S.C. § 1125(a) (Claim One), trade dress infringement under Oregon common law (Claim Two), unlawful trade practices (Claim Three), unfair competition under Oregon common law (Claim Four), and design patent infringement under the Patent Act, 35 U.S.C. § 271(a) (Claim Five). As discussed below, plaintiff alleges enough facts to establish all but Claim Three.
1. Claims One, Two and Four: Trade Dress Infringement and Unfair Competition
Plaintiff has established federal and Oregon common-law claims for trade-dress infringement, and a claim for unfair competition. The court discusses these claims together because analysis of the common-law trade-dress infringement claim mirrors the claim under the Lanham Act. See Slep-Tone Entm't Corp. v. Grillhouse, Inc., 6:13-CV-02016-MC, 2015 WL 12880560, at *2 n.4 (D. Or. Jan. 30, 2015); Classic Instruments, Inc. v. VDO-Argo Instruments, Inc., 73 Or. App. 732, 734 (1985) (analyzing claim for common law trademark infringement within the Lanham Act's framework). And the "ultimate test" for unfair competition is "the same as for federal trademark infringement," but may "involve a broader range of inquiry." Adidas-Salomon AG v. Target Corp., 228 F. Supp. 2d 1192, 1201 (D. Or. 2002).
"[T]rade dress refers to the total image of a product and may include features such as size, shape, color, color combinations, texture or graphics." Disc Golf Ass'n, Inc. v. Champion Discs, Inc., 158 F.3d 1002, 1006 n.3 (9th Cir. 1998) (citation omitted). Once the trade dress is defined, the plaintiff must then establish that: (1) the trade dress design is nonfunctional, (2) the design is either inherently distinctive or has acquired distinctiveness through secondary meaning, and (3) there is a likelihood that the consuming public will confuse the accused products with plaintiff's products employing the trade dress. Id. at 823.
i. Functionality
"Trade dress protection extends only to design features that are nonfunctional." Clicks Billiards, Inc. v. Sixshooters, Inc., 251 F.3d 1252, 1258 (9th Cir. 2001). "A product feature is functional and cannot serve as a trademark if the product feature is essential to the use or purpose of the article or if it affects the cost or quality of the article, that is, if exclusive use of the feature would put competitors at a significant, non-reputation-related disadvantage." Qualitex Co. v. Jacobson Prods. Co., 514 U.S. 159, 165 (1995); accord 15 U.S.C. § 1125 (holding "the person who asserts trade dress protection has the burden of proving that the matter sought to be protected is not functional").
Here, the Bailey trade dress is not functional and consists of the following nonfunctional elements: (1) classic suede boot styling; (2) overlapping of front and rear panels on the lateral side of the boot shaft; (3) curved top edges on the overlapping panels; (4) exposed fleece-type lining edging that overlaps the panels and top of the boot; and (5) one or more buttons (depending on the height of the boot) prominently featured on the lateral side of the boot shaft adjacent to the overlapping panels, on the front panel of the boot. Compl. ¶ 21, ECF #1.
The design of the Bailey trade dress is neither essential to its use or purpose, nor affects the cost or quality of the boot. Id. ¶ 23. These features of the trade dress do not provide any cost advantages to the manufacturer, nor do they provide any utilitarian advantages to the consumer. Id. The features of the trade dress, in combination, serve only to render itself as distinct and recognizable as goods originating from Deckers' UGG brand. Id. Additionally, there are numerous other designs for boots available that are equally feasible and efficient, none of which necessitate copying or imitating the trade dress. Id. Therefore, plaintiff has shown that the Bailey trade dress is not functional.
ii. Distinctiveness
The Bailey trade dress has acquired distinctiveness through secondary meaning. A mark must be distinctive to be protectable. Wal-Mart Stores, Inc. v. Samara Bros., 529 U.S. 205, 211 (2000). Distinctiveness may be inherent or acquired if, "in the minds of the public, the primary significance of a mark is to identify the source of the product rather than the product itself." Id. (citation and alteration omitted).
"Secondary meaning can be established in many ways, including (but not limited to) direct consumer testimony; survey evidence; exclusivity, manner, and length of use of a mark; amount and manner of advertising; amount of sales and number of customers; established place in the market; and proof of intentional copying by . . . defendant." Filipino Yellow Pages, Inc. v. Asian J. Publ'ns, Inc., 198 F.3d 1143, 1151 (9th Cir. 1999).
Here, Deckers "has been engaged in the design, distribution, marketing, offering for sale, and sale of footwear since 1975." Compl ¶ 9, ECF #1. Deckers owns the UGG footwear brand, which it founded in 1979. Id. ¶ 10. From being featured on Oprah Winfrey's "Favorite Things" to being donned by certain celebrities, the use of UGG footwear has steadily grown across the globe. Id. The UGG brand has become highly coveted by consumers and, due to its overwhelming popularity, has achieved "luxury brand" status. Id. Plaintiff introduced the Bailey trade dress in 2009. Id. ¶ 21. Deckers has featured the Bailey trade dress in its advertising and promotional materials and various trade publications. Id. ¶¶ 24, 25. The trade dress, having achieved a high degree of consumer recognition, is one of the most well-recognized and commercially successful styles of UGG brand footwear. Id. Deckers has spent substantial time, effort, and money in designing, developing, promoting, and marketing both the UGG footwear brand and the line of footwear embodying the Bailey trade dress. Id. ¶ 26. Deckers spends millions of dollars annually on advertising UGG products, including the products bearing the Bailey trade dress, and it has sold hundreds of millions of dollars of such products. Id. ¶ 27.
Accordingly, due to its extended use, extensive sales, and significant advertising and promotional activities, the Bailey trade dress has achieved widespread acceptance and recognition among the consuming public and trade throughout the United States. Id. ¶ 28. Based on these uncontroverted allegations, which the court accepts as true, plaintiff has sufficiently demonstrated a mental recognition in buyers' and potential buyers' minds that the trade dress, part of the UGG footwear brand, is associated with Deckers' UGG brand. Therefore, plaintiff has shown that the Bailey trade dress has acquired distinctiveness through secondary meaning.
iii. Likelihood of Confusion
"Likelihood of confusion exists when customers viewing a mark would probably assume that the product or service it represents is associated with the source of a different product or service identified by a similar mark." Clicks Billiards, Inc., 251 F.3d at 1265 (citing Fuddruckers, Inc. v. Doc's B.R. Others, Inc., 826 F.2d 837, 845 (9th Cir. 1987)) (internal quotations marks and emphasis omitted). "The factual elements that make up likelihood of confusion include evidence of actual confusion, . . . defendant's intent in adopting the mark, similarity of marks, similarity of goods and marketing channels, and the strength of the mark." Park 'N Fly, Inc. v. Dollar Park and Fly, Inc., 782 F.2d 1508, 1509 (9th Cir. 1986).
These factors are not weighted evenly. Fuddruckers, Inc., 826 F.2d at 845. Evidence of actual confusion is persuasive proof that future confusion is likely. Id. A showing that the defendant intended to adopt the plaintiff's trade dress is also entitled to great weight because a defendant is presumed able to accomplish this purpose. Id. at 846.
Here, the accused products—which are produced, distributed, advertised, and offered for sale by Pacific Harbors—bear confusingly similar reproductions to the Bailey trade dress. Pacific Harbors' boot: (1) appears to made up of a suede styling that encompasses the entire boot; (2) has overlapping front and rear panels on the lateral side of the boot shaft; (3) has curved top edges on the overlapping panels; (4) has exposed fleece-like lining edging the overlapping panels and the top of the boot; and (5) has at least one button prominently featured on the lateral side of the boot shaft adjacent to the overlapping panels on the front panel of the boot. Compl. ¶ 21, ECF #1. Accordingly, the design features of defendant's accused products bear a striking similarity to that of plaintiff's trade dress.
Additionally, Pacific Harbors has introduced its accused products into the stream of commerce to exploit Deckers' reputation in the market established by its trade dress. Id. ¶ 16. Accordingly, Pacific Harbors' use and imitation of Deckers' trade dress is likely to result in consumer confusion and is likely to cause the public to believe that defendant's products are produced, sponsored, authorized, or licensed by or are otherwise connected or affiliated with Deckers, all to the detriment of Deckers. Therefore, Deckers has sufficiently demonstrated a likelihood of confusion among consumers.
In sum, Deckers has shown that the Bailey trade dress is nonfunctional and distinctive, and Pacific Harbors' use of the same or similar trade dress is likely to confuse consumers. Thus, Deckers has established claims for federal and Oregon common law trade dress infringement and common law unfair competition.
2. Claim Three: Unlawful Trade Practice Act
Deckers also asserts a claim under Oregon's Unlawful Trade Practices Act ("UTPA"), O.R.S. 646.604-.648. The UTPA protects consumers from a wide variety of unfair and dishonest business practices. Pearson v. Phillip Morris, Inc., 358 Or. 88, 115 (2015). Private persons may bring an action under the UTPA if they have suffered an "ascertainable loss of money or property, real or personal, as a result of another person's willful use or employment of a method, act or practice declared unlawful under ORS 646.608." O.R.S. 646.638(1). "To state a claim under the UTPA a plaintiff must allege: (1) a violation of O.R.S. § 646.608(1); (2) causation; (3) damages; and (4) willfulness." Colquitt v. Manufacturers & Traders Tr. Co., 144 F. Supp. 3d 1219, 1231 (D. Or. 2015). Section 646.608(1) has 79 subsections, many of which refer to other multitudinous provisions of the Oregon revised statutes. See O.R.S. 646.608(1)(a)-(aaaa).
Here, Deckers does not invoke any specific provision of O.R.S. 646.638(1) in its complaint and does not even mention the UTPA claim in its motion for entry of default judgment. Thus, Deckers has failed to establish its UTPA claim. It is well established that "claims which are legally insufficient, are not established by default." Cripps, 980 F.2d at 1267. However, as Deckers has met its burden of establishing the remaining claims, which provide more than an adequate basis for the requested relief, failure to establish the UTPA claim does not sway Eitel factors two and three.
3. Claim Five: Patent Infringement
Deckers has sufficiently alleged a claim for design patent infringement under the Patent Act, which provides in pertinent part, "Except as otherwise provided in this title, whoever without authority makes, uses, offers to sell, or sells any patented invention, within the United States or imports into the United States any patented invention during the term of the patent therefor, infringes the patent." 35 U.S.C. § 271(a); id. § 171 (covering design patents). "A patentable design 'gives a peculiar or distinctive appearance to the manufacture, or article to which it may be applied, or to which it gives form.'" Samsung Electronics Co. v. Apple Inc., 137 S.Ct. 429, 432 (2016) (quoting Gorham Co. v. White, 14 Wall. 511, 525, 20 L.Ed. 731 (1872)). The term "article of manufacture" encompasses both "a product sold to a consumer as well as a component of that product." Id. at 435.
The "ordinary observer" test is the sole test for determining whether a design patent has been infringed. Egyptian Goddess, Inc. v. Swisa, Inc., 543 F.3d 665, 678 (Fed. Cir. 2008). Under this test, "an accused product infringes a design patent if 'in the eye of an ordinary observer . . . two designs are substantially the same,' such that 'the resemblance is such as to deceive such an observer, inducing him to purchase one supposing it to be the other. . . ." Curver Luxembourg, SARL v. Home Expressions Inc., 938 F.3d 1334, 1338 (Fed. Cir. 2019) (quoting Gorham Co., 14 Wall. at 528). The fact-finder must "compare similarities in overall designs, not similarities of ornamental features in isolation." Lanard Toys Ltd. v. Dolgencorp LLC, 958 F.3d 1337, 1343 (Fed. Cir. 2020) (citation and alteration omitted). Moreover, the ordinary observer is considered to be familiar with prior art designs, and "[w]hen the differences between the claimed and accused designs are viewed in light of the prior art, the attention of the hypothetical ordinary observer may be drawn to those aspects of the claimed design that differ from the prior art." Crocs, Inc. v. Int'l Trade Comm'n, 598 F.3d 1294, 1303 (Fed. Cir. 2010).
Here, Deckers has sufficiently alleged that an ordinary observer would find the design of the accused products is substantially the same as the design described by the '999 patent. Compl. ¶¶ 56-65, ECF #1; U.S. Patent No. D599,999 (describing ornamental design for a portion of a footwear upper as shown and described in figures 1 through 7). Deckers has established a claim for patent infringement.
In sum, both the merits of Deckers' substantive claim and the sufficiency of the complaint weigh toward entry of the default judgment.
C. Factor Four: Sum of Money at Stake
Under the fourth Eitel factor, "the court must consider the amount of money at stake in relation to the seriousness of [d]efendant's conduct." PepsiCo, 238 F.Supp.2d at 1176-77; see also J&J Sports Productions, Inc. v. Cardoze, 2010 WL 2757106, at *5 (N.D. Cal. July, 2010) ("a large sum of money at stake would disfavor default damages," such as a request for $114,200 in damages); Board of Trustees of the Sheet Metal Workers v. Vigil, 2007 WL 3239281, at *2 (N.D. Cal. Nov. 1, 2007) ("[D]efault judgment is disfavored if there were a large sum of money involved").
Deckers sought both money damages and injunctive relief in its complaint. However, Deckers represents that "because Defendant has not participated in any discovery in this matter, Deckers does not have knowledge of the amount of Accused Products distributed by Defendant." Pl.'s Mot. Entry Default J. 9, ECF #13. As Deckers seeks only permanent injunctive relief in its motion for default judgment, no sum of money is at stake.
D. Factor Five: Possibility of Dispute Over Material Facts
In addressing the fifth factor, the court considers the possibility that there is a dispute concerning material facts. As mentioned above, "[u]pon entry of default, all well-pleaded facts in the complaint are taken as true, except those relating to damages." PepsiCo, 238 F.Supp.2d at 1177. Thus, "[t]he fifth factor . . . weighs in favor of default judgment when the claims in the complaint are well-pleaded." Joe Hand Prods. v. Holmes, 2015 WL 5144297, at *7 (D. Or. Aug. 31, 2015). Otherwise stated, "[b]ecause all allegations in a well-pleaded complaint are taken as true after the court clerk enters default judgment, there is no likelihood that any genuine issue of material fact exists." Elektra Entm't Grp., Inc. v. Crawford, 226 F.R.D. 388, 393 (C.D. Cal. 2005).
Here, Deckers' has sufficiently established its trade dress infringement, unfair competition, and patent infringement claims through its well-pleaded complaint. Taking these allegations as true, they leave no room for the possibility of a dispute over material facts.
E. Factor Six: Excusable Neglect
The sixth factor pertains to the possibility that the default resulted from excusable neglect. Here, Deckers served Pacific Harbors with the summons and complaint on October 18, 2019, and written notice of the motion for entry of default on February 21, 2020, pursuant to Federal Rule of Civil Procedure 55(b)(2). Decl. Brent Blakely ¶¶ 4,8, ECF #13-1. Pacific Harbors' registered agent responded by email to Deckers' counsel admitting the sale of 71 accused products. Blakely Decl., Ex. A, at 3, ECF #11-1. The agent claimed that the "boots are very different," he already ceased to offer for sale any accused products, he had moved to China, and he could not afford a lawyer. Id. There is no indication of excusable neglect.
F. Factor Seven: Policy Favoring Decision on the Merits
Factor seven is "the strong policy underlying the Federal Rules of Civil Procedure favoring decisions on the merits," specifically the policy that "[c]ases should be decided upon their merits whenever reasonably possible." Eitel, 782 F.2d at 1472. However, "this policy, standing alone, is not dispositive, especially where a defendant fails to appear or defend itself in an action." Joe Hand Promotions, Inc. v. Machuca, 2014 WL 1330749, at *6 (E.D. Cal. Mar. 31, 2014); see also PepsiCo, 238 F.Supp.2d at 1177 (noting that the mere existence of Rule 55(b) indicates that this preference, standing alone, is not dispositive). Where a defendant fails to answer a complaint, it "makes a decision on the merits impractical, if not impossible." Pepsi Co., 238 F. Supp. 2d at 1177. Under those circumstances, Rule 55(a) allows for a default judgment. Id. "Thus, the preference to decide cases on the merits does not preclude a court from granting default judgment." Id. (internal quotation omitted).
Here, a decision on the merits is impossible because Pacific Harbors has failed to appear, plead, or defend this action. Additionally, all of the other factors weigh in favor of a default judgment. Therefore, the seventh factor is not dispositive and does not preclude the court from entering a default judgment against Pacific Harbors.
VI. Permanent Injunctive Relief
Injunctive relief is available under the Patent Act, 35 U.S.C. § 283, the Lanham Act, 15 U.S.C. § 1116, and Decker's analogous state law claims. O.R.S. 647.105; O.R.S. 647.095. "[T]he decision whether to grant or deny injunctive relief rests within the equitable discretion of the district courts, and that such discretion must be exercised consistent with traditional principles of equity, in patent disputes no less than in other cases governed by such standards." eBay Inc. v. MercExchange, L.L.C., 547 U.S. 388, 394 (2006); accord Pepsico, 238 F. Supp. 2d at 1177 ("The Lanham Act gives the court 'power to grant injunctions according to the rules of equity and upon such terms as the court may deem reasonable, to prevent the violation' of a mark holder's rights."). To obtain a permanent injunction, 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." eBay Inc., 547 U.S. at 391 (applying standard four-part test for permanent injunctions "to disputes arising under the Patent Act").
Deckers has suffered irreparable harm to the Bailey trade dress and the design covered by the '999 patent, and will likely continue to suffer irreparable harm absent injunctive relief. See Chanel Inc. v. Lin, 2010 WL 2557503, *11 (N.D. Cal. 2010) (finding likelihood of confusion gave rise to a presumption that plaintiff would suffer irreparable harm to its mark if injunctive relief was not granted). Indeed, Pacific Harbors has ignored the present lawsuit and may continue its infringing activities. Pacific Harbors' failure to submit to the judicial process has put the possibility of money damages out of reach because it thwarted Deckers' ability to discover the extent of those damages.
Considering the balance of hardships, a remedy in equity is warranted. Deckers will suffer irreparable injury without an injunction; however, there would be no potential harm to Pacific Harbors, as an injunction would still allow it to operate its business, albeit without the products at issue. 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). Finally, 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).
As such, Deckers is entitled to a permanent injunction against Pacific Harbors to enjoin it from further infringement of the UGG Bailey Button Trade Dress, the '999 Patent, and from unfairly competing with Plaintiff.
RECOMMENDATIONS
Plaintiff's motion for entry of default judgment (ECF #13) should be GRANTED as to the claims for federal and common law trade dress infringement, unfair competition, and design patent infringement (claims one, two, four, and five), and DENIED as to the claim for unlawful trade practices (claim three). It further should be ordered that:
Pacific Harbors, its officers, agents, servants, and employees, and any persons in active concert or participation with them are permanently restrained and enjoined from infringing upon Plaintiff's UGG® Bailey Button Trade Dress and U.S. Patent No. D599,999 (issued on September 15, 2009), either directly or contributorily in any manner, including:
(a) Manufacturing, importing, advertising, marketing, promoting, supplying, distributing, offering for sale, and/or selling the Accused Products (shown below) and/or products that infringe upon the UGG® Bailey Button Trade Dress and/or U.S. Patent No. D599,999;
Image materials not available for display.
Defendant's Accused Product
(b) Committing any other act that falsely represents or that has the effect of falsely representing that the good and services of Defendant are licensed by authorized by, offered by, produced by, sponsored by, or in any way associated with Plaintiff;
(c) Knowingly assisting, aiding or attempting to assist or aid any other person or entity in performing any of the prohibited activities referred to in paragraphs (a) and (b) above.
SCHEDULING ORDER
These Findings and Recommendations will be referred to a district judge. Objections, if any, are due August 24, 2020. If no objections are filed, then the Findings and Recommendations will go under advisement on that date.
If objections are filed, then a response is due within 14 days after being served with a copy of the objections. When the response is due or filed, whichever date is earlier, the Findings and Recommendations will go under advisement.
NOTICE
These Findings and Recommendations are not an order that is immediately appealable to the Ninth Circuit Court of Appeals. Any Notice of Appeal pursuant to Rule 4(a)(1), Federal Rules of Appellate Procedure, should not be filed until entry of a judgment.
DATED August 10, 2020.
/s/ Youlee Yim You
Youlee Yim You
United States Magistrate Judge