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finding an intentional act where trademark infringing products were delivered to a reseller in California with the intent to have those products sold in California
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No. C 08-03437 WHA.
October 22, 2009
ORDER GRANTING PLAINTIFF'S MOTION FOR DEFAULT JUDGMENT AND PERMANENT INJUNCTION AGAINST DEFENDANT YONGFENG FURNITURE CO., LTD.
INTRODUCTION
In this trademark infringement action, plaintiff Herman Miller, Inc., moves for default judgment, permanent injunction, statutory damages, and attorney's fees and costs. For the following reasons, the motion is GRANTED.
STATEMENT
The following facts are alleged by plaintiff. Plaintiff is a manufacturer of office and home furniture. Plaintiff has used the names "Eames," "Charles Eames," and "Ray Eames" in connection with its furniture since 1951 due to a long-time working relationship between plaintiff and designers Charles and Ray Eames. On January 26, 1982, the United States Patent and Trademark Office issued plaintiff Registration No. 1,187,673 for the EAMES® trademark.In 1956, Charles and Ray Eames designed the EAMES® Lounge Chair and Ottoman. Plaintiff now also owns Trademark Registration No. 2,716,843, which provides plaintiff with the exclusive right to use the EAMES® Lounge Chair and Ottoman design in connection with its furniture. Since the chair was developed in 1956, plaintiff has advertised and sold over 100,000 EAMES® Lounge Chairs and Ottomans under the Herman Miller name. Plaintiff claims that the design of this chair is unique and distinctive. After many years of advertising and selling furniture in connection with these trademarks, plaintiff has developed a reputation for manufacturing and marketing EAMES® contemporary furniture products.
Defendant Yongfeng Furniture Co. Ltd. is located in China, but manufactures and exports furniture to co-defendant Alphaville Design, Inc., a Delaware corporation with its principle place of business in California. Plaintiff alleges that Yongfeng manufactures counterfeit EAMES® Lounge Chairs and Ottomans in China and transports these chairs to retailers for sale in the United States. These counterfeit chairs are "identical with, or substantially indistinguishable from" plaintiff's registered EAMES® Lounge Chair and Ottoman. Yongfeng also advertises these counterfeit chairs as the "Charles Eames Chair and Ottoman Set."
Plaintiff filed a complaint on July 16, 2008 (Dkt. No. 1). At that time, plaintiff did not know the identity of defendant Yongfeng Furniture Co. Ltd. and instead named this defendant as "Unknown China Company." During the initial pre-trial conference on October 30, 2008, this Court ordered co-defendant Alphaville to disclose the name of the Unknown China Company to plaintiff to allow plaintiff to properly amend the complaint (Dkt. No. 46 at 6-9). On that same day, Alphaville filed a supplemental initial disclosure identifying Yongfeng Furniture Co., Ltd., as the Unknown China Company (Dkt. No. 74 Exh. 19).
Plaintiff filed the first amended complaint on January 23, 2009 (Dkt. No. 65). It alleges claims against defendant Yongfeng Furniture Co., Ltd. for:
1. Trade dress infringement and unfair competition regarding the EAMES® Lounge Chair and Ottoman under 15 U.S.C. 1114(1) and 1125(a), California Business and Professions Code 17200 et seq., and California common law; and
2. Trademark infringement and unfair competition regarding the EAMES® trademark under 15 U.S.C. 1114(1) and 1125(a), California Business and Professions Code 17200 et seq., and California common law.
In early 2009, plaintiff sent the summons (Dkt. No. 66) and first amended complaint, with appropriate translations thereof, and a request for service abroad of judicial or extrajudicial documents (Dkt. No. 69) to the Chinese Central Authority for service upon defendant Yongfeng. On April 14, 2009, the Chinese Central Authority personally served the above-mentioned documents upon Yongfeng at the contact address listed on Yongfeng's website ( see Dkt. Nos. 66, 74). A certificate, completed and signed by the Chinese Central Authority attesting that Yongfeng was served in conformity with the Hague Convention, and an attached proof of service were filed (Dkt. No. 69).
Yongfeng did not respond. Plaintiff applied for entry of default against Yongfeng on June 12, 2009 (Dkt. No. 70). The clerk entered default on June 29, 2009 (Dkt. No. 72). Plaintiff filed the present motion for entry of default judgment and permanent injunction against Yongfeng on September 11, 2009 (Dkt. No. 73). An order dated September 24, 2009, requested that plaintiff submit materials to show that the Court has personal jurisdiction over Yongfeng and that Yongfeng was properly served in accordance with the Hague Convention, federal law, and/or state law (Dkt. No. 76). On October 1, 2009, plaintiff filed the requested submissions (Dkt. Nos. 77-78).
ANALYSIS
1. PERSONAL JURISDICTION.
In order to grant default judgment, this Court must have personal jurisdiction over the defendant. Defendant Yongfeng is a foreign corporation residing in China — a non-resident of the forum state. In the Ninth Circuit:
Personal jurisdiction over a nonresident defendant is tested by a two-part analysis. First, the exercise of jurisdiction must satisfy the requirements of the applicable state long-arm statute. Second, the exercise of jurisdiction must comport with federal due process. Because California's long-arm statute is coextensive with the limits of due process, the court need only consider the requirements of due process.Bauman v. DaimlerChrysler Corp., No. 07-15386, 2009 U.S. App. LEXIS 19360, at *8-9 (9th Cir. Aug. 28, 2009) (internal quotation marks and citations omitted).
Personal jurisdiction may be either general or specific to the allegations in the complaint. See Schwarzenegger v. Fred Martin Motor Co., 374 F.3d 797, 801-02 (9th Cir. 2004). Plaintiff claims that this Court has specific jurisdiction over Yongfeng (see Dkt. No. 77). The Ninth Circuit applies a three-element test for analyzing claims of specific jurisdiction:
(1) The non-resident defendant must purposefully direct his activities or consummate some transaction with the forum or resident thereof; or perform some act by which he purposefully avails himself of the privilege of conducting activities in the forum, thereby invoking the benefits and protections of its laws;
(2) The claim must be one which arises out of or relates to the defendant's forum-related activities; and
(3) The exercise of jurisdiction must comport with fair play and substantial justice, i.e., it must be reasonable.Id. at 802.
A. Purposeful Direction and Availment.
The first element "includes both purposeful availment and purposeful direction. It may be satisfied by purposeful availment of the privilege of doing business in the forum; by purposeful direction of activities at the forum; or by some combination thereof." Yahoo! Inc. v. La Ligue Contre Le Racisme Et. L'Antisemitisme, 433 F.3d 1199, 1206 (9th Cir. 2006). "Evidence of availment is typically action taking place in the forum that invokes the benefits and protections of the laws in the forum. Evidence of direction generally consists of action taking place outside the forum that is directed at the forum." Pebble Beach Co. v. Caddy, 453 F.3d 1151, 1155 (9th Cir. 2006).
Here, plaintiff argues that defendant Yongfeng purposefully directed activities at the forum by distributing counterfeit furniture to a company in California to facilitate the sale of such furniture in California. See id. at 1155-56 ("[E]vidence of purposeful direction includes activities such as distribution and advertising"). In purposeful direction cases, courts normally employ the "effects test" of Calder v. Jones, 465 U.S. 783 (1984). The Ninth Circuit construes Calder as imposing three requirements: "The defendant allegedly [must] have (1) committed an intentional act, (2) expressly aimed at the forum state, (3) causing harm that the defendant knows is likely to be suffered in the forum state." Yahoo! Inc., 433 F.3d at 1207.
The following facts support the contention that Yongfeng committed an intentional act that was expressly aimed at the forum state, thereby fulfilling prongs one and two of the "effects test." First, Yongfeng delivered counterfeit chairs under the EAMES® name to a company in California. Second, Yongfeng intended for the resale of the counterfeit chairs in California. Third, Yongfeng's website states that it manufactures exclusively for export, with North America being a main export market.
The third prong of the "effects test" — causing harm that defendant knows is likely to be suffered in the forum state — is also met as to Yongfeng because plaintiff's alleged harms of suffering a loss of goodwill and lost profits occurred in California due to sales of the counterfeit furniture in California, as defendant presumably knew they would be. Accordingly, all prongs of the "effects test" are satisfied.
B. Connection to Forum-Related Activities.
As to the second element of the specific jurisdiction test, plaintiff must show that its claims arise out of or relate to defendant Yongfeng's forum-related activities. In making this determination, the Ninth Circuit inquires whether plaintiff would have been injured but for defendant's conduct directed toward the forum state. Ballard v. Savage, 65 F.3d 1495, 1500 (9th Cir. 1995); Thomas Weisel Partners LLC v. BNP Paribas, et al., No. C 07-6198 MHP, 2008 U.S. Dist. LEXIS 65936, at *20 (N.D. Cal. Aug. 26, 2008) (Patel, J.).
There is no doubt that plaintiff's claims arise from Yongfeng's forum-related activities. Indeed, plaintiff's claim stems from Yongfeng's distribution of counterfeit furniture to a California-based company for sale in California. Additionally, but for Yongfeng's conduct in infringing plaintiff's trademarks, the alleged harm to plaintiff would not have occurred. In sum, this element is satisfied.
C. Reasonableness.
Because plaintiff has satisfied its burden under the first two elements of the specific jurisdiction test, the burden now shifts to defendants to "'present a compelling case' that the exercise of jurisdiction would not be reasonable." Schwarzenegger, 374 F.3d at 802 (quoting Burger King Corp. v. Rudzewicz, 471 U.S. 462, 476-78 (1985)). Here, Yongfeng has failed to plead or otherwise defend; consequently, no compelling reasons have been presented as to why the exercise of jurisdiction over Yongfeng would be unreasonable. Presumably, had Yongfeng filed a responsive pleading or otherwise appeared in this case, Yongfeng might have emphasized a lack of geographic connection to the United States. Regardless, any such concerns would be insufficient to render jurisdiction unreasonable. If the reasonableness inquiry were dictated by the extent of a defendant's geographic ties to the forum alone, the purposeful availment and purposeful direction inquiries would be meaningless.
Although the burden on the defendant is a relevant factor, the other fairness and reasonableness factors weigh in favor of finding that such an exercise of jurisdiction is reasonable, including the forum state's interest in adjudicating the dispute, plaintiff's interest in obtaining convenient and effective relief, judicial efficiency, and the shared interest of states "in furthering fundamental substantive social policies." Burger King Corp., 471 U.S. at 476-77. Plaintiff certainly has a strong interest in obtaining effective and efficient relief. Likewise, the forum state has an interest in adjudicating this dispute as the parties are conducting business in the forum and a decision now will prevent future suits over similar conduct thereby serving judicial efficiency. Finally, preventing the continued infringement of trademarks is certainly a substantive policy.
In sum, the three-element test for analyzing claims of specific jurisdiction is satisfied. Accordingly, personal jurisdiction over defendant Yongfeng is proper.
2. SERVICE OF PROCESS.
Federal Rule of Civil Procedure 4 governs service of process in federal court. Rule 4(h)(2) authorizes service on a foreign corporation outside of the United States "in any manner prescribed for individuals by subdivision [4](f) except personal delivery as provided in paragraph (2)(C)(i) thereof," unless a waiver of service has been obtained and filed. In the present case, no waiver of service was obtained. Rule 4(f) authorizes, inter alia, service by the methods prescribed in the Hague Convention on the Service Abroad of Judicial and Extrajudicial Documents in Civil or Commercial Matters, Nov. 15, 1965, 20 U.S.T. 361, 658 U.N.T.S. 163 (hereinafter the Hague Convention).
The Hague Convention governs service on persons in foreign countries that are parties to the Convention. Indeed, "[c]ompliance with the Convention is mandatory in all cases to which it applies." Volkswagenwerk Aktiengesellschaft v. Schlunk, 486 U.S. 694, 705 (1988). Both China and the United States are parties to the Hague Convention. See The Hague Conference on Private International Law website, "Status Table of the Service Convention," 1951-2009, available at www.hcch.net (last visited Oct. 8, 2009). Under the Hague Convention:
Requests for service must conform to a model form attached to the Hague Convention. The Hague Convention, art. 3, . . . The form, as well as all relevant documents, should be sent "by the judicial officer of authority in the state in which the documents originate to the designated central authority of the country in which the recipient is located." Cipolla v. Picard Porsche Audi, Inc., 496 A.2d 130, 131-132 (R.I. 1985); see The Hague Convention, art. 4 . . . "Once a central authority receives a request in the proper form, it must serve the documents by a method prescribed by the internal law of the receiving state or by a method designated by the requester and compatible with that law. The central authority must then provide a certificate of service that conforms to a specific model." Schlunk, 486 U.S. at 698; see The Hague Convention arts. 5-6 . . . [T]he Hague Convention ensures that proper service upon foreign defendants will be effected in accordance with Rule 4(h)(2).Nuance Communications, Inc. v. Abbyy Software House, No. C 08-02912 JSW, 2009 U.S. Dist. LEXIS 75583, at * 10-11 (N.D. Cal. Aug. 25, 2009) (White, J.).
As explained in plaintiff's submissions in response to the order concerning personal jurisdiction and service (Dkt. Nos. 77-78), plaintiff has complied with these requirements. Plaintiff's request form for service, as well as all relevant documents, were sent to the Chinese Central Authority for personal service upon Yongfeng. Upon receipt of these documents, the Central Authority then served Yongfeng and returned the certificate of service to plaintiff, pursuant to the Hague Convention. Indeed, the "Central Authority's return of a completed certificate of service is prima facie evidence that the Authority's service . . . was made in compliance with [the foreign nation's] law." Northrup King Co. v. Compania Productora Semillas Algodoneras Selectas, S.A., 51 F.3d 1383, 1390 (8th Cir. 1995); see also Brockmeyer v. Marquis Publications, Ltd., 383 F.43d 798, 804 (9th Cir. 2004) ("The Hague Convention affirmatively authorizes service of process through the Central Authority of a receiving state"). Defendant Yongfeng was, therefore, properly served with the first amended complaint in accordance with the requirements of due process.
3. DEFAULT JUDGMENT.
Under FRCP 55(b)(2), a party can apply to the court for entry of judgment by default. "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 determining whether default judgment is appropriate, the following factors are considered:
(1) [T]he possibility of prejudice to 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 the 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). For the following reasons, these factors favor entry of default judgment against defendant Yongfeng.
A. Merits of Substantive Claims and Sufficiency of the Complaint.
After the entry of default, all well-pleaded factual allegations in the complaint are taken as true, except as to the amount of damages. Fair Housing of Marin v. Combs, 285 F.3d 899, 906 (9th Cir. 2002). The merits of plaintiff's substantive claims and the sufficiency of the complaint are thus considered together.
At the outset, this order notes that plaintiff's certificates of trademark registration regarding the EAMES® name and the EAMES® Lounge Chair and Ottoman are "prima facie evidence of the validity of the mark[s] and . . . shifts the burden of proof to the contesting party, who must introduce sufficient evidence to rebut the presumption of the holder's right to protected use." Qualitex Co. v. Jacobson Products Co., Inc., 13 F.3d 1297, 1301 (9th Cir. 1994), overruled on other grounds by Qualitex Co. v. Jacobson Products Co., Inc., 514 U.S. 159 (1995).
Plaintiff claims that defendant Yongfeng is liable for trademark infringement, trade dress infringement, and unfair competition based on Yongfeng's use of the EAMES® trademark and counterfeit manufacture and distribution of the EAMES® Lounge Chair and Ottoman in violation of 15 U.S.C. 1114(1) and 1125(a), California Business and Professions Code 17200 et seq., and California common law. Because plaintiff holds registered trademarks on both the EAMES® name and the EAMES® Lounge Chair and Ottoman, the elements that plaintiff must meet to state a claim are the same as to all of plaintiff's federal and state law claims. These elements are as follows: (1) defendant must have used the protected trademark "in commerce," and (2) that use must be likely to confuse or misrepresent to consumers the characteristics of goods or services. Karl Storz Endoscopy-America, Inc. v. Surgical Technologies, Inc., 185 F.3d 848, 853-54 (9th Cir. 2002).
See Jada Toys, Inc. v. Mattel, Inc., 518 F.3d 628, 631-32 (9th Cir. 2007) (federal claims under 15 U.S.C. 1114(1) and 1125(a) and state law claims for unfair competition under California Business and Professions Code 17200 and California common law are all subject to the same test); E.S.S. Entertainment 2000, Inc. v. Rock Star Videos, Inc., 547 F.3d 1095, 1098 n. 1 (9th Cir. 2008) (trade dress infringement and trademark infringement claims under Section 1125(a) follow the same analysis); Two Pesos, Inc. v. Taco Cabana, Inc., 505 U.S. 763, 768 (1992) (Section 1125(a) prohibits a broader range of practices than Section 1114(1), which requires a registered trademark, and thereby encompasses Section 1114(1) claims).
Under 15 U.S.C. 1127, "a mark is 'used in commerce' when (1) the mark has been placed on the goods or their containers, labels or the documents associated with the goods or their sale, and (2) the goods are sold or transported in commerce." Karl Storz Endoscopy-America, 185 F.3d at 855 (internal quotation marks omitted). Plaintiff's complaint sufficiently states that defendant used the EAMES® name and counterfeit EAMES® furniture "in commerce" because the EAMES® name was placed on furniture that was near identical to the design of the EAMES® Lounge Chair and Ottoman, and such counterfeit furniture was then advertised, sold, and transported in commerce by defendant. Thus, this element is satisfied.
The second element is "[t]he core element . . ., i.e., whether the similarity of the marks is likely to confuse customers about the source of the products." The Freecycle Network, Inc. v. Oey, 505 F.3d 898, 902 (9th Cir. 2007) (internal quotation marks and citations omitted). The Ninth Circuit considers the following eight factors as relevant to determining whether there is a likelihood of confusion:
(1) [S]trength of the mark; (2) proximity of the goods; (3) similarity of the marks; (4) evidence of actual confusion; (5) marketing channels used; (6) type of goods and the degree of care likely to be exercised by the purchaser; (7) defendant's intent in selecting the mark; and (8) likelihood of expansion of the product lines.Id. at 903 n. 5. Although not all elements must be satisfied, the complaint states sufficient facts to fulfill each element.
First, the mark is strong due to plaintiff's use of the EAMES® name in connection with its furniture since at least 1951 and "industry-wide reputation" associated with the mark (First Amd. Compl. 4). Second, Yongfeng's counterfeit furniture is in close-proximity to plaintiff's because it is exported for sale in the United States (id. at 5). Third, the marks are substantially similar because "Yongfeng's knockoff furniture is identical with, or substantially indistinguishable from" plaintiff's design (id. at 6). Fourth, "evidence that the defendant intentionally copied the plaintiff's mark" is "persuasive proof that future confusion is likely" because "a defendant is presumed able to accomplish this purpose." Kendall-Jackson Winery, 150 F.3d at 1048. That the counterfeit furniture is identical to, or substantially indistinguishable from, the Herman Miller furniture and labeled with the EAMES® name is sufficient to show that Yongfeng intentionally copied plaintiff's marks — actual confusion is therefore presumed. Fifth, there is similarity in marketing channels because of the close proximity of the goods and Yongfeng's advertising to United States customers (id. at 5-6). Sixth, consumers are not likely to be particularly diligent in researching the actual manufacturer of the chair prior to purchasing given the familiarity of the EAMES® name in the United States. Seventh, the substantial similarity between the products demonstrates that Yongfeng's intent in selecting the EAMES® mark was most likely for reasons of profit at the expense of plaintiff. Eighth, given that Yongfeng was bold enough to use the EAMES® name on substantially identical furniture, there is no reason why Yongfeng would not attempt to expand the product line of counterfeit EAMES® furniture in the future.
In sum, all factors militate in favor of a strong likelihood of consumer confusion, and the complaint sufficiently states claims for trademark infringement, trade dress infringement, and unfair competition under 15 U.S.C. 1114(1) and 1125(a), California Business and Professions Code 17200 et seq., and California common law against defendant Yongfeng. B. Remainder of the Eitel Factors.
The remainder of the Eitel factors favor entering default judgment in favor of plaintiff. If this motion is not granted, plaintiff will be left without a remedy or a means to prevent Yongfeng's continued infringement. Yongfeng never answered or otherwise responded to the complaint, so it is unclear whether there would be any dispute over material facts. Trademark and trade dress infringement are both strict liability claims, thereby limiting the scope of factual disputes. In general, the fact that a large sum of money is at stake disfavors default judgment. See Eitel, 782 F.2d at 1472 (stating that a three million dollar judgment at stake, considered in light of the parties' dispute as to material facts, supported the court's decision not to enter default judgment). Here, plaintiff asks for an even larger sum of money — more than four million dollars — in addition to a permanent injunction. As described below, however, the damages are statutory and the amount is left to the Court's discretion. There is no evidence that Yongfeng's failure to respond was the result of excusable neglect. Although federal policy does favor a decision on the merits, Rule 55(b) allows entry of default judgment in situations such as this, where the defendant has refused to litigate. On balance, the Eitel factors weigh in favor of granting default judgment.
C. Determination of Relief.
Allegations of damages are not deemed true simply because of the defendant's default. Some proof of the amount is required. Geddes v. United Financial Group, 559 F.2d 557, 560 (9th Cir. 1977). Plaintiff seeks a permanent injunction, statutory damages, and attorney's fees and costs.
(1) Permanent Injunction.
Injunctive relief is available to prevent future trademark infringement under the Lanham Act. See 15 U.S.C. §§ 1116(c), 1125(a). Indeed,"[i]njunctive relief is the remedy of choice for trademark and unfair competition cases, since there is no adequate remedy at law for the injury caused by a defendant's continuing infringement." Century 21 Real Estate Corp. v. Sandlin, 846 F.2d 1175, 1180 (9th Cir. 1988). Plaintiff has demonstrated that defendant Yongfeng's infringement has caused irreparable injury by hurting the goodwill of Herman Miller's iconic furniture piece and the EAMES® name. Moreover, Yongfeng's refusal to answer or appear in this action makes it difficult for plaintiff to prevent further infringement. An injunction would serve to prevent Yongfeng from continuing to infringe plaintiff's trademarks and would resolve the on-going public confusion regarding the EAMES® furniture. In sum, the "traditional equitable principles" established by eBay Inc. v. MercExchange, L.L.C., 126 S. Ct. 1837, 1839-40 (2006), are satisfied, and injunctive relief is warranted. Plaintiff's motion for a permanent injunction is GRANTED. Defendant Yongfeng Furniture Co., Ltd., is hereby permanently enjoined from:
1. Exporting into the United States copies, reproductions, colorable imitations, or counterfeits of the EAMES® Lounge Chair and Ottoman; and
2. Using EAMES®, any colorable imitation thereof, or any other mark likely to cause confusion with EAMES® in connection with the sale of furniture for export into the United States.(2) Statutory Damages.
For trademark actions involving the use of a counterfeit mark, a plaintiff may elect to recover statutory damages at any time before final judgment is entered. 15 U.S.C. § 1117(c). In its discretion, a court can award "not less than $1,000 or more than $200,000 per counterfeit mark per type of goods or services sold, offered for sale, or distributed, as the court considers just." Ibid. A court may also grant enhanced damages of up to $2,000,000 per counterfeit mark on a finding of willful infringement. Ibid. Willful infringement occurs when the defendant knowingly and intentionally infringes on a trademark. See Earthquake Sound Corp. v. Bumper Industries, 352 F.3d 1210, 1216-17 (9th Cir. 2003). Willfulness can also be inferred from a defendant's failure to defend. Philip Morris USA, Inc. v. Castworld Products, Inc., 219 F.R.D. 494, 500 (C.D. Cal. 2003).
Plaintiff argues that defendant Yongfeng's infringement was willful for the following reasons. First, plaintiff notified Yongfeng that the furniture was both counterfeit and infringing on trademarks, yet Yongfeng persisted in its illegal behavior. Second, due to Yongfeng's failure to appear, plaintiff has been unable to determine its precise damages because plaintiff does not know exactly how many counterfeit EAMES® Lounge Chair and Ottoman sets Yongfeng has exported to the United States. Third, Yongfeng's labeling of the furniture as the "Charles Eames Chair" proves that Yongfeng intended to copy and create counterfeits of the EAMES® Lounge Chair and Ottoman. This order agrees that these factors support a finding of willful infringement on the part of defendant Yongfeng.
Plaintiff asks for the maximum enhanced statutory damages for the infringement of each of two trademarks. At $2,000,000 per counterfeit trademark, the tab comes to $4,000,000. It is true that due to Yongfeng's failure to appear and respond to the lawsuit, plaintiff does not know exactly how many counterfeit chairs have been sold — but that in itself simply does not support levying a statutory damages award of $4,000,000. See Chanel, Inc. v. Doan, No. C 05-03464 VRW, 2007 WL 781976, at *5 (N.D. Cal. Mar. 13, 2007) (Walker, J.) (granting the plaintiff's request for statutory damages on default judgment where it bore a plausible relationship to the defendant's profits from infringement). Statutory damages are intended to serve as a deterrent, but that does not justify such a windfall. See Peer International Corp. v. Pausa Records, Inc., 909 F.2d 1332, 1332 (9th Cir. 1990).
A court has wide discretion to determine the amount of statutory damages between the statutory maxima and minima. Harris v. Emus Records Corp., 734 F.2d 1329, 1335 (9th Cir. 1984). In calculating statutory damages, some courts have looked to estimates of actual damages. Sara Lee Corp. v. Bags of New York, Inc., 36 F. Supp. 2d 161, 170 (S.D.N.Y. 1999). Here, plaintiff has presented no estimate of how much Yongfeng profited from its infringing activity. Plaintiff's statements that Yongfeng generates over five million dollars in yearly revenue (as of 2005), currently has production capacity of over 5000 units per month, and employs dozens of personnel do not demonstrate how much of this revenue, production capacity, or personnel are a product of Yongfeng's sales of counterfeit EAMES® chairs. No case cited by plaintiff in response to this problem is binding.
Plaintiff's strongest argument for being awarded the maximum statutory damages is that because Yongfeng is located in China plaintiff will have to expend considerable resources just to collect on the money judgment. For this proposition, plaintiff cites Arthur Yan, Enforcing and Collecting Money Judgments in China from a U.S. Judgment Creditor's Perspective, 36 GEO. WASH. INT'L L. REV. 757, 758 (2004). But this article does not state that enforcing a money judgment in China is expensive, nor does it detail how expensive such a process may be. Rather, the article simply explains that getting such judgments enforced in China has been "notoriously difficult in recent years." Id. at 758. For example, the article lists one instance of a company located in the United States having held a judgment against a Chinese paramilitary unit in the amount of approximately $10,000 since 1996. Id. at 758 n. 4. It is certainly not true that the enforcement of a money judgment in China will cost $4,000,000. Moreover, the fact that the judgment may not ultimately be enforced by a Chinese court does not warrant awarding plaintiff a windfall in statutory damages.
Accordingly, the Court concludes it is just to award statutory damages in the amount of $250,000 per trademark infringed, for a total of $500,000. This is 250 times the minimum allowed under the statute to reflect the finding of willfulness. These damages, coupled with the permanent injunction granted against defendant Yongfeng, will adequately serve the purpose of deterrence and will help defray any additional costs associated with attempting to enforce the judgment in China.
(3) Attorney's Fees and Costs.
An award of reasonable attorney's fees and costs is allowed in "exceptional cases" of trademark infringement. See 15 U.S.C. § 1117(a). "While the term 'exceptional' is not defined in the statute, attorneys' fees are available in infringement cases where the acts of infringement can be characterized as malicious, fraudulent, deliberate, or willful." Rio Properties, Inc. v. Rio International Interlink, 284 F.3d 1007, 1023 (9th Cir. 2002). This order has already determined that defendant Yongfeng's infringement was "willful."
Plaintiff asks for $9,461.69 in attorney's fees and $3,965.60 in costs of the action, totaling $13,427.29, which its counsel declares is substantially less than the amount of fees and costs actually accrued in prosecuting this action against defendant Yongfeng (First. Amd. Compl. 21). Defendant Yongfeng has failed to appear in this action, and the amount of attorney's fees and costs asked for by plaintiff seems reasonable under the circumstances. Accordingly, plaintiff will be granted its request of $13,427.29 in attorney's fees and costs.
CONCLUSION
For the above reasons, plaintiff's motion for default judgment and permanent injunction is GRANTED. Defendant Yongfeng Furniture Co., Ltd., is hereby permanently enjoined from:
1. Exporting into the United States copies, reproductions, colorable imitations, or counterfeits of the EAMES® Lounge Chair and Ottoman; and
2. Using EAMES®, any colorable imitation thereof, or any other mark likely to cause confusion with EAMES® in connection with the sale of furniture for export into the United States.
Plaintiff has the responsibility to serve the injunction order in such a manner as to make it operative in contempt proceedings. Plaintiff is awarded $500,000 in damages and $13,427.29 in attorney's fees and costs.
IT IS SO ORDERED.