Opinion
21-CV-2098 (LGS) (RWL)
08-24-2022
VENUS BY MARIA TASH, INC., a New York Corporation, Plaintiff, v. PRINATRIAM LTD, a Cyprus Limited Liability Company, dba GALLERIA ARMADORO; GALLERIA ARMADORO TRADING LTD, a Cyprus Limited Liability Company; EPAMINONDAS CHOULIARAS; and DIMITRA CHOULIARAS, Defendants.
REPORT AND RECOMMENDATION TO HON. LORNA G. SCHOFIELD: INQUEST AFTER DEFAULT
ROBERT W. LEHRBURGER UNITED STATES MAGISTRATE JUDGE
This is a copyright and trademark infringement case in which Plaintiff seeks relief against defendants who have marketed and sold infringing jewelry that copies Plaintiff's jewelry designs and infringed Plaintiff's CORONET common law trademark rights. By orders dated May 13, 2022, the Honorable Lorna G. Schofield, U.S.D.J., granted a default judgment and permanent injunction against Defendants and referred the matter to me to conduct an inquest on damages. For the reasons set forth below, I recommend that the Court award Plaintiff damages in the amount of $253,079.43, attorney's fees in the amount of $97,136.00, costs in the amount of $437.44, and post-judgment interest.
Factual And Procedural Background
Plaintiff commenced this action on March 10, 2021 by filing a complaint asserting claims for (1) copyright infringement under the federal Copyright Act, 17 U.S.C. § 101, et seq.; (2) trademark infringement under Section 43(a) of the federal trademark act, known as the Lanham Act, 15 U.S.C. § 1125(a); (3) false advertising, false designation of origin, false representation of fact, unfair competition, and passing off also in violation of Section 43(a) of the Lanham Act; and (4) analogous provisions of New York statutes and principles of New York common law. (Dkt. 1.) Plaintiff served Defendants with the summons and complaint by alternative means as approved by the Court. (Dkts. 30-31, 33.)
None of the Defendants appeared in the action. Upon application by Plaintiff, the Clerk of Court issued certificates of default as to each Defendant. (Dkts. 39-41, 43.) On March 29, 2022, Plaintiff moved by order to show cause for entry of default judgment against the Defendants. (Dkt. 52; see also Dkt. 54 (Amended Order To Show Cause).) By order entered on May 13, 2022, Judge Schofield entered default judgment against all Defendants (the “Default Judgment”). (Dkt. 57.) The Default Judgment stated that the Court has jurisdiction over the subject matter of the action and personal jurisdiction over the Defendants. (Dkt. 57 ¶ 1.)
The Default Judgment determined that Defendants are liable for each cause of action asserted by Plaintiff, and included entry of permanent injunctive relief against Defendants, prohibiting them from copying Plaintiff's jewelry designs or otherwise infringing Plaintiff's copyrights and from using or otherwise infringing Plaintiff's CORONET trademark. (Dkt. 57 ¶¶ 10, 12.) In support of the Default Judgment and injunction, the Court made the following factual findings (Dkt. 57 ¶¶ 3-9):
“Plaintiff owns copyright in ... 20 original and creative jewelry designs (the “Maria Tash Designs”), and owns copyright registrations for two of these designs (U.S. Reg. No. VA 2-136-485 and VA 2-136-482). Maria Tash is also the owner of the CORONET trademark in connection with jewelry, which Plaintiff has used in commerce since 2016 (the “CORONET Mark”). Through continuous and extensive sales, advertising, and promotion, the CORONET Mark has acquired goodwill and has become known to consumers as a source indicator.”
At the August 16, 2022 inquest hearing, Plaintiff acknowledged that the U.S. Copyright Office rejected the 18 other designs as not meeting the requirements for registration.
“Defendants advertise, market, promote, offer to sell, and sell jewelry products that intentionally copy and are substantially similar to the Maria Tash Designs. Defendants have also adopted and used the CORONET Mark in connection with advertising, marketing, and offering for sale some of their jewelry products. Defendants' use of the CORONET Mark in connection with jewelry is likely to cause confusion or mistake or to deceive persons into the erroneous belief that Defendants' products are those of Plaintiff or that Defendants' products are endorsed by, sponsored, or connected in some way with Plaintiff. Defendants falsely advertise that their articles of jewelry are created by one or more of the Defendants when they are, in fact, cheap reproductions of the Maria Tash Designs.”
“Though Defendants have been put on notice of their infringing activity, they continue to offer for sale articles of jewelry that infringe upon the Maria Tash Designs and CORONET Mark, thereby harming Plaintiff, Plaintiff's business reputation, and the Maria Tash brand generally. Defendants' aforementioned acts have been willful, wanton, and in bad faith, and with the intent to misrepresent the source of Defendants' products and trade off of the Maria Tash Designs, and the reputation and goodwill of Plaintiff.”
The same day she issued the Default Judgment, Judge Schofield referred the matter to this Court for an inquest on damages. (Dkt. 58.) On May 16, 2022, this Court issued an order requiring Plaintiff to file certain submissions, including proposed findings of fact and conclusions of law, requiring Plaintiff to serve Defendants with both the order and Plaintiff's submissions, and providing Defendants with an opportunity to respond. (Dkt. 59.) Plaintiff filed the requisite inquest submissions on June 16, 2022, including Proposed Findings Of Fact and Conclusions Of Law (Dkt. 60) (“FFCL”) and Declarations from Eileen Li, Plaintiff's Senior Vice President Of Finance (Dkt. 61) (“Li Decl.”), and Robert M. Wasnofski, Plaintiff's lead attorney (Dkt. 62) (“Wasnofski Decl.”).
The Court held an inquest conference on August 16, 2022 at which Plaintiff's counsel answered various questions. The Court has determined that no further evidentiary hearing is necessary and that this inquest can be resolved on the submissions and prior proceedings.2
Legal Standard At Inquest
At an inquest on damages following default judgment, all well-pled factual allegations of the complaint, except those relating to damages, are accepted as true, and all reasonable inferences are drawn in favor of the plaintiff. City of New York v. Mickalis Pawn Shop, LLC, 645 F.3d 114, 137 (2d Cir. 2011) (“It is an ‘ancient common law axiom' that a defendant who defaults thereby admits all ‘well-pleaded' factual allegations contained in the complaint”) (quoting Vermont Teddy Bear Co., Inc. v. 1-800 Beargram Co., 373 F.3d 241, 246 (2d Cir. 2004)). “A factual allegation will be deemed not well-pled only in very narrow, exceptional circumstances.” Ideavillage Products Corp. v. Bling Boutique Store, No. 16-CV-9039, 2018 WL 3559085, at *2 (S.D.N.Y. July 24, 2018) (internal quotation marks and citations omitted). That said, a court “must still satisfy itself that the plaintiff has established a sound legal basis upon which liability may be imposed.” Jemine v. Dennis, 901 F.Supp.2d 365, 373 (E.D.N.Y. 2012) (citing Au Bon Pain Corp. v. Artect, Inc., 653 F.2d 61, 65 (2d Cir. 1981)); accord Finkel v. Romanowicz, 577 F.3d 79, 84 (2d Cir. 2009) (“[A district court] is also required to determine whether [plaintiff's] allegations establish [defendant's] liability as a matter of law”). As recited above, Judge Schofield already has found multiple sound legal bases for Defendants' liability, including copyright infringement, trademark infringement, and false advertising.
At inquest, the plaintiff bears the burden of establishing an amount of damages with reasonable certainty. RGI Brands LLC v. Cognac Brisset-Aurige, S.A.R.L., No. 12-CV-1369, 2013 WL 1668206, at *6 (S.D.N.Y. Apr. 18, 2013) (collecting cases), R. & R. adopted, 2013 WL 4505255 (S.D.N.Y. Aug. 23, 2013); see also Transatlantic Marine Claims Agency, Inc. v. Ace Shipping Corp., 109 F.3d 105, 111 (2d Cir. 1997) (District Court “could not just accept [Plaintiff's] statement of damages” at “face value” without satisfying “the court's obligation to ensure that the damages were appropriate”). In conducting the inquest, the court is charged with “‘determining the proper rule for calculating damages on such a claim, and assessing plaintiff's evidence supporting the damages to be determined under this rule.'” Tiffany (NJ) Inc. v. Luban, 282 F.Supp.2d 123, 124 (S.D.N.Y. 2003) (quoting Credit Lyonnais Securities (USA), Inc. v. Alcantara, 183 F.3d 151, 155 (2d Cir. 1999)). Further, the damages award on a default judgment “must not differ in kind from, or exceed in amount, what is demanded in the pleadings.” Fed.R.Civ.P. 54(c).
Discussion
Plaintiff seeks an award of damages, attorney's fees, costs, and post-judgment interest. The Court addresses each in turn.
A. Damages
Plaintiff requests an award of actual damages in the amount of $253,079.43, which represents two percent of its alleged lost profits from Defendants' sales of jewelry infringing the Maria Tash Designs and CORONET Mark. (FFCL ¶¶ 21, 33; see Li Decl. Exs. A-B.) To arrive at that number, Plaintiff first calculated profits for its own sale of jewelry with the Maria Tash Designs infringed by Defendant for the period beginning March 10, 2018 (three years prior to commencement of this action) to June 8, 2022 (shortly before the June 16, 2022 date when Plaintiff filed the inquest materials required by the Court. (FFCL ¶ 28; Li Decl. ¶ 5.) That amount totals $11,886,003.00. (Li Decl. ¶ 5 and Ex. A.)
An inquest into damages may be conducted “on the papers,” without an evidentiary hearing where there is a sufficient basis on which to make a calculation. See Tamarin v. Adam Caterers, Inc., 13 F.3d 51, 53-54 (2d Cir. 1993); Fustok v. ContiCommodity Services, Inc., 873 F.2d 38, 40 (2d Cir. 1989); Maldonado v. La Nueva Rampa, Inc., No. 10-CV-8195, 2012 WL 1669341, at *2 (S.D.N.Y. May 14, 2012).
Plaintiff next calculated profits for its sale of jewelry in connection with the CORONET trademark from February 20, 2019 (the earliest date Defendants are known to have infringed the mark) to June 8, 2022. (FFCL ¶ 29; Li Decl. ¶¶ 3, 6 and Ex. B.) That amount comes to $767,968.30. (Li Decl. ¶ 6 and Ex. B.) The total of those two figures is $12,653,971.30. Plaintiff conservatively “anticipates” that two percent of Plaintiff's profits represents its lost profits caused by Defendant's infringing sales. Two percent of Plaintiff's total profits for the relevant period of time is $253,079.43. (Li Decl. ¶ 15.)
Plaintiff's calculation of damages raises several issues meriting discussion. First, Plaintiff correctly seeks actual damages rather than statutory damages. Statutory damages are not an option for Plaintiff in this case. As Plaintiff's counsel conceded at the inquest hearing, statutory damages are not available to the Plaintiff for either copyright or trademark infringement. Plaintiff cannot seek statutory damages under the Copyright Act, because the two registered works were not registered until after the alleged infringement began. (Compare Compl. Exs. 2-3 (reflecting Registration date of December 2018) with Compl. ¶ 40 and Ex. 5 (reflecting allegations of infringement in October 2017).) See 17 U.S.C. § 412; Fischer v. Forrest, 968 F.3d 216, 222 (2d Cir. 2020) (Section 412 of the Copyright Act barred plaintiff's recovery of statutory damages because “the first allegedly infringing act occurred before the date of the copyright registration”).
Similarly, Plaintiff cannot obtain statutory damages under the Lanham Act, because its CORONET common law trademark is unregistered. (Compl ¶ 26.) See Off-White LLC v. Beijing Yinyu Trading Co., Ltd., No. 20-CV-7894, 2022 WL 846833, at *8 (S.D.N.Y. 2022) (holding that statutory damages were not available for infringement of unregistered trademarks, and collecting cases). Moreover, Plaintiff has not contended that Defendant engaged in trademark counterfeiting, for which statutory damages may be available, as distinct from trademark infringement, for which statutory damages are not an available remedy. See 15 U.S.C. § 1117(c) (making statutory damages available for use of counterfeit trademarks); GTFM, Inc. v. Solid Clothing, Inc., 215 F.Supp.2d 273, 307 (S.D.N.Y. 2002) (Section 1117(c) “provides for the award of statutory damages ‘[i]n a case involving the use of a counterfeit mark.' Because Solid's use of the “05” designation did not constitute a counterfeit use, statutory damages are not available to GTFM under the Act.”).
Second, lost profits, as sought by Plaintiff, is an appropriate measure of damages. Under the Copyright Act, a copyright owner may recover for infringement “the actual damages suffered by him or her as a result of the infringement, and any profits of the infringer that are attributable to the infringement and are not taken into account in computing the actual damages.” 17 U.S.C. § 504(b). Similarly, under the Lanham Act, a trademark owner may recover against an infringer both the defendant's profits and any damages sustained by the plaintiff. 15 U.S.C. § 1117(a). Under both statutes, a plaintiff thus may recover actual damages, of which lost profits is one measure (provided they are not duplicative of other damages). Although a plaintiff may also seek the defendant's profits attributable to the infringement, Plaintiff has not sought such relief here. That is understandable as Plaintiff has no information about the profits garnered by Defendant from infringement of either the Maria Tash Designs or the CORONET Mark.
Third, and more problematic for Plaintiff, is its estimate of having lost two percent of its profits due to Defendants' infringement. By having defaulted and failing to appear, Defendants have prevented Plaintiff from obtaining discovery about Defendants' sales. Plaintiff therefore has not been able to present any evidence of the number of units of infringing jewelry that Defendant has sold. Consequently, Plaintiff has not presented any evidence of the volume of sales it “lost” to Defendant, and there is no direct numerical basis on which to calculate lost profits. Nor has Plaintiff provided the Court with any case in which a Court awarded lost profits based on an assumption about Defendant's sales that was not tethered to any evidence. Cf. Hamil America Inc. v. GFI 193 F.3d 92, 108 (2d Cir. 1996) (holding, in non-default case, that district court did not abuse its discretion in denying lost profits award under Copyright Act where proof of lost sales was too speculative); Merchant Media, LLC v. H.S.M. International, No. 05-CV-2817, 2006 WL 3479022, at *12 (S.D.N.Y. Nov. 30, 2006) (declining to award lost profits under Lanham Act, despite defendant's default, due to “evidentiary vacuum” as to whether defendant's conduct caused plaintiff to lose sales or any other economic harm).
That said, “[b]ecause the proper measure of damages is often difficult to ascertain, ... indirect evidence may be used to fix the amount of the damages.” Fitzgerald Publishing Co. v. Baylor Publishing Co., 807 F.2d 1110, 1118 (2d Cir. 1986). Moreover, “[i]n setting a damages award based on a plaintiff's ‘actual damages,' the court is not constrained to limit the award to the precise amount of the defendant's profits or the plaintiff's losses that the plaintiff has been able to demonstrate, should the court find such an amount ‘inadequate' to reflect the plaintiff's actual damages.” Microban Products Co.v. Iskin Inc., No. 14-CV-5980, 2016 WL 4411349, at *6 (S.D.N.Y. Feb. 23, 2016) (citing 15 U.S.C. §1117(a)), R. & R. adopted, 2016 WL 4411414 (S.D.N.Y. Aug. 18, 2016). “Rather, based on the ‘circumstances of the case,' and as the court ‘shall find to be just,' the court may decrease or increase an award of actual damages, provided the court does not enter judgment in an amount ‘exceeding three times' the amount demonstrated by the plaintiff.” Id.
Although Plaintiff has not presented direct evidence of Defendants' sales of infringing goods, Plaintiff has presented indirect evidence indicating that Defendants have widely marketed the infringing jewelry, that Defendants' jewelry business has achieved substantial recognition among industry and influencers, and that Defendants' infringing jewelry is available for sale internationally, including within the United States. For instance, Defendants sell the infringing jewelry through their website at www.galleria-armadoro.com and through various unidentified third-party retailers. (Li Decl. ¶¶ 8, 10 and Ex. C.) Defendants broadly market their jewelry through social media platforms, including Instagram, Facebook, YouTube, and Pinterest. (Li Decl. ¶ 11 and Ex. D.) And, various fashion and jewelry-focused blogs have reported on Defendants' success, featured their jewelry (including items infringing here), and included Defendants on lists of the top fashion brands on social media. (Li Decl. ¶ 12 and Ex. E.) A reasonable inference can be drawn from these facts that Defendants have sold, and profited from their sale of, infringing jewelry and that Plaintiff lost sales, and profits, as a result.
There is no evidence that every sale by Defendant of an infringing item necessarily results in a lost sale to Plaintiff. But based on the extent of Plaintiff's own sales and profits, and the extent to which Defendants have marketed their jewelry and achieved recognition in the industry and among influencers, Plaintiff believes that the lost profits calculated based on two-percent loss of sales caused by Defendants' infringing conduct is “fair” and “conservative.” (Li Decl. ¶ 17.) The Court agrees, particularly as Defendants continue to infringe despite entry of the permanent injunction enjoining them from further marketing and sale of the Maria Tash Designs and use of the CORONET trademark. (Li Decl. ¶¶ 8, 10.) The extent of lost profits calculated by Plaintiff is finite (ending as of June 8, 2022), and does not account for any sales of infringing jewelry occurring after that time.
Accordingly, I recommend awarding Plaintiff $253,079.43 in damages.
See Sohn v. Scholastic, Inc., 959 F.3d 39, 52 (2d Cir. 2020) (under the Copyright Act, a plaintiff can recover damages dating back to three years prior to filing suit). According to Plaintiff, Defendant has infringed the Maria Tash Designs since at least March 10, 2018. (Li Decl. ¶ 3.)
B. Attorney's Fees
Plaintiff seeks an award of attorney's fees, primarily pursuant to the Lanham Act. Whether attorney's fees may be awarded depends on whether the case is an “exceptional” one. The Court concludes that it is, and that Plaintiff is entitled to $97,136.00 in attorney's fees.
1. This Case Is Exceptional
The Lanham Act authorizes an award of attorney's fees to prevailing parties in “exceptional cases.” 15 U.S.C. § 1117(a). The Second Circuit has defined an exceptional case as “one that stands out from others with respect to the substantive strength of a party's litigating position (considering both the governing law and the facts of the case) or the unreasonable manner in which the case was litigated.” Sleepy's LLC v. Select Comfort Wholesale Corp., 909 F.3d 519, 530 (2d Cir. 2018) (citing Octane Fitness, LLC v. ICON Health & Fitness, Inc., 572 U.S. 545, 554, 134 S.Ct. 1749, 1756 (2014)). District courts determine whether a case is exceptional in a “case-by-case exercise of their discretion, considering the totality of the circumstances.” 4 Pillar Dynasty LLC v. New York & Co., Inc., 933 F.3d 202, 215 (2d Cir. 2019) (internal citation and quotation marks omitted). Relevant factors include “frivolousness, motivation, objective unreasonableness (both in the factual and legal components of the case) and the need in particular circumstances to advance considerations of compensation and deterrence.” Octane Fitness, LLC, 572 U.S. at 554 n.6, 134 S.Ct. at 1756 n.6 (quoting Fogerty v. Fantasy, Inc., 510 U.S. 517, 534 n.19, 114 S.Ct. 1023, 1033 n. 19 (1994)).
The Court notes a fourth issue inherent in Plaintiff's damages request. Plaintiff calculated its lost profits figure based on lost sales of all 20 Maria Tash Designs asserted as infringed by Defendants. As noted above, however, the Copyright Office rejected registration for 18 of those designs. The Court nonetheless includes those designs among those for which damages may be recovered because Judge Schofield already has found that notwithstanding the absence of registration for those 18 designs, “Plaintiff owns copyright in” all of them and enjoined further infringement of those designs. (Dkt. 57 ¶¶ 3, 12(c).)
Considering all the circumstances, an award of attorney's fees in this case is warranted. First, Plaintiff's case is strong, as demonstrated by the evidence of Defendants' infringement, unfair competition, and deceptive trade practices as detailed in and attached to the Complaint, and the Court's award of default judgment to Plaintiff on all counts. See Antetokounmpo v. Costantino, No. 21-CV-2198, 2021 WL 5916512, at *8 (S.D.N.Y. Dec. 15, 2021) (finding case exceptional in part because plaintiff had “a substantively strong litigating position”), R. & R. adopted, 2022 WL 36232 (S.D.N.Y. Jan. 4, 2022); Streamlight, Inc. v. Gindi, No. 18-CV-987, 2019 WL 6733022, at *17 (E.D.N.Y. Oct. 1, 2019), (finding case exceptional based, in part, on strength of trademark infringement case), R. & R. adopted, 2019 WL 6726152 (E.D.N.Y. Dec. 11, 2019).
Second, Defendants frustrated the litigation process by failing to appear in this case or at any point respond to the allegations in the Complaint or Plaintiff's motion for default judgment. See Streamlight, 2019 WL 6733022, at * 17 (finding case exceptional in part because “defendants frustrated the litigation process by failing to appear in this case”); E. Mishan & Sons, Inc. v. Novel Brands LLC, No. 18-CV-2932, 2020 WL 9815178, at *7 (S.D.N.Y. Feb. 13, 2020) (finding case exceptional where defendant's failure to answer complaint or discovery requests frustrated litigation and displayed “utter lack of respect for the judicial process”).
Third, “an award of attorneys' fees and costs is appropriate here as it furthers the goals of the Lanham Act, including deterrence of similarly willful conduct by defendants and other possible infringers.” Streamlight, 2019 WL 6733022 at *17. Defendants' conduct here was willful, as demonstrated not only by their failure to appear in this litigation, but also by their continued infringement after being put on notice by Plaintiff's cease and desist letter. See Antetokounmpo, 2021 WL 5916512 at *8 (finding defendants' conduct unreasonable and willful as they “failed to satisfactorily respond to the cease-and-desist letters or appear in this action, while continuing to sell and profit from goods featuring [plaintiff's] name, likeness, and trademarks”).
In short, “although Defendants' default alone is insufficient to deem this an ‘exceptional' case, an award of attorneys' fees is appropriate given (1) the substantive strength of [Plaintiff]'s litigating position, (2) Defendants' objectively unreasonable conduct, and (3) the need for compensation and deterrence”. Antetokounmpo, 2021 WL 5916512 at *8.
2. Calculation Of A Reasonable Fee Award
Plaintiff requests a fee award of $97,136.00. (FFCL ¶ 67.) The Court finds that that amount is a reasonable fee award in this case.
The traditional approach to determining a fee award is the “lodestar” calculation, which is the number of hours expended multiplied by a reasonable hourly rate. See Healey v. Leavitt, 485 F.3d 63, 71 (2d Cir. 2007); Tackie v. Keff Enterprises LLC, No. 14-CV-2074, 2014 WL 4626229, at *6 (S.D.N.Y. Sept. 16, 2014). The Second Circuit has held that “the lodestar ... creates a ‘presumptively reasonable fee.'” Millea v. Metro-North Railroad Co., 658 F.3d 154, 166 (2d Cir. 2011) (quoting Arbor Hill Concerned Citizens Neighborhood Association v. County of Albany, 522 F.3d 182, 183 (2d Cir. 2008); and then citing Perdue v. Kenny A. ex rel. Winn, 559 U.S. 542, 552, 130 S.Ct. 1662, 1673 (2010)); see also Stanczyk v. City Of New York, 752 F.3d 273, 284-85 (2d Cir. 2014) (reaffirming Millea). To arrive at a lodestar calculation, “[t]he party seeking an award of [attorneys'] fees should submit evidence supporting the hours worked and rates claimed.” Hensley v. Eckerhart, 461 U.S. 424, 433, 103 S.Ct. 1933, 1939 (1983). Plaintiff has submitted such evidence here, including a declaration from counsel and copies of contemporaneous records of time expended by specific attorneys. (Wasnofski Decl. ¶ 12 and Ex. B.)
Hourly Rates: Courts assess the reasonableness of a proposed hourly rate by considering the prevailing market rate for lawyers in the district in which the ruling court sits. Polk v. New York State Department of Correctional Services, 722 F.2d 23, 25 (2d Cir. 1983). “The rates used by the court should be current rather than historic hourly rates.” Reiter v. Metropolitan Transportation Authority Of New York, 457 F.3d 224, 232 (2d Cir. 2006) (internal quotation marks omitted). “[C]ourts may conduct an empirical inquiry based on the parties' evidence or may rely on the court's own familiarity with the rates if no such evidence is submitted.” Wong v. Hunda Glass Corp., No. 09-CV-4402, 2010 WL 3452417, at *2 (S.D.N.Y. Sept. 1, 2010) (internal quotation marks omitted). Additionally, “the range of rates that plaintiff's counsel actually charges their clients ... is obviously strong evidence of what the market will bear.” Rozell v. Ross-Holst, 576 F.Supp.2d 527, 544 (S.D.N.Y. 2008); see also Lilly v. County Of Orange, 910 F.Supp. 945, 949 (S.D.N.Y. 1996) (“The actual rate that counsel can command in the market place is evidence of the prevailing market rate”).
Plaintiff is represented in this action by the law firm Dentons U.S. LLP and seeks reimbursement of fees for the work of four attorneys from that firm. Lead counsel, Robert Wasnofski, is a partner with over 25 years of experience in intellectual property litigation. (Wasnofski Decl. ¶ 12.) Mr. Wasnofski billed at an hourly rate of $775 for 22.1 hours and $710 for 36.7 hours. (Id. ¶ 14.) Frank Benjamin, also a partner, has advised clients on intellectual property matters for more than 25 years and Plaintiff in particular for more than 12 years. (Id. ¶ 11(a).) Mr. Benjamin billed at an hourly rate of $710 for 26.7 hours. (Id. ¶ 14.) Sara Gates, a fifth-year associate, previously worked as a law clerk for the Office of General Counsel of the U.S. Copyright Office, and has considerable experience in copyright and trademark litigation. (Id. ¶ 11(b).) Ms. Gates billed at an hourly rate of $510 for 49.4 hours. (Id. ¶ 14.) Finally, Megan Carroll, is also a fifth-year associate, who litigates commercial and intellectual property matters. (Id. ¶ 11(c).) Ms. Carroll billed at an hourly rate of $315 for 31 hours and $335 for .1 hours. (Id. ¶14.)
Notably, in billing Plaintiff, counsel applied a 25% “COVID-19 Relief Discount,” to its fees. (Wasnofski Decl. ¶ 13.) Accordingly, the rates sought are effectively reduced to 75% of their norm, meaning that the highest rate charged is $581.25, not $755.
The Court finds the discounted rates requested for Plaintiff's attorneys to be reasonable. The Court has reviewed the qualifications of each individual for whom such rates are sought, as well as the roles played by each in this case, and finds the rates charged appropriate for attorneys of their background and experience. Even without the 25% “COVID-19 Relief Discount,” the rates sought, although on the high end, are within the reasonable range of rates for experienced intellectual property attorneys performing similar work, and rates in that range have previously been approved by courts in this District. See, e.g., Aquavit Pharmacueticals, Inc. v. U-Bio Med, Inc., No. 19-CV-3351, 2021 WL 4312579, at *28 (S.D.N.Y. July 16, 2021) (finding hourly rates of $575 and $600 “reasonable in this District for work on complex intellectual properties”), R. & R. adopted as modified, 2021 WL 3862054 (S.D.N.Y. August 30, 2021); Latin American Music Co. v. Spanish Broadcasting System, Inc., 13-CV-1526, 2020 WL 2848232, at *6 (S.D.N.Y. June 1, 2020) (observing that courts in copyright cases consider reasonable rates of $400 to $750 an hour for partners); Pyatt v. Raymond, 10-CV-8764, 2012 WL 1668248, at *6 (S.D.N.Y. May 10, 2012) (over a decade ago, collecting cases approving rates ranging from $400 to $650 for partners in copyright and trademark cases); but see Streamlight, 2019 WL 6733022 at *19 (rejecting hourly rates of $725 and $650 where plaintiff failed to submit adequate description of attorneys' experience and qualifications).
Hours Worked: To determine the compensable hours, “the court must examine the hours expended by counsel and the value of the work product of the particular expenditures to the client's case.” Tlacoapa v. Carregal, 386 F.Supp.2d 362, 371 (S.D.N.Y. 2005) (citing Gierlinger v. Gleason, 160 F.3d 858, 876 (2d Cir. 1998)). “In making this examination, the district court does not play the role of an uninformed arbiter but may look to its own familiarity with the case and its experience generally as well as to the evidentiary submissions and arguments of the parties.” Gierlinger, 160 F.3d at 876. “The relevant issue ... is not whether hindsight vindicates an attorney's time expenditures, but whether, at the time the work was performed, a reasonable attorney would have engaged in similar time expenditures.” Grant v. Martinez, 973 F.2d 96, 99 (2d Cir. 1992); see also Mugavero v. Arms Acres, Inc., No. 03-CV-5724, 2010 WL 451045, at *6 (S.D.N.Y. Feb. 9, 2010) (same). A court thus should exclude from the lodestar calculation “excessive, redundant or otherwise unnecessary hours.” Quaratino v. Tiffany & Co., 166 F.3d 422, 425 (2d Cir. 1999); see also Luciano v. Olsten Corp., 109 F.3d 111, 116 (2d Cir. 1997) (“If the district court concludes that any expenditure of time was unreasonable, it should exclude these hours from the lodestar calculation”).
A prevailing party can recover fees for several categories of work, including failed efforts otherwise reasonably pursued. See, e.g., Gortat v. Capala Brothers, Inc., 621 F. App'x. 19, 23 (2d Cir. 2015) (“there is no rule that [p]laintiffs need achieve total victory on every motion in pursuit of a successful claim in order to be compensated for the full number of hours spent litigating that claim”); Ni v. Bat-Yam Food Services Inc., No. 13-CV-07274, 2016 WL 369681, at *8 (S.D.N.Y. Jan. 27, 2016) (awarding attorneys' fees for hours spent on discovery, discovery-related motions, failed settlement negotiations, and summary judgment motions); Easterly v. Tri-Star Transportation Corp., No. 11-CV-6365, 2015 WL 337565, at *10 (S.D.N.Y. Jan. 23, 2015) (approving fees for time spent, inter alia, preparing pleadings prior to the commencement of the action, discovery, discovery disputes, summary judgment motions, and a damages inquest).
Dentons billed a total of 166 hours on this matter. (Wasnofski Decl. ¶¶ 12, 14.) The Court has reviewed the records and finds the time spent to be reasonable. The work performed is of the nature and type that would be expected for an infringement and unfair competition case such as this one. The principal work performed included client consultations and briefings; investigation; drafting the complaint; researching and effecting service first through the Hague Convention and, when that did not succeed, moving for court approval of service by alternative means; preparing the motion for default judgment; and strategizing with respect to all the foregoing. Notably, the time records do not reflect time spent on the submissions or hearing required for this inquest, which would otherwise be subject to recovery. The hours spent, broken down by each individual and supported by contemporaneous documentation, were all reasonably necessary for the litigation of Plaintiff's claims. Moreover, the number of hours for which Plaintiff seeks recovery already excludes entries for time deemed duplicative or unnecessary. (See generally Wasnofski Decl. and Ex. B.)
Plaintiff is also entitled to an award of attorney's fees under New York's statute prohibiting deceptive practices, which authorizes a court, in its discretion, to award costs and attorneys' fees to a prevailing party. N.Y. Gen. Bus. Law § 349(h); see Riordan v. Nationwide Mutual Fire Insurance Co., 977 F.2d 47, 53-54 (2d Cir. 1992). Attorney's fees also are available to a prevailing party as “costs” under the Copyright Act, but only when the copyright at issue has been registered prior to infringement. See 15 U.S.C. §§ 412, 505. Plaintiff has not asked for attorney's fees pursuant to the Copyright Act, presumably because Plaintiff did not register any of its copyrighted designs before Defendant's infringing activity began.
Having determined that the fees sought are reasonable, the Court finds that Plaintiff should be awarded fees of $97,136.00.
C. Costs
A prevailing party is entitled to recover costs. See Fed.R.Civ.P. 54(d)(1) (“Unless a federal statute, these rules, or a court order provides otherwise, costs - other than attorney's fees - should be allowed to the prevailing party”). Plaintiff is the prevailing party by default. Plaintiff seeks recovery of $437.44 in costs, including service ($184.43), delivery other than for service ($28.01), and electronic research ($225). (Wasnofski Decl. ¶ 16 and Ex. B.) Such costs are routinely awarded. See Malletier v. Artex Creative International Corp., 687 F.Supp.2d 347, 365 (S.D.N.Y. 2010) (costs such as filing fees, shipping costs, and research fees are “typically awarded when a defendant defaults”) (citing Arbor Hill Concerned Citizens Neighborhood Association, 369 F.3d at 98)). The Court has reviewed Plaintiff's submissions and finds sufficient proof of the costs paid and that they are recoverable. Accordingly, Plaintiff should be awarded $437.44 in costs.
D. Post-Judgment Interest
Finally, Plaintiff requests an award of post-judgment interest. A federal district court must award post-judgment interest on any money judgment awarded in a civil case. 28 U.S.C. § 1961; STMicroelectronics, N.V. v. Credit Suisse Securities (USA) LLC, 648 F.3d 68, 83 (2d Cir. 2011). As provided by statute, an award of post-judgment interest is measured “from the date of the entry of judgment, at a rate equal to the weekly average 1-year constant maturity Treasury yield ... for the calendar week preceding the date of the judgment,” “computed daily to the date of payment,” and “compounded annually.” 28 U.S. §§ 1961(a)-(b). Accordingly, Plaintiff should be awarded post-judgment interest at the statutory rate.
Conclusion
For the foregoing reasons, I recommend that the Court award Plaintiff damages in the amount of $253,079.43, attorney's fees in the amount of $97,136.00, costs in the amount of $437.44, and post-judgment interest at the statutory rate calculated from the date of entry of judgment of damages.
Service On Defaulting Defendants
Plaintiff shall effect service of this Report and Recommendation on the defaulting Defendants through the same means of service provided by the Court. Service shall be made no later than three days after entry of this Report and Recommendation, and Plaintiff shall file proof of service no later than three days after service is made.
Procedure For Filing Objections And Preserving Right To Appeal
Pursuant to 28 U.S.C. § 636(b)(1) and Rules 72, 6(a), and 6(d) of the Federal Rules of Civil Procedure, the parties shall have fourteen (14) days to file written objections to this Report and Recommendation. Such objections shall be filed with the Clerk of Court, with extra copies delivered to the Chambers of the Honorable Lorna G. Schofield, United States Courthouse, 40 Foley Square, New York, New York 10007, and to the Chambers of the undersigned, United States Courthouse, 500 Pearl Street, New York, New York 10007. FAILURE TO FILE TIMELY OBJECTIONS WILL RESULT IN A WAIVER OF OBJECTIONS AND WILL PRECLUDE APPELLATE REVIEW.