BTL Industries, Inc v. Versalini Beauty & Spa Salon

Background

BTL Industries, Inc. sued Versalini Beauty & Spa Salon for patent infringement, trademark infringement, and unfair competition under federal and New York law. BTL alleged that Versalini advertised and provided body-toning treatments using a device labeled “EMSCULPT,” without BTL’s consent. BTL alleged that the advertised process mirrored the method protected by its U.S. Patent No. 10,478,634 and that Versalini’s use of “EMSCULPT” infringed BTL’s two registered trademarks.

Versalini did not appear, answer, or otherwise respond to the complaint. The Clerk entered a certificate of default, and BTL moved for default judgment, a permanent injunction, and permission to file limited portions of its supporting papers under seal.

Liability

The court held that BTL’s well-pleaded allegations established liability as a matter of law. It found that BTL had adequately alleged ownership of the patent, identified the patent and the means of infringement, and alleged that Versalini used or offered services based on BTL’s patented process. The court therefore entered default judgment on the patent-infringement claim.

The court also found that BTL owned valid registered “EMSCULPT” marks and that Versalini used identical or substantially indistinguishable marks for directly competing body-toning services. The court concluded that this use was likely to confuse consumers and entered default judgment on the trademark-infringement claim.

For unfair competition under the Lanham Act, the court applied the same basic standard as trademark infringement. For New York common-law unfair competition, the court also required bad faith. The court found bad faith based on the distinctiveness of “EMSCULPT,” the strong similarities between the parties’ products and services, the use of the marks in advertising, and Versalini’s continuation of the conduct after receiving two notices from BTL. The court therefore found Versalini liable for unfair competition under both federal and New York law.

Damages

BTL sought lost-profit damages for patent infringement, but the court found that BTL had not proved the fourth requirement of the applicable lost-profit test: the amount of profit BTL would have made. BTL’s theory assumed that Versalini would have purchased a legitimate BTL device, rather than showing that BTL would have made the sales that Versalini allegedly captured. The court therefore did not award the requested patent lost-profit damages. BTL did not seek a reasonable royalty.

Because Versalini had defaulted and BTL could not show Versalini’s profits, BTL elected statutory damages for trademark infringement. The court ruled that BTL could receive enhanced statutory damages for willful infringement, but could not triple statutory damages under the provision governing trebling of actual damages. Considering deterrence, Versalini’s lack of cooperation, and the willfulness and possible continuation of the infringement, the court awarded $100,000 for each of the two infringed trademarks, for a total of $200,000.

Permanent Injunction

The court concluded that all four requirements for a permanent injunction were satisfied: irreparable injury, inadequate legal remedies, a favorable balance of hardships, and consistency with the public interest. It permanently enjoined Versalini from using BTL’s trademarks to promote, market, advertise, or offer unauthorized goods or services; passing off or enabling others to pass off unauthorized goods or services as BTL products or services; and further infringing BTL’s trademarks and patent.

Sealing and Disposition

The court granted BTL’s request to seal four phrases in its memorandum and two sentences in a declaration. The redactions concerned confidential financial information, including pricing and profit data, and the court found them limited and specific.

In the conclusion, Judge Lewis J. Liman granted the motion for default judgment and the motion to seal. He directed BTL to submit a proposed judgment consistent with the opinion by July 23, 2024.