Off-White LLC v. 1000percent1000

Background

Off-White sued 30 eBay merchants under the federal trademark law and New York law, alleging that they sold counterfeit products using Off-White’s trademarks and designs. Off-White sought damages only for its federal trademark counterfeiting and infringement claims. Thirteen defendants were dismissed without prejudice because they had not been served, and the claims against another defendant were also dismissed without prejudice. The remaining 16 defendants did not appear.

The court had previously entered a default judgment establishing those 16 defendants’ liability. This amended report and recommendation addressed the amount of damages and other requested relief. Magistrate Judge Valerie Figueredo issued the recommendation for consideration by District Judge Paul A. Engelmayer.

Personal jurisdiction

The recommendation concluded that the court had personal jurisdiction over each defaulting defendant. The complaint and supporting materials showed that the defendants used eBay to offer counterfeit Off-White products for sale to New York customers. For each defendant, Off-White submitted materials including an infringing product listing, a storefront screenshot, and a checkout page showing that the product could be shipped to a New York address. The recommendation concluded that offering or selling a counterfeit product to a New York customer through eBay was enough to establish purposeful business activity in New York and that exercising jurisdiction was consistent with constitutional due-process requirements.

Liability

The federal trademark law protects registered marks and imposes liability when a person uses a counterfeit mark in connection with selling or offering goods for sale in a way likely to confuse consumers. Off-White submitted registration certificates for 22 trademarks. The recommendation accepted the allegations that the defendants’ products bore marks that were virtually indistinguishable from Off-White’s marks. Because counterfeit products are inherently likely to cause confusion, the recommendation concluded that Off-White established its counterfeiting and infringement claims against the 16 defaulting defendants.

Damages

Off-White elected statutory damages instead of actual damages because the defendants’ failure to participate prevented it from proving the precise amount of sales or losses. The recommendation considered factors including the defendants’ possible profits, Off-White’s lost revenue, the value of the trademarks, the scale of online sales, the defendants’ willfulness, their lack of cooperation, and the need for deterrence.

The recommendation found that most factors favored Off-White. It treated the infringement as willful, noted that the marks were virtually identical, and concluded that online sales through eBay could reach a broad customer base. The cooperation factor was neutral because Off-White had not shown that the defendants actively concealed their identities or the scale of their conduct. The recommendation found that $75,000 per defendant was appropriate and within the range used in similar cases.

Recommended relief

Magistrate Judge Figueredo recommended a total statutory-damages award of $1,200,000, consisting of $75,000 against each of the 16 defaulting defendants. She also recommended post-judgment interest calculated under the federal statutory formula.

Off-White additionally requested an order freezing the defendants’ assets and transferring those assets to Off-White. The recommendation recommended denying that request because third parties holding the assets might have competing claims and would not receive notice or an opportunity to be heard. Instead, it recommended allowing Off-White to execute on and enforce the judgment immediately, without the usual automatic waiting period after entry of judgment.

Procedural posture

This document is an amended report and recommendation rather than the final district-court judgment. The parties were given 14 days after service to object, and the recommendation stated that Judge Engelmayer would address any request for an extension and the district court would decide the matter.