Off-White LLC. v. Alicarl Serise Store

Background

Off-White LLC. brought trademark claims under the federal Lanham Act and an unfair-competition claim under New York law against merchants operating on Alibaba and AliExpress. The complaint alleged that the defendants sold or offered for sale counterfeit products bearing Off-White’s registered marks and shipped, or offered to ship, those products to New York consumers.

The action originally named 54 defendants. Several defendants were later dismissed, and 47 defendants remained in default. None of those 47 defendants appeared or opposed Off-White’s request for default judgment. The district court had already entered default judgment against them and referred the damages issue to Magistrate Judge Valerie Figueredo for an inquest.

Personal Jurisdiction

The recommendation concluded that the court had personal jurisdiction over each defaulting defendant. Off-White submitted screenshots of each defendant’s allegedly infringing listing and storefront, along with checkout pages showing that the products could be shipped to a New York address. The recommendation concluded that offering or selling counterfeit products to New York consumers through interactive online marketplaces was sufficient under New York’s long-arm statute and consistent with constitutional due process.

Liability

Off-White sought damages only for its federal trademark counterfeiting and infringement claims. The recommendation treated the well-pleaded allegations concerning liability as admitted because of the defendants’ defaults, but it did not treat the requested damages as admitted.

The recommendation concluded that Off-White established ownership and validity of its protected marks through its federal trademark registrations. It also concluded that the products offered by the defaulting defendants were counterfeit and likely to confuse consumers because they were virtually identical or substantially indistinguishable from Off-White products and marks. Default judgment on the counterfeiting and infringement claims was therefore warranted.

Damages

Off-White elected statutory damages instead of actual damages because the defendants’ failure to participate prevented it from proving the precise amount of actual losses. The recommendation evaluated factors including the defendants’ likely profits, Off-White’s lost revenue, the value of the marks, the scale of online sales, willfulness, cooperation, and deterrence.

It recommended statutory damages of $75,000 for each of the 47 defaulting defendants, for a total of $3,525,000. The recommendation also concluded that Off-White should receive post-judgment interest calculated under the federal statutory formula.

Asset Freeze and Enforcement

Off-White requested a post-judgment order freezing the defendants’ assets and transferring those assets to Off-White. The recommendation advised denying that request because such an order could give Off-White priority over other creditors or third parties without providing those parties notice and an opportunity to be heard.

Instead, the recommendation advised allowing Off-White to execute on and enforce the judgment immediately, rather than waiting through the usual automatic stay period after judgment.

Recommendation and Objections

Magistrate Judge Valerie Figueredo recommended awarding Off-White $3,525,000 in statutory damages, plus post-judgment interest; denying the requested post-judgment asset freeze and transfer; and permitting immediate enforcement of the judgment. The parties had 14 days after service to file objections with Judge Paul A. Engelmayer. The opinion was a report and recommendation, not the final district-court order.