GS Holistic, LLC v. Alseeiadi

Background

GS Holistic, LLC alleged that Dukaan Alhanjari Inc. d/b/a Berkeley Tobacco, Salah Khulaqi, and Mohsin Alriashi infringed, counterfeited, and falsely designated the origin of GS’s registered Stündenglass trademarks in violation of the Lanham Act. GS alleged that an investigator bought a glass infuser bearing a Stündenglass mark from the defendants’ Berkeley store for $350.50 and that a GS agent determined the product was counterfeit. The Clerk entered default after the defendants failed to appear.

Service and jurisdiction

The court found that GS served Khulaqi and Alriashi within the Federal Rules of Civil Procedure’s 90-day service period. GS served Dukaan Alhanjari Inc. 196 days after filing the second amended complaint and did not show good cause for the delay. The court therefore denied the default-judgment motion without prejudice as to that company. The court concluded that it had federal subject-matter jurisdiction over the trademark claims and personal jurisdiction over the relevant defendants.

Claims and default judgment

For Khulaqi and Alriashi, the court applied the factors used to decide whether default judgment is appropriate. It concluded that the allegations established GS’s ownership of protectable marks, unauthorized use of confusingly similar marks, and a likelihood that consumers would be confused. The defendants’ failure to appear also meant that there was little prospect of a dispute over the liability-related allegations. The court therefore granted the motion for default judgment as to Khulaqi and Alriashi.

Relief

GS requested $150,000 in statutory damages, or $50,000 for each of three registered marks. The court awarded $5,000 in total statutory damages instead. It reasoned that the record described one sale involving one counterfeit product and did not show that the defendants produced or distributed counterfeit products on a significant scale. The court found that $5,000 was above the statutory minimum, more than ten times the price of the sale, and sufficient to deter future infringement without giving GS an unwarranted financial gain.

The court awarded $1,397 in costs for the filing fee and service fees, but did not award the $415.50 in pre-suit investigation expenses because GS cited no authority supporting that request. The court granted GS’s request for post-judgment interest.

GS requested a permanent injunction directed at Dukaan Alhanjari Inc. and related persons, but the court denied that request because the company had not been timely served. The court also denied GS’s request to have infringing products delivered for destruction because GS provided no supporting argument or evidence.

Disposition

The court granted the motion for default judgment as to Salah Khulaqi and Mohsin Alriashi, awarding $5,000 in total statutory damages, $1,397 in costs, and post-judgment interest. It denied without prejudice the motion as to Dukaan Alhanjari Inc. d/b/a Berkeley Tobacco and denied the requests for injunctive and other equitable relief.