King Spider LLC v. 884886 CH Store

Background

King Spider LLC moved for final default judgment and a permanent injunction against the defaulting defendants. The motion concerned alleged trademark infringement, trademark counterfeiting, false designation of origin, passing off, unfair competition, and related state and common-law claims arising from the defendants’ alleged unauthorized use of King Spider’s Sp5der marks in connection with counterfeit products.

The court relied on the motion papers, an affidavit from Gabriela N. Nastasi, proof of service of the summons and Fourth Amended Complaint, and the Clerk’s certificate stating that no answer had been filed. The opinion defines the defaulting defendants as 47 defendants identified in the order.

Rulings on Liability and Claims

The court granted judgment in King Spider’s favor on the first and second causes of action pleaded against the defaulting defendants. It dismissed the third, fourth, and fifth causes of action against those defendants without prejudice.

Damages

The court awarded King Spider $75,000 in statutory damages under 15 U.S.C. § 1117(c) against the 47 defaulting defendants identified in the damages section of the order. The court stated that the award served both compensatory and punitive purposes under the Lanham Act’s prohibitions on willful infringement and that King Spider had sufficiently established the basis for the requested award. The judgment also included post-judgment interest.

Permanent Injunction

The order permanently enjoins the defaulting defendants, their officers, agents, servants, employees, and persons acting with or under their direction who receive actual notice from manufacturing, importing, exporting, advertising, marketing, promoting, distributing, displaying, offering for sale, selling, or otherwise dealing in counterfeit products or products bearing the Sp5der marks or confusingly similar marks. It also prohibits direct or indirect infringement, unauthorized use of reproductions or imitations of the marks, false designations or descriptions likely to cause confusion, and conduct intended to evade the order through new entities, accounts, storefronts, or platforms.

The defaulting defendants must deliver for destruction counterfeit products and related packaging, labels, tags, advertising, promotional materials, and other infringing materials in their possession, custody, or control. The order also restricts the concealment, transfer, disposal, withdrawal, encumbrance, or payment of the defendants’ assets from or to their financial accounts. Covered third-party service providers and financial institutions that receive actual notice are likewise prohibited from assisting conduct barred by the order.

Other Relief and Disposition

The court dissolved the 30-day automatic stay on enforcement of the judgment under Federal Rule of Civil Procedure 62(a). A defaulting defendant may, upon a proper showing and two business days’ written notice to the court and King Spider’s counsel, move to dissolve or modify the order. Violations may be treated as contempt of court and may lead to remedies including fines and seizure of property.

The court retained jurisdiction to interpret and enforce the order. Because it found no just reason for delay under Rule 54(b), it directed the Clerk to enter judgment against the defaulting defendants, terminate them as parties, and terminate ECF No. 260.