Simple Design Ltd. v. Candymobi Information Technology Co.

Background

Simple Design Ltd. alleged that Candymobi Information Technology Co. and other defendants violated the Lanham Act by selling women’s fitness applications using app icons that infringed Simple Design’s registered trademarks. The applications were sold through the Google Play store. The court had previously authorized service by email and early discovery from Google. The defendants did not appear, and the clerk entered default on February 3, 2020.

Simple Design moved for default judgment on claims for trademark infringement and false designation of origin. A default judgment is a judgment entered when a defendant fails to plead or otherwise defend. Before entering one, the court considered whether it had jurisdiction over the defendants and applied the factors identified in Eitel v. McCool.

Merits and Injunction

The court found that the Eitel factors supported default judgment. Accepting the complaint’s factual allegations as true, the court applied the Sleekcraft factors for determining whether trademark use creates a likelihood of consumer confusion. It found that the defendants’ app icons were strikingly similar to Simple Design’s marks, that the parties’ applications directly competed in the women’s fitness market, and that they used the same marketing channel. The court also considered Simple Design’s allegations that it was the market leader in its category and that some consumers had been misled.

The court concluded that the defendants had violated and continued to violate the Lanham Act. It permanently enjoined the defendants, along with their officers, agents, servants, affiliates, employees, attorneys, and persons acting in concert with them, from using, displaying, advertising, selling, distributing, or promoting any mark consisting of or confusingly similar to the Simple Design marks, including in connection with mobile applications and related products or services.

Damages, Fees, and Costs

The court did not award damages. It held that the defendants’ marks were not counterfeit because they were not “substantially indistinguishable” from Simple Design’s marks. The court also found that Simple Design had not provided sufficient evidence or explanation to calculate actual damages, despite evidence that the defendants’ applications had been downloaded more than 500,000 times. In addition, the court stated that damages based on the defendants’ profits generally require evidence of willful infringement, which Simple Design had not submitted beyond conclusory allegations in the complaint.

The court found that Simple Design was the prevailing party and that the case was exceptional under the Lanham Act. It awarded Simple Design $27,278.75 in attorney’s fees and $1,825.55 in costs. Simple Design was ordered to serve the order and accompanying judgment on the defendants and file proof of service within seven days. Judge Vince Chhabria entered the order.