Mattel, Inc. v. Uenjoy Limited Liability Company

Background

Mattel sued Uenjoy Limited Liability Company, Wang Xiaowei, Power in Cloud, Inc., and unidentified companies using names containing “Uenjoy.” Mattel alleged that defendants infringed its registered POWER WHEELS trademark by using “power wheels” in online marketplace listings for children’s ride-on toy vehicles. The complaint asserted trademark infringement, trademark counterfeiting, false designation of origin, and trademark dilution under the Lanham Act.

Defendants did not answer the complaints. The court entered a default judgment and permanent injunction against Uenjoy and Power in Cloud, Inc. on August 2, 2019. The judgment imposed joint and several liability of $680,567.50, consisting of $600,000 in statutory damages and $80,567.50 in attorneys’ fees. It also directed Amazon and Walmart to transfer certain funds held in defendants’ accounts to Mattel’s counsel, subject to returning any excess over the judgment amount.

Defendants later moved under Rules 55(c) and 60(b) of the Federal Rules of Civil Procedure to vacate, or set aside, the default judgment.

Whether the Judgment Was Void

Defendants argued under Rule 60(b)(4) that the judgment was void because they had not been properly served and the court therefore lacked personal jurisdiction over them. The court explained that this provision applies only in rare circumstances involving a serious jurisdictional error or a denial of due process, such as a lack of notice or opportunity to be heard.

The court concluded that defendants had actual notice of the lawsuit. Uenjoy learned of the case in September 2018 when a former representative of a Chinese brand agency sent Jacob Wang a copy of the complaint. Uenjoy apparently relied on that person’s advice that it did not need to respond immediately. Uenjoy also received notice from Amazon in July 2019 and contacted Mattel’s attorneys, but still did not file a response or seek additional time.

Power in Cloud, Inc. was served at its California warehouse on January 3, 2019. The warehouse manager accepted service, and the court found that defendants’ general denial that they received the papers was not enough to overcome the process server’s affidavit.

The court also upheld service by email at fayqing@hotmail.com. Mattel found the address in a domain-registration database identifying it as associated with the registrant of uenjoy.us, a website Uenjoy conceded it operated. Mattel’s counsel repeatedly sent papers to the address without receiving delivery-error notices. The court had previously authorized service by that email address after Mattel attempted service through the Hague Convention and received no certificate of service or other substantive update from the relevant Chinese authority.

Whether the Default Was Willful

Defendants alternatively relied on Rule 60(b)(1), which permits relief from a judgment for mistake, inadvertence, surprise, or excusable neglect. Courts generally consider whether the default was willful, whether the defendant has a potentially valid defense, and whether setting aside the judgment would prejudice the other side.

The court found that defendants’ default was willful. Defendants had notice from the former brand-agency representative, Amazon, and, for Power in Cloud, in-person service at its warehouse. They nevertheless did not respond until after the default judgment was entered. The court determined that this conduct was more than mere carelessness. Because the default was willful, the court did not reach whether defendants had a meritorious defense or whether Mattel would suffer prejudice if the judgment were vacated.

Disposition

The court denied defendants’ motion to vacate the default judgment and directed the Clerk to terminate the motion. Judge P. Castel did not set aside the default judgment.