OFF-WHITE LLC v. 5HK5584

Background

Off-White LLC sued 100 defendants on January 23, 2019, alleging, among other violations, trademark infringement and counterfeiting under the Lanham Act. With its complaint, Off-White sought emergency relief, including a temporary restraining order, an asset restraining order, a preliminary injunction, alternative service by electronic means, and expedited discovery. The court granted that application on February 4, 2019. After defendants failed to appear at the scheduled hearing, the court entered a preliminary injunction against all defendants on February 19, 2019.

Off-White later received permission to seek default judgment and a permanent injunction. It voluntarily dismissed the action against dearpanda and projectzeroclothingstore2, then sought default judgment against the remaining 98 defendants. After another hearing at which defendants did not appear, the court entered default judgment on Off-White’s trademark counterfeiting and infringement claims and entered a permanent injunction against each defendant.

Report and Recommendation

The case was referred to Magistrate Judge Cott for an inquest into damages. He recommended statutory damages totaling $22,400,000, plus post-judgment interest. His proposed tiered awards were:

- $100,000 from each of 54 defendants that sold fewer than 100 counterfeit Off-White products; - $200,000 from each of 14 defendants that sold between 100 and 250 products; - $300,000 from each of 18 defendants that sold between 250 and 500 products; - $400,000 from each of 7 defendants that sold between 500 and 1,000 products; - $750,000 from each of 2 defendants that sold between 1,000 and 1,100 products; - $1,000,000 from the one defendant that sold 1,405 products; - $1,500,000 from the one defendant that sold 1,963 products; and - $2,000,000 from the one defendant that sold about 3,136 products.

Judge Cott also recommended an order freezing each defaulting defendant’s assets and allowing those assets to be released and transferred to Off-White until that defendant’s monetary judgment was satisfied.

District Court’s Review and Ruling

Neither party objected to the Report and Recommendation. The court therefore reviewed it for clear error—that is, an obvious mistake in the factual or legal findings—and found none. The court also addressed three defendants—vintage-fashion-store, simplebuy2588, and khhetehsn—for whom Off-White had been unable to serve the Report. The court nevertheless adopted the recommendations concerning those defendants because they had previously received litigation documents, had not appeared, and had already been included in the default judgment.

Judge Abrams adopted the Report and Recommendation in its entirety. The court awarded Off-White statutory damages totaling $22,400,000, plus post-judgment interest, ordered the defendants’ assets frozen, and authorized their release and transfer to Off-White until the monetary judgments were satisfied. The Clerk was directed to terminate pending motions and close the case.