Ideavillage Products Corp. v. OhmyGod 1

Background

Ideavillage Products Corp. brought the action on October 30, 2018, against 124 individuals and entities based in China. It alleged that they sold counterfeit versions of its Touch-brand hair-removal products through Wish.com, an online marketplace. The claims involved federal trademark and copyright law, New York’s General Business Law, and New York common law.

The complaint alleged that the defendants’ products were nearly indistinguishable from Ideavillage’s products and were offered for sale and shipment to consumers in New York. The court had previously issued a temporary restraining order and then a preliminary injunction barring further marketing of the counterfeit products and restraining related assets. Ideavillage served the summons, complaint, and temporary restraining order on all of the defaulting defendants. None appeared at the scheduled hearing or otherwise appeared in the case.

The Clerk entered a certificate of default on May 5, 2020. Ideavillage then moved for default judgment against 71 defendants. The plaintiff voluntarily dismissed its claims against the other 53 defendants. The opinion states that Ideavillage did not explain why four defendants—slde, superboxi, Terry is World, and YouMengGo—were not served with the court’s May 8, 2020 order concerning resolution of the motion.

Liability

For a default judgment, the court may treat well-pleaded factual allegations as admitted, but it must still determine whether those allegations establish legal liability. The court accepted the complaint’s allegations as true and concluded that Ideavillage established liability on all eight causes of action for the defaulting defendants covered by the ruling.

The court found that the allegations established violations of federal trademark law because the defendants allegedly used counterfeit or confusingly similar marks without Ideavillage’s consent in connection with sales. The allegations also established copyright liability because Ideavillage alleged that it owned the relevant Touch copyrights. The court further found liability under New York’s laws against deceptive business practices and false advertising, and under New York common-law claims for unfair competition and unjust enrichment. For unfair competition, the court found that the allegations of notice of Ideavillage’s rights and intent to cause confusion and harm were sufficient to plead bad faith.

The court declined to enter default against slde, superboxi, Terry is World, and YouMengGo “at this juncture” because Ideavillage had not affirmed that those defendants were served with the May 8 order.

Damages

Ideavillage requested $50,000 in statutory trademark damages from each defaulting defendant. A default establishes liability but does not admit the amount of damages; the plaintiff must provide a basis allowing the court to determine damages with reasonable certainty.

The court concluded that $50,000 per defendant was appropriate. It noted that the complaint alleged the Touch trademark was valuable and that the defendants willfully profited from its recognition. The defendants’ failure to appear also prevented the court from determining the value of the infringing material. The court awarded post-judgment interest under the statutory formula.

Permanent injunction and asset restraint

The court granted Ideavillage’s request for a permanent injunction barring the covered defendants from infringing the Touch marks, concealing records or data relating to sales of Touch products, or creating new entities or user accounts to avoid the judgment. The court found that the alleged willful infringement created a risk of continuing harm, that money alone would not be enough, and that an injunction served the public interest by preventing consumer deception.

The court also continued the asset restraint imposed by the temporary restraining order until Ideavillage could enforce the judgment. It authorized transfer of the covered defendants’ frozen assets to satisfy the judgment.

Disposition and classification

The court granted the motion for default judgment as to each defaulting defendant except slde, superboxi, Terry is World, and YouMengGo. It directed Ideavillage to advise the court by December 1, 2020, whether it wished to continue litigating the claims against those four defendants, and directed the Clerk to terminate the motion from the docket.

This summary classifies the opinion as a procedural order because the judgment followed the defendants’ failure to appear rather than an adversarial merits determination, even though the court analyzed the complaint’s allegations and found them legally sufficient.