MATTEL v. THE ENTITIES DOING BUSINESS ON AMAZON.COM UNDER THE BRAND NAME…

Background

Mattel, Inc., owner of the registered BARBIE® trademark, sued entities doing business on Amazon.com under the name BARBEGIO. The complaint alleged trademark infringement, counterfeiting, dilution, and other claims based on the sale and distribution of doll clothes and accessories. Mattel sought a temporary restraining order and an order preventing the defendants from transferring or withdrawing funds held in their Amazon.com accounts.

Guangzhou Zhehong Network Technology Col, Ltd. was served with the complaint, temporary restraining order, and motion for default judgment. It did not appear or respond by the deadline. The clerk entered a certificate of default, and Mattel moved for default judgment. Mattel requested a permanent injunction and at least $6,323.86 in damages.

Liability

Under Federal Rule of Civil Procedure 55, default judgment has two steps: formally recognizing the defendant’s failure to defend and then entering a final judgment. A default admits well-pleaded allegations, but the court must still decide whether those allegations establish a legal basis for liability.

The court concluded that Mattel established a prima facie claim for trademark infringement and counterfeiting under the Lanham Act. Mattel showed that it owned the BARBIE® mark and that Guangzhou Zhehong used BARBEGIO to advertise similar doll clothes and accessories on Amazon.com. Based on the similarity between the marks and products, the court found a likelihood that buyers would be confused, mistaken, or deceived about the products’ affiliation with Mattel.

Permanent Injunction

The court applied the four-factor test for a permanent injunction: irreparable injury, inadequate legal remedies, the balance of hardships, and the public interest. It found that the likelihood of customer confusion could harm Mattel’s control over the reputation of its trademark; damages alone would be insufficient because the conduct was likely to continue; Guangzhou Zhehong had no legitimate hardship from losing the ability to use an infringing brand; and consumers would benefit from knowing the source and quality of products.

The court therefore permanently enjoined Guangzhou Zhehong, its agents, employees, attorneys, and persons acting in concert with them who received actual notice from infringing Mattel’s BARBIE® mark, registered for dolls, doll clothing, and doll accessories.

Damages

The court explained that allegations about the amount of damages are not automatically accepted as true after a default. It must determine the proper method of calculation and evaluate the evidence with reasonable certainty. Mattel showed that $6,323.86 was held in Guangzhou Zhehong’s Amazon.com account when the account was frozen. The court treated that amount as a reasonable approximation of Guangzhou Zhehong’s profits because the defendant did not show that costs should be deducted or that the funds came from sources unrelated to the infringement.

The court found the infringement willful. It relied on the defendant’s default, the popularity of Mattel’s mark, and the similarity between the products. Under 15 U.S.C. § 1117(b), it trebled the $6,323.86 amount and awarded Mattel $18,971.58 in actual damages.

Disposition

The court granted Mattel’s motion for default judgment. It ordered judgment against Guangzhou Zhehong for $18,971.58 and directed Amazon.com, Inc. to transfer the funds it held for Guangzhou Zhehong, up to the judgment amount, to Mattel’s attorneys, with any excess returned to Amazon.com. The court administratively denied the request to extend the temporary restraining order, noted that Mattel voluntarily dismissed its claims against the remaining defendants, directed the clerk to enter judgment, and closed the case.