Moonbug Entertainment Limited v. A20688

Background

Moonbug Entertainment Limited sued 211 defendants, collectively called the “Defaulting Defendants,” alleging trademark counterfeiting, infringement of registered trademarks, infringement of unregistered trademarks, false designation of origin, passing off, and unfair competition. Moonbug moved for default judgment only on Count One, trademark counterfeiting under 15 U.S.C. § 1114(1)(b), and Count Two, infringement of registered trademarks under 15 U.S.C. § 1114.

The court had entered a temporary restraining order and authorized alternative methods of service. The opinion states that the Defaulting Defendants were properly served but never answered the complaint or otherwise appeared. Moonbug sought default judgment, a permanent injunction, statutory damages, and permission to serve asset-restraint notices under New York law.

Rulings

The court authorized default judgment on Counts One and Two and granted Moonbug’s motion for default judgment against the named Defaulting Defendants. In a default judgment, the complaint’s factual allegations are accepted as true, but the amount of damages still must be supported by evidence. The court treated the infringement as willful because of the defendants’ default.

The court granted Moonbug’s motion for a permanent injunction. It found that Moonbug had shown irreparable harm through lost goodwill and confusion, that the defendants’ past conduct created a likelihood of continued infringement, that the balance of hardships favored Moonbug, and that an injunction served the public interest by reducing confusion about the origin and quality of goods.

The court awarded statutory damages of $50,000 for each Defaulting Defendant, plus interest under 28 U.S.C. § 1961 beginning on the date of the order and continuing until the judgment was satisfied. The court relied on the defendants’ default, the difficulty of measuring actual damages without discovery, evidence that the defendants concealed their identities or destroyed or hid evidence, the need for deterrence, and the worldwide operation of the online marketplace platforms involved.

Asset restraints and enforcement

The court stated that it granted in part and denied in part Moonbug’s request under New York Civil Practice Law and Rules § 5222. It denied without prejudice the request for general authority to serve asset-restraint notices on unidentified third-party service providers and financial institutions because the proposed notices were not narrowly directed to identified parties and assets connected to the counterfeiting. The court also noted that it might lack personal jurisdiction over those unidentified parties. Moonbug may modify its request to identify the parties and assets and comply with §§ 5222 and 5225.

The court dissolved the automatic 30-day stay under Federal Rule of Civil Procedure 62 and permitted Moonbug to enforce the judgment immediately.

Disposition

The motion for default judgment was GRANTED. The motion for a permanent injunction was GRANTED. Moonbug received $50,000 in statutory damages per Defaulting Defendant, with post-judgment interest, and immediate enforcement of the judgment was permitted. The general request for asset-restraint notices against unidentified third-party service providers and financial institutions was denied without prejudice, subject to a properly narrowed request.