Telebrands Corp. v. Shenzhen Yitai Technology Co., Ltd.

Background

Telebrands alleged that Shenzhen Yitai Technology Co., Ltd., doing business as Kesida and yitai-us, advertised, offered for sale, and sold products through an Amazon storefront using a design that copied or was confusingly similar to Telebrands’ Ruby Sliders trade dress. The opinion describes the Ruby Sliders product as a furniture-leg cover with a red pad and other features. Telebrands asserted trade-dress infringement and unfair competition under the Lanham Act.

The defendant did not file an answer. After prior temporary and preliminary restraints, Telebrands applied for final default judgment and a permanent injunction. The court reviewed Telebrands’ legal memorandum, an affidavit, the service certificate, the clerk’s certificate stating that no answer had been filed, and the other papers in the case.

Liability

The court granted judgment in Telebrands’ favor on all claims properly pleaded against the defendant. It found that the complaint adequately alleged that the Ruby Sliders trade dress was nonfunctional and that the defendant’s product created a high likelihood of confusion because it appeared virtually identical to Telebrands’ product, although the defendant’s product was described as lower quality. Because the judgment was entered by default, the defendant’s liability was not tested through an adversarial trial.

Damages

The court awarded Telebrands $114,221.29, representing the defendant’s gross revenues as the defendant’s profits under the Lanham Act, plus post-judgment interest. The court stated that the award served both compensatory and punitive purposes in light of the alleged willful infringement and found that Telebrands had sufficiently supported the requested damages.

Permanent injunction and other relief

The defendant and persons acting with or under its direction who received actual notice were permanently prohibited from manufacturing, importing, exporting, advertising, marketing, promoting, distributing, displaying, offering for sale, selling, or otherwise dealing in the allegedly infringing products. They were also prohibited from infringing or using Telebrands’ Ruby Sliders trade dress, using confusingly similar marks or designs, making false designations or descriptions likely to cause confusion, concealing or disposing of infringing products or related records, and using organizational or transfer arrangements to evade the order.

The defendant was ordered to deliver infringing products, packaging, labels, tags, advertising, promotional materials, and other infringing materials in its possession, custody, or control to Telebrands for destruction. Third-party service providers were permanently prohibited from concealing or disposing of relevant records, providing services that supported the defendant’s storefronts or shipment of infringing products, or knowingly helping others engage in the prohibited activities. Upon Telebrands’ request, those providers were also ordered to remove infringing listings and related images, disable related product-identification numbers, and deliver infringing products in their possession for destruction.

The court dissolved the 30-day automatic stay on enforcing the judgment, released Telebrands’ $5,000 security bond to its counsel, and retained jurisdiction over the case and parties to interpret and enforce the order. Failure to comply could be treated as contempt of court and could lead to remedies including fines and seizure of property.

Disposition

The court entered default judgment in favor of Telebrands on all properly pleaded claims, awarded $114,221.29 plus post-judgment interest, and issued permanent and additional equitable relief. Under the classification used here, default judgment is a procedural order because the claims were not tested through an adversarial proceeding.