MATTEL, INC. v. WWW.FISHER-PRICE.ONLINE

Background

Mattel sued WWW.FISHER-PRICE.ONLINE for allegedly selling counterfeit products and using Mattel’s registered Power Wheels and Fisher-Price trademarks. Mattel alleged that the defendant’s website used marks and product images that were identical or confusingly similar to Mattel’s, offered counterfeit Power Wheels products for sale worldwide including in New York, accepted payment in U.S. dollars, and agreed to ship products to New York. The opinion says the defendant was an individual and/or business believed to be located in China, but the defendant’s true identity and location could not be determined from the website.

Mattel served the defendant with the summons, complaint, temporary restraining order, and supporting papers. The defendant did not appear at the preliminary-injunction hearing, did not answer or otherwise respond to the complaint, and did not appear at the hearing on Mattel’s motion. The Clerk entered a certificate of default. Mattel moved for default judgment on its trademark-counterfeiting, trademark-infringement, and cybersquatting claims. Because Mattel did not brief its claim for false designation of origin, passing off, and unfair competition, the court treated that claim as abandoned for purposes of this motion.

Personal Jurisdiction

The court reaffirmed that it had personal jurisdiction over the defendant. Under New York’s long-arm statute, the court concluded that the defendant transacted business in New York by operating an interactive website that offered products for sale, accepted online payment, and processed Mattel’s purchase for shipment to New York. The court also found a substantial relationship between those New York transactions and Mattel’s claims. It concluded that jurisdiction under the New York statute also satisfied constitutional due-process requirements.

Liability

The court held that Mattel’s allegations were sufficient to establish liability on the trademark-counterfeiting and trademark-infringement claims under the Lanham Act. Mattel had registered Power Wheels and Fisher-Price marks, and the defendant’s products and branding were nearly identical to Mattel’s. The court concluded that the counterfeit products were likely to confuse consumers about their origin or sponsorship.

The court also held that Mattel established cybersquatting under the Anti-Cybersquatting Consumer Protection Act. The Power Wheels and Fisher-Price marks were distinctive, the domain name www.fisher-price.online was confusingly similar to the Fisher-Price mark, and the defendant acted with bad-faith intent to profit. The court relied on the defendant’s use of virtually identical marks and the domain name to sell counterfeit goods, as well as the defendant’s failure to rebut Mattel’s allegations.

Damages

Mattel requested $200,000 for each of three trademark registrations, for a total of $600,000. The court found that statutory damages were appropriate because the defendant’s default and failure to provide business records made its sales and profits unavailable. The court also found that the alleged conduct was willful, that Mattel’s marks had substantial value, and that a significant award would serve deterrence purposes.

The court did not award the full requested amount. It reasoned that the three similar marks were infringed in connection with the same product and that Mattel had not provided a sufficient basis for a cumulative $600,000 award. The court reduced the amount to $180,000 per mark, for a total of $540,000, and awarded post-judgment interest under 28 U.S.C. § 1961(a).

Permanent Injunction

The court granted Mattel’s request to permanently prohibit further counterfeiting or infringement of the Power Wheels and Fisher-Price marks. It found irreparable harm to Mattel’s goodwill and reputation, no adequate remedy at law because future infringement was possible and damages were difficult to measure, a balance of hardships favoring Mattel, and a public interest in avoiding confusion about the source and quality of goods.

The court also approved an injunction concerning the retention or destruction of records relating to the defendant’s counterfeit products, website, assets, and infringing activity. It narrowed the proposed language governing people acting with the defendant by using the language of Federal Rule of Civil Procedure 65(d)(2), which covers parties and persons acting in active concert or participation with them who receive actual notice.

The court limited the injunction against financial institutions and third-party service providers. It held that those entities could be enjoined only when acting in active concert or participation with the defendant, rather than merely because they processed payments, held assets, or provided services. It also narrowed the restriction on service providers so that it applied to services connected with the continued operation of the defendant’s website.

The court granted Mattel’s request to transfer the infringing domain name to Mattel. It also granted a post-judgment asset restraint under New York law, while explaining that any later request to transfer particular assets would need to identify the specific property involved. Finally, the court dissolved the automatic thirty-day stay on enforcement and allowed immediate enforcement of the judgment.

Disposition

The motion for default judgment was GRANTED. The motion for a permanent injunction was GRANTED IN PART and DENIED IN PART. The court directed the Clerk to close the motion and the case.