Florida State University v. Individuals

Background

Florida State University and the Florida State University Board of Trustees, together called FSU, moved for default judgment against 133 defendants identified on Schedule A. FSU alleged trademark infringement and counterfeiting under 15 U.S.C. § 1114, false designation of origin under 15 U.S.C. § 1125(a), and unfair competition under New York common law.

The court had entered a temporary restraining order one day after the complaint was filed. The opinion states that the defaulting defendants were properly served but never answered the complaint or otherwise appeared. FSU therefore sought default judgment under Federal Rule of Civil Procedure 55(b)(2), a permanent injunction, heightened statutory damages under 15 U.S.C. § 1117(c), and permission to serve asset-restraint notices on certain third parties.

Default Judgment and Permanent Injunction

The court authorized entry of default judgment on Count One and Count Two for trademark counterfeiting and trademark infringement. On default, the factual allegations in the complaint were accepted as true, but the court independently assessed the amount of damages.

The court found that a permanent injunction was appropriate. It determined that FSU had shown irreparable harm through loss of goodwill and consumer confusion, that legal damages would not adequately address the injury, that the balance of hardships favored FSU, and that an injunction would serve the public interest by protecting consumers from confusion and deception. The court therefore granted FSU’s motion for a permanent injunction barring the defaulting defendants from engaging in the wrongful infringement alleged in the action.

Statutory Damages

FSU requested $150,000 in statutory damages against each defaulting defendant. The Lanham Act permits statutory damages for counterfeit-mark violations within specified limits, including up to $2 million per mark when the violation is willful. The court treated the infringement as willful because of the defendants’ default.

After considering factors including the defendants’ unknown profits and expenses, FSU’s lost revenues, the value of its marks, deterrence, willfulness, cooperation in providing records, and the need for specific deterrence, the court found the requested $150,000 award too high. It awarded FSU $50,000 in statutory damages per defaulting defendant. The court cited the defendants’ online operations and the absence of evidence showing that their sales were large enough to justify a higher award.

Asset-Restraint Notices

FSU asked to serve asset-restraint notices under New York Civil Practice Law and Rules § 5222 on specified third-party platforms and on financial service providers, including unidentified banks and other financial institutions. The court stated that it granted in part and denied in part this request.

The court denied general authorization because the proposed notices were not narrowly limited to identified parties holding assets necessarily connected to the counterfeiting. FSU had not shown that the third parties were substantially intertwined with the defaulting defendants, and the court noted that it might not have personal jurisdiction over some of them. The court denied this portion of the request without prejudice and permitted FSU to modify its request under §§ 5222 and 5225 to identify the parties and assets covered by the notices.

Order

Judge Marrero ordered that FSU’s motion for default judgment against the 133 identified defendants was granted; the motion for a permanent injunction was granted; and FSU was awarded $50,000 in statutory damages for each defaulting defendant. The court also ordered that FSU could modify its requested asset-restraint relief as described in the decision. A $5,000 bond posted by the plaintiffs, with interest less the registry fee, was to be released after notice that all non-defaulting defendants had been dismissed.