Roku Inc. v. Individuals

Background

Roku, Inc. alleged that defendants identified on Schedule A infringed Roku’s trademarks and sold counterfeit products bearing those marks through online storefronts, including on Amazon, AliExpress, DHgate, eBay, and other marketplace platforms. The opinion states that the defendants were alleged to reside mainly in the People’s Republic of China or other foreign jurisdictions. The court had previously issued a temporary restraining order and then a preliminary injunction. Service was made by sending electronic copies of the summons, complaint, and temporary restraining order, or a link to those documents, as authorized by the court.

The defendants covered by this order—the “Defaulting Defendants”—did not answer, appear at the preliminary-injunction hearing, or oppose Roku’s motion. The Clerk issued a certificate of default. The court concluded that it had personal jurisdiction because the defendants directly targeted consumers in the United States, including New York, by offering to sell and ship products into the district.

Default Judgment and Liability

The court held that default judgment was appropriate. When a defendant defaults, properly pleaded factual allegations are treated as admitted. The court therefore deemed Roku’s plausibly pleaded allegations admitted by each Defaulting Defendant and granted the motion for default judgment as to liability. The order did not apply to defendants who had subsequently been voluntarily dismissed.

Permanent Injunction

The court found that Roku’s allegations established irreparable harm, meaning harm that could not be adequately remedied by money alone. The alleged storefront designs made the sites appear to be authorized sellers and made it difficult for consumers to distinguish them from authorized websites. The court found that the unauthorized use of Roku’s marks created a likelihood of confusion about the goods’ origin, quality, affiliation, sponsorship, or approval. It also found that the default established Roku’s success on the merits. The court therefore ordered a permanent injunction against the Defaulting Defendants’ infringing activities.

Statutory Damages

Under the Lanham Act, the federal trademark statute, statutory damages may range from $1,000 to $200,000 per counterfeit mark per type of goods or services sold. If the infringement is willful, the maximum may be $2 million per counterfeit mark per type of goods sold. The court treated the Defaulting Defendants’ infringement as willful because of the default.

The court considered the inability to determine the defendants’ profits and Roku’s losses, the apparent scale of internet sales, the value and recognition of Roku’s marks, the need for deterrence, the defendants’ failure to provide records, and the alleged willful conduct. It concluded that $130,000 per Defaulting Defendant was just and appropriate. The court also awarded post-judgment interest under 28 U.S.C. § 1961(a).

Asset Relief and Required Filing

The court granted Roku’s request to continue the pre-judgment restraint on the Defaulting Defendants’ asset transfers. It also authorized assets held by affected third parties to be transferred to Roku toward satisfaction of the judgment, provided that the amount transferred did not exceed the judgment plus accrued post-judgment interest. The court found that, without this relief, enforcement of the judgment faced a serious risk of being frustrated.

The court directed Roku to submit, within fourteen days, a revised proposed default judgment reflecting the monetary and injunctive relief and listing the accurate Defaulting Defendants as of the order’s date.