ALLSTAR MARKETING GROUP, LLC v. ALI DROPSHIPPING SUPPORT STORE

Background

AllStar Marketing Group, LLC sued 52 defendants, asserting claims for trademark counterfeiting, trademark infringement, false designation of origin, passing off and unfair competition under the Lanham Act, copyright infringement under the Copyright Act, and unfair competition under New York common law.

The court previously entered a preliminary injunction. After the defendants failed to defend the case, the court determined that it had personal jurisdiction over Coocnico Offcial Store, EFDKC Offcial Car Accessories Store, Four Seasons’ Song, and Little For Baby Store. It entered an order of default against those four defendants, permanently prohibited them from infringing AllStar’s marks, and referred the damages issue to Magistrate Judge Sarah Netburn. The court later dismissed the remaining defendants without prejudice for lack of personal jurisdiction. The opinion also states that three defendants had been dismissed earlier through an amended certificate of default.

Report and Recommendation

Judge Netburn found that the four defaulting defendants were liable for trademark counterfeiting and infringement under the Lanham Act and copyright infringement under the Copyright Act. Because the defendants had not produced sales records and their conduct was found to be willful, she recommended statutory damages under the Lanham Act instead of actual damages. She recommended $50,000 against each defendant.

Judge Netburn did not recommend additional statutory damages under the Copyright Act, concluding that one statutory-damages award was adequate to compensate copyright owners and deter infringement. She also recommended post-judgment interest under 28 U.S.C. § 1961.

District Court’s Review

Because no party objected to the report and recommendation, the district court reviewed it for clear error on the face of the record. The court stated that the parties had waived judicial review by failing to object, but it independently reviewed the fourteen-page report and found it thorough, well-reasoned, and free of clear error.

Disposition

Judge Gardephe adopted Magistrate Judge Netburn’s report and recommendation in its entirety. The court awarded AllStar a total of $200,000, consisting of $50,000 against each of Coocnico Offcial Store, EFDKC Offcial Car Accessories Store, Four Seasons’ Song, and Little For Baby Store, plus post-judgment interest under 28 U.S.C. § 1961. The Clerk of Court was directed to enter judgment and close the case.