Telebrands Corp. v. Aleta Co. Ltd.

Background

Telebrands moved for final default judgment and a permanent injunction against the five “Defaulting Defendants”: chunjia, Dongbielin2022, jue jiang yao, ru zha pi, and TAZEMAT. Telebrands alleged claims involving its “YUMMY CAN” and “YUMMY CAN BACON” trademarks and its copyrighted Yummy Can Bacon packaging, instruction manual, website, and commercial. The alleged unauthorized conduct included manufacturing, advertising, offering for sale, and selling counterfeit products through online marketplace accounts and storefronts.

The opinion states that Telebrands served each Defaulting Defendant on May 1, 2023, and that responses were due May 22, 2023. None filed an answer, responded to the complaint, or formally appeared. The Clerk entered a certificate of default on September 7, 2023. None of the Defaulting Defendants appeared at the October 2, 2023 show-cause hearing.

Court’s analysis

Under Federal Rule of Civil Procedure 55, a court first enters default when a defendant fails to defend and may then enter default judgment if the well-pleaded allegations establish liability as a matter of law. The court accepted the complaint’s well-pleaded factual allegations as true and analyzed them under the plausibility standard, drawing reasonable inferences in Telebrands’ favor.

For copyright infringement, the court explained that Telebrands had to show ownership of valid copyrights and unauthorized copying. It found that Telebrands pleaded and supported both elements, establishing a preliminary case of copyright infringement.

For trademark infringement and counterfeiting, the court required valid marks entitled to protection and a likelihood that the defendants’ use would confuse consumers about the goods’ origin. The court found that Telebrands’ marks had acquired secondary meaning and that the defendants’ marks were nearly identical and likely to confuse consumers. It concluded that the allegations established violations of the Copyright Act and the Lanham Act, including trademark infringement and counterfeiting.

Disposition

The court granted judgment in favor of Telebrands on its First, Second, Third, and Fifth causes of action. It did not consider the Fourth and Sixth causes of action because, according to the opinion, Telebrands did not appear to seek separate relief on those causes of action.

The court awarded Telebrands $50,000 in statutory damages against the five Defaulting Defendants under the Lanham Act, plus post-judgment interest. The order permanently enjoined the Defaulting Defendants and certain persons acting with them who receive actual notice from manufacturing, importing, advertising, marketing, distributing, offering for sale, selling, or otherwise dealing in counterfeit products or products using the Yummy Can Bacon marks or copyrighted works. The order also prohibited related infringement, concealment or disposal of counterfeit products and records, and efforts to evade the injunction through new entities, accounts, storefronts, or platforms.

The Defaulting Defendants were ordered to deliver infringing products, packaging, labels, tags, advertising, promotional materials, and other infringing materials for destruction. The court dissolved the 30-day automatic stay on enforcing the judgment, stated that violations could be treated as contempt of court, released Telebrands’ $5,000 security bond to its counsel, and retained jurisdiction to interpret and enforce the order. Judge Lewis J. Liman signed the order on October 6, 2023.