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Coach, Inc. and Coach Services, Inc v. Cosmetic House

March 29, 2011

COACH, INC. AND COACH SERVICES, INC., PLAINTIFFS,
v.
COSMETIC HOUSE, SOON CHEOL MOH AND DOES 1 THROUGH 10,
DEFENDANTS.



The opinion of the court was delivered by: Walls, Senior District Judge

NOT FOR PUBLICATION

OPINION

Plaintiffs Coach, Inc. and Coach Services, Inc. (collectively "Coach") move for entry of default judgment and a permanent injunction against defendants Cosmetic House and Soon Cheol Moh. The motion is unopposed. Pursuant to Rule 78 of the Federal Rules of Civil Procedure, the Court decides this motion without oral argument. The motion is granted.

FACTUAL AND PROCEDURAL BACKGROUND

Coach manufactures, markets and sells fine leather and mixed material products including handbags, wallets, accessories, eyewear, footwear, jewelry and watches. (Rosenberg Decl., Ex. A; Compl. at ¶ 11.) Coach sells its products through its own specialty retail stores, department stores, catalogs and the internet. (Id.) It has used a variety of legally-protected trademarks, trade dresses and design elements/copyrights for many years in connection with the advertisement and sale of its products (collectively, the "Coach Marks"). (Walden Decl.; Compl. at ¶¶ 12, 14-15, 20.) Coach has put substantial resources into developing, advertising and promoting the Coach Marks. (Compl. at ¶ 13.) Coach alleges that products bearing the Coach Marks are widely recognized by consumers and the public as being high-quality products exclusively associated with Coach. (Id.)

On or about April 11, 2010, James Ricuarte, an investigator from Allegiance Protection Group, Inc., conducted a survey of retail stores on Market Street in Newark, New Jersey. His firm was retained in order to determine whether counterfeit Coach products were being advertised or sold. Ricuarte observed that defendant Cosmetic House "displayed for sale . . . numerous amounts of sunglasses bearing the Coach trademark." (Ricaurte Decl. at ¶ 4.) He purchased a pair of these sunglasses for $5.00. (Id.; Photographs at ECF No. 14, Ex. to Mot. for Default Judgment.) Coach examined these sunglasses and determined that they were counterfeit (Walden Decl. at ¶ 15.)

The complaint in this action was filed by Coach on June 1, 2010. Coach brings claims for trademark counterfeiting and infringement under the Lanham Act (15 U.S.C. § 1114) (Counts I and II), trade dress infringement (15 U.S.C. § 1125(a)) (Count III), false designation of origin and false advertising (15 U.S.C. §1125(a)) (Count IV), trademark dilution (15 U.S.C. § 1125(c)) (Count V), trademark counterfeiting under N.J.S.A. § 56:3-13.16 (Count VI), unfair competition under N.J.S.A. § 56:4-1 et seq. (Count VII), common law trademark infringement (Count VIII) and unjust enrichment under the common law of New Jersey (Count IX).

Defendant Soon Cheol Moh, the registered owner of Cosmetic House, was served with a copy of the Summons and Complaint on June 10, 2010. (ECF No. 8.) Defendant Cosmetic House was served with a copy of the Summons and Complaint on June 14, 2010. (ECF No. 7.) To date, the defendants have not answered or otherwise defended this action. On September 30, 2010, the Clerk of the Court entered default against the defendants for failure to appear, plead or otherwise defend. (ECF No. 11.) Coach now moves to enter default judgment against the defendants.

STANDARD OF REVIEW

Rule 55 of the Federal Rules of Civil Procedure governs a court's decision to grant default judgment. Parties seeking default judgment are not entitled to such relief as a matter of right. See Petrucelli v. Bohringer & Ratzinger, 46 F.3d 1298, 1303 (3d Cir. 1995). The Clerk of the Court must first approve plaintiff's request for entry of default, after which a court may enter default judgment. Fed. R. Civ. P. 55(a). In order to determine if default judgment should be granted, the court must ascertain whether "the unchallenged facts constitute a legitimate cause of action, since a party in default does not admit mere conclusions of law." Directv v. Croce, 332 F. Supp. 2d 715, 717 (D.N.J. 2004). Courts should accept as true the well-pleaded factual allegations of the complaint, but need not accept the moving party's legal conclusions or factual allegations relating to the amount of damages. See Comdyne I, Inc. v. Corbin, 908 F.2d 1142, 1149 (3d Cir. 1990). A court must "conduct its own inquiry 'in order to ascertain the amount of damages with reasonable certainty.'" Int'l Assoc. of Heat & Frost Insulators v. S. Jersey Insulation Servs., No. 05-3143, 2007 WL 276137, at *1 (D.N.J. Jan. 26, 2007) (quoting In re Indus. Diamonds, 119 F. Supp. 2d 418, 420 (S.D.N.Y. 2000)).

Once a legitimate cause of action is established, a court decides whether to issue a default judgment by looking at: "(1) prejudice to the plaintiff if default is denied; (2) whether the defendant appears to have a litigable defense; and (3) whether defendant's delay is due to culpable conduct." Chamberlain v. Giampapa, 210 F.2d 154, 164 (3d Cir. 2000). The issuance of default judgment is largely a matter of judicial discretion. Hritz v. Woma Corp., 732 F.2d 1178, 1181 (3d Cir. 1984). This "discretion is not without limits," as the Third Circuit's preference is "that cases be disposed of on the merits whenever practicable." Id.

JURISDICTION

This Court has original jurisdiction over plaintiffs' claims arising under federal law pursuant to 28 U.S.C. § 1331, and supplemental jurisdiction over plaintiffs' state law claims pursuant to 28 U.S.C. § 1367.

DISCUSSION

I.Sufficiency of Causes of Action Federal Claims

A.Trademark Infringement (15 U.S.C. § 1441) and False Designation (15 U.S.C. § 1125(a))

Trademark infringement (Count II) and false designation (Count IV) are measured by identical standards. A & H Swimwear, Inc. v. Victoria's Secret Stores, Inc., 237 F.3d 198, 210 (3d Cir. 2000). "To prove either form of Lanham Act violation, a plaintiff must demonstrate that

(1) it has a valid and legally protectable mark; (2) it owns the mark; and (3) the defendant's use of the mark to identify goods or services causes a likelihood of confusion. Id. (citing Commerce Nat'l Ins. Servs., Inc. v. Commerce Ins. Agency, Inc., 214 F.3d 432, 437 (3d Cir.2000)).

A certificate of registration issued by the United States Patent and Trademark Office constitutes prima facie evidence of the validity and ownership of a disputed mark. 15 U.S.C. § 1057(b), 1115(a). Here, Coach has attached copies of the trademark registrations over which they assert ownership (Compl. at ¶ 14), and states that the "Coach Trademarks at issue in this case have been continuously used and have never been abandoned." (Compl. at ¶ 19.) Coach asserts that "[t]hese registrations are valid, subsisting in full force and effect, and have become incontestable pursuant to 15 U.S.C. § ...


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