Tile sued S&W Dealz in April for trademark infringement. After S&W Dealz failed to answer the complaint or to oppose Tile’s motion for entry of default, Judge Burroughs granted Tile’s motion. As a result of the default, the willfulness allegations of the complaint are deemed to be true, so S&W Dealz is deemed to have willfully infringed. Tile sought $500,000 in willfulness damages for each of the two trademarks in suit, primarily to serve as a deterrent to future infringer (Tile apparently acknowledged the low likelihood of recovering any money from S&W Dealz). Judge Burroughs acknowledged that Tile could opt for statutory damages, but the statutory damages provision was intended to provide compensation to the plaintiff and serve as a deterrent against future willful infringement, but noted that the statutory damage provision was not intended to provide plaintiff with a windfall. She awarded $50,000 per mark, for a total of $100,000. She also granted Tile’s request for a permanent injunction.
In 2017, plastic bag and packaging maker Laddawn and its owner Ladd Lavallee sued former Laddawn employee Marc Bolduc for cybersquatting and defamation. Bolduc had been Laddawn’s network administrator since 1999, and is alleged to have kept information pertaining to Laddawn’s network secret from Laddawn personnel. His performance allegedly devolved over the years to the point that he was terminated in 2015. Laddawn asserts that Bolduc has password-protected its data backup and refused to turn over the passwords, and that following his termination he began a pattern of harassment of Laddawn and its employees. As a part of this, Laddawn asserts that Bolduc registered a number of domain names utilizing the federally-registered “LADDAWN” mark and made them available for sale “to the highest bidder.”
In the ensuing litigation, Bolduc repeatedly failed to comply with deadlines and discovery orders, resulting in the entry of default judgment against him. Judge Hillman has now awarded damages and costs and entered a permanent injunction. He found that Laddawn had demonstrated bad faith in Bolduc’s registration of the domain names – Bolduc testified at deposition that he had no intellectual property rights in the names registered, did not use the sites to offer goods or services, and registered the names solely to sell them for financial gain. He awarded $3000 per name in statutory damages, for a total of $24,000. He also awarded $100,000 in damages for defamation, and enjoined Bolduc from further acts of defamation or cybersquatting.
Judge Stearns granted photographer John Curtis Rice default judgment, finding that SAJ wrongfully reproduced Rice’s copyrighted photograph of New York City taken by drone from above in SAJ’s “DroneLife” drone news website. The default came after SAJ’s CEO was informed that he (a non-lawyer) could not file an answer on SAJ’s behalf and SAJ could not afford to pay for a defense. Judge Stearns refused, however, to go along with Rice’s demand for regarding damages and fees. Rice had sought $3000 in actual damages for copyright infringement, $10,000 in statutory damages for removal of copyright management information, and $3,825 in fees and $475 in costs, asserting that SAJ’s “infringement and refusal to appear and respond” were “objectively unreasonable.” Judge Stearns, noting that an intern at SAJ had utilized the image without the corporation’s knowledge and that SAJ immediately took down the photograph upon learning of its use, determined that the violations were “unintentional, very limited, and the source of no discernable profit to SAJ.” He awarded only the minimum $750 in statutory damages.
As I have previously noted, the attorney representing Rice has achieved quite a bit of notoriety in demanding vastly unreasonable sums having no ties to the actual infringement or actual likely measure of damages. As Judge Furman of Liebowitz’s home court in the Southern District of New York, recently noted, “[i]n his relatively short career litigating in this District, Richard Liebowitz has earned the dubious distinction of being a regular target of sanctions-related motions and orders. Indeed, it is no exaggeration to say that there is a growing body of law in this District devoted to the question of whether and when to impose sanctions on Mr. Liebowitz alone.” Perhaps this decision is an indication that courts outside of New York’s Southern District are taking note of Mr. Liebowitz’s predatory practices.
Judge Talwani denied defendant’s motion to join or substitute two alleged real parties in interest. AF Holdings brought the case in 2012, accusing Chowdhury of copyright infringement relating to a pornographic film, but failed to show at a hearing, resulting in dismissal of AF’s claims against Chowhurdy and denial of AF’s motion to dismiss Chowhurdy’s counterclaims. When AF failed to answer Chowhurdy’s counterclaims, the Court entered default judgment against AF, as well as AF aliases/alter egos AF Holdings, Inc., Prenda Law, Inc., John L. Steele, Paul A. Duffy, Paul R. Hansmeier and Mark Lutz. Several of these alter egos appealed, asserting that they were not properly named or served, and the First Circuit vacated default judgment against them, noting that even where an alter ego is alleged to be liable for a judgment, they must be hailed into court. Chowhurdy in response filed the instant motion. Judge Talwani noted, however, that a party can be substituted only where an interest is transferred to the new party during pendency of the lawsuit, which was not alleged here. Noting that the proposed new counterclaim defendants would be stuck with a default against them, rather than a judgment following adjudication on the merits, she refused to substitute them in the instant case. Judge Talwani did note that the claim that the proposed new defendants may well be the real parties in interest and subject to a new claim for relief. Accordingly, she made the denial was without prejudice to defendant seeking leave to file an amended counterclaim adding the new parties.