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IP/Entertainment Case Law Updates

Apple Corps Limited v. Lockalita.com et. al.

District court enters default judgment in favor of plaintiffs, owners of Beatles-related trademarks, against defendants that sold unauthorized “Yellow Submarine” and Beatles merchandise, awarding both permanent injunctive relief and $1 million in statutory damages against each of 77 defendants.

Plaintiffs Apple Corps Limited and Subafilms Limited, the registered owner of Beatles-related trademarks for a variety of goods, brought suit against 77 different entities, alleging trademark counterfeiting and infringement, false designation of origin, common law unfair competition, and common law trademark infringement for the sale of unauthorized Beatles and “Yellow Submarine” merchandise. After defendants failed to respond, plaintiffs sought the entry of default final judgment and requested both injunctive relief and statutory damages. Specifically, plaintiffs moved the court to (1) enjoin defendants from producing or selling goods that infringe their trademarks; (2) cancel or, at plaintiffs’ election, transfer defendants’ domain names to plaintiffs; (3) permanently remove the listings and associated images of goods bearing plaintiffs’ trademarks; (4) require the surrender of defendants’ goods to plaintiffs; and (5) award statutory damages.

The district court granted plaintiffs’ requests, holding that the well-pled factual allegations of plaintiffs’ amended complaint properly alleged the elements for each of their claims and that plaintiffs’ factual allegations were substantiated by sworn declarations and other evidence, establishing defendants’ liability under each of the claims asserted. 

The court agreed with plaintiffs that injunctive relief was available under the Lanham Act in default judgments. Permanent injunctive relief is appropriate where a plaintiff demonstrates that (1) it has suffered irreparable injury, (2) there is no adequate remedy at law, (3) the balance of hardship favors an equitable remedy and (4) an issuance of an injunction is in the public’s interest. Plaintiffs adequately alleged that defendants’ goods would cause confusion among customers and that an award of monetary damages alone would not cure the injury to plaintiffs’ respective reputations and goodwill that would result if defendants’ infringing and counterfeiting actions were allowed to continue. Plaintiffs also would face hardship from loss of sales and their inability to control their reputations in the marketplace. In contrast, defendants would face no hardship if they were prohibited from the infringement of plaintiffs’ trademarks—an illegal act— and the public interest supports the issuance of a permanent injunction against defendants to prevent consumers from being misled by defendants’ products.  

On the issues of monetary damages, in a case involving the use of counterfeit marks in connection with a sale, offering for sale or distribution of goods, the Lanham Act allows a plaintiff to elect statutory damages. The court may award damages between $1,000 and $200,000 per counterfeit mark, per type of good and above the maximum up to $2 million per mark, per type of good for willful counterfeiting actions. Noting that it was appropriate to award statutory damages without holding an evidentiary hearing based upon affidavits and other documentary evidence, since the facts were not disputed, the court found that the allegations in the amended complaint clearly established that defendants intentionally copied plaintiffs’ marks for the purpose of deriving the benefit of plaintiffs’ famous reputations and awarded statutory damages of $1 million against each of the 77 defendants.  

Summary prepared by Melanie Howard and Lisa Rubin