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MALLETIER v. VEIT

June 26, 2002

LOUIS VUITTON MALLETIER AND OAKLEY, INC., PLAINTIFFS,
V.
CHRISTOPHER VEIT AND HENA HASAN A/K/A HENA VEIT, ET AL., DEFENDANTS.



The opinion of the court was delivered by: Lowell A. Reed, Jr., Senior District Judge.

     
MEMORANDUM INCLUDING FINDINGS OF FACT, CONCLUSIONS OF LAW, DEFAULT JUDGMENT, DAMAGE ASSESSMENT, and PERMANENT INJUNCTION

Plaintiffs Louis Vuitton Malletier and Oakley, Inc. brought this suit against Defendants Christopher Veit, Hena Hasan a/k/a Hena Veit, individually and d/b/a Watch Replica, watchreplica.com, and replicatime.com; Swiss Click, Inc.; and Michael Kelvin a/k/a Richard Jones, Individually and d/b/a Netgifts and Net Gifts, Inc., and have charged the Defendants with federal trademark counterfeiting under the Lanham Act, 15 U.S.C. § 1114 (Count 1), federal trademark infringement under the Lanham Act, 15 U.S.C. § 1114 (Count 2), federal unfair competition under the Lanham Act, 15 U.S.C. § 1125(a) (Count 3), federal trademark dilution under the Lanham Act, 15 U.S.C. § 1125(c) (Count 4), cybersquatting under the Federal Anti-Cybersquatting Act, 15 U.S.C. § 1125(d) (Count 5), trademark dilution under Pennsylvania statutory law, 54 Pa.C.S. § 1124 (Count 6), and unfair competition under Pennsylvania common law (Count 7), based upon the sale of counterfeit goods bearing the federally registered trademarks of the Plaintiffs. A default was entered against Defendants on September 17, 2001.

Presently before this Court is the motion of Plaintiffs for default judgment, including money damages, and a permanent injunction, (Document No. 9), pursuant to Rule 55(b) of the Federal Rules of Civil Procedure. By Orders dated April 25, 2002 (Document No. 13), and April 29, 2002, (Document No. 14) this Court scheduled an evidentiary hearing, ordered the Plaintiffs to be prepared to present factual proof of service, as well as factual proof that the Plaintiffs had made reasonable efforts to serve a copy of each April Order upon the Defendants personally. This Court conducted the evidentiary hearing on June 5, 2002, and because the Defendants had failed to answer the complaint, pursuant to Rule 8(d) of the Federal Rules of Civil Procedure, all averments to which a response is required, were accepted into evidence. Based upon the pleadings, the exhibits, the affidavits and memorandum of law in support thereof, as well as the arguments of counsel, this Court now makes the following findings of fact and conclusions of law.

I. FINDINGS OF FACT*fn1

1. Plaintiff Louis Vuitton Malletier is a societe anonyme duly organized and existing under the laws of France, having an office and principal place of business in at 2 rue du Pont Neuf, Paris cedex 01, 75354, France. (Comp. ¶ 6.)

2. Louis Vuitton is the exclusive distributor of Louis Vuitton products, all of which bear one or more of Louis Vuitton's registered trademarks. (Comp. ¶ 24.)

3. Louis Vuitton owns, among others, the trademarks and trade names "LV," "LOUIS VUITTON," Monogram Canvas Pattern Design and Epi trademarks. (Comp. ¶ 25.)

4. Commencing at least as early as 1932, Louis Vuitton registered its trademarks in the United States Patent and Trademark Office. At present, Louis Vuitton's U.S. trademark registrations include, inter alia: LV (Interlocked Letters) in a Circle Design (Reg. No. 286,345), LV (Interlocked Letters) and Monogram Canvas Design (Reg. No. 297,594), LOUIS VUITTON (Reg. No. 1,045,932), LV (Interlocked Letters) Design (Reg. No. 1,519,828), L'ANE DU VOYAGE (Reg. No. 1,574,197), LOUIS VUITTON MALLETIER A PARIS in Rectangle Design (Reg. No. 1,615,681), Noe Style Handbag Design with LV (Interlocked Letters) and Monogram Canvas Design (Reg. No. 1,643,625), LV (Interlocked Letters) on Half Epi Leather Design (Reg. No. 1,646,847), LV (Interlocked Letters) LOUIS VUITTON Brass Lock Design (Reg. No. 1,650,162), LV (Interlocked Letters) on Criss-Cross Background Design (Reg. No. 1,653,662), Keepall Style Duffel Bag Design with LV (Interlocked Letters) and Monogram Canvas Design (Reg. No. 1,653,663), LV (Interlocked Letters) on Epi Leather Design (Reg. No. 1,655,564), Monogram Canvas Design (Reg. No. 1,841,850), LV (Interlocked Letters) CUP with Flag Design (Reg. No. 1,902,728), TAIGA (Reg. No. 1,923,652), Epi Leather Design (Reg. No. 1,931,144), LOUIS VUITTON Design (Reg. No. 1,990,760), Epi Leather Design (Reg. No. 2,058,732), Epi Leather Design (Reg. No. 2,071,273),Epi Leather Design (Reg. No. 2,075,141), Epi Leather Design (Reg. No. 2,098,630), Epi Leather Design (Reg. No. 2,147,003), Epi Leather Design (Reg. No. 2,159,848), "Fleur" Design (Reg. No. 2,177,828), "Fleur" in Circle Design (Reg. No. 2,181,753), and Epi Leather Design (Reg. No. 2,263,903). (Hereinafter referred to as the "Louis Vuitton Registered Trademarks"). (Comp.Ex.; Comp. ¶ 26.)

5. The trademarks are associated with, inter alia, trunks, valises, traveling bags, hat boxes, shoe boxes used for luggage, hand bags, pocketbooks, traveling bags, satchels, shopping bags and beach bags in the nature of luggage, briefcases, briefcase-type portfolios, wallets, billfolds, passport cases, key cases, credit card cases, business card cases, change purses, umbrellas and walking-stick seats, paper and cardboard goods, namely posters, product catalogs and brochures, product picture albums, product magazines and notepads, calendars, indexes, notebooks, envelopes, labels, writing paper, boxes of cardboard or paper, packing paper, bags of paper or plastic for packaging, photographs, pencils, pencil holders, fountain pens, ballpoint pens, inkstands, nibs of gold and playing cards. (Comp.Ex.; Comp. ¶ 26.)

6. The Louis Vuitton Registered Trademarks and the goodwill of Louis Vuitton's business in connection with which its trademarks are and have been used, have never been abandoned. (Comp. ¶ 27.)

7. The Louis Vuitton Registered Trademarks have become exclusively associated by the public and the trade with Louis Vuitton. (Comp. ¶ 29.)

8. As a result of Louis Vuitton's extensive advertising in connection with the Louis Vuitton Registered Trademarks, the widespread sale of Louis Vuitton merchandise and the celebrity that Louis Vuitton trademarks have achieved, the goodwill associated with the Louis Vuitton Registered Trademarks is of inestimable value to Louis Vuitton. (Comp. ¶ 30.)

9. Plaintiff Oakley, Inc. ("Oakley") is a corporation duly organized and existing under the laws of the state of Washington having an office and principal place of business at 1 Icon, Foothill Ranch, CA 92610. (Comp. ¶ 7.)

10. As early as 1985, Oakley has been and continues to be actively engaged in the manufacture and sale of high quality sport sunglasses. One of the successful lines of these sunglasses is marketed under the name FROGSKINS. Other current and successful lines of Oakley sunglasses are the BLADES/RAZOR BLADES, M FRAMES, ZEROS, SUB ZEROS, E WIRES, ROMEO and JULIET. (Comp. ¶ 31.)

11. Oakley also actively engages in the manufacture and sale of high quality watches. Some of the successful lines of Oakley watches are INERTIAL GENERATOR and O ENGINE. (Comp. ¶ 32.)

12. As early as 1985, Oakley has registered its trademarks in the United States Patent and Trademark Office. At present, Oakley's U.S. Trademark Registrations include, inter alia: OAKLEY (Stylized Text) (Reg. No. 1,356,297), IRIDIUM (Reg. No. 1,485,155), ROGSKINS (Reg. No. 1,486,827), BLADES (Reg. No. 1,519,593), OAKLEY (Stylized Text) (Reg. No. 1,519,596), OAKLEY (Reg. No. 1,519,823), OAKLEY (Reg. No. 1,521,599), OAKLEY (Reg. No. 1,552,583), SWEEP (Reg. No. 1,687,647), HEATER (Reg. No. 1,701,078), M FRAME (Reg. No. 1,701,476), HIGH DEFINITION OPTICS (Reg. No. 1,719,875), STRIKE (Reg. No. 1,728,557), UNOBTAINIUM (Reg. No. 1,740,532), HYBRID (Reg. No. 1,778,325), HDO (Reg. No. 1,851,312), T WIRE (Reg. No. 1,952,458), THE VAULT (Reg. No. 1,968,365), EYE JACKET (Reg. No. 1,970,951), E WIRE (Reg. No. 1,973,974), SLASH (Reg. No. 1,978,257), J EYE JACKET (Stylized Text) (Reg. No. 1,979,602), OAKLEY (Stylized Text) (Reg. No. 1,980,039), Ellipse Design (Reg. No. 1,984,501), Ellipse Design with OAKLEY (Stylized) (Reg. No. 1,990,262), Jagged O Design (Reg. No. 2,209,416), ROMEO (Reg. No. 2,250,767), ROMEO (Stylized) (Reg. No. 2,250,773), RACING JACKET (Reg. No. 2,265,324), CRATER (Reg. No. 2,279,279), MINUTE (Reg. No. 2,337,186), A WIRE (Reg. No. 2,339,802), TEN (Reg. No. 2,364,859), JULIET (Reg. No. 2,388,070), XX Design (Reg. No. 2,388,095), Pro M Frame Design (Reg. No. 2,393,107), Heater Design (Reg. No. 2,403,609), TWENTY (Reg. No. 2,410,960), and X (Stylized "Metal" Design) (Reg. No. 2,419,394). (Hereinafter referred to as the "Oakley Registered Trademarks"). (Comp.Ex. 2; Comp. ¶ 33.)

14. The Oakley Registered Trademarks are in full force and effect and the goodwill of the business of Oakley in connection with which the trademarks are used, have never been abandoned. (Comp. ¶ 34.)

15. Oakley intends to continue to preserve and maintain its rights with respect to the Oakley Registered Trademarks. (Comp. ¶ 36.)

16. Oakley sunglasses, bearing one or more of the Oakley Registered Trademarks, by reason of their style, distinctive designs and quality have come to be known by the purchasing public throughout the United States as sunglasses of the highest quality. As a result thereof, the Oakley Registered Trademarks and the goodwill associated therewith are of inestimable value to plaintiff Oakley. (Comp. ¶ 37.)

17. Based on Plaintiffs extensive sales of Louis Vuitton articles and Oakley sunglasses and the wide popularity of Louis Vuitton articles and Oakley sunglasses, the Louis Vuitton and Oakley Registered Trademarks have developed a secondary meaning and significance in the minds of the purchasing public and products bearing such marks and names are immediately identified by the purchasing public with plaintiffs Louis Vuitton and Oakley. (Comp. ¶¶ 29 & 38.) (Collectively, the Louis Vuitton Registered Trademarks and the Oakley Registered Trademarks will be referred to as "Plaintiffs' Registered Trademarks.")

18. Plaintiffs' Registered Trademarks are inherently distinctive. (Comp. ¶ 86.)

19. Plaintiffs' Registered Trademarks are world famous and distinctive. (Comp. ¶ 106.)

20. Plaintiffs' Registered Trademarks have acquired secondary meaning indicative of origin, relationship, sponsorship, and/or association with Plaintiffs and their distinctive reputations for high quality. (Comp. ¶ 107.)

21. Based on Plaintiffs' extensive advertising under the Plaintiffs' Registered Trademarks, its extensive sales and the wide popularity of Plaintiffs' products, Plaintiffs' Registered Trademarks have acquired a secondary meaning so that any product and advertisement bearing such trademarks is immediately associated by purchasers and the public as being a product and affiliate of Plaintiffs. (Comp. ¶ 87.)

22. Defendants Christopher Veit ("Veit") and Hena Hasan a/k/a Hena Veit ("Hasan") are a married couple who are Pennsylvania residents who were residing at 1506 Windermere Road, # 103, West Chester, PA 19001 at the beginning of this action, but shortly thereafter moved to 2886 Dorman Avenue, Broomall, PA 19008. (Comp. ¶ 9 and Testimony of Gregory Sherrick, June 5, 2002.)

23. Veit and Hasan were and have been doing business from their residence under the fictitious names Watch Replica, watchreplica.com, and replicatime.com (hereinafter referred to as the "Websites"). (Comp, ¶ 10.)

24. Veit and Hasan registered and or used the domain name Louis Vuitton-replicas.com. (Comp. ¶ 11.)

25. Veit and Hasan established a mailing address at Mailboxes, Etc. P.O. Box located at 3553 West Chester Pike, Suite 308, Newtown, PA 19073. (Comp. ¶ 12.)

26. Swiss Click, Inc. is a Pennsylvania Corporation with an office and principle place of business at 1506 Windermere Road, # 103, West Chester, PA 19001. This is identical to the address of Veit and Hasan residence at the time this action was commenced. (Comp. ¶ 14.)

27. Swiss Click, Inc. also uses the same mailing address as defendant Veit and Hasan's Mailboxes, Etc. P.O.Box. (Comp. ¶ 14.)

28. Veit is the CEO and Hasan is the Vice President of Swiss Click, Inc. (Comp. ¶ 15.)

29. The Defendants have established email addresses at: sales@watchreplica.com, shipping@watchreplica.com, support@watchreplica.com, affiliates@watchreplica.com, watrep5@aol.com rolexusa@usa.net and rjharpp@aol.com. (Comp. ¶ 23.)

30. Long after Plaintiffs' adoption and use of Plaintiffs' Registered Trademarks, Defendants advertised, distributed, offered for sale and sold counterfeit Louis Vuitton handbags and other articles bearing one or more of the Louis Vuitton Registered Trademarks and counterfeit Oakley sunglasses bearing one or more of the Oakley trademarks through their websites watchreplica.com and replicatime.com. (Comp. ¶ 41.)

31. The replicatime.com website consists entirely of a "mirror" of watchreplica.com, meaning that it contains the exact same content including the name of the website, which is listed on both websites as "Watch Replica." Representative samples of Defendants' pages on the Websites offering replica Louis Vuitton handbags and other related accessories and replica Oakley sunglasses for sale. These counterfeit items could be purchased directly from the internet site. (Comp.Ex. 3; Comp. ¶ 42.)

32. Defendants also operated the website louisvuitton-replicas.com, which is no longer an active website. (Printouts of pages from louisvuitton-replicas.com on May 4, 2001, when it was an active website, Comp.Ex. 4; Comp. ¶ 43.)

33. On September 6, 2000, Plaintiff Oakley notified the Defendants, by email of the illegality and potential penalties of selling sunglasses bearing counterfeit Oakley Registered Trademarks. Thus, the Defendants were so notified before the commencement of this lawsuit. (Comp.Ex. 5; Comp. ¶ 44.)

34. On December 15, 2000, Plaintiff Louis Vuitton's private investigator ordered a Louis Vuitton Monogram umbrella online at watchreplica.com. (Comp. ¶ 45.)

35. On December 21, 2000, Plaintiff Louis Vuitton's private investigator received a Monogram umbrella from the Defendants. The return address for the package was Swiss Click, Inc. at Defendant Veit and Hasan's Mailboxes, Etc. P.O. Box address. (Digital image of the umbrella, Comp.Ex. 6; Comp. ¶ 61.)

36. Louis Vuitton's Industrial Property Director, an expert on Louis Vuitton's products and trademarks, has examined the umbrella and determined that it is counterfeit. The pattern is more than twice the size as a genuine Monogram umbrella, the wood handle should be made from Noble Wood but it is not and the overall quality of the umbrella is lower than that of a genuine Louis Vuitton umbrella. (Aff. of Authenticity of Helene Ramonatxo, Comp.Ex. 7; Comp. ¶ 62.)

37. The counterfeit Louis Vuitton Umbrella ordered from watchreplica.com bears several Louis Vuitton Registered Trademarks including LV (Interlocked Letters) Design, LV (Interlocked Letters) with Monogram Canvas Design, Monogram Canvas Design, "Fleur" Design and "Fleur" in a circle design. (Comp. ¶ 63.)

38. On March 13, 2001, Plaintiff Oakley's private investigator ordered a pair of Oakley Romeo Sunglasses from watchreplica.com by mailing a money order to Veit and Hasan's Mailboxes, Etc. P.O. Box. (Comp. ¶ 64.)

39. On April 5, 2001, Plaintiff Oakley's private investigator received a pair of Oakley Romeo Sunglasses from watchreplica.com. The return address on the package was Net Gifts, Inc. at Kelvin's Mailboxes, Etc. P.O. Box. (Digital images of the sunglasses received from watchreplica.com, Comp.Ex. 8; Comp. ¶ 65.)

40. Oakley's U.S. Intellectual Property Enforcement Specialist has evaluated the pair of sunglasses received from watchreplica.com; and determined that they are a counterfeit imitation of Oakley Romeo sunglasses (the "Counterfeit Sunglasses"). Unlike a genuine pair of Oakley Romeo sunglasses, the Counterfeit Sunglasses are missing rubber earsocks and a nosepiece; the frame is not cleanly molded and contains blemishes and imperfections; and the Counterfeit Sunglasses have the "Oakley" trademark in the wrong place. (Aff. of Sandy Beattie, Comp.Ex. 9; Comp. ¶ 66.)

41. The Counterfeit Sunglasses contain the Oakley Registered Trademarks OAKLEY and OAKLEY (Stylized Text). (Comp. ¶ 67.)

42. On May 16, 2001, Plaintiffs' counsel notified the Defendants by regular mail and email of the illegality and potential penalties of articles bearing counterfeit Louis Vuitton Registered Trademarks. Thus, the Defendants were so notified before the commencement of this lawsuit. (Copy of counsel's correspondence, Comp. Ex. 10; Comp. ¶ 68.)

43. At the time this action commenced the websites watchreplica.com and replicatime.com were still offering for sale counterfeit Louis Vuitton handbags and other articles and counterfeit Oakley sunglasses. (Comp. ¶ 69.)

44. The Defendants have, through the watchreplica.com, replicatime.com, louisvuitton-replicas.com websites offered for sale Louis Vuitton handbags and related articles bearing counterfeit Louis Vuitton Registered Trademarks and sunglasses bearing Oakley Registered Trademarks despite knowledge that such sales are illegal. (Comp. ¶ 70.)

45. The Defendants have registered and/or used the domain name louisvuittonreplicas.com, which incorporates the Louis Vuitton Registered Trademark LOUIS VUITTON for the purpose of selling counterfeit Louis Vuitton merchandise. (Comp. ¶ 71.)

46. The Defendants' acts as aforesaid are deliberately calculated to confuse and to deceive the public and are performed with full knowledge of Plaintiffs' rights. (Comp. ¶ 72.)

47. The Defendants are not now, nor have they ever been, associated, affiliated or connected with, or endorsed or sanctioned by the Plaintiffs. (Comp. ¶ 73.)

48. The Defendants have used spurious designations that are identical with, or substantially indistinguishable from, Plaintiffs' Registered Trademarks on goods covered by registrations for Plaintiffs' Registered Trademarks. (Comp. ¶ 77.)

49. The Defendants have intentionally used these spurious designations knowing they are counterfeit in connection with the advertising, sale, offering for sale and distribution of goods. (Comp. ¶ 78.)

50. Defendants' use of Plaintiffs' Registered Trademarks to advertise, offer for sale, distribute and sell Defendants' counterfeit watches, handbags and related accessories and sunglasses was and is without the consent of Plaintiffs. (Comp. ¶ 79.)

51. Defendants' unauthorized use of Plaintiffs' Registered Trademarks on and in connection with his advertising and sale of counterfeit merchandise through the World Wide Web constitutes Defendants' use of Plaintiffs' Registered Trademarks in commerce. Defendants' unauthorized use of Plaintiffs' Registered Trademarks as set forth above is likely to:

(a) cause confusion, mistake and deception;

(b) cause the public to believe that Defendants' merchandise is the same as Plaintiffs' watches and/or that Defendants are authorized, sponsored or approved by Plaintiffs or that Defendants are affiliated, connected or associated with or in some way related to Plaintiffs;
(c) result in Defendants unfairly benefitting from Plaintiffs' advertising and promotion and profiting from the reputation of Plaintiffs and its Registered Trademarks all to the substantial and irreparable injury of the public, Plaintiffs and Plaintiffs'
Plaintiffs' Registered Trademarks and the substantial goodwill represented thereby. (Comp. ¶ 80 & Comp. ¶ 81.)

52. Defendants have intentionally used Plaintiffs' Registered Trademarks knowing they are the exclusive property of Plaintiffs in connection with the sale, offering for sale and distribution of goods. (Comp. ¶ 89.)

53. Defendants' activities as aforesaid creates the false and misleading impression that Defendants are sanctioned, assigned or authorized by Plaintiffs to use Plaintiffs' Registered Trademarks to advertise, manufacture, distribute, appraise, offer for sale or sell merchandise bearing ...


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