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Touchtown, Inc v. Digital Sign Guys.Com

December 13, 2010


The opinion of the court was delivered by: Mitchell, M.J.:


Presently before the Court for disposition is the plaintiff‟s Motion for Default Final Judgment (Document No. 9). For the reasons set forth below the motion will be granted and an appropriate judgment entered.

Touchtown, Inc. ("Touchtown") commenced this action on May 21, 2010 seeking equitable and legal relief on its claims that the defendants infringed its TOUCHTOWN trademark (United States Trademark Registration No. 2,709,773 filed on June 9, 2000 and registered on April 22, 2003) and for copyright infringement of its "Advertising Photograph for Digital Signage" (United States Copyright Registration No. VA 1-713-744 registered on May 10, 2010) as well as related claims (Document No.1 and Exhibit D thereto). This Court has jurisdiction over this action brought pursuant to 17 U.S.C. §§101 et seq. and 15 U.S.C.§§ 1051 et seq. pursuant to 28 U.S.C. §§ 1331, 1338(a) and (b) and 15 U.S.C. § 1121.

On July 20, 2010 a summons was issued to both defendants and the complaint was served on July 28, 2010 (Document No.3). Because the defendants did not take any action, on September 13, 2010 Touchtown moved for default (Document No.4) and on September 14, 2010 default was entered by the Clerk of Court (Document No.5). Ultimately, in the motion presently before the Court, Touchtown moved for default judgment pursuant to Rule 55(b)(2), F.R.Civ.P. and a hearing on the matter was conducted on November 30, 2010 (Document No.11). Certified mail notice of that hearing was sent to and received by the defendants‟ registered agent although the mail sent to Jon Eck, defendants‟ chief executive officer, was returned to the Court.*fn1 The matter came on for a hearing on November 30, 2010, and no appearance was made on behalf of the defendants.

For purposes of proceeding on a default, the factual allegations of the complaint are accepted as true. City of New York v. Adventure Outdoors, Inc., 644 F.Supp.2d 201 (E.D.N.Y. 2009); Microsoft Corp. v. Nop, 549 F.Supp.2d 1233, 1235 (E.D.Cal. 2008) (relying on Pope v. United States, 323 U.S. 1 (1944). Accordingly, for purposes of further discussion here we accept the allegations that the defendants infringed the plaintiff‟s trademark and copyright.

In addition, appended to the motion for judgment, plaintiff has provided a copy of a June 14, 2010 letter from Jon M. Eck to counsel for the plaintiff in which he states:

As to the infringement and copyright issue of Touchtown‟s property, I also wish to sincerely apologize for any inconvenience this may have caused your client. We are a two person company and as such took an unfortunate shortcut in creating a flier for the purpose of selling digital signage systems to assisted living facilities. We were looking for an image depicting people looking at a digital signage system. We completely missed the Touchtown logo in the image. Digital signage is not our core competency and we did not profit at all from the use of this material. Our only reason for creating said flier was based upon our sale of one digital signage system to one of our existing advertising clients. They did not receive this flier. They simply asked us to install a digital signage system at their assisted living facility.

We are certainly willing to cease and desist from using said flier. We are also willing to send a letter to those persons that received that flier stating we do not represent Touchtown, Inc. in any way. We of course will attach a list of companies that received this flier. I have looked at our list and have found that eleven (11) companies received this flier. (See attached). We did not make copies of this flier, it was sent as a digital attachment and shall be deleted.

We are no longer pursuing digital signage sales to assisted living facilities as we are unfortunately close to bankruptcy.*fn2

From the above letter, it would appear that the defendants acknowledged the infringements and have voluntarily ceased any further similar activity.

In Malik v. Hannah, 661 F.Supp.3d 485, 490 (D.N.J.2009), the Court held:

In contrast to a full proceeding on the merits, a plaintiff seeking default judgment can proceed with only limited proofs, for a consequence of entry of default "is that the factual allegations of the complaint, except those relating to the amount of damages, will be taken as true." . Plaintiff still must offer some proof of damages . Once a plaintiff has met the prerequisites for default judgment-entry of default and proof of damages- the question of whether or not to enter a default judgment "is left primarily to the discretion of the district court".

"Before imposing the extreme sanction of default [judgment], district courts must make explicit factual findings as to: (1) whether the party subject to default has a meritorious defense, (2) the prejudice suffered by the party seeking default, and (3) the culpability of the party subject to default." (internal citations omitted).

Since no defense was forthcoming and voluntary infringement has been conceded, we turn to the appropriate measure of damages to be imposed for trademark and copyright violations. Under the Lanham Act, in addition to equitable relief, the appropriate measure of damages is based on (1) the defendant‟s profits, (2) any damages sustained by the plaintiff, and (3) costs of the action. 15 U.S.C.§1117(a). However, that section also provides that "if the court shall find that the amount of recovery based on profits is either inadequate or excessive the court may in its discretion enter judgment for such sum as the court shall find to be just." Finally, in exceptional circumstances, the court may also award reasonable attorney fees to the prevailing party. In addition to equitable remedies, a party whose copyright in infringed is entitled to recover actual damages suffered as a result of the infringement and any profits earned by the infringer which are attributable to the infringement, 17 U.S.C. §§ 502, 504(b). In the alternative, the copyright owner may elect to recover statutory damages of "not less than $750 or more than $30,000 as the court considers just. For the purposes of this subsection, all the parts of a compilation or derivative work constitute one work." 17 U.S.C. §504(c)(1). The latter measure of damages applies to each work infringed. As the Court in WB Music Corp. v. RTV Communication Group, Inc., 445 F.3d ...

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