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Hershey Co. v. Anykiss

United States District Court, M.D. Pennsylvania

November 4, 2019

ANYKISS, Defendant


          Kane Judge

         Before the Court is the motion for default judgment (Doc. No. 24) filed by Plaintiffs the Hershey Company and Hershey Chocolate and Confectionary Corporation (“Plaintiffs”) against Defendant Anykiss (“Defendant”). For the reasons that follow, the Court will grant the motion and defer the entry of judgment in favor of Plaintiffs until the receipt of additional information from Plaintiffs as to its request for attorney's fees and costs.

         I. BACKGROUND

         Plaintiffs initiated the above-captioned action by filing a complaint against Defendant, a Ukrainian business, in this Court on April 18, 2018. (Doc. No. 1.) In their complaint, Plaintiffs assert the following causes of action: a violation of the Anticybersquatting Consumer Protection Act (“ACPA”), codified at 15 U.S.C. § 1125(d) (Count I); unfair competition under the Lanham Act, codified at 15 U.S.C. § 1125(a) (Count II); and unfair competition in violation of Pennsylvania common law (Count III). (Id.) The complaint alleges that Defendant has interfered with the use of the KISSES (“KISSES”) mark, which has the corresponding registration numbers 2, 416, 701 and 4, 918, 242 and pertains to Plaintiffs' widely known chocolate candy products and related merchandise sold throughout the world. (Id. ¶ 13.) Specifically, Plaintiffs allege that Defendant has been operating the internet domain <> (the “Offending Domain”), which Defendant uses “to advertise its business of selling chocolate and confections under the name ‘KISS chocolaterie.'” (Id. ¶ 24.) According to Plaintiffs, “Defendant purports to have founded its business in 2015, over 100 years after the first use of the KISSES mark[, ]” and “[t]he Offending Domain advertises Defendant's business of selling competing chocolate goods.” (Id. ¶¶ 25-26.) Plaintiffs further allege that “[t]he Offending Domain is interactive in that it allows consumers to purchase goods and to contact [] Defendant concerning the goods or franchise opportunities.” (Id. ¶ 26.) In March of 2016, Defendant unsuccessfully applied for registration of its KISS CHOCOLATERIE (“KISS CHOCOLATERIE”) mark with the United States Patent and Trademark Office, which denied the application on the ground of confusion with the KISSES mark. (Id. ¶ 27.) According to the complaint, Defendant subsequently abandoned this unsuccessful application. (Id.) Plaintiffs add that “Defendant has reached out to [Plaintiffs'] representatives in an effort to ‘partner' with [Plaintiffs] by selling authorized Hershey products in its shop[, ]” an invitation that Plaintiffs declined on the basis that they do not wish to enter into any such relationship with Defendant. (Id. ¶ 28.)

         According to Plaintiffs, “[d]espite Defendant's clear knowledge of [Plaintiffs'] prior rights in the KISSES mark, Defendant wrongfully continued to use marks confusingly similar to the KISSES marks for the purpose of selling its competing chocolate products through the Offending Domain.” (Id. ¶ 29.) Plaintiffs maintain that “[b]y using the KISSES marks (or marks confusingly similar thereto) in the Offending Domain, [] Defendant seeks to wrongfully benefit from the fame and goodwill associated with the KISSES marks for Defendant's commercial gain to [Plaintiffs'] detriment[, ]” and that “[b]y making unauthorized use of the KISSES marks (or marks confusingly similar thereto) via the Offending Domain, Defendant's actions are diluting and/or tarnishing the goodwill that [Plaintiffs have] developed in the KISSES marks, thereby causing damage to [Plaintiffs].” (Id. ¶¶ 30-31.) Plaintiffs assert that, in light of the above, Defendant's actions are willful and knowing, in addition to being indicative of “a bad faith intent to profit . . . from the use of the KISS CHOCOLATERIE mark and Offending Domain[, ]” which has harmed and will continue to harm Plaintiffs. (Id. ¶¶ 32-34.)

         A review of the docket reveals that Plaintiffs filed an affidavit of service as to Defendant on January 11, 2019, indicating that Defendant was served on August 28, 2018 (Doc. No. 13).[1]Defendant, however, did not appear, answer, move, or otherwise respond to Plaintiffs' complaint. Consequently, Plaintiffs filed a request with the Clerk of Court to enter default against Defendant pursuant to Federal Rule of Civil Procedure 55(a) on February 21, 2019 (Doc. No. 15), which was granted on February 22, 2019 (Doc. No. 16). Plaintiffs filed the instant motion for default judgment on June 11, 2019 (Doc. No. 24), along with a brief in support thereof (Doc. No. 25). Because Defendant has not filed a response to the motion, the Court deems the motion unopposed. Accordingly, Plaintiffs' motion is ripe for disposition.


         Default judgments are governed by a two-step process set forth under Rule 55 of the Federal Rules of Civil Procedure. An entry of default by the Clerk of Court under Rule 55(a) is a prerequisite to a later entry of a default judgment under Rule 55(b). See 10A Charles Alan Wright & Arthur R. Miller, Federal Practice and Procedure § 2682 (3d ed. 2007) (“Prior to obtaining a default judgment under either Rule 55(b)(1) or Rule 55(b)(2), there must be an entry of default as provided by Rule 55(a).”). Once the Clerk of Court has entered a default, the party seeking the default may then move the court to enter a default judgment under Rule 55(b)(2). Entry of default does not entitle a claimant to default judgment as a matter of right. See 10 James Wm. Moore et al., Moore's Federal Practice § 55.31 (Matthew Bender ed. 2010). Indeed, it is well settled that decisions relating to the entry of default judgments are committed to the sound discretion of the district court. See Emcasco Ins. Co. v. Sambrick, 834 F.2d 71, 74 (3d Cir. 1987).

         Three factors control the exercise of the district court's discretion in assessing whether default judgment should be granted following the entry of default: “(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.” See Chamberlain v. Giampapa, 210 F.3d 154, 164 (3d Cir. 2000) (citing United States v. $55, 518.05 in U.S. Currency, 728 F.2d 192, 195 (3d Cir. 1984)). Yet, if the defendant has been properly served but fails to appear, plead, or defend an action, a court may “enter a default judgment based solely on the fact that the default occurred, ” without considering the Chamberlain factors. See Anchorage Assocs. v. Virgin Islands Bd. of Tax Review, 922 F.2d 168, 177 n.9 (3d Cir. 1990).

         “A finding that default judgment is appropriate, however, is not the end of the inquiry.” Martin v. Nat'l Check Recovery Servs., LLC, No. 12-1230, 2016 WL 3670849, at *1 (M.D. Pa. July 11, 2016). Prior to entering a default judgment, the Court must also determine whether the “unchallenged facts constitute a legitimate cause of action.” See Wright, et al., supra, at § 2688; Broad. Music, Inc. v. Spring Mount Area Bavarian Resort, Ltd., 555 F.Supp.2d 537, 541 (E.D. Pa. 2008) (“Consequently, before granting a default judgment, 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.” (citations omitted)). In conducting this inquiry, “the well-pleaded, factual allegations of the complaint . . . are accepted as true and treated as though they were established by proof.” See E. Elec. Corp. of N.J. v. Shoemaker Const. Co., 652 F.Supp.2d 599, 605 (E.D. Pa. 2009) (citation omitted). While the Court must accept as true the well-pleaded factual allegations of the complaint, the Court need not accept the moving party's factual allegations or legal conclusions relating to the amount of damages. See Comdyne I, Inc. v. Corbin, 908 F.2d 1142, 1149 (3d Cir. 1990).


         Having reviewed the record, including Plaintiffs' complaint, motion, and supporting brief, the Court finds that entry of default judgment against Defendant and in favor of Plaintiffs is appropriate. The Court examines the merits of Plaintiff's motion by addressing the sufficiency of Plaintiffs' allegations, the applicability of the Chamberlain factors, and the propriety of the relief requested in the complaint.

         A. Sufficiency of Plaintiffs' Allegations

         As an initial matter, the Court observes that Plaintiff's unchallenged allegations in the complaint, taken as true, state a legitimate cause of action as to each of the three counts asserted in the complaint. First, the Court finds such allegations ...

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