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Roor International BV And Sream, Inc., v. AKS1 Enterprise Inc

United States District Court, S.D. Texas, Houston Division

August 1, 2019

Roor International BV and Sream, Inc., Plaintiffs,
AKS1 Enterprise, Inc. and Saima Karim Shaikh, Defendants.


          Gray H. Miller Senior United States District Judge

         Pending before the court is a motion for default judgment against defendant AKS1 Enterprise, Inc. (“AKS1”) and Saima Karim Shaikh (collectively, “Defendants”). Dkt. 10. AKS1 and Shaikh have not responded to the motion. Having considered the motion and applicable law, the court is of the opinion that the motion should be GRANTED.

         I. Background

         This is a trademark infringement case. Roor International BV (“Roor”) and Sream, Inc. (“Sream”) (collectively, “Plaintiffs”) are suing Defendants for trademark infringement and false designation of Roor's trademarked “water pipes.” Dkt. 1. Roor owns the trade name “ROOR” and the trademark for various different distinctive marks relating to the same. See Dkt. 1 ¶ 12 (listing three registered trademarks Roor owns). Roor licenses Sream, Inc. to distribute Roor's products in the United States. See Id. ¶ 13. Roor contends that it has continuously used and never abandoned the marks at issue in this case. See Id. ¶ 14.

         AKS1, owned and operated by Shaikh, is a tobacco and pipe shop called King of Tobacco. See Id. ¶ 8. In this shop, Defendants offered for sale a counterfeit Roor water pipe which bore the Roor trademark. See Id. ¶ 25. Plaintiffs sued Defendants for trademark infringement in the present action. See e.g. Id. Plaintiffs served Defendants. See Dkt. 6. After Defendants failed to appear, Plaintiffs moved for a default judgment. See Dkt. 10.

         II. Legal Standard

         Under Rule 55(b)(2), a party may apply for the court to enter a default judgment, and the “court may conduct hearings or make referrals-preserving any federal statutory right to a jury trial-when, to enter or effectuate judgment, it needs to: (A) conduct an accounting; (B) determine the amount of damages; (C) establish the truth of any allegation by evidence; or (D) investigate any other matter.” Fed.R.Civ.P. 55(b)(2).

         A default judgment is a “drastic remedy, not favored by the Federal Rules[, ] and resorted to by courts only in extreme situations.” Sun Bank of Ocala v. Pelican Homestead & Sav. Ass'n, 874 F.2d 274, 276 (5th Cir. 1989). “The Federal Rules of Civil Procedure are designed for the just, speedy, and inexpensive disposition of cases on their merits, not for the termination of litigation by procedural maneuver.” Id. A default judgment, thus, “must be ‘supported by well-pleaded allegations' and must have ‘a sufficient basis in the pleadings.'” Wooten v. McDonald Transit Assoc., Inc., 788 F.3d 490, 498 (5th Cir. 2015) (quoting Nishimatsu Constr. Co. v. Hou. Nat'l Bank, 515 F.2d 1200, 1206 (5th Cir. 1975)). The well-pleaded allegations in the complaint are assumed to be true. Nishimatsu, 515 F.2d at 1206.

         A court may not enter a default judgment against a minor or incompetent person unless the person is represented by a general guardian, conservator, or other like fiduciary who has appeared. Fed.R.Civ.P. 55(b). Additionally, a court may not enter a default judgment if the plaintiff does not file an affidavit regarding the defendant's military status. 50 U.S.C. § 3931(b)(1). If the defendant is in the military service, “the court may not enter a judgment until after the court appoints an attorney to represent the defendant.” Id. § 3931(b)(2). Local Rule 5.5 requires that motions for default judgment “be served on the defendant-respondent by certified mail (return receipt requested).” S.D. Tex. L.R. 5.5.

         III. Analysis

         Plaintiffs served Defendants with the Complaint on November 17, 2018 via private process server. See Dkt. 6. Defendants never filed an answer or responsive pleading. On May 13, 2019, Plaintiffs served the motion for default judgment on Defendants via certified mail, return receipt requested as required by the Local Rules. See Dkt 11. Defendants failed to file an answer or responsive pleading prior to the June 3, 2019 deadline. Plaintiffs have shown that AKS1, a company, and Shaikh, an individual, are not minors, are not incompetent persons, and are not in the military. See Dkt. 10-2. “Because [the Defendants] ha[ve] failed to plead or otherwise defend, the court may: (1) enter default against [the Defendants]; (2) accept all well-pleaded facts in the complaint as true; and (3) if [Plaintiffs have] stated a valid claim, award [Plaintiffs] the relief [they] seek[].” Senegal v. TAS Foods, LLC, No. 2:18-CV-1734, 2019 WL 2568630 (Miller, J.) (quoting Nishimatsu, 515 F.2d at 1206).

         A “trademark” is “any word, name, symbol, or device, or any combination thereof . . . used by a person, or which a person has a bona fide intention to use in commerce . . . to identify and distinguish his or her goods, including a unique product, from those manufactured or sold by others and to indicate the source of the goods, even if that source is unknown.” 15 U.S.C. § 1127. The Lanham Act “provide[s] remedies for unfair and misleading use of trademarks.” Schlotzsky's, Ltd. v. Sterling Purchasing & Nat'l Distribution Co., Inc., 520 F.3d 393, 399 (5th Cir. 2008).

         Plaintiffs allege violations of sections 1114 and 1125(a) of the Lanham Act.[1] The claims under 15 U.S.C. § 1114 are for trademark counterfeiting and infringement. Dkt. 12. Section 1114 prohibits using counterfeit “imitation[s] of a registered mark in connection with the sale, offering for sale, distribution, or advertising of any goods or services on or in connection with which such use is likely to cause confusion, or to cause mistake, or to deceive, ” and prohibits counterfeiting “a registered mark and applying it to labels, signs, prints, packages, wrappers, receptacles or advertisements intended to be used in commerce . . . .” 15 U.S.C. § 1114. Plaintiffs contend that Defendants have used Roor's trademarks in commerce. See Dkt. 1 at 12. Further, Plaintiffs allege that Defendants' actions have caused confusion, mistake and deception as to the source of the goods. Id.

         The claim under § 1125 for which Plaintiffs seek a default judgment is for false designation of origin. Dkt. 10. Under 15 U.S.C. § 1125(a), a person may not use in commerce “a word, term name, symbol, or device, or any combination thereof, or any false designation of origin, false or misleading description of fact, or false or misleading representation of fact” that is likely to cause confusion “as to the origin, sponsorship, or approval of his or her goods, services, or commercial activities by another person” or misrepresents the origin of the goods, services, or commercial activities in commercial advertising or promotion. 15 U.S.C. § 1125(a). Plaintiffs contend that Defendants' promotion, sale, and/or offering for sale of the infringing products ...

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