Case 2:10-cv-02086-SHM-dkv Document 15 Filed 12/08/11 Page 1 of 32 PageID 916
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`IN THE UNITED STATES DISTRICT COURT
`FOR THE WESTERN DISTRICT OF TENNESSEE
`WESTERN DIVISION
`
`
`
`ORDER GRANTING PLAINTIFF’S MOTION FOR ENTRY OF FINAL DEFAULT
`JUDGMENT
`
`Before the Court is Plaintiff Chanel, Inc.’s (“Chanel”)
`August 25, 2011 Motion for Entry of Final Default Judgment
`Against Defendant. (See Pl.’s Mot. for Entry of Final Default
`J. Against Def., ECF No. 12.) Defendant Huang Cong (“Cong”) has
`not responded. For the following reasons, Plaintiff’s Motion is
`GRANTED.
`Background1
`
`I.
`Chanel is a New York corporation with its principal place
`of business in New York, New York. (Compl. ¶ 2, ECF No. 1.)
`Chanel manufactures and distributes a wide range of high-quality
`
`1 The facts in this Part come from the factual allegations in Chanel’s
`Complaint, which are deemed admitted due to Defendant’s default. See Antoine
`v. Atlas Turner, Inc., 66 F.3d 105, 110-11 (6th Cir. 1995) (citations
`omitted).
`
`
`
`
`
`)
`)
`)
`)
`) No. 10-2086
`)
`)
`)
`)
`)
`)
`
`
`CHANEL, INC.,
`
` Plaintiff,
`
`v.
`
`HUANG CONG, and DOES 1-10,
`
` Defendants.
`
`
`

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`Case 2:10-cv-02086-SHM-dkv Document 15 Filed 12/08/11 Page 2 of 32 PageID 917
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`luxury goods around the world. (Id.) In Shelby County,
`Tennessee, Chanel operates boutiques and maintains a warehouse
`used to fulfill its e-commerce orders. (Id.)
`Chanel owns a number of federally-registered trademarks,
`including variations on the word “Chanel,” the word “J12,” and a
`monogram consisting of a letter “C” interlocked with another,
`opposite-facing letter “C” (collectively the “Chanel Marks” or
`
`“Marks”).2 (Id. ¶¶ 2, 9; Hahn Decl. ¶ 4, ECF No. 12-2.) The
`Chanel Marks are registered in International Classes 9, 14, 18,
`20, and 25 and are used in manufacturing and distributing
`Chanel’s luxury goods, including its handbags and watches.
`(Compl. ¶¶ 9-10.)
`The Chanel Marks symbolize Chanel’s quality, reputation,
`and goodwill. (Compl. ¶ 11.) Chanel has never abandoned the
`Marks and has invested substantial time, money, and other
`resources developing and promoting them. (Id. ¶¶ 11-12.) In
`the United States, Chanel has used, advertised, and promoted the
`Chanel Marks in association with its luxury goods, carefully
`
`2 Chanel owns the following federally registered trademarks at issue in this
`case: CHANEL (registered May 1, 1956 as number 0,626,035), CHANEL (registered
`November 10, 1970 as number 0,902,190), CHANEL (registered January 19, 1971
`as number 0,906,262), CHANEL (registered June 15, 1971 as number 0,906,139),
`CHANEL (registered March 13, 1973 as number 0,955,074), CHANEL (registered
`March 13, 1973 as number 0,955,074), CC Monogram (registered June 7, 1983 as
`numbers 1,241,264 and 1,241,265), CC Monogram (registered January 15, 1985 as
`number 1,314,511), CHANEL (registered July 9, 1985 as number 1,347,677),
`CHANEL (registered December 19, 1989 as number 1,571,787), CHANEL (registered
`November 17, 1992 as number 1,733,051), J12 (registered April 9, 2002 as
`number 2,559,772), Partial CC Monogram (registered December 13, 2005 as
`number 3,025,934), CHANEL (registered August 22, 2006 as number 3,133,139).
`(See Compl. ¶ 9) (collecting trademarks).
`2
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`monitoring their uses. (Id. ¶ 13.) As a result, consumers
`readily identify merchandise bearing the Marks as high-quality
`merchandise sponsored and approved by Chanel. (Id. ¶ 14.)
`Accordingly, the Chanel Marks have secondary meaning as
`identifiers of high quality. (Id. ¶ 15.)
`Cong and Does 1-10 (collectively, the “Defendants”) are
`individuals and/or business entities. (Id. ¶ 3.) The
`Defendants, individually and jointly, maintain fully operational
`websites operating under various domain names (collectively, the
`
`“Subject Domain Names”).3 (Id. at 1, ¶ 4.) The Chanel Marks
`have never been assigned or licensed to the Defendants for use
`on any of the websites operating under the Subject Domain Names.
`(See Compl. ¶ 10.) Through the Subject Domain Names, the
`Defendants advertise, offer, sell, and distribute counterfeit
`products bearing the Chanel Marks. (See id. ¶¶ 3, 4, 18, 19.)
`The Defendants’ products bear exact copies of the Chanel Marks
`in the same stylized fashion as genuine Chanel products, but the
`quality of the Defendants’ products is substantially different.
`(Id. ¶ 17.)
`On February 5, 2010, Chanel brought this action against the
`Defendants. (See Compl.) Chanel alleges that Defendants’
`actions constitute (1) counterfeiting and infringement under
`
`3 The Subject Domain Names are: cheap-chanel-shopping.com, chanel-gucci-
`louisvuitton.com, bluestonetrade.com, knockoffnamebag.com,
`sunglassesmerchant.com, replicabagsmerchant.com, and handbagsjobber.com.
`(See Compl. at 1.)
`
`
`
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`Section 32 of the Lanham Act, 15 U.S.C. § 1114, (see Compl. ¶¶
`30-35); (2) false designation of origin under Section 43(a) of
`the Lanham Act, 15 U.S.C. § 1125(a), (see id. ¶¶ 36-41); and (3)
`cyberpiracy under the Anticybersquatting Consumer Protection
`Act, 15 U.S.C. § 1125(d), (see id. ¶¶ 44-48).
`Chanel filed a Motion to Authorize Alternate Service of
`Process on Defendant Pursuant to Federal Rule of Civil Procedure
`4(f)(3) of the Federal Rules of Civil Procedure on May 14, 2010.
`(See Chanel, Inc.’s Mot. to Authorize Alternate Services of
`Process on Def., ECF No. 4.) The Court granted that motion on
`November 4, 2010. (See Order Authorizing Alternate Service of
`Process on Def. Pursuant to Federal Rule of Civil Procedure
`4(f)(3), ECF No. 7). Chanel served Cong with copies of the
`Summons and Amended Complaint by e-mail on November 5, 2010.
`(See Proof of Service ¶ 3, ECF No. 8-1; Morrow Decl. ¶ 3, ECF
`No. 9-1.) Over twenty days have elapsed since service was
`effective, and Cong has not responded. (See Morrow Decl. ¶ 4.)
`On January 7, 2011, the Clerk entered default against Cong. See
`Fed. R. Civ. P. 55(a); (Entry of Default, ECF No. 10). Chanel
`filed the Motion for Entry of Final Default Judgment now before
`the Court on August 25, 2011.4
` (See Mot. for Default, ECF No.
`12.)
`
`4 Chanel’s Complaint alleges that Cong acted in concert with various unnamed
`Defendants Does 1-10. (See Compl. ¶ 5.) However, only Cong has defaulted.
`(See Entry of Default.) The other Defendants have not been identified or
`4
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`II. Jurisdiction
`A court’s default judgment is invalid unless it has proper
`jurisdiction. See, e.g., Citizens Bank v. Parnes, 376 F. App’x
`496, 501 (6th Cir. 2010) (“Personal jurisdiction over a
`defendant is a threshold issue that must be present to support
`any subsequent order of the district court, including entry of
`the default judgment.”) (citing Kroger Co. v. Malease Foods
`Corp., 437 F.3d 506, 510 (6th Cir. 2006)).
`personal
`and
`Courts
`must
`consider
`subject-matter
`jurisdiction, but not defects in venue, before entering a
`default judgment. Compare In re Tuli, 172 F.3d 707, 712 (9th
`Cir. 1999) (holding that a district court properly raised the
`issue of personal jurisdiction sua sponte), and Williams v. Life
`Sav. & Loan, 802 F.2d 1200, 1203 (10th Cir. 1986) (per curiam)
`(“[W]hen entry of a default judgment is sought against a party
`who has failed to plead or otherwise defend, the district court
`has an affirmative duty to look into its jurisdiction both over
`the subject matter and the parties.”), and Columbia Pictures
`Indus. v. Fysh, No. 5:06-CV-37, 2007 U.S. Dist. LEXIS 11234, 3-4
`(W.D. Mich. Feb. 16, 2007) (considering and finding subject-
`matter and personal jurisdiction before entering a default
`
`served. Therefore, this Order applies only to Cong. See County Sec. Agency
`v. Ohio Dep’t of Commerce, 296 F.3d 477, 483 (6th Cir. 2002) (“It is
`elementary that one is not bound by a judgment in personam resulting from
`litigation in which he is not designated as a party or to which he has not
`been made a party by service of process.”) (quoting Zenith Radio Corp. v.
`Hazeltine Research, Inc., 395 U.S. 101, 110 (1969)).
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`judgment), with Rogers v. Hartford Life & Accident Ins. Co., 167
`F.3d 933, 942 (5th Cir. 1999) (“The Supreme Court has made clear
`that if a party defaults by failing to appear or file a timely
`responsive pleading, the party waives defects in venue.”)
`(citations omitted), and Williams, 802 F.2d at 1202 (“[I]f a
`party is in default by failing to appear or to file a responsive
`pleading, defects in venue are waived, a default judgment may be
`validly entered and the judgment cannot be attacked collaterally
`for improper venue.” (citing Hoffman v. Blaski, 363 U.S. 335,
`343 (1960)).
`A. Subject-matter Jurisdiction
`question
`Congress
`has
`specifically
`granted federal
`jurisdiction for claims of copyright and trademark infringement.
`See 15 U.S.C. § 1121(a) (providing for jurisdiction over all
`trademark claims arising under Chapter 22 of Title 15 of the
`United States Code); 28 U.S.C. § 1338(a) (providing for
`jurisdiction of any action arising under a federal law relating
`to copyrights and trademarks). General federal question
`jurisdiction exists for any claims arising under the laws of the
`United States. See 28 U.S.C. § 1331. Chanel has alleged
`violations of federal statutes barring trademark infringement,
`false designation of origin, and cyberpiracy. See 15 U.S.C. §§
`1114(1)(a), 1125(a), 1125(d); (Compl. ¶¶ 31-51). Therefore, the
`
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`Court has subject-matter jurisdiction over Chanel’s claims. See
`15 U.S.C. § 1121(a); 28 U.S.C. §§ 1331, 1338(a).
`B. Personal Jurisdiction
`A court’s subject-matter jurisdiction arises from the
`existence of a federal question. “[P]ersonal jurisdiction over
`a defendant exists ‘if the defendant is amenable to service of
`process under the [forum] state’s long-arm statute and if the
`exercise of personal jurisdiction would not deny the defendant[]
`due process.’” Flynn v. Greg Anthony Constr. Co., 95 F. App’x
`726, 740 (6th Cir. 2003) (quoting Bird v. Parsons, 289 F.3d 865,
`871 (6th Cir. 2002)). “Where the state long-arm statute extends
`to the limits of the due process clause, the two inquiries are
`merged and the court need only determine whether exercising
`personal jurisdiction violates constitutional due process.”
`Bridgeport Music, Inc. v. Still N the Water Publ’g, 327 F.3d
`472, 477 (6th Cir. 2003) (citing Nationwide Mut. Ins. Co. v.
`Tryg Int’l Ins. Co., 91 F.3d 790, 793 (6th Cir. 1996)). Because
`“the Tennessee long-arm statute has been interpreted as
`coterminous with the limits on personal jurisdiction imposed by
`the due process clause,” federal courts in Tennessee may
`exercise personal jurisdiction if doing so is consistent with
`federal due process requirements. Id. (citing Payne v.
`Motorists’ Mut. Ins. Cos., 4 F.3d 452, 454 (6th Cir. 1993)).
`
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`“Personal jurisdiction over an out-of-state defendant
`arises from ‘certain minimum contacts with [the forum] such that
`maintenance of the suit does not offend traditional notions of
`fair play and substantial justice.’” Air Prods. & Controls,
`Inc. v. Safetech Int’l, Inc., 503 F.3d 544, 550 (6th Cir. 2007)
`(quoting Int’l Shoe Co. v. Washington, 326 U.S. 310, 316
`(1945)). Personal jurisdiction may be specific or general,
`depending on the type of minimum contacts maintained by the out-
`of-state defendant. Id. (citing Reynolds v. Int’l Amateur
`Athletic Fed’n, 23 F.3d 1110, 1116 (6th Cir. 1994)). The Sixth
`Circuit applies a three-part test to determine whether specific
`personal jurisdiction exists.
`First, the defendant must purposefully avail himself
`of the privilege of acting in the forum state or
`causing a consequence in the forum state. Second, the
`cause of action must arise from the defendant’s
`activities there. Finally, the acts of the defendant
`or consequences caused by the defendant must have a
`substantial enough connection with the forum state to
`make the exercise of jurisdiction over the defendant
`reasonable.
`
`Air Prods., 503 F.3d at 550 (quoting S. Mach. Co. v. Mohasco
`Indus., Inc., 401 F.2d 374, 381 (6th Cir. 1968)) (emphasis
`added).
`
`1. Purposeful Availment
`To satisfy the first requirement of specific personal
`
`jurisdiction, the defendant “must have purposefully availed
`himself of ‘the privilege of acting in the forum state or
`
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`causing a consequence in the forum state.’” Id. (quoting S.
`Mach Co., 401 F.2d at 381). Where a defendant’s contacts with
`the forum state result from actions undertaken by the defendant
`himself, the defendant has purposefully availed himself of the
`privilege of acting in the state. Id. (quoting Burger King
`Corp. v. Rudzewicz, 471 U.S. 462, 475 (1985)). Physical
`presence in the forum state is not required, but a defendant’s
`connection to the forum state must be “substantial,” rather than
`a
`result
`of
`“random,”
`“fortuitous,”
`or
`“attenuated”
`circumstances. Id.
`
`Operating a website constitutes personal availment “if the
`website is interactive to a degree that reveals specifically
`intended interaction with residents of the state.” Bird, 289
`F.3d at 874 (quoting Neogen Corp. v. Neo Gen Screening, Inc.,
`282 F.3d 883, 890 (6th Cir. 2002)) (internal quotation marks
`omitted). To determine whether a defendant’s website
`constitutes personal availment, courts use a sliding scale
`approach. Cadle Co. v. Schlichtmann, 123 F. App’x 675, 678 (6th
`Cir. 2005) (citing Neogen, 282 F.3d at 890; Revell v. Lidov, 317
`F.3d 467, 472 (5th Cir. 2002)). This sliding scale
`“distinguishes between interactive websites, where the defendant
`establishes repeated online contacts with residents of the forum
`state, and websites that are passive, where the defendant merely
`posts information on the site.” Id. “Interactive websites can
`
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`subject the defendant to specific personal jurisdiction, whereas
`passive websites are less likely to confer such jurisdiction.”
`Id. (citing Neogen, 282 F.3d at 889-91). Where, through a
`website, a defendant sells products and services to customers in
`the forum state, the defendant has purposefully availed itself
`of the privilege of acting in the forum state, even if the
`customers initiate the sales by placing orders through the
`website. See, e.g., Neogen, 282 F.3d at 892 (holding that a
`defendant’s shipping products to and accepting payment from
`forum state customers constituted personal availment); Morel
`Acoustic, Ltd. v. Morel Acoustics USA, Inc., No. 3-:04-CV-348,
`2005 U.S. Dist. LEXIS 32864, at *19-20 (S.D. Ohio Sept. 7, 2005)
`(concluding that, where a defendant’s website “provide[d]
`specifications and prices, invite[d] orders, provide[d] order
`forms for downloading and provide[d] an e-mail link for placing
`orders,” the defendant had purposefully availed itself of the
`forum state).
`
`Cong has operated “fully interactive . . . commercial
`website[s]” operating under the Subject Domain Names. (See
`Compl. ¶¶ 1, 3.) Through these websites, Cong has advertised
`and sold his products to Tennessee residents. (See id. ¶¶ 5-6.)
`For these reasons, Cong has purposefully availed himself of the
`privilege of acting in Tennessee, and the first requirement for
`personal jurisdiction is satisfied. See See Cadle Co., 123 F.
`
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`App’x at 678; Neogen, 282 F.3d at 892; Morel Acoustic, 2005 U.S.
`Dist. LEXIS 32864, at *19-20.
`2. Arising From
`
`The second requirement is that the plaintiff’s claims
`“arise from” the defendant’s contacts with the forum state. Air
`Prods., 503 F.3d at 553. The Sixth Circuit has phrased the test
`for this requirement in a number of ways, including “whether the
`causes of action were ‘made possible by’ or ‘lie in the wake of’
`the defendant’s contacts, . . . or whether the causes of action
`are ‘related to’ or ‘connected with’ the defendant’s contacts
`with the forum state.” Id. (internal citations omitted).
`Regardless of its phrasing, this standard is a lenient one.
`Bird, 289 F.3d at 875. A cause of action need not formally
`arise from a defendant’s contacts with the forum. Id. Rather,
`this test requires only “that the cause of action, of whatever
`type, have a substantial connection with the defendant’s in-
`state activities.” Bird, 289 F.3d at 875 (quoting Third Nat’l
`Bank in Nashville v. Wedge Group, Inc., 882 F.2d 1087, 1091 (6th
`Cir. 1989))(internal quotation marks omitted).
`
`The gravamen of Chanel’s complaint is that Cong committed
`trademark infringement, false designation of origin, and
`cyberpiracy by selling products bearing exact copies of the
`Chanel Marks though various websites, including one with a
`domain name confusingly similar to one of the Chanel Marks.
`
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`(See Comp. ¶¶ 28-48.) Cong’s contacts with the forum state are
`his interactive websites and sales of products to Tennessee
`residents through those websites. (See Compl. ¶¶ 5-7.) There
`is a “substantial connection” between Chanel’s claims and Cong’s
`contacts with Tennessee. Cf. Bird, 289 F.3d at 875 (finding
`that a plaintiff’s copyright and trademark infringement claims
`were related to defendants’ contacts with the forum state
`because the defendants’ operation of a website both created the
`contacts and the factual basis for the plaintiff’s claims).
`Therefore, Chanel’s claims arise from Cong’s contacts in
`Tennessee.
`
`3. Reasonableness
`The third requirement is that “the acts of the defendant or
`
`consequences caused by the defendant must have a substantial
`enough connection with the forum state to make the exercise of
`jurisdiction over the defendant reasonable.” Air Prods., 503
`F.3d at 554 (quoting S. Mach. Co., 401 F.2d at 381). If the
`first two requirements for specific personal jurisdiction are
`met, an inference arises that the third requirement is also
`satisfied. Bird, 289 F.3d at 875. If “a defendant who
`purposefully has directed his activities at forum residents
`seeks to defeat jurisdiction, he must present a compelling case
`that the presence of some other considerations would render
`jurisdiction unreasonable.” Air Prods., 289 F.3d at 554.
`
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`personal
`for
`requirements
`two
`first
`the
`Because
`
`jurisdiction have been met, there is an inference that the Court
`may reasonably exercise jurisdiction over Cong. See Bird, 289
`F.3d at 875; supra Sections II.B.1-2. Cong has defaulted and
`has not presented a compelling case that any additional
`considerations make the Court’s exercise of jurisdiction
`unreasonable. See Air Prods., 289 F.3d at 554.
`
`For the foregoing reasons, the Court’s exercise of personal
`jurisdiction over Cong comports with federal due process
`requirements. Subject-matter and personal jurisdiction are
`proper, and the Court may enter a valid default judgment.
`III. Standard of Review
`Federal Rule of Civil Procedure 55(b)(2) governs default
`judgment. See Fed. R. Civ. P. 55(b). “Once a default is
`entered against a defendant, that party is deemed to have
`admitted all of the well pleaded allegations in the complaint,
`except for those relating to damages.” Microsoft Corp. v.
`McGee, 490 F. Supp. 2d 874, 878 (S.D. Ohio 2007) (citing Antoine
`v. Atlas Turner, Inc., 66 F.3d 105, 110-11 (6th Cir. 1995)); see
`also Fed. R. Civ. P. 8(d) (“Averments in a pleading to which a
`responsive pleading is required, other than those as to the
`amount of damage, are admitted when not denied in the responsive
`pleading.”) Unlike factual allegations, “legal conclusions are
`not deemed admitted as a result of the entry of default.”
`
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`Krowtoh II, LLC v. Excelsius Int’l Ltd., No. 04-505-KSF, 2007 WL
`5023591, at *4 (E.D. Ky. 2007) (citations omitted). Because the
`Clerk entered default against Cong on January 7, 2011 (see Order
`of Default), Cong is deemed to have admitted the factual
`allegations in Chanel’s complaint, other than those relating to
`damages. If the factual allegations provide a sufficient legal
`basis, the court enters a default judgment and conducts an
`inquiry to determine damages and other relief. See Coach, Inc.
`v. Cellular Planet, No. 2:09-cv-00241, 2010 U.S. Dist. LEXIS
`45087, at *7 (S.D. Ohio May 7, 2010) (citing Arista Records,
`Inc. v. Beker Enters., 298 F. Supp. 2d 1310, 1311-12 (S.D. Fla.
`2003)).
`IV. Analysis
`A. Liability
`Chanel’s undisputed allegations establish that Cong
`committed trademark infringement, false designation of origin,
`and cyberpiracy, in violation of 15 U.S.C. §§ 1114(1)(a),
`1125(a), and 1125(d).
`1. Trademark Infringement
`trademark
`for
`Lanham
`Act
`provides
`liability
`The
`infringement if a trademark registrant shows that (1) another
`person has used any reproduction, counterfeit, copy, or
`colorable imitation of the registrant’s mark, (2) without the
`registrant’s consent, (3) in commerce, (4) in the sale, offer,
`
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`distribution, or advertisement of any goods or services, (5)
`where the use is likely to cause confusion or mistake or to
`deceive. See 15 U.S.C. § 1114(1)(a). Liability often turns on
`“whether the defendant’s use of the disputed mark is likely to
`cause confusion among consumers regarding the origin of the
`goods offered by the parties.” Daddy’s Junky Music Stores v.
`Big Daddy’s Family Music Ctr., 109 F.3d 275, 280 (6th Cir. 1997)
`(citations omitted).
`Chanel’s allegations establish Cong’s liability for
`trademark infringement. Chanel is the owner of the Chanel
`Marks. (See Compl. ¶ 9.) Through the internet, Cong has
`promoted, advertised, distributed, sold, and/or offered products
`bearing marks that are exact copies of the Chanel Marks. (See
`id. ¶¶ 16-23.) Cong has done so without Chanel’s consent. (See
`id. ¶ 21.) By defaulting, Cong has admitted that his using the
`Marks has likely caused confusion, deception and mistake among
`members of the trade and the general consuming public as to the
`origin and quality of his goods. (See id. ¶¶ 18, 23.) For
`these reasons, Chanel is entitled to judgment on the trademark
`infringement claim.
`2. False Designation of Origin
`Under the Lanham Act, liability for false designation of
`origin may arise in a number of ways. See 15 U.S.C. 1125(a).
`The Act provides liability where a person shows that, (1) in
`
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`connection with any goods, services, or goods containers, (2)
`another person has used any word, term, name, symbol, or device
`(3) that is likely to cause confusion or mistake or to deceive
`“as to the affiliation, connection, or association of such
`person with another person, or as to the origin, sponsorship, or
`approval of his or her goods, services, or commercial activities
`by another person.” See 15 U.S.C. 1125(a)(1)(A).
`Chanel’s undisputed allegations establish Cong’s liability
`for false designation of origin. In advertising, distributing,
`selling, and/or offering his goods, Cong has used marks that are
`exact copies of the Chanel Marks. (See Compl. ¶ 17.) The “net
`effect of [Cong’s] actions will be to result in the confusion of
`consumers who will believe the Defendant’s Counterfeit Goods are
`genuine goods originating from and approved by the Plaintiff.”
`(Id. ¶ 18.) Therefore, Chanel is entitled to judgment on the
`false designation of origin claim.
`3. Cyberpiracy
`The Anticybersquatting Consumer Protection Act (“ACPA”)
`provides liability for cyperpiracy if a person (1) registers,
`traffics or uses a domain name (2) that is identically or
`confusingly similar to a distinctive or famous mark (3) with a
`“bad faith intent to profit from that mark.” See 15 U.S.C. §
`1125(d)(1)(A). The ACPA includes a safe harbor provision for a
`person who “believed and had reasonable grounds to believe that
`
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`the use of the domain name was a fair use or otherwise lawful.”
`Id. § 1125(d)(1)(B)(ii).
`
`Chanel’s allegations establish that Cong’s actions meet the
`first element of cyberpiracy under the ACPA. Cong registered
`the domain names anonymously and for the sole purpose of
`engaging in illegal counterfeiting activities. (See Compl. at
`¶¶ 7, 44.) A famous mark is one that is “widely recognized by
`the general consuming public of the United States as a
`designation of source of the goods or services of the mark’s
`owner.” 15 U.S.C. § 1125(2)(A). To determine whether a mark is
`so recognized, a court considers “all relevant factors,”
`including: (1) the “duration, extent, and geographic reach of
`advertising and publicity of the mark,” (2) the amount, volume,
`and geographic extent of sales of goods or services offered
`under the mark, (3) actual recognition of the mark, and (4)
`whether the mark is registered.
`
`The word “Chanel” is a famous mark under 15 U.S.C. §
`1125(2)(A). Chanel registered the mark “Chanel” in various
`forms in 1955, 1956, 1970, 1971, 1973, 1983, 1985, 1988, 1992,
`and 2006. (See Compl. ¶ 9.) Chanel has used that mark in
`advertising and promoting its goods around the world for “an
`extended period of time.” (Compl. ¶ 10.) Due to Chanel’s
`efforts, the public identifies goods bearing any of the Chanel
`Marks as goods “sponsored and approved by Chanel.” (Compl. ¶
`
`
`
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`14.) Therefore, Chanel is a “famous mark” within the meaning of
`the ACPA. See 15 U.S.C. 1125(2)(A)(i-iv).
`
`The domain names cheap-chanel-shopping.com and chanel-
`gucci-louisvuitton.com are confusingly similar to the Chanel
`Mark J12. “Courts generally have held that a domain name that
`incorporates a trademark is ‘confusingly similar to’ [a famous]
`mark if ‘consumers might think that [the domain name] is used,
`approved, or permitted’ by the mark holder.” DaimlerChrysler v.
`Net Inc., 388 F.3d 201, 205 (6th Cir. 2004) (citing 15 U.S.C. §
`1125(d)(1)(C)) (quoting Ford Motor Co. v. Greatdomains.Com,
`Inc., 177 F. Supp. 2d 635, 641 (E.D. Mich. 2001). Courts
`consider “slight differences between domain names and registered
`marks, such as the addition of minor or generic words” to be
`irrelevant. Id. at 206 (quoting Ford Motor Co., 177 F. Supp. at
`641). Although Cong has added the descriptive word “cheap” to
`the Chanel Mark, the domain name cheap-chanel-shopping.com is
`nonetheless confusingly similar to the Chanel Mark. See, e.g.,
`HER, Inc. v. RE/MAX First Choice, LLC, 468 F. Supp. 2d 964, 973
`(S.D.
`Ohio
`2007)
`(finding
`that
`domain
`name
`www.insiderealliving.com was confusingly similar to REALLIVING
`mark and rejecting argument that the addition of the word
`“inside” eliminated confusion); Ford Motor Co., 177 F.Supp.2d at
`641 (internal quotations omitted) (finding that the domain names
`
`
`
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`
`“4fordparts.com,” “jaguarcenter.com,” and “volvoguy.com” were
`confusingly similar to the marks FORD, JAGUAR, and VOLVO).
`
`Cong has registered the domain names with the bad faith
`intent to profit from the Chanel Marks and the goodwill
`associated the Chanel Marks. The ACAP provides nine non-
`exclusive factors for courts to consider in determining whether
`there is bad faith intent to profit:
`(I) the trademark or other intellectual property
`rights of the person, if any, in the domain name;
`
`(II) the extent to which the domain name consists of
`the legal name of the person or a name that is
`otherwise commonly used to identify that person;
`
`(III) the person’s prior use, if any, of the domain
`name in connection with the bona fide offering of any
`goods or services;
`
`(IV) the person’s bona fide noncommercial or fair use
`of the mark in a site accessible under the domain
`name;
`
`(V) the person’s intent to divert consumers from the
`mark owner’s online location to a site accessible
`under the domain name that could harm the goodwill
`represented by the mark, either for commercial gain or
`with the intent to tarnish or disparage the mark, by
`creating a likelihood of confusion as to the source,
`sponsorship, affiliation, or endorsement of the site;
`
`(VI) the person’s offer to transfer, sell, or
`otherwise assign the domain name to the mark owner or
`any third party for financial gain without having
`used, or having an intent to use, the domain name in
`the bona fide offering of any goods or services, or
`the person’s prior conduct indicating a pattern of
`such conduct;
`
`(VII) the person’s provision of material and
`misleading false contact information when applying for
`
`
`
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`
`the registration of the domain name, the person’s
`intentional failure to maintain accurate contact
`information, or the person’s prior conduct indicating
`a pattern of such conduct;
`
`(VIII) the person’s registration or acquisition of
`multiple domain names which the person knows are
`identical or confusingly similar to marks of others
`that are distinctive at the time of registration of
`such domain names, or dilutive of famous marks of
`others that are famous at the time of registration of
`such domain names, without regard to the goods or
`services of the parties; and
`
`(IX) the extent to which the mark incorporated in the
`person’s domain name registration is or is not
`distinctive and famous within the meaning of
`subsection (c) of this section.
`
`15 U.S.C. § 1125(d)(1)(B)(i).
`Cong has no intellectual property rights in a domain name
`using any of the Chanel Marks, his legal name has no relation to
`the domain name, and he has not used the domain name for a bona
`fide offering of goods and services. See 15 U.S.C. §
`1125(d)(1)(B)(i)(I-III). By defaulting, Cong has admitted that
`he has used the Chanel Marks to drive internet traffic to all of
`his domain names to increase the value of his domain names at
`Chanel’s expense. See 15 U.S.C. § 1125(d)(1)(B)(i)(V); (Compl.
`¶ 8). He has also admitted that he used false or misleading
`§
`See
`information
`to
`register
`the
`domain
`names.
`
`1125(d)(1)(B)(i)(VII); (Compl. ¶ 7). The Chanel Marks are
`famous marks. See 15 U.S.C. § 1125(d)(1)(B)(i)(IX); supra
`Section IV.A.3. Therefore, Cong acted with the bad faith intent
`
`
`
`
`
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`
`to profit from the Chanel Marks. Chanel is entitled to judgment
`on its cyberpiracy claim.
`B. Permanent Injunction
`Chanel seeks a permanent injunction enjoining Cong from
`further violations of Chanel’s trademark rights. (See Compl. ¶
`49(a).) Under 15 U.S.C. § 1116, a court may issue injunctions
`“according to principles of equity and upon such terms as the
`court may deem reasonable,” to prevent future violations of 15
`U.S.C. § 1125. See 15 U.S.C. § 1116 (permitting injunctive
`relief for violations of 15 U.S.C. §§ 1125(a), 1125(b), and
`1125(d)). “A plaintiff seeking a permanent injunction must
`demonstrate that it has suffered irreparable injury, there is no
`adequate remedy at law, ‘that considering the balance of
`hardsh