United States District Court, D. Nevada
SEIKO EPSON CORP. et al., Plaintiffs,
INKSYSTEM LLC et al., Defendants.
C. JONES, UNITED STATES DISTRICT JUDGE.
case arises out of alleged counterfeiting and other
unauthorized use of trademarks in relation to computer
printer ink cartridges.
FACTS AND PROCEDURAL HISTORY
Seiko Epson Corp. (“Seiko”) is a Japanese
corporation that owns eight registered trademarks at issue in
the present case, U.S. Trademark Nos. 1, 134, 004
(“EPSON”); 2, 144, 386 (“EPSON”); 2,
949, 374 (“EPSON”); 3, 092, 025
(“EPSON”); 3, 520, 274 (“EPSON”); 3,
448, 351 (“EPSON EXCEED YOUR VISION”); 3, 875,
333 (“Better Products for a Better Future”); and
2, 644, 235 (“DURABRITE”) (collectively,
“the Marks”). Plaintiff Epson America, Inc. is a
California corporation and Seiko's sole licensee for ink
cartridges using the Marks. Defendants are Nevada and
California residents and business entities.
allege that Defendants import, modify, repackage, advertise,
distribute, and/or sell at least three types of infringing
cartridge: (1) counterfeit ink cartridges manufactured abroad
bearing one or more of the Marks; (2) genuine Epson
cartridges sold abroad with printers that are not intended
for resale; and (3) genuine Epson cartridges sold abroad that
are expired or nearly expired. As to the latter two
categories of cartridge, Defendants remove them from their
original packaging, reprogram or otherwise modify them to
work in American printers (they otherwise would not), and
repackage them with counterfeit Epson labels. In the process,
Defendants degrade the quality and lifespan of the ink,
remove instructions for use with the cartridges and other
important consumer information such as the expiration date,
and add their own false advanced expiration dates.
Defendants' activities infringe the Marks, deceive
consumers, and damage Plaintiffs' goodwill.
sued Defendants in this Court for trademark counterfeiting
and infringement under 15 U.S.C. § 1114 et seq.
and unfair competition and false advertising under §
1125 et seq. The Court granted a temporary
restraining order (“TRO”) and after a hearing
granted a preliminary injunction, enjoining certain offending
activity and ordering the seizure and impoundment of the
accused goods. Discovery has been problematic. Plaintiffs
asked the Magistrate Judge to issue a report and
recommendation for terminating sanctions against certain
Defendants for their continued intransigence. InkSystem, LLC
and Lucky Print, LLC (collectively, “Debtors”)
filed for Chapter 11 bankruptcy protection. Plaintiffs asked
for another TRO seizing Defendants' assets (minus the
assets of Debtors). The Court granted the motion and later
granted a preliminary injunction when Defendants failed to
appear at the hearing. In the meantime, the Magistrate Judge
recommended that the sanction of default be entered against
Defendants Art LLC, AF LLC, Inkredible LLC, Andriy Kravchuk,
Artem Koshkalda, Igor Bielov, and Vitalii Maliuk. The Court
adopted that recommendation. The Clerk had previously entered
the defaults of Defendants Veles LLC, Alado LLC, Karine LLC,
Karine Vardanian, Vladimir Slobodianiuk, Kristina Antonova,
and Roman Taryanik for failure to answer or defend. The Clerk
has since entered the defaults of InkSystem LLC, KBF LLC, and
Lucky Print LLC.
Court has denied several motions to reconsider the
preliminary injunction and to release funds. When they failed
to appear to show cause why they should be held in contempt
for violations of the preliminary injunction, the Court
issued an order of contempt as to Defendants Artem Koshkalda
and Vladimair Westbrook. Bench warrants for their arrest have
motions are pending before the Court. Several
defendants have asked the Court to lift the
preliminary injunction or to increase the bond. (ECF Nos.
231, 256, 257). Koshkalda has asked the Court to issue an
order directing his bank to comply with the preliminary
injunction and permit him to withdraw $3, 000 per month, as
permitted by the preliminary injunction. (ECF No. 236).
Maliuk, on behalf of Inkredible LLC, has asked the Court
permit Inkredible LLC to withdraw $3, 000 per month. (ECF No.
259). Plaintiff has moved for default judgment against
LLC's motion (for a “writ of execution”)
asking the Court permit Inkredible LLC to withdraw $3, 000
per month is stricken. Inkredible, LLC may only appear
through licensed counsel, not through a corporate officer.
See Rowland v. Cal. Men's Colony, 506 U.S. 194,
201-03 (1993). Even if the motion had been made through
counsel, the preliminary injunction permitted $3, 000 monthly
withdrawals only from the personal bank accounts of
individual Defendants, not from the accounts of business
Court has always been amenable to amending or supplementing
the preliminary injunction to make clear that withdrawals of
$3, 000 per month from personal accounts of individual
Defendants is permitted, an argument again made by Koshkalda
in another motion, but Koshkalda failed to appear to argue
his previous motion to this effect (and to show cause why he
should not be held in contempt for violating the preliminary
injunction) when given the chance. The Court therefore denies
his current motion, as well.
motions to dissolve the preliminary injunction or increase
the bond are stricken as to AF LLC, Inkredible LLC, Inksystem
LLC, Lucky Print LLC, and ART LLC. See Id. at
201-03. As to Koshkalda, Kravchuk, Bielov, and Maliuk, the
motions are denied. On November 16, 2017, the Court of
Appeals denied Defendants' petition for a writ of
mandamus challenging the preliminary injunction. The Court
has seen nothing indicating that dissolution of the
preliminary injunction is appropriate. Nor will the Court
entertain arguments to reconsider a preliminary injunction
from parties who failed to appear to argue against default
judgment being entered against them on the claim for a
final motion is Plaintiff's motion for default judgment.
Obtaining default judgment is a two-step process under Rule
55. Eitel v. McCool, 782 F.2d 1470, 1471 (9th Cir.
1986). First, the clerk must enter the party's default.
Fed.R.Civ.P. 55(a). It appears that all Defendants here have
had their defaults entered either for failure to defend or as
a sanction. Second, the party seeking default judgment must
then petition the court for a default judgment. Id.
at 55(b)(2). “A grant or denial of a motion for the
entry of default judgment is within the discretion of the
court.” Lau Ah Yew v. Dulles, 236 F.2d 415,
416 (9th Cir. 1956). Default judgments are generally
disfavored, so courts should attempt to resolve motions for