United States District Court, D. Nevada
SEIKO EPSON CORP. et al., Plaintiffs,
INKSYSTEM LLC et al., Defendants.
C. JONES UNITED STALES DISTRICT JUDGE
case arises out of alleged counterfeiting and other
unauthorized use of trademarks in relation to computer
printer ink cartridges. Plaintiff 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 diree 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
issued. Koshkalda appeared at a later hearing, and the Court
ordered him to undergo a judgment debtor exam. The Court has
entered default judgment against Defendants. The Court also
granted a motion for a receiver for Koshkalda's assets,
but he petitioned for bankruptcy protection (Case No.
18-bk-30016 in the Northern District of California) before
the proposed written receivership order and a proposed
amendment thereto were approved. In that bankruptcy action,
there are pending motions to dismiss the bankruptcy case and
to lift the automatic stay, with a hearing for the latter
motion scheduled for March 8.
Court will defer ruling on the receivership motions pending
resolution of the lift-stay and/or dismissal motions in
Koshkalda's bankruptcy action. Several older motions are
also pending in the docket of the present case. First, the
motions for orders of contempt against Koshkalda and
Westbrook have been determined. (See Order of Contempt, ECF
No. 250). Those motions will be administratively terminated.
Second, a September 29, 2017 motion for a hearing on
then-pending motions is moot. Third, Koshkalda's and ART
LLC's motion for return of certain seized items and to
obtain an inventory, as well as Kravchuk's and Inksystem
LLC's similar motion, are denied. Plaintiffs have
provided an inventory of the seized items, (see Wang
Decls., ECF Nos. 17, 34), and return of the items is not
appropriate, as the seizure of those items was in accordance
with the Court's orders.
HEREBY ORDERED that the Clerk shall administratively
TERMINATE the Motions for Orders of Contempt (ECF Nos. 155,
FURTHER ORDERED that the Motion for Hearing (ECF No. 219) is
DENIED as moot.
FURTHER ORDERED that the Motions to Obtain an Inventory (ECF
No. 177, 271) are DENIED.
FURTHER ORDERED that rulings on the Motion to Appoint
Receiver (ECF No. 274) and the Stipulation Between Plaintiffs
and Lender re Receivership (ECF No. 298) are DEFERRED.
FURTHER ORDERED that the parties shall immediately inform the
Court upon the determination of the motion to dismiss, the
motion to lift the automatic stay, or any other relevant
rulings in ...