Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-cand-3_06-cv-03594/USCOURTS-cand-3_06-cv-03594-2/pdf.json

Nature of Suit Code: 840
Nature of Suit: Trademark
Cause of Action: 15:1051 Trademark Infringement

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United States District Court

For the Northern District of California

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 Though TG asserted claims against both Twinstar and Ming Lee in its original complaint, see

Compl. ¶ 3, TG has moved for default judgment against Twinstar only. See Mot. at 1. 

UNITED STATES DISTRICT COURT

NORTHERN DISTRICT OF CALIFORNIA

TRUONG GIANG CORP.,

Plaintiff,

v.

TWINSTAR TEA CORP. and MING LEE

TRADING, INC.,

Defendants.

___________________________________/

No. C-06-3594 JSW (EMC)

REPORT AND RECOMMENDATION

RE PLAINTIFF’S MOTION FOR

DEFAULT JUDGMENT

(Docket No. 11)

Plaintiff Truong Giang Corporation (“TG”) has moved for default judgment against

Defendant Twinstar Tea Corporation (“Twinstar”). Judge White referred the matter to the

undersigned for a report and recommendation. Having considered TG’s brief and supporting

documents, and all other evidence of record, the Court hereby recommends that the motion for

default judgment be GRANTED. The Court further recommends the issuance of an injunction, an

accounting, and retention of jurisdiction to assess damages after accounting.

I. FACTUAL AND PROCEDURAL BACKGROUND

On June 6, 2006, TG filed a complaint against Defendants Twinstar and Ming Lee Trading,

Inc. (“Ming Lee”),1

 asserting five causes of action: (1) infringement of federal trademark registration

No. 2,570,889; (2) infringement of federal trademark registration No. 2,561,662; (3) false

designation of origin in violation of 15 U.S.C. § 1125(A); (4) common law unfair competition and

trademark infringement; and (5) statutory unfair competition in violation of California Business and

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Professions Code § 17200 et seq. The allegations underlying the above claims are as follows, as

further detailed in TG’s complaint and motion for default judgment. 

 TG sells its 3 BALLERINA tea in Asian grocery stores across the country. See Compl. ¶ 8;

see also Mot. at 2. TG has registered two trademarks in conjunction with this product: (1) the word

mark 3 BALLERINA and (2) a design mark consisting of a drawing of three slender ballerinas. See

Compl. ¶¶ 4, 7, 14. TG has used the 3 BALLERINA word mark nationwide on its tea products,

advertising, and promotional materials since as early as August 2000. See Compl. ¶ 8. TG has used

its ballerina design mark nationwide since as early as May 1991. See Compl. ¶ 15. Both the word

mark and the design mark were registered for ten-year terms beginning on May 21, 2002, and April

16, 2002, respectively. See Compl. Exs. A, E (certifications of TG’s registration of the 3

BALLERINA word mark and ballerina design mark). 

Twinstar, incorporated in New York in 2002, has been selling the tea product SLIM

BALLERINA since at least 2003. See Hansen Decl., Ex. 9 (letter from TG to U.S. Customs and

Border Protection, dated 5/12/05, stating that, “[t]o the best of our knowledge and belief, Twinstar

commenced sale of the ‘Ballerina’ tea product less than two (2) years ago”); see also Ly Decl. ¶ 3

(stating that “[m]y distributor told me he had seen SLIM BALLERINA tea for sale since at least

2003”). The SLIM BALLERINA tea features on its product packaging a design consisting of a

drawing of two ballet dancers. See Compl. ¶¶ 9, 16; see also Ly Decl. ¶ 3. Twinstar sold the SLIM

BALLERINA tea nationwide through the channels of distribution including Asian supermarkets and

the internet. See Ly Decl.¶¶ 3-4; see also Hansen Decl., Exs. 14, 15. Twinstar’s SLIM

BALLERINA tea was sold in San Francisco as recently as March 2006 by Ming Lee, see Compl. ¶

9, and, as of October 20, 2006, Twinstar’s SLIM BALLERINA tea was still on sale on the Internet. 

See Hansen Decl. ¶ 17 (referring to Ex. 15, a printout list of items sold by Ecomeal.org).

On December 17, 2004, TG sent an initial cease-and-desist letter to Twinstar, notifying

Twinstar that its SLIM BALLERINA tea was in violation of TG’s 3 BALLERINA word mark. No

mention was made of the ballerina design mark. See Hansen Decl., Ex. 6. On January 8, 2005, in

response to TG’s letter, Twinstar affirmed that it would no longer produce and distribute tea bearing

the SLIM BALLERINA word mark, but it noted that a small quantity of products remained in the

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marketplace. See Hansen Decl., Ex. 10. Nearly one year later, on December 15, 2005, Twinstar

sent a letter to TG informing it that Twinstar had altered its tea product package in order to avoid

litigation. See Hansen Decl., Ex. 11. To this letter, Twinstar attached copies of its altered tea

product package, which bore the product title, “TWINSTAR SLIM TEA,” but which featured the

same graphical drawing of two ballerinas as the previous package. See Hansen Decl., Exs. 11, 5. 

TG replied soon after, on December 21, 2005, with another cease-and-desist letter, in which it

claimed that Twinstar was continuing to infringe not only TG’s 3 BALLERINA word mark but also

TG’s ballerina design mark because SLIM BALLERINA tea was still available for purchase online.

TG warned that it was prepared to file suit if necessary. See Hansen Decl., Ex. 12. Based on the

evidence provided, this letter was the first correspondence to mention infringement of TG’s design

mark. 

In March 2006, TG purchased SLIM BALLERINA tea at Ming Lee, a store located in San

Francisco, California. See Hansen Decl., Ex. 14. Subsequently, on June 6, 2006, TG filed the

instant action against both Twinstar and Ming Lee, and also served the summons and complaint. 

See Docket No. 1 (TG’s complaint). It appears that Twinstar received proper and timely formal

notice of the original complaint. See Docket No. 5 (Summons Returned Executed by TG as to

Twinstar, filed September 6, 2006). TG attempted to personally serve Twinstar with the summons

and complaint on three occasions at the corporate address on file with the Secretary of State of New

York, which is also the home address of Twinstar’s president, Kei Sing Ma; however, no one

answered the doorbell at the listed address on any of these occasions. See Hansen Decl., Ex. 17

(Decl. of Teresa Barnett, legal secretary of TG Corp’s counsel). TG also attempted to serve Myron

Amer, an attorney who had previously corresponded with TG in this matter on behalf of Twinstar,

but Mr. Amer refused service saying that he did not represent Twinstar in the litigation. See Hansen

Decl., Ex. 17 (Decl. of Teresa Barnett). Ultimately, TG served Twinstar by mail, pursuant to

California Civil Procedure section 415.40, and sent the summons and complaint to Twinstar’s

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 California Code of Civil Procedure section 415.40 states,

A summons may be served on a person outside this state in any manner provided

by this article or by sending a copy of the summons and of the complaint to the

person to be served by first-class mail, postage prepaid, requiring a return

receipt. Service of a summons by this form of mail is deemed complete on the

10th day after such mailing.

Cal. Code Civ. Proc. § 415.40 (2007).

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corporate address. See Docket No. 5 (Return of Service by Mail on Out of State Defendant); see

also, Cal. Code Civ. Proc. § 415.40.2

 TG received a signed return receipt. See Docket No. 5. 

Twinstar failed to answer or otherwise respond to the complaint in a timely manner, and so

TG informed Twinstar of its intention to request a default judgment, although TG also offered

Twinstar one last opportunity to respond to the complaint. See Hansen Decl., Ex. 21. 

Approximately two weeks later, TG asked the Clerk of the Court to enter Twinstar’s default, and

default was entered on September 22, 2006. See Docket No. 7. TG filed its motion for default

judgment several months later. In its motion, TG noted that, as recently as October 20, 2006, it was

able to find SLIM BALLERINA tea for sale on the Internet. See Hansen Decl., Ex. 15.

II. DISCUSSION

A. Legal Standard

After entry of a default, a court may grant a default judgment on the merits of the case. See

Fed. R. Civ. P. 55. “The district court’s decision whether to enter a default judgment is a

discretionary one.” Aldabe v. Aldabe, 616 F.2d 1089, 1092 (9th Cir. 1980). Factors that a court may

consider in exercising that discretion include: 

(1) the possibility of prejudice to the plaintiff, (2) the merits of

plaintiff’s substantive claim, (3) the sufficiency of the complaint, (4)

the sum of money at stake in the action; (5) the possibility of a dispute

concerning material facts; (6) whether the default was due to

excusable neglect, and (7) the strong policy underlying the Federal

Rules of Civil Procedure favoring decisions on the merits. 

Eitel v. McCool, 782 F.2d 1470, 1471-72 (9th Cir. 1986). In considering the above factors, the

Court takes all factual allegations in TG’s complaint as true, except for those relating to damages. 

See TeleVideo Systems, Inc. v. Heidenthal, 826 F.2d 915, 917-18 (9th Cir. 1987). 

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B. Eitel Factors

1. Possibility of Prejudice to Plaintiff

As discussed below, TG’s main claim of trademark infringement is meritorious. If the Court

were to deny TG’s motion for default judgment, TG would have no other recourse for recovery. See

Walters v. Shaw/Guehnemann Corp., No. C 03-04058 WHA, 2004 U.S. Dist. LEXIS 11992, at *7

(N.D. Cal. Apr. 15, 2004) (“To deny plaintiffs’ motion [for default judgment] would leave them

without a remedy. Prejudice is also likely in light of the merits of their claim.”). Furthermore, in the

absence of the injunctive relief granted here, TG would likely continue to suffer harm from the

violation of their trademark rights. See American Cyanamid Co. v. America Baolishi, Inc., No. C

99-0520, 2000 U.S. Dist. LEXIS 10097 (N.D. Cal. July 13, 2000) (in granting default judgment

against defendant who violated plaintiff’s trademark rights by using a nearly identical trademark on

a competing product, court held that without default judgment, plaintiff, a trademark holder “would

be prejudiced by customer confusion and mistakes as to the source of the product’s ownership, and

by suffering further economic detriment”). Accordingly, the first Eitel factor, the possibility of

prejudice to the plaintiff, weighs in favor of granting default judgment. 

2 & 3. Merits of Plaintiff’s Substantive Claims and Sufficiency of Complaint

The second and third Eitel factors, concerning the merits of plaintiff’s substantive claims and

the sufficiency of its complaint, also weigh in favor of default judgment. 

As noted above, TG alleges five causes of action in its complaint: (1) infringement of federal

trademark registration No. 2,570,889; (2) infringement of federal trademark registration No.

2,561,662; (3) false designation of origin in violation of 15 U.S.C. § 1125(A); (4) common law

unfair competition and trademark infringement; and (5) statutory unfair competition in violation of

California Business and Professions Code § 17200 et seq. In the present case, as in many trademark

infringement cases, the essential elements of the two federal claims -- infringement of federal

trademark registration and false designation of origin -- are identical, see Brookfield

Communications, Inc. v. West Coast Entm’t Corp., 174 F.3d 1036, 1047 n.8 (9th Cir.1999) (noting

that infringement and false designation of origin claims are often identical, except that false

designation of origin claims protect both registered and unregistered trademarks and can protect a

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wider range of practices, such as false advertising), and the federal claims, if met with adequate

evidence, are also sufficient to establish defendant’s liability under the state law claims for unfair

competition and trademark infringement. See Cleary v. News Corp., 30 F.3d 1255, 1262-63 (9th

Cir. 1994) (“This Circuit has consistently held that state common law claims of unfair competition

and actions pursuant to California Business and Professions Code §17200 are ‘substantially

congruent’ to claims made under the Lanham Act.”); Philip Morris v. Shalabi, 352 F. Supp. 2d

1067, 1072 (C.D. Cal. 2004) (noting the identity between the essential elements and standard

applied to three distinct claims of federal trademark infringement, federal false designation of origin,

and state unfair competition).

The Court therefore focuses on the legal merits of only the claims for federal trademark

infringement. Analyzing the merits of the infringement claims is sufficient because the standard of

infringement, i.e., the likelihood of confusion, is essentially implicated in the remaining federal and

state causes of action. See M2 Software, Inc. v. Madacy Entertainment Corp., 421 F.3d 1073, 1080

(9th Cir. 2005) (“The test of trademark infringement under state, federal, and common law is

whether there will be a likelihood of confusion.”); see also Academy of Motion Pictures, 944 F.2d.

at 1457 (holding that under both federal trademark infringement and state unfair competition

statutes, the “ultimate test” is whether a likelihood of confusion exists) (internal quotations omitted).

To prove a claim of trademark infringement under Section 32(1) of the Lanham Act, a

plaintiff must show that (1) it owns the trademark at issue; (2) the defendant has used in commerce,

without authorization, a copy, reproduction, counterfeit or colorable imitation of the plaintiff’s mark

in connection with the sale, distribution, or advertising of goods and services; and (3) the

defendant’s use of the mark is likely to cause confusion or to cause mistake or to deceive. See 15

U.S.C. § 1114(1). 

 In its complaint, TG alleges all facts necessary to prove trademark infringement by Twinstar. 

First, TG adequately alleges its ownership of the two trademarks at issue. See Compl. ¶¶ 7, 14

(referencing Exs. A and E, certifications of TG’s registration of the 3 BALLERINA word mark and

ballerina design mark); see also Brookfield Communications, 174 F.3d at 1047 (holding that a

plaintiff’s federal registration of a mark constitutes prima facie evidence of its validity and of

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plaintiff’s exclusive rights to the mark). Second, the “use in commerce” requirement is satisfied as

to Twinstar. TG states in its complaint that Twinstar has used the name SLIM BALLERINA alone

and in conjunction with drawings of ballet dancers on its tea packaging, advertising, and

promotional materials throughout the United States, see Compl. ¶¶ 8, 9, 15, 16, and without TG’s

consent. See Compl. ¶¶ 10, 17.

The third and “core” element of trademark infringement is the likelihood of confusion, or

whether the similarity of the marks is likely to confuse customers about the source of the products. 

See E&J Gallo Winery v. Gallo Cattle, 967 F.2d 1280, 1290 (9th Cir. 1992). Likelihood of

confusion is analyzed using an eight-factor test established by the Ninth Circuit. See id. (citing AMF

Inc. v. Sleekcraft Boats, 599 F.2d 341, 348-49 (9th Cir. 1979) (finding a likelihood of confusion

existed between plaintiff’s SLEEKCRAFT mark and defendant’s SLICKCRAFT where the marks

were product names of recreational boats produced by the two parties)). Applying this test to both

the SLIM BALLERINA word mark and ballerina design mark, the Court concludes that TG has

successfully pled a likelihood of confusion, whether the word and design marks are used separately

or together. Of the eight factors, the Court finds that five weigh in favor of finding a likelihood of

confusion of both the SLIM BALLERINA word mark and ballerina design mark: (I) strength of the

allegedly infringed mark; (ii) proximity or relatedness of the goods; (iii) similarity of the sight,

sound, and meaning of the marks, (iv) degree to which the parties’ marketing channels converge;

and (v) the type of goods and degree of care consumers are likely to exercise in purchasing them. 

a. Word Mark 

i. Strength of Allegedly Infringed Mark

The strength of TG’s word mark is adequately alleged in its pleadings and weighs in favor of

a likelihood of confusion. The strength of a mark is based on the distinctiveness of the mark and

whether it has acquired secondary meaning, i.e., whether it has come to be associated with a good or

service. See Gallo Cattle, 967 F.2d. at 1291. The distinctiveness of a mark depends on its

placement on a “continuum of marks from ‘generic,’ afforded no protection; through ‘descriptive’ or

‘suggestive,’ given moderate protection; to ‘arbitrary’ or ‘fanciful’ awarded maximum protection.” 

Nutri/System, Inc. v. Con-Stan Industries, Inc., 809 F.2d 601, 605 (9th Cir. 1987). TG’s 3

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 Arguably, TG’s word mark is an arbitrary, rather than suggestive, mark, in which case the mark

would be given even more protection. See id. Arbitrary marks are those that involve common words

or designs that have no connection to the product, but are used to create a distinctive mark which

identifies the source of the product, such as the use of Dutch Boy on a can of paint. See Dreamwerks

Prod. Group v. SKG Studio, 142 F.3d 1127, 1131 n.7 (9th Cir. 1998). In the instant case, a ballerina

does not automatically have a connection to tea. The word mark at issue, however, seems more

appropriately deesignated a suggestive mark because the tea product at hand is actually a dietary drink.

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BALLERINA word mark is suggestive, as applied to TG’s “herbal dietary supplement” tea, see

Hansen Decl., Ex. 1 (colored copy of TG’s 3 BALLERINA tea package, containing labels “Herbal

Dietary Supplement” and “DIETER’S TEA”). Suggestive marks are those which convey an

impression of a good but require the exercise of imagination and perception to reach a conclusion as

to the product’s nature. See Brookfield Communications, 174 F.3d at 1058, n.19 (providing as an

example of a suggestive mark, “Roach Motel” for insect traps) (internal citations omitted); see also

Thane Int’l, Inc. v. Trek Bicycle, 305 F.3d 894, 912, n.14 (holding that a bicycle manufacturer’s

“TREK” trademark was suggestive, because “‘trek’ means a long journey, and one can undertake a

long journey on a bicycle”). Here, TG’s ballerina word mark evokes the slimness and grace of

ballerinas, which would lead the purchaser to conclude that TG’s product, an herbal dietary

supplement, is associated with those desired characteristics. Though suggestive marks like TG’s

word mark are not afforded as much protection as arbitrary or fanciful marks, they still receive

automatic protection, absent any secondary meaning.3

 See Sleekcraft, 599 F.2d at 349 (stating that,

“[a]lthough less distinctive than an arbitrary or fanciful mark and therefore a comparatively weak

mark, a suggestive mark will be protected without proof of secondary meaning”). 

The length of time that TG has used its word mark in the marketplace further establishes the

strength of the mark. TG alleges in its complaint that it has been selling tea under the 3

BALLERINA word mark since at least August 2000. See Compl. ¶ 8. Thus, the status of this mark

as a suggestive mark, coupled with the duration of its use in the marketplace, establishes that it is a

relatively strong mark, which makes consumer confusion more likely. See Joujou Designs, Inc. v.

Jojo Ligne Internationale, 821 F. Supp. 1347, 1353-54 (N.D. Cal. 1992) (referring to plaintiff’s

well-established use of the mark in advertising and sales since 1977 as “compelling evidence of the

strength of the mark”).

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ii. Proximity or Relatedness of Goods

The second factor, the proximity or relatedness of TG’s 3 BALLERINA tea and Twinstar’s

SLIM BALLERINA tea, also points toward a likelihood of confusion. The more related or

complementary goods are, the higher the danger of consumer confusion. See Gallo Cattle, 967 F.2d.

at 1291. Here, the infringed mark and infringing mark appear on identical goods -- tea products. 

More specifically, both products bear the label “Dieter’s Drink,” which indicates that they are a

specific type of dietary tea product. See Hansen Decl., Exs. 1, 5 (color copies of 3 BALLERINA

and SLIM BALLERINA tea packages). 

iii. Similarity of Sight, Sound, and Meaning of Marks

The third factor -- namely, the similarity of the sight, sound, and meaning of the marks --

also supports a finding of a likelihood of confusion. Where, as here, the products bearing the

disputed marks are identical, even less similarity is required to demonstrate a likelihood of

confusion. See AMF, 599 F.2d at 350 (“Although the Sleekcraft boat is for higher speed recreation

and its refinements support the market distinction the district court made, they are so closely related

that a diminished standard of similarity must be applied when comparing the two marks.”). Given

this lower standard, TG has adequately demonstrated that the word marks are similar. 

Marks should be compared based on their sight, sound, and meaning as they appear in the

marketplace, and similarities between marks should be weighed more heavily than differences. See

Sleekcraft, 599 F.2d. at 351. TG has submitted color photocopies of its 3 BALLERINA tea

packaging and Twinstar’s SLIM BALLERINA tea packaging. See Hansen Decl., Exs. 1, 5. 

Under the lower standard for marks used for identical products, Twinstar’s SLIM

BALLERINA word mark is sufficiently similar to TG’s 3 BALLERINA word mark in sight, sound,

and meaning. See Sleekcraft, 599 F.2d at 350-51 (finding that defendant’s SLEEKCRAFT mark

infringed upon plaintiff’s SLICKCRAFT mark because the two marks were “quite similar” in sight,

sound, and meaning). On a visual level, both TG and Twinstar’s packaging feature the word

“ballerina” in white lettering on a green background. See Hansen Decl., Exs. 1, 5; see also S.C.

Johnson & Son v. Drop Dead Co., 210 F. Supp. 816, 817 (S.D. Cal. 1962) (finding trademark

infringement because label on defendant’s product used not only the word mark in question, but also

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 Of course, Twinstar’s use of green on its packaging is not altogether damning, as tea leaves are

often green. 

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the same color scheme as plaintiff’s label). Even though the fonts used by TG and Twinstar are

different, and the shades of green quite different, see Hansen Decl., Exs. 1, 5, the overall visual

impact weighs in favor of similarities rather than differences.4

 

As for sound and meaning, it is significant that the TG’s word mark “3 BALLERINA”

differs from “SLIM BALLERINA” by the beginning modifying word – “3” versus “Slim”– which

makes the marks fairly different. “3” refers to the number of ballerinas featured in TG’s design

mark, while “slim” is a general modifier that could both refer to the design mark and to the desired

result of drinking Twinstar’s tea. However, as TG points out, the phrase “3 BALLERINA” is

literally translated in Chinese on its packaging. See Hansen Decl., Exs. 5, 9 (photocopy of 3

BALLERINA tea package and letter to U.S. Customs and Border Protection). In contrast,

Twinstar’s tea packaging does not bear a full Chinese translation of “SLIM BALLERINA,” but

instead features the Chinese phrase meaning “ballerina” without the modifier “slim.” See id.

Twinstar’s use of the Chinese phrase meaning “ballerina,” and not “slim ballerina,” thus emphasizes

the centrality of the word “ballerina” on its packaging and makes TG and Twinstar’s packages more

similar. See id. More importantly, the common word “ballerina” appears to dominate the mark, at

least more so than the differing elements of “3” and “slim.”

Taking into account the similarities in sight, sound, and meaning, the word marks “3

BALLERINA” and “SLIM BALLERINA” are quite similar, which makes consumer confusion more

likely.

iv. Degree to Which Marketing Channels Converge

In considering the marketing channels used by TG and Twinstar, the Court finds that the

channels largely overlap, which makes consumer confusion more likely. See Gallo Cattle, 967 F.2d.

at 1291. Both 3 BALLERINA tea and SLIM BALLERINA tea feature Chinese and English

language labels on its packaging, indicating that they are geared toward customers who read and

understand Chinese. See Hansen Decl., Exs. 1, 5, 9. Furthermore, TG has represented that both TG

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and Twinstar both market their tea in Asian grocery stores throughout the United States, thus

reaching the same type of potential consumer. See Ly Decl. ¶ 3.

v. Type of Goods and Degree of Care Consumers Are Likely to Exercise

in Purchasing Goods

The goods in question in the instant case are tea products that are relatively inexpensive.

See Hansen Decl., Exs. 14, 15 (receipt for Twinstar SLIM BALLERINA tea indicating price of

$1.69 per box, and printout from website selling Twinstar SLIM BALLERINA tea indicating price

of $1.00 per box). Thus, the presumption that buyers of expensive products exercise greater care is

not applicable here. See Sleekcraft, 599 F.2d at 353. The Court finds that this factor weighs in favor

of a likelihood of confusion because purchasers of tea are not likely to exercise more than ordinary

care in their purchases. 

vi. Intent of the Defendant in Selecting the Allegedly Infringing Mark

Though bad intent is not necessary to demonstrate a likelihood of confusion, where the

plaintiff establishes that defendant knowingly used an infringing mark, there is a presumption that

the infringer will accomplish his purpose, and the public will be deceived. See Sleekcraft, 599 F.2d

at 354. The Court concludes that there is insufficient evidence in the record to support a finding that

Twinstar knowingly selected infringing marks, and therefore this factor does not weigh in favor of a

likelihood of confusion. 

The facts herein are distinguishable from cases where there was a purposeful effort to take

advantage of another’s mark. In Fleischmann Distilling v. Maier Brewing, the Ninth Circuit

concluded that where defendant, a beer manufacturer, knew of the popularity of plaintiff’s “Black &

White” trademark for Scotch and then adopted it for defendant’s beer product, defendant’s “only

possible purpose” for doing so was to capitalize on plaintiff’s popularity. See Fleischmann

Distilling Corp. v. Maier Brewing Co., 314 F.2d 149, 157 (9th Cir. 1963). In that case, defendant’s

employees had openly acknowledged that they knew that plaintiff’s Black & White scotch was one

of the most popular brands in the market. See id. Similarly, in Gallo Cattle, the Ninth Circuit found

that defendant, a seller of cheese, intentionally took advantage of the goodwill associated with

plaintiff’s GALLO mark, used for wine. See Gallo Cattle, 967 F.2d at 1292. Before launching his

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product, defendant, whose surname was also Gallo, had told plaintiff that he would not use GALLO

as a trademark. See id. However, after a sales manager and label designer recommended that

defendant use his surname, Gallo, defendant began to sell cheese under the JOSEPH GALLO mark. 

See id. The Ninth Circuit affirmed the finding that these facts demonstrated an intent to deceive,

which contributed to a likelihood of confusion. In a third case, a district court found that the

defendant, a clothing manufacturer, intended to infringe by trading off the popularity of plaintiff’s

preexisting mark. See Joujou Designs, 821 F. Supp. at 1355. The district court doubted the

credibility of defendant’s claim that he knew nothing of plaintiff’s mark, since the defendant was a

participant in the same market for women’s clothing, and plaintiff was well-established and had

advertised extensively in the same California women’s clothing market. See id. Furthermore, the

court found that a strong inference existed that defendant not only knew of plaintiff’s mark, but had

the intent to infringe and trade off its popularity, because of the similar appearance, placement,

sound and feel of defendant’s mark. See id. 

In this case, TG has not adequately demonstrated that Twinstar adopted its SLIM

BALLERINA word mark in order to trade off of TG’s popularity. Unlike the plaintiffs in

Fleischmann and Gallo Cattle, TG has not produced any evidence that Twinstar or any of its

employees actually knew of 3 BALLERINA tea and made statements about its popularity before

launching SLIM BALLERINA tea. See Fleischman,314 F.2d 149, 157; see also Gallo Cattle, 967

F.2d at 1292. Additionally, although TG claims it has been using its 3 BALLERINA word mark

since August 2000 and its ballerina design mark since May 1991, see Compl. ¶¶ 8, 15, TG has not

demonstrated the popularity of its products or its share of the tea market. Though the president of

TG has claimed that 3 BALLERINA tea is “well-known in the marketplace,” see Ly Decl. ¶ 2, it

does not support this claim, other than claiming that the tea has been widely distributed, see Hansen

Decl., Ex. 9 (TG letter to U.S. Customs and Border Protection), and that TG has long-standing

relationships with Asian grocery stores nationwide. See Ly Decl. ¶ 2. Compare Joujou Designs,

821 F. Supp. at 1355 (where the district court found that given plaintiff’s $25 million in California

sales and extensive advertising, the defendant knew of plaintiff’s name mark). Furthermore,

Twinstar’s word mark is similar to TG’s, but not nearly identical like the “JOUJOU” and “JOJO”

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marks in Joujou Designs, whose nearly identical nature raised a strong inference of intentional

infringement . See 821 F. Supp. at 1355. 

The Court also notes that any constructive notice Twinstar might have from TG’s registration

of its word mark is insufficient, without additional evidence of intent, to demonstrate that Twinstar

knowingly adopted TG’s mark. See M2 Software, 421 F.3d at 1075 (citing 3 McCarthy § 23:109

(“The existence of constructive notice [of a plaintiff’s registration] is not evidence that a later user

necessarily intended to confuse”), to counter plaintiff’s claim that constructive notice was sufficient

to demonstrate bad intent); see also Health Net v. U.S.A. Healthnet, Inc., No. CV 92-3925, 1993

U.S. Dist. LEXIS 21126, *23 (C.D. Cal. Jan.13, 1993) (in determining whether defendant had

requisite intent and “knowingly” adopted the mark, “the term ‘knowingly’ requires more than

‘constructive knowledge’ from a previously registered mark”). In cases where constructive notice is

taken into account to determine intent, it is only one of numerous factors that contribute to that

finding. See, e.g., Discovery Communications, Inc. v. Animal Planet, 172 F. Supp. 2d 1282, 1290

(C.D. Cal. 2001) (finding bad intent based on defendant’s constructive notice from plaintiff’s federal

trademark registrations, defendant’s identical mark, and defendant’s continued and increased use of

the mark after assuring plaintiff it would cease use); Qwest Communs. Int’l v. Oneqwest, No.

CO2-829R, 2002 U.S. Dist. LEXIS 25469, *24 (W.D. Wash. 2002) (finding bad intent based on

several circumstances surrounding defendant’s use, such as defendant’s constructive notice from

previous registration and the complete adoption of plaintiff’s strong mark, where defendant even

adopted the arbitrary spelling of “QWEST” used by plaintiff). 

vii. Evidence of Actual Confusion and Likelihood that the Parties Will

Expand Their Product Lines

The two remaining factors used to determine if a likelihood of confusion exists are whether

evidence of actual confusion exists and the likelihood that parties will expand their product lines. 

See Sleekcraft, 599 F.2d at 348-349. TG has not provided any evidence as to either of these factors,

and accordingly, they do not factor into the Court’s analysis of likelihood of confusion.

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viii. Conclusion

Of the eight factors above, all but the last three weigh in favor of a likelihood of confusion. 

Thus, the Court concludes that, taking all allegations in the complaint as true, TG has adequately

demonstrated that its 3 BALLERINA word mark would likely be confused with Twinstar’s SLIM

BALLERINA word mark. See id. at 354 (noting that bad intent is not required for a finding of

likelihood of confusion). 

b. Design Mark

The Court finds that TG has adequately demonstrated not only a likelihood of confusion with

respect to its word mark but also a likelihood of confusion with respect to its design mark. In fact,

most of the analysis above regarding TG’s word mark is applicable to the analysis here regarding the

design mark. The main differences between the two analyses are: (1) the similarity between TG’s

design mark and Twinstar’s design mark and (2) Twinstar’s intent in selecting the allegedly

infringing design mark.

i. Strength of the Allegedly Infringed Mark

Like the 3 BALLERINA word mark, TG’s ballerina design mark is a strong mark, which

supports a finding of likelihood of confusion. TG’s design mark is suggestive when used in

connection with the sale of tea or, more specifically, dietary tea. See Part II.B.2.a.i, supra. Like the

3 BALLERINA word mark, TG’s ballerina design mark evokes the slimness and grace of ballerinas,

which would lead the purchaser to conclude that TG’s product, an herbal dietary supplement, is

associated with those desired characteristics. Furthermore, TG has used its design mark in

commerce even longer than its word mark. TG has used its ballerina design mark on its tea since

1991, see Compl. ¶ 15, while it has used its word mark since August 2000. See Compl. ¶ 8; see also

Joujou Designs, Inc. v. Jojo Ligne Internationale, 821 F. Supp. at 1353-54 (plaintiff’s wellestablished use of the mark in advertising and sales since 1977 was “compelling evidence of the

strength of the mark”).

ii. Proximity or Relatedness of the Goods

The ballerina design mark is used on Twinstar’s SLIM BALLERINA tea, and more recently,

on Twinstar’s TWINSTAR SLIM TEA. See Hansen Decl. Exs. 5, 24 (photocopies of SLIM

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BALLERINA and TWINSTAR SLIM TEA packaging). Both products featuring the infringing

design mark are tea products, and specifically, dietary tea products. These Twinstar products are

identical to TG’s tea, or more specifically, dietary drink product. This factor thus supports a finding

of likelihood of confusion. See Gallo Cattle, 967 F.2d. at 1291 (holding that the more related or

complementary goods are, the higher the danger of consumer confusion). 

iii. Similarity of the Sight, Sound, and Meaning of the Marks

Under the lower standard applied to marks used on identical products, Twinstar’s ballerina

design mark is sufficiently similar to TG’s ballerina design mark to support a likelihood of

confusion determination -- although this is a closer question than the similarity of Twinstar’s word

mark to TG’s word mark. The drawing on TG’s package features the silhouettes of three ballerinas,

arms outstretched in dancing poses, poised atop a teacup. See Hansen Decl., Ex. 1. The drawing on

Twinstar’s packages -- both the SLIM BALLERINA tea and the TWINSTAR SLIM tea -- features

the silhouettes of two ballerinas, arms outstretched in dancing poses. See Hansen Decl., Exs. 5, 24. 

Both TG and Twinstar’s packaging feature multiple ballerinas in dancing poses, and both

companies’ packaging feature silhouetted figures in black, placed against a green background. See

Hansen Decl., Exs. 1, 5; see also S.C. Johnson & Son, 210 F. Supp. at 817 (finding that the

similarity of the color scheme defendant used contributed toward a finding of infringement). 

Though the design marks are different (based on the number of ballerinas features, their exact

positions, and the absence of a teacup in Twinstar’s design), the similarities outweigh the

differences, and the similarities are heightened when the design marks are viewed in conjunction

with the word marks. See Brookfield Communications, Inc. v. West Coast Entm’t Corp., 174 F.3d at

1054-55 (stating that “the marks must be considered in their entirety and as they appear in the

marketplace, with similarities weighed more heavily than differences”). 

iv. Degree to Which the Parties’ Marketing Channels Converge

The tea products featuring the parties’ design marks are the same as the products featuring

the parties’ word marks. Thus, just as the marketing channels of the products featuring the parties’

word marks largely overlap, the marketing channels of the products featuring the ballerina design

marks overlap, which makes consumer confusion more likely. See Part II.B.2.a.iv, supra.

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v. Type of Goods and Degree of Care Consumers Are Likely to Exercise

in Purchasing Them

The goods featuring the design mark are the same as the goods featuring the word mark;

thus, this factor weighs in favor of a likelihood of confusion, as purchasers of inexpensive tea are

unlikely to exercise particular care in their purchases. See Part II.B.2.a.v., supra. 

vi. Intent of the Defendant in Selecting the Allegedly Infringing Mark

As to Twinstar’s original packaging, TG has not produced evidence supporting a finding of

bad intent in selecting the design mark, for the same reasons discussed above in regards to the word

mark. See Part II.B.2.a.vi., supra. TG presents no evidence that Twinstar selected the design mark

for its SLIM BALLERINA tea in an attempt to trade on TG’s popularity. See id. 

As to the altered packaging, see Hansen Decl., Exs. 11, 24, TG presents no evidence

demonstrating that Twinstar retained the design mark on its altered TWINSTAR SLIM TEA

packaging in an attempt to capitalize on TG’s popularity. In its December 2004 cease and desist

letter, TG did not mention the design mark, only the word mark. The evidence provided by TG

indicates that Twinstar altered its packaging to avoid litigation with TG, see Hansen Decl., Exs. 11,

24 (containing letters from Twinstar’s counsel expressing the expectation that this new packaging

would avert litigation, as it bears no similarity to TG’s product), and TG does not point to any

evidence indicating that Twinstar was attempting to trade off of the recognition of TG’s ballerina

design mark. 

vii. Evidence of Actual Confusion and Likelihood that the Parties Will

Expand Their Product Lines

TG presents no evidence of actual confusion or evidence suggesting a likelihood that parties

will expand their product lines. Thus, these factors do not weigh into the Court’s analysis of

likelihood of confusion of the design marks. 

viii. Conclusion

Because five of the eight factors discussed above weigh in favor of a likelihood of confusion,

the Court finds that Twinstar’s design mark is likely to be confused with TG’s design mark. Though

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the question is closer than in the case of the parties’ word marks, the likelihood of confusion

persists.

According, because both Twinstar’s word mark and design mark are likely to be confused

with TG’s marks, TG has sufficiently established its claims for trademark infringement, and its

additional federal, common law, and state law claims, and satisfies the second and third Eitel factors.

 See Eitel, 782 F.2d at 1471-72. 

4. Sum of Money at Stake in the Action

Under the fourth Eitel factor, the Court considers the amount of money at stake. Default

judgment is disfavored where the sum of money at stake is too large or unreasonable in light of

defendant’s actions. See Totten v. Hurrell, No. 00-2718, 2001 U.S. Dist. LEXIS 20259, *2 (N.D.

Cal. Nov. 28, 2001) (stating that “the ‘sum of money at stake’ factor [under Eitel] is meant to focus

on the size of the award requested, as courts are hesitant to enter default judgments where large

sums of money are at stake”); see also Board of Trustees of the Cal. Metal Trades v. Peter, No. 00-

0395, 2000 U.S. Dist. LEXIS 19065,*5 (N.D. Cal., Dec. 29, 2000) (holding that this factor favors

entry of default where “[t]he amount at stake is minor in comparison to the potential loss...as a result

of defendants’ conduct”). The Court considers Plaintiff’s declarations, calculations, and other

documentation of damages in determining if the amount at stake is reasonable. See Walters v.

Shaw/Guehnemann Corp., 2004 U.S. Dist. LEXIS 11992, at *7 (finding plaintiff’s calculations of

damages and attorney fees reasonable, based on plaintiff’s sworn declarations and pay stubs and

other documentation submitted by plaintiffs). 

In the present case, TG seeks recovery of approximately $100,174: $67,200 in damages,

$31,113 in attorney’s fees, and $1,861 in litigation costs. See Mot. at 6-8. As discussed below,

however, the Court finds TG failed to prove up the amounts sought. In view of the Court’s

recommendation below, the sum of money sought by TG is unreasonable, because it is unsupported

by the evidence on the record, and this factor therefore weighs against default. Cf. Walters v.

Shaw/Guehnemann Corp., 2004 U.S. Dist. LEXIS at *8-9 (where the amount of damages was

supported by pay stubs and other documentation). On the other hand, given the Court’s

recommendation against an award of damages (at least on this record), this factor may be mitigated.

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5. Possibility of a Dispute Concerning Material Facts

Twinstar has not filed an answer in response to TG’s complaint, and therefore, a dispute

concerning material facts as to infringement is unlikely. As the Clerk of the Court has already

entered default, the Court takes all well-pleaded facts, except those pertaining to damages, as true. 

See Televideo, 826 F.2d at 917-18. Furthermore, evidence submitted by TG in support of its motion

for default judgment -- in particular, correspondence between TG and Twinstar -- supports TG’s

account of the events. Though there is a possibility of dispute as to the amount of damages, there is

little possibility of dispute as to Twinstar’s liability for damages. 

6. Possibility of Excusable Neglect

There is little possibility of excusable neglect. Twinstar was duly served with the complaint

and summons as discussed above. This suit followed more than a year of correspondence between

the parties. Furthermore, in informal correspondence, TG informed Twinstar of its intention to

request default judgment, see Hansen Decl., Ex. 21 (letter from TG counsel to Twinstar president,

Kei Sing Ma), and gave Twinstar an opportunity to file an answer even after the expiration of the

court’s deadline. See id; see also Philip Morris U.S.A, Inc. v. Castworld Products Inc. 219 F.R.D.

494, 501 (C.D. Cal. 2003) (finding that the possibility of excusable neglect was remote, where

defendant received notice of complaint and motion for default judgment, but failed to respond to

either, and “[i]n light of the multiple notices delivered to Defendant regarding the pending lawsuit,

the extended period of time that has elapsed, and Defendant’s resistance to Plaintiff’s attempts to

resolve this matter through settlement). Compare Eitel, 782 F.2d at 1472 (finding that defendant’s

failure to answer was attributable to excusable neglect, where defendant reasonably believed that

litigation had been ended when parties reached a settlement agreement prior to the deadline for filing

an answer). 

In light of the facts above, the Court finds that there is little possibility of excusable neglect,

and this factor therefore weighs in favor of granting default judgment.

///

///

///

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7. Strong Policy Favoring Decisions on the Merits

Though default judgment is disfavored, and “[c]ases should be decided upon their merits

whenever reasonably possible,” this preference for adjudication on the merits, standing alone, is not

dispositive. See Pepsico Inc. v. Cal. Sec. Cans, 238 F. Supp. 2d 1172, 1177 (C.D. Cal. 2002)

(internal citations omitted). When a defendant like Twinstar fails to defend an action by submitting

an answer to plaintiff’s complaint, a judgment on the merits is impractical, if not impossible. See

Castworld Products, 219 F.R.D. at 501 (quoting Pepsico, 238 F. Supp. 2d at 1177). 

8. Summary of Eitel Factors

The Court finds that, in light of the Eitel factors as a whole, default judgment against

Twinstar is appropriate. See Eitel, 782 F.2d at 1471-72. In brief, (1) failure to grant default

judgment would prejudice TG; (2) and (3) TG’s trademark infringement and other claims are

meritorious and sufficiently alleged as to both its word mark and design mark; (5) there is little

possibility of dispute concerning material facts; and (6) Twinstar’s default does not appear to be due

to excusable neglect. These factors overcome the fourth Eitel factor, the reasonableness of the

amount of money at stake (potentially mitigated by the actual award recommended herein), and the

seventh factor favoring decisions on the merits weigh against default judgment. The Court takes

into account its finding as to the fourth Eitel factor in its discussion of damages and fees below.

C. Damages and Injunctive Relief

In granting default judgment, a court can award only up to the amount prayed for by a

plaintiff in its complaint. Fed. R. Civ. Pro. 54(c). A demand for relief must be specific, under FRCP

8(a)(3), and plaintiff must “prove up” the amount of damages it is claiming. See Castworld

Products, 219 F.R.D. at 501. In the instant case, TG seeks from Twinstar: (1) damages in the

amount of $67,200; (2) attorney’s fees totaling $31,113; (3) costs of litigation totaling $1,861; and

4) permanent injunctive relief and the surrender for destruction of infringing materials. See Mot. at

6-9. TG demands each of these forms of relief in its complaint. See Compl. at 7-8 (listing relief

prayed for). 

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In reviewing TG’s requests for relief, the Court notes that although factual allegations

relating to liability are taken as true upon entry of default, allegations as to amount of damages are

not automatically accepted. See TeleVideo, 826 F.2d at 917-18. 

1. Damages

TG seeks damages in the amount of Twinstar’s profits from its sale of SLIM BALLERINA

tea, which TG estimates at $67,200. See Mot. at 5-6. A plaintiff whose federally registered

trademark is violated may recover its lost sales, the defendant’s profits, and the costs of the action. 

See 15 U.S.C. § 1117(a). Monetary damages only benefit the plaintiff, and not consumers at large,

so a higher standard of proof is injury is required. See Taylor Made Golf Co., Inc. v. Carsten Sports,

Ltd., 175 F.R.D. 658, 661-62 (S.D. Cal. 1997) Furthermore, monetary damages cannot be merely

speculative or punitive; they can only be issued for actual injury caused. See id. Furthermore, it is

the burden of the plaintiff, TG, to prove one or both of the following measures of damages: its lost

sales or defendant’s gross profits from infringing activity with reasonable certainty. See Lindy Pen

Co. v. Bic Pen Corp., 982 F.2d 1400, 1408 (9th Cir. 1993) (the court refused to award damages

where plaintiff was “unable or unwilling to present competent evidence of its lost profits or

[defendant’s] unjust enrichment arising from the infringement”). In cases such as this one, where

defendant and plaintiff are direct competitors, Twinstar’s profits from its sales of SLIM

BALLERINA tea are a measure for Plaintiff TG’s damages. See Polo Fashions, Inc. v. Craftex,

Inc., 816 F.2d 145, 149 (4th Cir. 1987) (holding that where defendant infringed upon plaintiff’s polo

horse and rider symbol, defendants’ profits where “probably the best possible measure of damages

available”). Thus, TG’s use of Twinstar’s profits as a proxy for damages is appropriate. See Mot. at

5-6. 

Here, TG provides an estimation of Twinstar’s profits based on Twinstar’s alleged admission

that it sold $12,000 of SLIM BALLERINA tea during a two-month period. See Mot. at 6. Thus, TG

estimated that the monthly intake from SLIM BALLERINA tea was $6,000. See id. TG then

multiplied this $6,000 monthly profit by 56 months, which TG alleged to be a conservative estimate

of the number of months Twinstar sold the tea. TG arrived at the 56-month period by measuring the

time between Twinstar’s date of incorporation on April 5, 2002 to October 20, 2006, the date on

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which TG last found SLIM BALLERINA tea for sale online. See id. TG thus calculated that the

total intake from SLIM BALLERINA sales was equivalent to $336,000. See id. By multiplying this

total, $336,000, by their claimed industry standard profit margin of 20%, TG arrived at the final

estimate that Twinstar reaped a total profit of $67,200 over the 56-month period it sold SLIM

BALLERINA tea. See id. 

The Court finds three problems with the above listed calculations. First, TG does not

adequately support its allegation that Twinstar sold SLIM BALLERINA tea for at least 56 months. 

TG does not provide evidence to support its allegation that Twinstar began to sell SLIM

BALLERINA tea around the time of its incorporation on August 5, 2002. See Mot. at 6. In fact,

based on evidence submitted by TG, the earliest that Twinstar began selling SLIM BALLERINA

was some time in 2003. See Hansen Decl., Ex. 9 (letter from TG to U.S. Customs and Border

Protection, indicating that Twinstar began selling SLIM BALLERINA around 2003); see also Ly

Decl. ¶ 3 (“My distributor told me he had seen SLIM BALLERINA tea for sale since at least

2003.”). TG provides no evidence that SLIM BALLERINA was sold before 2003. In addition, even

assuming Twinstar began selling SLIM BALLERINA tea on April 5, 2002, and stopped selling the

tea on October 20, 2006, see Hansen Decl., Ex. 15 (printout dated October 20, 2006, containing list

of items sold by Ecomeal.org, including Twinstar SLIM BALLERINA tea), this period measures a

total of fifty-four and one-half months, not fifty-six months, according to the Court’s calculations. 

See Mot. at 6.

Second, TG bases its calculation of Twinstar’s profit on TG president’s claim that the

standard industry profit margin is 20%. See Mot. at 6 (citing to Ly Decl. ¶ 5). However, TG fails to

provide enough evidence to explain why TG’s president is qualified to opine on this 20% standard.

Finally, and most significantly, although TG alleges that Twinstar has admitted that it sold

$12,000 of Slim Ballerina tea over a two-month period in 2004, see Mot. at 6, TG provides no

evidence demonstrating this admission. Specifically, the exhibit cited in TG’s motion as providing

Twinstar’s admission of its two-month sales totaling $12,000 does not mention any profit figures at

all. See Mot. at 6 (referring to Hansen Decl., Ex. 24, a 5/15/06 letter from Twinstar’s intellectual

property counsel Myron Amer). As TG provides no alternative estimation of Twinstar’s monthly

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sales of SLIM BALLERINA tea, the Court cannot grant damages based on profits derived from

these missing sales figures. See Lindy Pen, 982 F.2d at 1408 (refusing to grant damages where

plaintiff failed to establish with reasonable certainty its own lost sales or defendant’s profits from

infringing conduct). Though at least one district court has suggested that the standard of proof for

defendant’s profits may be more relaxed in cases where defendant does not appear or participate in

litigation, the Court refuses to grant damages where, as here, there is a complete lack of

documentation providing a starting point for TG’s calculations. See Taylor Made Golf, 175 F.R.D.

at 663 (where the district court granted default judgment to a plaintiff trademark holder and noted

that plaintiff might have a relaxed standard of proof for defendant’s actual profits, where a defendant

refused court summons or was otherwise entirely uncooperative; the court granted plaintiff’s

approximate calculations of defendant’s profits from sale of counterfeit golf clubs; based on rough

estimations of Taiwanese golf club exports and the defendant’s share of that market). 

FRCP 55(b) states, in relevant part,

If, in order to enable the court to enter judgment or to carry it into

effect, it is necessary to take an account or to determine the amount of

damages or to establish the truth of any averment by evidence or to

make an investigation of any other matter, the court may conduct such

hearings or order such references as it deems necessary and proper.

Fed. R. Civ. P. 55(b). In the Ninth Circuit, it is established that “a default judgment for money may

not be entered without a hearing unless the amount claimed is a liquidated sum or capable of

mathematical calculation.” See Davis v. Fendler, 650 F.2d 1154, 1161 (9th Cir. 1981). 

Thus, instead of ordering Twinstar to pay damages, the Court grants the alternative relief TG

requested in its motion for default judgment, see Mot. at 7, and orders Twinstar to account for its

sales of SLIM BALLERINA tea and provide the financial information necessary to establish an

accurate amount of profits gained from its sales of SLIM BALLERINA tea. See Pickern v.

Marino’s Pizza & Italian Restaurant, No. S-01-1096, 2003 U.S. Dist. LEXIS 26951, at *3-4 (E.D.

Cal. Feb. 24, 2003) (where the court entered default judgment against defendant, who never

answered plaintiff’s complaint and never appeared in court, and whose only participation in the

litigation was sending an unverified letter to the court apparently opposing default; the court ordered

both parties to submit evidence in the form of affidavits or declarations that demonstrated the fact

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5

 In Taylor Made Golf, the court held that a case may also be deemed “exceptional” because of

a defendant’s disregard of the court proceedings and failure to appear. See Taylor Made Golf, 175

F.R.D. at 663 (citing Lien v. Compusoft of Kalamazoo, Inc., No. 1:89-CV-104, 1991 U.S. Dist. LEXIS

3218, at *13-14 (W.D. Mich. Mar. 13, 1991)). Several courts in the Central and Southern Districts of

California have cited Taylor Made Golf approvingly for this proposition. However, in Lien -- the case

on which Taylor Made Golf relied to arrive at this conclusion -- the court actually found the case

“exceptional” not solely on the basis of defendant’s disregard of the judicial process, but also because

of willful behavior on the defendant’s part. See Lien, 1991 U.S. Dist. LEXIS 3218, at *13-14. The

court referred to defendant’s complete disregard of plaintiff’s trademark rights and the string of broken

promises during five months of negotiations, which “essentially invited plaintiff to institute [the]

action.” See id. 

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and amount of damages, because the amount of damages claimed by plaintiff was not liquidated or

capable of mathematical calculation). TG is not precluded from providing other evidence to the

Court to prove any other measure for damages.

2. Attorney’s Fees

The Lanham Act gives the court discretion to award reasonable attorney’s fees in exceptional

cases. See 15 U.S.C. § 1117(a). Though not explicitly defined in the Lanham Act, a trademark case

may be “exceptional” and may merit attorney’s fees where the defendant’s infringement is

“malicious, fraudulent, deliberate, or willful.” See Lindy Pen, 982 F.2d at 1409. In addition, some

courts have indicated that a failure by a plaintiff to demonstrate any actual economic damages

weighs against finding a case “exceptional.” See Ferrero U.S.A., Inc. v. Ozak Trading, Inc., 952

F.2d 44, 47 (3d Cir. 1991) (indicating that a failure to prove damages can render a case

unexceptional); Pyramid Tech. Corp. v. Pyramid Tech., No. 92-3347, 1993 U.S. Dist. LEXIS 10946,

at *9 (E.D. La. July 30, 1993) (finding a case unexceptional because of “[t]he utter absence of any

proof of actual economic loss together with the complete absence of other evidence of ‘willful’ or

‘fraudulent’ intent or conduct on the part the defendants”).5

 

 An example of the type of “exceptional” case that merits attorney’s fees is found in

Earthquake Sound Corp. v. Bumper Indus., 352 F.3d 1210 (9th Cir. 2003), in which the Ninth

Circuit held the “total picture in the case was one of deliberate, willful infringement.” Id. at 1219. 

In affirming the district court’s finding of willful infringement, the appellate court noted that the

question of infringement was “not a particularly close case on the question of infringement,” as

defendant knew of plaintiff’s mark for three years before applying for its own mark’s registration,

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and plaintiff had provided ample evidence of actual confusion. See id. at 1217-18. To support its

finding of willful and deliberate infringement, the court further noted that the defendant did not

establish that it took reasonable measures, such as consulting an attorney, when informed by

plaintiff of possible infringement. See id. The infringing defendant was continually notified of the

problem by plaintiff, but defendant refused plaintiff’s offer to settle the matter without litigation, and

instead continued to market the infringing products. See id.

Here, the Court finds that Twinstar’s infringement was not so malicious, fraudulent,

deliberate, or willful as to make it an “exceptional” case. See Lindy Pen, 982 F.2d at 1409 (where

defendant’s infringement was not intentional, and no other factors suggested the case was

“exceptional”). First, as stated above in the discussion on likelihood of confusion, TG has not

adequately demonstrated that Twinstar intentionally selected TG’s marks in order to capitalize on

TG’s popularity. See Moore Business Forms v. Ryu, 960 F.2d 486, 492 (5th Cir. 1992) (denying

attorney’s fees because the case was not exceptional, where defendant did not adopt the mark in bad

faith, and though plaintiff notified defendant of possible infringement, defendant’s post-notification

conduct did not demonstrate bad faith); cf. Earthquake Sound, 352 F.3d at 1217 (willful

infringement found, in part because defendant knew of plaintiff’s mark for at least three years before

defendant attempted to register its own highly similar mark, and thus adopted the mark in bad faith).

Second, though TG did send Twinstar repeated cease-and-desist letters, the record indicates

that Twinstar was responsive to these letters and made attempts to reach an understanding with TG

and avoid litigation -- unlike the defendant in Earthquake Sound, who continually ignored

plaintiff’s correspondence and rejected plaintiff’s offer to settle out of court. See id; see also Hansen

Decl., Exs. 7-13 (correspondence between TG and Twinstar). Twinstar’s responsiveness suggests a

lack of willfulness or bad faith. For example, in its early correspondence with TG, Twinstar stated

that it was ceasing production of SLIM BALLERINA tea, though it acknowledged that some supply

of the tea might still be available for sale. See Hansen Decl., Ex. 10 (1/8/05 letter from Twinstar

counsel stating that Twinstar had ceased production and distribution of its SLIM BALLERINA tea

products, though a small quantity of products might still be in the marketplace). One year later, on

January 19, 2006, Twinstar again represented to TG that it had no SLIM BALLERINA tea in its

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inventory. Though TG was later able to purchase SLIM BALLERINA tea in a store and found it for

sale online, see Mot. at 3, these purchases do not necessarily demonstrate bad faith or willfulness,

because they do not necessarily show that Twinstar continued production of SLIM BALLERINA tea

after stating it would no longer do so. Rather, the availability of tea for sale may be consistent with

Twinstar’s earlier acknowledgment that a small quantity of its SLIM BALLERINA products

remained in the marketplace. See Hansen Decl., Ex. 10. TG has produced no evidence

demonstrating the rate at which Twinstar sold its SLIM BALLERINA tea. Further proof of

Twinstar’s responsiveness is found in evidence provided by TG that suggests that Twinstar was

willing to enter into a agreement with TG to settle outstanding trademark disputes as recently as

January 19, 2006. See Hansen Decl., Ex. 13; cf. Earthquake Sound, 352 F.3d at 1217.

As additional evidence of Twinstar’s lack of bad faith, evidence produced by TG indicates

that in response to TG’s communications, Twinstar changed its product packaging, and now sells its

product as “TWINSTAR SLIM TEA.” See Hansen Decl., Ex. 11. TG does not dispute the fact that

Twinstar revised its packaging, nor does TG claim anywhere in its pleadings that this new packaging

would continue to infringe upon its 3 BALLERINA word mark. However, the TWINSTAR SLIM

TEA product still features the same ballerina design that appeared on the SLIM BALLERINA tea

packaging. In light of the Court’s findings of infringement, see Part II.B.2.b., supra, any continued

use by Twinstar of its ballerina design mark constitutes infringement of TG’s ballerina design mark.

That being said, the Court does not find that Twinstar’s continued use the infringing ballerina

design mark on its “TWINSTAR SLIM TEA,” see Hansen Decl., Exs. 11, 24, demonstrates willful

infringement that would make this case “exceptional.” See Earthquake Sound, 352 F.3d at 1218

(“The issue [in determining if a case is exceptional] is not necessarily one of bad faith: willful or

deliberate infringement will suffice.”). The Court notes that Twinstar produced this altered

TWINSTAR SLIM TEA packaging in or before December 2005. See Hansen Decl., Ex. 11. In

TG’s original cease-and-desist letter to Twinstar, dated December 14, 2004, TG only alleged that

Twinstar’s SLIM BALLERINA tea violated TG’s 3 BALLERINA word mark; TG made no mention

of the ballerina design mark. See Hansen Decl., Ex. 6. In TG’s letters to U.S. Customs and Border

Protection, dated December 17, 2004 and May 12, 2005, TG only alleges that Twinstar has violated

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its 3 BALLERINA word mark. See Hansen Decl., Exs. 8, 9. Thus, it is likely that the altered

TWINSTAR SLIM TEA package, see Hansen Decl., Ex. 11, was produced at a time when Twinstar

did not know the ballerina design mark was at issue, which suggests that retention of the design

mark on the new packaging was not willful infringement. In the evidence submitted by TG, the first

indication that the design mark was at issue appears in a December 21, 2005 letter, in which TG

informs Twinstar in passing that its design mark is being infringed. See Hansen Decl., Ex. 12

(stating that the continued availability of SLIM BALLERINA online is “further evidence of

[Twinstar’s] willful and deliberate infringement of [TG’s] “3 Ballerina word mark, as well as [TG’s]

design mark”). This letter makes no reference to the altered packaging. See id. As late as May 15,

2006, correspondence from Twinstar’s counsel to TG’s suggested that Twinstar believed, however

incorrectly, that its altered TWINSTAR SLIM TEA packaging to be in compliance with TG’s

trademarks. See Hansen Decl., Ex. 24 (letter from Twinstar counsel to TG counsel with copy of new

packaging, stating “Without prejudice or any admission of wrongdoing, we have been authorized by

our client to advise you that the protested trademark has been replaced by the mark TWINSTAR

SLIM, as illustrated on the copy of the packaging being enclosed herewith”). The Court notes that

Twinstar has received copies of both TG’s complaint and motion for default judgment, which allege

infringement of both the word mark and design mark. See Docket Nos.1, 5, 6. Nevertheless, there is

no evidence submitted by TG that Twinstar has continued to use the infringing ballerina design mark

subsequent to service of the complaint.

Furthermore, as noted above, cases have also been deemed unexceptional when a plaintiff

has not demonstrated actual damages, and, here, TG has not provided adequate evidence of such. 

See Ferrero U.S.A., 952 F.2d at 47; see also Pyramid Tech. Corp., 1993 U.S. Dist. LEXIS 10946, at

*9. TG has not provided any evidence that it has lost sales because of the new product packaging

used by Twinstar, which uses the ballerina design mark but not the SLIM BALLERINA word mark. 

///

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///

///

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6

 The Court notes that, even if a case is exceptional, a court still has discretion in deciding

whether to award fees. See 15 U.S.C. § 1117 (2007) (“The court in exceptional cases may award

reasonable attorney fees to the prevailing party”); see also Dieter v. B & H Indus., 880 F.2d 322, 328

(11th Cir. 1989) (“Even if the trial court finds that the circumstances of the case are, in fact,

exceptional, the decision whether to award attorney’s fees is still discretionary.”); accord Birthright v.

Birthright, Inc., 827 F. Supp. 1114 (D.N.J. 1993) (denying attorney’s fees despite finding the case

exceptional because the trademark violation occurred in a nonprofit, noncommercial context). 

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For these reasons, this case is not an “exceptional” one in which attorney fees are merited.6

See 15 U.S.C. § 1117(a). Given the totality of the circumstances, Twinstar’s behavior was not

malicious, fraudulent, deliberate or willful. See Lindy Pen, 982 F.2d at 1409. Twinstar was at least

partially responsive to TG’s demands with respect to infringement of the word mark. As to the

design mark, TG did not raise the issue of infringement with respect to the design mark until many

months after the parties’ negotiations began, and subsequent correspondence indicates that Twinstar

believed, though erroneously, that their new packaging was in compliance with TG’s trademark

rights. Furthermore, TG did not provide any evidence of actual damages. These considerations all

counsel against the awarding of fees, especially in the amount sought by TG (more than $30,000). 

See Mot. at 8.

3. Costs

Holders of federally registered trademarks are entitled to recover the costs of actions brought

under the Lanham Act, subject to the principles of equity. 15 U.S.C. § 1117(a); see also Castworld

Products, 219 F.R.D. at 502-503; see also Planetary Motion, Inc. v. Techsplosion, Inc., 261 F.3d

1188 (holding that under the Lanham Act, plaintiff need not establish that infringer acted

maliciously, fraudulently, deliberately, or willfully to recover costs). Because the Court has found

Twinstar liable for infringing TG’s trademark, TG is entitled to recover costs in the action that are

specific to Twinstar. See Castworld Products, 219 F.R.D. at 503. Accordingly, the Court

recommends that TG’s request for award of costs in the amount of $1,861 which have accrued

between May and October 2006 be GRANTED. See Mot. at 8. These litigation costs include costs

for obtaining certified copies of TG’s trademark registrations, copying costs, and messenger service

and postage costs. See Hansen Decl., Ex. 25 (TG attorneys’ invoices detailing services rendered and

costs incurred, from May 2006 to October 2006). 

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4. Injunctive Relief

TG has requested a permanent injunction enjoining Twinstar from the following: 

(1) using the name SLIM BALLERINA and/or graphical representations of ballerinas,

either separately or together, in conjunction with the offering of tea; 

(2) any other infringement of U.S. Trademark Registration Nos. 2,570,889 and 2,561,662

(TG’s 3 BALLERINA word mark and ballerina design mark);

(3) unfairly competing with TG; and 

(4) engaging in unfair and deceptive trade practices and from injuring Plaintiff’s business

reputation, pursuant to Section 34 of the Lanham Act (15 U.S.C. § 1116), California

Business & Professions Code § 17200 et. seq. and the equitable power of this Court

to enforce the common law of the state of California.

See Compl. at 7. 

Under the Lanham Act, the Court has the power to grant injunctions according to the rules of

equity, and on such terms as the Court deems reasonable, to prevent the violation of a mark holder’s

rights. See 15 U.S.C. § 1116(a). A plaintiff is not entitled to an injunction as a matter of course, but

where, as here, a mark holder demonstrates ongoing infringement of its marks, an injunction is

appropriate. See Pepsico, 238 F. Supp. 2d at 1177-78. (“A plaintiff is not automatically entitled to

an injunction simply because it proves its affirmative claims”) (internal citations omitted). Because,

as discussed above, Twinstar’s altered TWINSTAR SLIM TEA packaging still infringes upon TG’s

ballerina design mark, see Hansen Decl., Ex. 11, the Court finds that a permanent injunction is

appropriate. Additionally, a permanent injunction is appropriate in light of Twinstar’s failure to

respond to TG’s complaint and motion for default judgment. See Castworld Products, 219 F.R.D. at

502 (finding permanent injunctive relief appropriate where defendant willfully violated plaintiff’s

mark by selling counterfeit cigarettes bearing plaintiff’s logo, and defendant had ignored plaintiff’s

lawsuit, leading the court to grant default judgment in favor of plaintiffs). 

The Court therefore recommends that TG’s request for a permanent injunction be granted. 

However, items 3 and 4 of the injunctive relief requested by TG are vague and overbroad. See

Lamb-Weston, Inc. v. McCain Foods, Ltd., 941 F.2d 970, 974 (9th Cir. 1991) (“An overbroad

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injunction is an abuse of discretion.”); see also Fed. R. Civ. P. 65(d) (stating that injunctions should

be set forth in specific terms). The Court recommends that Twinstar be permanently ENJOINED

from the following: 

(1) using the name SLIM BALLERINA and/or graphical representations of ballerinas,

either separately or in conjunction with the offering of tea;

(2) any other infringement of U.S. Trademark Registration Nos. 2,570,889 and 2,561,662

(TG’s 3 BALLERINA word mark and ballerina design mark). 

TG further requests that the Court order Twinstar to surrender for destruction nameplates,

labels, advertisements pursuant to Lanham Act Section 36 (15 U.S.C. § 1118). Such a request is

reasonable. See Allergan, Inc. v. Mira Life Group, Inc., No. 04-36, 2004 U.S. Dist. Lexis 26811, at

*6 (C.D. Cal. June 9, 2004) (ordering defendant to deliver the Court for destruction or other

disposition labels, prints, packages, wrappers, receptacles, etc. that defendant used to manufacture,

promote, and sell a pharmaceutical product that infringed upon plaintiff’s mark).

III. RECOMMENDATION

Having considered the seven Eitel factors and the evidence of damages, the Court hereby

recommends that judgment be entered in favor of TG against Twinstar. As to the relief requested,

the Court recommends that TG’s request for damage be denied without prejudice. The Court

recommends that Twinstar be ordered to produce financial records indicating its profits from sales of

its SLIM BALLERINA tea, and that the presiding judge retain jurisdiction to determine damages

based on Twinstar’s profits from its SLIM BALLERINA tea. Additionally, TG may submit further

evidence in its attempt to prove another measure of damages. The Court further recommends that

TG be awarded its costs, in the amount $1,861, but not its attorney’s fees. Finally, the Court

recommends that a permanent injunction be issued that enjoins Defendant from the following: 

(1) using the name SLIM BALLERINA and/or graphical representations of ballerinas,

either separately or in conjunction with the offering of tea; and

(2) any other infringement of U.S. Trademark Registration Nos. 2,570,889 and 2,561,662

(TG’s 3 BALLERINA word mark or ballerina design mark).

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Defendants should also be ordered to surrender for destruction nameplates, labels, advertisements

for the Slim Ballerina tea or graphic representation of ballerinas used with the offering of tea.

Any party may file objections to this report and recommendation pursuant to 28 United

States Code § 636(b)(1)(B), Federal Rule of Civil Procedure 72(b), and Local Rule 72-3.

Dated: March 22, 2007

 EDWARD M. CHEN

United States Magistrate Judge

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