Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-azd-2_19-cv-02109/USCOURTS-azd-2_19-cv-02109-0/pdf.json

Nature of Suit Code: 840
Nature of Suit: Trademark
Cause of Action: 15:1114 Trademark Infringement

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WO

IN THE UNITED STATES DISTRICT COURT

FOR THE DISTRICT OF ARIZONA

Zekelman Industries Incorporated, et al.,

Plaintiffs,

v. 

Robert Wayne Marker, et al.,

Defendants.

No. CV-19-02109-PHX-DWL

ORDER 

AND DEFAULT JUDGMENT

Pending before the Court is Plaintiffs’ motion for default judgment and permanent 

injunction. (Doc. 31.) For the following reasons, the motion will be granted in part and 

denied in part.

I. Background

On March 29, 2019, Plaintiffs initiated this action by filing an eight-count 

complaint, which includes federal claims under the Lanham Act and the Copyright Act and 

various state-law claims. (Doc. 1.) 

For purposes of this order, the facts alleged in the complaint are assumed to be true, 

except as to damages. Geddes v. United Fin. Grp., 559 F.2d 557, 560 (9th Cir. 1977) (“The 

general rule of law is that upon default the factual allegations of the complaint, except those 

relating to the amount of damages, will be taken as true.”).

Plaintiff Zekelman Industries Incorporated (“Zekelman”) manufactures steel pipe 

and Plaintiff Z-Modular, LLC (“Z-Modular”), a subsidiary of Zekelman, “provides a onestop shop for modular buildings and services” marketed to real estate developers. (Doc. 1 

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¶ 5.) The modular buildings utilize a self-bracing structural system that is based upon 

“VectorBloc” construction technology. (Id.) According to Zekelman’s advertising 

materials, the “VectorBloc” system uses bolts to join hollow structural sections with 

“VectorBloc corners” or “VectorBloc connectors”—cast steel L-shaped joints—which 

creates building modules that can be assembled from inside and stacked. (Doc. 3-3 at 3-4; 

see also Doc. 1 ¶ 58.) 

Zekelman registered the service mark “Z Modular” with the United States Patent 

and Trademark Office on February 6, 2018. (Doc. 1 ¶ 15; Doc. 3 at 5.) With Zekelman’s 

approval, Z-Modular has used the Z Modular mark in commerce in the United States 

continuously since at least April 2017. (Doc. 1 ¶ 17.)

Although “VectorBloc” has not been registered as a trademark or service mark,

1 ZModular owns common-law rights in the VectorBloc trademark and service mark.2

 (Doc. 

1 ¶ 24.) Plaintiffs have used the VectorBloc mark in commerce continuously since 

September 2018 or earlier. (Id. ¶ 25.) Plaintiffs display a photograph of the VectorBloc 

connector and information about it on their webpage. (Id. ¶ 26; Doc. 3-1 at 4.)

In June 2018, a marketing agency created two video advertisements for Zekelman’s 

use, one entitled “Build Stronger Graphics” and the other entitled “Build Faster Graphics” 

(collectively, the “Copyrighted Works”), and transferred ownership to Zekelman. (Doc. 1 

¶ 37.) Both videos were copyrighted. (Id. ¶¶ 38-39.) One “features a modular steel unit

outlined in red forming in the air and landing sturdily on the ground,” and the other 

“features modular steel units being stacked vertically, a façade forming . . . , then the stack 

being repeated horizontally . . . , eventually forming a complex.” (Id.) Zekelman and its 

1

“[T]he only difference between a trademark and a service mark is that a trademark 

identifies goods while a service mark identifies services.” Chance v. Pac-Tel Teletrac Inc., 

242 F.3d 1151, 1156 (9th Cir. 2001). “Service marks and trademarks are governed by 

identical standards.” Id.

2 Legal conclusions in the complaint are not taken as true for purposes of a motion 

for default judgment. Wecosign, Inc. v. IFG Holdings, Inc., 845 F. Supp. 2d 1072, 1078 

(C.D. Cal. 2012) (“[A] defendant is not held to admit facts that are not well-pleaded or to 

admit conclusions of law.”) However, the relevant facts alleged in the complaint (Doc. 1 

¶¶ 26-28) amply support this conclusion. Chance, 242 F.3d at 1156 (“[C]ommon law rights 

are acquired . . . by adopting and using the mark . . . .”).

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affiliates display the Copyrighted Works online. (Id. ¶ 40.)

At least as of the date on which the complaint was filed, March 29, 2019, Defendant 

Robert Wayne Marker (“Marker”) held himself out as engaged in services related to 

modular buildings. (Id. ¶ 42.) Marker used the names “Evo Micro Condos” and “Evo 

International” (collectively, “Evo”) and operated the website www.evomicrocondos.com, 

but apparently no legal entity with those names ever existed. (Id. ¶¶ 42-43, 45.) In 

February 2019, Marker formed GreenFeet, Inc. (“GreenFeet”), which is the other 

defendant in this case. (Id. ¶ 46.) 

Neither Zekelman nor Z-Modular has any connection to or agreement with Marker, 

GreenFeet, or the apparently non-existent entity Evo. (Id. ¶ 51.) Nevertheless, through 

February 2019, the www.evomicrocondos.com website featured a photograph of a 

VectorBloc connector, which was taken from the Z-Modular website,3along with text 

identifying the connector as VectorBloc and describing how it works. (Doc. 1 ¶ 59; Doc. 

3-4 at 3 [“It all starts with the VectorBloc Connection”].) The website also published the 

Copyrighted Works. (Doc. 1 ¶ 60.)

The website also publicized an “Authorized Developer Program” and invited 

interested persons to click on a “contact us” hyperlink to receive more information. (Id. ¶ 

49; Doc. 3-7 at 12.) Once contact was made, Marker invited the interested person to 

become a “dealer” and represented that Marker had a business relationship with Plaintiffs. 

(Doc. 1 ¶¶ 49, 51.)

For example, on January 10, 2019, Marker sent an email (the “Jan. 10 email”) to a 

prospective dealer entitled “Dealer Oppty Outline – Evo Micro Condos,” inviting the 

prospective dealer to check out Evo’s website at www.evomicrocondos.com and to check 

out Evo’s “manufacturing partner’s site at www.z-modular.com.” (Doc. 1 ¶¶ 49, 51; Doc. 

3-9 at 2.) On January 16, 2019, the prospective dealer’s brother forwarded the Jan. 10 

email to Plaintiffs. (Doc. 3-9 at 2.) On January 17, 2019, Plaintiffs’ counsel sent Marker 

3 Plaintiffs do not allege that the photograph of the VectorBloc connector was 

copyrighted.

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a cease and desist letter. (Doc. 1 ¶ 71; Doc. 3-11 at 2-3.) Marker never responded. (Doc. 

1 ¶ 72.) 

In March 2019, Marker began to edit his website at www.evomicrocondos.com, 

replacing the names “Evo International” and “Evo Micro Condos” with the name

“GreenFeet Development.” (Id. ¶ 46.) The website continued to publicize the “Authorized 

Developer Program.” (Doc. 3-8 at 3.) GreenFeet has since “taken over” (or “jointly 

participates in”) this endeavor. (Doc. 1 ¶¶ 52, 54.)

Furthermore, “at some point,” Marker “and/or” GreenFeet took an image from a 

frame of the Build Stronger Graphics video (one of the Copyrighted Works), altered it (by 

removing the color red and flipping the image horizontally), and posted the altered image 

on the website. (Doc. 1 ¶ 61.) The altered image existed on the www.evomicrocondos.com

website as of March 5, 2019, at which point the website listed an address for GreenFeet. 

(Id. ¶¶ 47, 61; Doc. 3-7 at 4.)

When the www.evomicrocondos.com website first became affiliated with 

GreenFeet, it still included a picture of a VectorBloc connector and information about 

VectorBloc connectors. (Doc. 3-6 at 8.) However, the website later stopped displaying 

the VectorBloc connector and instead advertised an “Innerloc Connector.” (Doc. 3-7 at 5.) 

The image of the Innerloc Connector “is merely an edited image” of the “stolen 

photograph” of the VectorBloc connector. (Doc. 1 ¶¶ 63-66.)

II. Procedural History

As noted, on March 29, 2019, Plaintiffs filed this lawsuit. (Doc. 1.) 

A. Service Of Process

Because a federal court lacks jurisdiction over a defendant who has not been 

properly served, the Court must “assess the adequacy of service of process on the party 

against whom default is requested” before entering default judgment. Golden Scorpio 

Corp. v. Steel Horse Saloon I, 2009 WL 976598, *1 (D. Ariz. 2009). 

On April 3, 2019, a process server served both Defendants by means of personal 

delivery to Jeanne Marker. (Docs. 21, 22.) This service was effective as to Marker because 

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he was living at the same residence as Jeanne Marker at the time of service. See Fed. R. 

Civ. P. 4(e)(2)(B); Ariz. R. Civ. P. 4.1(d)(2). This service was also effective as to 

GreenFeet because Jeanne Marker was its statutory agent. See Fed. R. Civ. P. 4(h)(1)(B); 

Ariz. R. Civ. P. 4.1(i).

B. Preliminary Injunction

On April 15, 2019, Plaintiffs filed a motion for preliminary injunction and served it 

on GreenFeet (Doc. 23), but GreenFeet never responded. On May 14, 2019, the Court 

summarily granted the preliminary injunction as to GreenFeet.4 (Doc. 26.) The Court also 

prompted Plaintiffs to seek entry of default. (Id. at 3.)

C. Entry Of Default And Motion For Default Judgment

On June 19, 2019, Plaintiffs applied for entry of default (Doc. 29), which the Clerk 

entered the following day (Doc. 30). 

On August 28, 2019, Plaintiffs moved for default judgment and sought a permanent 

injunction. (Doc. 31.)

On October 1, 2019, Plaintiffs served both Defendants with the application for entry 

of default, the Clerk’s entry of default, and the motion for default judgment and permanent 

injunction. (Docs. 32, 33.) The process server personally delivered the documents to 

Marker. (Id.) Defendants never responded and have not participated in this litigation in 

any manner.

On March 23, 2020, the Court issued a tentative order concerning the motion for 

default judgment. (Doc. 37.)

On March 25, 2020, the Court held oral argument, via telephone, with Plaintiffs’ 

counsel. (Doc. 38.)

///

///

4 The Court noted that the motion for preliminary injunction was not properly served 

on Marker, because he was no longer living at the service address by the time the motion 

was filed (he apparently moved out after the complaint was served), but because the 

injunction bound GreenFeet and its agents, it had “the practical effect of enjoining Marker, 

too.” (Doc. 26 at 2 n.1.)

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III. Analysis

A. Default Judgment

The “decision whether to enter a default judgment is a discretionary one.” Aldabe 

v. Aldabe, 616 F.2d 1089, 1092 (9th Cir. 1980). The following factors, known as the Eitel

factors, may be considered when deciding whether default judgment is appropriate: (1) the 

possibility of prejudice to the plaintiff, (2) the merits of the claims, (3) the sufficiency of 

the complaint, (4) the amount of money at stake, (5) the possibility of factual disputes, (6) 

whether the default was due to excusable neglect, and (7) the policy favoring decisions on 

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

1. The First, Fifth, Sixth, And Seventh Eitel Factors

In cases like this one, in which Defendants have not participated in the litigation at 

all, the first, fifth, sixth, and seventh factors are easily addressed. 

The first factor weighs in favor of default judgment. Prejudice to Plaintiffs is 

obvious—if the motion for default judgment were denied, Plaintiffs would be without other 

recourse for recovery. PepsiCo, Inc. v. Cal. Sec. Cans, 238 F. Supp. 2d 1172, 1177 (C.D. 

Cal. 2002). 

The fifth and sixth factors weigh in favor of default judgment or are neutral. Due 

to Defendants’ failure to participate, there is no dispute over material facts (except as to 

damages) and no indication that default is due to excusable neglect. 

The seventh factor generally weighs against default judgment, given that cases 

“should be decided on their merits whenever reasonably possible.” Eitel, 782 F.2d at 1472. 

However, the existence of Rule 55(b) of the Federal Rules of Civil Procedure, which 

authorizes default judgments, “indicates that this preference, standing alone, is not 

dispositive.” PepsiCo, 238 F. Supp. 2d at 1177. Put simply, “the default mechanism is 

necessary to deal with wholly unresponsive parties who could otherwise cause the justice 

system to grind to a halt. Defendants who appear to be ‘blowing off’ the complaint should 

expect neither sympathy nor leniency from the court.” 2 Gensler, Federal Rules of Civil 

Procedure Rules and Commentary, Rule 55, at 119-20 (2020).

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2. The Fourth Eitel Factor—The Amount Of Money At Stake

At first blush, the fourth factor—the amount of money at stake—seems to weigh 

against granting default judgment. Plaintiffs seek $639,774.25 (Doc. 31 at 8), which is a 

substantial sum. Moreover, none of the facts alleged in the complaint, taken as true, 

indicate that Plaintiffs actually lost any business as a result of Defendants’ actions. Indeed, 

during oral argument, Plaintiffs’ counsel acknowledged that Plaintiffs have no evidence of 

actual damage.

5

 “When the money at stake in the litigation is substantial or unreasonable, default 

judgment is discouraged.” Bd. of Trustees v. Core Concrete Const., Inc., 2012 WL 380304, 

*4 (N.D. Cal. 2012), report and recommendation adopted, 2012 WL 381198 (N.D. Cal. 

2012). However, Plaintiffs seek damages for only three of their eight counts: two Lanham 

Act claims (Counts Two and Three) and one Copyright Act claim (Count Eight). (Doc. 31 

at 8.) Additionally, with respect to Counts Two and Eight, Plaintiffs seek statutory 

damages, not actual damages. (Id.)

Under the Lanham Act, the Court has wide discretion to “enter judgment for such 

sum as the court shall find to be just, according to the circumstances of the case.” 15 U.S.C.

§ 1117(a); see also id. § 1117(c)-(d) (allowing wide latitude “as the court considers just”). 

The Court, in exercising its broad discretion, may award only statutory damages and 

decline to award actual damages, to keep the sum more modest. Media Lab, Inc. v. Collis, 

2010 WL 3893582, *6 (N.D. Cal. 2010). Under the Copyright Act, the Court similarly has 

wide discretion in assessing statutory damages. 17 U.S.C. § 504(c) (allowing “an award 

of statutory damages for all infringements involved in the action, with respect to any one 

work, for which any one infringer is liable individually, or for which any two or more 

infringers are liable jointly and severally, in a sum of not less than $750 or more than 

$30,000 as the court considers just”) (emphasis added). Where the Court has the discretion 

5 Plaintiffs’ counsel explained that, due to Defendants’ refusal to participate in these 

proceedings, Plaintiffs have not been able to use to discovery process to identify evidence 

of damages. This is further evidence of prejudice to Plaintiffs and weighs in favor of

granting default judgment. Nevertheless, the amount sought is high for a case where there 

may be no actual damage.

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to reduce the monetary award to a less substantial sum that the Court considers reasonable, 

the fourth Eitel factor becomes neutral. Twitch Interactive, Inc. v. Johnston, 2018 WL 

1449525, *8 (N.D. Cal. 2018).

3. The Second And Third Eitel Factors—Merits And Sufficiency

That leaves the second and third Eitel factors—the merits of the claims and the 

sufficiency of the complaint. “These two factors are often analyzed together and require 

courts to consider whether a plaintiff has stated a claim on which it may recover.” Vietnam 

Reform Party v. Viet Tan - Vietnam Reform Party, 416 F. Supp. 3d 948, 962 (N.D. Cal. 

2019) (internal quotation marks omitted). “Of all the Eitel factors, courts often consider 

the second and third factors to be the most important.” Id. 

Here, these factors constitute the most complicated part of the analysis. Plaintiffs 

seek entry of default judgment on seven grounds, covering all eight counts of their 

complaint. (Doc. 31 at 14.) Unfortunately, Plaintiffs devoted less than half of one page of 

their default-judgment motion to the merits and sufficiency of the complaint, merely 

asserting in a conclusory fashion that the complaint pleads all the elements of all the causes 

of action. (Doc. 31 at 12.) This approach is understandable, given that Plaintiffs had 

already expended significant fees litigating this matter by the time the case reached the 

default-judgment stage and likely determined that it would be inefficient to continue 

pouring substantial resources into a case against potentially judgment-proof adversaries. 

Nevertheless, Plaintiffs’ motion does not (1) identity the elements of each claim or (2) 

identify the facts alleged in the complaint that establish each element of each claim. 

Additionally, although Plaintiffs’ earlier motion for a preliminary injunction did address, 

in some detail, why Defendants’ conduct has resulted in a “likelihood of confusion” for 

purposes of the Lanham Act claims (Doc. 23 at 11-14), Plaintiffs have asserted a variety 

of different Lanham Act claims and none turns solely on whether a likelihood of confusion 

exists. 

Given this backdrop, the Court will decline to assess the merits and sufficiency of 

Counts One, Four, Five, Six, and Seven of the complaint—the counts for which Plaintiffs 

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aren’t seeking damages—and will deny, without prejudice, Plaintiffs’ motion for a default 

judgment as to those counts. See generally T-Cetra, LLC v. Guzman, 2017 WL 7156250, 

*1 (C.D. Cal. 2017) (“[T]he Court denied without prejudice Plaintiff’s motion for default 

judgment because Plaintiff failed (1) to set forth the elements of Plaintiff’s claims with 

citations and legal support, and (2) failed to provide evidentiary support for the damages 

requested.”); Bank of New York Mellon v. Morandini, 2018 WL 6788858, *1 (S.D. Fla. 

2018) (emphasizing that “[a] default judgment is a matter of discretion for the court, not a 

matter of right to the moving party” and noting that the court had denied an earlier motion 

for default judgment without prejudice to the movant’s ability to file a renewed motion that 

addressed the sufficiency of the claims in more detail).

6

 As for Counts Two, Three, and 

Eight, the Court will forge ahead and analyze the merits and sufficiency of each count.

i. Count Two

Count Two asserts a claim for counterfeiting of the Z Modular mark, in violation of 

“Section 32(1) of the Lanham Act, 15 U.S.C. § 1114(1).” (Doc. 1 ¶¶ 83-87.) 

“To prevail on a claim of trademark infringement under the Lanham Act, 15 U.S.C. 

§ 1114, a party must prove: (1) that it has a protectible ownership interest in the mark; and 

(2) that the defendant’s use of the mark is likely to cause consumer confusion.” Network 

Automation, Inc. v. Advanced Sys, Concepts, Inc., 638 F.3d 1137, 1144 (9th Cir. 2011) 

(citations and internal quotation marks omitted). The second element, however, actually 

two subcomponents: “use” is distinct from “confusion.” Bosley Med. Institute, Inc. v. 

Kremer, 403 F.3d 672, 676 (9th Cir. 2005) (“Infringement claims are subject to a 

commercial use requirement.”). See generally 1-800 Contacts, Inc. v. WhenU.Com, Inc., 

414 F.3d 400, 412 (2d Cir. 2005) (“Not only are ‘use,’ ‘in commerce,’ and ‘likelihood of 

confusion’ three distinct elements of a trademark infringement claim, but ‘use’ must be 

decided as a threshold matter because, while any number of activities may be ‘in 

6 Given this outcome, Plaintiffs are free to file a renewed motion for default judgment 

that addresses the sufficiency of Counts One, Four, Five, Six, and Seven in more detail. 

However, in light of the other relief being granted in this order, and in light of Plaintiffs’ 

counsel’s comments during the motion hearing, it seems unlikely that future litigation will 

be necessary.

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commerce’ or create a likelihood of confusion, no such activity is actionable under the 

Lanham Act absent the ‘use’ of a trademark.”). 

Here, Plaintiffs’ motion for preliminary injunction (which is the only filing that 

addresses the elements of trademark infringement) focuses on whether Defendants’ 

conduct was likely to cause confusion. (Doc. 23 at 11-13.) The Court agrees with that 

analysis, but it doesn’t address the antecedent question of whether Defendants engaged in 

a qualifying “use” of the Z Modular mark. 

On that issue, it is notable that Defendants are not accused of placing the Z Modular 

mark7(or any imitation of it) anywhere on their website, advertising materials, or 

products. Such conduct would be the quintessential sort of “use” of a trademark that may 

be challenged in an infringement action. 1-800 Contacts, 414 F.3d at 408 (placing the 

plaintiff’s “trademarks on any goods or services in order to pass them off as emanating 

from or authorized by [the plaintiff]” is the sort of “‘use’ . . . ordinarily at issue in an 

infringement claim”). Rather, the complaint alleges that after prospective dealers would 

contact Defendants (via the link on Defendants’ website), Defendants would respond by 

sending an email that, among other things, invited the recipient to “check out . . . our 

manufacturing partner’s site at www.z-modular.com.” (Doc. 1 ¶¶ 49, 51; Doc. 3-9 at 2.) 

Thus, the challenged “use” of the Z Modular mark consists of falsely describing Z-Modular 

as a “manufacturing partner” and then providing a link to Z-Modular’s own website, where 

Z-Modular has posted its own mark.

Plaintiffs assert, without any supporting authority, that “[d]irecting prospective 

dealers to Z-Modular’s advertisements that extensively use the [Z-Modular mark] by a link 

in an email, while representing that any product sold is and will be manufactured by ZModular, is no different than using [the mark] directly in the email.” (Doc. 1 ¶ 53.) This

ipse dixit fails to satisfy Plaintiffs’ burden under the second and third Eitel factors. There 

is a broad body of caselaw addressing when a reference to a competitor’s website may 

7 Section 1114 applies only when there is “a registered mark,” so Plaintiffs could not

bring a cause of action under that section as to VectorBloc.

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constitute an infringing use under the Lanham Act. Depending on the facts, such conduct 

may indeed qualify. See, e.g., Brookfield Commc’ns, Inc. v. W. Coast Entm’t Corp., 174 

F.3d 1036, 1041 (9th Cir.1999) (defendant violated the Lanham Act by using a 

competitor’s “trademark in the domain name of its web site and in its web site’s metatags”). 

Nevertheless, not every reference to a competitor’s name or website qualifies. See, e.g., 

Nelson-Ricks Cheese Co., Inc. v. Lakeview Cheese Co., LLC, 331 F. Supp. 3d 1131, 1139-

40 (D. Idaho 2018). 

Given this backdrop, it was incumbent upon Plaintiffs to provide citations and 

analysis in their motion for default judgment demonstrating that the conduct at issue 

constitutes trademark infringement under Section 1114(1) of the Lanham Act. Although 

the factual allegations in the complaint describe conduct that is certainly tortious and 

improper, not all such conduct falls within the ambit of Section 1114(1) and this is not a 

typical infringement case. Thus, given Plaintiffs’ failure to meet their burden under the 

second and third Eitel factors, their motion for a default judgment as to Count Two will be 

denied without prejudice. Cf. T-Cetra, LLC, 2017 WL 7156250 at *1; Bank of New York 

Mellon, 2018 WL 6788858 at *1. Again, it’s possible the challenged conduct does 

constitute counterfeiting under Section 1114(1)—the narrow ruling reached here is that 

Plaintiffs needed to provide more fulsome briefing (which they understandably declined to 

do, in light of the financial realities of this case) if they wished to prevail in the defaultjudgment context. 

ii. Count Three

In Count Three, Plaintiffs assert a claim for “Unfair Competition By Use Of The 

VectorBloc Mark,” “in violation of Section 43(a) of the Lanham Act, 15 U.S.C. § 1125(a).” 

(Doc. 1 ¶¶ 88-95.)

Section 43(a) of the Lanham Act provides:

Any person who, on or in connection with any goods or services, . . . uses in 

commerce any word, term, name, symbol, or device, or any combination 

thereof, or any false designation of origin, false or misleading description of 

fact, or false or misleading representation of fact, which—

(A) is likely to cause confusion, or to cause mistake, or to deceive as to the 

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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, or 

(B) in commercial advertising or promotion, misrepresents the nature, 

characteristics, qualities, or geographic origin of his or her or another 

person’s goods, services, or commercial activities,

shall be liable in a civil action by any person who believes that he or she is 

or is likely to be damaged by such act.

15 U.S.C. § 1125(a)(1).

“Section 1125(a) . . . creates two distinct bases of liability: false association, 

§ 1125(a)(1)(A), and false advertising, § 1125(a)(1)(B).” Lexmark Int’l, Inc. v. Static 

Control Components, Inc., 572 U.S. 118, 122 (2014). “False association” appears to be 

synonymous with “false designation of origin” or “passing off.” Int’l Order of Job’s 

Daughters v. Lindeburg & Co., 633 F.2d 912, 917 (9th Cir. 1980).

Section 43(a) of the Lanham Act “prohibits a broader range of practices than does 

§ 32.” Inwood Labs., Inc. v. Ives Labs., Inc., 456 U.S. 844, 858 (1982). Among other 

things, it “applies to both registered and unregistered” marks. Brookfield Commc’ns, 174 

F.3d at 1046 n.6. See also Enigma Software Grp. USA, LLC v. Malwarebytes, Inc., 946 

F.3d 1040, 1053 (9th Cir. 2019) (“[E]ven though the Lanham Act is known as the federal 

trademark statute, not all claims brought under the statute involve trademarks. . . . [Section] 

1125(a) is one of the few provisions that goes beyond trademark protection.”) (citation and 

internal quotation marks omitted). Thus, “false designation of origin” is “a federal remedy 

against the deceptive use of unregistered trademarks to designate falsely the origin of goods 

(‘passing off’).” Job’s Daughters, 633 F.2d at 917. 

As an initial matter, Plaintiffs do not specify whether their claim in Count Three is 

a claim for false association under Section 1125(a)(1)(A), a claim for false advertising 

under Section 1125(a)(1)(B), or both. Instead, they describe it as a claim for “unfair

competition”—a term that doesn’t appear in the text of Section 1125(a). In any event, 

because paragraph 90 of the complaint contains a specific reference to “a false designation 

of origin,” and because (as discussed below) the liability analysis under Section 

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1125(a)(1)(A) is relatively straightforward, the Court will construe Count Three as a false 

association claim.

A Lanham Act claim for false association under Section 1125(a)(1)(A) has the 

following elements:

1) the defendant used a word, term, name, symbol, or device (or any 

combination thereof) or any false designation of origin, false or 

misleading description of fact, or false or misleading representation of 

fact;

2) the usage was in commerce, in connection with goods or services;

3) the usage is likely to cause confusion, or to cause 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; and

4) the plaintiff has been or is likely to be injured as a result of the usage.

See 15 U.S.C. § 1125(a)(1)(A).

Here, through February 2019, Marker published a photograph of a VectorBloc 

connector on the www.evomicrocondos.com website, along with text identifying the 

connector as VectorBloc and describing how it works. (Doc. 1 ¶ 59; Doc. 3-4 at 3.) When 

the www.evomicrocondos.com website first became affiliated with GreenFeet, it still 

included a picture of a VectorBloc connector and information about VectorBloc 

connectors. (Doc. 3-6 at 8.) Thus, Plaintiffs have clearly established the first three 

elements of a Section 1125(a)(1)(A) false association claim. Defendants used the word 

“VectorBloc,” and its image, on their website advertising their goods and services. Online 

advertisements are “in commerce.” TrafficSchool.com, Inc. v. Edriver Inc., 653 F.3d 820, 

829 n.3 (9th Cir. 2011). Defendants’ use of the word “VectorBloc” and its image was 

likely to cause confusion or deceive viewers into believing that Defendants were associated 

with Plaintiffs, that Defendants’ goods originated with Plaintiffs, and/or that Plaintiffs 

sponsored or approved of Defendants’ services.

The problem with the Section 1125(a)(1)(A) claim is that it is unclear whether 

Plaintiffs have satisfied the fourth element—actual injury or a likelihood thereof.

8

 No 

8 The same would be true if Count Three were construed as a false advertising claim 

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allegations in the complaint establish actual damage—for example, Plaintiffs do not 

contend they lost any sales. All references to damages are vague. (See, e.g., Doc. 1 ¶¶ 76, 

93, 95, 105.) And at any rate, the Court cannot accept as true allegations in the complaint 

as to damages, which require proof. Geddes, 559 F.2d at 560.

Plaintiffs’ motion for default judgment provides a bit more detail. It seeks damages 

as to Count Three in the amount of $108,000. (Doc. 31 at 8.) The explanation for this 

figure is as follows: “$108,000 . . . is equivalent to Plaintiffs[’] potential profits from selling 

72 geographical sales districts at $1,500 per district.” (Id.) 

There are several problems with this approach. First, there is no evidence that 

Defendants actually signed up any dealers (let alone procured a $1,500 dealer fee from any 

of those dealers) in each of the 72 geographical areas that Evo claimed were “needed.” The 

$108,000 figure thus represents the theoretical amount that Defendants hoped to obtain 

through their scheme, not the amount they actually obtained. Second, even if Defendants 

did collect some dealer fees, those fees are not synonymous with Plaintiffs’ lost profits or 

sales. It appears Defendants were attempting to rip off third parties by inducing them to 

pay a one-time dealer fee in return for the right to serve as Plaintiffs’ exclusive dealer in a 

particular region of the country. The direct victims in this scheme were the dealers, not 

Plaintiffs. Although it’s possible the scheme may have also caused Plaintiffs to suffer a 

less direct injury (such as harm to reputation or goodwill), Plaintiffs have not proffered any 

evidence of such injuries. 

In sum, Plaintiffs’ $108,000 damage figure seems to be a theoretical disgorgement 

calculation. Although the Lanham Act permits a plaintiff that “cannot quantify its losses 

with sufficient certainty to recover damages” to seek “disgorgement of the defendant’s illgotten profits under § 1117(a),” Lexmark, 572 U.S. at 135-36, Plaintiffs have cited no 

authority suggesting they may recover, under a disgorgement theory, Defendants’ 

attempted-but-unrealized profits. And although the Lanham Act also permits a plaintiff 

that cannot quantify its losses to seek “injunctive relief under § 1116(a) (assuming it can 

under Section 1125(a)(1)(B). 

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prove a likelihood of future injury),” Lexmark, 572 U.S. at 135-36, there is no likelihood 

of future injury as to Count Three because the website Defendants used

(www.evomicrocondos.com) appears to be defunct and, as Plaintiffs’ counsel 

acknowledged during oral argument, the challenged conduct does not appear to be ongoing. 

Accordingly, Plaintiffs have failed to meet their burden under the second and third 

Eitel factors, so their motion for a default judgment as to Count Three will be denied 

without prejudice.

iii. Count Eight

In Count Eight, Plaintiffs assert a claim for “Copyright Infringement” pertaining to 

Defendants’ “acts of stealing and re-publishing the Copyrighted Works without 

Zekelman’s permission.” (Doc. 1 ¶¶ 133-38.)

A plaintiff asserting a claim for copyright infringement must demonstrate “(1) 

ownership of a valid copyright, and (2) copying of constituent elements of the work that 

are original.” Feist Pubs., Inc. v. Rural Telephone Service Co., Inc., 499 U.S. 340, 361 

(1991). “Registration is prima facie evidence of the validity of a copyright.” Three Boys 

Music Corp. v. Bolton, 212 F.3d 477, 488–89 (9th Cir. 2000).

Zekelman owns the Copyrighted Works,

9 which have been registered with the 

United States Copyright Office. (Doc. 1 ¶¶ 37-39.) The videos are original (id.) and they 

contain graphic renderings of modular steel units (id.), which are original. Feist, 499 U.S. 

at 345 (“[T]he requisite level of creativity [required to constitute an original work] is 

extremely low; even a slight amount will suffice.”).

Before GreenFeet was incorporated, Marker published the Copyrighted Works in 

full on the www.evomicrocondos.com website. (Doc. 1 ¶ 60.) Furthermore, “at some 

point,” Marker “and/or” GreenFeet took an image from a frame of the Build Stronger 

Graphics video (one of the Copyrighted Works), altered it (by removing the color red and 

flipping the image horizontally), and posted the altered image on the website. (Id. ¶ 61.) 

The altered image existed on the www.evomicrocondos.com website as of March 5, 2019, 

9 Z-Modular does not appear to have standing to bring this claim.

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at which point the website listed an address for GreenFeet. (Id. ¶¶ 47, 61; Doc. 3-7 at 4.) 

Publication of the altered image violated Zekelman’s copyright, cf. Friedman v. Guetta, 

2011 WL 3510890, *4-5 (C.D. Cal. 2011), and of course, publication of the Copyrighted 

Works in full did as well. 

Given these allegations (which must be accepted as true), Defendant Marker 

infringed Zekelman’s valid copyright of the Build Faster Graphics video and both 

Defendants infringed Zekelman’s valid copyright of the Build Stronger Graphics video.

Thus, with respect to Count Eight, Plaintiffs have met their burden under the second 

and third Eitel factors.

v. Conclusion as to the Eitel Factors

For the reasons stated above, default judgment is appropriate only as to Zekelman’s 

claim for copyright infringement in Count Eight.

B. Damages

For the copyright infringement claim, Zekelman seeks $60,000 in statutory damages 

($30,000 for infringement of each of the two Copyrighted Works) instead of actual 

damages or Defendants’ profits. (Doc. 31 at 8, 13.) See Peer Int’l Corp. v. Pausa Records, 

Inc., 909 F.2d 1332, 1336 (9th Cir. 1990) (“Under the 1976 Copyright Act, the plaintiff 

may elect to recover either actual or statutory damages.”).

Under the Copyright Act, the Court has wide discretion in assessing statutory 

damages. Section 504(c) permits “an award of statutory damages for all infringements 

involved in the action, with respect to any one work, for which any one infringer is liable 

individually, or for which any two or more infringers are liable jointly and severally, in a 

sum of not less than $750 or more than $30,000 as the court considers just,” or up to as 

much as $150,000 where the infringement is “willful.” The Court is “constrained only by 

the specified maxima and minima,” and should consider “what is just in the particular case, 

considering the nature of the copyright, the circumstances of the infringement and the like.” 

Peer Int’l, 909 F.2d at 1336.

The Court finds that Defendants’ infringement of the Copyrighted Works was 

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willful—Marker stole video material directly from Zekelman’s website and published that 

material (in full and altered form) in an improper attempt to procure $108,000 of dealer 

fees. 

On the other hand, there is no indication that Defendants’ scheme was in any way 

successful or that more than a handful of people ever visited Defendants’ website and 

viewed the infringing publications of the Copyrighted Works. To be clear, the statutory 

award need not bear any relationship to actual damages. F. W. Woolworth Co. v. 

Contemporary Arts, 344 U.S. 228, 233 (1952) (“Even for uninjurious and unprofitable 

invasions of copyright the court may, if it deems it just, impose a liability within statutory 

limits to sanction and vindicate the statutory policy.”). Nevertheless, courts often award 

statutory damages on the lower end of the permissible range, even for willful violations 

with serious ramifications. See, e.g., Twentieth Century Fox Film Corp. v. Streeter, 438 F. 

Supp. 2d 1065, 1072-73 (D. Ariz. 2006) (awarding $6,000—$3,000 per infringement—as 

statutory damages for willful infringement in a default judgment where the “means of 

infringement—an online media distribution system with tens of millions of potential 

users—has left [plaintiff’s copyrighted works] vulnerable to massive, repeated, and 

worldwide infringement,” where “it is likely that the actual number of works infringed by 

[defendant] is greater than the two brought in this action,” and where defendant’s conduct 

was essentially a few drops in the digital piracy bucket, which as a whole was “estimated 

to have cost the motion picture industry in excess of $858.5 million”). Furthermore, 

statutory damages “are not intended to serve as a windfall to plaintiffs” in the default 

judgment context. UN4 Prods., Inc. v. Primozich, 372 F. Supp. 3d 1129, 1135 (W.D. 

Wash. 2019) (awarding the minimum statutory penalty of $750).

The Court finds that the conduct at issue here was serious enough to merit an award 

to Zekelman of $5,000 per infringement, for a total of $10,000 in statutory damages. 

Defendant Marker is solely liable for paying the $5,000 award for infringing the Build

Faster Graphics video, and both Defendants are jointly and severally liable for paying the 

$5,000 award for infringing the Build Stronger Graphics video. Finally, Defendants are 

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specifically warned that, if they were to engage in future acts of infringement, the findings 

contained in this order would likely result in a much higher statutory damage award in light 

of their status as recidivists.

C. Permanent Injunction

“An injunction is a drastic and extraordinary remedy, which should not be granted 

as a matter of course.” Monsanto Co. v. Geertson Seed Farms, 561 U.S. 139, 165 (2010). 

“[A] plaintiff seeking a permanent injunction . . . must demonstrate: (1) that it has suffered 

an irreparable injury; (2) that remedies available at law, such as monetary damages, are 

inadequate to compensate for that injury; (3) that, considering the balance of hardships 

between the plaintiff and defendant, a remedy in equity is warranted; and (4) that the public 

interest would not be disserved by a permanent injunction.” eBay Inc. v. MercExchange, 

L.L.C., 547 U.S. 388, 391 (2006).

“The Copyright Act provides that courts ‘may’ grant injunctive relief ‘on such terms 

as it may deem reasonable to prevent or restrain infringement of a copyright.’” Id. at 392 

(quoting 17 U.S.C. § 502(a)). But the Supreme Court “has consistently rejected invitations 

to replace traditional equitable considerations with a rule that an injunction 

automatically follows a determination that a copyright has been infringed.” Id. at 392-93.

1. Irreparable Injury

“[T]here is no presumption of irreparable harm with respect to permanent 

injunctions.”

10

 Apple Inc. v. Psystar Corp., 673 F. Supp. 2d 943, 948 (N.D. Cal. 

2009), aff’d, 658 F.3d 1150 (9th Cir. 2011). “[H]arm to . . . reputation and goodwill, 

supported by compelling evidence, is sufficient to establish irreparable harm.” Id. at 949 

(emphasis added). “[E]conomic injury alone does not support a finding of irreparable 

harm, because such injury can be remedied by a damage award.” Rent-A-Ctr., Inc. v. 

Canyon Television & Appliance Rental, Inc., 944 F.2d 597, 603 (9th Cir. 1991).

10 This quotation omits the district court’s reference to a no-longer-valid exception for 

trademark infringement. Herb Reed, Enterprises, LLC v. Fla. Entm't Mgmt., Inc., 736 F.3d 

1239, 1250 (9th Cir. 2013) (no presumption of irreparable harm based solely on a strong 

case of trademark infringement).

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Plaintiffs have alleged harm to their reputation and goodwill in conclusory fashion 

but acknowledged during oral argument that they have no evidence of such harm.

11

 

Therefore, Plaintiffs have not established irreparable injury.

2. Adequacy of Legal Remedies

“District courts must ascertain whether remedies available at law, such as monetary 

damages, are inadequate to compensate for the injury suffered.” Apple, 673 F. Supp. 2d at

949. Monetary damages are inadequate where, for example, there is good reason to believe 

the infringement will continue. Id. at 950 (“[M]onetary damages would not prevent 

[defendant] from continuing to infringe [plaintiff’s] copyrights . . . in the future . . . ; indeed, 

[defendant’s] actions throughout this litigation and statements at oral argument reveal a 

dogged determination to continue . . . .”).

Here, as noted, the website Defendants once used (www.evomicrocondos.com) 

appears to be defunct and Plaintiffs have not established that any of the conduct alleged in 

the complaint is ongoing. Indeed, this litigation appears to have scared Defendants out of 

business. Thus, the legal remedy of damages appears adequate to punish Defendants for 

infringing Zekelman’s Copyrighted Works. Defendants are again warned, however, that 

if they were to resume their misconduct following the issuance of this order, they would 

be exposing themselves to significantly increased sanctions.

3. Balancing of the Hardships

Where there is no indication the challenged conduct will continue, this factor is 

essentially neutral—Plaintiffs have little to gain from the issuance of a permanent 

injunction, and Defendants have little to lose from being enjoined from doing something 

they aren’t doing anymore.

4. Effect on the Public Interest

“If a less drastic remedy . . . [is] sufficient to redress [an] injury, no recourse to the 

11 The forwarding of the Jan. 10 email by a potential dealer’s brother may show

confusion, but it does not establish irreparable harm. Herb Reed Enterprises, 736 F.3d at 

1250 (“Even if we comb the record for support or inferences of irreparable harm, the 

strongest evidence . . . is an email from a potential customer . . . [the content of which] 

simply underscores customer confusion, not irreparable harm.”).

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additional and extraordinary relief of an injunction [is] warranted.” Monsanto, 561 U.S. at

165–66. The public has no interest in the issuance of extraordinary relief where it is not 

warranted. This factor is neutral.

5. Conclusion as to the eBay Factors

None of the eBay factors favor granting a permanent injunction regarding 

infringement of Zekelman’s Copyrighted Works. Thus, the Court will vacate the 

preliminary injunction (Doc. 26) and will deny Plaintiffs’ motion to the extent it seeks a 

permanent injunction.

D. Attorneys’ Fees

Under the Copyright Act, a district court has the discretion to award “a reasonable 

attorney’s fee to the prevailing party.” 17 U.S.C. § 505. See also Fogerty v. Fantasy, Inc., 

510 U.S. 517, 534 (1994) (“[A]ttorney’s fees are to be awarded to prevailing parties only 

as a matter of the court’s discretion.”). In exercising this discretion, district courts are 

given “wide latitude.” Entertainment Research Group, Inc. v. Genesis Creative Group, 

Inc., 122 F.3d 1211, 1229 (9th Cir. 1997). Courts consider the following non-exhaustive 

list of factors when determining whether to grant attorneys’ fees: “(1) the degree of success 

obtained; (2) frivolousness; (3) motivation; (4) the objective unreasonableness of the losing 

party’s factual and legal arguments; and (5) the need, in particular circumstances, to 

advance considerations of compensation and deterrence.” Id.

Here, Zekelman prevailed on its copyright infringement claim, so that claim 

obviously wasn’t frivolous. Zekelman also acted with appropriate motives—one of the 

Copyright Act’s goals “is to discourage infringement,” Fogerty v. Fantasy, Inc., 510 U.S. 

517, 526 (1994), and this suit does that. Indeed, Defendants effectively forced Zekelman 

to file this lawsuit by refusing to acknowledge, let alone respond to, the cease-and-desist

letter. Finally, Defendants asserted no factual or legal arguments (and therefore the nonexistent arguments are neither reasonable nor unreasonable). Thus, the first four factors 

weigh in favor of granting attorneys’ fees.

The final factor is neutral. On the one hand, the award of $10,000 in statutory 

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damages should, standing alone, deter future misconduct by Defendants. On the other 

hand, Defendants could have avoided litigation by responding to the cease-and-desist letter, 

and it also appears (based on Plaintiffs’ counsel’s statements during oral argument) that 

Defendants played games when it came to service. Defendants should not be rewarded for 

running up Plaintiffs’ fees in a case in which Plaintiffs were the clear victims of intellectual 

property violations.

Balancing these factors, the Court will award some attorneys’ fees to Plaintiffs, but 

not the entire $67,473.75 they seek. Calculating the reduced sum is more art than science, 

but it seems appropriate, in the Court’s discretion, to discount Plaintiffs’ request based on 

the fact that they only secured a default judgment on one of the eight claims in the 

complaint12 and based on the observation that 178.35 hours of attorney time seems high 

for a case resulting in a default judgment, even though Defendants helped contribute to 

those hours through their gamesmanship.

13

 Accordingly, the Court will award $20,000 in 

attorneys’ fees.

Accordingly,

IT IS ORDERED:

(1) Plaintiffs’ motion for default judgment (Doc. 31) is granted in part and 

denied in part;

(2) There being no just reason for delay, the Court enters judgment in favor of 

Plaintiff Zekelman on Count Eight of the complaint;

(3) Plaintiff Zekelman is awarded $5,000 in statutory damages against 

Defendant Marker for infringement of Zekelman’s valid copyright of the Build Faster 

Graphics video;

12 Cf. The Traditional Cat Ass’n, Inc. v. Gilbreath, 340 F.3d 829, 834 (9th Cir. 2003)

(“If the district court determines that the copyright and non-copyright claims are not 

related, the defendants cannot recover fees for the non-copyright claims, but the district 

court must attempt to arrive at a fair apportionment and then calculate a reasonable fee 

award.”).

13 Cf. Hensley v. Eckerhart, 461 U.S. 424, 433 (1983) (“The most useful starting point 

for determining the amount of a reasonable fee is the number of hours reasonably expended 

on the litigation multiplied by a reasonable hourly rate.”).

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(4) Plaintiff Zekelman is awarded $5,000 in statutory damages against 

Defendant Marker and Defendant GreenFeet, jointly and severally, for infringement of 

Zekelman’s valid copyright of the Build Stronger Graphics video;

(5) Plaintiff Zekelman is awarded $20,000 in attorneys’ fees against Defendant 

Marker and Defendant GreenFeet, jointly and severally;

(6) The preliminary injunction (Doc. 26) is vacated;

(7) Plaintiffs’ request for a permanent injunction (Doc. 31) is denied; and

(8) Plaintiffs shall have 14 days from the issuance of this order to file a renewed 

motion for default judgment on Counts One through Seven of the complaint (and ZModular may renew its request for default judgment on Count Eight of the complaint). If 

no such motion is filed, the Clerk of Court shall terminate this action and enter judgment 

accordingly.

Dated this 26th day of March, 2020.

 

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