Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-cand-3_09-cv-05301/USCOURTS-cand-3_09-cv-05301-4/pdf.json

Nature of Suit Code: 840
Nature of Suit: Trademark
Cause of Action: 15:1125 Trademark Infringement (Lanham Act)

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UNITED STATES DISTRICT COURT

NORTHERN DISTRICT OF CALIFORNIA

ZYNGA GAME NETWORK INC.,

Plaintiff(s),

v.

AHAMED SUHAIL, dba

CHIPSSTORE.COM,

Defendant(s).

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No. C09-5301 JSW (BZ)

REPORT AND RECOMMENDATION

By order dated June 21, 2010, the Honorable Jeffrey S.

White referred to me Zynga’s motion for entry of default

judgment against Ahamed Sudhail (“Sudhail”). The following is

my report and recommendation for the entry of default

judgment.

On November 6, 2009, Zynga filed a complaint against 5

Doe defendants for (1) violation of 15 U.S.C. § 1125(a), (2)

violation of 18 U.S.C. § 1030, (3) violation of Cal. Bus. &

Prof. Code § 17200, (4) violation of California Penal Code §

502 (5) State common law trademark infringement, (6) common

law passing off and unfair competition, (7) breach of

contract, (8) intentional interference with contractual

Case 3:09-cv-05301-JSW Document 37 Filed 08/09/10 Page 1 of 7
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1 Although plaintiff has offered evidence to prove all

ten causes of action, because they have only sought relief

under 2 statutes, this report will not discuss the validity of

all causes of action.

2

relations, and (9) trespass to chattels.1 On March 4, 2010,

the first amended complaint (“FAC”) was filed to add Sudhail

to the action and to add one more cause of action, for a

violation of 15 U.S.C. §1114(1). On May 5, 2010, Zynga served

the FAC and related papers on Sudhail. See Docket No. 22. 

Sudhail failed to answer the complaint or otherwise defend the

action. On May 12, 2010, upon Zynga’s request, the Clerk

entered defendant’s default under Rule 55(a). See Docket No.

24. Zynga has now moved for entry of a default judgment,

seeking relief for violations of the Lanham Act (15 U.S.C. 

§§ 1111 et seq.) and the California Unfair Competition Law

(Cal. Bus. Prof §§ 17200 et seq.). 

By his default, Sudhail is deemed to have admitted the

well-pleaded averments of the complaint except those as to the

amount of damages. See Fed. R. Civ. P. 8(d). Zynga’s

pleadings are sufficient to demonstrate defendant’s violations

of the Lanham Act. See 15 U.S.C. §§ 1114(1), 1125(a); see

also Zynga Game Network v. Erkan, 2010 WL 2650503, at *2 (N.D.

Cal.). Zynga’s pleadings are also sufficient to demonstrate

Sudhail’s violations of § 17200. See Cal. Bus. Prof § 17200.

Zynga has established that Sudhail violated the Lanham

Act (15 U.S.C. §§ 1114(1), 1250(a)) by using Zynga’s

registered trademark on his websites, chipsstore.com,

ezechips.com, palchips.com, chips-wholesale.com and

bestchipswholesale.com, to sell Zynga “chips” for the Zynga

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Poker game, and earn income through “pay-per-click”

advertising, without Zynga’s permission or consent. FAC ¶¶

13, 29, 30, Varas Dec., Exh. 2-7. Zynga alleges that

defendant acted willfully and intentionally, Id. at ¶ 37, and

seek disgorgement pending an accounting, injunctive relief

pursuant to § 1116(a), a transfer of property pursuant to §

1118 and attorney’s fees and costs pursuant to section

1117(a). Motion at 12-16. 

Zynga has also established that Sudhail violated the

California Unfair Competition Law, Cal. Bus. & Prof. Code §

17200. Through the terms of a user agreement, Zynga Poker

users are not allowed to resell their chips or use the game as

a vehicle to resell chips. FAC ¶¶ 23, 25, Varas Dec., Exh. 1. 

Sudhail has been selling chips, without authorization from

Zynga, through his websites and distributing them fraudulently

through Zynga’s game. FAC ¶¶ 30, 31, 32. As a direct

competitor of Zynga, Sudhail’s use of Zynga’s trademark is an

“unlawful, unfair and/or fradulent” business practice under

California Business and Professions Code § 17200. FAC ¶¶ 47,

50. Because this practice is ongoing, Zynga seeks injunctive

relief under § 17203. FAC ¶ 53.

A court may not enter a default judgment against an

unrepresented minor, an incompetent person, or a person in

military service. See Fed. R. Civ. P. 55(b)(2); 50 App.

U.S.C. § 521. In his supplemental declaration, Zynga’s

counsel has satisfied me that Sudhail is not an infant or

incompetent person, and that the Servicemembers Civil Relief

Act does not apply to him. 

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Pursuant to Rule 55(b)(2), the court may enter a default

judgment against a party against whom default has been

entered. The decision to grant or deny a default judgment

under Rule 55(b) is within the discretion of the court. Eitel

v. McCool, 782 F.2d 1470, 1471-72 (9th Cir. 1986). Although a

formal hearing is not required for a court to render a default

judgment, Davis v. Fendler, 650 F.2d 1154 (9th Cir. 1981),

plaintiffs have the burden of proving damages through

testimony or written affidavit. If damages are ascertainable,

however, there is no need for an evidentiary hearing. See

Ortiz-Gonzalez v. Fonovisa, 277 F.3d 59, 63-64 (1st Cir.

2002). 

In its motion, Zynga seeks an injunction prohibiting

Sudhail from infringing the ZYNGA mark, from selling or

advertising “chips,” and from accessing Zynga’s servers. 

Zynga also requests the transfer or cancellation of Sudhail’s

domain names. Zynga requests an accounting of Sudhail’s

profits to determine the appropriate damages, and an award of

reasonable attorney’s fees.

Section 1116(a) of the Lanham Act gives the court the

power to “grant injunctions, according to the principles of

equity...to prevent a violation of any right of the registrant

of a mark.” 15 U.S.C. § 1116(a). “Injunctive relief is the

remedy of choice for trademark and unfair competition cases.”

Century 21 Real Estate Corp. v. Sandlin, 846 F.2d 1175, 1180

(9th Cir. 1988). By virtue of his default, Sudhail has

admitted to violating Zynga’s trademark rights. As there are

no assurances he will not continue to infringe, I recommend

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the court grant Zynga’s request for injunctive relief under §

1116(a).

California Business and Professions Code § 17203 empowers

the court to issue orders “as may be necessary to

prevent...any practice which constitutes unfair competition.” 

Cal. Bus. & Prof. Code § 17203. “The remedial power granted

under this section is ‘extremely broad.’” Hewlett v. Squaw

Valley Ski Corp., 54 Cal. App. 4th 499, 540 (1997). (internal

citations omitted). By virtue of his default, Sudhail has

admitted to violating § 17200 through his sale of “chips” and

his use of Zynga’s game to transfer “chips.” With no

assurances as to Sudhail’s future conduct, I recommend the

court grant Zynga’s request for injunctive relief under §

17203.

Under 15 U.S.C. § 1118, the court has the power to order

the destruction of any materials used to infringe upon a

trademark. Zynga concedes that “the transfer of domain names

that do not themselves infringe the plaintiff’s mark is not a

common remedy,” but requests the court authorize their

transfer under the basic principles of equity. Two recent

cases in this District, factually similar to this one, have

ordered that non-infringing domain names be transferred to

Zynga. See Zynga Game Network Inc. v. Lin et al., 3:09-cv03211 MMC, Doc. 34 (N.D. Cal. March 30, 2010), Zynga Game

Network Inc. v. Erkan, 3:09-cv-03264 SC, Doc. 47 (N.D. Cal.

July 1, 2010). Because Sudhail could resume infringing

through his websites if the domain names remained under his

control, I recommend that they be ordered transferred

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2 Zynga has offered no authority that the common law

unfair competition claims would be different from the trademark

claims. Unless Zynga can provide further proof of the

differences between the damages available under either statute,

the common law unfair competition damages should be ignored. 

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to Zynga. Zynga has provided letters from the registrars of

the names stating that they will abide by a court order to

transfer a name, even though they are not a party to this

suit. 

Zynga is entitled to Sudhail’s profits as a result of the

infringement under both the Lanham Act and common law unfair

competition claims under § 1114.2 Because Sudhail cannot be

located and no exact value can be attached to his profits,

Zynga requests an accounting to determine Sudhail’s profits,

and thus, its damages. An accounting may be ordered as a

remedy to prove damages under the Lanham Act. See Maier

Brewing Co. v. Fleishmann Distilling Corp., 390 F.2d 117, 124

(9th Cir. 1968), Nat’l Leader Co. v. Wolfe, 223, F.2d 195, 205

(9th Cir. 1995). However, Zynga has provided no authority

permitting a court to order an accounting against a defaulting

party, arguably an idle act in this case. Once again, I

recommend following the lead of two other judges in this

district and ordering an accounting of Sudhail’s profits. 

See Zynga Game Network Inc. v. Lin et al., 3:09-cv-03211 MMC,

Doc. 34 (N.D. Cal. March 30, 2010), Zynga Game Network Inc. v.

Erkan, 3:09-cv-03264 SC, Doc. 47 (N.D. Cal. July 1, 2010). 

Finally, Zynga is entitled to recover attorney’s fees

under § 1117 of the Lanham Act if the case is considered

exceptional. “Generally, a trademark case is exceptional...

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when the infringement is malicious, fraudulent, deliberate or

willful.” Gracie v. Gracie, 217 F.3d 1060, 1068 (9th Cir.

2000) citing Lindy Pen Co. Inc. v. Bic Pen Co., 982 F.2d 1400,

1409 (9th Cir. 1997). By defaulting, Sudhail has admitted

that his infringement was malicious, fraudulent, deliberate or

willful. For example, he has admitted that his conduct was

contrary to Zynga’s Terms of Service and other notices and

licenses which Sudhail accepted in order to participate in

Zynga’s game. Therefore, I recommend Zynga be given leave to

file a request for attorney’s fees at the conclusion of this

action. 

For the foregoing reasons, I recommend that the court

GRANT Zynga the injunctive relief sought in its complaint. 

I recommend the domain names be transferred to Zynga, and that

an accounting of Sudhail’s profits be ORDERED. Finally, I

recommend an award of reasonable attorney’s fees to be

determined by motion at a later date. 

Dated: August 9, 2010

Bernard Zimmerman 

 United States Magistrate Judge

G:\BZALL\-REFS\ZYNGA V. CHIPPSSTORE.COM\R&R DEFAULT.wpd

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