Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-cand-3_06-cv-04006/USCOURTS-cand-3_06-cv-04006-3/pdf.json

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

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United States District Court

For the Northern District of California

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IN THE UNITED STATES DISTRICT COURT

FOR THE NORTHERN DISTRICT OF CALIFORNIA

AMERICAN AUTOMOBILE

ASSOCIATION,

Plaintiff,

 v.

AUTO GLASS EXPERTS, INC.,

Defendant. /

No. C 06-04006 WHA

ORDER GRANTING 

DEFAULT JUDGMENT

AND INJUNCTION

INTRODUCTION

Plaintiff American Automobile Association (“AAA”) moves for default judgment

against defendant Auto Glass Experts, Inc. Auto Glass Experts has never appeared in this

action, nor did they ever respond to AAA’s complaint. Review of the Eitel factors favors entry

of default judgment. Accordingly, Plaintiff’s motion is GRANTED. 

STATEMENT

Plaintiff AAA is a not-for-profit, non-stock corporation that provides its members with

automobile repair and emergency services and rating and certification of automobile repair

services (Complaint ¶ 6). AAA owns more than 100 marks which have been registered with the

United States Patent and Trademark Office (Complaint ¶ 12). AAA uses its trademarks to

identify itself and its services. It uses its service marks and certification marks to identify its

services of rating and certifying automobile repair shops and emergency road services

(Complaint ¶ 12). Goods and services that bear AAA’s certification marks are approved of,

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United States District Court

For the Northern District of California

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endorsed by, or affiliated with AAA (Complaint ¶ 15). AAA’s marks are distinctive, widely

recognized by the public, and carry with them the good will associated with AAA’s services

(Complaint ¶¶ 14–16). 

Defendant Auto Glass Experts has been using the trade name “AAA Auto Glass” on its

signs and business materials and in advertisements for its own auto repair services in

publications and on the Internet (Complaint ¶¶ 18–19). AAA sent a series of letters dated

January 18, February 28, and March 29, 2006 to Auto Glass Experts asking it to cease and

desist use of AAA’s marks (Complaint ¶ 23). Defendant never responded to any of the letters. 

AAA filed the instant suit on June 28, 2006 alleging federal and California state

trademark infringement, federal and California state unfair competition, and federal and

California state trademark dilution. The summons and complaint was hand delivered to Auto

Glass Expert’s president and agent for service of process, Kerry Connolly, on June 30, 2006

(Olson Decl. ¶ 3; Olson Ex. A). Auto Glass Experts never served AAA with a responsive

pleading. AAA sent a letter to the defendant on July 24, 2006, asking for a response and

granting them an additional ten days in which to respond. (Olson Decl. ¶ 5). AAA never

received a response to that letter, nor did the letter prompt Auto Glass to file a responsive

pleading. As a result, AAA filed a request for entry of default against Auto Glass Experts, and

the request was entered on August 9, 2006 (Olson Decl. ¶ 6–7). AAA now moves for a default

judgment seeking an injunction against Auto Glass Experts’ use of AAA’s marks. 

ANALYSIS

Under Federal Rule of Civil Procedure 55(b)(2), a party can apply to the court for entry

of judgment by default. “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). The court

considers the following factors: 

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

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 the material facts, (6) whether the default judgment was due to

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

Civil Procedure favoring decisions on the merits. 

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Eitel v. McCool, 782 F.2d 1470, 1471–2 (9th Cir. 1986). These factors favor entry of default

judgment in this case for the following reasons.

1. MERITS OF SUBSTANTIVE CLAIMS AND SUFFICIENCY OF THE COMPLAINT.

After entry of default, well-pleaded factual allegations in the complaint are taken as true,

except as to the amount of damages. Fair Hous. of Marin v. Combs, 285 F.3d 899, 906 (9th Cir.

2002). The merits of plaintiff’s substantive claims and sufficiency of the complaint are thus

considered together. 

A. Trademark Infringement Under 15 U.S.C. 1114.

AAA’s first claim alleged that Auto Glass Experts committed trademark infringement

under 15 U.S.C. 1114. To prove trademark infringement under 15 U.S.C. 1114, plaintiff must

show (1) that its marks are valid and protectable trademarks; (2) that plaintiff owns the

trademarks; (3) that plaintiff used its marks in interstate commerce; (4) that defendant used in

commerce a reproduction or copy of a registered trademark in connection with the advertising

or sale of goods or services; and (5) that such use is likely to cause confusion, mistake, or

deceive consumers.

First, AAA has alleged that it marks are valid and protectable trademarks that were

registered with the United States Patent and Trademark Office. Second, AAA has alleged that it

owns the trademarks. Third, the complaint alleges that AAA has used its marks in interstate

commerce. Fourth, AAA alleged that Auto Glass Experts has used the trade name “AAA Auto

Glass” and has displayed AAA’s marks on its website and advertisements. Finally, AAA has

alleged that Auto Glass Expert’s use of the AAA marks is likely to cause confusion as to the

origin of services provided, and that consumers could mistakenly believe that AAA endorses or

approves of the services provided by Auto Glass Experts. Thus, AAA has adequately stated a

plausible claim for trademark infringement. 

B. Unfair Competition Under 15 U.S.C. 1125(a).

In its second claim, AAA alleged unfair competition under 15 U.S.C. 1125(a). Plaintiff

must show that defendant used 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

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false or misleading representation of fact, which 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 goods by such person. 

15 U.S.C. 1125(a)(1). The analysis for unfair competition under 15 U.S.C. 1125(a) is highly

similar to the analysis for a claim for trademark infringement under 15 U.S.C. 1114. Brookfield

Commc’ns., Inc., v. West Coast Entm’t Corp., 174 F.3d 1046–47 (9th Cir. 1999). Here, AAA

alleged that Auto Glass Experts used its marks in such a way that consumers would be likely to

believe that Auto Glass Experts’ services are endorsed by AAA, when in fact they are not. 

AAA has adequately pleaded its unfair competition claim under 15 U.S.C. 1125(a). 

C. Trademark Dilution Under 15 U.S.C. 1125 (c).

AAA alleged federal trademark dilution in its third claim. To state a claim under 15

U.S.C. 1125(c), the plaintiff must show that “(1) its mark is famous; (2) the defendant is making

commercial use of the mark; (3) the defendant’s use of the mark began after the plaintiff’s mark

became famous; and (4) the defendant’s use creates a likelihood of dilution of the distinctive

value of the mark.” Avery-Dennison Corp. v. Sumpton, 189 F.3d 868, 874 (9th Cir. 1999). 

First, AAA alleged in its complaint that its marks are famous. Second, AAA alleged that Auto

Glass Experts used AAA’s marks in its trade name and advertising materials, including on the

Internet and in publications. Third, AAA alleged that it its marks were famous since before

defendant began using the marks. Fourth, AAA alleged that Auto Glass Experts’ use of the its

creates a likelihood of the dilution of the marks’ distinctive value. AAA has adequately alleged

its claim of trademark dilution under 15 U.S.C. 1125(c).

D. Trademark Infringement Under California Common Law.

In its fourth claim, AAA alleged that Auto Glass Experts committed trademark

infringement under California common law. Likelihood of confusion is the basic test for

common law trademark infringement, and the same standard for likelihood of confusion is used

for both common law trademark infringement and federal trademark infringement under 15

U.S.C. 1114. See Thane Int’l., Inc. v. Trek Bicycle Corp., 305 F.3d 894, 901 n.3 (9th Cir.

2002). Because AAA has sufficiently pleaded its claim for federal trademark infringement, it

has also adequately pleaded its claim for common law trademark infringement. 

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E. Trademark Dilution Under Section 14330.

In its fifth claim, AAA alleged trademark dilution under California Business and

Professions Code Section 14330. Trademark dilution under California law is “substantially

similar” to the federal trademark dilution under 15 U.S.C. 1125 (c). Avery Dennison Corp. v.

Sumpton, 189 F.3d 868, 873 (9th Cir. 1999). Additionally, Section 14330 has been construed

consistently with the federal trademark dilution statute. Nissan Motor Co. v. Nissan Computer

Co., 378 F.3d 1002, 1015 (9th Cir. 2004). As mentioned above, AAA has alleged all the

necessary elements of a claim for trademark dilution under 15 U.S.C. 1125(c). AAA has

adequately pleaded its claim for trademark dilution under Section 14330. 

F. Unfair Competition Under Sections 17200 and 17500. 

AAA’s sixth and final claim alleged unfair competition under California state law. The

Ninth Circuit has “consistently held” that unfair competition claims under Section 17200 of the

California Business and Professions Code are “substantially congruent” to federal unfair

competition claims under 15 U.S.C. 1125(c). Cleary v. News Corp., 30 F.3d 1255, 1262–1263

(9th Cir. 1994). As stated above, AAA has sufficiently pleaded a federal unfair competition

claims, thus it follows that AAA has also sufficiently pleaded an unfair competition claim under

Section 17200.

AAA’s final claim also alleged a violation of California Business and Professions Code

Section 17500. To state a claim under Section 17500, the plaintiff must show that members of

the public are likely to be deceived by the defendant’s statements. Arizona Cartridge

Remanufacturers Ass’n., Inc. v. Lexmark Int’l. Inc ., 421 F.3d 981, 985 (9th Cir. 2005). Here,

AAA has alleged that Auto Glass Experts has disseminated false statements to the public

through its use of AAA’s marks because that use indicates AAA’s endorsement or approval of

its services. AAA has given no such endorsement or approval, and so Auto Glass Experts’

statements are likely to cause confusion to the public. Thus, AAA has stated a claim for false

advertising under Section 17500. 

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2. THE REMAINING EITEL FACTORS.

This order finds that the remaining Eitel factors favor entry of default judgment against

Auto Glass Experts. Denying AAA’s application for default judgment would likely cause it

prejudice because AAA would be left without a remedy. AAA prevails on the fourth Eitel

factor as well; AAA has agreed to forego monetary relief provided it is granted an injunction

against Auto Glass Experts. As to the fifth Eitel factor, it is difficult to say whether there is a

possibility of a dispute concerning material facts. Autoglass Experts has neither answered

AAA’s complaint, nor have they yet appeared in this action. For the sixth Eitel factor, it is

unlikely that default was due to excusable neglect. Before filing its complaint, AAA sent three

letters to Auto Glass Experts ordering it to stop using the AAA marks. AAA properly served its

complaint on the defendant’s president Kerry Connolly. After receiving no responsive

pleading, AAA sent Auto Glass Experts a letter as a reminder giving them an additional 10 days

to respond. Subsequently, the Clerk of Court entered default against the defendant on August 9,

2006. As to the final Eitel factor, the policy of the Federal Rules favors decisions on the merits,

however, FRCP 55(b) does permit entry of a default judgment where, as here, the defendant

refuses to litigate. The Court concludes that balance of the Eitel factors weighs in favor of

default judgment. 

3. DETERMINATION OF DAMAGES AND INJUNCTIVE RELIEF.

In making this motion, this plaintiff has agreed to forego monetary damages if a

permanent injunction issues. In its complaint, the plaintiff asked for an injunction forbidding

Auto Glass Experts from using AAA’s marks, and requiring defendants to destroy or remove all

literature, advertising, and electronic materials. A plaintiff may receive injunctive relief under

both 15 U.S.C. 1118 and Section 17500 of the California Business and Professions Code.

“Injunctive relief is the remedy of choice for trademark and unfair competition cases, since

there is no adequate remedy at law for the injury caused by defendant’s continuing

infringement.” Century 21 Real Estate Corp. v. Sandlin, 846 F.2d 1175, 1180 (9th Cir. 1988). 

As of the time that AAA filed its complaint, the defendant was still using AAA’s marks

in its trade name and advertising materials. In doing so, defendant was misrepresenting that its

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services were endorsed by or affiliated with AAA, making it likely that customers would be

confused. This order, therefore, enjoins defendant from using AAA’s trademarks, service

marks, and certification marks in any way. 

AAA also asks that Auto Glass Experts be required to file and serve on AAA, within

thirty days of entry of the judgment, a report in writing and under oath detailing the manner in

which defendant has complied with the injunction. This requirement is permitted by 15 U.S.C.

1116, therefore defendant will be required to file such a report. 

For the Court’s contempt power to apply to this injunction, the defendant “must receive

actual notice of the order by personal service or otherwise.” Fed. R. Civ. P. 65(d). Plaintiff is

instructed to provide proper service of this order, by personal service to the extent possible, no

later than NOVEMBER 22, 2006. Plaintiff shall file a copy of the proof of service. 

CONCLUSION

For good cause shown, this order GRANTS plaintiff’s motion for default judgment. 

Defendant Auto Glass Experts shall comply with the following: 

(1) defendant, its agents, servants, employees, attorneys, and any and all persons

in active concert or participation with it shall immediately and permanently to cease and desist

from all use of the AAA marks, or of any combination or the letter “A,” in any form or manner

tha resembles, suggests, or intimates that defendant is approved or endorsed by, or otherwise

affiliated with, AAA; 

(2) defendant, pursuant to 15 U.S.C. 1118, shall destroy all literature, signs,

billboards, labels, prints, packages, wrappers, containers, advertising materials, stationery, and

other items in its possession or control that contain the AAA marks or any term, symbol, or logo

confusingly to those marks; and to destroy and all means in its possession or control of making

any of those infringing items;

(3) defendant shall have deleted or removed from publication any

advertisements paid for or used by it containing any of the AAA marks and any other name,

mark, or logo confusingly similar to them; 

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G:\WHAALL\2006Civ\06-04006 American Auto\orderdefaultjudgment.wpd 8

(4) defendant shall permanently delete and destroy all electronic content,

including all websites, domain names, and other electronic materials displaying the AAA marks

and any other name, mark or logo confusingly similar to them; 

(5) defendant shall file with the Court and serve on AAA, within thirty days

after entry of an injunction, a report in writing under oath setting forth in detail the manner in

which defendant has complied with the Court’s injunction and orders. 

Judgment shall be entered accordingly. 

IT IS SO ORDERED.

Dated: November 16, 2006 

WILLIAM ALSUP

UNITED STATES DISTRICT JUDGE

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