Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-cand-4_04-cv-04608/USCOURTS-cand-4_04-cv-04608-0/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

NORTHERN DISTRICT OF CALIFORNIA

SIMPSON STRONG-TIE COMPANY,

INC., a California

corporation,

Plaintiff(s),

v.

TODD ESREY, an individual

dba ESREY.COM,

Defendant(s).

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No. C04-4608 CW (BZ)

REPORT AND RECOMMENDATION

RE: PLAINTIFF’S MOTION FOR 

DEFAULT JUDGMENT

Pursuant to Judge Wilken's order dated January 18, 2005,

this matter was referred to me to prepare findings and a

recommendation on plaintiff's Motion for Default Judgment.

 On October 29, 2004, plaintiff filed a complaint for

trademark infringement, trademark dilution, unfair

competition, and cybersquatting against defendant based on

defendant’s alleged unauthorized registration and use of

domain names that incorporate terms and names that are

identical or confusingly similar to plaintiff’s registered

trademarks. On November 11, 2004, plaintiff served defendant

with the Summons and a copy of the Complaint. Defendant did
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not answer or file any responsive pleadings. On January 1,

2005, upon plaintiff's request, the Clerk of this court

entered the default of defendant under Federal Rule of Civil

Procedure 55(a). Plaintiff then moved for a default judgment,

requesting of a permanent injunction, statutory damages,

attorneys’ fees, and costs.

A hearing was held on April 6, 2005. Defendant appeared. 

I reviewed the procedural history of this action with

defendant, and suggested that he retain counsel to represent

him in this matter. I also notified him that he could move to

set aside his default, settle the case, or return to court and

contest the amount of damages. I continued the hearing to

June 29, 2005. Defendant did not move to set aside the

default; nor did he reach any agreement with plaintiff or

retain counsel. He appeared at the June 29, 2005 hearing. 

After taking some testimony the matter was continued to July

11, 2005. The July 11, 2005 hearing lasted 90 minutes before

a recess for lunch. Upon resuming the hearing, defendant

stated that he felt ill, and I continued the hearing to the

next morning. The hearing concluded on July 12, 2005 after

two hours. 

 The decision to grant or deny a default judgment under

Rule 55(b) is within the discretion of the court. See Fed. R.

Civ. P. 55(b); Eitel v. McCool, 782 F.2d 1470, 1471 (9th Cir.

1986); Shanghai Automation Instrument Co. v. Kuei, 194 F.

Supp. 2d 995, 999 (N.D. Cal. 2001). By his default, defendant

is deemed to have admitted the well-pleaded averments of the

complaint except as to the amount of damages, including
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statutory damages, attorneys’ fees, and costs. See Fed. R.

Civ. P. 8(d); Geddes v. United Financial Group, 559 F.2d 557

(9th Cir. 1977). Having reviewed plaintiff’s complaint, I

find that the allegations are sufficiently well-pled to

establish defendant’s liability under a number of theories

including the Anticybersquatting Consumer Protection Act. The

remaining issue for default judgment is the relief available

to plaintiff. Plaintiff seeks statutory damages under the

Anticybersquatting Consumer Protection Act (“ACPA”). 15

U.S.C. § 1125(d)(1). Pursuant to 15 U.S.C. § 1117, an

aggrieved plaintiff is permitted to recover statutory damages

for a violation of § 1125(d)(1) “in an amount of not less than

$1,000 and not more than $100,000 per domain name, as the

court considers just.” 15 U.S.C. § 1117(d). Plaintiff seeks

statutory damages of up to $100,000 per domain name for

defendant’s use and registration of four domain names, which

plaintiff claims are identical or confusingly similar to its

trademarks, simpsonstrongtie.com, simpsonstrong-tie.com,

strong-tie.com, and strong-wall.com.

Plaintiff Simpson Strong-tie Company, Inc., in business

since 1956, sells construction products and specializes in

metal devices designed to connect construction components. 

Compl. ¶ 7. Simpson owns a family of registered and commonlaw trademarks which include the Simpson name. Compl. ¶ 9. 

Simpson’s registered trademarks include, “STRONG-TIE,”

“SIMPSON STRONG-TIE,” SIMPSON STRONG-TIE CONNECTORS,” “STRONGWALL,” and “SIMPSON STRONG-WALL.” See Compl. ¶¶ 10-18; Pl.'s

Mot. for Default J., Ex. A-G. Defendant does not deny that he
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1 Trial Transcript

2 While testimony by Bob O’Connor might have helped to

elucidate the facts, neither side called O’Connor as a witness. 

The only witness from Simpson either side chose to call was

Simpson’s CFO who had little personal knowledge of the events.

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registered these four domain names.

Plaintiff and defendant both acknowledge that defendant

spoke with Bob O’Connor, a vice president at Simpson sometime

prior to October, 2003 regarding the domain names. TT1

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6/29/05 at 20; 21-25. Although there is disagreement as to

whether the conversations with O’Connor took place in 2002 or

2003, it is undisputed plaintiff asked defendant to transfer

all domain names relating to Simpson’s name and registered

trademarks to plaintiff. Plaintiff and defendant disagree as

to whether defendant transferred those domain names to Simpson

prior to October 2003.2

Plaintiff provided evidence and testimony that in October

2003, four domain names relating to Simpson were registered in

defendant’s name; simpsonstrongtie.com, simpsonstrong-tie.com,

strong-tie.com, and strong-wall.com. Compl. ¶ 22. That same

month plaintiff sent two cease and desist letters to

defendant, the first on October 6, 2005, and the second on

October 17, 2005. Munzinger Decl. ¶ 4. Defendant denies

receiving the October 6, 2005 letter. TT of 6/29/05 at 27;

16-19.

After receiving no response to either letter, plaintiff’s

counsel called defendant. Munzinger Decl. ¶ 5. During their

conversation, defendant told plaintiff’s counsel that 1) he

knew of plaintiff, its business, and its marks because he and
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3 Neither plaintiff nor defendant presented any

evidence from the registrar, Enom, as to whether anyone took

affirmative steps to re-register strong-tie.com after the

registration expired, or alternatively, whether that domain

name was automatically renewed.

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his employer had done business with plaintiff; 2) he knew the

infringing domain names were of value to plaintiff and knew

that plaintiff would seek to obtain them from him; and 3) he

believed he was doing plaintiff a favor by “holding” the

domain names for plaintiff. Compl. ¶ 25; Munzinger Decl. ¶ 5. 

In December of 2003, after several telephone conversations

with plaintiff’s counsel defendant agreed to permanently

transfer ownership of the domain names to plaintiff and

informed plaintiff that he had done so. Compl. ¶ 26;

Munzinger Decl. ¶ 7. Plaintiff’s counsel confirmed that

defendant completed the transfer, and plaintiff began placing

the strong-tie.com domain name on its products. Compl. ¶¶ 26-

27; Munzinger Decl. ¶ 7.

There is no evidence that defendant took any action to

re-register the domain names or any additional domain names

using Simpson’s name or registered trademarks. However on May

26, 2004, at least one of the four domain names, strongtie.com, expired. Pl.’s Ex. 3 at 3. This domain name was

apparently re-registered in defendant’s name on August 20,

2004. Pl.’s Ex. 4 at 2. Defendant denies taking affirmative

steps to re-register strong-tie.com. Rather, defendant claims

that the registrar may have automatically renewed strongtie.com in defendant’s name.3

 TT of 7/12/05 at 17.

Even though defendant “transferred” the four domain names
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to plaintiff by changing the administrative, billing,

technical and registrant data to plaintiff’s contact

information, defendant testified that he placed the domain

names in a sub-account of his primary account with the

registrar, Enom. TT of 7/12/05 at 27. All of defendant’s

accounts were in a “locked” status, and plaintiff was unable

by itself to transfer the domain names to a new registrar. 

Plaintiff did not seek defendant’s assistance but filed this

action. TT of 7/12/05 at 12.

In February 2005, after having been served with

plaintiff’s Motion for Default Judgment, defendant

transferred all four domain names to an entirely separate

account in plaintiff’s name. Supplemental Declaration of

Richard F. Munzinger in Support of Plaintiff’s Motion for

Default Judgment (“Munzinger Supp. Decl.”) ¶¶ 5-7. All four

domain names are now registered in plaintiff’s name and are

under plaintiff’s control. Munzinger Supp. Decl. ¶ 8.

15 U.S.C. § 1117(d) prescribes damages for a violation

of the ACPA, and allows a court to award statutory damages in

an amount from $1,000 to “$100,000 per domain name, as the

court considers just.” 15 U.S.C. § 1117(d). “A review of

the cases reveals that courts reserve the high-end of the

$1,000 to $100,000 range for the most egregious offenders.” 

Int’l Bancorp v. Societe des Bains de Mer, 192 F.Supp.2d 467,

490 (E.D. Va. 2002); Electronics Boutique Holdings Corp. v.

Zuccarini, No. CIV.A.00-4055, 2000 WL 1622760, at *8 (E.D.

Pa. Oct. 30, 2000). However, where “[t]he need for

deterrence is not exceptional” and where little harm is done
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to the plaintiff, a minimal award of statutory damages is

appropriate. Mattel, Inc. v. Adventure Apparel, No.

00CIV.4085(RWS), 2001 WL 1035140, at *5 (S.D.N.Y. Sept. 7,

2001). I recommend that plaintiff be awarded minimal

statutory damages. Plaintiff offered no proof of any

economic harm to its business as a result of defendant’s

actions. Defendant never asked for money in exchange for any

of the domain names he registered containing Simpson’s name

or registered trademarks. TT of 6/29/05 at 15; 15-16. In

fact, defendant that testified at one point he refused

plaintiff's offer of money for his expenses. Id. at 15; 17-

18. I do not believe that the need for deterrence in this

case is exceptional. Therefore, I find that statutory

damages of $4,000 for the domain name strong-tie.com and

$2,000 for the remaining three domain names, for a total of

$10,000, is a just amount.

 Plaintiff also seeks $36,631.00 in attorneys’ fees. See

Munzinger Supp. Decl., Ex. AA, CC. The party requesting fees

must make an adequate showing of the time expended and the

rates claimed. Hensley v. Eckerhart, 461 U.S. 424, 433

(1983). “The burden of establishing an entitlement to an

attorneys’ fee award lies solely with the claimant.” Id. at

437. Counsel must submit “detailed time records justifying

the hours claimed to have been expended.” Chalmers v. City

of Los Angeles, 796 F.2d 1205, 1210 (9th Cir. 1986). “Where

the documentation is inadequate, the district court is free

to reduce an applicant’s fee award accordingly.” Hensley,

461 U.S. at 433. The billing statements provided to the
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Court by plaintiff are redacted. While the billing

statements generally demonstrate that these fees were

reasonably incurred, many of the entries fail to identify the

subject matter of the work performed. As a result, I am

unable to determine whether the fees associated with these

entries are reasonable. I therefore recommend that the Court

reduce any award of attorneys’ fees by 20 percent.

Attorneys’ fees are reasonable in “exceptional cases,”

in which a defendant has acted in bad faith or where the acts

of infringement were malicious, deliberate, or willful. See

15 U.S.C. § 1117(a); Playboy Enters., Inc. v. Baccarat

Clothing Co., 692 F.2d 1272, 1276 (9th Cir. 1982); Discovery

Communications, Inc. v. Animal Planet, Inc., 172 F. Supp. 2d

1282, 1291 (C.D. Cal. 2001). “The word [willfully] often

denotes an act which is intentional, or knowing, or

voluntary, as distinguished from accidental.” U.S. v.

Murdock, 290 U.S. 389, 394 (1933). Attorneys’ fees may also

be appropriate where a defendant engages in “dilatory

litigation tactics”. See Mattel, Inc., 2001 WL 1035140, at

*5.

Here, defendant acted willfully. It was no accident

that defendant registered the four domain names in question. 

Defendant was aware that plaintiff used the words “Simpson”,

“Strong-tie”, and “Strong-wall” in conducting its business,

and intentionally registered domain names containing

plaintiff’s trademarks. I also find that defendant was

dilatory in his dealings with plaintiff’s counsel in 2003

when they contacted him about transferring the domain names
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into plaintiff’s name and unreasonable in his position that

he did not want to deal with counsel and wanted instead to

deal with Simpson. Had defendant not retained control over

the four domain names by placing them in a sub-account of his

primary account, resulting in the either automatic or

intentional re-registration of the strong-tie.com domain name

after plaintiff began using it on its products, a significant

portion of the fees would not have been incurred. Defendant

should have created an entirely separate account from his own

and placed Simpson’s domain names in the new account, as he

ultimately did.

However, plaintiff provided no evidence that defendant

purposely took back the domain name strong-tie.com. After 

learning strong-tie.com was re-registered in defendant’s

name, plaintiff did not contact defendant to try to regain

control of the re-registered domain name. Had it tried to

resolve this matter directly with defendant, much of these

attorneys’ fees might not have been incurred.

In light of the foregoing, I recommend recovery of some,

but not all, of plaintiff’s attorneys’ fees from plaintiff. 

I recommend that plaintiff recover all requested fees,

through October of 2003 when the record shows defendant

transferred the four domain names in question to plaintiff. 

I recommend that these fees be reduced by 20 percent for

inadequate billing statements. The frequent unexplained

redactions make the inadequate records especially hard to

understand. This amount is $4,013.90, less $802.78 for

inadequate billing statements, for a total of $3,211.12. 
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4 I have decreased plaintiff’s requested amount by

$34.73 because plaintiff requests a total of $159.62 for

photocopying but the documents support only $124.89. 

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Further, I recommend that plaintiffs recover 50 percent of

the fees requested after this time, less 20 percent for

inadequate billing statements, because of their failure to

attempt to resolve this problem which they helped create by

not re-registering strong-tie.com without resorting to

litigation. This amount is $16,308.55, less $3,261.71 for

inadequate billing statements, for a total of $13,046.84. 

Therefore I recommend plaintiff recover $16,257.96 in

attorneys’ fees.

In addition to attorneys’ fees, plaintiff seeks to

recover $3,520.44 in costs. See Munzinger Supp. Decl., Ex.

AA, CC. 15 U.S.C. § 1117(a) provides for the award of costs

for a violation of the ACPA. See 15 U.S.C. § 1117(a). I

recommend that plaintiff be awarded $3,485.71 in costs.4

Plaintiff also seeks an injunction to prevent further

acts of infringement, dilution and cybersquatting. 

Injunctive relief is the “remedy of choice” for trademark

infringement cases. See 15 U.S.C. § 1116(a); see also

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

(9th Cir. 1988). In trademark cases, where there is a

likelihood of confusion between the plaintiff's and

defendant's trademarks, irreparable harm is ordinarily

presumed for purposes of awarding injunctive relief. See

Vision Sports, Inc. v. Melville Corp., 888 F.2d 609, 612, n.3

(9th Cir. 1989). Injunctive relief is also appropriate in
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cases involving default. See, e.g., Discovery

Communications, Inc., 172 F. Supp. 2d 1282; PepsiCo, Inc.,

189 F.R.D. 431. Though the infringing domain names are now

within plaintiff’s control, in light of defendant’s past

behavior and the fact that he has registered thousands of

domain names, I find that injunctive relief requiring the

destruction of infringing materials and prohibiting defendant

from using plaintiff’s trademarks or any derivation of those

marks for any reason in the future is appropriate. 15 U.S.C.

§ 1118; see also Whittaker Corp. v. Execuair Corp., 953 F.2d

510, 518-19 (9th Cir. 1992) (acknowledging that a district

court has the power to order the destruction of infringing

articles); Online Partners.Com, Inc. v. Atlanticnet Media

Corp., 2000 WL 101242, *11 (N.D.Cal. 2000)(ordering the

delivery and destruction of infringing articles). 

 For the reasons set forth above, I RECOMMEND entering

judgment in plaintiff’s favor in the amount of $29,743.67. 

This amount includes $10,000 in damages, $16,257.96 in

attorneys’ fees, and $3,485.71 in costs. I also RECOMMEND

that the defendant, his agents, and all persons acting for,

with, by, or through him, are enjoined as follows: 

1. To refrain from using plaintiff’s marks, or any

derivation or combination of words thereof, for any

reason, including in domain names and on the Internet.

2. Pursuant to 15 U.S.C. § 1118, to destroy any

reproduction, counterfeit, copy, or colorable imitation

of the infringing domain names, in whatever format, and 

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all plates, molds, matrices, and other means of making

the same.

Dated: August 5, 2005

Bernard Zimmerman 

 United States Magistrate Judge

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