Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-cand-3_12-cv-00407/USCOURTS-cand-3_12-cv-00407-1/pdf.json

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

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Case No. 5:12-00407-PSG

ORDER GRANTING MOTION FOR SUMMARY JUDGMENT AS TO COMPANY 

DEFENDANTS AND REASSIGNING CASE WITH REPORT AND RECOMMENDATION 

THAT SUMMARY JUDGMENT BE GRANTED AS TO INDIVIDUAL DEFENDANTS

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United States District Court

For the Northern District of California

UNITED STATES DISTRICT COURT

NORTHERN DISTRICT OF CALIFORNIA 

SAN JOSE DIVISION

SD-3C, LLC, 

 Plaintiff,

 v. 

BIWIN TECHNOLOGY LTD, et al., 

 Defendants. 

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Case No. 5:12-cv-00407-PSG

ORDER GRANTING MOTION FOR 

SUMMARY JUDGMENT AS TO 

COMPANY DEFENDANTS AND 

REASSIGNING CASE WITH 

REPORT AND RECOMMENDATION 

THAT SUMMARY JUDGMENT BE 

GRANTED AS TO INDIVIDUAL 

DEFENDANTS

(Re: Docket No. 104)

Plaintiff SD-3C, LLC, moves for summary judgment or, in the alternative, default judgment 

against Defendants Biwin Technology Ltd., Wintek Enterprises Ltd. (the “Company Defendants”), 

Sun Rixin, Zhou Zhengxian, Lu Wei and Xu Linxian (the “Individual Defendants”). As the 

Company Defendants have not participated in the case since July 2013 and the Individual 

Defendants have never appeared in the case, the motion is unopposed. The court GRANTS 

SD-3C’s motion for summary judgment as to the Company Defendants and orders that the case be 

reassigned with a report and recommendation that summary judgment be granted as to the 

Individual Defendants as well. 

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Case No. 5:12-00407-PSG

ORDER GRANTING MOTION FOR SUMMARY JUDGMENT AS TO COMPANY 

DEFENDANTS AND REASSIGNING CASE WITH REPORT AND RECOMMENDATION 

THAT SUMMARY JUDGMENT BE GRANTED AS TO INDIVIDUAL DEFENDANTS

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I.

This is a case about a licensing agreement gone awry. In 2006, Biwin sought a license for 

patents and related intellectual property to manufacture and sell SD memory cards for use in digital 

cameras and related devices.1 The terms of the card license agreement (“CLA”) required Biwin to 

make accurate quarterly sales reports and pay SD-3C a six percent royalty on its SD card sales.2 

Over the course of the next two years, SD-3C grew skeptical about Biwin’s sales reporting and—in 

line with the CLA—conducted an audit to review Biwin’s financial records.3 Biwin’s financial 

records painted an incomplete picture but were adequate to establish that Biwin had underreported 

and concealed its true SD card manufacturing and sales operations to avoid paying SD-3C the full 

royalty to which it was due.4 SD-3C terminated Biwin’s license on August 22, 2009.5

Just a few months later, Wintek—Biwin’s alter ego—entered the scene and approached 

SD-3C for a CLA of its own—which was promptly granted—without informing SD-3C of its 

affiliation with Biwin.6 In fact, the relationship between Biwin and Wintek is extensive: they are 

owned and operated by the same four individuals—the Individual Defendants—they share 

personnel and addresses in China and Hong Kong and orders for SD cards placed with one 

company are routinely filled by the other.7 

Nearly three years after SD-3C terminated Biwin’s CLA, SD-3C discovered that Biwin was 

still claiming to produce SD cards pursuant to a valid license agreement—a claim that has not yet 

been withdrawn to this day.8 And in deposition, Joseph James—Biwin America’s former marking 

 

1 See Docket No. 64 at ¶¶ 11-13, 15. 

2 See id. 

3 See id. at ¶¶ 20-26. 

4 See id.

5 See id. at ¶ 28. 

6 See id. at ¶ 38. 

7 See id. at ¶¶ 4-8, 56-61. 

8 See id. at ¶ 35. 

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ORDER GRANTING MOTION FOR SUMMARY JUDGMENT AS TO COMPANY 

DEFENDANTS AND REASSIGNING CASE WITH REPORT AND RECOMMENDATION 

THAT SUMMARY JUDGMENT BE GRANTED AS TO INDIVIDUAL DEFENDANTS

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director—testified that as recently as 2012, Biwin was still manufacturing two million SD cards 

each month, representing between ten and thirty-three percent of the company’s total revenues.9

As a result of Biwin’s ongoing breach of the CLA, SD-3C filed its initial complaint on 

January 25, 2013 alleging breach of contract, fraud, trademark infringement and unfair competition 

under both the Lanham Act and under California law.10 SD-3C was only able to effect service on 

Biwin and Wintek through the Hague Convention in September 2012, at which point the complaint 

had evolved into a Third Amended Complaint.11 Biwin and Wintek answered that complaint and 

defended the lawsuit through July 2013, when SD-3C sought leave and filed a Fourth Amended 

Complaint—adding the Individual Defendants, two additional counts of trademark counterfeiting 

and civil conspiracy and specific facts learned through discovery.12 Within two weeks of SD-3C 

amending its complaint, Biwin and Wintek ceased participation in the lawsuit. Their counsel 

sought leave to withdraw—which was granted by this court—and neither Company Defendants nor 

Individual Defendants answered the operative complaint.13 SD-3C now moves for summary 

judgment or, in the alternative, default judgment against all Defendants.

II.

This court has jurisdiction under 28 U.S.C. § 1331, 28 U.S.C. § 1332 and 28 U.S.C. § 1338. 

SD-3C and the Company Defendants further consent to the jurisdiction of the undersigned under 

28 U.S.C. § 636(c) and Fed. R. Civ. P. 72(a).14 

 

9 See Docket No. 104-4 at 24-28. 

10 See Docket No. 1 at ¶¶ 48-92. 

11 See Docket No. 18. 

12 See Docket Nos. 26, 28, 64. 

13 See Docket No. 85. 

14 The Individual Defendants have not entered an appearance and thus have not consented to the 

jurisdiction of the undersigned. A report and recommendation as to the Individual Defendants thus 

is included within this order, together with an order that the claims against the Individual 

Defendants be reassigned. 

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Case No. 5:12-00407-PSG

ORDER GRANTING MOTION FOR SUMMARY JUDGMENT AS TO COMPANY 

DEFENDANTS AND REASSIGNING CASE WITH REPORT AND RECOMMENDATION 

THAT SUMMARY JUDGMENT BE GRANTED AS TO INDIVIDUAL DEFENDANTS

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Pursuant to Fed. R. Civ. P. 56(a), summary judgment is appropriate when “there is no 

genuine issue as to any material fact and the moving party is entitled to judgment as a matter of 

law.” Material facts are those that may affect the outcome of the case.15 A dispute as to a material 

fact is genuine if there is sufficient evidence for a reasonable jury to return a verdict for the 

non-moving party.16 All evidence must be viewed in the light most favorable to the non-moving 

party. At this stage, a court “does not assess credibility or weigh the evidence, but simply 

determines whether there is a genuine factual issue for trial.”17 Initially, the moving party bears the 

burden to show that no genuine issue of material fact exists.18 If this burden is met, the burden 

shifts to the non-moving party.

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Pursuant to Fed. R. Civ. P. 55(b)(2), the court may enter default judgment against a 

defendant who has failed to plead or otherwise defend an action.20 “The district court’s decision 

whether to enter default judgment is a discretionary one.”21

III.

As an initial matter, SD-3C asks this court to grant summary judgment, or in the alternative, 

default judgment. This court finds that default judgment would likely otherwise be appropriate but 

ultimately is not viable here. While Biwin and Wintek answered the third amended complaint,22

neither the Company Defendants nor the Individual Defendants—who were added for the first time 

 

15 See Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986) (“Only disputes over facts that 

may affect the outcome of the suit under governing law will properly preclude the entry of 

summary judgment. Factual disputes that are irrelevant or unnecessary will not be counted.”). 

16 See id.

17 House v. Bell, 547 U.S. 518, 559-60 (2006). 

18 See Celotex Corp. v. Caltrett, 477 U.S. 317, 323-24 (1986). 

19 See T.W. Elec. Serv., Inc. v. Pac. Elec. Contractors Ass’n, 809 F.2d 630, 630 (9th Cir. 1987). 

20 Fed. R. Civ. P. 55(b)(2). 

21 Aldabe v. Aldabe, 616 F.2d 1089, 1092 (9th Cir. 1980). 

22 See Docket Nos. 26, 28. 

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ORDER GRANTING MOTION FOR SUMMARY JUDGMENT AS TO COMPANY 

DEFENDANTS AND REASSIGNING CASE WITH REPORT AND RECOMMENDATION 

THAT SUMMARY JUDGMENT BE GRANTED AS TO INDIVIDUAL DEFENDANTS

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in the Fourth Amended Complaint—answered the operative complaint. In fact, Biwin and Wintek 

stopped paying their attorneys, leading this court to grant Defendants’ lawyers leave to withdraw 

from the case.23 Ultimately, Defendants ceased participating in the litigation in or around July 

2013. Although Biwin and Wintek responded to the third amended complaint, “[a]n amended 

complaint supersedes the original, the latter being treated thereafter as nonexistent.”24 This case 

thus falls within the ambit of default judgment consideration, but SD-3C failed to follow the proper 

procedure to seek default judgment from this court. In the Ninth Circuit, Federal Rule of Civil 

Procedure 5525 “requires a two-step process consisting of: (1) seeking a clerk’s entry of default, 

and (2) filing a motion for the entry of default judgment.”26 SD-3C has skipped straight to step 

two. 

 

23 See Docket No. 85. 

24 Brantley v. Boyd, Case No. 07-cv-06139, 2013 WL 3766911, at *6 (N.D Cal. July 16, 2013) 

(citing Lacey v. Maricopa Cnty., 649 F. 3d 1118, 1137 (9th Cir. 2011) (internal citation and 

quotation omitted)); Employee Painters’ Trust v. Ethan Enters., 480 F.3d 993, 999-1000 (9th Cir. 

2007) (default judgment proper where defendant failed to answer amended complaint even after 

filing an answer to original complaint and disputing counterclaim).

25 Fed. R. Civ. P. 55(a)-(b):

(a) Entering a Default. When a party against whom a judgment for affirmative relief is 

sought has failed to plead or otherwise defend, and that failure is shown by affidavit or 

otherwise, the clerk must enter the party’s default. 

(b) Entering a Default Judgment.

(1) By the Clerk. If the plaintiff’s claim is for a sum certain or a sum that can be made 

certain by computation, the clerk—on the plaintiff’s request, with an affidavit showing 

the amount due—must enter judgment for that amount and costs against a defendant 

who has been defaulted for not appearing and who is neither a minor nor an 

incompetent person. 

(2) By the Court. In all other cases, the party must apply to the court for a default 

judgment. 

26 Marty v. Green, Case No. 10-cv-01823, 2011 WL 320303, at *3 (E.D. Cal. Jan. 28, 2011) 

(internal quotation marks omitted); see Eitel v. McCool, 782 F.2d 1470, 1471 (9th Cir. 1986) 

(“Eitel apparently fails to understand the two-step process required by Rule 55”); accord Symantec 

Corp. v. Global Impact, Inc., 559 F.3d 922, 923 (9th Cir. 2009) (noting that Rules 55(1) and (b) 

provide a two-step process for obtaining a default judgment); see also Norman v. Small, Case No. 

09-cv-02235, 2010 WL 5173683, at *2 (S.D. Cal. Dec. 14, 2010) (denying plaintiff’s motion for 

default judgment because the clerk had not yet entered a default); Cramer v. Target Corp., Case 

No. 08-cv-01693, 2010 WL 2898996, at *1 (E.D. Cal. July 22, 2010) (“Obtaining a default 

judgment in federal court is a two-step process that includes: (1) entry of default and (2) default 

judgment.”); Bach v. Mason, 190 F.R.D 567, 574 (D. Idaho 1999) (“Plaintiffs have improperly 

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ORDER GRANTING MOTION FOR SUMMARY JUDGMENT AS TO COMPANY 

DEFENDANTS AND REASSIGNING CASE WITH REPORT AND RECOMMENDATION 

THAT SUMMARY JUDGMENT BE GRANTED AS TO INDIVIDUAL DEFENDANTS

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Notably, SD-3C’s motion for summary judgment is unopposed. While “[a] district court 

may not grant a motion for summary judgment solely because the opposing party has failed to file 

an opposition,”27 “[t]he court may . . . grant an unopposed motion for summary judgment if the 

movant’s papers are themselves sufficient to support the motion and do not on their face reveal a 

genuine issue of material fact.”28 The court finds that SD-3C has sufficiently established its case to 

warrant granting the motion as to each of its four causes of action: (1) breach of contract, 

(2) trademark infringement and counterfeiting, (3) unfair competition and (4) fraud.

First, regarding the breach of contract claim, it is undisputed that Biwin and Wintek entered 

CLAs with SD-3C, establishing the existence of the contract itself.29 SD-3C also provided 

Defendants with the license, as required under the CLAs.

30 Biwin and Wintek underreported their 

manufacturing and sales activities as required under the CLAs—a material breach—incenting SD3C to terminate the CLAs.

31 Finally, SD-3C claims damages based on royalty payments due under 

the CLAs and attorneys’ fees and other expenses incurred as a result of Defendants’ breaches.32 

Based on the record before the court, there is no material dispute that Defendants in fact breached 

their contract with SD-3C.33

 

asked this court to enter a default judgment without first obtaining an entry of default by the clerk. 

Since plaintiffs’ motion for entry of default judgment is improper, it is denied.”). 

27 McColm v. San Francisco Hous. Auth., Case No. 02-cv-05810, 2007 WL 1575883, at *10 (citing 

Cristobal v. Siegel, 26 F.3d 1488, 1494-95 & n.4 (9th Cir. 1994)). 

28 Id. (citing United States v. Real Property at Incline Village, 47 F.3d 1511, 1520 (9th Cir. 1995) 

(local rule cannot mandate automatic entry of judgment for moving party without consideration of 

whether motion and supporting papers satisfy Fed. R. Civ. P. 56)). 

29 See Docket No. 64 at ¶¶ 62-68; Docket No. 105-9 at Attachment 2; Docket No. 104-2 at Nos. 

3-4, 91-97, 101-102; Docket No. 104-3 at Nos. 1-2, 31-41. 

30 See id.

31 See Docket No. 64 at ¶¶ 62-68. In light of Defendants’ failure to respond to the Fourth Amended 

Complaint, there is no dispute as to the allegations pleaded therein and they are deemed admitted. 

See Fed. R. Civ. P. 55(a). 

32 See id. at ¶¶ 62-75 (claiming at least $12,900,000 in unpaid royalties based on a 2009 audit and 

available information about Biwin’s manufacture and sale of memory cards).

33 Any award of damages is discussed below. 

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ORDER GRANTING MOTION FOR SUMMARY JUDGMENT AS TO COMPANY 

DEFENDANTS AND REASSIGNING CASE WITH REPORT AND RECOMMENDATION 

THAT SUMMARY JUDGMENT BE GRANTED AS TO INDIVIDUAL DEFENDANTS

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Second, SD-3C’s trademark infringement and counterfeiting claims are equally undisputed. 

Under the Lanham Act, a plaintiff can establish a trademark infringement cause of action by 

showing (1) ownership of the mark by the plaintiff, (2) use by the defendant without consent of the 

owner and (3) of a mark which is likely to cause confusion in the marketplace.34 SD-3C owns and 

maintains multiple trademarks and registrations for its well-known SD products in many countries, 

including the United States.35 Pursuant to 15 U.S.C. § 1115(b), such trademarks constitute 

incontestable evidence of SD-3C’s ownership of, and exclusive right to use, the SD name and mark 

related to flash memory devices and other associated goods and services.36 This evidence is 

sufficient to establish prong one under the Lanham Act. 

As for prong two, while Biwin and Wintek were authorized to manufacture and sell SD 

flash technology during the pendency of the CLAs, upon termination, that authority was nullified.

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But Biwin and Wintek were unrelenting and continued to produce and sell technology bearing the 

SD trademark long after SD-3C revoked its consent—the hallmark of trademark infringement.

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SD-3C further contends that Biwin and Wintek’s unauthorized actions constitute trademark 

counterfeiting under 15 U.S.C § 1114(1)(a)—where the infringer uses “a counterfeit of a mark that 

is registered on the principal register of the United States Patent and Trademark Office for such 

goods or services sold, offered for sale, or distributed and that is in use.”39 Here, Biwin and 

 

34 See Dep’t of Parks & Rec. v. Bazaar Del Mundo, Inc., 448 F.3d 1118, 1124 (9th Cir. 2006). 

35 See Docket No. 64 at ¶ 91. 

36 See id. at ¶ 92; 15 U.S.C. § 1115(b); see also Brookfield Comm’ns v. West Coast Entm’t, 174 

F.3d 1036, 1046-48, n.10 (9th Cir. 1999) (the “validity and legal protectability, as well as the 

[registrant’s] ownership therein, are all conclusively presumed,” when a mark’s registration 

becomes incontestable.).

37 See Docket No. 64 at ¶¶ 62-68. 

38 See id. at ¶ 81; State of Idaho Potato Comm’n v. G&T Terminal, 425 F.3d 708, 721 (9th Cir. 

2005); U.S. Structures, Inc. v. J.P. Structures, Inc., 130 F.3d 1185, 1190-92 (6th Cir. 1997) (“proof 

of continued, unauthorized use of an original trademark by one whose license to use the trademark 

had been terminated is sufficient to establish ‘likelihood of confusion’”). 

39 15 U.S.C. § 1116(d)(1)(B). 

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ORDER GRANTING MOTION FOR SUMMARY JUDGMENT AS TO COMPANY 

DEFENDANTS AND REASSIGNING CASE WITH REPORT AND RECOMMENDATION 

THAT SUMMARY JUDGMENT BE GRANTED AS TO INDIVIDUAL DEFENDANTS

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Wintek have manufactured and sold products bearing marks that are substantially indistinguishable 

from SD-3C’s SD trademarks—as evidenced by shipments of Biwin products that have been seized 

as counterfeit by customs authorities in various countries, including the United States.40 Because

many of these facts are substantiated by Biwin and Wintek’s own admissions, the court cannot see 

any dispute that Defendants are liable for trademark infringement and counterfeiting. 

The third prong requires that the counterfeited SD cards are likely to confuse consumers as 

to their source, origin, association or connection. Given the prolific name that SD has nationally 

and internationally, and the almost indistinguishable nature of the counterfeited products, there is 

no genuine dispute that it is sufficiently likely that consumers would attribute Biwin and Wintek 

products bearing the SD trademark to in fact be licensed or owned by SD.41 Altogether, the court 

can find no dispute that Defendants’ actions infringed on and diluted SD-3C’s trademarks.42

Third, SD-3C is entitled to summary judgment on its unfair competition claim. This claim

requires that a plaintiff establish it has a valid, protectable mark and that a defendant’s use of that 

mark creates a likelihood of confusion with plaintiff’s mark.43 This cause of action is substantially 

similar to that brought under the Lanham Act, such that the reasoning above applies equally to this 

claim.

 

40 See Docket No. 64 at 29-30, 100-103; Docket No. 104-2 at Nos. 86-89, 101-104; Docket No. 

104-3 at Nos. 40-43. 

41 See Haeger Potteris, Inc. v. Gilner Potteris, 123 F. Supp. 261, 270 (S.D. Cal. 1954) (“Copying 

of the product of another, as defendant is doing here, in precise detail as to design, shape and color, 

and in every other respect than quality, is nothing less than piracy . . . his very act of copying 

strongly impels the inference that he intends to reap commercial gain by trading on the good will of 

the first comer”); Audio Fidelity, Inc. v. High Fidelity Recordings, Inc., 283 F.2d 551, 557 (9th Cir. 

1960) (when actual copying has been established, the plain inference is that the copier intended to 

cause confusion). 

42 See Docket No. 64 at ¶¶ 94-95; AMF, Inc. v. Sleekcraft Boats, 599 F.2d 341, 348-49 (9th Cir. 

1979; Docket No. 104-2 at Nos. 1-2, 18-21, 70-78, 101-102; Docket No. 104-3 at Nos. 1, 29-30, 

36, 40-41. Any award of damages is discussed below. 

43 Academy of Motion Picture Arts & Sciences v. Creative House Promotions, Inc., 944 F.2d 1446, 

1457 (9th Cir. 1991). 

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ORDER GRANTING MOTION FOR SUMMARY JUDGMENT AS TO COMPANY 

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Fourth, there is no genuine dispute that Biwin and Wintek engaged in fraud by entering 

into a contract with the undisclosed intention of non-performance. Under California law, a plaintiff 

must prove four elements to establish fraud: (1) knowingly false misrepresentation by defendant, 

(2) made with intent to deceive or to induce reliance by plaintiffs, (3) justifiable reliance by 

plaintiff and (4) resulting damages.44 As discussed above, Biwin represented to SD-3C that it 

would perform its obligations under the CLA in return for a license to SD-3C’s intellectual 

property rights.45 But Biwin concealed its intention to obtain these licensing rights and then 

misreport its true sales and hide statistics that would illuminate the true royalties owed to SD-3C.46 

The misrepresentation was discovered during the 2009 audit and 2010 investigation into Biwin, 

which uncovered massive under-reporting of SD memory card manufacturing, distribution and 

sales operations.47 

And when SD-3C took action to terminate the CLA, Biwin not only continued producing 

products bearing a substantially similar mark to SD’s mark, but Biwin created a shell alter-ego—

Wintek—which approached SD-3C anew to enter into a CLA of its own.48 Wintek failed to 

disclose its substantial affiliation with Biwin and the Individual Defendants—shared offices and 

common owners and directors.49 SD-3C extended a license to Wintek in good faith and then 

Wintek proceeded to engage in the same false reporting that had previously led to SD-3C revoking 

Biwin’s license—even going so far as to doctor invoices provided to SD-3C’s auditors to hide the 

actual sales figures of SD cards and to shield Biwin’s shell companies from detection by global 

 

44 Aqua-Lung Am., Inc. v. Am. Underwater Prods., Inc., 709 F. Supp. 2d 773, 786 (N.D. Cal. 2010) 

(citing Glenn K. Jackson Inc. v. Roe, 273 F.3d 1192 (9th Cir. 2001)). 

45 See Docket No. 64 at ¶ 77. 

46 See id. at ¶ 78. 

47 See id. at ¶ 80; see also Docket No. 105-9 at Attachment 2.

48 See Docket No. 64 at ¶ 81. 

49 See id. 

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ORDER GRANTING MOTION FOR SUMMARY JUDGMENT AS TO COMPANY 

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customs officials.50 There is no dispute that Biwin and Wintek intentionally and knowingly 

induced SD-3C into the license agreements without any intention to make good on their obligations 

and that SD-3C incurred damages as a result.

51

Fifth, there is no genuine dispute that the Individual Defendants are jointly and severally 

liable for the torts alleged against Biwin and Wintek under the alter ego doctrine—which allows 

for such a finding where a corporation is used by an individual or individuals, or by another 

corporation, to perpetrate fraud, circumvent a statute or accomplish some other wrong or 

inequitable purpose.52 “The alter ego doctrine prevents individual or other corporations from 

misusing the corporate laws by the device of a sham corporate entity formed for the purpose of 

committing fraud or other misdeeds,”53 and it allows a court to “disregard the corporate entity and 

treat the corporation’s acts as if they were done by the persons actually controlling the 

corporation.”54 

The Lanham Act contemplates that natural persons, as well as corporations, can be liable 

for trademark infringement because “if there was an infringement by the corporation, this 

infringement was caused by some one or more persons either officers or employees of the 

corporation who caused the acts to be done.”55 Moreover, a corporate “officer or director is, in 

general, personally liable for all torts which he authorizes or directs in which he participates, 

 

50 See id. at ¶ 85; see also Docket No. 104-2 at No. 97; Docket No. 104-3 at Nos. 37-38. 

51 In California, such fraudulent conduct is separate and independent from the breach itself and 

causes “actual damage independent of the contract damages.” Robinson Helicopter Co., Inc. v. 

Dana Corp., 34 Cal. 4th 979, 991 (2004); see also Frye v. Wine Library Inc., Case No. 06-cv05399, 2006 WL 3500605, at *2-3 (N.D. Cal. Dec. 4, 2006) (fraud in the inducement alleging harm 

is independent of the contract). 

52 Guifu Li v. A Perfect Day Franchise, Inc., 281 F.R.D. 373, 402 (N.D. Cal. 2012). 

53 Sonora Diamond Corp. v. Superior Court, 83 Cal. App. 4th 523, 538 (2000). 

54 Robbins v. Blecher, 52 Cal. App. 4th 886, 892 (1997). 

55 Mead Johnson & Co. v. Baby’s Formula Serv., Inc., 402 F.2d 19 (5th Cir. 1968); 15 U.S.C. 

§§ 1114, 1127; see also Wilden Pump & Eng’g Co. v. Pressed & Welded Prods. Co., 655 F.2d 984, 

990 (9th Cir. 1981) (in analogous patent infringement context, an individual is personally liable if 

he actively and knowingly causes the infringement). 

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Case No. 5:12-00407-PSG

ORDER GRANTING MOTION FOR SUMMARY JUDGMENT AS TO COMPANY 

DEFENDANTS AND REASSIGNING CASE WITH REPORT AND RECOMMENDATION 

THAT SUMMARY JUDGMENT BE GRANTED AS TO INDIVIDUAL DEFENDANTS

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notwithstanding that he acted as an agent of the corporation and not on his own behalf.”56 As 

directors of Biwin and Wintek, the Individual Defendants were aware that Biwin and Wintek’s 

CLAs were terminated for non-compliance, yet they continued to direct their companies to 

manufacture and sell counterfeit SD cards bearing the SD mark.57 It is undisputed that the 

Individual Defendants enjoy a direct financial benefit from the infringing activity and that they 

supervised and directed the illegal acts of their companies.58 

Under California law, for an individual to be treated as an alter ego of a corporate entity, a 

plaintiff must show (1) “that there be such a unity of interest and ownership that the separate 

personalities of the corporation and the individual[s] no longer exist” and (2) that “if the acts are 

treated as those of the corporation alone, an inequitable result will follow.”59 To determine the 

requisite unity of interest, California courts consider factors such as inadequate capitalization, 

commingling of funds and other assets, holding out by one entity that it is liable for the debts of the 

other, identical equitable ownership, use of the same offices and employees, use of one as a mere 

conduit for the affairs of the other, disregard of corporate formalities, lack of segregation of 

corporate records and identical directors and officers.60 It is undisputed that the Individual 

Defendants are the owners, managers and/or directors of Biwin, Wintek, Happy Route Ltd. and 

Great Mover Ltd.61 and have commingled funds, established equal entity ownership of the former 

three among the Individual Defendants, used the Biwin offices, employees, equipment, invoicing 

system and computers as a conduit for the affairs of the other entities and diverted Biwin and 

 

56 Transgo, Inc. v. Ajac Transmission Parts Corp., 768 F.2d 1001, 1021 (9th Cir. 1985). 

57 See Docket No. 64 at ¶¶ 55-61. 

58 See Comm. For Idaho’s High Desert v. Yost, 92 F.3d 814, 823-24 (9th Cir. 1996) (citing cases 

that approve vicarious liability of a corporate officer for trademark infringement). 

59 Mesler v. Bragg Mgmt. Co., 39 Cal. 3d 290, 300 (1985) (quoting Automotriz etc. de Cal. v. 

Resnick, 47 Cal. 2d 792, 796 (1957)). 

60 See Guifu Li, 281 F.R.D. at 403 (citing Virtualmagic Asia, Inc. v. Fil-Cartoons, Inc., 99 Cal. 

App. 4th 228, 245 (2002)). 

61 Happy Route Ltd. and Great Mover Ltd.—like Wintek—are shell corporations of Biwin. 

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Case No. 5:12-00407-PSG

ORDER GRANTING MOTION FOR SUMMARY JUDGMENT AS TO COMPANY 

DEFENDANTS AND REASSIGNING CASE WITH REPORT AND RECOMMENDATION 

THAT SUMMARY JUDGMENT BE GRANTED AS TO INDIVIDUAL DEFENDANTS

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Wintek assets to themselves to evade creditors, including SD-3C.62 These facts are sufficient to 

support a finding that the Individual Defendants have a unity of interest. And any other finding 

would improperly condone the practice of using shell corporations to perpetrate fraud and shield 

individuals from liability. 

The court therefore recommends that upon reassignment to a district judge summary 

judgment as to SD-3C’s trademark counterfeiting claims against the Individual Defendants be 

GRANTED and that the district judge find the Individual Defendants jointly and severably liable 

for the intentional torts of fraud, trademark infringement, trademark counterfeiting and unfair 

competition along with the Company Defendants.63

Finally, SD-3C asks this court for a total of $43,185,148 in damages—including 

$12,943,555 in unpaid royalties, $978,134 in legal and accounting expenses and $29,263,459 in 

late payment interest through July 15, 2014.64 SD-3C engaged an expert—Dr. Michael 

Quackenbush—to produce a report detailing the damages at issue.65 Dr. Quackenbush considered 

all available information from the 2009 audit, the 2010 investigation and any other records SD-3C 

was able to acquire before Company Defendants ceased participation in the litigation.66 Based on 

 

62 See Docket No. 104-2 at Nos. 5-12, 22-58, 65-69, 80-82, 93-104; Docket No. 104-3 at Nos. 3-22, 

27-30, 37-43; Docket No. 64 at ¶¶ 55-61, 85-87. 

63 The undersigned is ordering reassignment to a district judge and issuing a report and 

recommendation because, absent consent of all parties, a magistrate judge does not have authority 

to make case-dispositive rulings. See 28 U.S.C. § 636 (authorizing magistrate judges to submit 

“findings of fact and recommendations” to the district judge); Tripati v. Rison, 847 F.2d 548, 

548-49 (9th Cir. 1988) (noting “a magistrate can prepare a report and recommendation which, after 

allowing opportunity for objections, a district judge can review” and adopt). 

64 See Docket No. 105-9 at Attachment 2. Because the Individual Defendants have not consented 

to the jurisdiction of the undersigned, the court is only awarding damages as to the Company 

Defendants at this time.

65 See id.

66 See id.

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