Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-casd-3_05-cv-01555/USCOURTS-casd-3_05-cv-01555-0/pdf.json

Nature of Suit Code: 840
Nature of Suit: Trademark
Cause of Action: 15:1051 Trademark Infringement

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1 05cv1555

UNITED STATES DISTRICT COURT

SOUTHERN DISTRICT OF CALIFORNIA

THE AFFINITY GROUP, INC. dba

EMERALD PUBLICATIONS, INC.,

Plaintiff,

CASE NO. 05cv1555 WQH (LSP)

ORDER

vs. (Doc. # 10)

BALSER WEALTH MANAGEMENT,

LLC, an Ohio Limited Liability Company;

ROGER BALSER, an individual, and

DOES 1-10,

Defendants.

HAYES, Judge:

The matter before the Court is Plaintiff’s Motion for Default Judgment. (Doc. # 10.)

I. Background

On August 4, 2005, Plaintiff instituted the above-styled trademark and copyright

infringement action. (Doc. # 1.) On October 26, 2005, Plaintiff filed an Affidavit of Process

Server indicating that Defendants were personally served by leaving the Complaint and

Summons with Defendant Roger Balser in Ohio on September 26, 2005. (Doc. # 3.) On

March 29, 2006, at the request of Plaintiff, the Clerk entered Default as to Defendants. (Doc.

# 6.) On January 24, 2007, Plaintiff filed its Motion for Default Judgment (Doc. # 10) arguing

that, as a matter of law, judgment should be entered awarding Plaintiff the sum of $13,292 (or

$21,392 if the Court awards treble damages).

II. Allegations of the Complaint

Plaintiff is the owner of United States Trademark Registration No. 75/644,168,

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“Passport to Retirement,” for use in conjunction with seminars and workshops to the public

in the areas of retirement planning, investments, tax strategies, and estate planning. (Compl.

¶ 11, Ex. A.) Plaintiff has used its “Passport to Retirement” mark continuously since 1999, and

has sold products under the mark nationwide, including in the State of Ohio. (Compl. ¶ 12.)

Defendant Roger Balser, and his alter ego Defendant Balser Wealth Management, have

infringed Plaintiff’s mark by advertising and using the name “Passport to Retirement” in

connection with retirement seminars and related written materials. (Compl. ¶¶ 13, 33.)

Defendants’ use of the name is without Plaintiff’s permission or authority, with actual and

constructive notice of Plaintiff’s federal trademark registration rights, and is likely to cause

confusion, to cause mistake and/or to deceive. (Compl. ¶¶ 14-15.)

III. Motion for Default Judgment

A. Legal Standards

Federal Rule of Civil Procedure 55(b) provides that judgment by default may be entered

by the Court. A district court may consider the following factors in exercising its discretion

to enter a default judgment:

(1) the possibility of prejudice to the plaintiff; (2) the merits of 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 material facts; (6)

whether the default was due to excusable neglect; and (7) the strong policy

underlying the Federal Rules of Civil Procedure favoring decision on the merits.

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

“In applying this discretionary standard, default judgments are more often granted than

denied.” Philip Morris USA, Inc. v. Castworld Prods., Inc., 219 F.R.D. 494, 498 (C.D. Cal.

2003). “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.” TeleVideo Sys., Inc. v.

Heidenthal, 826 F.2d 915, 917-18 (9th Cir. 1987) (quotation omitted). “Plaintiff is required

to prove all damages sought in the complaint. In addition, ‘[a] judgment by default shall not

be different in kind [or] exceed in amount that prayed for in the [complaint].’ In determining

damages, a court can rely on the declarations submitted by the plaintiff or order a full

evidentiary hearing. Plaintiff’s burden in ‘proving up’ damages is relatively lenient. If

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proximate cause is properly alleged in the complaint, it is admitted upon default. Injury is

established and plaintiff need prove only that the compensation sought relates to the damages

that naturally flow from the injuries pled.” Phillip Morris USA, 219 F.R.D. at 498 (quoting

Fed. R. Civ. P. 54(c)) (citing Cripps v. Life Ins. Co. of N. Am., 980 F.2d 1261, 1267 (9th Cir.

1992)).

B. Discussion

1. Default Judgment

In order to determine whether default judgment is appropriate, the Court considers each

of the Eitel factors, set out above. The first Eitel factor “considers whether the plaintiff will

suffer prejudice if default judgment is not entered.” PepsiCo, Inc. v. Cal. Sec. Cans, 238 F.

Supp. 2d 1172, 1177 (C.D. Cal. 2002). “[S]ince, by defaulting, Defendant is deemed to have

admitted the truth of [Plaintiffs’] averments,” Plaintiff will likely suffer prejudice because

Plaintiff “would be without other recourse for recovery.” Philip Morris USA, 219 F.R.D. at

499. Therefore, this factor favors entry of judgment against the Defendant. 

The second and third Eitel factors (i.e., the merits of plaintiff’s substantive claim and

the sufficiency of the complaint) require that a plaintiff “state a claim on which the [plaintiff]

may recover.” Id. (internal quotation marks omitted). The elements necessary to establish

trademark infringement and unfair competition claims are identical. See Brookfield Comm.,

Inc. v. West Coast Enter. Corp., 174 F.3d 1036, 1046 n.6, 1047 n.8 (9th Cir. 1999). Federal

trademark infringement claims under § 32 of the Lanham Act apply to registered marks, while

unfair competition claims under § 43(a) of the Lanham Act apply to both registered and

unregistered marks and protect against a wider range of practices. See id.; see also 15 U.S.C.

§ 1114; 15 U.S.C. § 1125(a)(1). In both cases, the plaintiff must “prove the existence of a

trademark and the subsequent use by another in a manner likely to create consumer confusion.”

Comedy III Prod., Inc. v. New Line Cinema, 200 F.3d 593, 594 (9th Cir. 2000). As set out

above, the factual allegations of the Complaint sufficiently allege the existence of a trademark

and the subsequent use by Defendants in a manner likely to create consumer confusion.

(Compl. ¶¶ 11-17.) Therefore, the Complaint states a claim for trademark infringement and

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unfair competition. 

The elements of a copyright infringement claim are “(1) ownership of a valid copyright;

and (2) that the defendant violated the copyright owner’s exclusive rights under the Copyright

Act.” Ellison v. Robertson, 357 F.3d 1072, 1076 (9th Cir. 2004) (citing, inter alia, 17 U.S.C.

§ 501(a)). Plaintiff adequately alleges both of these elements. (Compl. ¶¶ 23-27.) Therefore,

the Complaint also states a claim for copyright infringement. The second and third Eitel

factors favor entry of default judgment against Defendants.

The fourth Eitel factor considers the amount at stake in relation to the seriousness of

Defendant’s conduct. See Eitel, 782 F.2d at 1471-72. Plaintiff seeks damages in the amount

of $4,050, as detailed below. Given the allegations of willful infringement, as well as

Defendants’ failure to comply with the judicial process or to participate in this litigation, the

Court finds that this factor likewise favors entry of default judgment against Defendants. Cf.

Phillip Morris USA, 219 F.R.D. at 500 (“Given Defendant’s infringing importation of large,

commercial quantities of counterfeit Marlboro cigarettes, the likelihood that its conduct would

cause confusion or mistake or otherwise deceive customers, and its failure to comply with the

judicial process or to participate in any way in the present litigation, the Defendant has

engaged in willful use of the counterfeit mark, which justifies the imposition of a substantial

monetary award.”) (awarding $2,000,000 in damages in trademark infringement default

judgment).

The fifth Eitel factor considers the possibility of dispute as to any material facts in the

case. See Eitel, 782 F.2d at 1471-72. In this case, there is little possibility of dispute because

the Court takes all factual allegations of the Complaint as true based on the entry of default.

See TeleVideo Sys., Inc., 826 F.2d at 917-18. Additionally, Defendant has not made any

attempt to challenge the Complaint or appear in the case. Thus, this factor favors the entry of

default judgment.

The sixth Eitel factor considers the possibility that the default resulted from excusable

neglect. Due process requires that all interested parties be given notice reasonably calculated

to apprise them of the pendency of the action and be afforded opportunity to present their

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objections before a final judgment is rendered. See Mullane v. Central Hanover Bank & Trust

Co., 339 U.S. 306, 314 (1950). As set out in the Declarations of Paul Peterson and Michael

Hoisington, submitted with the Motion for Default Judgment, Plaintiff made numerous

attempts to contact Defendants. Between March 16, 2005 and August 12, 2005, Plaintiff or

Plaintiff’s attorney mailed four letters concerning the subject of this suit to Balser at the

address where he later would be personally served. (Hoisington Decl., Exs. B-D.) Plaintiff

received no response. (Peterson Decl. ¶ 3.) In May of 2005, Plaintiff’s counsel spoke with

Balser on the telephone, during which time Balser “expressed his distaste for lawyers, was very

rude, and refused to discuss the issues.” (Hoisington Decl. ¶ 9.) Balser also stated that

Plaintiff “would never get a dime from him” because “he was protected by his LLC.”

(Hoisington Decl. ¶ 9.) After Plaintiff served Defendants via personal service on September

26, 2005, Defendants’ website content was removed and the telephone number was

disconnected. (Peterson Decl. ¶¶ 3-5.) On March 15, 2006, Plaintiff sent Balser a certified

letter stating that Plaintiff was seeking default in this Court. (Peterson Decl. ¶ 8.) The letter

was delivered, but Plaintiff did not receive a response. (Peterson Decl. ¶ 8.) On January 23,

2007, Plaintiff served the Motion for Default Judgment on Balser at his last known address and

also e-mailed a copy to his last known e-mail address. (Hoisington Decl. ¶ 5.) Given the

above-stated facts, the Court finds the possibility of excusable neglect to be remote.

Accordingly, the sixth Eitel factor favors the entry of default judgment. See Phillip Morris

USA, 219 F.R.D. at 500-01.

The seventh Eitel factor is “the strong policy underlying the Federal Rules of Civil

Procedure favoring decision on the merits.” Eitel, 782 F.2d at 1472. However, “the mere

existence of [Federal Rule of Civil Procedure] 55(b) indicates that the seventh Eitel factor is

not alone dispositive.” Id. at 501 (citing PepsiCo Inc. v. Cal. Sec. Cans, 238 F. Supp. 2d 1172,

1177 (C.D. Cal. 2002)). “Defendant’s failure to answer [Plaintiff’s] Complaint makes a

decision on the merits impractical, if not impossible. Under FRCP 55(a), termination of a case

before hearing the merits is allowed whenever a defendant fails to defend an action.” PepsiCo

Inc., 238 F. Supp. 2d at 1177. Therefore, the seventh Eitel factor does not preclude the Court

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from entering default judgment against Defendants. See id.; see also Philip Morris USA, Inc.,

219 F.R.D. at 501.

Upon considering all of the Eitel factors, the Court finds that default judgment should

be entered in this case.

2. Remedies

As a threshold issue, the remedies sought by “[a] judgment by default shall not be

different in kind [or] exceed in amount that prayed for in the [complaint].” Fed. R. Civ. P.

54(c). In the Motion for Default Judgment, Plaintiff seeks the same injunctive relief sought

in the Complaint, a smaller amount of money damages than what was sought in the Complaint,

as well as attorney’s fees and costs, which were also sought in the Complaint.

a. Injunctive Relief

The Court may “grant temporary and final injunctions on such terms as it may deem

reasonable to prevent or restrain infringement of a copyright.” 17 U.S.C. § 502(a); see also

15 U.S.C. § 1116(a) (“The several courts vested with jurisdiction of civil actions arising under

this chapter shall have power to grant injunctions, according to the principles of equity and

upon such terms as the court may deem reasonable, to prevent the violation of any right of the

registrant of a mark registered in the Patent and Trademark Office . . . .”). “As a general rule,

a permanent injunction will be granted when liability has been established and there is a threat

of continuing violations.” MAI Sys. Corp. v. Peak Computer, Inc., 991 F.2d 511, 520 (9th Cir.

1993) (emphasis added) (citation omitted); see also Olan Mills, Inc. v. Linn Photo Co., 23 F.3d

1345, 1349 (8th Cir. 1994) (“[I]t is appropriate to permanently enjoin . . . future infringement”

where “‘there has been a history of continuing infringement and a significant threat of future

infringement remains.’”) (quoting Walt Disney Co. v. Powell, 897 F.2d 565, 568 (D.C. Cir.

1990)).

Here, Plaintiff seeks a permanent injunction prohibiting Defendants from infringing

Plaintiff’s trademark and copyrighted seminar materials. Plaintiff has alleged that, with

knowledge of Plaintiff’s rights and without permission, Defendants willfully infringed

Plaintiff’s rights by using the “Passport to Retirement” trademark and copyrighted seminar

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materials. However, as Plaintiff acknowledges in its brief: “Plaintiff has been unable to

determine whether or not Defendants are continuing their use of Plaintiff’s trademark and

copyrighted materials.” (Mem. Supp. Mot. Default J. at 3.) Plaintiff also has not shown any

threat of future infringement, absent the instances of past infringement alleged in the

Complaint. Indeed, based upon Plaintiff’s evidence, it appears Balser has abandoned his

business, “Balser Wealth Management.” Given the lack of showing of “a threat of continuing

violations,” MAI Sys. Corp., 991 F.2d at 520, the Court denies Plaintiff’s request for a

permanent injunction.

b. Damages

A “copyright owner is entitled to recover the actual damages suffered by him or her as

a result of the infringement.” 17 U.S.C. § 504(a); see also 15 U.S.C. § 1117(a) (for a willful

violation of a trademark, a plaintiff is entitled to recover, inter alia, “defendant’s profits” and

“any damages sustained by plaintiff”). As set out above, once a court determines default

judgment is appropriate, plaintiff has a “relatively lenient” burden to prove damages. Phillip

Morris USA, 219 F.R.D. at 498. This burden may be discharged by submitting declarations.

See id.

Here, Plaintiff seeks its profit on a licensing fee for a one-year license for the use of the

“Passport to Retirement” trademark and copyrighted materials ($1,650), the profit on the

average purchase of audience seminar materials ($900), and one-half of its “in-house costs to

try to settle the matter with Defendants” ($1,500). (Mem. Supp. Mot. Default J. at 4.) Plaintiff

adequately supports this request for $4,050 in damages with evidence. (Peterson Decl. ¶¶ 8-9.)

Therefore, the Court grants Plaintiff’s request for $4,050 in damages.

In its brief, Plaintiff quotes 15 U.S.C. § 1117(b) (providing for treble damages in

counterfeiting cases) and states that “[i]f the court determines that treble damages are

warranted, this [damages] amount increases to $12,150.00.” (Mem. Supp. Mot. Default J. at

4.) Plaintiff offers no further discussion of the issue of treble damages. To the extent this is

a request for treble damages, the Court denies it. Plaintiff fails to meet its burden of showing

that this is a counterfeiting case pursuant to 15 U.S.C. § 1114(1)(a) and § 1116(d).

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Specifically, the Complaint does not specifically allege that Defendants attempted to convince

consumers that its materials were in fact produced by Plaintiff. Cf. U.S. v. Petrosian, 126 F.3d

1232, 1233 (9th Cir. 1997) (“The term ‘counterfeit mark’ includes genuine trademarks, affixed

to packaging containing products not made by, but sold as products of the owner of the

registered trademark.”) (emphasis added). Instead, the Complaint alleges that Defendants

copied Plaintiff’s “Passport to Retirement” mark and “significant portions” of copyrighted text,

and attempted to sell the materials as if they were wholly produced by Defendants. (Compl.

¶ 13, 26.)

c. Attorney’s Fees and Costs

“In any civil action under this title, the court in its discretion may allow the recovery

of full costs. . . . [T]he court may also award a reasonable attorney’s fee to the prevailing party

as part of the costs.” 17 U.S.C. § 505. Here, Plaintiff seeks attorney’s fees of $8,798 and

additional costs of $444, for a total of $9,242. These amounts are adequately proven by the

Hoisington Declaration. (Hoisington Decl. at 2-4.) Given the allegations of willful

infringement and Balser’s refusal to meaningfully communicate with Plaintiff regarding this

lawsuit, the Court grants Plaintiff’s request for attorney’s fees and costs in the amount of

$9,242. See Philip Morris USA, Inc., 219 F.R.D. at 502 (granting attorney’s fees and costs

because “Plaintiff alleges Defendant’s conduct was willful and deliberate and that Defendant

refused to meaningfully communicate with Plaintiff regarding this lawsuit”). 

IV. Conclusion

Plaintiff’s Motion for Default Judgment (Doc. # 10) is GRANTED in part and DENIED

in part, as follows. Default Judgment shall be entered in favor of Plaintiff and against

Defendants. Plaintiff shall be awarded damages in the amount of $4,050, and attorney’s fees

and costs in the amount of $9,242. Plaintiff’s requests for injunctive relief and treble damages

are denied. 

DATED: April 10, 2007

WILLIAM Q. HAYES

United States District Judge

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