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Silhouette International Schmied AG v. Chakhbazian

October 4, 2004

SILHOUETTE INTERNATIONAL SCHMIED AG & SILHOUETTE OPTICAL LTD., PLAINTIFFS,
v.
VACHIK CHAKHBAZIAN D/B/A VERONA EYEWEAR, ET AL., DEFENDANTS.



The opinion of the court was delivered by: Andrew J. Peck, United States Chief Magistrate Judge

REPORT AND RECOMMENDATION

To the Honorable Richard J. Holwell, United States District Judge:

On August 24, 2004, Judge Holwell granted a default judgment for plaintiffs Silhouette International Schmied and Silhouette Optical Ltd. (collectively,"Silhouette") against all defendants, and referred the matter to me for an inquest as to damages, attorneys' fees and costs. (Dkt. No. 20: 8/24/04 Default Judgment.) I directed Silhouette to provide proof of its inquest damages by September 22, 2004 (Dkt. Nos. 21, 23), which it did, and for defendants to file opposition papers by September 29, 2004, which defendants did not.

For the reasons stated below, the Court should award plaintiff Silhouette statutory damages of $250,000, attorneys' fees of $49,596.50 and costs of $3,957.80, for a total of $303,554.30.

FACTS

"Where, as here,'the court determines that defendant is in default, the factual allegations of the complaint, except those relating to the amount of damages, will be taken as true.'" Chen v. Jenna Lane, Inc., 30 F. Supp. 2d 622, 623 (S.D.N.Y. 1998) (Carter, D.J. & Peck, M.J.) (quoting C. Wright, A. Miller & M. Kane, Federal Practice & Procedure: Civil 3d § 2688 at 58-59 (3d ed. 1998)).

The Amended Complaint (Dkt. No. 11) asserts that defendants have infringed on plaintiffs' Silhouette trademarks for eyewear and related products by advertising and selling counterfeits of the Silhouette mark on Ebay, on the internet. The amended complaint asserts claims for federal trademark infringement and counterfeiting (Am. Compl. ¶¶ 40-51), false advertising (id. ¶¶ 52-57), trademark dilution (id. ¶¶ 58-65), and various state law claims (id. ¶¶ 66-119).

Defendants retained but then dismissed their counsel and did not provide any discovery to Silhouette. (Dkt. No. 25: Hanlon 9/22/04 Aff. ¶ 7.)

In granting the default judgment, Judge Holwell found this to be an"exceptional case," thus justifying attorneys' fees. (Dkt. No. 20: 8/23/04 Default Judgment.) Indeed, the amended complaint asserts, and the Hanlon Affidavit further demonstrates, that defendants' infringement has been and is willful. (Am. Compl. ¶¶ 27-33, 42, 48, 54, 62, 68, 74, 81, 87, 94, 100; Hanlon 9/24/04 Aff. ¶¶ 14-17 & Exs. B-C.)

ANALYSIS

The Second Circuit has approved the holding of an inquest by affidavit, without an in-person court hearing,"'as long as [the Court has] ensured that there was a basis for the damages specified in the default judgment.'" Transatlantic Marine Claims Agency, Inc. v. Ace Shipping Corp., 109 F.3d 105, 111 (2d Cir. 1997) (quoting Fustok v. ContiCommodity Serv., Inc., 873 F.2d 38, 40 (2d Cir. 1989)).

Because defendants have failed to provide any discovery, plaintiff Silhouette is unable to prove actual damages, and so relies on statutory damages pursuant to 15 U.S.C. § 1117(c). (Dkt. No. 26: Silhouette Br. at 3.) That section provides:

(c) Statutory damages for use of counterfeit marks

In a case involving the use of a counterfeit mark (as defined in section 1116(d) of this title) in connection with the sale, offering for sale, or distribution of goods or services, the plaintiff may elect, at any time before final judgment is rendered by the trial court, to recover, instead of actual damages and profits under subsection (a) of this section, an award of statutory damages for any such use ...


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