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Coach Services, Inc. v. Kya International

June 10, 2010

COACH SERVICES, INC., PLAINTIFF,
v.
KYA INTERNATIONAL, INC.; QUI Z YU;: AND PU SHENG A/K/A ALAN SHENG, DEFENDANTS.



The opinion of the court was delivered by: Honorable Richard M. Berman, U.S.D.J.

REPORT AND RECOMMENDATION

This is an action for trademark counterfeiting and infringement and unfair competition brought by Coach Services, Inc. ("Coach") against K Ya International, Inc. ("K Ya International") and Pu Sheng a/k/a Alan Sheng.*fn1 Coach contends that by selling piratical copies of handbags and leather goods, the defendants violated 15 U.S.C. §§ 1114 and 1125(a) of the Lanham Trademark Act of 1946 (the "Lanham Act") as well as the common law of the State of New York.

The defendants failed to answer the Amended Complaint, and on January 4, 2010, the Honorable Richard M. Berman, U.S.D.J., entered a default judgment and referred the case to me for a hearing on damages. An inquest was held on March 15, 2010, and although the defendants were notified of the hearing, no one appeared on their behalf.*fn2 The following findings are therefore based on the evidence provided by the plaintiff.

Background

Coach manufactures, markets, and sells fine leather and mixed-material products including handbags, wallets, briefcases, footwear, apparel, and accessories. (First Amended Complaint ("Am. Compl."), ¶ 7). The company owns the trademark "COACH" in addition to several related trademarks, all of which frequently appear on the company's goods. (Am. Compl., ¶¶ 8-13). The plaintiff's trademarks have achieved a great deal of consumer recognition. (Am. Compl., ¶ 9).

KYa International is a company of unknown origin with offices and places of business in Brooklyn and Manhattan, and Mr. Sheng is the active force behind the company. (Am. Compl., ¶¶ 5-6). In March 2009, investigators for Coach obtained handbags from the retail store of K Ya International, including some bearing counterfeit reproductions of three Coach trademarks.*fn3 (Am. Compl., ¶¶ 15, 19; Photographs ("Photos"), attached as Exh. A to Am. Compl.; Plaintiff's Proposed Findings of Fact and Conclusions of Law ("Findings") at 2).

Discussion

A. Jurisdiction

This court has subject matter jurisdiction over the plaintiff's trademark claim pursuant to 28 U.S.C. §§ 1331 and 1338(a) as well as 15 U.S.C. § 1121(a). Further, the Court has supplemental jurisdiction over the state law claims pursuant to 28 U.S.C. § 1367(a). There is personal jurisdiction over both defendants because they transacted business in New York in connection with the matter at issue. (Am. Compl., ¶¶ 5-6). N.Y. Civ. Prac. Law & R. § 302(a)(1).

B. Liability

Following a default, all factual allegations of the complaint, except those relating to damages, must be accepted as true. Cotton v. Slone, 4 F.3d 176, 181 (2d Cir. 1993); Gucci America, Inc. v. MyReplicaHandbag.com, No. 07 Civ. 2438, 2008 WL 512789, at *1 (S.D.N.Y. Feb. 26, 2008) (citing Au Bon Pain Corp. v. Artect, Inc., 653 F.2d 61, 65 (2d Cir. 1981)); Robinson v. Sanctuary Record Groups, Ltd., 542 F. Supp. 2d 284, 289 (S.D.N.Y. 2008).

In connection with this inquest, the plaintiff has requested damages only for trademark infringements in violation of the Lanham Act, and therefore liability need only be considered with respect to that claim.*fn4 There are two elements necessary to establish trademark infringement under the Lanham Act: (1) the plaintiff's ownership of a valid trademark and (2) the likelihood of confusion from the defendants' use of that trademark without the plaintiff's permission. Chanel, Inc. v. Louis, No. 06 CV 5924, 2009 WL 4639674, at *10 (E.D.N.Y. Dec. 7, 2009). Here, the allegations in the Amended Complaint clearly establish a valid claim of infringement. The plaintiff has demonstrated ownership of the three marks at issue (Am. Compl., ¶ 8) and has not authorized the defendants to use these marks. (Am. Compl., ¶ 21). Nevertheless, the defendants have produced and sold materials bearing these trademarked designs. (Am. Compl., ¶ 15; Photos). And, because of the recognition of the Coach as a brand, there is likely to be confusion between its products and the defendants'. (Am. Compl., ¶ 14).

Furthermore, in addition to K Ya International, Mr. Sheng may be held liable for the infringement. An individual corporate officer or employee is accountable for trademark infringement under the Lanham Act if he "actively and knowingly" caused the infringement. Fugazy International Travel Group, Inc. v. Stargazer, Ltd., No. 02 Civ. 3373, 2003 WL 115220, at *2 (S.D.N.Y. Jan. 10, 2003); Mattel, Inc. v. Internet Dimensions Inc., No. 99 Civ. 10066, 2000 WL 973745, at *9; see also Lauratex Textile Corp. v. Allton Knitting Mills Inc., 517 F. Supp. 900, 904 (S.D.N.Y. 1981); 15 U.S.C. ยง 1114(1). Here, Mr. Sheng was the "conscious, dominant and ...


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