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The American Society for Prevention of Cruelty to Animals v. J.C. Clothing Drive, Inc.

United States District Court, E.D. New York

January 7, 2020

THE AMERICAN SOCIETY FOR THE PREVENTION OF CRUELTY TO ANIMALS, Plaintiff,
v.
J.C. CLOTHING DRIVE, INC., Defendant.

          CORRECTED MEMORANDUM DECISION AND ORDER

          BRIAN M. COGAN U.S.D.J

         Plaintiff The American Society for the Prevention of Cruelty to Animals (“ASPCA”) brings this trademark infringement action against a company that is essentially a former licensee that has refused to stop using ASPCA's trademarks despite the expiration of the license. It is before the Court on ASPCA's motion for a default judgment pursuant to Federal Rule of Civil Procedure 55(b), the Clerk having noted defendant's default under Rule 55(a). The motion is granted.

         BACKGROUND

         ASPCA has a program called the ASPCA Business Ambassador Program. Participants in the Ambassador Program help raise funds and awareness for ASPCA or provide other support to its mission. In return, the participant is granted permission to use both ASPCA's trademarks and a special ASPCA Business Ambassadors badge (both of which the participant apparently feels will either attract consumers to it or it will help the participant's own mission by consumers' associating ASPCA with the participant). Under the terms and conditions of the Ambassadors Program, each authorized participant is entitled to use ASPCA's intellectual property for a one-year period. That term can be renewed annually subject to the approval of ASPCA.

         ASPCA has been using its trademarks in commerce since 1866 on various products and services. One of the marks, Reg. 1, 891, 019, issued by the U.S. Patent and Trademark Office on April 25, 1995, covers “THE AMERICAN SOCIETY FOR THE PREVENTION OF CRUELTY TO ANIMALS” as applied to every variety of printed matter of which one could conceive, expressly including “charitable fundraising, ” as well as clothing and services involving animal care and protection. Another mark, Reg. 1, 934, 584, issued November 14, 1995, covers “ASPCA”. It has the same scope as the '019 trademark.

         In June 2016, defendant J.C. Clothing Drive, Inc. (“JCCD”), a New York corporation located in Queens, was admitted into the Ambassador's Program for the one-year period; the term therefore ended in June 2017. JCCD did not seek to re-register for further participation and thus its right to use ASPCA's trademarks lapsed at that time.

         Nevertheless, JCCD continued to use ASPCA's two trademarks. It distributed flyers, a copy of one of which is annexed to the complaint, showing the trademarks in its solicitation of household items, clothing, toys, appliances, and electronics. The flyer stated that bags containing donations “must clearly be marked ‘ASPCA'” and contained advice at the bottom stating:

The American Society for the Prevention of Cruelty to Animals® (ASPCA®) was the first humane society to be established in North America and is, today, one of the largest in the world. JC Clothing Drive is proud to support he ASPCA® and its mission to save lives. To learn more, visit: aspca.org.

         Alongside this legend, the flyer displayed the ASPCA Ambassador Program's symbol. It also featured prominently a picture of cute cats and dogs (with which JCCD has no apparent association other than through its association with ASPCA). However, JCCD never turned over any donations to ASPCA.

         ASPCA sent multiple cease and desist letters to JCCD, both before and after the filing of this action, to no avail. JCCD has continued to distribute flyers bearing the ASPCA marks in connection with clothing drives. ASPCA received a number of communications from concerned citizens regarding JCCD's use of the ASPCA's trademarks. In 2018, one person reported receiving flyers approximately every two weeks. Additional reports from others came in throughout the spring and summer of 2019.

         The complaint asserts five claims for relief. The first two are under the Lanham Act § 32 (15 U.S.C. § 1114(1)) and § 43(a) (15 U.S.C. § 1125(a)(1)), respectively. The third and fifth claims are under the corresponding provisions of state statutory law (N.Y. Bus. Corp. L. § 349) and common law (unfair competition), respectively.[1] The fourth is for trademark dilution under 15 U.S.C. § 1125(c).

         DISCUSSION

         In light of JCCD's default in this case, all of the well-pleaded allegations in plaintiff's third-party complaint pertaining to liability are deemed true. See Greyhound Exhibitgroup, Inc. v. E.L.U.L. Realty Corp., 973 F.2d 155, 159 (2d Cir. 1992). However, “[e]ven when a default judgment is warranted based on a party's failure to defend, the allegations in the complaint with respect to the amount of the damages are not deemed true.” Credit Lyonnais Sec. (USA), Inc. v. Alcantara, 183 F.3d 151, 155 (2d Cir. 1999). A court may conduct hearings to determine the amount of damages, but an inquest by paper record - rather than an in-person court hearing - is appropriate when the court relies on affidavits and other documentary evidence and the amount is liquidated. See Transatlantic Marine Claims Agency, Inc. v. Ace Shipping Corp., Div. of Ace Young Inc., 109 F.3d 105 (2d Cir. 1997). In addition, “[t]he Court may issue an injunction on a motion for default judgment upon a showing by the moving ...


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