1 2 3 4 5 6 7 UNITED STATES DISTRICT COURT 8 NORTHERN DISTRICT OF CALIFORNIA 9 SILICON VALLEY TEXTILES, INC., 10 Case No. 23-cv-03988-RS Plaintiff, 11 v. ORDER GRANTING PLAINTIFF'S 12 MOTION FOR DEFAULT JUDGMENT SOFARI COLLECTIONS LTD., AND PERMANENT INJUNCTION 13 Defendant. 14

15 I. INTRODUCTION 16 This is a copyright infringement suit pursuant to

. Plaintiff seeks entry of 17 default judgment. Plaintiff Silicon Valley Textiles is a manufacturer and distributor of home goods 18 and clothing bearing its original and third-party licensed designs. Sofari Collections Ltd. is an 19 Ontario-based seller of similar goods, such as bedding and clothing, and DOES 1-10 are unknown 20 defendants that Plaintiff alleges acted in concert and as agents of each other to act unlawfully 21 (collectively, “Defendants”). Plaintiff moves for default judgment against Defendants, seeking a 22 permanent injunction, statutory damages ($150,000), attorney’s fees ($21,875), and costs ($402). 23 II. BACKGROUND 24 Plaintiff avers that Defendants infringed on its copyrighted design item #16112, 25 (“Copyrighted Design”) by manufacturing and offering for sale various goods that contain 26 “substantially, if not strikingly, similar” designs to the Copyrighted Design. Defendants are not 27 licensed to reproduce, prepare derivative works of, display copies of, or distribute the Copyrighted 1 purchase Plaintiff’s products depicting the Copyrighted Design. Defendants directed Plaintiff to 2 purchase the goods from one of their distributors, which, upon Plaintiff’s belief, Defendants did. 3 Plaintiff alleges that the court has jurisdiction over Defendants because they are “doing 4 business in California” by distributing the alleged infringing products in this state. Furthermore, 5 Plaintiff, a California resident, alleges Defendants infringe on Plaintiff’s rights. 6 This action arises under federal law of copyright infringement,

, so subject 7 matter jurisdiction is satisfied. See

(“The district courts shall have original 8 jurisdiction of any civil action arising under any Act of Congress relating to patents, plant variety 9 protection, copyrights and trademarks”). Further, Defendants were properly served with a 10 summons and complaint pursuant to Article 10 of the Hague Service Convention. 11 III. LEGAL STANDARD 12 A. Personal Jurisdiction 13 “When entry of judgment is sought against a party who has failed to plead or otherwise 14 defend, a district court has an affirmative duty to look into its jurisdiction over both the subject 15 matter and the parties.” In re Tuli,

(9th Cir. 1999). Without an evidentiary 16 hearing, “the plaintiff need only make a prima facie showing of jurisdiction.” Harris Rutsky & Co. 17 Ins. Servs. v. Bell & Clements Ltd.,

, 1129 (9th Cir. 2003). To determine personal 18 jurisdiction, a forum court may apply the long arm statute of the state in which it is located. 19 California’s long-arm statute, Cal. Code. Civ. Pro. § 410.10, permits jurisdiction “on any basis not 20 inconsistent with the Constitution of this state or of the United States.” Therefore, the exercise of 21 jurisdiction must comport with due process. A defendant who is not present in the forum may be 22 subject to jurisdiction only when he has certain “minimum contacts” with the forum state such that 23 maintenance of the suit “does not offend traditional notions of fair play and substantial justice.” 24 Int’l Shoe Co. v. Washington,

(1945). 25 The party seeking to invoke the jurisdiction of the federal court bears the burden of 26 establishing that jurisdiction exists. Data Disc, Inc. v. Systems Technology Assoc.,

, 27 1285 (9th Cir. 1977). Personal jurisdiction may arise from general or specific jurisdiction. The 1 standard for establishing general jurisdiction is high and requires that the defendant's contacts with 2 the forum state “approximate physical presence.” Tuazon v. R.J. Reynolds Tobacco Co.,

(9th Cir. 2006) (citing Bancroft & Masters, Inc. v. Augusta Nat'l Inc.,

, 4 1086 (9th Cir. 2000)). 5 If general jurisdiction is unavailable, the court may exercise jurisdiction over the defendant 6 based on specific jurisdiction. The Ninth Circuit has a three-step test to determine whether a court 7 may exercise specific personal jurisdiction: 8 (1) The non-resident defendant must purposefully direct his activities or consummate some transaction in the forum or resident thereof; or 9 perform some act by which he purposefully avails himself of the privilege of conducting activities in the forum, thereby invoking the 10 benefits and protections of its laws; (2) the claim must be one which arises out of or relates to the defendant's forum-related activities; and 11 (3) the exercise of jurisdiction must comport with fair play and substantial justice, i.e., it must be reasonable. 12 IO Group., Inc. v. Jordan,

(N.D. Cal. 2010) (citation 13 omitted). The first step is satisfied by either purposeful availment or purposeful direction, “two 14 distinct concepts.” Pebble Beach Co. v. Caddy,

(9th Cir. 2006). In cases 15 involving copyright infringement, purposeful direction is used. See Jordon,

995. Purposeful direction cases typically employ the “effects” test from Calder v. Jones, 465 U.S 17 783 (1984). See Yahoo! Inc. v. La Ligue Contre Le Racisme Et L'Antisemitisme,

, 18 1206 (9th Cir. 2006). The Calder test imposes three requirements: “the defendant allegedly [must] 19 have (1) committed an intentional act, (2) expressly aimed at the forum state, (3) causing harm that 20 the defendant knows is likely to be suffered in the forum state.”

(internal citation omitted). The 21 Ninth Circuit has held that willful infringement of a copyright owned by a Plaintiff, which has its 22 principal place of business in the forum state, is sufficient to satisfy the purposeful availment test. 23 See Columbia Pictures Television v. Krypton Broad. of Birmingham, Inc.,

, 289 (9th 24 Cir. 1997) (rev’d on other grounds); Jordon,

. 25 B. Default Judgment 26 Once procedural requirements are met, a district court's decision whether to enter a default 27 1 judgment following entry of default is discretionary. Aldabe v. Aldabe,

(9th 2 Cir. 1980); Fed. R. Civ. Pro. 55(b)(2). In exercising this discretion, courts consider: “(1) the 3 possibility of prejudice to the plaintiff, (2) the merits of plaintiff's substantive claim, (3) the 4 sufficiency of the complaint, (4) the sum of money at stake in the action; (5) the possibility of a 5 dispute concerning material facts; (6) whether the default was due to excusable neglect, and (7) the 6 strong policy underlying the Federal Rules of Civil Procedure favoring decisions on the merits.” 7 Eitel v. McCool,

(9th Cir. 1986). In considering the Eitel factors, all 8 factual allegations in the complaint are taken as true, except for those relating to damages. 9 TeleVideo Sys. Inc. v. Heidenthal,

(9th Cir. 1987). 10 IV. DISCUSSION 11 A. Specific Personal Jurisdiction is satisfied 12 Defendants do not have their primary place of business in California, nor are they 13 incorporated in the forum. Therefore, general personal jurisdiction may not be exercised over 14 Defendants. However, Plaintiff alleges that this court has specific personal jurisdiction as to the 15 Defendants because they “distribute the infringing goods in California” and Defendants 16 “knowingly infringed on SVT’s copyrights.” Since it is a California resident, Plaintiff argues this 17 amounts to Defendants “purposefully directing [their] activities towards California.” Mot. at 4. 18 Whether Plaintiff satisfied the Calder test requires a finding that Defendants willfully 19 infringed on resident Plaintiff’s Copyrighted Design. Plaintiff alleges Defendants did so by 20 committing an intentional unlawful act. To prove willful infringement, Plaintiff must show “(1) 21 that the defendant was actually aware of the infringing activity, or (2) that the defendant’s actions 22 were the result of ‘reckless disregard’ for, or ‘willful blindness’ to, the copyright holder's rights.” 23 Louis Vuitton Malletier, S.A. v. Akanoc Sols., Inc.,

(9th Cir. 2011) (internal 24 quotes omitted). As evidence of willful infringement, Plaintiff points to the fact that Defendant 25 Sofari Collections reached out to Plaintiff 2-3 years ago about where they could buy Plaintiff’s 26 products consisting of the Copyrighted Design. After Plaintiff directed Defendants to its 27 distributors, Plaintiff believes, but is not certain, that Defendants actually bought Plaintiff’s goods 1 from Plaintiff’s distributors. Taking these facts as true, Plaintiff has advanced a sufficient prima 2 facie case that Defendants actions were willful. 3 The second inquiry under the Ninth Circuit’s test is whether the claim arises from the 4 Defendant’s forum-related activities, i.e., “but for” Defendants’ forum-related conduct, Plaintiff 5 would not have been injured. See Myers v. Bennett Law Offs.,

(9th Cir. 6 2001). Plaintiff contends that Defendants market and sell their infringing products to resident 7 Plaintiff’s wholesale customers at lower costs and that the infringing goods are distributed in 8 California. The entire basis of Plaintiff’s injury is this forum-related conduct. Therefore, based on 9 Plaintiff’s contentions, this requirement is satisfied. See, e.g., Keeton v. Hustler Mag., Inc., 465

, 774-75 (1984). 11 The third requirement is whether the exercise of jurisdiction is reasonable. Even if the first 12 two steps are met, the exercise of jurisdiction must be reasonable to satisfy the Due Process 13 Clause, but there is a rebuttable presumption of reasonableness. See Ziegler v. Indian River Cnty., 14

, 474–75 (9th Cir. 1995); Columbia Pictures Television, 106 F.3d at 289 (citation 15 omitted). Defendants bear the burden of overcoming this presumption by “presenting a compelling 16 case that jurisdiction would be unreasonable.” Columbia Pictures Television, 106 F.3d at 289. 17 Defendants have not appeared to contest the reasonableness of jurisdiction here. See Gavrieli 18 Brands, LLC v. GmbH, No. 2:22-cv-06112-MCS-MRW,

(C.D. Cal. Sept. 19, 19 2023). Therefore, Plaintiff has made a prima facie showing that specific personal jurisdiction over 20 the Defendants is proper. 21 B. Default Judgment 22 Plaintiff seeks entry of default judgment against Defendants, a permanent injunction, and 23 fees and damages. The seven Eitel factors lean towards granting Plaintiff’s motion. 24 The first Eitel factor weighs in favor of entry of default judgment. The Copyrighted 25 Design is one of Plaintiff’s more popular designs and appears in a wide array of their goods. 26 Plaintiff would be left “without other recourse for recovery” for which it is entitled if Defendants 27 1 are permitted to continue infringing and default judgment is not granted. Philip Morris USA, Inc. 2 v. Castworld Prods. Inc.,

(C.D. Cal. 2003). 3 The second and third Eitel factors are often analyzed together because they require that 4 plaintiff’s assertions “state a claim on which the [plaintiff] may recover.” PepsiCo, Inc. v. Cal. 5 Sec. Cans,

(C.D. Cal. 2002) (internal citation omitted). These factors 6 also weigh in favor of default judgment. To state a claim for copyright infringement pursuant to 7

, Plaintiff must plausibly show “(1) ownership of a valid copyright; and (2) that 8 the defendant violated the copyright owner's exclusive rights under the Copyright Act.” Ellison v. 9 Robertson,

(9th Cir. 2004). Plaintiff has sufficiently shown ownership of the 10 Copyrighted Design, also known as the 16112 Design, evidenced in U.S. Copyright Registration 11 Nos. VA0002251839 and VA0002305079. See also Dkt. 11-1 (providing the Certificate of 12 Registration for the 16112, Registration No. VA0002251839). A copyright owner’s exclusive 13 rights include the right to reproduce the copyrighted works in copies, prepare derivative works, or 14 distribute copies by sale. Plaintiff here has provided examples of Defendants’ goods that display 15 the Copyrighted Design in violation of Plaintiff’s exclusive rights. Plaintiff also alleges that 16 Defendants have unlawfully distributed these goods to Plaintiff’s customers at lower prices, 17 undercutting Plaintiff’s sales. Therefore, Plaintiff has sufficiently plead a meritorious claim for 18 relief. 19 The fourth Eitel factor also weighs in favor of granting entry of default judgment. This 20 factor “pertains to the amount of money at stake in relation to the seriousness of [d]efendant's 21 conduct.” Elias v. Allure SEO, No. 20-CV-06031-RS,

, at *2 (N.D. Cal. July 22 14, 2022) (citation omitted). Plaintiff has sufficiently pled that Defendants willfully infringed on 23 its copyright. The statutory maximum for willful copyright infringement is $150,000, which is 24 what Plaintiff seeks, and after having provided a supplemental brief in support of its argument, 25 Plaintiff has sufficiently shown why it should be awarded this amount. This is discussed further 26 below. See infra Section IV.C.2.a. 27 1 The fifth factor concerns the possibility of a dispute pertaining to material facts. This 2 factor weighs in favor of Plaintiff. First, Plaintiff has provided evidence of ownership of the 3 Copyrighted Design via the Certification of Registration. Second, Plaintiff has proffered evidence 4 that Defendants knew of Plaintiff’s design because they approached Plaintiff several years ago to 5 inquire about their goods consisting of the Copyrighted Design, and, on Plaintiff’s belief, 6 subsequently bought the goods. Therefore, Plaintiff has sufficiently shown the infringement is 7 willful. Third, Plaintiff has submitted two examples of goods sold by Defendants, bathmats and 8 sweatshirts, that feature Plaintiff’s Copyrighted Design. There may be additional facts pertaining 9 to how many infringing goods Defendants sold, but Plaintiff has provided enough facts that, taken 10 as true, indisputably establish a case for willful copyright infringement. 11 The sixth factor also weighs in favor of Plaintiff. This factor questions whether 12 Defendants default is due to some excusable neglect. While Defendants are based in Ontario, 13 Canada, they were properly served pursuant to Article 10 of the Hague Service Convention. They 14 have not appeared or otherwise informed Plaintiff or the court of why their default occurred. 15 Furthermore, Defendants acknowledged receipt of the Complaint, but failed to respond to 16 Plaintiff counsel’s subsequent emails. 17 The seventh and last Eitel factor also weighs in favor of entry of default judgment. 18 Although the Federal Rules of Civil Procedure have a strong policy favoring decisions on the 19 merits, Defendants have failed to appear or to answer Plaintiff’s Complaint. According to 20 Plaintiff’s attorney, they have also failed to respond to Plaintiff counsel’s principal settlement 21 terms via email. This makes judgment on the merits impractical. Therefore, despite the Federal 22 Rules of Civil Procedure’s strong policy favoring such decisions, this factor weighs in favor entry 23 of default judgment. 24 C. Remedies 25 Plaintiff seeks a permanent injunction against Defendants. In addition, Plaintiff seeks 26 $150,000 in statutory damages, $21,875 in attorneys’ fees, and $402 in costs associated with court 27 filing fees. 1 1. Permanent Injunction 2 Plaintiff argues that Defendants should be permanently enjoined from further infringing on 3 Plaintiff’s Copyrighted Design. The decision to grant permanent injunctive relief for Plaintiffs is 4 discretionary. There is a four-factor test a plaintiff must demonstrate to be awarded a permanent 5 injunction: 6 (1) that it has suffered an irreparable injury; (2) that remedies available at law are inadequate to compensate for that injury; (3) that 7 considering the balance of hardships between the plaintiff and defendant, a remedy in equity is warranted; and (4) that the public 8 interest would not be disserved by a permanent injunction. 9 eBay Inc. v. MercExchange, L.L.C.,

(2006). Plaintiff argues it faces 10 irreparable injury due to the continued threat of Defendants’ infringement and its inability to 11 control the circumstances in which consumers can view the design and ensure the quality of the 12 goods on which the Copyrighted Design appears. Plaintiff has sufficiently addressed the first 13 factor. Next, Plaintiff argues that legal remedies are inadequate to address the injury Plaintiff 14 suffers. Specifically, Defendants’ infringement harms Plaintiff’s goodwill, brand, reputation, and 15 market share, some of which are unquantifiable and thus incapable of being addressed by a legal 16 remedy. Further, Plaintiff correctly contends that the balance of hardships tips in its favor. 17 Defendants cannot “claim any legitimate hardships as a result of being enjoined from committing 18 unlawful activities” whereas Plaintiff would suffer significant hardships if Defendants were 19 permitted to continue unlawfully infringing on their Copyrighted Design. Apple, Inc. v. Psystar 20 Corp.,

(N.D. Cal. 2009). Finally, Plaintiff insists that injunctive relief 21 serves the public interest. The Copyright Act protects the labor of creators. Indeed, “the public 22 receives a benefit when the legitimate rights of copyright holders are vindicated.”

Enjoining 23 Defendants from impermissibly infringing on Plaintiff’s exclusive rights would, therefore, 24 appropriately serve the public interest aims of the Copyright Act. Based on these factors, Plaintiff 25 is entitled to a permanent injunction. 26 2. Damages 27 a. Statutory damages 1 Plaintiff is entitled to statutory damages, and is seeking $150,000, the statutory maximum 2 for willful copyright infringement. It has provided a supplemental brief with additional facts to 3 guide the analysis for how much statutory damages must be awarded. “Statutory damages are 4 particularly appropriate in a case, such as this one in which [the] defendant has failed to mount 5 any defense or to participate in discovery, thereby increasing the difficulty of ascertaining 6 plaintiff's actual damages.” Jackson v. Sturkie,

(N.D. Cal. 2003). 7 District Courts in the Ninth Circuit use four factors to guide a statutory damages analysis. See 8 Getty Images (US), Inc. v. Virtual Clinics, No. C13–0626JLR,

at *7 (W.D. 9 Wash. Jan. 31, 2014); Controversy Music v. Shiferaw, No. C03–5254 MJJ,

10 (N.D. Cal. July 7, 2003). The four factors are “(1) the infringers’ profits and the expenses they 11 saved because of the infringement; (2) the plaintiff’s lost revenues; (3) the strong public interest 12 in ensuring the integrity of copyright laws; and (4) whether the infringer acted willfully.” Getty 13 Images,

at *7. The first two factors are similar and often analyzed together.

14 Here, the first two factors suggest an award for the maximum statutory damages would be 15 appropriate. While Plaintiff cannot be expected to provide evidence of Defendants’ profits, and 16 indeed Defendants have failed to provide Plaintiff with sales information to calculate its profits 17 resulting from its unlawful conduct, Plaintiff has provided additional facts to support its 18 argument. Plaintiff asserts that it has applied the Copyrighted Design to over one hundred 19 different SKUs, ranging from “blankets, bedding, bathroom sets, kitchen accessories, furniture 20 and home goods, school supplies, wallets/bags/luggage, automotive accessories, pet accessories, 21 toys, and a clothing line.” Singh Decl. at ¶ 3. The Copyrighted Design is the primary design 22 comprising these products, as evidenced by Plaintiff’s catalog. Plaintiff further provides 23 information that it has lost over $100,000 in revenue from Defendants infringement of the 24 Copyrighted Design as to the sale of bathmats alone. In 2022, the year the infringing bathmats 25 entered into the marketplace, Plaintiff asserts that its bathmat sales were half of those in 2021, 26 with a further 12% decrease in 2023. The difference in costs between Plaintiff’s goods with the 27 Copyrighted Design and Defendants’ goods also show that Plaintiff will continue to experience 1 significant lost revenues should Defendants’ infringement be allowed to continue. For example, 2 Plaintiff sells bathmats for $18-$20 each, whereas Defendants sell bathmats for $12 each, and 3 Plaintiff’s hoodies bearing the Copyrighted Design cost $20-24 each while Defendants’ infringing 4 hoodies cost $15 apiece. The first two factors thus weigh in favor of awarding Plaintiff $150,000 5 in statutory damages. 6 As to the third factor, there is a strong public interest in ensuring the integrity of copyright 7 laws, and Plaintiff sufficiently shows that public interest will not be advanced with a lower 8 damages award. This factor considers the severity or egregiousness of the Defendants’ conduct. 9 See Curtis v. Illumination Arts, Inc.,

(W.D. Wash. 2014). After being served 10 the complaint, Defendant initially corresponded with Plaintiff’s counsel regarding settlement, 11 before going silent and continuing to expand its range of products bearing the Copyrighted 12 Design. In early November of 2023, parties attended a trade show, the IGES Smoky Mountain 13 Gift Show in Tennessee, and Defendant exhibited various infringing goods at its booth. Plaintiff 14 was also present at the show and exhibited its goods. Therefore, Plaintiff has sufficiently alleged 15 the infringement was willful, and Defendants’ behavior is so egregious as to justify the statutory 16 maximum for willful copyright infringement damages. This would advance the public interest in 17 ensuring the integrity of copyright laws. 18 The final factor considers whether the infringer acted willfully. Here, as discussed above 19 supra Section IV.A., Plaintiff has sufficiently demonstrated a prima facie case of willful 20 copyright infringement. Based on these four factors, Plaintiff is entitled to a statutory damage 21 award of $150,000. 22 b. Attorneys’ fees and costs 23 The Copyright Act authorizes award of “a reasonable attorney’s fee to the prevailing 24 party.”

. This award is discretionary and must “seek to promote the Copyright 25 Act’s objectives.” Hist. Rsch. v. Cabral,

, 378-79 (9th Cir. 1996). There are five 26 factors available to guide the attorneys’ fees analysis: “(1) the degree of success obtained; (2) 27 whether the lawsuit was frivolous; (3) motivation; (4) objective legal or factual unreasonableness; 1 and (5) the need to advance the considerations of compensation and deterrence.” Curtis,

Supp. 3d at 1220 (citation omitted). Here, these factors weigh in favor of granting attorneys’ fees. 3 Calculation of reasonable attorneys’ fees requires a lodestar analysis based on “the 4 number of hours reasonably expended on the litigation multiplied by a reasonable hourly rate.” 5 Jordan v. Multnomah Cnty.,

, 1262 (9th Cir. 1987). Plaintiff’s requested award for 6 attorneys’ fees is reasonable. Plaintiff seeks $21,875 in attorneys’ fees and provides an accounting 7 for support. This figure represents the hourly rates of Mr. Mizrahi, the senior attorney, Ms. 8 Burdette, the senior associate, and Ms. Yamada, the litigation paralegal, all working on this 9 matter. Plaintiff’s counsel has provided sufficient evidence of why their hourly billing rates are 10 $550, $450, and $300, respectively. Furthermore, counsel provided a table outlining the number 11 of hours each of them expended on this matter. Counsel asserts expending 41.8 billing hours. 12 While the billing sheet, Exhibit 2, lacks specific detail to support their assertion, this amount of 13 time seems reasonable based on the substance of work involved in this matter. Therefore, based 14 on the length of the complaint and the various filings by Plaintiff, it is reasonable that counsel 15 expended 41.8 hours on this matter, so an award of $21,875 for attorneys’ fees is warranted. 16 Plaintiff further seeks award of fees associated with litigation costs in the amount of $402 17 comprised of the filing fee. This is reasonable and is thus granted. 18 V. CONCLUSION 19 Plaintiff’s motion for default judgment is granted. Defendants and their officers, members, 20 directors, agents, servants, employees, successors, licensees, representatives, successors, assigns, 21 and all persons acting in concert or participation with them are enjoined from unlawfully 22 infringing on Plaintiff’s exclusive rights. They are restricted from manufacturing, importing, exporting, distributing, displaying, advertising, selling, or offering to sell Plaintiff’s Copyrighted 23 Design or otherwise infringing on Plaintiff’s exclusive rights under the Copyright Act. 24 Furthermore, Plaintiff is entitled an award of $150,000 statutory damages, $21,875 in attorney’s 25 fees and may also recover $402 in costs. 26

27 1 IT IS SO ORDERED. 2 3 Dated: November 28, 2023. 4 RICHARD SEEBORG 5 Chief United States District Judge 6 7 8 9 10 11 a 12

13 14

15 16 € = 17

Z 18 19 20 21 22 23 24 25 26 27 ORDER GRANTING DEFAULT JUDGMENT CASE No. 23-cv-03988-RS