Hollander Glass Tex., Inc. v. Rosen-Paramount Glass Co.
Hollander Glass Tex., Inc. v. Rosen-Paramount Glass Co.
Opinion of the Court
Plaintiff Hollander Glass Texas, Inc. ("Hollander") brought this action alleging federal copyright infringement, trademark infringement and unfair competition under the Lanham Act, and trademark infringement under New York statutory and common law against defendants Rosen Paramount Glass & Mirror, LLC ("RPGM") and David Gutman (collectively, the "Gutman defendants"), and Rosen-Paramount Glass Co., Inc. and Stanley Rosen (collectively, the "Rosen defendants"). The Gutman defendants have defaulted and now Hollander seeks a judgment for damages as well as attorneys' fees and costs.
I. BACKGROUND
On March 23, 2017, Hollander filed a complaint against the Rosen defendants. See Complaint, filed Mar. 23, 2017 (Docket # 1). Following an appearance by counsel for the Rosen defendants, Hollander learned that Rosen had sold its business to the Gutman defendants in November 2016. See Affidavit of Stanley Rosen, dated May 30, 2017 (annexed as Ex. 1 to Declaration of Stephanie J. Kaufman, filed May 31, 2017 (Docket # 26) ), ¶ 9. Accordingly, Hollander amended its complaint to name the Gutman defendants. See Amended Complaint, filed June 22, 2017 (Docket # 27) ("Am. Compl."). RPGM was served on July 3, 2017, see Affidavit of Service, filed July 20, 2017 (Docket # 33), and David Gutman was served on July 6, 2017, see Affidavit of Service, filed July 20, 2017 (Docket # 34). The amended complaint alleged infringement of a registered trademark and a registered copyright of Hollander's online *557content. See Am. Compl. ¶¶ 35, 37, 38, 42. The Gutman defendants failed to respond and the Clerk issued a certificate of default on August 3, 2017. See Clerk's Certificate of Default, filed Aug. 3, 2017 (Docket # 40).
Several months later, the Rosen defendants were dismissed from the case in accordance with a settlement they entered into with Hollander. See Stipulation of Dismissal, filed Jan. 10, 2018 (Docket # 67); Letter from Stephanie J. Kaufman, dated Nov. 7, 2017 (Docket # 63) ("Kaufman letter").
On August 24, 2017, District Judge Vernon S. Broderick issued an Order requiring the Gutman defendants to show cause why a default judgment should not be entered against them. Order to Show Cause for Default Judgment Against Defendants Rosen-Paramount Glass & Mirror, LLC, and David Gutman, filed Aug. 24, 2017 (Docket # 41). On September 19, 2017, Judge Broderick ordered that a default judgment be entered against the Gutman defendants in an amount to be determined after inquest, and decreed that the Gutman defendants be permanently enjoined from further infringement of Hollander's trademark and copyright as alleged in the amended complaint. See Default Judgment Order, filed Sept. 19, 2017 (Docket # 46) ("Default Judgment Order").
Shortly thereafter, Hollander filed the instant motion for a default judgment against the Gutman defendants seeking damages in the amount of $150,000, together with attorneys' fees in the amount of $54,102.25 and costs in the amount of $1663.42, for a total of $205,765.67. Pl. Mem. at 8, 10, 11. On October 20, 2017, Judge Broderick referred the motion to the undersigned for an inquest as to damages. See Amended Order Referring Case to Magistrate Judge, filed Oct. 20, 2017 (Docket # 59). On October 23, 2017, this Court directed the Gutman defendants to respond to Hollander's motion for default judgment by December 15, 2017. Order, filed Oct. 23, 2017 (Docket # 60) ("October 23 Order"). They never filed a response.
After reviewing Hollander's submission, the Court requested further explanation for Hollander's application for attorneys' fees and costs. See Order, filed Feb. 15, 2018 (Docket # 68). Hollander submitted further explanation on March 1, 2018. See Rollings 2d Decl.
Because the default order entered in this case establishes the Gutman defendants' liability, see Bambu Sales, Inc. v. Ozak Trading Inc.,
II. FINDINGS OF FACT AND CONCLUSIONS OF LAW
In light of the Gutman defendants' default, Hollander's properly pleaded allegations in the complaint, except those related to damages, are accepted as true. See, e.g., City of New York v. Mickalis Pawn Shop, LLC,
A. Facts Relating to Liability
Hollander is a Texas corporation with its principal place of business in Houston, Texas. Am. Compl. ¶ 10. Defendant RPGM is a New York limited liability corporation with its principal place of business in the Bronx, New York. Id. ¶ 12. Defendant Gutman is an individual residing in New York who serves as president or chief executive officer of RPGM. Id. ¶ 14.
Hollander is the owner and user of a federally registered trademark-"WINTERLAKE, (the 'Trademark')"-"for use in connection with decorative glass not for building purposes, namely, pattern glass." Id. ¶ 22. It is also the owner and operator of a website that displays federally registered copyrighted text, photographs, artwork, and other original content showing examples of Hollander's "Clear Patterned Architectural Glass" products. Id. ¶ 29 (the "Copyright"). Hollander is a "well-known and established manufacturer and distributor of architectural window glass and other speciality glass products and accessories." Id. ¶ 17. It has sold products bearing the Trademark since at least October 2007 and displayed its Copyright since January 2011. Id. ¶¶ 23, 31. The Trademark is "extensive[ly] use[d] and promot[ed]," and with help from "unsolicited media coverage and notoriety [sic]," the Trademark "has become distinctive and prominent." Id. ¶ 26. Consumers associate the Trademark with Hollander. Id. ¶ 27.
The Gutman defendants purchased the domain name "rosenparamountglass.com" in November 2016 from the Rosen defendants, who had owned and operated the website since 2003. Id. ¶¶ 33-34. The website displays "an exact duplicate copy," id. ¶ 38, of Hollander's Copyright "without license or authority from Hollander" and did so both before and after November 2016, id. ¶¶ 35-36. The website also displays, "without Hollander's authority, permission, consent, [or] license," the Trademark. Id. ¶ 42. The Gutman defendants have used the Copyright to "advertise and promote [their] products and related services and accessories" and thereby "generate revenue through the marketing, advertising, and sale of [their] goods and services." Id. ¶¶ 40-41. The Gutman defendants do not "actively or currently sell Hollander glass products," and they do not "maintain[ ] an inventory of Hollander glass products available for sale." Id. ¶ 43. By using the Trademark, the Gutman defendants "mislead[ ] consumers into believing that [the Gutman defendants] sell[ ] Hollander glass products, or that [the Gutman defendants] otherwise are or have been affiliated with or sponsored by Hollander." Id. ¶ 44. The Gutman defendants are "aware of Hollander and Hollander's use of its Trademark in connection with Hollander's goods and services," id. ¶ 47, and "adopted and commenced use of the [Trademark] with the intent to deceive consumers and to cause confusion among purchasers for the purpose of benefitting from the goodwill and public recognition associated with Hollander's *559Trademark," id. ¶ 49. The defendants "ha[ve] refused to remove either the [Trademark] or [the Copyright] from [their] website." Id. ¶ 58.
B. Claimed Damages
Hollander requests damages for willful copyright infringement in the amount of $150,000 under
1. Copyright Damages
Hollander seeks statutory damages under
Section 504(c) of the Copyright Act permits a court to award statutory damages "with respect to any one work ... in a sum of not less than $750 or more than $30,000 as the court considers just."
Where a defendant has defaulted, a complaint's allegations of willfulness may be taken as true. See Rovio Entm't, Ltd. v. Allstar Vending, Inc.,
In calculating the appropriate statutory damages award, courts should consider:
(1) the infringer's state of mind; (2) the expenses saved, and profits earned, by the infringer; (3) the revenue lost by the copyright holder; (4) the deterrent effect on the infringer and third parties; (5) the infringer's cooperation in providing evidence concerning the value of the infringing material; and (6) the conduct and attitude of the parties.
Bryant v. Media Right Prods.,
While it is established that defendants willfully infringed Hollander's Copyright, Default Judgment Order ¶ 3, and we recognize that the defendants' default and subsequence silence shows a lack of cooperation in determining damages, several factors weigh against granting high statutory damages. Notably, Hollander has failed to show that use of the Copyright saved the Gutman defendants revenue or earned the Gutman defendants significant profits. In one case defendants cite in support of their requested damages, Hounddog Productions, L.L.C. v. Empire Film Group, Inc.,
Additionally, Hollander has not shown that it lost revenue as a result of the infringement and courts have often refused to award the statutory maximum without any evidence of lost revenue or information about the defendants' profits. See All-Star Mktg. Grp., LLC,
Cases where high statutory damages are awarded typically involve defendants who profit significantly despite repeated notices that they are infringing on the plaintiff's copyright. See, e.g., Hounddog Prods., L.L.C.,
2. Attorneys' Fees and Costs
Hollander seeks attorneys' fees in the amount of $54,102.25 and costs in the amount of $1663.42. Pl. Mem. at 10, 11. A court has the authority to award attorneys' fees to the prevailing party in a copyright suit under
In any civil action under this title, the court in its discretion may allow the recovery of full costs by or against any party other than the United States or an officer thereof. Except as otherwise provided by this title, the court may also award a reasonable attorney's fee to the prevailing party as part of the costs.
As the Second Circuit noted in Arbor Hill Concerned Citizens Neighborhood Ass'n v. County of Albany,
(a) Reasonable Hourly Rates
The rate to be set for Hollander's attorneys should be "what a reasonable, paying client would be willing to pay."
*561Arbor Hill Concerned Citizens Neighborhood Ass'n,
Here, two partners, one associate, and one paralegal worked on the case. Partner Howard F. Mandelbaum has been practicing law for over 40 years and is "Managing Member" of his firm. Mandelbaum Decl. ¶ 1. He is also a registered patent attorney at the U.S. Patent and Trademark Office.
Attorney Jeffrey M. Rollings is an associate with 29 years' legal experience and 24 years' experience in intellectual property law matters. See Rollings Decl. ¶ 3-4. He requests an hourly rate of $515. A rate of $515 hourly is higher than that typically approved for associates in this district. See, e.g., Broad. Music, Inc. v. Prana Hosp., Inc.,
Hollander seeks an hourly rate of $240 for paralegal Eric Menist. Rollings Decl. ¶ 8. Menist has seven years experience as a litigation paralegal, now serves as "principal litigation paralegal," and is also attending law school part-time.
(b) Reasonable Number of Hours Expended
Hollander must also establish that the number of hours for which it seeks compensation was reasonable. Arbor Hill Concerned Citizens Neighborhood Ass'n,
Additionally, it is well-established that "any attorney ... who applies for court-ordered compensation in this Circuit ... must document the application with contemporaneous time records ... specify[ing], for each attorney, the date, the hours expended, and the nature of the work done." N.Y. State Ass'n for Retarded Children, Inc. v. Carey,
In support of their application for attorneys' fees, Hollander's attorneys submitted copies of their invoices showing the date on which services were performed, the hours expended, and a description of the work done, see Billing Detail Report, dated Oct. 9, 2017 (annexed to Mandelbaum Decl.) ("Mandelbaum Bill"), at *3-13; Billing Invoices; Rollings 2d Decl. at *7-29, which they have indicated are based on contemporaneous time entries, Rollings Decl. ¶ 10. This satisfies the contemporaneous *563time records requirement. See, e.g., Cruz v. Local Union No. 3 of the Int'l Bhd. of Elec. Workers,
Hollander's initial submissions did not differentiate between hours expended in litigation with the Gutman defendants and hours expended in litigation with the Rosen defendants. See Mandelbaum Bill at *11-13; Billing Invoices at *10-29. In response to a court order, see Order, filed Feb. 15, 2018 (Docket # 68), Hollander annotated its records to indicate which hours were expended in litigation with the Gutman defendants, the Rosen defendants, or both, see Rollings 2d Decl. at *5.
Hollander contends its attorneys and their support staff spent 32.75 hours on litigation with the Gutman defendants and 56.05 hours on work attributable to both the Rosen defendants and the Gutman defendants, for a total of 88.8 hours.
Even the 32.75 hours attributable solely to the Gutman defendants cannot be relied upon. For example, an entry dated October 12, 2017, by Jeffrey Rollings states that he spent 3.7 hours on: "Teleconference opposing counsel, re: referral to magistrate order; teleconference Judge's chambers clerk, re: order error; review/analyze conference order, re: initial conference, magistrate referral, edit inquest papers for default; conference [eric menist] same." Rollings 2d Decl. at *26-27. While the notation next to the entry identifies the time as spent exclusively on the Gutman defendants, part of the entry is apparently time spent on the Rosen defendants since it references a conversation with the Rosen defendants' attorney, i.e., "teleconference opposing counsel," and the opposing counsel in fact sent a letter that same day that purported to be on behalf of the plaintiff as well. See Letter from Stephanie J. Kaufman, dated Oct. 12, 2017 (Docket # 52).
Additionally, the time entries submitted include many instances of what is commonly referred to as "block billing"-that is, the aggregation of a number of tasks in a single time entry. See, e.g., Rollings 2d Decl. at *15 (June 7, 2017), *23 (Sept. 22, 2017), *26 (Oct. 13, 2017). Because block billing interferes with the ability of a court to evaluate the reasonableness of attorney hours, its use may sometimes result in a reduction of fees. See, e.g., Erickson Prods., Inc.,
Accordingly, we conclude that a reduction in the hours sought is appropriate. For the 32.75 hours sought that allegedly relate only to the Gutman defendants, we will reduce the hours by 15%, allowing for a total of 27.9 hours. For the 56.05 hours expended on work attributable to both the Rosen defendants and the Gutman defendants, we will reduce the hours by 35%, allowing a total of 36.4 hours.
(c) Presumptively Reasonable Fees and Costs
The hourly rate and total hours after the reduction attributable to each attorney are as follows:
Hourly Rate Hours Hours Total fees attributable to attributable to Gutman both sets of defendants after defendants after 15% reduction 35% reduction Aronson $575 .4 hours 1.2 hours $920 Mandelbaum $570 .3 hours 3.4 hours $2109 Rollings $500 12.5 hours 21.5 hours $17,000 Menist $75 14.7 hours 10.3 hours $1875 Totals: 27.9 hours 36.4 hours $21,904
Accordingly, Hollander should be awarded $21,904 in attorney's fees.
Hollander also seeks reimbursement of costs of $1663.42. Pl. Mem. at 11. Section 505 allows the prevailing party to recover its "full costs" incurred in protection of its copyright.
In sum, the Court should award $1269.31 in costs to Hollander. Combined with attorneys' fees of $21,904, the plaintiffs should be awarded $23,173.31 in attorneys' fees and costs.
III. CONCLUSION
For the foregoing reasons, plaintiff Hollander Glass Texas, Inc., should be awarded a judgment of $48,173.31 against Rosen Paramount Glass & Mirror, LLC and David Gutman, consisting of $25,000 in statutory damages and $23,173.31 in attorneys' fees and costs.
PROCEDURE FOR FILING OBJECTIONS TO THIS REPORT AND RECOMMENDATION
Pursuant to
Plaintiff's Application for Damages, Attorneys' Fees and Costs Against Defendants Rosen-Paramount Glass & Mirror, LLC and David Gutman and Memorandum of Law in Support Thereof, filed Oct. 13, 2017 (Docket # 54) ("Pl. Mem."); Declaration of Jeffrey M. Rollings in Support of Plaintiff's Application for Attorneys' Fees and Costs, filed Oct. 13, 2017 (Docket # 55) ("Rollings Decl."); Declaration of Howard F. Mandelbaum, filed Oct. 13, 2017 (Docket # 56) ("Mandelbaum Decl."); Declaration of Jeffrey M. Rollings in Further Support of Plaintiff's Application for Attorneys' Fees and Costs, filed Mar. 1, 2018 (Docket # 69) ("Rollings 2d Decl.").
Page numbers identified as "*__" refer to the pagination system provided by the Court's ECF system.
Reference
- Full Case Name
- HOLLANDER GLASS TEXAS, INC. v. ROSEN-PARAMOUNT GLASS CO., INC.
- Cited By
- 16 cases
- Status
- Published