Procedural Posture

Plaintiff, a cigarette manufacturer, sued defendant, an importer of counterfeit cigarettes, for violating 15 U.S.C.S. §§ 1114, 1124, and 1125; 19 U.S.C.S. § 1526(a); and the California Unfair Competition Law, Cal. Bus. & Prof. Code § 17200 et seq.; and for common-law unfair competition and trademark infringement. The manufacturer applied for a default judgment against the importer.

Table of Contents

Overview

The manufacturer filed its action against the importer after the United States Bureau of Customs and Border Protection (Customs) seized 40,000 cartons of counterfeit cigarettes bearing imitation marks of the manufacturer’s brand cigarettes. Customs’ notice of seizure of infringing merchandise indicated that the importer had imported the counterfeit cigarettes. The importer was served with a summons and complaint. Entry of default against the importer was recorded for its failure to timely respond to the manufacturer’s complaint. The manufacturer’s unopposed application for entry of a default judgment followed. Accordingly, the court entered a permanent injunction against the importer, ordered it to pay statutory damages of $ 2 million, and ordered it to pay the manufacturer’s attorney’s fees of $ 43,600 and costs of $ 472.95. An EEOC lawyer represented respondent.

Outcome

The court entered a default judgment against the importer.

Overview

HOLDINGS: [1]-Because a notice of voluntary dismissal without prejudice under Fed. R. Civ. P. 41(a)(1)(A)(i) was not a final judgment, there was no judgment upon which attorney’s fees under Fed. R. Civ. P. 54(d)(2) could be based; [2]-Case law indicated that recovery of attorney’s fees under Cal. Pen. Code § 502(e)(2) was limited to prevailing plaintiffs, and even if the court had discretion to award fees, doing so would be unreasonable because the claim was neither frivolous nor abusive; [3]-Dismissal without prejudice did not confer prevailing party status under 18 U.S.C.S. § 1836(b)(3)(D) because it did not judicially preclude refiling trade secrets claims in federal court; [4]-Absent evidence of bad faith, the court declined to award attorneys’ fees under inherent power; [5]-Costs could not be awarded under Rule 54(d)(1) and S.D. Cal. Civ. R. 54.1(f) without prevailing party status.