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Island Stone International Ltd. v. Island Stone India Private Ltd.

United States District Court, M.D. Florida, Orlando Division

November 3, 2017

ISLAND STONE INTERNATIONAL LIMITED and ISLAND STONE NORTH AMERICA, INC., Plaintiffs,
v.
ISLAND STONE INDIA PRIVATE LIMITED and AJAY GUPTA, Defendants.

          REPORT AND RECOMMENDATION

          KARLA R. SPAULDING, UNITED STATES MAGISTRATE JUDGE.

         TO THE UNITED STATES DISTRICT COURT:

         This cause came on for consideration without oral argument on the following motion filed herein:

MOTION: PLAINTIFFS' MOTION FOR ENTRY OF FINAL DEFAULT JUDGMENT AND PERMANENT INJUNCTION AGAINST DEFENDANTS (Doc. No. 104)
FILED: September 13, 2017

         I. BACKGROUND.

         Plaintiffs, Island Stone International Limited (“Island Stone International”) and Island Stone North America, Inc. (“Island Stone North America”), filed a complaint against Defendants, Island Stone India Private Limited (“Island Stone India”) and Ajay Gupta. Doc. No. 1. Plaintiffs allege that Island Stone International is the owner of a federal trademark in the United States for the “ISLAND STONE” mark. Id. ¶ 11. Plaintiffs further allege that Island Stone International licensed Island Stone North America to use the ISLAND STONE mark in connection with the manufacture and wholesale distribution of tiles, floor and wall coverings. Id. ¶ 12. Plaintiffs further allege that Island Stone North America is the owner of copyright registrations in the United States in multiple photographs of tile, wall and flooring products (sometimes referred to as the “Works”). Id. ¶ 14.

         Plaintiffs allege that Defendants solicited Terry and Maria Stout to form Style in Stones, LLC (“Style in Stones”) in Orlando, Florida to distribute and sell tile and stone products similar to those offered by Plaintiffs. Id. ¶¶ 16, 17. They allege that Island Stone India supplied Style in Stones with tile and stone products, and that Defendants directed and controlled Style in Stones' marketing, sales and distribution decisions. Id. ¶ 17. They allege that Defendants registered the domain name styleinstones.com and used the website www.styleinstones.com (the “Website”) to display numerous unauthorized and infringing copies of the Works, including superimposing the text www.styleinstones.com onto Island Stone North America's copyrighted images. Id. ¶ 18. They further allege that the Website uses the ISLAND STONE mark without authorization from Plaintiffs. Id. ¶ 19.[1]

         Plaintiffs allege that Defendants have committed copyright infringement in violation of 17 U.S.C. §§ 101, et seq. (Count I); federal trademark infringement in violation of 15 U.S.C. § 1114(a)(a) (Count II); unfair competition in violation of 15 U.S.C. § 1125(a) (Count III); false designation of origin in violation of 15 U.S.C. § 1125(a) (Count IV); deceptive and unfair trade practices in violation of Fla. Stat. § 501.201, et seq. (Count V); misleading advertising in violation of Fla. Stat. §§ 817.41, et seq. (Count VI); and, unjust enrichment in violation of Florida common law (Count VII). They seek injunctive relief, damages, an accounting and attorneys' fees and costs.

         Pursuant to the direction of the Court, the Clerk of Court issued a default against each Defendant. Doc. Nos. 25, 28, 98, 99. Plaintiffs now ask the Court to issue a default judgment against Defendants. Plaintiffs caused the motion for a default judgment to be served on Defendants by registered email on September 13, 2017. Doc. Nos. 107, 107-1. As of the writing of this Report and Recommendation, Defendants have not responded to the motion and the time for responding has expired. Accordingly, the motion is ripe for resolution. The motion has been referred to the undersigned for issuance of a Report and Recommendation.

         II. LEGAL STANDARD.

         A court may enter a default judgment only if the factual allegations of the complaint, which are assumed to be true, provide a sufficient legal basis for entry of a default judgment. Nishimatsu Constr. Co. v. Houston Nat'l Bank, 515 F.2d 1200, 1206 (5th Cir. 1975) (“The defendant is not held to admit facts that are not well-pleaded or to admit conclusions of law.”). Therefore, in considering a motion for default judgment, a court must examine the sufficiency of the allegations in the complaint to determine whether the plaintiff is entitled to a default judgment. Fid. & Deposit Co. v. Williams, 699 F.Supp. 897, 899 (N.D.Ga. 1988).

         “Although a defaulted defendant admits well-pleaded allegations of liability, allegations relating to the amount of damages are not admitted by virtue of default. Rather, the Court determines the amount and character of damages to be awarded.” Miller v. Paradise of Port Richey, Inc., 75 F.Supp.2d 1342, 1346 (M.D. Fla. 1999). If a default judgment is warranted, the court may hold a hearing for the purposes of assessing damages. Transatlantic Marine Claims Agency, Inc. v. Ace Shipping Corp., 109 F.3d 105, 111 (2d Cir. 1997) (citing Federal Rule of Civil Procedure 55(b)(2)). However, a hearing is not necessary if sufficient evidence is submitted to support the request for damages. Id.

         III. ANALYSIS.

         A. Personal Jurisdiction.

         The Court previously determined that it has personal jurisdiction over Defendant Gupta. Doc. Nos. 70, at 5-7; 76. Because the allegations against Island Stone India are the same as the allegations against Gupta for purposes of exercise of personal jurisdiction, I recommend that the Court find that it can also exercise personal jurisdiction over Defendant Gupta.

         B. Liability.

         1. Copyright Infringement (Count I).

         To prevail on the claim for copyright infringement, Plaintiffs must plead facts establishing that they own a valid copyright and that Defendants copied constituent elements of the copyrighted work that are original. Feist Publ'ns, Inc. v. Rural Tel. Serv. Co., 499 U.S. 340, 361 (1991).

         “In a judicial proceeding, a certificate of a registration made before or within five years after first publication of the work shall constitute prima facie evidence of the validity of the copyright and of the facts stated in the certificate.” 17 U.S.C. § 410(c). In the complaint, Plaintiffs allege that Island Stone North America has obtained valid copyright registrations in multiple photographs of tile, wall and flooring products. Doc. No. 1 ¶ 14. Copies of sixteen copyright registrations are attached as Exhibit C to the complaint. Doc. No. 1-3. Each of these registrations reflect that the registration was made within five years after the date of first publication of work. Id.

         To satisfy the second element of copyright infringement, Plaintiffs must allege facts that establish that the Defendants actually copied the copyrighted material. Latimer v. Roaring Toyz, Inc., 601 F.3d 1224, 1233 (11th Cir. 2010). Plaintiffs allege that Defendants displayed on the Website the Works with the text “www.styleinstones.com” superimposed on the copyrighted images. Id. ¶ 18; see also Doc. Nos. 1-3 and 1-4. This is sufficient to establish the second element of copyright infringement.

         Because the well-pleaded facts in the complaint are sufficient to establish each element of the prima facie case of copyright infringement, I recommend that the Court find Defendants liable to Island Stone North America for copyright infringement as alleged in Count I of the complaint.

         2. Trademark Infringement (Count II).

         To prevail on a claim of federal trademark infringement, Plaintiffs must allege facts that show that (1) they own a valid trademark; (2) Defendants used the mark or a colorable imitation thereof in commerce in connection with the sale or advertising of good or services; and, (3) Defendants used the mark in a manner likely to confuse consumers. Sound ...


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