Lafayette, IN – The Northern District of Indiana granted a default judgment, damages and a permanent injunction in a trademark infringement case involving a hold-over franchisee. Century 21 Real Estate, LLC of Parsippany, New Jersey had filed a trademark infringement lawsuit in the Northern District of Indiana alleging that Destiny Real Estate Properties LLC, f/d/b/a Century 21 Destiny Real Estate and Daniel Sutton of Lowell, Indiana infringed Century 21’s trademarks and service marks. Indiana Intellectual Property Law and News blogged about the case when it was filed. The defendants failed to file any response to the Century 21’s complaint. After finding that the defendants had been properly served, the court granted Century 21’s motion for a judgment by default.
The Court analyzed a legal question that has not yet been examined by the Seventh Circuit Court of Appeals and that different federal circuit courts have reached different results: “whether a hold-over franchisee’s continued unauthorized use of a franchisor’s mark constitutes counterfeiting[?]” The court found that the defendants use to Century 21’s mark was counterfeiting in this case and noted “The Court can conceive of no reason why an ex-franchisee should escape liability for counterfeiting simply because that person had access to franchise’s original marks because of the former relationship[.]” The court then analyzed the damages claims of Century 21 and awarded $113,656 plus attorneys fees of $5,419 and costs of $595 to Century 21. The Court also granted Century’s 21’s request for a permanent restraining order that prevents the defendants from using the Century 21 marks.
Practice Tip: Since the Court found that the defendant’s trademark infringement was counterfeiting, treble damages were available to Century 21. This case explains how intellectual property rights are generally well protected in statutory damages provisions and explains how the trebling of damages, ability to recover a defendant’s “profits” and recovery of attorney fees can lead to significant recoveries, even without the intellectual property owner having to prove “actual” damages.