MARTIN D. SINGER (BAR NO. 78166) DAVID B. JONELIS ...Attorneys for Plaintiff GRUMPY CAT LIMITED...

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APPLICATION FOR DEFAULT JUDGMENT

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MARTIN D. SINGER (BAR NO. 78166)[email protected] B. JONELIS (BAR NO. 265235)[email protected] D. MOLNAR (BAR NO. 275156)[email protected] & SINGERPROFESSIONAL CORPORATION2049 Century Park East, Suite 2400Los Angeles, California 90067-2906Telephone: (310) 556-3501Facsimile: (310) 556-3615

Attorneys for Plaintiff GRUMPY CAT LIMITED

UNITED STATES DISTRICT COURT

CENTRAL DISTRICT OF CALIFORNIA - WESTERN DIVISION

GRUMPY CAT LIMITED, an OhioLimited Liability Entity,

Plaintiff,v.

GRENADE BEVERAGE LLC, aCalifornia Limited LiabilityCompany; PAUL SANDFORD, anindividual; NICK SANDFORD, anindividual; and DOES 1-50,

Defendants.

______________________________

)))))))))))))))

Case No.: 15-cv-02063-DOC-DFM

PLAINTIFF’S MEMORANDUM OFPOINTS AND AUTHORITIES INSUPPORT OF APPLICATION FORDEFAULT JUDGMENT AGAINSTGRENADE BEVERAGE LLC

Date: September 12, 2016Time: 8:30 a.m.Place: Courtroom 9DJudge: Hon. David O. Carter

Case Filed: December 11. 2015Trial Date: June 12, 2017

Case 8:15-cv-02063-DOC-DFM Document 41-1 Filed 08/23/16 Page 1 of 30 Page ID #:326

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TABLE OF CONTENTSPage(s)

I. INTRODUCTION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1

II. STATEMENT OF FACTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1

A Plaintiff's Exclusive Intellectual Property Rights In TheGrumpy Cat Brand . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1

B. The License Agreement Between Plaintiff and Grenade . . . . . . . . . 4

C. Grenade’s Wrongful Conduct . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5

D. Plaintiff Files and Serves the Complaint; Grenade Defaults . . . . . 10

III. LEGAL ARGUMENT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10

A. Default Judgment Against Grenade Is Procedurally Proper . . . . . . 10

B. The Eitel Factors Favor Entering Default Judgment . . . . . . . . . . . . 11

1. Plaintiff Will Be Prejudiced If Default Judgment IsNot Entered . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12

2. Plaintiff Can Prevail on Its Claims . . . . . . . . . . . . . . . . . . . . 13

i. Plaintiff Can Prevail on its Copyright InfringementClaim . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13

ii. Plaintiff Can Prevail on its Claims for Federal andCommon Law Trademark Infringement and FalseDesignation of Origin . . . . . . . . . . . . . . . . . . . . . . . . . 14

iii. Plaintiff Can Prevail on its Claim for TrademarkDilution . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15

iv. Plaintiff Can Prevail on its Claim for Breachof Contract . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16

3. The Damages Sought by Plaintiff Favor DefaultJudgment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17

4. No Dispute Exists As to Material Facts . . . . . . . . . . . . . . . . 18

5. Defendants’ Failure to Respond is Not Attributable toExcusable Neglect . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18

C. Defendants’ Failure to Answer or Appear Makes a Decision onthe Merits Possible . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19

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TABLE OF CONTENTS (cont’d.) Page(s)

IV. PLAINTIFF IS ENTITLED TO DAMAGES, DISGORGEMENT,INJUNCTIVE RELIEF, AND RECOVERY OF ITS ATTORNEYS’FEES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19

A. Statutory Damages for Copyright Infringement Pursuant to17 U.S.C. § 504(c)(1) and (2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20

B. Actual and Treble Damages for Trademark InfringementPursuant to 15 U.S.C. § 1117(a) . . . . . . . . . . . . . . . . . . . . . . . . . . . 21

C. Actual Damages for Breach of Contract . . . . . . . . . . . . . . . . . . . . . 21

D. Injunctive Relief . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22

E. Attorneys’ Fees Pursuant to 17 U.S.C. § 505, 15 U.S.C.§ 1117(a) and the License Agreement . . . . . . . . . . . . . . . . . . . . . . . 23

V. CONCLUSION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24

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TABLE OF AUTHORITIES

FEDERAL CASES Page(s)

ACS Recovery Servs., Inc. v. KaplanNo. CV 09-01304 JSW, 2010 WL 144816 (N.D. Cal. 2010) . . . . . . . . . . . 17

Adobe Sys. Inc. v. KernNo. C 09-1076 CW (JL), 2009 WL 5218005(N.D Cal. Nov. 24, 2009). 19, 20

Amini Innovation Corp. v. KTY Int'l Mktg.768 F. Supp. 2d 1049, 1054 (C.D. Cal. 2011) . . . . . . . . . . . . . . . . 12, 13, 22

Avery Dennison Corp. v. Sumpton189 F.3d 868, 874 (9th Cir.1999) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16

Brookfield Commc'ns, Inc. v. W. Coast Entm't Corp.174 F.3d 1036 (9th Cir. 1999) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14

Coach Servs., Inc. v. YNM, Inc.No. CV 10-02326 JST, 2011 WL 1752091 (C.D.Cal. 2011) . . . . . . . . . . 15

Craigslist, Inc. v. Naturemarket, Inc.694 F.Supp.2d 1039 (N.D. Cal. 2010) . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17

Eitel v. McCool782 F.2d 1470 (9th Cir. 1986) . . . . . . . . . . . . . . . . 12, 13, 14, 16, 17, 18, 19

Elektra Entm't Grp., Inc. v. BryantNo. CV 03-6381 GAF, 2004 WL 783123 (C.D.Cal. 2004) . . . . . . . . . . . 12

Friend v. H.A. Friend & Co.416 F.2d 526 (9th Cir.1969) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21

Hounddog Prods., LLC v. Empire Film Grp., Inc.826 F. Supp. 2d 619 (S.D.N.Y. 2011) . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20

Jackson v. Sturkie255 F.Supp.2d 1096 (N.D. Cal. 2003) . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23

Landstar Ranger, Inc. v. Parth Enterprises, Inc.725 F. Supp. 2d 916 (C.D. Cal. 2010) . . . . . . . . . . . . . . . . . . . . . . . . . 12, 13

Levi Strauss & Co. v. Toyo Enter. Co.665 F. Supp. 2d 1084 (N.D. Cal. 2009) . . . . . . . . . . . . . . . . . . . . . . . . . . . 16

Lindy Pen Co. v. Bic Pen Corp.982 F.2d 1400 (9th Cir. 1993) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23

Microsoft Corp. v. WenNo. CV 99-04561 MEJ, 2001 WL 1456654 (N.D. Cal. Nov. 13, 2001). . . 20

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FEDERAL CASES (cont’d.) Page(s)

Peer Int'l Corp. v. Pausa Records, Inc.909 F.2d 1332 (9th Cir.1990) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13, 14

PepsiCo, Inc. v. Cal. Sec. Cans238 F. Supp. 2d 1172 (CD. Cal. 2002) . . . . . . . . . . . . . . . . . . . . . 10, 13, 19

PepsiCo, Inc. v. Triunfo-Mex189 F.R.D. 431 (C.D. Cal. 1999) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11

Perfect 10, Inc. v. Talisman Commc'ns Inc.No. CV99-10450 RAP 2000 WL 364813(C.D. Cal. Mar. 27, 2000).. . . . 20

Philip Morris USA Inc. v. Castworld Prods., Inc.219 F.R.D. 494 (C.D. Cal. 2003) . . . . . . . . . . . . . . . . . . . . . . . . . . 11, 17, 19

Phillip Morris USA Inc. v. Shalabi352 F.Supp.2d 1067 (C.D. Cal. 2004) . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14

Playboy Enters., Inc. v. Baccarat Clothing Co., Inc.692 F.2d 1272 (9th Cir. 1982) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23

Smith v. Jackson84 F.3d 1213 (9th Cir. 1996) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13

Taylor Made Golf Co. v. Carsten Sports, Ltd.175 F.R.D. 658 (S.D. Cal. 1997) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23

TeleVideo Sys., Inc. v. Heidenthal826 F.2d 915 (9th Cir. 1987) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18

Thane Int'l, Inc. v. Trek Bicycle Corp.305 F.3d 894 (9th Cir. 2002) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14, 15

Wecosign, Inc. v. IFG Holdings, Inc.845 F. Supp. 2d 1072 (C.D. Cal. 2012) . . . . . . . . . . . . . . . . . . . . . . . . . . . 18

Williams-Sonoma, Inc. v. Friendfinder, Inc.2007 WL 4973848 (N.D. Cal. 2007) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19

STATE CASES

CDF Firefighters v. Maldonado

158 Cal. App. 4th 1226 (2008) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16

STATUTES AND CODES

Fed. R. Civ. P. 8(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15

Fed. R. Civ. P. 55 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19

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STATUTES AND CODES (cont’d.) Page(s)

Fed. R. Civ. P. 55 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1

Fed. R. Civ. P. 55(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1

Fed. R. Civ. P. 55(b)(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1, 11

Central District of California, Local Rule 55-1 . . . . . . . . . . . . . . . . . . . . . . . . . . . 1

Central District of California, Local Rule 55-3 . . . . . . . . . . . . . . . . . . . . . . . . . . 22

15 U.S.C. § 1114 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14

15 U.S.C. § 1114 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14

15 U.S.C. § 1116(a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20, 22, 23, 24

15 U.S.C. § 1117(a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20, 21, 23

15 U.S.C. § 1125(c)(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22

15 U.S.C. § 1125(c)(5) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22

15 U.S.C. § 1125 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22

17 U.S.C. § 502 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20, 22, 23, 24

17 U.S.C. § 504(c)(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17, 20

17 U.S.C. § 504(c)(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17, 20

17 U.S.C. § 505 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20, 23

Service Members Civil Relief Act

50 App. U.S.C. 15 U.S.C. § 1114 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11

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I. INTRODUCTION

This case arises out of Defendant Grenade Beverage LLC’s (“Grenade”)

willful infringement of Plaintiff Grumpy Cat Limited’s (“Plaintiff”) federally-

registered trademarks and copyrights for the famous “GRUMPY CAT” brand. In an

unauthorized and unilateral attempt to broaden license rights that were previously

granted to Grenade, Grenade advertised, offered for sale and sold a line of Grumpy

Cat roasted coffee ground products, marketed as “Grumpy Cat Roasted Coffee” (the

“Infringing Product”) without Plaintiff’s permission. In fact, Grenade marketed,

distributed, offered for sale and sold the Infringing Product despite repeatedly being

told by Plaintiff that it was not authorized to do so.

In light of Grenade’s actions (including the actions of its principals,

Defendants Paul and Nick Sandford), Plaintiff filed this lawsuit and Defendants,

including Grenade, were properly served with the Summons and Complaint.

Grenade, however, failed (and refused) to file an answer or otherwise defend,

resulting in the Clerk’s entry of default against Grenade on June 7, 2016 (Dkt. No.

34. As such, pursuant to Federal Rule Civ. P. 55(b)(2) and Local Rule 55-1, Plaintiff

seeks a default judgment against Grenade, including an award of statutory damages,

an award of actual damages (subject to a full and complete accounting of Grenade’s

books and records), permanent injunctive relief, and the recovery of its award

reasonable attorneys’ fees.

II. STATEMENT OF FACTS

A. Plaintiff’s Exclusive Intellectual Property Rights In The Grumpy

Cat Brand

Grumpy Cat (a/k/a Tardar Sauce) is one of the most famous and recognizable

felines in the world due to her perpetually grumpy expression. (Compl., ¶ 13).

Grumpy Cat has appeared in numerous major television shows (including Today,

Good Morning America, American Idol, and The Bachelorette), been featured on the


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front page of major periodicals such as The Wall Street Journal and New York

Magazine, starred in advertisements for Cheerios and McDonalds, starred in her own

Lifetime Television Christmas movie, “authored” three (3) books that debuted on the

New York Times bestsellers list, and even has her own animatronic waxwork

at Madame Tussauds in San Francisco. (Id.)

Plaintiff is the sole and exclusive owner of all relevant intellectual property

rights in and to Grumpy Cat’s name, image, and likeness, specifically including the

copyrights and trademarks forming the basis of this action. (Id. at ¶ 14). Plaintiff

and its authorized licensees have realized millions of dollars in sales of a wide range

of goods and services incorporating the “Grumpy Cat” brand, including without

limitation t-shirts, calendars, and plush toys. (Id.)

Plaintiff is the sole and exclusive owner of the copyrights in and to certain

photographs and an illustration of Grumpy Cat, which are protected by U.S.

Copyright Reg. Nos. VA0001849042, VA0001849043, VA0001849044, and

VA0001901628 (the “Grumpy Cat Copyrights”), issued by the United States

Copyright Office on December 4, 2012 and December 18, 2013. (Compl., ¶ 15).

These copyrights include the following photograph and illustration:

Copyright Reg. No.VA0001901628

Copyright Reg. No.VA0001849042


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Plaintiff is also the sole and exclusive owner of all federal and common law

rights in and to the word mark “GRUMPY CAT” as used and registered in, inter alia,

International Class 030 (Coffee and tea) (protected by U. S. Trademark Reg. No.

4,527,097 issued by the United States Patent and Trademark Office (the “USPTO”) on

May 6, 2014), and International Classes 021 (Coffee and Tea cups/mugs), 025

(“Clothing, namely, t-shirts, shirts, long-sleeved shirts, polo shirts, sweatshirts,

hoodies”), and 041 (website services) (protected by U. S. Trademark Reg. No. 4,417,

549 issued by the USPTO on October 15, 2013) (collectively, the “Federal Word

Marks”). (Compl., ¶ 16).

Plaintiff is also the sole and exclusive owner of all federal and common law

rights in and to the image mark for the above-depicted photograph of Grumpy

Cat, as used and registered in, inter alia, International Classes 021 (Coffee and Tea

cups/mugs) and 025 (“Clothing, namely, t-shirts, shirts, long-sleeved shirts, polo

shirts, sweatshirts, hoodies”) (protected by U. S. Trademark Reg. Nos. 4,820,434,

issued by the USPTO on September 29, 2015) (collectively, the “Federal Design

Marks”). (Compl., ¶ 16).

Plaintiff is also the sole and exclusive owner of any and all common law

trademark rights in and to the word mark “GRUMPY CAT” and the design mark

for the above-depicted photograph of Grumpy Cat, in connection with a variety of

products and services, including for the purpose of this action, on coffee drinks and

non-alcoholic beverages, and t-shirts (collectively, the “Common Law Grumpy Cat

Trademarks” and, along with the Federal Word Marks and the Federal Design Marks,

referred to herein as the “Grumpy Cat Trademarks”). (Compl., ¶ 17). Plaintiff also

has numerous international trademark registrations for the Grumpy Cat brand. (Id.)

The Grumpy Cat Trademarks are distinctive, have been continually used

throughout the United States, as well as worldwide, and are well known to members

of the purchasing public. (Compl., ¶ 18).


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B. The License Agreement Between Plaintiff and Grenade

On or around May 31, 2013, Plaintiff entered into a license agreement with

Grenade (the “License Agreement”), pursuant to which Plaintiff granted Grenade

certain limited rights to use Grumpy Cat’s copyrighted and trademarked name and

image (the “Licensed Properties”) in connection with the advertisement, distribution,

offering for sale, and sale of “a line of Grumpy Cat-branded coffee products.”

(Compl., ¶ 20; Declaration of David B. Jonelis (“Jonelis Decl.”), ¶3, Exh. A). In

exchange for the foregoing limited grant of rights, Grenade agreed to pay Plaintiff

royalties from Grenade’s sale and exploitation of the Licensed Properties, as well as a

monetary advance against those royalties. (Id.)

The mutually understood intent of the License Agreement was to allow Grenade

to produce and distribute a line of “Grumpy Cat” branded iced-coffee beverages called

“Grumpy Cat Grumppuccino.” (Compl., ¶ 21). The parties further understood and

agreed, as clearly memorialized in the language of the License Agreement, that any

additional product offerings would require further negotiations and approval from

Plaintiff. (Id.)

Of relevance here are the following material provisions from the License

Agreement:

Pursuant to Section 4(a), “all uses” of the Licensed Properties

(including any visual depictions, interpretation or adaptations thereof)

by Grenade are subject to Plaintiff’s “prior approval.”

Pursuant to Section 4(b), “All right, title and interest in and to all

copyrights and trademarks in and to the Licensed Properties” remain

the exclusive property of Plaintiff. Moreover, Plaintiff is deemed to

be the exclusive owner of any and all copyright and trademark rights

in and to any derivative works created by Grenade in connection with

its use of the Licensed Properties. In other words, if Grenade creates


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its own graphical and/or otherwise derivative depictions of Grumpy

Cat, Plaintiff is the owner of all copyrights and trademarks in and to

those depictions pursuant to Section 4(b).

Pursuant to Section 6(d), Grenade was required to form a California

Limited Liability Company called “Grumpy Beverage LLC,” which

would maintain and manage Grenade’s rights in and to the Licensed

Properties, and in which Plaintiff would be granted a 10% equity

interest.

Pursuant to Section 6(d), Grenade and Plaintiff were required to

“negotiate in good faith the terms of [Grumpy Beverage LLC]’s

Operating Agreement, which terms shall not conflict with the terms

[of the License Agreement].”

Pursuant to Section 7(a), Grenade was required to provide detailed

monthly accountings to Plaintiff reflecting Grenade’s sale of the

Product and/or exploitation of the Licensed Properties.

(Compl., ¶ 22; Jonelis Decl., ¶3, Exh. A).

Moreover, pursuant to Section 14(b) of the License Agreement, the prevailing

party in any litigation is entitled to recovery of its attorneys’ fees incurred in such

action. (Jonelis Decl., ¶3, Exh. A).

C. Grenade’s Wrongful Conduct

In late 2015, Plaintiff learned of Grenade’s intent to create and exploit a line of

“Grumpy Cat” branded roasted coffee ground products, which would be separate and

apart from the “Grumpy Cat Grumppuccino” product line contemplated by the

License Agreement. (Compl., ¶ 23).

Although, as required by the License Agreement, Defendants sought Plaintiff’s

approval of use of the Licensed Properties in connection with the proposed roasted

coffee ground product, Plaintiff never approved such use. (Compl., ¶ 24). Rather,


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Defendants were repeatedly told by Plaintiff (both in writing and verbally) that the

Licensed Properties could not be used in connection with a roasted coffee ground

product, including on the following occasions:

By email exchange on October 21, 2015, in which Paul Sandford was

told: “Approval is still required. Hold off until you hear back from

us.”

Verbally, during a November 2, 2015 conference call between Paul

Sandford, on the one hand, and two of Plaintiff’s attorneys and

Plaintiff’s brand manager, on the other hand.

By email exchange on November 2, 2015, in which Paul Sandford

was told: “Per our conversation of today, our client does not approve

this. Do not proceed.”


was told “You are not authorized to proceed with the ground coffee

product, and your posting of these products for sale will constitute a

clear breach of the subject licensing agreement…Do NOT proceed

with the posting of the ground coffee products.”


was told: “You are not authorized to proceed with a “Grumpy Line”

line of ground coffee products.”

(Compl., ¶ 24).

Despite Plaintiff’s repeated and clear refusal to allow and approve Defendants’

use of the Licensed Properties in connection with the proposed roasted coffee ground

product, Defendants have nevertheless proceeded to advertise, publicly disseminate,

offer for sale and sell an unauthorized line of Grumpy Cat roasted coffee ground

products, marketed as “Grumpy Cat Roasted Coffee” (the “Infringing Product”).

(Compl., ¶ 25).


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Not only was the Infringing Product never approved by Plaintiff under the

License Agreement, but the packaging and marketing materials for the Infringing

Product, as depicted in the example below, primarily and exclusively incorporate

Plaintiff’s exclusive intellectual property, including the Grumpy Cat Copyrights and

the Grumpy Cat Trademarks – a use which Plaintiff has never approved. (Compl., ¶

26).

Without authorization, Defendants (both Nick Sandford and Paul Sandford in

their individual capacity as well as on behalf of Grenade) have extensively and

repeatedly exploited the Grumpy Cat Copyrights and the Grumpy Cat Trademarks,

including confusingly similar derivative depictions thereof, in connection with the sale

and advertisement of the Infringing Product, including without limitation on widely

popular social media websites such as Twitter, Facebook, and Instagram. (Compl.,

27). For instance, Plaintiff is informed and believes that Nick Sandford and Paul

Sandford caused the following unauthorized advertisement to be posted on Instagram

on or around December 4, 2015:


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(Compl., ¶ 27).

The www.drinkgrumpycat.com website, which Plaintiff is informed and

believes is owned and operated by Defendants, and through which Defendants are

currently selling and distributing the Infringing Product direct to consumers, is also

replete with unauthorized uses of the Grumpy Cat Copyrights and Grumpy Cat

Trademarks. (Compl., ¶ 28). Among other unauthorized uses, Defendants have been

selling and continue to sell “Grumppuccinno” t-shirts which blatantly infringe on the

Grumpy Cat Copyrights and Grumpy Cat Trademarks. (Id.)

Without Plaintiff’s authorization, Defendants have also obtained the rights and

ownership to the internet domain www.grumpycat.com (the “Infringing Website”),

and have been operating the Infringing Website for the purpose of furthering their

unauthorized use and exploitation of the Grumpy Cat Copyrights and Grumpy Cat

Trademarks. (Compl., ¶ 29). Despite repeated demands from Plaintiff to transfer and

turn over the rights to the Infringing Website, Defendants have refused. (Id.)

Separate and apart from Defendants’ unauthorized use and misappropriation of

the Grumpy Cat Copyrights and Grumpy Cat Trademarks, in connection with the


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Infringing Product (which also constitutes a breach by Grenade of the express

approval requirements set forth in the License Agreement), Grenade has also breached

its contractual obligations to Plaintiff under the License Agreement by, inter alia:

a. Failing to provide Plaintiff with detailed monthly accountings,

much less any accountings, despite repeated requests from

Plaintiff. Even after Plaintiff demanded a formal audit (as allowed

by the License Agreement), Grenade only provided an incomplete

and questionable set of purported sales documents.

b. Failing to pay Plaintiff the royalty payments to which Plaintiff is

informed and believes it is entitled based upon existing sales of the

“Grumpy Cat Grumppuccino” product line.

c. Selling “Grumppuccinno” t-shirts that exceed the limited scope of

the iced-coffee product line authorized by the License Agreement,

and then failing to account to Plaintiff for these sales.

d. Failing to form a California limited liability company called

“Grumpy Beverage LLC” pursuant to Section 6(d) of the License

Agreement, and instead forming a Texas limited liability company

with the same name.

e. Failing to “negotiate in good faith” the terms of the Operating

Agreement for “Grumpy Beverage LLC” with Plaintiff, as required

by Section 6(d) of the License Agreement. In fact, despite

repeated requests, Plaintiff has not even been provided with a copy

of the Operating Agreement. As a result, Plaintiff has been kept

completely in the dark regarding the operations of the very

company that was purportedly formed to maintain and manage

Grenade’s use of the Licensed Property, and in which Plaintiff is

purportedly a 10% owner.


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(Compl., ¶ 30).

D. Plaintiff Files and Serves the Complaint; Grenade Defaults

On December 11, 2015, Plaintiff filed the Complaint. Dkt. No. 1. On January

15, 2016, Plaintiff served Grenade with the summons and Complaint via its registered

agent, John Gulino (Dkt. No. 21).

On January 21, 2016, Plaintiff and Grenade entered into a Stipulation allowing

Grenade an additional 30 days to respond to the Complaint (from February 5, 2016 to

February 24, 2016). (Dkt. No. 20).

On February 24, 2016, Defendants Paul Sandford, Nick Sandford and non-party

Grumpy Beverage LLC filed an answer to the Complaint. Grenade, however, did not

file an answer (or otherwise respond) to the Complaint, despite having been properly

served.

On June 3, 2016, counsel for Plaintiff contacted counsel for Grenade (both by

phone and email) to confirm that Grenade would not be filing a responsive pleading to

the Complaint and advising that, in the absence of such a response, Plaintiff would be

filing a request for default against Grenade Beverage, LLC. (Jonelis Decl., ¶5, Exh.

B). Counsel for Grenade confirmed that Grenade would not be filing a responsive

pleading and acknowledged his understanding that Plaintiff would be filing a request

for default against Grenade. (Id.)

The Clerk entered default against Grenade on June 7, 2016 (Dkt. No. 34).

III. LEGAL ARGUMENT

A. Default Judgment Against Grenade Is Procedurally Proper

Default judgments are governed by Federal Rule of Civil Procedure 55. Under

Rule 55(b), a court may enter default judgment following entry of default by the clerk

of court. See PepsiCo, Inc. v. Cal. Sec. Cans, 238 F. Supp. 2d 1172, 1174 (CD. Cal.

2002) (granting motion for default judgment). In the Central District of California,

motions for default judgment also must be set forth with the following information:


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(a) When and against what party the default was entered; (b) The

identification of the pleading to which default was entered; (c)

Whether the defaulting party is an infant or incompetent person,

and if so, whether that person is represented by a general

guardian, committee, conservator or other representative; (d)

That the Servicemembers Civil Relief Act (50 App. U.S.C. §

521) does not apply; and (e) That notice has been served on the

defaulting party, if required by F.R.Civ.P. 55(b)(2).

Local Rule 55-1.

In this case, Plaintiff filed its Complaint on December 11, 2015. (Dkt. No. 1)

On January 15, 2016, Plaintiff served Grenade the summons and Complaint via its

registered agent (Dkt. No. 21). Per the stipulation of the parties, the deadline for

Grenade to respond to the Complaint was February 24, 2016. (Dkt. No. 20). Grenade

did not file an answer or a motion by the foregoing date. (Jonelis Decl. ¶4). As such,

and pursuant to Plaintiff’s request, the Clerk entered default against Grenade on June

7, 2016 (Dkt. No. 34). Grenade is not an infant or incompetent person and the Service

Members Civil Relief Act, 50 U.S.C. App. § 501 et seq., does not apply to Grenade.

(Jonelis Decl., ¶6). Further, notice of this Application is being provided to Grenade as

required by statute and local rule. (Jonelis Decl. ¶7). Accordingly, and because all of

the requirements of Rule 55 have been satisfied, entry of default judgment against

Grenade is procedurally proper.

B. The Eitel Factors Favor Entering Default Judgment

Entry of default judgment is left to the trial court's sound discretion. Philip

Morris USA Inc. v. Castworld Prods., Inc., 219 F.R.D. 494, 498 (C.D. Cal. 2003)

(granting default judgment). “In applying the discretionary standard, default

judgments are more often granted than denied.” PepsiCo, Inc. v. Triunfo-Mex, 189

F.R.D. 431, 431 (C.D. Cal. 1999) (granting motion for default judgment). In the


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Ninth Circuit, a district court must examine the following factors on a motion for

default judgment: (1) prejudice to plaintiff, (2) merits of the substantive claim, (3)

sufficiency of the complaint, (4) sum of money at stake; (5) possibility of a dispute on

material facts; (6) whether default was due to excusable neglect, and (7) the policy

favoring decisions on the merits. Eitel v. McCool, 782 F.2d 1470, 1471-72 (9th Cir.

1986). In applying these Eitel factors, “[o]nce a party’s default has been entered, the

factual allegations of the complaint, except those concerning damages, are deemed to

have been admitted by the non-responding party.” Landstar Ranger, Inc. v. Parth

Enterprises, Inc., 725 F. Supp. 2d 916, 920 (C.D. Cal. 2010) citing Geddes v. United

Fin. Group, 559 F.2d 557, 560 (9th Cir.1977) and Fed. R. Civ. Proc. 8(b)(6).

Here, each Eitel factor weighs in favor of default judgment.

1. Plaintiff Will Be Prejudiced If Default Judgment Is Not

Entered

As to the first Eitel factor, prejudice exists where “[i]f the Court does not enter

a default judgment, it will allow Defendant to avoid liability by not responding to

Plaintiff’s claims.” Amini Innovation Corp. v. KTY Int’l Mktg., 768 F. Supp. 2d 1049,

1054 (C.D. Cal. 2011).

Here, Grenade ignored this lawsuit and, even when Plaintiff’s counsel notified

Grenade that it had not responded, counsel for Grenade effectively consented to entry

of default against Grenade. (Jonelis Decl., ¶5, Exh. B). As such, the Court entered

default against Grenade because it never responded to Plaintiffs’ Complaint. (Dkt.

No. 34). “[I]n light of the fact that Defendant[s] defaulted, thereby admitting the

averments of the [C]omplaint, Plaintiff[] will likely suffer prejudice if default is not

entered.” Elektra Entm’t Grp., Inc. v. Bryant, No. CV 03–6381 GAF, 2004 WL

783123, at *3 (C.D.Cal. 2004). Moreover, Grenade’s misconduct has materially and

significantly damaged Plaintiff. As such, the first Eitel factor is met, given that there

is no other procedural mechanism by which Plaintiffs could vindicate their claims


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against Grenade. See Cal. Sec. Cans, 238 F.Supp.2d at 1177 (recognizing that a

plaintiff who is denied a default judgment and is subsequently left without other

recourse for recovery has a basis for establishing prejudice).

2. Plaintiff Can Prevail on Its Claims

“The second and third Eitel factors assess the substantive merit of plaintiff’s

claim and the sufficiency of its pleadings.” Landstar Ranger, Inc. v. Parth Enters.,

725 F. Supp. 2d 916, 920 (C.D. Cal. 2010).

i. Plaintiff Can Prevail on its Copyright Infringement Claim

For its copyright infringement claim, Plaintiff must prove: (1) ownership of

the copyrights; and (2) that Grenade copied protected elements of Plaintiff’s

works. See Amini Innovation Corp. v. KTY Int’l Mktg., 768 F. Supp. 2d 1049, 1054

(C.D. Cal. 2011) (granting default on copyright infringement claim). Absent direct

evidence of copying, Plaintiff must demonstrate through fact based showings

that Grenade had “access” to Plaintiff’s copyrighted works and that the two

works are “substantially similar.” See Id; Smith v. Jackson, 84 F.3d 1213, 1218 (9th

Cir. 1996). Further, to show that Grenade infringed Plaintiff's copyrights willfully,

Plaintiff must prove that Grenade knew that its conduct constituted an act

of infringement. See Peer Int'l Corp. v. Pausa Records, Inc., 909 F.2d 1332 (9th

Cir.1990) (finding that a showing of reckless disregard may also suffice).

Plaintiff has satisfied the requirements for copyright infringement in its

Complaint. The Complaint references Plaintiff’s U.S. Copyright Registration Nos.

VA0001849042, VA0001849043, VA0001849044, and VA0001901628,

demonstrating that it owns valid copyrights for the works at issue. (Compl., ¶¶ 15,

33). Additionally, Plaintiff alleges in the Complaint that Defendants copied the

original elements of Plaintiff’s copyrighted works. (Compl. ¶¶ 27-29, 34-37).

Finally, Plaintiff alleges that Defendant’s acts of copyright infringement were

willful. “To prove ‘willfulness' under the Copyright Act, the Plaintiff must show that


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(1) the Defendant was actually aware of the infringing activity, or (2) the Defendant's

actions were the result of the ‘reckless disregard’ for, or ‘willful blindness' to,

the copyright holders rights.” Peer Int’l Corp v. Pausa Records, Inc., 909 F.2d 1332,

1335-36 (9th Cir. 1990). In this case, Plaintiff has alleged that “Defendants

infringement of Plaintiff’s rights in and to the Grumpy Cat Copyrights has been and

continues to be intentional, willful, and with full knowledge of Plaintiff’s rights.”

(Compl., ¶¶ 25, 36). Indeed, Plaintiff repeatedly and clearly refused to allow

Defendants to use the Grumpy Cat Copyrights (along with Plaintiff’s other intellectual

property), but Defendants did it anyway. (Compl., ¶¶ 25-29). Accordingly, Plaintiff

has established that Defendants engaged in willful copyright infringement. Thus, the

second and third Eitel factors thus weigh in favor of default judgment as to this claim.

ii. Plaintiff Can Prevail on its Claims for Federal and Common

Law Trademark Infringement and False Designation of

Origin

Here, as a prerequisite for all of its trademark infringement and false

designation of origin claims, Plaintiff must plead: (1) that it has a protectable

ownership interest in the mark; and (2) that Grenade subsequently and without

authorization used a similar mark likely to cause consumer confusion, deception, or

mistake. Phillip Morris USA Inc. v. Shalabi, 352 F.Supp.2d 1067, 1072

(C.D.Cal.2004) (the essential elements of claims for trademark infringement and false

designation of origin are identical); Brookfield Commc’ns, Inc. v. W. Coast Entm't

Corp., 174 F.3d 1036, 1047 n. 8 (9th Cir. 1999) (holding the same legal standard

applies to sections 32(1) and 43(a) of the Lanham Act); Thane Int’l., Inc. v. Trek

Bicycle Corp., 305 F.3d 894, 901 n.3 (9th Cir. 2002) (same standard applied for

common law trademark infringement as 15 U.S.C. § 1114 federal trademark

infringement).


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Plaintiff’s Complaint properly alleges the necessary elements for its federal and

common law trademark infringement claims and false designation of origin of claim

regarding its Grumpy Cat Trademarks. (Compl., ¶¶ 16-18, 25-29, 31, 42-67) For

instance, Plaintiff alleges that:

It owns the common law rights and federally-registered rights in and to

the Grumpy Cat Trademarks, which are “distinctive, have been

continually used throughout the United States, as well as worldwide, and

are well known to the trade and members of the purchasing public.”

(Compl., ¶¶ 16-18, 42, 51)

Defendants’ use of the Grumpy Cat Trademarks is unauthorized.

(Compl., ¶¶ 25-31, 43-44, 52)

Defendant’s unauthorized use of the Grumpy Cat Trademarks “is likely

to cause consumer confusion, or to cause mistake, or to deceive” which

has caused monetary damages to Plaintiff and irreparable harm to

Plaintiff’s Grumpy Cat brand. (Compl., ¶¶ 43, 45-49, 53-59).

Accepting these factual allegations as true, “as the court must in deciding an

application for default judgment,” Coach Servs., Inc. v. YNM, Inc., No. CV 10–02326

JST, 2011 WL 1752091, at *3 (C.D.Cal. 2011), Plaintiff has successfully pled the

elements for federal and common law trademark infringement and use of false

designations of origin. See also, Fed. R. Civ. Pro. 8(b). Thus, the second and third

Eitel factors thus weigh in favor of default judgment as to these claims.

iii. Plaintiff Can Prevail on its Claim for Trademark Dilution

To prove a dilution claim, a plaintiff must demonstrate that the mark used by

the defendant is identical, or nearly identical, to the plaintiff's protected mark. See

Thane Int’l, Inc. v. Trek Bicycle Corp., 305 F.3d 894, 905 (9th Cir. 2002).

Additionally, the plaintiff must prove that “(1) its mark is famous; (2) the defendant is

marking commercial use of the mark in commerce; (3) the defendant’s use began after


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the plaintiff's mark became famous; and (4) the defendant’s use presents a likelihood

of dilution of the distinctive value of the mark.” Avery Dennison Corp. v. Sumpton,

189 F.3d 868, 874 (9th Cir.1999); see also, Levi Strauss & Co. v. Toyo Enter. Co., 665

F. Supp. 2d 1084, 1096–97 (N.D. Cal. 2009).

Here, Plaintiff has demonstrated that Defendants are using marks that are

identical or nearly identical to its Grumpy Cat Trademarks. (Compl., ¶¶ 23-31, 43, 52)

Plaintiff has also shown that its Grumpy Cat Trademarks are famous; that Defendants

are making commercial use of the Grumpy Cat Trademarks through their packaging

and marketing of products bearing the Grumpy Cat Trademarks; that Defendants

began using the Grumpy Cat Trademarks after Plaintiff’s marks became famous; and

that Defendants’ use of the Grumpy Cat Trademarks presents a likelihood of diluting

the distinctive value of Plaintiff’s marks. (Compl. ¶¶ 1-2, 13-14, 23-29, 43, 53, 61-67).

As such, Plaintiff has set forth sufficient facts to recover on its federal trademark

dilution claim. Thus, the second and third Eitel factors thus weigh in favor of default

judgment as to this claim.

iv. Plaintiff Can Prevail on its Claim for Breach of Contract.

In California, the elements for a breach of contract claim are as follows: (1)

existence of the contract; (2) plaintiff’s performance or excuse for nonperformance;

(3) defendant’s breach; and (4) damages to plaintiff as a result of the breach. See CDF

Firefighters v. Maldonado, 158 Cal. App. 4th 1226, 1239 (2008).

Here, Plaintiff has alleged there is a contract between Plaintiff and Grenade and

quotes relevant provisions of the contract in the Complaint. (Compl., ¶¶19-22, 79).

Plaintiff also alleges that it “performed the obligations, promises and covenants

required of it under the License Agreement,” thereby satisfying its obligation to

perform. (Compl., ¶ 81). Plaintiff further alleges in detail Grenade’s breach of the

License Agreement. (Compl., ¶¶ 21-30, 82). Finally, Plaintiff alleges it has been

damaged by Grenade’s breach of the License Agreement. (Compl., ¶¶ 84-85). These


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allegations are sufficient to state a claim for relief and demonstrate that Plaintiff could

bring a successful claim. Thus, the second and third Eitel factors thus weigh in favor

of default judgment as to this claim.

3. The Damages Sought by Plaintiff Favor Default Judgment

For the fourth Eitel factor, “the court must consider the amount of money at

stake in relation to the seriousness of [the d]efendant’s conduct.” Cal. Sec. Cans, 238

F.Supp.2d at 1176. If the sum of money at issue is “reasonably proportionate to the

harm caused by the defendant’s actions, properly documented, and contractually

justified, then default judgment is warranted.” ACS Recovery Servs., Inc. v.

Kaplan, No. CV 09–01304 JSW, 2010 WL 144816, at *6 (N.D. Cal. 2010) (citation

omitted).

Here, Grenade’s willful infringement and the likelihood that consumers will be

confused justifies Plaintiff’s request for maximum statutory damages (in the amount

of $600,000 pursuant to 17 U.S.C. § 504(c)(1) and (2)) and actual damages (in an

amount to be determined by an accounting). Indeed, Plaintiff has established through

its Complaint that Grenade’s actions were intentional, willful, and likely to cause

damage to the goodwill Plaintiff has established in the Grumpy Cat Trademarks.

(Compl., ¶¶ 23-31, 34, 36, 38, 39, 43-47, 49, 51-55, 59, 62-64, 66-67). Plaintiff has

also established that Grenade willfully infringed its federally-registered copyrights

(i.e., the Grumpy Cat Copyrights). Coupled with Grenade’s failure to participate in

the litigation (and in fact, Grenade’s effective consent to the entry of a default against

it), Plaintiff’s request for monetary damages is reasonable and justified. See Philip

Morris USA Inc., 219 F.R.D. at 500 (finding that the defendant's willful trademark

infringement through large scale sale of counterfeit cigarettes and its failure to

participate in the judicial process justified statutory damages under the Lanham Act in

the amount of $2,000,000); Craigslist, Inc. v. Naturemarket, Inc., 694 F.Supp.2d

1039, 1060 (holding that this factor weighed in favor of default judgment where


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plaintiff asserted copyright, trademark, breach of contract, and fraud claims seeking

damages up to $4,900,327.07). Thus this factor weighs in favor of granting the instant

motion.

4. No Dispute Exists As To Material Facts

Plaintiff’s well-pleaded Complaint eliminates any possibility of dispute as to

material facts. “The general rule of law is that upon default the factual allegations of

the complaint, except those relating to the amount of damages, will be taken as

true.” See TeleVideo Sys., Inc. v. Heidenthal, 826 F.2d 915, 917-18 (9th Cir.

1987) (affirming the grant of default judgment). As established above, Plaintiff, in its

Complaint, alleges all facts necessary to establish its claims (Compl., ¶¶ 1-3, 13-67,

78-85) and the Clerk of Court entered default against Grenade (Dkt. No. 34). Grenade

failed and refused to respond to the Complaint, and therefore no dispute has been

raised regarding any material fact included in the Complaint against Grenade. (Jonelis

Decl., ¶¶ 4,5) As a result, this factor favors Plaintiff’s request for entry

of default judgment. See Wecosign, Inc. v. IFG Holdings, Inc., 845 F. Supp. 2d 1072,

1082 (C.D. Cal. 2012) (fifth Eitel factor met because of defendants’ “early

participation in this matter and subsequent failure to contest Plaintiff’s claims”).

5. Defendants’ Failure to Respond is Not Attributable to

Excusable Neglect.

As to the sixth Eitel factor, the fact that Grenade knowingly consented to the

entry of default against it contradicts any excuse for neglect. Wecosign, 845 F. Supp.

2d at 1082. Plaintiff gave Grenade proper notice of the action and afforded Grenade

the opportunity to respond to its claims. Indeed, Plaintiff even stipulated to an

extension of Grenade’s time to respond. (Dkt. No. 20). Grenade’s failure to respond

is not the result of excusable neglect. See Adobe Sys. Inc. v. Kern, No. C 09-1076 CW

(JL), 2009 WL 5218005, at *6 (N.D. Cal. Nov. 24, 2009) (finding the

sixth Eitel factor favored granting default judgment where defendant was served with


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the summons and complaint but failed to respond); Williams-Sonoma, Inc. v.

Friendfinder, Inc., 2007 WL 4973848, *8 (N.D. Cal. 2007) (finding little possibility

for excusable neglect where defendant did not respond to a validly served

complaint). “[Defendant's] voluntary decision to allow default to be entered

contradicts any argument for excusable neglect.” Adobe Sys. Inc., 2009 WL 5218005,

at *6.

C. Defendants’ Failure to Answer or Appear Makes a Decision on the

Merits Possible.

Finally, under Federal Rule of Civil Procedure 55, “termination of a case before

hearing the merits is allowed whenever a defendant fails to defend an action.” See Cal.

Sec. Cans, 238 F. Supp. 2d at 1177. Although there is a preference in the judicial

system to decide a case on its merits, this preference is not dispositive and does not

preclude default judgment. See Philip Morris USA Inc., 219 F.R.D. at 501. Indeed,

whereas here, Grenade’s “failure to answer [the] Complaint makes a decision on the

merits impractical, if not impossible” termination of the case before a hearing is

allowed. Cal. Sec. Cans, 238 F. Supp. 2d at 1177. Grenade should not escape an

adverse judgment because it elected to not defending itself, especially where

Plaintiff’s counsel gave Grenade the opportunity to respond to the Complaint, but

Grenade refused to do so. As such, like all of the others, this last Eitel factor is

satisfied.

In sum, the Eitel factors, taken together, weigh in favor of the entry of default

judgment against Grenade.

IV. PLAINTIFF IS ENTITLED TO DAMAGES, DISGORGEMENT,

INJUNCTIVE RELIEF, AND RECOVERY OF ITS ATTORNEYS’ FEES

With default judgment justified, the Court next conducts an inquiry into

appropriate relief, including the amount of damages. Here, Plaintiff seeks: (i)

enhanced statutory damages in the amount of $600,000 for four (4) separate counts of


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willful copyright infringement pursuant to 17 U.S.C. § 504(c)(1) and (2); (ii) actual

damages in an amount subject to a full and complete accounting of Grenade’s books

and records for trademark infringement, false designation of origin and trademark

dilution (pursuant to 15 U.S.C § 1117(a)) and for breach of contract; (iii) treble

damages pursuant to 15 U.S.C. §1117(a); (iv) disgorgement of Grenade’s profits

pursuant to 15 U.S.C. § 1117(a) in an amount subject to a full and complete

accounting of Grenade’s books and records; (v) $15,600 in attorneys’ fees pursuant to

17 U.S.C. § 505, 15 U.S.C. § 1117(a) and Section 14(b) of the License Agreement;

and (vi) injunctive relief pursuant to 17 U.S.C. § 502 and 15 U.S.C. § 1116(a).

A. Statutory Damages for Copyright Infringement Pursuant to 17

U.S.C. § 504(c)(1) and (2)

The Copyright Act provides that the statutory range for each copyright

infringement is between $750 and $30,000 for all infringements involved in the

action. 17 U.S.C. § 504(c)(1). In addition, 17 U.S.C. § 504(c)(2) provides that: “[in] a

case where the copyright owner sustains the burden of proving, and the court finds,

that infringement was committed willfully, the court in its discretion may increase the

award of statutory damages to a sum of not more than $150,000.” Indeed, California

courts regularly grant higher than the statutory minimum as part of default judgments

in copyright infringement cases. See, e.g., Perfect 10, Inc. v. Talisman Commc’ns

Inc., No. CV99-10450 RAP MCX, 2000 WL 364813, at *5 (C.D. Cal. Mar. 27, 2000)

(awarding $300,000 of statutory damages for willful copyright infringement on

default judgment); Microsoft Corp. v. Wen, No. C 99-04561 MEJ, 2001 WL 1456654,

at *6 (N.D. Cal. Nov. 13, 2001) (awarding $90,000 of statutory damages for willful

copyright infringement on default judgment); see also Hounddog Prods., LLC v.

Empire Film Grp., Inc., 826 F. Supp. 2d 619, 632 (S.D.N.Y. 2011) (awarding

maximum copyright statutory damages of $150,000 per infringed work on default

judgment because infringement was willful).


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Here, the magnitude of Grenade’s willful infringement of Plaintiff’s Grumpy

Cat Copyrights, willful disregard of this Court’s authority, and refusal to stop its

blatant infringement renders Plaintiff entitled to a $150,000 statutory damages award

for each of the Grumpy Cat Copyrights, in a total amount of $600,000.

B. Actual and Treble Damages for Trademark Infringement Pursuant

to 15 U.S.C. § 1117(a)

Trial courts have broad equitable discretion in determining proper

compensation to holders of valid trademarks. See Friend v. H.A. Friend & Co., 416

F.2d 526, 533 (9th Cir.1969). Trademark infringement plaintiffs may recover (1)

defendant’s profits; (2) damages sustained by the plaintiff; and (3) the costs of the

action. See 15 U.S.C. § 1117(a).

Here, Plaintiff is owed monies stemming from Grenade’s unauthorized use and

exploitation of the Grumpy Cat Trademarks. However, Grenade is exclusively in

control over the financial information necessary to ascertain the exact amounts owed

to Plaintiff, and Grenade has refused to account to Plaintiff for these amounts.

(Compl., ¶88; Jonelis Decl., ¶8). Accordingly, in order to determine the complete

amount of Plaintiff’s damages resulting from Grenade’s trademark infringement,

Plaintiff must be allowed to conduct a full and accurate accounting of Grenade’s

relevant books and records. (Compl., ¶89; Jonelis Decl., ¶8).

Once the full amount of Plaintiff’s damages is ascertained through an

accounting, Plaintiff requests that it be awarded three times this amount, pursuant to

See 15 U.S.C. § 1117(a).

C. Actual Damages for Breach of Contract.

On account of Grenade’s breach of the License Agreement, Plaintiff has been

deprived of the royalty payments to which Plaintiff is entitled based upon existing

sales of the “Grumpy Cat Grumppuccino” product line, as well as “Grumppuccinno”

t-shirts. (Compl., ¶¶ 30, 31). However, Grenade is exclusively in control over the


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financial information necessary to ascertain the exact amounts owed to Plaintiff, and

Grenade has refused to account to Plaintiff for these amounts. (Compl., ¶88; Jonelis

Decl., ¶8).Accordingly, in order to determine the complete amount of Plaintiff’s

damages resulting from Grenade’s breach of the License Agreement, Plaintiff must be

allowed to conduct a full and accurate accounting of Grenade’s relevant books and

records. (Compl., ¶89; Jonelis Decl., ¶8).

D. Injunctive Relief

In an action brought under the Copyright Act and/or Lanham Act, injunctive

relief against further copyright and trademark infringement is an appropriate remedy.

See 17 U.S.C. § 502; 15 U.S.C. § 1116(a); 15 U.S.C. § 1125(c)(1) and (5)). Courts

grant injunctive relief even in situations of default. Amini Innovation Corp., supra,

768 F. Supp. 2d at 1057, citing Lifted Research Group, Inc. v. Salem, Case No. C–08–

4497 SC, 2009 WL 1371416 at *1 (N.D.Cal. May 15, 2009) and Jackson v. Sturkie,

255 F.Supp.2d 1096, 1103 (N.D.Cal.2003).

Absent issuance of injunctive relief here, Plaintiff will suffer irreparable harm

and there is a lack of adequate alternative remedies at law. (Compl., ¶¶ 40, 48, 58,

65). Without the Court’s issuance of an injunction, the continued misuse of the

Grumpy Cat Copyrights and Grumpy Cat Trademarks by Grenade would damage the

goodwill in which Plaintiff has greatly invested in its intellectual property. (Id.)

Damages from future violations of Grumpy Cat Copyrights and Grumpy Cat

Trademarks would be difficult to value due to the unknown impact on RRI’s

goodwill. (Id.) The balance of hardships also weighs in Plaintiff’s favor. Grenade

faces no hardship in refraining from its infringement of the Grumpy Cat Copyrights

and Grumpy Cat Trademarks, whereas Plaintiff faces loss of royalties and damage to

its reputation. (Id.) Likewise, the injunction is in the public’s interest, as Grenade’s

continued use and exploitation of the Grumpy Cat Copyrights and Grumpy Cat

Trademarks will likely cause confusion and false designation of origin in connection

with Grenade’s goods or services.


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Plaintiff is thus entitled to injunctive relief. Specifically, pursuant to statute,

Plaintiff requests the Court enter an order permanently restraining, enjoining, and

prohibiting Grenade, and its agents and employees and representatives, from any use

of the Grumpy Cat Copyrights or Grumpy Cat Trademarks Domain Name or use of

any other variations thereof, and from posting content, distributing, importing,

exporting, advertising, promoting, selling offering for sale, and/or in anyway using

(including on any platform, medium, and/or website) any trademarks, service marks or

device in the United States which use or incorporate or that are identical or

confusingly similar to the Grumpy Cat Copyrights and Grumpy Cat Trademarks,

pursuant to 17 U.S.C. § 502 and 15 U.S.C. § 1116(a).

E. Attorneys’ Fees Pursuant to 17 U.S.C. § 505, 15 U.S.C. § 1117(a) and

the License Agreement.

Plaintiff asks the Court to award its attorneys’ fees. Pursuant to both Section

14(b) of the License Agreement and 17 U.S.C. § 505, the prevailing party in a lawsuit

(in this case, Plaintiff) is entitled to recover its attorneys’ fees from the non-prevailing

party (in this case, Grenade). (Jonelis Decl., ¶3, Exh. A).

Moreover, the Lanham Act gives the Court discretion to award reasonable

attorneys’ fees in “exceptional cases.” See 15 U.S.C. § 1117(a). The term

“exceptional cases” is generally accepted to mean cases in which trademark

infringement is “deliberate and willful.” See Lindy Pen Co. v. Bic Pen Corp., 982 F.2d

1400, 1409 (9th Cir. 1993) (interpreting the term “exceptional” to apply when “the

infringement is malicious, fraudulent, deliberate, or willful.”); Playboy Enters., Inc. v.

Baccarat Clothing Co., Inc., 692 F.2d 1272, 1276 (9th Cir. 1982). Additionally, a

case may be deemed “exceptional” and merit an award of attorneys’ fees under the

Lanham Act when a defendant (i.e., Grenade) disregards the proceedings and does not

appear. See Taylor Made Golf Co. v. Carsten Sports, Ltd., 175 F.R.D. 658, 663 (S.D.

Cal. 1997) (“Because the defendant has failed to appear, Plaintiff may request an

award of reasonable attorney fees in this case.”).


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As discussed above, Grenade’s willful infringement and wrongful conduct

qualifies this as an “exceptional case” under the Lanham Act.

Therefore, Plaintiff respectfully requests that the Court award its reasonable

attorneys’ fees of at least $15,600 (pursuant to the Schedule of Attorneys’ Fees in

Local Rule 55-3) (See Jonelis Decl., ¶9).

V. CONCLUSION

For the foregoing reasons, the Court should grant Plaintiff’s Application for

Entry of Default Judgment by Court against Defendant Grenade Beverage LLC and

enter default judgment against Grenade for (i) statutory damages totaling no less than

$600,000.00, (ii) actual damages in an amount subject to a full and complete

accounting of Grenade’s books and records, (iii) treble damages, (iv) disgorgement of

Grenade’s profits in an amount subject to a full and complete accounting of Grenade’s

books and records; (v) $15,600 in attorneys’ fees, and (vi) injunctive relief pursuant

to 17 U.S.C. § 502 and 15 U.S.C. § 1116(a)

Dated: August 23, 2016 LAVELY & SINGERPROFESSIONAL CORPORATIONDAVID B. JONELISLINDSAY D. MOLNAR

By: /s/ David B. Jonelis _____DAVID B. JONELIS

Attorneys for PlaintiffGRUMPY CAT LIMITED


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MARTIN D. SINGER (BAR NO. 78166) DAVID B. JONELIS ...Attorneys for Plaintiff GRUMPY CAT LIMITED...

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