Hammerless Tools LLC and Eight Eighteen, LLC v. Jonathan Clausen, Clausen, Inc., AR-TT LLC, and Lilac City, LLC

Summary

The United States District Court for the Eastern District of Washington granted Hammerless Tools LLC and Eight Eighteen, LLC’s motion for default judgment and a permanent injunction against Clausen, Inc., AR-TT LLC, and Lilac City, LLC. The court found liability for breach of a settlement agreement, trademark infringement, design patent infringement, and violations of Washington’s Consumer Protection Act. The court entered a permanent injunction and awarded $781,994 in principal damages, $42,485.50 in attorney fees, and $484.80 in costs, with 12 percent annual interest.

Holdings

1. Plaintiffs were entitled to default judgment because the Eitel factors favored judgment, the defendants had been properly served and failed to defend, and plaintiffs established liability and the requested relief.
2. The entity defendants were liable for Lanham Act trademark infringement because plaintiffs owned protectable marks and defendants' use of identical marks and logos on nearly identical products was likely to cause consumer confusion.
3. The entity defendants were liable for Washington common-law trademark infringement because their use of plaintiffs' distinctive marks was likely to confuse the public about the businesses' relationship.
4. The entity defendants breached the settlement agreement by continuing to use plaintiffs' marks and by failing to destroy covered goods or provide proof of destruction.
5. The entity defendants violated the Washington Consumer Protection Act because their trademark infringement constituted an unfair or deceptive act in trade or commerce that caused business injury and implicated the public interest through consumer confusion.
6. The entity defendants infringed U.S. Design Patent No. D981199 by manufacturing, offering, and selling tools with a substantially similar or identical ornamental design that would cause an ordinary observer to purchase the accused product believing it was plaintiffs' patented product.
7. Plaintiffs were entitled to a permanent injunction barring the entity defendants and persons acting with them from using plaintiffs' marks and from manufacturing, offering, or selling goods bearing designs identical or similar to the patented design.

Questions Presented

1. Whether plaintiffs were entitled to default judgment under Federal Rule of Civil Procedure 55(b) after default was entered against the entity defendants.
2. Whether the defaulted defendants were liable for Lanham Act and common-law trademark infringement.
3. Whether the defaulted defendants breached the parties' settlement agreement.
4. Whether the defaulted defendants violated the Washington Consumer Protection Act.
5. Whether the defaulted defendants infringed plaintiffs' design patent.
6. Whether plaintiffs were entitled to a permanent injunction against continued trademark and design-patent infringement.
7. Whether plaintiffs were entitled to damages, attorney fees, costs, and post-judgment interest.

Disposition

other