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Applause Production Group, LLC v. Showtime Events Inc.

United States District Court, D. Maryland, Southern Division

October 13, 2017

APPLAUSE PRODUCTION GROUP, LLC, Plaintiff,
v.
SHOWTIME EVENTS INC., et al., Defendants.

          MEMORANDUM OPINION

          GEORGE J. HAZEL, UNITED STATES DISTRICT JUDGE.

         Plaintiff Applause Production Group, LLC ("Applause" or "Plaintiff) brings this action against Defendants Showtime Events Inc. ("Showtime") and Amilcar Mendez (collectively, "Defendants"), alleging trademark infringement and false designation of origin in violation of the Lanham Act, 15 U.S.C. §§ 1114(1) and 1125(a). Now pending before the Court is Plaintiffs Renewed Motion for Default Judgment, ECF No. 18. No hearing is necessary. Loc. R. 105.6 (D. Md. 2016). For the following reasons, Plaintiffs Renewed Motion for Default Judgment is granted, in part, and denied, in part.

         I. BACKGROUND

         A. Factual Background[1]

         Applause is an entertainment business that provides services such as event production, audio/visual services, themed decor and event management. ECF No. 17 ¶ 8. Applause owns Federal Trademark Registration No. 3, 756, 459 for the "Showtime Events" trademark ("the '459 trademark") and conducts business under that name. Id. at 1 & ¶ 9; see also ECF No. 1-1.[2]The Showtime Events trademark has been in exclusive and continuous use by Plaintiff since January 1, 1996. ECF No. 17 ¶ 10. Applause currently has offices in North Carolina, Michigan, Florida and Washington, D.C. Id. ¶ 8. Applause's customer base includes clients in the Washington, D.C. metropolitan area. Id. ¶ 13. Since 2000, Applause has bid on at least 20 projects in the area, most recently in August 2016, and has performed jobs worth over $100, 000. Id. Applause has expended substantial money and resources in advertising and promoting their mark throughout the United States, resulting in a mark that is "inherently distinctive" and which has "acquired distinctiveness among relevant purchasers." Id. ¶ 18.

         Defendant Showtime Events Inc. is a Maryland corporation with its principal place of business in Hyattsville, Maryland and Defendant Mendez, a resident of the State of Maryland, is an officer and managing member of Showtime Events Inc. Id. ¶ 3. Defendants are also in the entertainment industry, promoting and selling event management services in the Washington, D.C. metropolitan area. Id. ¶ 30; see also ECF Nos. 1-4 & 1-7. Applause alleges that Showtime Events Inc. forfeited its corporate charter in or around 2012 and, since that time, Defendant Mendez has been operating the company as a sole proprietorship. ECF No. 17 ¶ 4.

         On April 26, 2011, Defendants established a website, www.showtimeeventsinc.com, to promote their company. Id. ¶ 19; see also ECF No. 1-2. They also established and promoted their company using the names "Showtime Events" or "Showtime Events Inc." on various social media pages, such as Facebook, and event planning websites, such as Wedding Wire, the Knot, and Special Events. ECF No. 17 ¶¶ 19-23; see also ECF Nos. 1-3, 1-9, 1-10, 17-5. Plaintiff alleges that Defendants had actual knowledge of its Showtime Events trademark prior to establishing these websites and listings. ECF No. 17 ¶ 24.

         On March 19, 2014, Applause notified Defendants of their infringing use of the Showtime Events mark and requested that they cease their use of the mark. Id. ¶ 35. Defendants allegedly refused and continued their use of the mark both in their business and on their website. Id¶ 35. Plaintiff alleges that the Showtime Events mark, as used by Applause over the past twenty years, is "incontestable, distinctive and has acquired secondary meaning." Id. ¶ 28. Plaintiff further alleges that Defendants' unauthorized use of their mark is likely to cause confusion among potential customers by creating the impression that "Applause itself has offered or endorsed Plaintiffs services." Id. ¶ 32. Plaintiff alleges that Defendants have defaulted on their credit accounts, and, as a result, various credit agencies are contacting Applause, causing actual confusion tarnishing Applause's image. Id. ¶ 34. Such confusion has the "potential to hurt the Showtime Events brand and business greatly if not addressed." Id.

         Plaintiff alleges that this infringement is willful and "designed to specifically trade and capitalize upon the substantial goodwill of Applause's trademark, " id. ¶ 35, and that Defendants advertise several event planning websites on their website, such as Special Events, that have featured Applause numerous times. Id. ¶ 36. Plaintiff alleges that Defendants' conduct has caused them harm through lost sales and profits and forced them to incur the expenses associated with attempting to halt Defendants' actions. Id. ¶ 39.

         B. Procedural Background

         On May 16, 2016, Plaintiff filed the instant case. Defendants were served via a private process server on June 10, 2016. ECF Nos. 7 & 8. Because the Defendants had not filed a response to the Complaint, Plaintiff filed a Motion for Default Judgment on September 16, 2016, ECF No. 13, and an Order of Default was entered by the Clerk of the Court against Defendants on October 6, 2016. ECF No. 14.

         On May 4, 2017, the Court denied Plaintiffs Motion for Default Judgment but suggested that Plaintiff could file an amended complaint and a renewed motion. ECF Nos. 15, 16. Plaintiff filed an Amended Complaint on May 25, 2017, providing additional facts in support of its trademark infringement count and removing counts of unfair competition and cyber squatting, consistent with the Court's Memorandum Opinion, ECF No. 15. See ECF No. 17. Plaintiff now renews its Motion for Default Judgment. ECF No. 18.

         II. STANDARD OF REVIEW

         "A defendant's default does not automatically entitle the plaintiff to entry of a default judgment: rather, that decision is left to the discretion of the court." Choice Hotels Intern., Inc. v. Savannah Shakti Carp., No. DKC-11-0438, 2011 WL 5118328, at *2 (D. Md. Oct. 25, 2011) (citing Dow v. Jones, 232 F.Supp.2d 491, 494 (D. Md. 2002)). Although "[t]he Fourth Circuit has a 'strong policy' that 'cases be decided on their merits, '" id. (citing United States v. Shaffer Equip. Co.,11 F.3d 450, 453 (4th Cir.1993)), "default judgment may be appropriate when the adversary process has been halted because of an essentially unresponsive party[.]" Id. (citing S.E.C v. Lawbaugh,359 F.Supp.2d 418, 421 (D. Md. 2005)). "Upon default, the well-pled allegations in a complaint as to liability are taken as true, although the allegations as to damages are not." Lawbaugh, 359 F.Supp.2d at 422. When considering a Motion for Default Judgment, the Court "must [then] determine whether [those] allegations ... support ...


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