United States District Court, D. South Carolina, Florence Division
REPORT AND RECOMMENDATION
Kaymani D. West, United States Magistrate Judge
trademark-infringement matter is before the court on
Plaintiff's Motion for Entry of Default Judgment. ECF No.
87. In its Complaint Surf's Up, LLC (“Surf's
Up” or “Plaintiff”) brings claims pursuant
to the Lanham Act, 15 USC §§ 1051, et seq.
and common law claims for “trademark infringement,
deceptive trade practices.” Compl. ¶ 1, ECF No. 1.
Plaintiff seeks injunctive and monetary relief, as well as
attorneys' fees and costs. This matter was referred to
the undersigned pursuant to 28 U.S.C. § 636(b)(1)(B).
Because this motion is dispositive, the undersigned submits
this Report and Recommendation (“Report”) for the
Initial entry of default
served Defendant Myrtle Laser Tag, LLC (“Myrtle Laser
Tag”) with a Summons and Complaint by certified mail on
January 27, 2015. ECF No. 6. Myrtle Laser Tag did not timely
answer or otherwise respond to the Complaint, and Plaintiff
requested that the Clerk of Court enter default. ECF No. 10.
The Clerk entered default as to Myrtle Laser Tag on February
27, 2015. See ECF No. 12. On March 12, 2015,
attorney Benjamin Parker appeared and filed a Motion to
Dismiss on behalf of Defendants Myrtle Laser Tag,
(“BusinessVentures.com”), and Rick Rahim
(“Rahim”). ECF No. 13. On March 26, 2015, Counsel
Parker filed a Motion to Set Aside Default as to Myrtle Laser
Tag. ECF No. 16. Plaintiff's counsel responded to the
pending Motions and filed a Motion for Preliminary Injunction
on behalf of Surf's Up, ECF No. 21, to which Defendants
responded on May 18, 2015, ECF No. 22, and Plaintiff replied
on May 29, 2015, ECF No. 23.
Relief from initial default and relief of counsel
February 18, 2016, Counsel Parker filed a motion to withdraw
as counsel for all Defendants. ECF No. 24. On March 21, 2016,
United States District Judge Bruce H. Hendricks granted the
motion of Surf's Up to be relieved from default and
granted Parker's Motion to be Relieved as Counsel. ECF
No. 25. The court stayed the matter for 45 days to
“allow the corporate defendants [Myrtle Laser Tag and
BusinessVentures.com] o obtain substitute counsel.”
Id. at 2. In that same order, the court denied the
motion to dismiss and the motion for a preliminary
injunction, finding it was unable to determine issues raised
in those motions on the record then before it. Id.
Entry of default as to all Defendants
matter then included pro se litigants, the matter was
referred to the undersigned for pretrial handling. On March
24, 2016, the undersigned issued an Order, stating, inter
alia, that the pro se corporate Defendants [Myrtle Laser
Tag and Businessventures.com] were required to have retained
counsel licensed to practice in this District and that
counsel was to have filed a formal appearance in this case on
or before May 5, 2016 as District Judge Hendricks had
directed. ECF No. 32. Myrtle Laser Tag and
Businessventures.com were advised that corporations were not
permitted to represent themselves and that failure to obtain
counsel “could have serious consequences, including,
but not limited to, striking a defense, striking a pleading,
and/or holding the party in default.” Id. at
1-2. Defendant Rahim was advised that individual defendants
such as himself were permitted to proceed pro se but were
required to follow the court's rules and orders.
Id. at 2-3.
did not appear on behalf of Myrtle Laser Tag and
Businessventures.com, nor did Defendant Rahim submit
additional pleadings in this matter. On June 21, 2016, Judge
West issued a Report and Recommendation recommending that
default be entered against Defendants Myrtle Laser Tag and
BusinessVentures.com for failure to appear through counsel by
the required deadline and failure to otherwise communicate
with the court. ECF No. 43. On November 7, 2016, Judge
Hendricks issued an Order adopting the undersigned's
Report, and ordering the Clerk of Court to enter default
against Defendants Myrtle Laser Tag and BusinessVentures.com.
ECF No. 61. The Clerk entered default as to those Defendants
that same day. ECF No. 62. As Defendant Rahim did not respond
to the court's orders or otherwise respond to the
Complaint, on February 21, 2017, the undersigned recommended
that the Clerk of Court be instructed to enter default as to
Rahim. ECF No. 74. On March 22, 2017, Judge Hendricks issued
an Order adopting the undersigned's Report and ordering
the Clerk of Court to enter default against Defendant Rahim.
ECF No. 80. The Clerk entered default against Defendant Rahim
on March 22, 2017. ECF No. 81.
Motion for Entry of Default Judgment
April 10, 2017, Plaintiff filed the Motion for Entry of
Default Judgment now under consideration. ECF No. 87.
Defendants were served with the Motion on April 26, 2017 and
affidavits of service for each Defendant were filed on May 2,
2017. ECF Nos. 89, 90. No Defendant has filed any response to
Plaintiff's Motion. On August 8, 2017, the undersigned
issued an order setting a hearing on the Motion for Default
Judgment for October 18, 2017, instructing Plaintiff to file
a supplemental memorandum outlining its establishment of the
elements of its claims and the relief it seeks, and advising
pro se Defendant Rahim it could file a response by October 2,
2017 if he so chose, and that Defendants Myrtle Laser Tag and
BusinessVentures.com could file a response through counsel.
ECF No. 93. The Order was sent to all Defendants at their
last known addresses by both regular and certified mail.
Although the copies the court sent to Myrtle Laser Tag were
returned as undeliverable, the certified-mail copies of the
Order were signed for by Rahim and by an individual on behalf
of BusinessVentures.com. ECF Nos. 101, 102. Plaintiff
submitted the requested briefing, ECF No. 99, but no
Defendant filed any response, nor has any Defendant otherwise
submitted any filing to the court since the filing of the
Motion for Default Judgment.
undersigned conducted a hearing on the Motion for Default
Judgment on October 18, 2017, at which time counsel for
Plaintiff appeared and offered argument on behalf of
Plaintiff. No one appeared on behalf of any Defendant. At the
court's request, Plaintiff has now provided an affidavit
with details of specific damages sought as well as
supplemental briefing as to attorneys' fees and costs
sought. ECF No. 107. Having considered all pleadings,
briefing, and arguments of Plaintiff's counsel, the
undersigned issues the following proposed findings and
conclusions recommending default judgment.
Recommended findings and conclusions
reviewed Plaintiff's Complaint, Answers to Local Rule
26.01 Interrogatories, Requests for Entry of Default, Motion
for Default Judgment, as well as all supporting and
supplemental information provided, the court accepts
Plaintiff's well-pleaded factual allegations as true and
makes the following factual findings. See DIRECTV, Inc.
v. Rawlins, 523 F.3d 318, 322 n.2 (4th Cir. 2008)
(accepting plaintiff's allegations against defaulting
defendant as true, noting a defaulting defendant
“‘admits the plaintiff's well-pleaded
allegations of fact, is concluded on those facts by the
judgment, and is barred from contesting on appeal the facts
thus established.'”) (quoting Ryan v.
Homecomings Fin. Network, 253 F.3d 778, 780 (4th Cir.
a South Carolina limited liability company, owns the federal
trademark Registration No. 3496814-which is the trademark for
“Surf's Up Family Fun Center.” Compl.
¶¶ 2, 8; U.S. Patent and Trademark Office Notice of
Acceptance of Statement of Use of “Surf's Up Family
Fun Center” Mark, ECF No. 1-1. Plaintiff is owned in
equal parts by Patrick E. Fire and Teresa M. Walden. Compl.
¶ 9; Affidavit of Patrick E. Fire (“Fire
Aff.”) ¶¶ 1-3, ECF No. 107-1. Plaintiff
formerly owned and operated an amusement facility and
business located at 4112 Carolina Commercial Drive in Myrtle
Beach, South Carolina called Surf's Up Family Fun Center,
which opened in April 2008. Compl. ¶ 13. In September
2010 Plaintiff closed the business. Subsequently, Defendants
purchased the property on which and the building in which the
business was formerly operated. Id. ¶ 20.
Defendants began operating the amusement business in early
2012. Plaintiff, through Fire, “learned Defendants were
unlawfully and improperly using, utilizing and
misappropriating” Plaintiff's intellectual
property, which Defendants did not own. Id. ¶
21. Plaintiff learned Defendants were using a website and
copyrighted logo belonging to Fire, as well as
Plaintiff's registered Trademark. Id. ¶ 21.
Plaintiff and Fire asserted their rights in that intellectual
property and, in the spring of 2012, Fire-on behalf of
himself and Plaintiff-and Defendants reached an agreement in
which Defendants agreed to purchase the rights to the website
and the copyrighted logo from Fire and the registered and
protected Trademark from Plaintiff. Id. ¶ 22.
When Defendants reneged on that agreement, Fire personally
sued Defendants in Horry County Magistrate's Court. The
suit in that court was brought by Fire himself and concerned
only the website and copyright violations. That litigation
did not relate to the trademark infringement suffered by
Plaintiff. Id. ¶ 22. In March 2015, the Horry
County Magistrate's Court issued a judgment in favor of
Patrick Fire and against Defendants in the sum $7, 333.33 on
each of the two claims, for a total of $14, 666.66. Amended
Judgment, ECF No. 19-1.
early May of 2012, Dennis M. Moskal, counsel for Plaintiff,
sent a demand letter to Defendants, requesting that they
“immediately cease and desist from any further
commercial use of the Trademark in connection with
advertising, promotion, offer or sale of any goods or
services.” Letter, ECF No. 99-1; see Compl. ¶
26. Defendants did not comply with Plaintiff's demand
letter. Rather, Defendants continue to use the Trademark.
Compl. ¶¶ 27-28.
website-both at the former address,
www.surfsupfun.com and at the current address,
registered trademark, “Surf's Up Family Fun
Center.” Compl. ¶ 24; see also ECF No.
99-2 (printed copy of homepage provided by Plaintiff with
Aug. 27, 2017 filing). This remains true as of the writing of
this Report. http://www.myrtlebeachlasertag.com
(last visited Nov. 14, 2017).
goes to the website www.lasertaggroup.com, and
clicks on the icon “Locations” a viewer will see
the listing for “Surf's Up Family Fun Center”
and can connect directly to its website.
visited Nov. 14, 2017), see ECF No. 99-3. If one
clicks on the “On TV” icon, the viewer can
actually watch the television commercial for the
“Surf's Up Family Fun Center” wherein the
protected Trademark is displayed prominently throughout.
visited Nov. 6, 2017); see ECF No. 99-4. At the
bottom of the “extrememyrtlebeach.com” home page
is a banner indicating the “[s]ite design and content
[is] by Rick Rahim.”
http://www.extrememyrtlebeach.com (last visited Nov.
14, 2017). The website information continues:
“Copyright Myrtle Laser Tag, LLC I Managed by
BusinessVentures.com II A LaserTagGroup.com store.”
Id.; see also ECF No. 99-3 (copy of
LaserTagGroup.Com homepage showing locations, including
Surf's Up Family Fun Center as “Myrtle Beach
(#1)”). This remains true as of the writing of this
alleged by Plaintiff, Defendants' continued use of the
Trademark has created confusion as to the business and
source, affiliation, approval and/or sponsorship of the
materials, advertisements, and services bearing the
Trademark. Plaintiff further alleges consumers are likely to
incorrectly believe that Defendants'
www.lasertaggroup.com website and its
www.myrtlebeachlasertag.com website, as well as its
business venture and products, are associated with Plaintiff.
Plaintiff submits such confusion has damaged its ability to
interact with potential patrons and gain revenue through the
sale of merchandise bearing the Trademark and, consequently,
has prevented or reduced its ability to perform any business
functions. Compl. ¶ 25.
Analysis of Lanham Act claim
these facts as true, the court now reviews the Complaint to
ensure it sets forth claims as to which relief can be granted
pursuant to the standard of Rule 12(b)(6) of the Federal
Rules of Civil Procedure. See Joe Hand Promotions, Inc.
v. Scott's End Zone, Inc., 759 F.Supp.2d 742, 747
(D.S.C. 2010); GlobalSantaFe Corp. v.
Globalsantafe.com, 250 F.Supp.2d 610, 612 n.3 (E.D. Va.
2003). If Plaintiff's claims pass Rule 12(b)(6) muster,
the undersigned must also consider the appropriate damages to
be awarded Plaintiff.
Plaintiff's Complaint includes a cause of action for
common law trademark infringement as well as trademark
infringement in violation of the Lanham Act, Plaintiff's
counsel advised at the hearing that Plaintiff elects to
proceed on its Lanham Act claim.
The Lanham Act provides, in pertinent part:
(1) Any person who shall, without the consent of the
(a) use in commerce any reproduction, counterfeit, copy, or
colorable imitation of a registered mark in connection with
the sale, offering for sale, distribution, or advertising of
any goods or services in connection with which such use is
likely to cause confusion, or to cause mistake, or to
(b) reproduce, counterfeit, copy or colorably imitate a
registered mark and apply such reproduction, counterfeit,
copy, or colorable imitation to labels, signs, prints,
packages, wrapper, receptacles or advertisements intended to
be used in commerce or upon or in connection with the sale,
offering for sale, distribution, or advertising of any goods
or services in connection with which such use is likely to
cause confusion, or to cause mistake, or to deceive, shall be
liable in a civil action by the registrant for the remedies
15 U.S.C. §1114(1)(a) and (b). Further, the Lanham Act
prohibits the “false or misleading description of fact,
or false or misleading representation of fact, which . . . in
commercial advertising or promotion, misrepresents the
nature, characteristics, qualities, or geographic origin of
his or her or another person's goods, services, or
commercial activities.” 15 U.S.C. § 1125(a)(1)(B).
prevail, Plaintiff must demonstrate that it has a
“‘valid, protectable trademark and that the
defendant's use of [the mark or] a colorable imitation of
the trademark is likely to cause confusion among
consumers.'” Synergistic Intern., LLC v.
Korman, 470 F.3d 162, 170 (4th Cir. 2006) (quoting
Lone Star Steakhouse & Saloon, Inc. v. Alpha of Va.,
Inc., 43 F.3d 922, 930 (4th Cir. 1995)). “[A]n
unauthorized use of a trademark infringes the trademark
holder's rights if it is likely to confuse an
‘ordinary consumer' as to the source or sponsorship
of the goods.” Anheuser-Busch, Inc. v. L & L
Wings, Inc., 962 F.2d 316, 318 (4th Cir. 1992).
has presented uncontested evidence that it owns a valid,
protectable trademark for “Surf's Up Family Fun
Center.” Attached to the Complaint is a copy of
Trademark Registration Number 3496814, which was issued to
Surf's Up LLC. The United States Patent and Trademark
Office issued the trade mark for “Surf's Up Family
Fun Center” on September 2, 2008. ECF No. 1-1.
Plaintiff has provided ample evidence of a potential for
confusion or deceit among consumers. Defendants continue to
use the registered mark in operating the same sort of
business and services-laser tag-at the same location where
Plaintiff had run a laser-tag business. See, e.g.,
ECF Nos. 99-2, 99-3, 99-4. Defendants continue to use the
Surf's Up Family Fun Center name in manners certain to
confuse the consuming public as to the source of the service.
Accordingly, the undersigned recommends a finding that
Plaintiff has established the elements of a Lanham Act
trademark infringement claim.
court now considers Plaintiff's request for monetary
damages and other relief. The Lanham Act provides that a
successful litigant “shall be entitled,  subject to
the principles of equity, to recover (1) defendant's
profits, (2) any damages sustained by the plaintiff, and (3)
the costs of the action.” 15 U.S.C. § 1117(a).
Under certain circumstances, the court may award up to three
times the amount of actual damages. Further, the court
“in exceptional cases may award reasonable attorney
fees to the prevailing party.” Id. Here,
Plaintiff seeks monetary damages, attorneys' fees, and
injunctive relief. Plaintiff does not request that the court
treble or otherwise multiply any monetary damages award.
the Lanham Act “gives little guidance on the equitable
principles to be applied by a court in making an award of
damages, ” the Fourth Circuit has set out the following
six nonexclusive factors for courts ...