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Docrx, Inc. v. Docrx Dispense, Inc.

United States District Court, D. Arizona

April 20, 2015

DocRx, Inc., Plaintiff,
v.
DocRx Dispense, Inc.; Martin
v.
Olson, Defendants.

DEFAULT JUDGMENT OPINION AND PERMANENT INJUNCTION ORDER

PAUL G. ROSENBLATT, District Judge.

Pending before the Court is Plaintiff's Motion for Entry of Default Judgment (Doc. 27). Having considered the motion in light of the relevant record, the Court finds that the motion should be granted in part and denied in part pursuant to Fed.R.Civ.P. 55(b)(2).

Background

Plaintiff DocRx, Inc. commenced this action, which is based on federal question jurisdiction, on April 17, 2014. Its First Amended Complaint ("FAC") (Doc. 9) alleges claims for Infringement of Federally Registered Trademark Under 15 U.S.C. § 1114 (First Cause of Action), Unfair Competition; False Designation of Origin Under 15 U.S.C. § 1125(a) (Second Cause of Action), Anticybersquatting Consumer Protection Act Under 15 U.S.C. § 1125(d) (Third Cause of Action), Common Law Unfair Competition (Fourth Cause of Action), and Intentional Interference with Contractual Relations and Business Expectancies (Fifth Cause of Action.)

The plaintiff, which operates throughout the United States, focuses on providing medications and software to pharmacies and clinics that allow them to dispense medications directly to patients. The plaintiff owns a United States Patent and Trademark Office Service Mark Registration for its "DocRx" mark (Reg. No. 4.504, 977); the trademark was registered in April 2014 and the registration notes that the trademark was first used in commerce in March 2009. The plaintiff registered its Internet domain name of "docrxdispensing.com" in January 2009.

The defendants, DocRx Dispense, Inc. and its president/principal Martin V. Olson, also provide similar pharmaceutical and medical supply-related services. DocRx Dispense, Inc. was incorporated in Arizona in September 2012; the FAC alleges that DocRx Dispense Inc. is the alter ego of Martin V. Olson. Olson registered the Internet domain name "doxrxdispense.com" in October 2011, and the defendants also do business using the domain names "docrxdispense.net, " "docrxdispensevideo.com, " and "docrxdispensewebinar.com." The gist of the plaintiff's FAC is that the defendants' subsequent use of confusingly similar corporate name and domain names to compete with the plaintiff amounts to an unauthorized use of the plaintiff's DocRx mark and constitutes trademark infringement and unfair competition.

DocRx Dispense, Inc. was served with process through the Arizona Corporation Commission on April 28, 2014 (Doc. 13), and Martin V. Olson was personally served with process on May 17, 2014 (Doc. 15). The plaintiff filed its Application for Entry of Default and served it on the defendants on July 8, 2014 (Doc. 17), and the Clerk of the Court entered default against the defendants on July 9, 2014 (Doc. 18). In its pending default judgment application, the plaintiff seeks damages and injunctive relief against the defendants, as well as an award of its attorneys' fees and costs.

Discussion

A. Whether Default Judgment Should be Entered

The Court must consider seven factors in determining whether to exercise its discretion to enter default judgment: (1) the possibility of prejudice to the plaintiff; (2) the merits of the plaintiff's substantive claim; (3) the sufficiency of the complaint; (4) the sum of money at stake; (5) the possibility of a dispute concerning material facts; (6) whether the default was due to excusable neglect; and (7) the strong policy underlying the Federal Rules of Civil Procedure favoring decisions on the merits. Eitel v. McCool, 782 F.2d 1470, 1471-72 (9th Cir.1986). In considering the Eitel factors, the Court takes all factual allegations in the complaint as true, except for those relating to damages. See TeleVideo Systems, Inc. v. Heidenthal, 826 F.2d 915, 917 (9th Cir.1987).

The first factor weighs in favor of granting the plaintiff's motion because the failure to enter default judgment will cause the plaintiff to continue to suffer damage to its goodwill and business reputation due to the defendants' infringement of its trademark and may leave it without any other recourse for recovery.

The second and third factors favor a default judgment because the FAC is both factually and legally sufficient at least as to the federal claims alleged in it, and because the defendants, by defaulting, have admitted the factual allegations in the FAC not related to damages.

The fourth factor also favors a default judgment because the plaintiff is seeking significant damages and injunctive relief, as well as its fees and costs, and the requested relief is balanced in relation to the seriousness of the defendants' infringing conduct.

The fifth factor also favors a default judgment because the sufficiency of the FAC and the defendants' default, along with the plaintiff's submission of evidence supporting its allegations regarding the defendants' infringing conduct, establish ...


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