1 2 3 4 5 6 7 8 UNITED STATES DISTRICT COURT 9 FOR THE EASTERN DISTRICT OF CALIFORNIA 10 11 GS HOLISTIC, LLC, Case No. 1:23-cv-00292-TLN-CSK 12 Plaintiff, FINDINGS AND RECOMMENDATIONS

DENYING PLAINTIFF’S MOTION FOR

13 v. DEFAULT JUDGMENT 14 KINGS SMOKE SHOP D/B/A KING’S

SMOKE SHOP,

15 (ECF No. 42) Defendant. 16 17 Plaintiff GS Holistic, LLC asserts claims for “Federal Trademark Counterfeiting 18 and Infringement, 15 U.S.C. § 1114” and “Federal False Designation of Origin and Unfair 19 Competition, 15 U.S.C. § 1125(a)” against Defendant Kings Smoke Shop d/b/a/ King’s 20 Smoke Shop,1 seeking monetary damages, restitution, an injunction, and other relief. 21 Second Amended Complaint (“SAC”) (ECF No. 28). Defendant has not made an 22 appearance in this action, and a Clerk’s Default was entered on May 8, 2024. (ECF No. 23 37.) Presently pending before the Court is Plaintiff’s motion for default judgment (Pl. 24 Mot., ECF No. 42), which was taken under submission without argument pursuant to 25

26 1 The Second Amended Complaint also alleges claims against Defendant Fathye Kassim. (See ECF No. 28 at 2.) On August 16, 2024, pursuant to Federal Rules of Civil 27 Procedure 4(m) and 41(b), the district judge dismissed Defendant Kassim based on Plaintiff’s failure to serve Defendant Kassim and/or for failure to move this case forward 28 as to Defendant Kassim. (ECF No. 40.) 1 Local Rules 230(c) and (g).2 For the reasons stated below, the Court recommends 2 Plaintiff’s motion for default judgment be DENIED. 3 I. BACKGROUND 4 A. Factual Background 5 The SAC alleges that since 2020, Plaintiff has marketed and sold glass infusers 6 and related accessories using the well-known “Stündenglass” trademark. SAC ¶ 7. 7 Plaintiff is the rightful owner of three federally registered trademarks: (1) U.S. Trademark 8 Registration Number 6,633,884 for “the standard character mark ‘Stündenglass’ in 9 association with goods further identified in registration in international class 011”; 10 (2) U.S. Trademark Registration Number 6,174,292 for “the design plus words mark ‘S’ 11 and its logo in association with goods further identified in the registration in international 12 class 034”; and (3) U.S. Trademark Registration Number 6,174,291 for “the standard 13 character mark ‘Stündenglass’ in association with goods further identified in registration 14 in international class 034.”3 SAC ¶ 11. 15 Plaintiff has used the Stündenglass trademarks in commerce continuously 16 throughout the United States since 2020. SAC ¶ 13. Plaintiff alleges the Stündenglass 17 trademarks are “distinctive to both the consuming public and the Plaintiff’s trade” and 18 that products branded with these trademarks are made from “superior materials” that are 19 “readily apparent to consumers” and “industry professionals.” Id. ¶ 14. Plaintiff alleges 20 the trademarks are exclusive to it and appear clearly on its products, packaging and 21 advertisements and that it has expended substantial time, money, and other resources 22

23 2 This motion is referred to the undersigned pursuant to Local Rule 302(c)(19) and 28 U.S.C. § 636(b)(1)(A). 24 3 The Nice Agreement establishes a classification of goods and services for the purposes of registering trademarks and service marks. Class 11 goods include 25 “apparatus and installations for lighting, heating, cooling, steam generating, cooking, 26 drying, ventilating, water supply and sanitary purposes.” Class 34 goods include “tobacco and tobacco substitutes; cigarettes and cigars; electronic cigarettes and oral 27 vaporizers for smokers; smokers’ articles; matches.” See List of Goods and Services in Class Order, Nice Classification Index, accessed May 9, 2025, available at 28 https://nclpub.wipo.int/enfr/. 1 in developing, advertising, and otherwise promoting and protecting its trademarks. 2 Id. ¶¶ 15, 17. Plaintiff alleges it has 3,000 authorized stores in the United States, 3 including in California, selling its products using the Stündenglass trademarks and 4 reaching a vast array of consumers throughout the country. Id. ¶ 20. Plaintiff alleges its 5 products using the Stündenglass trademarks have a higher sales value than non- 6 Stündenglass branded products and because of this, its products are targeted by 7 counterfeiters. Id. ¶¶ 21-22. 8 The SAC alleges Defendant has, and continues to, offer for sale counterfeit 9 products using the Stündenglass trademarks, including reproductions, counterfeits, 10 copies and/or colorable imitations of one or more of the Stündenglass trademarks, 11 without the consent of Plaintiff. SAC ¶¶ 26-28. Specifically, the SAC alleges that on 12 October 17, 2022, Plaintiff’s investigator “purchased a Glass Infuser with Stündenglass 13 [tradem]arks affixed to it” from Defendant for $350.00 and that “it was a Counterfeit 14 product in that it displayed” the three Stündenglass trademarks. Id. ¶¶ 31-32. Plaintiff 15 alleges Defendant’s “Counterfeit Good contained all three of [Plaintiff’s] trademarks” and 16 that Defendant’s use of the “Counterfeit [trademarks] is “substantially indistinguishable” 17 or “identical” to Plaintiff’s trademarks. Id. ¶¶ 32-33. Plaintiff further alleges Fathye 18 Kassim “authorized, directed, and/or participated in” Defendant’s “offer for sale, in 19 commerce, of the Counterfeit Goods” and that Fathye Kassim’s “acts were a moving, 20 active, and conscious force behind” Defendant’s infringement of the Stündenglass 21 trademarks. Id. ¶ 34. Plaintiff alleges the use of the counterfeit good “began after the 22 registration of the Stündenglass trademarks” without the consent of Plaintiff. Id. ¶ 35. 23 Plaintiff contends it has suffered losses and damage to the goodwill and 24 reputation of its trademarks because of Defendant Kings Smoke Shop’s acts, which 25 “was, and is, likely to cause confusion or to cause mistake and/or deceive consumers 26 who purchase the Counterfeit Goods.” SAC ¶¶ 37-38, 45-48. Plaintiff prays for statutory 27 and treble damages; costs; an order enjoining Defendant’s sale of any counterfeit 28 product using Plaintiff’s Stündenglass trademarks and an order for destruction of 1 products bearing the Stündenglass trademarks; and an accounting and disgorgement of 2 profits/restitution, among other relief. SAC at 13-15. 3 B. Procedural Posture 4 Plaintiff filed a complaint on February 25, 2023, asserting claims against Kings 5 Smokeshop d/b/a Kings Smokeshop and John Doe for Federal Trademark 6 Counterfeiting and Infringement, 15 U.S.C. § 1114 and Federal False Designation of 7 Origin and Unfair Competition, 15 U.S.C. § 1125(a). Compl. (ECF No. 1.) On April 11, 8 2023, Plaintiff requested the entry of default as to Kings Smokeshop, which the Clerk of 9 the Court entered on April 12, 2023. (ECF Nos. 5-6.) On June 1, 2023, Plaintiff filed a 10 First Amended Complaint, which was later stricken by the assigned magistrate judge for 11 failure to seek leave to amend pursuant to Federal Rules of Civil Procedure 15. (ECF 12 Nos. 7, 9.) On June 7, 2023, Plaintiff filed a motion to amend, which the Court granted 13 on June 27, 2023. (ECF Nos. 10, 12.) On June 27, 2023, Plaintiff filed a First Amended 14 Complaint against Defendant Kings Smoke Shop d/b/a King’s Smoke Shop and Fathye 15 Kassim, asserting the same claims as his initial complaint. (ECF No. 13.) On July 10, 16 2023, Plaintiff requested the entry of default as to Defendant Kings Smoke Shop and 17 Kassim, which the Clerk of the Court entered on July 27, 2023. (ECF Nos. 16, 17.) After 18 being ordered by the assigned magistrate judge to file a motion for default judgment on 19 July 31, 2023, Plaintiff filed its motion for default judgment. (ECF Nos. 18, 22.) On 20 January 12, 2024, the assigned magistrate judge denied without prejudice Plaintiff’s 21 motion for default judgment, vacated the defaults entered against each Defendant, and 22 granted Plaintiff an opportunity to file an amended complaint. (ECF No. 27.) On January 23 23, 2024, Plaintiff filed the operative Second Amended Complaint against Defendants 24 Kings Smoke Shop d/b/a King’s Smoke Shop and Fathye Kassim alleging the same 25 claims as his prior complaints. See SAC. 26 On February 9, 2024, Plaintiff filed a motion for extension of time to serve 27 Defendants with the Second Amended Complaint, which was granted on February 12, 28 2024. (ECF Nos. 29-30.) On March 28, 2024, Plaintiff filed a second motion for extension 1 of time to serve Defendants the Second Amended Complaint, which was granted on 2 April 2, 2024. (ECF Nos. 32, 35.) Plaintiff was warned no further extensions would be 3 granted absent a showing of good cause. (ECF No. 35.) 4 On April 1, 2024, Plaintiff filed a proof of summons indicating Defendant Kings 5 Smoke Shop d/b/a King’s Smoke Shop was served with process on February 20, 2024. 6 (ECF No. 33.) The notice indicates personal service was made on the “owner/authorized 7 to accept service”, Sam Mohammaed, at 1940 Crows Landing Rd Ste 9, Modesto, CA 8 95358. Id. Defendant Kings Smoke Shop did not respond to the SAC or make an 9 appearance. See Docket. On May 3, 2024, Plaintiff requested entry of default as to 10 Defendant Kings Smoke Shop, which was entered by the Clerk of the Court on May 8, 11 2024. (ECF Nos. 36-37.) On May 17, 2024, Plaintiff filed a third motion for extension of 12 time to serve Fathye Kassim. (ECF No. 38.) On May 24, 2024, the district judge granted 13 Plaintiff’s third motion for extension of time and noted Plaintiff’s prior requests for 14 extension of time and indicated in its prior April 2, 2024 order that no further extensions 15 would be granted absent a showing of good cause. (ECF No. 39.) The district judge 16 ordered Plaintiff to serve the SAC upon Fathye Kassim, ordered Plaintiff to serve Fathye 17 Kassim no later than June 14, 2024, ordered that no further extensions would be 18 granted, and that failure to timely serve Fathye Kassim would result in a dismissal 19 pursuant to Federal Rules of Civil Procedure 4(m). Id. After Plaintiff failed to file a proof 20 of service or provide the Court with any indication it had served Fathye Kassim as 21 ordered, on August 16, 2024, the district judge dismissed Fathye Kassim from this action 22 pursuant to Federal Rules of Civil Procedure 4(m) and 41(b). (ECF No. 40.) 23 On November 13, 2024, after no action had been taken from Plaintiff, the district 24 judge issued a minute order directing Plaintiff to file a declaration as to the status of this 25 action or a motion for default judgment. (ECF No. 41.) On November 19, 2024, Plaintiff 26 filed the pending motion for default judgment. Pl. Mot. On the same day, Defendant 27 Kings Smoke Shop was served with the motion for default judgment. Pl. Mot. at 26. A 28 hearing was set on the motion before the undersigned for February 18, 2025. (ECF No. 1 44.) Defendant did not respond to the motion for default judgment. See Docket. On 2 December 17, 2024, the undersigned issued an order taking Plaintiff’s motion under 3 submission; vacating the hearing; ordering a written response from Defendant Kings 4 Smoke Shop by January 6, 2025; and directing Plaintiff to serve Defendant Kings Smoke 5 Shop with a copy of the order. (ECF No. 45.) A copy of the December 17, 2024 order 6 was served on Defendant Kings Smoke Shop by mail the same day. (ECF No. 46.) 7 Defendant Kings Smoke Shop did not respond. See Docket. This pending motion 8 proceeds as to Defendant Kings Smoke Shop only. 9 II. LEGAL STANDARDS 10 Under Federal Rule of Civil Procedure 55, default may be entered against a party 11 against whom a judgment for affirmative relief is sought who fails to plead or otherwise 12 defend against the action. See Fed. R. Civ. P. 55(a). However, this default does not 13 automatically entitle the plaintiff to a judgment. PepsiCo, Inc. v. Cal. Sec. Cans, 238 F. 14 Supp. 2d 1172, 1174 (C.D. Cal. 2002) (citations omitted). The decision to grant or deny 15 the entry of default judgment is within the district court’s discretion. NewGen, LLC v. 16 Safe Cig, LLC, 840 F.3d 606, 616 (9th Cir. 2016). 17 In determining whether to enter default judgment, courts consider the following 18 factors: 19 1. the possibility of prejudice to the plaintiff; 20 2. the merits of the substantive claim(s); 21 3. the sufficiency of the complaint; 22 4. the amount of money at stake in the lawsuit; 23 5. whether there are any disputes of material fact; 24 6. whether the defendant’s default was due to excusable neglect; and 25 7. the strong policy favoring decisions on the merits. 26 Eitel v. McCool, 782 F.2d 1470, 1471-72 (9th Cir. 1986). The Ninth Circuit has long 27 disfavored default judgments, counseling that cases be decided on the merits “whenever 28 reasonably possible.” Id. at 1472. 1 Once a default is entered, all well-pled allegations in the complaint regarding 2 liability are deemed true. Fair Hous. of Marin v. Combs, 285 F.3d 899, 906 (9th Cir. 3 2002). “On the other hand, a defendant is not held to admit facts that are not well- 4 pleaded or to admit conclusions of law.” United States v. Cathcart, 2010 WL 1048829, at 5 *4 (N.D. Cal. Feb. 12, 2010) (citation omitted). “[I]t follows from this that facts which are 6 not established by the pleadings of the prevailing party, or claims which are not well- 7 pleaded, are not binding and cannot support the judgment.” Danning v. Lavine, 572 F.2d 8 1386, 1388 (9th Cir. 1978). Necessary facts not contained in the pleadings and claims 9 which are legally insufficient are not established by default. DIRECTV, Inc. v. Hoa 10 Huynh, 503 F.3d 847, 854 (9th Cir. 2007). Further, a plaintiff’s allegations regarding 11 damages are not deemed true at default, and the plaintiff bears the burden to prove 12 damages with evidence. See Fed. R. Civ. P. 55(b)(2)(C); Geddes v. United Fin. Grp., 13 559 F.2d 557, 560 (9th Cir. 1977). 14 III. DISCUSSION 15 A. Jurisdiction 16 When default judgment is sought, the “district court has an affirmative duty to look 17 into its jurisdiction over both the subject matter and the parties.” In re Tuli, 172 F.3d 707, 18 712 (9th Cir. 1999) (citations omitted). The Court has subject matter jurisdiction over this 19 action pursuant to 28 U.S.C. § 1331 because it arises under federal trademark law, 20 15 U.S.C. § 1051, et seq. In addition, the Court has personal jurisdiction over Defendant 21 Kings Smoke Shop, who is alleged to be a California resident. SAC ¶ 5. The Court’s 22 jurisdiction analysis is not a finding that the claims are sufficiently pled. 23 B. Default Judgment 24 1. Service of Complaint 25 In reviewing a motion for default judgment, the Court must determine whether 26 Defendant Kings Smoke Shop was properly served with the summons and complaint. 27 Fed. R. Civ. P. 4(c). Under California law, “[a] summons may be served on a corporation 28 by delivering a copy of the summons and the complaint” on an authorized agent by 1 personal delivery. Cal. Civ. Proc. §§ 415.10, 416.10. On February 20, 2024 at 7:39 p.m., 2 a third-party process server properly served Defendant Kings Smoke Shop with the SAC 3 and summons. (ECF No. 33.) 4 2. Eitel Factors 5 For the following reasons, the Court finds that the Eitel factors weigh against 6 granting default judgment against Defendant. Specifically, the Court finds the SAC is 7 deficient in several respects and fails to state a claim under the second and third Eitel 8 factors. The second and third Eitel factors, which are often analyzed together, consider 9 the substantive merits of a plaintiff's claim and the sufficiency of its pleadings. PepsiCo, 10 Inc., 238 F. Supp. 2d at 1175. The issue on default judgment is “whether the allegations 11 in the complaint are sufficient to state a claim on which the [plaintiff] may recover.” 12 Danning, 572 F.2d at 1388. In reviewing a default judgment, a court must take the well- 13 pleaded factual allegations of the complaint as true. Cripps v. Life Ins. Co. of N. Am., 980 14 F.2d 1261, 1267 (9th Cir. 1992). “However, necessary facts not contained in the 15 pleadings, and claims which are legally insufficient, are not established by default.” Id. 16 Plaintiff asserts two claims in this action: (1) trademark counterfeiting and 17 infringement under 15 U.S.C. § 1114, and (2) false designation of origin and unfair 18 competition under 15 U.S.C. § 1125(a). SAC at 11-13. The Court addresses each in 19 turn. 20 a) Trademark Infringement and Counterfeiting 21 To state a claim for trademark infringement, a plaintiff must adequately allege it is 22 the owner of a valid, protectable mark, and the alleged infringer is using a similar mark 23 that is likely to confuse. See Grocery Outlet Inc. v. Albertson’s Inc., 497 F.3d 949, 951 24 (9th Cir. 2007). Courts determine the likelihood of confusion by considering: (1) the 25 strength of the mark; (2) the proximity of the goods; (3) the similarity of the marks; (4) the 26 evidence of actual confusion; (5) the marketing channels used; (6) the type of goods and 27 degree of care consumers are likely to exercise in purchasing them; (7) the intent of the 28 defendant in selecting the mark; and (8) the likelihood that the parties will expand their 1 product lines. Lodestar Anstalt v. Bacardi & Co. Ltd., 31 F.4th 1228, 1252 (9th Cir. 2022) 2 (citing AMF Incorporated v. Sleekcraft Boats, 599 F.2d 341, 348-54 (9th Cir. 1979), 3 abrogated on other grounds by Mattel, Inc. v. Walking Mountain Prods., 353 F.3d 792 4 (9th Cir. 2003)). When analyzing a claim brought under a counterfeiting theory, courts 5 need not engage in a likelihood of confusion analysis because a defendant who 6 “deliberately copies the dress of his competitors already in the field…raises a 7 presumption that customers will be deceived.” Louis Vuitton Malletier, S.A. v. Akanoc 8 Sols., Inc., 658 F.3d 936, 946 (9th Cir. 2011) (citations omitted). Instead, courts examine 9 whether the defendant used a non-genuine mark identical to or substantially 10 indistinguishable from the plaintiff’s registered, genuine mark, and the genuine mark was 11 registered for use on the same goods to which the infringer applied the non-genuine 12 mark. Id. 13 First, the SAC adequately alleges the existence of one or more valid trademarks 14 to support Plaintiff’s claim for trademark infringement and counterfeiting. The SAC 15 alleges Plaintiff owns the following three registered trademarks: (1) U.S. Trademark 16 Registration Number 6,633,884 for “the standard character mark ‘Stündenglass’ in 17 association with goods further identified in registration in international class 011”; 18 (2) U.S. Trademark Registration Number 6,174,292 for “the design plus words mark ‘S’ 19 and its logo in association with goods further identified in the registration in international 20 class 034”; and (3) U.S. Trademark Registration Number 6,174,291 for “the standard 21 character mark ‘Stündenglass’ in association with goods further identified in registration 22 in international class 034.” SAC ¶ 11. Registration of a mark on the Principal Register in 23 the Patent and Trademark Office constitutes prima facie evidence of the validity of the 24 registered mark. Applied Info. Scis. Corp. v. eBAY, Inc., 511 F.3d 966, 970 (9th Cir. 25 2007). However, even accepting all well-pled factual allegations as true as required for 26 default judgment motions, the SAC does not allege sufficient facts to support plausible 27 allegations that Defendant used Plaintiff’s trademarks in an infringing or counterfeiting 28 manner. 1 Second, the SAC lacks sufficient factual allegations to plausibly conclude 2 Defendant used Plaintiff’s trademarks. The SAC states that on October 17, 2022, 3 Plaintiff’s investigator “observed that [Defendant’s location] had an excess of Glass 4 Infusers which displayed the Stündenglass Trademarks” and that the “investigator 5 purchased a Glass Infuser with a Stündenglass Marks affixed to it, from [Defendant 6 Kings Smoke Shop], for a cost of $350.00[.]” SAC ¶ 31. Although Plaintiff alleges that all 7 three trademarks were applied to the glass infuser purchased at Defendant’s store, and 8 includes photographs of these trademarks, Plaintiff fails to address how one single 9 product could infringe on two different international classes of goods. While Plaintiff’s 10 motion provides that Defendant’s glass infuser includes all three trademarks and that 11 “Plaintiff’s products are both glass infusers” that can be “used either for smoking 12 purposes or infusing foods and drinks” this does not adequately address how all three 13 trademarks are on Defendant’s single product. Pl. Mot. at 15. In addition, review of the 14 photographs only indicates Defendant’s product is utilized for smoking and does not 15 indicate it can be used as a food and beverage infuser. Compare SAC (ECF No. 28-2), 16 with SAC (ECF No. 28-1). Plaintiff also does not address this discrepancy, which is 17 problematic given Plaintiff seeks damages for infringement as to all three trademarks. 18 Thus, the SAC is deficient for lack of necessary facts. See DIRECTV, 503 F.3d at 854; 19 see also GS Holistic, LLC v. J’s Smoke Shop, 2024 WL 1054899, at *2 (E.D. Cal. Mar. 20 11, 2024) (denying motion for default judgment where, among other things, plaintiff failed 21 to specify which of its three trademarks was used); GS Holistic, LLC v. Pudasaini, 2024 22 WL 710890, at *4 (N.D. Cal. Feb. 21, 2024) (same); GS Holistic, LLC v. Bubbles Smoke 23 Shop, 2023 WL 6787773, at *3 (C.D. Cal. Sept. 5, 2023) (same). 24 Third, the SAC alleges Plaintiff’s investigator purchased a glass infuser with 25 Stündenglass trademarks “affixed to it” from Defendant and that “it was a Counterfeit 26 product in that it displayed the Infringing Marks [].” SAC ¶ 31. As pled, the SAC is vague 27 and conclusory as to the process Plaintiff’s investigator undertook to confirm the 28 similarities in the trademarks and does not clarify, as other courts have noted, whether 1 Defendant is merely reselling Plaintiff’s products and therefore not a counterfeit product, 2 which would not constitute an infringement. See GS Holistic, LLC v. Ravens Smoke 3 Shop, Inc., 2023 WL 5504964, at *5 (citing NEC Electronics v. CAL Circuit Abco, 810 4 F.2d 1506, 1509 (9th Cir. 1987) (noting that the sale of a genuine trademarked product 5 by an unauthorized seller is not a violation of the Lanham Act)); see also GS Holistic, 6 LLC v. Bubbles Smoke Shop, 2023 WL 6787773, at *5 (same). Further, mere assertions 7 that the glass infuser sold by Defendant is “a Counterfeit product in that it displayed the 8 Infringing Marks” are conclusory and not taken as true. See Paulsen v. CNF Inc., 559 9 F.3d 1061, 1071 (9th Cir. 2009) (the court is not required to accept as true legal 10 conclusions in a complaint “merely because they are cast in the form of factual 11 allegations”); see also GS Holistic, LLC v. Cigarette Outlet Smoke Shop, 2024 WL 12 519783, at *2 (E.D. Cal. Feb. 9, 2024) (denying plaintiff’s motion for default judgment for, 13 among other reasons, the complaint’s reliance on conclusory statements that “the Glass 14 Infuser [defendant] sold to Plaintiff’s investigator was a Counterfeit Good with an 15 Infringing Mark affixed to it”). 16 Fourth, although the SAC alleges Defendant’s “use of the counterfeit 17 Stündenglass Trademarks began after the registration of the Stündenglass Trademarks” 18 (SAC ¶ 35), it does not allege when this began—much less provide any other details 19 about Defendant’s allegedly infringing actions. The Court cannot supply necessary facts 20 that are omitted from the SAC. See DIRECTV, 503 F.3d at 854; see also GS Holistic, 21 LLC v. Puff+ LLC, 2024 WL 659362, at *3 (E.D. Cal. Feb. 16, 2024) (rejecting plaintiff’s 22 default judgment motion where the complaint lacked details regarding the defendant’s 23 alleged use where only one instance was alleged); GS Holistic, LLC v. Ashes Plus Nine, 24 2023 WL 5993055, at *4 (N.D. Cal. Aug. 25, 2023) (same). 25 Fifth, the SAC does not allege sufficient facts to support a plausible claim for 26 infringement as to a consumer’s likelihood of confusion. The SAC makes conclusory 27 allegations stating that Defendant “used images and names identical to or confusingly 28 similar to the Stündenglass Marks, to confuse customers and aid in the promotion and 1 sales of Counterfeit Goods”, the “Infringing Goods travel in identical channels of trade 2 and are sold to identical consumers as Stündenglass genuine goods”, and that the 3 “Infringing Marks affixed to the Counterfeit Goods that [Defendant Kings] Smoke Shop 4 has distributed, provided, marketed, advertised, promoted, offered for sale, and/or sold, 5 is confusingly identical or similar to the Stündenglass Marks that [Plaintiff] affixes to its 6 Glass Infusers.” SAC ¶¶ 39-41. Such conclusory allegations lacking in factual support 7 are insufficient for purposes of default judgment. See Paulsen, 559 F.3d at 1071; 8 DIRECTV, 503 F.3d at 854; see also GS Holistic, LLC v. Bubbles Smoke Shop, 2023 9 WL 6787773, at *4 (denying default judgment because the complaint failed to allege 10 facts supporting a Sleekcraft analysis and relied on conclusory statements about the 11 likelihood of confusion). While Plaintiff’s motion makes passing reference to the 12 Sleekcraft factors and provides photographs (see Pl. Mot. at 15 and ECF No. 42-2), 13 there is no effort to apply the applicable legal standards to this case. See GS Holistic, 14 LLC v. Linda, 2023 WL 8878140, at *3 (E.D. Cal. Dec. 22, 2023) (denying motion for 15 default judgment where, among other things, the motion relied on similarly conclusory 16 assertions about the likelihood of confusion). 17 Finally, as to the alleged sale of a counterfeit good, the SAC fails to state a claim 18 because it does not adequately allege that Defendant sold a counterfeit product. Instead, 19 the SAC relies on wholly conclusory allegations, such as allegations that Defendant’s 20 glass diffuser “was a Counterfeit product in that it displayed the Infringing Marks.” SAC 21 ¶ 31. Nor does the SAC explain the types of goods Defendant has sold in the past, other 22 than one glass infuser sold to Plaintiff’s investigator on October 17, 2022. SAC ¶ 31. 23 Thus, the SAC is deficient on Plaintiff’s counterfeit theory as well. See GS Holistic, LLC 24 v. J’s Smoke Shop, 2024 WL 1054899, at *2 (rejecting counterfeit theory on default 25 judgment motion because of the complaint’s failure to allege facts supporting the claim 26 and otherwise reliance on conclusory assertions that defendant’s goods were 27 counterfeit). 28 / / / 1 b) False Designation of Origin and Unfair Competition 2 To establish a claim for false designation of origin under 15 U.S.C. § 1125(a), a 3 plaintiff must show defendant used a false designation of origin in interstate commerce 4 that is likely to cause confusion, mistake, or deception as to the origin, sponsorship, or 5 approval of defendants’ goods or services. Freecycle Network, Inc. v. Oey, 505 F.3d 6 898, 902 (9th Cir. 2007). Claims for false designation of origin, as a type of unfair 7 competition claim, are analyzed similarly to infringement claims because the “ultimate 8 test” for these claims are the same: the public’s likelihood of confusion. Jada Toys, Inc. 9 v. Mattel, Inc., 518 F.3d 628, 632 (9th Cir. 2008) (using the same likelihood of confusion 10 test to analyze trademark infringement and false designation of origin claims); see also 11 Brookfield Commc’ns, Inc. v. W. Coast Ent. Corp., 174 F.3d 1036, 1046 (9th Cir. 1999) 12 (considering false designation of origin claim as one of “unfair competition”); Champions 13 Golf Club, Inc. v. The Champions Golf Club, Inc., 78 F.3d 1111, 1122-23 (6th Cir. 1996) 14 (“[F]alse designation is simply a species of unfair competition.”) (citing McCoy v. 15 Mitsuboshi Cutlery, Inc., 67 F.3d 917, 923 (Fed. Cir. 1995)). 16 Here, the Court has already determined the SAC is deficient on the likelihood of 17 confusion element for the infringement claim. Plaintiff relies on the exact same 18 allegations for its false designation of origin claim. Pl. Mot. at 12-13. Thus, the result is 19 the same for the false designation of origin claim brought under 15 U.S.C. § 1125(a). 20 See Jada, 518 F.3d at 632; see also GS Holistic, LLC v. J’s Smoke Shop, 2024 WL 21 1054899, at *3 (denying default judgment motion on plaintiff’s false designation claim on 22 the same grounds as on the infringement claim—for failure of the complaint to state 23 sufficient claims and failure on the merits); GS Holistic, LLC v. Puff N Go Gift Shop LLC, 24 2023 WL 4146232, at *5 (N.D. Cal. June 22, 2023) (same). 25 For the foregoing reasons, Plaintiff has failed to establish the second and third 26 Eitel Factors and its motion for default judgment should be denied for failure to state a 27 claim under 15 U.S.C. §§ 1114 and 1125(a). 28 / / / 1 C. Federal Actions Related to Plaintiff’s Stündenglass Trademarks 2 Plaintiff has brought many similar, if not identical, claims about its Stündenglass 3 trademarks against other defendants. See GS Holistic, LLC v. Mr Vape Smoke Shop, 4 2024 WL 4545885, at *3 (E.D. Cal. Oct. 22, 2024) (collecting cases). Numerous courts in 5 the Ninth Circuit have found vague and conclusory allegations made by Plaintiff to be 6 insufficient to grant default judgment. See GS Holistic, LLC v. Puff+ LLC, 2024 WL 7 659362, at *3 (collecting cases where motion for default judgment was denied due to GS 8 Holistic’s wholly insufficient pleadings and motion); GS Holistic, LLC v. Kings 9 Smokeshop, 2024 WL 150217, at *2 (E.D. Cal. Jan. 12, 2024) (denying motion for 10 default judgment because the complaint “has not satisfied the second and third Eitel 11 factors; i.e., the merits of plaintiff’s substantive claim and the sufficiency of the 12 complaint”); GS Holistic, LLC v. Ashes Plus Nine, 2023 WL 5993055, at *5 (“[T]his Court 13 and other district courts in this Circuit have found similar (if not almost identical) 14 allegations by GS Holistic equally insufficient”); GS Holistic, LLC v. Ravens Smoke 15 Shop, Inc., 2023 WL 5504964, at *4 (C.D. Cal. July 10, 2023) (“As currently pled, these 16 factual allegations are vague and conclusory, and need not be accepted as true.”); GS 17 Holistic, LLC v. Alien Smoke Shop, 2023 WL 3402589, at *1 (C.D. Cal. Mar. 17, 2023) 18 (“Plaintiff’s allegations of infringement here are insufficient to support a finding that 19 defendants willfully infringed plaintiff’s trademarks”). 20 The undersigned is aware that other courts—including those in this district—have 21 granted motions for default judgment on substantially similar complaints and motions 22 filed by this Plaintiff. See GS Holistic, LLC v. AA 110, 2024 WL 2848455, at *7 (E.D. Cal. 23 June 5, 2024) (granting motion for default judgment in part, but limiting damages to 24 $5,000), report and recommendation adopted sub nom. 2024 WL 3396380 (E.D. Cal. 25 July 12, 2024); GS Holistic, LLC v. Nasher, 2024 WL 1994702, at *1 (E.D. Cal. May 6, 26 2024) (same); GS Holistic, LLC v. Habib’s Disc., 2023 WL 8644103, at *7 (E.D. Cal. Dec. 27 14, 2023) (granting motion for default and awarding $75,000 in damages), report and 28 recommendation adopted sub nom. 2024 WL 495139 (E.D. Cal. Feb. 8, 2024). The 1 undersigned respectfully disagrees, and follows the approach of the many courts that 2 have denied similar motions for default judgment brought by GS Holistic. See, e.g., GS 3 Holistic, LLC v. Puff+ LLC, 2024 WL 659362, at *3; GS Holistic, LLC v. Kings 4 Smokeshop, 2024 WL 150217, at *2; GS Holistic, LLC v. Ashes Plus Nine, 2023 WL 5 5993055, at *5; GS Holistic, LLC v. Ravens Smoke Shop, Inc., 2023 WL 5504964, at *4; 6 GS Holistic, LLC v. Alien Smoke Shop, 2023 WL 3402589, at *1. 7 D. Failure to State a Claim 8 District courts have discretion whether to enter a default judgment. Aldabe v. 9 Aldabe, 616 F.2d 1089, 1092 (9th Cir. 1980). Where a complaint fails to state a claim, 10 default judgment may not be entered. See Aldabe, 616 F.2d at 1092 (affirming the 11 district court’s denial of default judgment where plaintiff’s claims lacked merit); DirecTV, 12 Inc., 503 F.3d at 854-56 (holding “[t]he district court properly refused to grant default 13 judgment” where a plaintiff’s complaint was not well-pleaded and instead provided only 14 “legal conclusions” that were “not held to have admitted through default.”) Accordingly, 15 because Plaintiff has failed to state a claim as to trademark counterfeiting and 16 infringement under 15 U.S.C. § 1114, and false designation of origin and unfair 17 competition under 15 U.S.C. § 1125(a), the Court recommends default judgment be 18 DENIED. 19 E. Dismissal without Leave 20 Plaintiff has failed to cure the deficiencies of its claims despite being provided 21 ample opportunity to do so. Accordingly, the Court finds further amendment would be 22 futile. See Zucco Partners, LLC v. Digimarc Corp., 552 F.3d 981, 1007 (9th Cir. 2009) 23 (affirming district court’s dismissal with prejudice “where the plaintiff has previously been 24 granted leave to amend and has subsequently failed to add the requisite particularity to 25 its claims, ‘the district court’s discretion to deny leave to amend is particularly broad.’“) 26 Here, Plaintiff’s SAC continues to rely on conclusory allegations that are insufficient to 27 state a claim despite awareness of the applicable legal standards and deficiencies in its 28 / / / 1 | prior pleading. Therefore, the Court recommends Plaintiff's SAC be DISMISSED without 2 | leave to amend. 3 | IV. CONCLUSION 4 For the reasons set forth above, it is HEREBY RECOMMENDED that: 5 1. Plaintiff's motion for default judgment (ECF No. 42) be DENIED; 6 2. The Second Amended Complaint (ECF No. 28) be DISMISSED without leave 7 to amend; and 8 3. The Clerk of the Court be directed to close this action. 9 These findings and recommendations are submitted to the United States District 10 | Judge assigned to the case, pursuant to the provisions of 28 U.S.C. § 636(b)(1). Within 11 | 14 days after being served with these findings and recommendations, any party may file 12 | written objections with the Court and serve a copy on all parties. This document should 13 | be captioned “Objections to Magistrate Judge’s Findings and Recommendations.” Any 14 | reply to the objections shall be served on all parties and filed with the Court within 14 15 | days after service of the objections. Failure to file objections within the specified time 16 | may waive the right to appeal the District Court's order. Turner v. Duncan, 158 F.3d 449, 17 | 455 (9th Cir. 1998); Martinez v. Yist, 951 F.2d 1153, 1156-57 (9th Cir. 1991). 18 19 | Dated: May 16, 2025 C iy s \U 20 CHI SOO KIM

UNITED STATES MAGISTRATE JUDGE

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