## Facts

- Microsoft Corporation owned copyrights in its Windows software (including Windows XP Professional) and owned registered trademarks used in connection with Microsoft software products.
- John Marturano allegedly installed and distributed unauthorized copies of Microsoft’s Windows XP Professional software and used Microsoft trademarks in connection with the copied software.
- Microsoft sent Marturano a letter in 2002 demanding that he stop the alleged infringing conduct.
- Despite that notice, Microsoft alleged that in 2006 Marturano distributed counterfeit Windows XP Professional software to an investigator, supporting Microsoft’s claim that the conduct was willful and part of ongoing business practices rather than a one-time event.
- Microsoft sued Marturano in the U.S. District Court for the Eastern District of California asserting trademark infringement and counterfeiting under the Lanham Act and copyright infringement under the Copyright Act.
- Marturano failed to answer or otherwise respond to the complaint.
- Microsoft moved for default judgment and a permanent injunction, seeking $360,778.60 in monetary relief.
- The district court referred the matter to a magistrate judge for findings and recommendations regarding the motion.

## Issues

1. Whether Microsoft was entitled to default judgment on its Lanham Act trademark infringement/counterfeiting claims and Copyright Act infringement claims based on the complaint’s well-pleaded allegations.
2. Whether Microsoft showed willful infringement sufficient to support enhanced statutory damages.
3. What statutory damages, if any, should be awarded under the Lanham Act and the Copyright Act where actual damages were difficult to prove due to the defendant’s nonappearance.
4. Whether the court should enter a permanent injunction to prevent future infringement and counterfeiting.

## Decision

- The court granted Microsoft’s request for default judgment, treating the complaint’s well-pleaded liability allegations as admitted due to Marturano’s default.
- The court found the allegations supported liability for trademark infringement and counterfeiting under the Lanham Act and copyright infringement under the Copyright Act.
- The court accepted Microsoft’s allegations of willful infringement, including continued distribution after the 2002 notice and the 2006 investigator purchase.
- The court awarded statutory damages in an amount it found justified by the willful and ongoing nature of the infringement and the need for deterrence, in light of Microsoft’s requested total of $360,778.60.
- The court entered a permanent injunction barring Marturano from further infringing Microsoft’s copyrights and using Microsoft’s trademarks in connection with counterfeit or unauthorized Microsoft software, and ordering related remedial relief consistent with typical anti-counterfeiting injunctions.

## Legal Principles

- After entry of default, a court may enter default judgment if the complaint states plausible claims for relief; the plaintiff must still prove entitlement to the requested damages and equitable relief.
- In the Ninth Circuit, courts commonly evaluate motions for default judgment using the Eitel factors, including prejudice to the plaintiff, the sufficiency and merits of the claims, the amount at stake, the likelihood of factual disputes, the possibility of excusable neglect, and the policy favoring decisions on the merits.
- For copyright infringement, statutory damages may be awarded under 17 U.S.C. § 504(c) within the statutory range, with higher awards permitted where infringement is willful.
- For trademark counterfeiting, statutory damages may be awarded under 15 U.S.C. § 1117(c) within the statutory range, with increased awards available for willful counterfeiting.
- Willfulness may be inferred from allegations and evidence that the defendant continued infringing conduct after receiving notice of the plaintiff’s rights.
- Permanent injunctive relief is available in trademark and copyright cases where the record supports a likelihood of continued infringement and where monetary relief alone is insufficient to prevent future violations.

## Conclusion

Microsoft Corporation v. Marturano resulted in default judgment for Microsoft on claims that Marturano willfully distributed counterfeit Windows XP Professional software and used Microsoft marks in connection with that conduct; the court awarded statutory damages and entered a permanent injunction to stop further infringement and counterfeiting.


Microsoft Corporation v. Marturano, 2009 WL 1530040 (2009)