July 27, 2018

U.S. District Court Issues Terminating Sanctions in Trademark Infringement Case

In a significant trademark infringement case initiated by Strategic Partners, Inc. (SPI) against Koi Design, LLC (Koi), the Honorable Terry J. Hatter, Jr., Judge of the United States District Court for the Central District of California, ordered that terminating sanctions be imposed upon Koi, that the answer filed by Koi to SPI’s complaint be stricken and that Koi’s default be entered. This, after Koi and its attorney, Albert Douglas Mastroianni of the Mastroianni Law Firm, failed to pay a massive $250,000 in sanctions previously ordered for their failure to participate in discovery in the case.

The dispute between SPI – represented by Michelman & Robinson, LLP (M&R) – and Koi arose out of Koi’s launch of a line of medical scrubs called Koi Sapphire targeted to healthcare workers. In its U.S. District Court case, SPI contended, among other things, that Koi’s sale of Koi Sapphire scrubs infringed upon SPI’s registered trademark – Sapphire Scrubs – which is associated with a competing collection of scrubs also marketed to medical personnel.

In prosecuting SPI’s action, M&R propounded comprehensive discovery upon Koi, which Koi neglected to respond to. Consequently, M&R filed a motion to compel discovery responses, which was granted by the Honorable Gail J. Standish. Nevertheless, Koi failed to abide by Magistrate Judge Standish’s order to provide answers to interrogatories and produce documents, leading M&R to move for terminating sanctions on behalf of SPI.

After considering Magistrate Judge Standish’s Report and Recommendations, Judge Hatter, on May 17, 2018, issued the mammoth quarter-million dollar sanction order, and made clear that the failure of Koi or Mr. Mastroianni to comply with court orders going forward would result in a judgment for SPI. That is precisely what looks to be happening, with SPI’s motion for default judgment currently in the works. Todd Stitt, Taylor Foss and Robert Estrin are the M&R lawyers who continue to handle the case for SPI.