GS Holistic, LLC v. PQR Enterprise INC. et al

THE UNITED STATES DISTRICT COURT
FOR THE SOUTHERN DISTRICT OF OHIO
WESTERN DIVISION AT DAYTON
GS HOLISTIC, LLC,
Plaintiff,
V.
Case No. 3:23-cv-317
Judge Walter H. Rice
Mag. Judge Michael R. Merz
PQR ENTER. INC., etal.,
Defendants.
ORDER SUSTAINING PLAINTIFFGS HOLISTIC, LLC'S MOTION FOR PARTIAL
SUMMARY JUDGMENT (DOC. #16), AND OVERRULING PLAINTIFF'S MOTION
FOR DEFAULT JUDGMENT AGAINST DEFENDANT PQR ENTERPRISE INC. (DOC.
#17); DEFENDANT PQR SHALL ANSWER PLAINTIFF'S COMPLAINT (DOC. #1)
WITHIN FOURTEEN (14) DAYS OF ENTRY; JUDGMENT SHALL ULTIMATELY
ENTER IN FAVOR OF PLAINTIFF AND AGAINST DEFENDANTS PQR AND
WAHDAN, M ON THE ISSUE OF THE ACTIVIPI', VALIDITY AND OWNERSHIP OF
TRADEMARK NOS. 6, 174, 291, 6, 174, 292, AND 6, 633, 884
On October 19, 2023, Plaintiff GS Holistic, LLC, filed suit against Defendants
PQR Enterprise Inc. ("PQR") and Mahmoud Wahdan, concerning alleged
infringement of United States Patent and Trademark Office ("USPTO")
Registration Nos. 6, 174, 291; 6, 174, 292; and 6, 663, 884 ("Stundenglass Marks").
(Compl., Doc. #1). Plaintiff filed Returns of Service with the Court, purporting to
show that Wahdan was served as PQR's registered agent and individually on
October 26, 2023, and December 14, 2023, respectively. (Doc. #9, PAGEID 65; Doc.
#9-1, PAGEID 67). On January 19, 2024, Wahdan filed a pro se answer. (Doc. #6).
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However, PQR did not answer the Complaint. Neither Defendant was represented
by counsel until August 15, 2025, when present counsel appeared as trial attorney
for both PQR and Wahdan. (Notices of Appearance, Docs. #22, 23).
Upon Order by the Court (Doc. #14), on June 21, 2025, Plaintiff filed a
Motion for Partial Summary Judgment against both Defendants with respect to
the activity, validity, and ownership of the Stundenglass Marks (Doc. #16), and on
June 27, 2025, Plaintiff filed a Motion for Default Judgment against PQR. (Doc.
#17). On August 1, 2025, Wahdan submitted a Motion for Extension of Time to
Retain Counsel, claiming that he was unaware of the proceedings against them.
(Doc. #20, PAGEID 302). The Court ultimately gave Defendants until October 15,
2025, to respond to the Summary Judgment and Default Judgment Motions.
(Notation Order, Doc. #29).
On October 15, 2025, Defendants filed their memorandum contra the
Summary Judgment Motion, stating that they "do not oppose Plaintiff's request
for partial summary judgment regarding the validity and ownership of the
trademarks at issue in this case. Defendants do, however, submit that Plaintiff is
not entitled to summary judgment regarding liability. " (Memo. in Opp., Doc. #31,
PAGEID 340). In its memorandum contrathe Default Judgment Motion, PQR
notes that a Clerk's Entry of Default was never entered against it, and argues that
absent such an entry, the Court cannot enter default judgment. (Memo. in Opp.,
Doc. #30, PAGEID 327, 328-29, citing FED. R. CIV. P. 55; Hamada Franchise Sys. v.
Baroda Enters., LLC, 220 F. R. D. 303, 304 (N. D. Ohio 2004); Fields v. Ohio Dep'tof
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Rehab. & Corr., No. 2:15-cv-1271, 2015 U. S. Dist. LEXIS 71849, *1 (S. D. Jun. 3,
2015) (Kemp, Mag. J. ), report and recommendation adopted at2Q^ U. S. Dist.
LEXIS 149758 (S. D. Ohio Nov. 4, 2015) (Sargus, J. )). Alternatively, PQR observes
that the descriptions by Plaintiff's process server, from when he purportedly
served Wahdan personally and as PQR's registered agent, were inconsistent,
despite the services supposedly taking place at the same time and place. (Id. at
PAGEID 329). PQR argues that this inconsistency means it is uncertain whether
PQR and Wahdan were ever served; at the very least, PQR claims, the
inconsistency and Wahdan's prompt action in retaining counsel upon becoming
aware of the proceedings show that PQR did not engage in culpable conduct. (Id.
at PAGEID 329-30, citing United States v. $22, 050. 00 United States Currency, 595
F. 3d 318, 327 (6th Cir. 2010); Shepard Claims Serv., Inc. v. William Darrah &
Assocs., 796 F. 2d 190, 194 (6th Cir. 1986)).
PQR further argues that Defendants have meritorious defenses as to both
willful liability and damages. (Doc. #30, PAGEID 330-31, citing 15 U. S. C. §§
1114(1 )(b), m4(2)(a), 1117(a)). Finally, PQR claims that it "has not destroyed
documents related to this lawsuit and has attempted to work with Plaintiff to
resolve this dispute. Plaintiff asserts the same claims within this lawsuit against
many Defendants and Plaintiff will not be prejudiced to have to litigate another
case with essentially the same facts. " [Id. at PAGEID 332, citing Dassault
Systemes, SA v. Childress, 663 F. 3d 832, 842 (6th Cir. 201 D). PQR concludes that
none of the three relevant factors weighs in favor of default, Plaintiff's Default
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Motion should be overruled, and PQR should be granted leave to answer the
Complaint. (Id.}
Plaintiff did not file reply memoranda, and the time for doing so has
expired. S. D. OHloCiv. R. 7. 2(a)(2). The matters are ripe for decision.
I. Legal Standards
A. Summary Judgment
Summary judgment shall be granted "if the movant shows that there is no
genuine dispute as to any material fact and the movant is entitled to judgment as
a matter of law. " FED. R. CIV. P. 56(a). Summary judgment must be entered
"against a party who fails to make a showing sufficient to establish the existence
of an element essential to that party's case, and on which that party will bear the
burden of proof at trial. " Celotex Corp. v. Catrett. 477 U. S. 317, 322 (1986). The
moving party always bears the initial responsibility of informing the court of the
basis for its motion, and identifying those portions of the record which it believes
demonstrate the absence of a genuine issue of material fact. Id. at 323; see also
Borettiv. Wiscomb, 930 F. 2d 1150, 1156 (6th Cir. 1991).
Once the moving party has met its initial burden, the nonmoving party must
present evidence that creates a genuine issue of material fact making it necessary
to resolve the difference at trial. Anderson v. Liberty Lobby, Inc., 477 U. S. 242, 250
(1986). Once the burden has so shifted, the party opposing summary judgment
cannot rest on its pleadings or merely reassert its previous allegations. It is not
sufficient to "simply show that there is some metaphysical doubt as to the
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material facts. " Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U. S. 574,
586 (1986). Rule 56 "requires the nonmoving party to go beyond the pleadings,"
and present some type of evidentiary material in support of its position. Celotex,
477 U. S. at 324. "The plaintiff must present more than a scintilla of evidence in
support of his position; the evidence must be such that a jury could reasonably
find for the plaintiff. " Michigan Prot. & Advocacy Serv., Inc. v. Babin, 18 F. 3d 337,
341 (6th Cir. 1994).
"Summary judgment will not lie if the dispute about a material fact is
'genuine, ' that is, if the evidence is such that a reasonable jury could return a
verdict for the nonmoving party. " Anderson, 477 U. S. at 248. In determining
whether a genuine dispute of material fact exists, a court must assume as true the
evidence of the nonmoving party and draw all reasonable inferences in favor of
that party. Id. at 255. If the parties present conflicting evidence, a court may not
decide which evidence to believe. Credibility determinations must be left to the
fact-finder. 10A CHARLESALANWRIGHT,ARTHUR R. MILLER,& MARY KAY KANE, FEDERAL
PRACTICEAND PROCEDURECIVIL§ 2726 (3d ed. 1998).
In determining whether a genuine dispute of material fact exists, a court
need only consider the materials cited by the parties. FED. R. CIV. P. 56(c)(3). "A
district court is not... obligated to wade through and search the entire record for
some specific facts that might support the nonmoving party's claim. " InterRoyal
Corp. v. Sponseller, 889 F. 2d 108, 111 (6th Cir. 1989). If it so chooses, however,
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the court may also consider other properly presented materials in the record.
FED. R. CIV. P. 56(c)(3).
B. Default Judgment
A Clerk's Entry of Default is a prerequisite to obtaining a default judgment.
Devlin v. Kalm, 493 F. App'x 678, 685 (6th Cir. 2012); see also Shepard, 796 F. 2d at
193 ("entry of default is just the first procedural step on the road to obtaining a
default judgment").
"The court may set aside an entry of default for good cause!. ]" FED. R. CIV.P
55(c).
When a defendant seeks relief from an entry of default, three
equitable factors are considered to determine if "good cause" has
been shown under the Rule 55(c) component of the analysis: "(1)
whether culpable conduct of the defendant led to the default, (2)
whether the defendant has a meritorious defense, and (3) whether
the plaintiff will be prejudiced."
Burrell v. Henderson, 434 F. 3d 826, 831 (6th Cir. 2006), quoting Waifersong, Ltd. v.
Classic Music Vending, 976 F. 2d 290, 292 (6th Cir. 1992). Whether to set aside an
entry of default is a matter of discretion. See Shepard Claims Serv., Inc. v. Wm.
Darrah &ASSOCS., 796 F. 2d 190, 194 (6th Cir. 1986) (reviewing refusal to vacate entry
of default for abuse of discretion). Nonetheless, there is a strong preference for
adjudicating cases on their merits; "any doubts as to the propriety of setting aside
a default judgment should be resolved in favor of the application, even in a case
where the showing is not strong. " Hogan v. Cleveland Ave. Rest., Inc., No. 2:15-cv-
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2883, 2023 WL 2664417, *1 (S. D. Ohio Mar. 28, 2023) (internal quotation marks and
citation omitted) (Marbley, C. J. )).
II. Analysis
A. Summary Judgment
In its Motion, Plaintiff presents substantial, valid, and undisputed evidence
that the Stundenglass Marks are valid, active, and assigned to Plaintiff.
Specifically, Plaintiff has attached true and accurate copies of the Stundenglass
Marks registration with the USPTO. (C. Folkerts Decl. 1, Doc. #16-1, PAGEID 91,
117, citing Marks, Doc. #16-1, PAGEID 93-98).
Receipt of a registered trademark automatically invokes a statutory
presumption that the trademark is valid. The statutory presumption
shifts the burden of proof to the party challenging the validity of the
mark. Furthermore, the District Court may not overrule the decision
of registerability of the Patent and Trademark Office (PTO) unless the
party challenging the mark argues persuasively that the mark was
ineligible for protection.
Burke-Parsons-Bowlby Corp. v. Appalachian Log Homes, Inc., 871 F. 2d 590, 593
(6th Cir. 1989) (internal citations omitted). Defendants do not challenge the
validity of the Stundenglass Marks; nor do they dispute Plaintiff's statements that
the Stundenglass Marks were active and owned by Plaintiff at all relevant times in
the litigation. (Doc. #16-1, PAGEID 92, 1114).
As there is no dispute, much less a material one, over activity, validity, and
ownership of the Stundenglass Marks, Plaintiff's Motion for Partial Summary
Judgment (Doc. #16) is SUSTAINED. Judgment shall ultimately enter in favor of
Plaintiff and against Defendants that Stundenglass Marks Nos. 6, 174, 291;
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6, 174, 292; and 6, 633, 884 have been continuously valid, active, and assigned to
Plaintiff.
B. Default Judgment
While Plaintiff argues that the Clerk filed an Entry of Default on June 6, 2025
(Doc. #17, PAGEID 140, citing Order, Doc. #14), the Clerk has never entered default
in the captioned case; nor has Plaintiff moved for such an entry against PQR or
any of the other Defendants. As one cannot obtain default judgment without first
obtaining an entry of default, Shepard, 796 F. 2d at 193, the Default Judgment
Motion must be overruled for that reason alone.
Even if the Clerk had entered default against PQR, however, the Default
Judgment Motion would still not be well-taken. As to the first factor, for
Defendants' conduct "[t]o be treated as culpable, the conduct of a defendant must
display either an intent to thwart judicial proceedings or a reckless disregard for
the effect of its conduct on those proceedings. " Shepard Claims, 796 F. 2d at 194.
"Culpable conduct" is not merely careless conduct or inexcusable neglect. Id.
Plaintiff does not argue that Defendants intentionally thwarted proceedings in this
Court; nor could it reasonably so argue. Further, Plaintiff's own process server
purportedly effected service on PQR more than six weeks before serving Wahdan
personally, and gave inconsistent descriptions ofWahdan when serving him with
respect to PQR versus personally. [Compare Doc. #9, PAGEID 65 (describing
Wahdan as 45 years old and 200 Ib. ) with Doc. #9-1, PAGEID 67 (describing
Wahdan as 65 years old and 240 Ib. ). Given the uncertainty of whether Wahdan
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was served, the Court cannot conclude that PQR acted with reckless disregard for
the proceedings. Thus, the Court concludes that PQR's conduct was not culpable.
"In determining whether a defaulted defendant has a meritorious defense[,]
likelihood of success is not the measure. Rather, if any defense relied upon states
a defense good at law, then a meritorious defense has been advanced. " United
Coin Meter Co., Inc. v. Seaboard Coastline R. R., 705 F. 2d 839, 845 (6th Cir. 1983)
(internal quotation marks and citations omitted). PQR's proffered defenses-lack
of intent and damages are disproportionate to harm- are facially valid and, if
proven, would limit PQR's liability. Indeed, even when a party is in default, the
factual allegations in the Complaint are admitted only as to liability; the Court
must conduct an independent inquiry as to damages. Vesligaj v. Peterson, 331 F.
App'x 351, 355 (6th Cir. 2009). Thus, the "meritorious defense" factor weighs
against enforcing a default.
Finally, as to prejudice, the undersigned notes that courts are loath to keep
defaults in place based solely on prejudice. See Shepard, 796 F. 2d at 194 ("when
the first two factors militate in favor of setting aside the entry, it is an abuse of
discretion for a district court to deny a Rule 55(c) motion in the absence of a willful
failure of the moving party to appear and plead. "). Also, Plaintiff is litigating more
than thirty cases in this Court alone regarding alleged infringement of the
Stundenglass Marks. In other words. Plaintiff would be pursuing nearly identical
claims for nearly identical relief, meaning that the prejudice from setting aside the
default would be minimal. As all three factors weigh against enforcing a default,
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the Default Judgment Motion(Doc. #17) is OVERRULED for that reason as well.
PQR shall answer, move, or otherwise respond to the Complaint within fourteen
(14)days.
III. Conclusion
For the foregoing reasons. Plaintiff's Motion for Partial Summary Judgment
(Doc. #16) is SUSTAINED, and its Motion for Default Judgment (Doc. #17) is
OVERRULED Judgment shall ultimately enter in favor of Plaintiff and against
Defendants as to the activity, validity, and ownership of the Stundenglass Marks.
PQR shall answer, move, or otherwise respond to the Complaint within fourteen
(14) days.
IT IS SO ORDERED.
November 13, 2025
.»
WALTER H. RICE, JUDGE
UNITED STATES DISTRICT COURT
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