IP Law Daily, TRADEMARK—9th Cir.: $9.3 million default judgment for supplement company over ‘CHILDLIFE’ marks affirmed, (Oct 14, 2025)

By Saurabh Kashyap, B.A., M.A., LL.B., LL.M.

Appellants’ failure to show “good cause,” its lack meritorious defenses, and its willful conduct justified default judgment under the Lanham Act.

In a nonprecedential disposition, the U.S. Court of Appeals for the Ninth Circuit affirmed a $9.3 million default judgment in favor of Biozeal, LLC and its founder, Murray Colin Clarke, in a trademark counterfeiting dispute against TNSG Health Co. and affiliates. The court held that the defendants’ bad-faith litigation conduct, willful infringement, and failure to show “good cause” for setting aside default justified the district court’s entry of judgment under the Lanham Act (Clarke v. TNSG Health Co., Ltd., Nos. 24-3411 et al. (9th Cir. Oct. 9, 2025)).

Background. The plaintiff/appellee, Biozeal, LLC, is a Delaware company engaged in developing nutritional and wellness supplements. It accused TNSG Health Co., Ltd., a U.K. firm, and several affiliates of counterfeiting Biozeal’s registered marks.

Biozeal and its founder, Dr. Murray Colin Clarke, asserted rights in two federally registered word marks—CHILDLIFE and CHILDLIFE ESSENTIALS—used in connection with their line of children’s nutritional supplements. Both marks appear on products marketed as allergy-free, gluten-free, GMO-free, and made without artificial additives. A third mark, NUTRITION FOR KIDS!, though registered on the Supplemental Register, was also referenced as part of the brand identity.

Filed in the Central District of California, the action alleged willful trademark infringement and counterfeiting under the Lanham Act. After defendants failed to retain counsel or respond to the amended complaint, the district court entered default and granted Biozeal’s motion for default judgment.

The court awarded $4 million in statutory damages—$2 million per mark under 15 U.S.C. §1117(c)(2)—and $5,299,205.88 in attorney fees, finding willful infringement and deeming the case “exceptional” under §1117(a). Defendants appealed, arguing improper service, lack of jurisdiction, and excessive damages.

Default and good cause. The Ninth Circuit held that although the district court did not rule explicitly on motions to set aside default, any procedural error was harmless because the defendants failed to show “good cause” under Rule 55(c). Citing Franchise Holding II, LLC v. Huntington Restaurants Group, Inc., 375 F.3d 922, 925–26 (9th Cir. 2004), the court applied the three-factor test: culpable conduct, meritorious defense, and prejudice.

Further, the defendants’ refusal to comply with orders and discovery, and their abandonment of counsel, demonstrated culpability under United States v. Signed Personal Check No. 730 of Yubran S. Mesle, 615 F.3d 1085, 1092 (9th Cir. 2010). Thus, the defendants’ proposed defenses also failed.

Jurisdiction, service, and sufficiency of pleadings. Citing SEC v. Hickey, 322 F.3d 1123, 1128 (9th Cir. 2003), the Ninth Circuit held that the district court properly exercised specific jurisdiction over TNSG Health and its affiliated entities, which functioned as alter egos engaged in a unified counterfeiting scheme.

Referencing Certified Building Products, Inc. v. NLRB, 528 F.2d 968, 969 (9th Cir. 1976), the appellate court found that service of process through TNSG’s U.S. counsel was valid for all related defendants, noting that service upon one alter ego satisfies service for all members of the enterprise.

Drawing on Eclectic Properties East, LLC v. Marcus & Millichap Co., 751 F.3d 990, 995 (9th Cir. 2014), the court concluded that the complaint plausibly alleged commercial use of infringing marks and met the Twombly–Iqbal pleading standard. Finally, referencing TCI Group Life Ins. Plan v. Knoebber, 244 F.3d 691, 701 (9th Cir. 2001), the Ninth Circuit held that setting aside the default would have prejudiced Biozeal by facilitating further collusion, asset transfers, and continued infringement. Collectively, these findings supported the district court's refusal to vacate the default judgment.

Default judgment factors. Applying Eitel v. McCool, 782 F.2d 1470 (9th Cir. 1986), the appellate court upheld the district court’s findings that Biozeal would suffer prejudice without relief, that the complaint was substantively sufficient, and that defendants’ conduct was inexcusable. The court observed that the policy favoring decisions on the merits did not apply when defendants “showed no intent to litigate in good faith.”

Statutory damages. The appellate court affirmed the $4 million statutory damages award under §1117(c)(2), noting that willful infringement justified the statutory maximum. Citing Harris v. Emus Records Corp., 734 F.2d 1329, 1335 (9th Cir. 1984), the court reiterated that statutory damages may be awarded even without proof of actual losses. The district court’s award was appropriate for deterrence and punishment under Nintendo of America, Inc. v. Dragon Pacific International, 40 F.3d 1007, 1011 (9th Cir. 1994), especially given defendants’ repeated counterfeiting attempts.

Attorney fees. The Ninth Circuit upheld the $5.3 million attorneys’ fee award under §1117(a), agreeing that the case was “exceptional” under SunEarth, Inc. v. Sun Earth Solar Power Co., 839 F.3d 1179, 1181 (9th Cir. 2016) (en banc). The district court verified that counsel’s rates were reasonable under McElwaine v. U.S. West, Inc., 176 F.3d 1167, 1173 (9th Cir. 1999), and applied a 5% reduction to eliminate excess billing consistent with Moreno v. City of Sacramento, 534 F.3d 1106, 1112 (9th Cir. 2008).

The defendants’ argument that the court ignored their objections also failed. The Ninth Circuit noted that courts are not required to address each argument explicitly, citing Rita v. United States, 551 U.S. 338, 356 (2007).

The Case is Nos. 24-3411, 24-3414, 24-3417, 24-5440, 24-5441, and 24-5442.

Judge: Per Curiam.

Attorneys: Diana M. Torres (Kirkland & Ellis, LLP) for Biozeal, LLC and Murray Colin Clarke. Peter B. Siegal (Norton Rose Fulbright US LLP) for TNSG Health Co., Ltd.

Companies: TNSG Health Co., Ltd.; Biozeal, LLC; Alps Holding Co. Ltd.; Mom’s Garden Co. Ltd.; Mom’s Garden GmbH; Nature’s Prime LLC; Naturalist Inc.; Tilis Co. Ltd.; Wild Forest, Inc.

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