Reported / Citable
Background
Light & Wonder manufactures and distributes electronic gaming machines and software, including the HUFF N’ EVEN MORE PUFF game. All gaming equipment must receive regulatory approval before deployment. In March 2025, L&W discovered Gamble Smart advertising gaming machines displaying L&W’s HUFF N’ EVEN MORE PUFF trademarks and copyrights without authorization. L&W purchased machines from Gamble Smart and discovered they were altered devices missing original serial number plates, contained unauthorized BIOS chips, and were loaded with DEMO versions of L&W software—material that L&W had not authorized for commercial distribution.
L&W filed suit on July 9, 2025, alleging statutory copyright infringement, trademark infringement, and unfair competition. Gamble Smart was served that same day with an answer due July 30. Rather than answer, Gamble Smart requested three successive extensions, pushing the deadline to October 17, 2025—a total 90-day extension. Despite this lengthy grace period, Gamble Smart failed to file a responsive pleading or any Rule 12 motion. The Clerk entered default on October 24, 2025. Gamble Smart subsequently attempted to proceed pro se, which the court rejected because corporations cannot represent themselves without counsel.
The Court’s Holding
The magistrate judge recommended granting L&W’s motion for default judgment and permanent injunction. All six Lindsey factors weighed in favor of default: no material factual issues remained (the defendant’s default admits all well-pled allegations as true); Gamble Smart suffered no substantial prejudice (it was represented by counsel throughout and received multiple deadline extensions); grounds for default were clearly established (failure to answer within 90+ days post-service); the default was not excusable neglect (invoking settlement discussions as cover for non-compliance does not excuse a failure to respond); default judgment would not be overly harsh; and the court would not feel obliged to set it aside. L&W’s detailed factual allegations—including purchase receipts, photographs of altered machines, and the dates of infringement—far exceeded the minimal pleading standard required and gave Gamble Smart fair notice of the claims.
On damages, the court awarded $1,020,000 in statutory copyright damages ($5,000 per work × 204 infringed works), declining L&W’s request for the maximum $30.6 million ($150,000 × 204). While the court found willfulness supported an award above the statutory minimum of $750 per work, L&W offered no evidentiary basis for the maximum and bankruptcy concerns weighed toward a moderate figure. The court awarded $605 in recoverable costs (filing fees only; investigatory purchases and service fees do not qualify under 28 U.S.C. § 1920) and $49,963.50 in attorney’s fees. Finally, the court entered a permanent injunction barring Gamble Smart from manufacturing, selling, or distributing any items bearing L&W’s marks or copyrights.
Key Takeaways
- Default judgment is appropriate when a defendant fails to respond within the extended deadline without offering excusable neglect or good faith mistake; citing ongoing settlement discussions is insufficient justification.
- In copyright cases, statutory damages are “liquidated sums” capable of mathematical calculation, eliminating the need for an evidentiary hearing on damages in default judgments.
- Courts have discretion to award statutory damages within the statutory range ($750–$30,000 per work, or up to $150,000 for willful infringement) and need not award the maximum absent evidence of actual damages or profits.
- Attorney’s fees are “the rule rather than the exception” in copyright actions and should be awarded routinely; the prevailing party bears the burden of itemizing recoverable costs under 28 U.S.C. § 1920, which excludes investigatory expenses and service fees absent exceptional circumstances.
- Permanent injunctions in copyright/trademark cases are appropriate when the defendant admits infringement by default, irreparable harm to reputation and regulatory standing is demonstrated, and the public interest favors enforcement.
- Corporations cannot proceed pro se; pro se filings by entities must be stricken from the record and cannot be considered by the court.
Why It Matters
This decision illustrates how federal courts treat deliberate avoidance in intellectual property litigation. Gamble Smart’s repeated requests for extensions followed by non-compliance left it vulnerable to default—a harsh remedy, but one courts impose when parties had fair notice and ample opportunity to respond. The damages calculation reflects modern copyright practice: courts award statutory damages that deter infringement without bankrupting defendants, particularly where evidence of actual damages is thin. The $5,000-per-work award was sufficient to deter and account for willfulness, but modest enough to account for Gamble Smart’s apparent financial distress.
For IP plaintiffs, this case reinforces that detailed factual pleading—including purchase receipts, photographs, and timelines—is essential even in default scenarios and strengthens the case for both statutory damages and attorney’s fees. For defendants, the message is clear: procedural defaults in copyright and trademark cases carry severe consequences, and settlement discussions do not suspend the obligation to make court deadlines.