Manwin Entitled to $100K Default Judgment, U.S. Judge Says

Mar 15, 2013 2:30 PM PST

LOS ANGELES — A federal judge has granted Manwin's motion for default judgment against Georgia resident Nicholas Bulgin, who was accused of cybersquatting and extorting the adult entertainment conglomerate.

U.S. District Judge George Wu, however, said that Manwin is only entitled to $100,000 in statutory damages under the Anticybersquatting Consumer Protection Act.

Manwin had been seeking $400,000 in its original demand but bumped it up after its first amended complaint.

Wu also granted Manwin's motions to restrain Bulgin from creating domain names, Twitter accounts or Blogspot pages that use the company's trademarks.

Wu also said he'd grant an order transferring Manwin.net, Manwin.co, ManwinSucks.com, Brazzers.us and Manwin.us to the Luxembourg-based company that has offices in Montreal and Los Angeles.

But Wu halved court costs and attorneys fees, limiting Manwin attorneys to only $5,600 because the damage claim was capped at $100,000.

And Wu rejected Manwin's motion to restrain Bulgin from engaging in "future defamatory conduct."

Bulgin, who last year was served at his home in Hampton, Ga., and has been communicative with opposing counsel as well as XBIZ for news reports, has failed to respond to the court over the suit.

One of the key components of Manwin's case was personal jurisdiction over Bulgin. Wu had asked Manwin to present an argument why jurisdiction would not be improper.

Manwin in previous motions alleged that Bulgin "purposefully directed" activities in California, where it has its Burbank, Calif., headquarters with 150 full-time employees and 137 part-time employees.

Wu said that the court considered factors used in evaluating jurisdiction over Bulgin and that they weighed in favor of Manwin.

"[D]espite communicating with plaintiffs counsel both before and after the commencement of this suit, defendant Bulgin has not formally responded to any of the documents filed in this action," Wu said in his ruling made this week. "He thus fails to present a compelling case as to why the exercise of jurisdiction would be unreasonable."

Looking at the details of the case, Wu said that he agreed with Manwin that Bulgin's conduct is causing injury to Manwin's goodwill and reputation.

"The court also concludes that money damages are unlikely to deter  Bulgin from his ongoing campaign of cybersquatting and defamation, particularly in light of his failure to appear in this litigation," Wu ruled. "A balancing of the hardships also favors Manwin: Bulgin will not be harmed by the proposed injunction because an injunction would merely require [defendant] to comply with the law. By contrast, without an injunction, Manwin's trademarks and reputation will continue to be harmed."

For similar reasons, Wu also said he would order Bulgin to remove existing defamatory statements identified in the complaint, accusing Manwin Managing Partner Fabian Thylmann and other employees of criminal conduct, including "trafficking in child pornography."

Wu, however, put a roadblock to Manwin's request for a permanent injunction with respect to Bulgin's future or continued dissemination or republication of defamatory speech against the company.

According to Manwin, Bulgin mounted an "escalating  campaign of cybersquatting, harassment, and defamation with the goal of extorting Manwin to pay him large sums of money," later trying to interfere in its licensing deal for Playboy Plus Entertainment.

Manwin, in a brief filed last month, said that "first, Bulgin targeted one of Manwin’s most important business partners, Playboy Enterprises International. During negotiations, Manwin said, Bulgin, using the aka "Jim Jagen" reached out to Playboy and accused Manwin of using "stolen property."

"Bulgin went on to write, '[a]s for your joint venture with Manwin, I suggest you seriously look at who you do business with because it can bring great harm to your own company name.' "

The case against Bulgin was initiated in April 2012 after Manwin officials took notice of Manwin.net, which included defamatory pieces relative to child porn on the site.

Manwin said that Bulgin registered the domain name Manwin.net, using the name Gill Manwinder to create a scheme to cause havoc at the company. The company also said that Bulgin used the alias "RadishDreams" in correspondence.

Besides the Playboy instance, Manwin said that Bulgin interfered in a U.S. trademark application after petitioning trademark examiners to cancel their application.

Manwinder, the suit said, claimed that Manwin his family's name. Manwinder claimed he was a businessman from the U.K. who was in the process of setting up various businesses using family name Manwinder.  

In another instance, Bulgin and accomplices are accused of registering Manwin.co, using the name Yi Weng, which purported to be a Chinese woman who maintains a blog to discuss issues of spirituality and charity.

Manwin attorneys also say that the company had been victim to a threat, allegedly tied to Bulgin and others.

The threat, emailed from an encrypted web-based Hushmail account, was directed at Fabian Thylmann, the company's managing partner, and made threats of cyberattacks on Manwin.

Manwin all along in its suit filed at U.S. District Court in Los Angeles has charged that Bulgin "engaged in an elaborate scam to force Manwin to purchase the Manwin domains."

Manwin said that Bulgin sent dozens of emails to company employees threatening to dilute the Manwin trademark and divert its traffic if it did not purchase the domains.

Manwin later made an agreement for some of the domains, but after the deal was brokered Bulgin reneged on it and claimed he wouldn't transfer them, the company's lawsuit said.

Manwin attorneys filed a notice of lodging in the case after Wu's ruling, narrowing the process in finalizing the judgment to within 10 days.

Bulgin, upon reviewing Wu's ruling, told XBIZ that he plans to "fight back."

"I never intended to fight this lawsuit because I was confident that the court would have seen all the lies that was being thrown at them," Bulgin said. "I guess at the end of the day, those with a lot of money will always win if we don't fight back. I look forward to doing just that."

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