Dynamic Mounting LLC v. AV Express, No. 1:2018cv01931 - Document 11 (N.D. Ohio 2019)
Court Description: Opinion & Order signed by Judge James S. Gwin on 2/19/19. The Court, for the reasons set forth in this order, grants in part and denies in part plaintiff's motion for default judgment. The Court enjoins defendant and its affiliates, partners, representatives, servants, employees, attorneys and all persons in active concert privity or participation with defendant from selling its infringing Aeon 50300 and 50310 TV wall mounts. (Related Doc. 10 ) (D,MA)
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Dynamic Mounting LLC v. AV Express Doc. 11 UNITED STATES DISTRICT COURT NORTHERN DISTRICT OF OHIO ----------------------------------------------------------------: : : : : : : : : : : DYNAMIC MOUNTING, LLC, Plaintiff, vs. AV EXPRESS, Defendant. CASE NO. 1:18-CV-1931 OPINION & ORDER [Resolving Doc. 10] ----------------------------------------------------------------JAMES S. GWIN, UNITED STATES DISTRICT JUDGE: Plaintiff alleges that D—‘—n–ant s TV wall mounts “n‘r“n’— its patent. Defendant failed to respond to the complaint, and Plaintiff now moves for entry of default judgment.1 For the following reasons, the Court GRANTS IN PART and DENIES IN PART Pla“nt“‘‘ s motion. I. Background Plaintiff manufactures TV wall mounting systems. It holds United States Patent No. 8,724,037 (th— 037 Pat—nt ), a mount“n’ syst—m allowing the user to mount a TV above a fireplace and vertically lower it on an arm.2 Defendant AV Express appears to sell TV mounts and other products. It markets these products on its website and on Amazon.com. 3 Plaintiff alleges that two of D—‘—n–ant s TV mount models the "A—on 50300 an– A—on 50310 infringe the 037 Patent.4 1 Doc. 10. Doc. 1 at 2; Doc. 1-2. 3 See Doc. 10-3 at 14, 44. 4 Doc. 1 at 3. 2 Dockets.Justia.com Case No. 1:18-cv-1931 Gwin, J. Plaintiff served Defendant by having the Clerk of Court for the United States District Court for the Northern District of Ohio send a copy of the summons and complaint via certified mail to Defendant. The mailing was sent to the business address listed on both D—‘—n–ant s website5 and on file with the Ohio Secretary of State.6 According to the postal service tracking website, the mailing was delivered at 11:29am on September 10, 2018. 7 A –—l“v—ry car– s“’n—– by A. Duss“n’ was r—turn—– to th— Cl—rk.8 To date, Defendant has not responded to the complaint. The Clerk entered default against AV Express on October 15, 2018. 9 Plaintiff now moves for default judgment. It seeks a permanent injunction enjoining Defendant from selling the infringing TV mounts, monetary damages, an– attorn—y s ‘——s and costs.10 II. Discussion Plaintiff moves for a default judgment under Federal Rule of Civil Procedure 55. That rule says that the party may apply to the court for default judgment after the clerk enters default.11 When ruling on a default judgment motion, the Court accepts all wellpleaded complaint allegations as true,12 except those relating to damages.13 5 Doc. 10-3 at 7. Id. at 5. 7 Doc. 10-3 at 11. 8 Doc. 5. 9 Doc. 9. 10 Doc. 10. 11 Fed. R. Civ. P. 55(b)(2). 6 12 See Thomson v. Wooster, 114 U.S. 104, 111 (1885); Au Bon Pain Corp. v. Artect, Inc., 653 F.2d 61, 65 (2d Cir. 1981). Antoine v. Atlas Turner, Inc., 66 F.3d 105, 110 (6th Cir. 1995) ( Wh—r— –ama’—s ar— unl“qu“–at—– a –—‘ault admits only defendant's liability and the amount of damages must be proved. (quot“n’ Fehlhaber v. Fehlhaber, 681 F.2d 1045, 1026 (5th Cir. 1982) (internal quotation marks omitted)). 13 -2- Case No. 1:18-cv-1931 Gwin, J. A. The Court Finds that Plaintiff Properly Served Defendant Before a court may enter default judgment, it must establish its subject-matter jurisdiction over the action and personal jurisdiction over the Defendant by assuring that Defendant was properly served.14 Federal Rule 4(h) provides that a plaintiff may serve a corporation in the same manner for serving an individual.15 Rule 4(e)(1), in turn, provides that one may serve an individual by ‘ollow“n’ stat— law ‘or s—rv“n’ a summons “n an act“on brou’ht “n courts o‘ ’—n—ral ”ur“s–“ct“on “n a stat— wh—r— th— –“str“ct court “s locat—–. 16 Plaintiff served Defendant under the Ohio Rules of Civil Procedure, which provide that a plaintiff may serv— a corporat“on at any o‘ “ts usual plac—s o‘ bus“n—ss 17 by having the Clerk of Court send a certified United States mailing —v“–—nc—– by r—turn r—c—“pt s“’n—– by any p—rson. 18 Here, the Cl—rk s—nt th— ma“l“n’ to th— a––r—ss l“st—– on D—‘—n–ant s w—bs“te and on file with the Ohio Secretary of State. The delivery card was returned and signed.19 Thus, the service was adequate. B. The Court Finds Defendant Liable for Patent Infringement Although the Court takes all well-pleaded complaint allegations as true, the Court must still determine whether these facts give rise to liability.20 Under 35 U.S.C. § 271(a), See Wright and Miller et al., 10A Fed. Prac. & Proc. Civ. § 2682 (4th —–.) ( B—‘or— a –—‘ault can b— —nt—r—–, the court must have subject-matter jurisdiction and jurisdiction over the party against whom the judgment is sought, wh“ch also m—ans that th— party must hav— b——n —‘‘—ct“v—ly s—rv—– w“th proc—ss. ). 15 Fed. R. Civ. P. 4(h)(1)(A). 16 Fed. R. Civ. P. 4(e)(1). 17 Ohio R. Civ. P. 4.2(F). 18 Ohio R. Civ. P. 4.1(A)(1)(a). 19 Doc. 5. 20 Black v. Lane, 22 F.3d 1395, 1407 (7th Cir. 1994) (explaining that the court must determine whether the alleged facts give rise to liability); J & J Sports Prods., Inc. v. Rodriguez, No. 1:08-CV-1350, 2008 WL 14 -3- Case No. 1:18-cv-1931 Gwin, J. who—v—r w“thout author“ty mak—s, us—s, o‘‘—rs to s—ll, or s—lls any pat—nt—– “nvention . . . “n‘r“n’—s th— pat—nt. Accor–“n’ to th— Compla“nt, Pla“nt“‘‘ hol–s th— 037 patent21 and AV Expr—ss s A—on 50300 an– 50310 mounts fall within patent claims 1, 4-9, 14-16, 19-24, 26-33 and 37-38.22 Because Defendant does not have the right to sell infringing products, the Court finds that these allegations adequately establish D—‘—n–ant s l“ab“l“ty for selling the mounts. C. Th— Court Grants Pla“nt“‘‘ s Mot“on ‘or a P—rman—nt In”unct“on Plaintiff asks the Court to permanently enjoin Defendant and its affiliates, partners, representatives, servants, employees, attorneys and all persons in active concert privity or participation with Defendant from selling its infringing Aeon 50300 and 50310 TV wall mounts and from otherwise infringing Plaintiff's pat—nts. 23 A court may issue a permanent injunction24 when the moving party demonstrates that: (1) that it has suffered an irreparable injury; (2) that remedies available at law, such as monetary damages, are inadequate to compensate for that injury; (3) that, considering the balance of hardships between the plaintiff and defendant, a remedy in equity is warranted; an– (4) that th— publ“c “nt—r—st woul– not b— –“ss—rv—– by a p—rman—nt “n”unct“on. 25 In ’—n—ral, courts hav— ’rant—– “n”unct“v— r—l“—‘ upon a ‘“n–“n’ o‘ “n‘r“n’—m—nt “n th— vast majority of patent cases . . . given the difficulty of protecting a right to exclude through 5083149, at *1 (N.D. Ohio Nov. 25, 2008) ( Th— Court, how—v—r, st“ll must –—t—rm“n— wh—th—r th— ‘acts alleged in the Complaint are sufficient to state a claim for relief as to each cause of action for which the pla“nt“‘‘ s——ks –—‘ault ”u–’m—nt. ). 21 Doc. 1 at 2. 22 Id. at 3. 23 Doc. 10-4 (proposed order). 24 See 35 U.S.C. § 283 ( Th— s—v—ral courts hav“n’ ”ur“s–“ct“on o‘ cas—s un–—r th“s t“tl— may ’rant “n”unct“ons in accordance with the principles of equity to prevent the violation of any right secured by patent, on such t—rms as th— court –——ms r—asonabl—. ). 25 eBay Inc. v. MercExchange, L.L.C., 547 U.S. 388, 391 (2006). -4- Case No. 1:18-cv-1931 Gwin, J. monetary damages that allow an infringer to use an “nv—nt“on a’a“nst th— pat—nt—— s w“sh—s. 26 The Court finds that Plaintiff has met the permanent injunction requirements. First, the Court presumes irreparable injury becaus— “n‘r“n’—m—nt “mpl“cat—s th— pat—nt—— s r“’ht to exclude others from using its property.27 For the same reason, the Court presumes that r—m—–“—s at law ar— “na–—quat— to comp—nsat— Pla“nt“‘‘ s “n”ury.28 The Court also finds that the balance of hardships weighs in favor of the Plaintiff, because its patented wall mount is “ts sol— pro–uct an– th— D—‘—n–ant s “n‘r“n’“n’ mount “s ”ust on— amon’ many. F“nally, th— Court finds that the public interest favors injunctive relief as prot—ct“on o‘ pat—nt——s statutory rights generally serves the public interest.29 Though th— Court ‘“n–s that a p—rman—nt “n”unct“on “s prop—r, Pla“nt“‘‘ s requested injunction is overbroad. The Federal Circuit has cautione– a’a“nst “n”unct“ons that s“mply proh“b“t ‘utur— “n‘r“n’—m—nt o‘ a pat—nt b—caus— th—y lack sp—c“‘“c t—rms an– a r—asonably –—ta“l—– –—scr“pt“on o‘ th— acts sou’ht to b— r—stra“n—–. 30 For this reason, the Court does not adopt Pla“nt“‘‘ s propos—– injunct“on lan’ua’— –“r—ct“n’ D—‘—n–ant to r—‘ra“n ‘rom oth—rw“s— “n‘r“n’“n’ Pla“nt“‘‘ s pat—nts. Th— Court oth—rw“s— ’rants Pla“nt“‘‘ s r—qu—st—– injunction. 26 27 Id. at 395. (Roberts, C.J., concurring). See Richardson v. Suzuki Motor Co., 868 F.2d 1226, 1246 47 (Fed. Cir.1989) ( Infringement having been established, it is contrary to the laws of property, of which the patent law partakes, to deny the patentee's right to exclude others from the use of his property. ). 28 See H.H. Robertson Co. v. United Steel Deck, Inc., 820 F.2d 384, 390 (Fed. Cir. 1987) ( Th— natur— o‘ th— patent grant thus weighs against holding that monetary damages will always suffice to make the patentee whole, for the principal valu— o‘ a pat—nt “s “ts statutory r“’ht to —xclu–—. ). 29 See Abbott Labs. v. Andrx Pharm., Inc., 452 F.3d 1331, 1348 (Fed. Cir. 2006). 30 Int'l Rectifier Corp. v. IXYS Corp., 383 F.3d 1312, 1316 (Fed. Cir. 2004) (noting that patent injunctions lacking such specificity violate Federal Rule 65(d)). -5- Case No. 1:18-cv-1931 Gwin, J. D. Th— Court D—n“—s Pla“nt“‘‘ s Mot“on ‘or Dama’—s Plaintiff also requests a reasonable royalty as monetary damages. To determine a reasonable royalty, the Court first looks to an established royalty for the patent. If there is none, the Court th—n cons“–—rs th— suppos—– r—sult o‘ a hypoth—t“cal n—’ot“at“ons b—tw——n pla“nt“‘‘ an– –—‘—n–ant. 31 To determine the results of this hypothetical negotiation, courts customarily consider the factors enumerated in Georgia-Pacific Corp. v. United States Plywood Corp.32 Plaintiff asserts that in a hypothetical negotiation it would have agreed with great reluctance to a 15% royalty on gross sales of the infringing mounts.33 It does not provide any other evidence. This statement, standing alone, is insufficient to support Pla“nt“‘‘ s requested damages award. First, Plaintiff does not give any evidence that Plaintiff obtained a 15% royalty from any other patent licensee. If such agreements exist, Plaintiff should provide them because such actual l“c—ns—s most cl—arly r—‘l—ct th— —conom“c valu— o‘ th— pat—nt—– t—chnolo’y “n th— mark—tplac—. 34 S—con–, Pla“nt“‘‘ s mot“on –o—s not ’“v— su‘‘“c“—nt ‘actual –—ta“l ‘or th— Court to determine a reasonable royalty. Th— Court cannot m—r—ly sp—culat— about th— n—’ot“at“on s outcome, but must car—‘ully t“— proo‘ o‘ –ama’—s to th— cla“m—– “nv—nt“on s ‘ootprint in 31 Rite-Hite Corp. v. Kelley Co., 56 F.3d 1538, 1554 (Fed. Cir. 1995) (en banc). 32 318 F. Supp. 1116, 1120 (S.D.N.Y. 1970). See Doc. 10-1 (propos“n’ a 15% royalty ‘or purpos—s o‘ th“s mot“on only ); Doc. 10-2 at 3 (Massey Decl.) ( I‘ I was forced to provide a license, I would have at least demanded $100 per mount or 25% of [D—‘—n–ant s] ’ross r—v—nu—s. ). 34 LaserDynamics, Inc. v. Quanta Computer, Inc., 694 F.3d 51, 79 (Fed. Cir. 2012). 33 -6- Case No. 1:18-cv-1931 Gwin, J. th— mark—tplac—. 35 Patentees typically offer expert testimony regarding a reasonable royalty.36 Th“r–, Pla“nt“‘‘ s royalty calculat“on –o—s not apport“on th— royalty rat— bas—– on th— incremental value that the patented invention adds to the final product. Even where Defendant holds a patent for the whole product, th— royalty r—war– must b— bas—– on the “ncr—m—ntal valu— that th— pat—nt—– “nv—nt“on a––s to th— —n– pro–uct. 37 Here, the infringing wall mount s valu— st—ms, in part, from non-infringing features. Finally, the Court finds that Pla“nt“‘‘ s royalty base calculation is too speculative. Pla“nt“‘‘ —st“mat—s D—‘—n–ant s ’ross r—v—nu—s by extrapolating from the review numbers on D—‘—n–ant s w—b pa’— an– “ts Amazon.com web page.38 The Court appreciates the difficulty of estimating sales “n l“’ht o‘ D—‘—n–ant s –—‘ault. However, Plaintiff is able to get sales data through a third-party subpoena on Amazon.com. This would provide a more reliable basis for estimating review rates and total sales. Thus, th— Court –—n“—s Pla“nt“‘‘ s mot“on ‘or mon—tary –ama’—s w“thout pr—”u–“c—. E. The Court D—n“—s Pla“nt“‘‘ s Mot“on ‘or Attorn—y s F——s Pla“nt“‘‘ mov—s ‘or attorn—y s ‘——s an– costs. Under 35 U.S.C. 285, a court may award reasonable attorney fees to the prevailing party “n —xc—pt“onal cas—s. Willful 35 36 ResQNet.com, Inc. v. Lansa, Inc., 594 F.3d 860, 869 (Fed. Cir. 2010). See Wordtech Sys. v. Integrated Networks Solutions, Inc. , 609 F.3d 1308, 1321 (Fed. Cir. 2010) (overturning jury award where patentee did not present expert damages testimony and relied on patentee —x—cut“v— s testimony); see also 1 Chisum on Patents § 20.07 ( Exp—rt w“tn—ss t—st“mony “s a pr“mary m—ans by which the parties may introduce evidence on what const“tut—s a r—asonabl— royalty. ). 37 Exmark Mfg. Co. Inc. v. Briggs & Stratton Power Prod. Grp., LLC, 879 F.3d 1332, 1348 (Fed. Cir. 2018) (—xpla“n“n’ that th— royalty rat— ‘or a pat—nt—– mult“bla–— lawn mow—r must b— t“—– to th— pat—nt—– “mprov—m—nt (th— mow—r s control ba‘‘l—) an– not th— ‘“n“sh—– pro–uct as a whol—). 38 That is, Plaintiff arrives at a sales figure by assuming that the product reviews on these web pages represent 3.5% of total sales. -7- Case No. 1:18-cv-1931 Gwin, J. infringement may make a case exceptional.39 Plaintiff estimates that they have spent $30,000 on this matter, but does not provide any billing records. 40 Th— Court us—s th— lo–—star m—tho– to —stabl“sh r—asonabl— attorn—y s ‘——s, wh“ch multiplies the reasonable hours worked by a reasonable hourly rate.41 Because Plaintiff has not provided billing records needed to conduct this analysis, the Court denies Pla“nt“‘‘ s mot“on ‘or attorn—y s ‘——s w“thout pr—”u–“c—. III. Conclusion For the reasons stated above, the Court GRANTS IN PART and DENIES IN PART Pla“nt“‘‘ s mot“on ‘or –—‘ault ”u–’m—nt. Th— Court enjoins Defendant and its affiliates, partners, representatives, servants, employees, attorneys and all persons in active concert privity or participation with Defendant from selling its infringing Aeon 50300 and 50310 TV wall mounts. IT IS SO ORDERED. s/ Dated: February 19, 2019 James S. Gwin JAMES S. GWIN UNITED STATES DISTRICT JUDGE 39 See nCube Corp. v. Seachange Int'l, Inc., 436 F.3d 1317, 1319 (Fed. Cir. 2006). Doc. 10-2 at 3. 41 See, e.g., Rawlings v. Prudential-Bache Properties, Inc., 9 F.3d 513, 515 (6th Cir. 1993). 40 -8-
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