United States District Court, D. Nevada
Charles H. Rimlinger, Jr., et al., Plaintiffs,
Shenyang 245 Factory, et al., Defendants.
ORDER GRANTING IN PART PLAINTIFFS' MOTION FOR DEFAULT JUDGMENT AND DECLARATORY JUDGMENT [DOC. 10]
JENNIFER A. DORSEY, District Judge.
Currently before the Court is Plaintiffs Charles H. Rimlinger and RELS Acquisition Company, Inc.'s Motion for Default Judgment [Doc. 10], seeking entry of a default judgment against Defendants, Shenyang 245 Factory and Chen Yan for a declaration that Defendants infringed on U.S. Patent No. 5, 749, 273 and a permanent injunction enjoining Defendants from continued infringement of this patent. Defendants were properly served on November 7, 2013, but neither has appeared; consequently, the motion is unopposed. Finding this motion can be resolved without a hearing,  and for the reasons set forth below, the Court grants the motion in part, awards declaratory relief, denies injunctive relief, and awards no damages.
In this patent infringement action, Plaintiffs allege that on May 12, 1998, the United States issued Patent No. 5, 749, 273, "Method and apparatus for advancing a tool on a lathe" ("273 Patent"). Doc. 1 at 2. They allege that Rimlinger, who owns the patent, granted an exclusive, worldwide license to RELS on February 1, 2005. Id. at 3. Defendant Shenyang continues to directly and indirectly infringe on the 273 Patent "by making, designing, using, offering to sell, and/or selling in the United States, and/or importing into the United States, products or processes that embody one or more inventions claimed in the 273 Patent." Id. Defendants also allegedly "contribute to and induce the infringement of the 273 Patent by advertising the infringing use in their promotions materials available in the United States... and on their website." Id.
Defendants advertised the infringing products for sale on November 5, 2013, at the Automotive Aftermarket Products Expo in Las Vegas, Nevada ("AAPE Expo"). Id. On that date, Rimlinger approached Shenyang's exhibit booth and spoke to Yan, demanding that Shenyang cease advertising and selling the infringing product, but Yan, on behalf of Shenyang, rebuffed him. Id. Plaintiffs allege, on information and belief, that Defendants intend to continue infringing on the 273 Patent. Id. at 4.
Plaintiffs brought one count of patent infringement, claiming that (1) Defendants have used, sold, or offered for sale products, machines, and/or tools infringing on each of the elements of one or more of the 273 Patent's claims without license from Plaintiffs; (2) this use violated 35 U.S.C. § 271(a) and/or (f); (3) the infringing use was and continues to be deliberate; and (4) as a result of Defendants' conduct, Plaintiffs have suffered injuries entitling them to relief under 35 U.S.C. § 284, for which they will suffer irreparable harm under 35 U.S.C. § 283. Id. at 4-5. Plaintiffs request declarations that (1) the 273 Patent was duly and legally issued, and is valid and enforceable; (2) Shenyang has "directly infringed, contributorily infringed, and/or induced infringement of one of more claims of the 273 Patent"; (3) Yan has "wilfully infringed" on the 273 Patent; and (4) Defendants have wilfully infringed on the 273 Patent. Id. at 5. Plaintiffs also seek a preliminary and permanent injunction against Defendants "and their respective officers, agents, servants, employees, and attorneys, and those persons in active concert or participation with them who receive actual notice of the order by personal service or otherwise, from committing further acts of infringement" under either 35 U.S.C. §§ 271 or 283. Id. Plaintiffs also seek attorney's fees under 35 U.S.C. § 285, damages under 35 U.S.C. § 284, and plaintiff's costs. Id.
Defendants were both served with a copy of the summons and complaint on November 7, 2013, but neither has appeared. On December 3, 2013, Plaintiffs sought a clerk's entry of default against both defendants, which was entered on December 5, 2013. Docs. 8, 9. Plaintiffs now move this court for a default judgment. Doc. 10.
Plaintiffs properly complied with the requirements for entry of a default judgment by first applying for and obtaining a clerk's entry of default pursuant to Fed R. Civ. Proc. 55(a), and then moving for entry of a default judgment pursuant to Fed. R. Civ. Proc. 55(b)(2). Therefore, the Court may consider the merits of their motion. In their motion, Plaintiffs seek only their declaratory and injunctive relief, but do not re-urge their request for attorney's fees, damages, or costs. See id. at 1, 9-10.
Fed. R. Civ. Proc. 55 provides a mechanism for obtaining a default judgment against a party who has failed to plead or otherwise respond to claims brought against it. Where this failure is "shown by affidavit or otherwise, " the clerk must enter that party's default under Fed. R. Civ. Proc. 55(a). After entry, the movant must request a default judgment from the court under Fed. R. Civ. Proc. 55(b)(2). A district court has discretion to enter a judgment by default,  which typically turns on the consideration of seven factors: (1) potential prejudice to the plaintiff; (2) the merits of the plaintiff's substantive claim; (3) the sufficiency of the complaint; (4) the amount of money at stake in the action; (5) the potential disputes as to material facts; (6) whether the default was due to excusable neglect; and (7) the strong federal policy favoring adjudications on the merits. Rule 54(c) provides that a default judgment entered against a party "must not differ in kind, form, or exceed in amount, what is demanded in the pleadings."
A. Possibility of Prejudice, Substantive Merits, and Sufficiency of Complaint
The Court finds that the first, second, and third Eitel factors all weigh in favor of a default judgment. As to the first factor, Plaintiffs will likely suffer potential prejudice if default judgment is not entered, as Defendants have failed to respond to the Complaint and the harm from the alleged infringement is ongoing.
As to the second and third factors, Plaintiffs' claims appear both sufficient and to have merit. Under 35 U.S.C. § 271(a), "whoever without authority makes, uses, offers to sell, or sells any patented invention, within the United States or imports into the United States any patented invention during the term of the patent therefor, infringes the patent." Similarly, 35 U.S.C. § 271(f) states,
(f)(1) Whoever without authority supplies or causes to be supplied in or from the United States all or a substantial portion of the components of a patented invention, where such components are uncombined in whole or in part, in such manner as to actively induce the combination of such components outside of the United States in a manner that would infringe the patent if such combination occurred within the United States, shall be liable as an infringer.
(2) Whoever without authority supplies or causes to be supplied in or from the United States any component of a patented invention that is especially made or especially adapted for use in the invention and not a staple article or commodity of commerce suitable for substantial noninfringing use, where such component is uncombined in whole or in part, knowing that such component is so made or adapted and intending that such component will be combined outside of the United States in a manner that would infringe the patent if such combination occurred within the United States, shall be liable as an infringer.
Plaintiffs brought one count of patent infringement, claiming that (1) Defendants have used, sold, or offered for sale products, machines, and/or tools infringing on each of the elements of one or more of the 273 Patent's claims without license from Plaintiffs; (2) this use violated 35 U.S.C. § 271(a) and/or (f); (3) the infringing use was and continues to be deliberate; and (4) as a result of Defendants' conduct, Plaintiffs have suffered injuries for which they will suffer irreparable harm under 35 U.S.C. § 283. Id. at 4-5. 35 U.S.C. § 283 gives the courts jurisdiction to grant injunctions for violations of the patent law. To support their claim that the 273 Patent ...