Innovative Office Prods., Inc. v. Amazon.com, Inc.

INNOVATIVE OFFICE PRODUCTS, INC. v. AMAZON.COM, INC., ET AL.

CIVIL ACTION NO. 10-4487

UNITED STATES DISTRICT COURT FOR THE EASTERN DISTRICT OF PENNSYLVANIA

Dated: April 26, 2012

SURRICK, J.

MEMORANDUM

Presently before the Court is Plaintiff Innovative Office Products, Inc.'s Motion for Entry of Default Final Judgment. (ECF No. 40.) For the following reasons, Plaintiff's Motion will be granted.

I. BACKGROUND

A. Nature of Action and Procedural History

Plaintiff brought this patent infringement action against Defendants Amazon.com, Inc., eBay Inc., Alibaba.com, Inc., S. Link Inc., Zeetron Inc. ("Zeetron"), GainGame, Inc., Lapworks, Inc., Neoteric Solution, Inc., iGear USA LLC, and Bafbiz, Inc. (doing business as KB Covers), pursuant to the United States Patent Act, 35 U.S.C. §§ 1, et seq.¹

Plaintiff is a Pennsylvania corporation with its principal place of business located at 100 Kuebler Road, Easton, Pennsylvania 18040. (Second Am. Compl. ¶ 1.) It manufactures and sells a portable stand for electronic devices under the trademark CRICKET®. (Id. at ¶ 17.) Plaintiff alleges that this portable stand is protected by two patents, (1) United States Patent No.D575,293 ("the '293 Patent"), and (2) United States Patent No. 7,712,719 ("the '719 Patent"). Plaintiff alleges that it owns both of these patents by assignment. (Id. at ¶¶ 15-16.)²

On September 2, 2010, Plaintiff filed a Complaint alleging patent infringement. (Compl., ECF No. 1.) Plaintiff subsequently filed a First Amended Complaint on September 17, 2010, in which Plaintiff added iGear USA LLC and Bafbiz, Inc. as defendants. (First Am. Compl., ECF No. 3.) On November 12, 2010, Plaintiff filed a motion for leave to file a second amended complaint. (ECF No. 4.) We granted this motion on November 23, 2010. (ECF No. 5.) The Second Amended Complaint was filed on that same day. (Second Am. Compl.) Thereafter, most of the Defendants were voluntarily dismissed from the action by Plaintiff. (See ECF Nos. 7 (Notice of Voluntary Dismissal of Bafbiz, Inc.), 35 (Notice of Voluntary Dismissal of iGear USA LLC), 41 (Notice of Voluntary Dismissal of Lapworks, Inc.), 43-45 (Notice of Voluntary Dismissal of eBay Inc. and Order), 46-47 (Notice of Voluntary Dismissal of S. Link Inc. and Order), 48 (Notice of Voluntary Dismissal of Neoteric Solution, Inc.), 53 (Notice of Voluntary Dismissal of Alibaba.com, Inc.), 54 (Notice of Voluntary Dismissal of Amazon.com, Inc).)³

B. Plaintiff's Allegations Against Zeetron and Zeetron's Non-Appearance in This Action

Plaintiff alleges that Zeetron, the sole Defendant remaining in this action and theDefendant against whom this Motion is directed, is a New York corporation with its principal place of business located at 2800 Coyle Street, Apartment 202, Brooklyn, New York 11235. (Second Am. Compl. ¶ 6.)⁴ Plaintiff believes that Zeetron owns, controls and operates the website located at http://www.zeetron.com. (Second Am. Compl. ¶ 166.) Plaintiff alleges that Zeetron has sold and continues to sell, offer for sale and import into the United States products that incorporate the design that is covered by the '293 and '719 Patents without Plaintiff's authorization. (Id. at ¶¶ 167-169.) Plaintiff attaches as an example a screen shot from http://www.amazon.com, which shows a product called "Foldable Stand/Holder/Cradle for iPad Macbook Laptop Notebook Tablet PC," which appears to be "[s]old by Zeetron." (Id. at ¶ 167 & Ex. H.) Plaintiff alleges that these acts constitute direct infringement of the '293 and '719 Patents and that it has been damaged as a result. (Id. at ¶¶ 170, 174, 180; see also Pl.'s Mot. ¶¶ 5-9 & Exs. A-C (asserting that Zeetron's product infringes the '293 and '719 Patents).) In addition, Plaintiff claims that Zeetron has sold and continues to sell and offer for sale these allegedly infringing products to United States customers without Plaintiff's authorization, knowing that these customers will use the products in the United States and therefore infringe the '293 and '719 Patents. (Second Am. Compl. ¶¶ 176-178.) Plaintiff asserts that in so doing, Zeetron induced infringement of the '293 and '719 Patents. (Id. at ¶ 179.) Plaintiff also alleges that Zeetron had actual knowledge of the existence of the '293 and '719 Patents and knew, orshould have known, that its acts constituted infringement of those patents. (Id. at ¶¶ 171-172.)⁵Accordingly, Plaintiff claims that Zeetron's infringement of those patents was willful. (Second Am. Compl. ¶ 173.)

On January 14, 2011, Plaintiff requested an entry of default against Zeetron. (ECF No. 28.) Default was entered by the Clerk of Court on that same day. On February 11, 2011, Plaintiff filed a Motion for Entry of Default Final Judgment against Zeetron, pursuant to Federal Rule of Civil Procedure 55(b)(2).⁶ (Pl.'s Mot.)⁷ Plaintiff seeks a permanent injunction againstZeetron, and its principals, officers, directors, shareholders, employees, affiliates, agents, successors and assigns, from making, using, selling or offering for sale within the United States, or importing into the United States, any product that infringes any of the claims of the '293 Patent or any of the claims of the '719 Patent. (Pl.'s Mot. ¶¶ 13-14.) Plaintiff's Motion was served upon Zeetron on or around February 11, 2011 by United States First Class Mail. (Certificate of Service, ECF No. 40.)

Zeetron has not answered Plaintiff's Complaint, has not entered an appearance in this matter, and has not moved to vacate the entry of default. (See Dkt., Innovative Office Prods., Inc. v. Amazon.com, No. 10-4487 (E.D. Pa. filed Sept. 2, 2010); see also Pl.'s Mot. ¶¶ 3, 12 (averring that as of January 14, 2011, more than twenty-one days since service of the Second Amended Complaint and summons upon Zeetron, Zeetron had not filed an answer and that Zeetron has failed to plead or otherwise defend this action).)

II. LEGAL STANDARD

Federal Rule of Civil Procedure 55(b)(2) provides that a district court may enter default judgment against a party when default has been entered by the Clerk of Court. Fed. R. Civ. P.55(b)(2). The entry of a default by the Clerk, however, does not automatically entitle the non-defaulting party to a default judgment. D'Onofrio v. Il Mattino, 430 F. Supp. 2d 431, 437 (E.D. Pa. 2006) (citing Mwani v. bin Laden, 417 F.3d 1, 6 (D.C. Cir. 2005); Hritz v. Woma Corp., 732 F.2d 1178, 1180 (3d Cir. 1984)). Judgment by default is generally disfavored. Budget Blinds, Inc. v. White, 536 F.3d 244, 258 (3d Cir. 2008); NuMed Rehab., Inc. v. TNS Nursing Homes of Pa., Inc., 187 F.R.D. 222, 223-24 (E.D. Pa. 1999). Nevertheless, the entry of default judgment is a matter within the sound discretion of the district court. Hritz, 732 F.2d at 1180. The Third Circuit has enumerated three factors that govern a district court's determination as to whether a default judgment should be entered: "(1) prejudice to the plaintiff if default is denied, (2) whether the defendant appears to have a litigable defense, and (3) whether defendant's delay is due to culpable conduct." Chamberlain v. Giampapa, 210 F.3d 154, 164 (3d Cir. 2000) (citing United States v. $55,518.05 in U.S. Currency, 728 F.2d 192, 195 (3d Cir. 1984)). If there is a default, "the factual allegations of the complaint, except those relating to damages, will be taken as true." Comdyne I, Inc. v. Corbin, Jr., 908 F.2d 1142, 1149 (3d Cir. 1999) (citing 10 C. Wright, A. Miller & M. Kane, Federal Practice and Procedure § 2688 at 444 (2d ed. 1983)).

III. LEGAL ANALYSIS

A. Defendant's Default

An entry of default under Rule 55(a) of the Federal Rules of Civil Procedure must precede an entry of default judgment under Rule 55(b)(2). Nationwide Mut. Ins. Co. v. Starlight Ballroom Dance Club, Inc., 175 F. App'x 519, 521 n.1 (3d Cir. 2006). Default against Zeetron was properly entered by the Clerk of Court on January 14, 2011. Despite having received a ceaseand desist letter from Plaintiff on September 20, 2010, and having properly been served with the Second Amended Complaint, Zeetron has failed to plead, or even make an appearance, in this action. Moreover, in compliance with the Federal Rules, Plaintiff filed with its Request for Entry of Default an affidavit asserting the grounds for its request. See Fed. R. Civ. P. 55(a) ("When a party against whom a judgment for affirmative relief is sought has failed to plead or otherwise defend, and that failure is shown by affidavit or otherwise, the clerk must enter the party's default.").

1. Prejudice to Plaintiff If Default Is Denied

This action has been pending for over a year and a half. Zeetron has not entered an appearance in this action, and has not responded to the Complaint, the First Amended Complaint or the Second Amended Complaint. Moreover, Zeetron has not filed a response to Plaintiff's Motion, which was filed over a year ago. The Clerk of Court entered default more than one year ago. During this time period, Plaintiff has been unable to enforce its patent rights against Zeetron. On this basis, we conclude that Plaintiff will suffer prejudice if the requested default judgment, which does not seek damages, is denied. See Tristrata Tech., Inc. v. Med. Skin Therapy Research, Inc., 270 F.R.D. 161, 164 (D. Del. 2010) (finding that plaintiff could not enforce its patent rights or recover damages against defendant where action was filed over three years ago, defendant submitted no substantive response, and default was entered over eighteen months ago).

2. Whether Defendant Appears To Have a Litigable Defense

Since Zeetron has not filed an answer or other responsive pleading to the Complaint, the First Amended Complaint or the Second Amended Complaint, it is unclear whether Zeetron hasa litigable defense. Tristata Tech., Inc., 270 F.R.D. at 164; see also Broadcast Music, Inc. v. Spring Mt. Area Bavarian Resort, Ltd., 555 F. Supp. 2d 537, 542 (E.D. Pa. 2008) (entering default judgment where there was "nothing in the record to suggest that Defendan...