2109971 Ont. Inc. v. Matrix Hosp. Furniture
| Decision Date | 14 January 2022 |
| Docket Number | Civ. 21-11412 (KM)(CLW) |
| Parties | 2109971 ONTARIO INC. d/b/a Xcella Furniture, Plaintiff, v. MATRIX HOSPITALITY FURNITURE INC. d/b/a Galaxy Home Furnishings And Galaxy Home Furniture, AKAL PURKH GROUP CORP. d/b/a Galaxy Home Furnishings And Galaxy Home Furniture, MATRIX HOSPITALITY FURNITURE INC., MEGA FURNITURE IMPORTS LTD., KULWINDER DEOL, RAJEEV BEDI, AND DILPREET DEOL, Defendants. |
| Court | U.S. District Court — District of New Jersey |
This matter comes before the Court on the motion of the plaintiff 2109971 Ontario, Inc. (“Xcella”) for a default judgment against Matrix Hospitality Furniture, Akal Purkh Group Corp., Mega Furniture Imports, Ltd. Kulwinder Deol, and Dilpreet Deol (collectively, “defendants”) pursuant to Fed.R.Civ.P. 55(b)(2). (DE 8)[1] This action arises from defendants' infringement of the plaintiff's design patent in violation of the rights of Xcella under 35 U.S.C. §§ 271(a) and 289.
For the reasons set forth below, the motion is GRANTED.
“[T]he entry of a default judgment is left primarily to the discretion of the district court.” Hritz v. Woma Corp., 732 F.2d 1178, 1180 (3d Cir. 1984) (citing Tozer v. Charles A. Krause Milling Co., 189 F.2d 242, 244 (3d Cir. 1951)). Because the entry of a default judgment prevents the resolution of claims on the merits “this court does not favor entry of defaults and default judgments.” United States v. $55, 518.05 in U.S. Currency, 728 F.2d 192, 194 (3d Cir. 1984). Thus, before entering default judgment, the Court must determine whether the “unchallenged facts constitute a legitimate cause of action” so that default judgment would be permissible. DirecTV, Inc. v. Asher, 03-cv-1969, 2006 WL 680533, at *1 (D.N.J. Mar. 14, 2006) (citing Wright, Miller, Kane, 10A Federal Practice and Procedure: Civil 3d § 2688, at 58-59, 63).
“[D]efendants are deemed to have admitted the factual allegations of the Complaint by virtue of their default, except those factual allegations related to the amount of damages.” Doe v. Simone, CIV.A. 12-5825, 2013 WL 3772532, at *2 (D.N.J. July 17, 2013). While “courts must accept the plaintiff's well-pleaded factual allegations as true, ” they “need not accept the plaintiff's factual allegations regarding damages as true.” Id. (citing Chanel, Inc. v. Gordashevsky, 558 F.Supp.2d 532, 536 (D.N.J. 2008)). Moreover, if a court finds evidentiary support to be lacking, it may order or permit a plaintiff seeking default judgment to provide additional evidence in support of the allegations. Doe, 2013 WL 3772532, at *2.
Before a court may enter default judgment against a defendant, the plaintiff must have properly served the summons and complaint, and the defendant must have failed to file an answer or otherwise respond to the complaint within the time provided by the Federal Rules, which is twenty-one days. See Gold Kist, Inc. v. Laurinburg Oil Co., Inc., 756 F.2d 14, 18-19 (3d Cir. 1985); Fed.R.Civ.P. 12(a).
After the prerequisites have been satisfied, a court must evaluate the following three factors: “(1) whether the party subject to default has a meritorious defense, (2) the prejudice suffered by the party seeking default, and (3) the culpability of the party subject to default.” Doug Brady, Inc. v. N.J. Bldg. Laborers Statewide Funds, 250 F.R.D. 171, 177 (D.N.J. 2008) (citing Emcasco Ins. Co. v. Sambrick, 834 F.2d 71, 74 (3d Cir. 1987)); accord Gold Kist, 756 F.2d at 19.
The complaint properly alleges that this court has personal jurisdiction over all of the defendants. A federal court may exercise personal jurisdiction over a defendant to the extent authorized by state law. Fed.R.Civ.P. 4(k)(1)(A). New Jersey provides for jurisdiction coextensive with constitutional due process. Miller Yacht Sales, Inc. v. Smith, 384 F.3d 93, 96 (3d Cir. 2004) (citing N.J. Ct. R. 4:4-4). Due process allows for general or specific jurisdiction. Danziger & De Llano, LLP v. Morgan Verkamp LLC, 948 F.3d 124, 129 (3d Cir. 2020). Plaintiff does not argue that the Court has general jurisdiction, so I focus on specific jurisdiction.
A court has specific jurisdiction when the defendant has sufficient contacts with the forum, and plaintiff's claims “arise out of or relate to” those contacts. Ford Motor Co. v. Mont. Eighth Jud. Dist. Ct., 141 S.Ct. 1017, 1025, (2021) (citation omitted). To unpack and apply that principle, the Third Circuit uses a three-part test, requiring the plaintiff to show that (1) the defendant purposefully available itself of the forum, (2) the claims arise out of or relate to at least one of the defendant's activities, and (3) exercising personal jurisdiction comports with fair play and substantial justice. O'Connor, 496 F.3d at 317.
Here, each defendant has purposefully availed itself of New Jersey in relation to the furniture business, the plaintiff's claims relate to the sales of furniture, and the exercise of personal jurisdiction comports with fair play and substantial justice. First, defendant Galaxy has its principal place of business in New Jersey and has a showroom in Fairview, NJ. (Compl. ¶ 18.) Second, defendant Akal Purkh Group is a New Jersey corporation with its principal place of business in Saddle Brook, NJ. (Id. ¶ 19.) Defendant Matrix is a Canadian corporation but participates in shipping furniture to the United States and selling from the New Jersey stores, thus purposefully availing itself of New Jersey in relation to its allegedly infringing products. (Id. ¶ 20.) Defendant Mega also regularly transacts business in New Jersey, purposefully availing itself of the state in relation to its allegedly infringing products. (Id. ¶ 21.) Finally, individual defendants Kulwinder Deol and Dilpreet Deol, though both Canadian residents, are officers of the defendant companies and regularly transact business in New Jersey through those companies, whose New Jersey activities are the subject of the complaint. (Id. ¶ 22.) I thus find that the plaintiff has properly alleged that this court can exercise personal jurisdiction over the defendants.
This action was filed on May 18, 2021. All defendants were properly served in June 2021, triggering the usual twenty-one-day deadline to respond under Fed.R.Civ.P. 12(a). (DE 7-11, 14.) Defendants did not answer or otherwise respond to the complaint, even to the extent of contesting jurisdiction. On October 21, 2021, the Clerk entered default. (Entry preceding DE 16.) On November 8, 2021, plaintiff moved for entry of a default judgment. (DE 20.) The prerequisites to a default judgment are therefore met. See Gold Kist, Inc., 756 F.2d at 18-19.
I next evaluate the following factors: (1) whether the party subject to default has a meritorious defense, (2) the prejudice suffered by the party seeking default, and (3) the culpability of the party subject to default. Gold Kist, 756 F.2d at 19.
As to the first factor, my review of the record reveals no suggestion that plaintiff's claims are legally flawed or that there is a meritorious defense to them. See Doe, 2013 WL 3772532, at *5.
Accepting the factual allegations as admitted by the defendants' default, I find that the plaintiff has stated a claim for patent infringement. The plaintiffs' design patent, United States Design Patent No. D909, 088 (“the ‘088 Patent”) was issued in February 2021 and is valid and in full force. (Compl. ¶ 24-26.) The Complaint further alleges that defendants are, “in bad faith, importing, using, offering for sale, and/or selling furniture” that infringes the ‘088 Patent. (Id. ¶34-50.) The complaint, corroborated by affidavits, thus alleges causes of action for patent infringement, unjust enrichment and civil conspiracy.
To state a claim for design patent infringement, the Complaint must include (1) an allegation of ownership of the patent; (2) the name of the defendant; (3) the patent number allegedly infringed; (4) a statement of the means by which the defendant allegedly infringes; and (5) the section of the patent laws invoked. Hall v. Bed Bath & Beyond, Inc., 705 F.3d 1357, 1362 (Fed. Cir. 2013). The complaint meets this bar. (Compl. ¶ 3-11, 24-26, 29-33, 34-46, 53-55.) It also includes as exhibits both the design patent and pictures of the defendants' alleged infringing products with side-by-side comparisons to the patent. (Id., Ex. A, Ex. B.)
To prove the claim for design patent infringement, the plaintiff must demonstrate that an “ordinary observer” would find the patented design and the infringing product to be substantially similar. Egyptian Goddess, Inc. v. Swisa, Inc., 543 F.3d 665, 668 (Fed. Cir. 2008). The design patent claims “an ornamental design for a seating unit.” (Compl., Ex. A.) The ornamental design, in the figures provided, is a raised panel attached to the outside of a couch or armchair that features a narrow rectangular piece of metal that gathers the fabric on the panel into a roughly hourglass shape. (Id.) Defendants' infringing products contain the same type of panel with a similar horizontal piece of metal gathering the fabric in what appears to be the same shape. (Id., Ex. B.) From my personal examination of the exhibits, I conclude that the accused ornament is plausibly alleged to be identical to the design in the plaintiff's patent. Thus, taking the allegations of the complaint true, I find that plaintiff has sufficiently established its case for design patent infringement. The materials before the Court do not suggest that defendants have any meritorious defense.
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