Am. Infertility of N.Y., P.C. v. Deep Blue Health N.Z. Ltd.

• Decision Date: 23 July 2020
• Docket Number: 17 Civ. 5666 (PGG) (BCM)
• Parties: AMERICAN INFERTILITY OF NEW YORK, P.C., Plaintiff, v. DEEP BLUE HEALTH NEW ZEALAND LTD., Defendant.
• Court: U.S. District Court — Southern District of New York

AMERICAN INFERTILITY OF NEW YORK, P.C., Plaintiff, v. DEEP BLUE HEALTH NEW ZEALAND LTD., Defendant.

17 Civ. 5666 (PGG) (BCM)

UNITED STATES DISTRICT COURT SOUTHERN DISTRICT OF NEW YORK

July 23, 2020

ORDER

PAUL G. GARDEPHE, U.S.D.J.:

Plaintiff American Infertility of New York, P.C. brings this patent infringement action against Defendant Deep Blue Health New Zealand Ltd. (Cmplt. (Dkt. No. 1)) This Court entered an Order of Default against Defendant (Dkt. No. 52) and referred this case to Magistrate Judge Barbara Moses for an inquest on damages. (Dkt. No. 51) Judge Moses issued a Report and Recommendation ("R&R") in which she recommends that Plaintiff be awarded $1.00 in nominal damages and $4,272.60 in costs. (R&R (Dkt. No. 59) at 22) Judge Moses also recommends that Defendant be permanently enjoined from infringing on U.S. Patent No. 8,067,400 (the "'400 Patent"). (Id.) For the reasons stated below, the R&R will be adopted in its entirety.

BACKGROUND

I. FACTS¹

On November 29, 2011, the U.S. Patent and Trademark Office issued the '400Patent, titled "Androgen Treatment in Females," to Plaintiff. (Cmplt. (Dkt. No. 1) ¶ 10) The '400 Patent is "generally directed to a method for improving the quality of embryos, increasing pregnancy rates, and reducing miscarriage rates by administrating an androgen." (Id. ¶ 12) Claim 1 of the '400 Patent is a "method of decreasing aneuploidy rates in human embryos comprising administering androgen to a female for at least two months." (Id. ¶ 19) Claim 3 is a "method according to claim 1, wherein said androgen is dehydroepiandrosterone [("DHEA")]." (Id. ¶ 20) Claim 4 is a "method according to claim 3, wherein . . . [DHEA] administration comprises between 50 and 100 mg per day." (Id. ¶ 21) Claim 6 is a method of decreasing time to pregnancy and increasing pregnancy rates by administering the androgen for at least two months. (Id. ¶ 22)

Plaintiff is a New York professional corporation and the assignee and owner of all rights, title, and interest in and to the '400 Patent, including the right to assert causes of action arising under the patent and the right to seek and recover for infringement. (Id. ¶ 13) Defendant is a New Zealand corporation that conducts business in the United States. (Id. ¶ 2)

Plaintiff alleges that Defendant has infringed, and has induced others to infringe, on the '400 Patent "by manufacturing, promoting, marketing, making, having made, using, importing, offering for sale, advertising, selling or otherwise making available, within the State of New York and elsewhere throughout the United States, products, including but not limited to DHEA 25mg (the Infringing Product), that contains dehydroepiandrosterone (DHEA) and are administered in accordance with the limitations of at least one claim of the '400 patent." (Id. ¶ 5)

II. PROCEDURAL HISTORY

Plaintiff commenced this action on July 26, 2017, asserting a claim of patent infringement in violation of 35 U.S.C § 271(a)-(b). (Id. ¶ 34) Deep Blue Health was served on March 9, 2018. (Proof of Service (Dkt. No. 26)) On June 11, 2018, Judge Katherine Forrest - to whom this case was then assigned - issued an order noting that her chambers had received a "document via email" which "appear[ed] to be from [D]efendant's counsel." (Dkt. No. 28) Judge Forrest refused to accept the document as "properly filed" because Defendant had not appeared in the case. (Id.)

On July 16, 2018, at Plaintiff's request, the Clerk of Court issued a certificate of default against Defendant. (Dkt. No. 41) On August 20, 2018, Plaintiff moved for a default judgement. (Dkt. No. 45) On August 24, 2018, Judge Forrest directed Defendant to show cause - at a hearing scheduled for September 27, 2018 - why a default judgement should not be entered. (Dkt. No. 46)

On September 20, 2018, this case was reassigned to this Court. On October 5, 2018, this Court rescheduled the September 27 hearing for October 10, 2018. (Order (Dkt. No. 49); Oct. 10, 2020 Tr. (Dkt. No. 55) at 2) Defendant was served with the October 5, 2018 order (Dkt. No. 50), but did not appear at the October 10, 2018 hearing. (Oct. 10, 2020 Tr. (Dkt. No. 55)) Instead, on October 10, 2018, Defendant submitted "Defendant's Submissions on the Application of the Law." (Id. at 4) Because no lawyer had appeared on behalf of Defendant, this Court ruled that the arguments in Defendant's submission could not be considered. (Id. at 2-3) The Court noted, however, that Defendant's submissions left "no question that effective service was made" and that Defendant "was on notice of these proceedings and has chosen not to appear." (Id. at 4)

After the October 10, 2018 hearing, this Court issued an Order of Default against Defendant. (Dkt. No. 52) The same day, the Court referred the case to Judge Moses for an inquest on damages. (Dkt. No. 51)

On December 11, 2018, Plaintiff submitted Proposed Findings of Facts and Conclusions of Law, seeking $10,000.00 in nominal damages, $24,250.00 in attorneys' fees, $19,250.00 in consulting fees, and $4,272.60 in costs. (Proposed Findings of Facts and Conclusions of Law (Dkt. No. 57) ¶¶ 9, 13) Plaintiff also seeks a permanent injunction enjoining Defendant from infringing on the '400 Patent. (Id. ¶ 14)

On December 30, 2019, Judge Moses issued a 23-page R&R, in which she recommends granting the requested injunction and awarding $1.00 in nominal damages and $4,272.60 in costs but otherwise denying the requested relief. (R&R (Dkt. No. 59) at 22) The R&R notifies the parties that they have 14 days to file any objections pursuant to 28 U.S.C. § 636(b)(1) and Fed. R. Civ. P. 72(b). (Id. at 23) The R&R further states that the "[f]ailure to file timely objections will result in a waiver of objections and will preclude appellate review." (Id. (emphasis omitted)) Neither side has filed objections to the R&R.

DISCUSSION

I. LEGAL STANDARD

In reviewing a report and recommendation, a district court "may accept, reject, or modify, in whole or in part, the findings or recommendations made by the magistrate judge." 28 U.S.C. § 636(b)(1)(C). Where a timely objection has been made to the magistrate judge's recommendations, the district court judge "shall make a de novo determination of those portions of the report or specified proposed findings or recommendations to which objection is made." Id.

Where, as here, no objections are filed to a magistrate judge's R&R - despite clear warning that a failure to file objections will result in a waiver of judicial review - judicial review has been waived. See Thomas v. Arn, 474 U.S. 140, 147-48 (1985); see also Mario v. P & C Food Markets, Inc., 313 F.3d 758, 766 (2d Cir. 2002) ("Where parties receive clear notice of the consequences, failure timely to object to a magistrate's report and recommendation operates as a waiver of further judicial review of the magistrate's decision." (citing Small v. Sec'y of Health and Human Servs., 892 F.2d 15, 16 (2d Cir. 1989) (per curiam))); see also Spence v. Superintendent, Great Meadow Correctional Facility, 219 F.3d 162, 174 (2d Cir. 2000) ("Failure to timely object to a report generally waives any further judicial review of the findings contained in the report.").

II. ANALYSIS

Even though the parties have waived their right to judicial review, the Court has nonetheless reviewed Judge Moses' R&R for clear error. As discussed below, the Court finds no error - clear or otherwise - in Judge Moses' thorough and well-reasoned R&R.

A. Jurisdiction and Venue

1. Subject Matter Jurisdiction

As an initial matter, Judge Moses finds that the Court has subject matter jurisdiction over Plaintiff's claims. (R&R (Dkt. No. 59) at 6) This Court agrees. Because Plaintiff sues under the Patent Act, 35 U.S.C. § 101, et seq., there is a federal question under 28 U.S.C. § 1331.

2. Personal Jurisdiction

Judge Moses next analyzes whether the Court has personal jurisdiction over Defendant. (R&R (Dkt. No. 59) at 6) For a federal district court to have personal jurisdictionover a defendant, three requirements must be met: (1) "'plaintiff's service of process upon the defendant must have been procedurally proper'"; (2) '"there must be a statutory basis for personal jurisdiction that renders such service of process effective'"; and (3) '"the exercise of personal jurisdiction must comport with constitutional due process principles.'" (Id. at 6-7 (quoting Licci ex rel. Licci v. Lebanese Canadian Bank, SAL, 673 F.3d 50, 59 (2d Cir. 2012))) Judge Moses correctly determined that all three criteria are satisfied here. First, service of process was procedurally proper because Plaintiff served Defendant under § 387(1)(b) of New Zealand's Companies Act of 1933 by delivering a copy of the summons and complaint to the "'employee in charge of Defendant's office and who was designated by law to accept service of process for Defendant.'" (Id. at 7 (citing Lester Decl. (Dkt. No. 45-1) ¶¶ 6-7 & Ex. 1 (copy of Companies Act § 387); Lester Decl. (Dkt. No. 32) ¶ 7; Proof of Service (Dkt. No. 26))) Thus, Plaintiff's service of the summons and complaint complied with the Federal Rules. (Id. (citing Fed. R. Civ. P. 4(h)(2) (permitting a foreign corporation to be served "at a place not within any judicial district of the United States, in any manner prescribed by Rule 4(f) for serving an individual"); Fed. R. Civ. P. 4(f)(2)(A) (permitting service to be effected on an individual "as prescribed by the foreign country's law for service in that country in an action in its courts of general jurisdiction")) Moreover, as Judge Moses found, there is "'no question'" that '"effective service was made'" and that Defendant had "actual notice of this lawsuit" given Defendant's submissions to Judge Forrest and to this Court. (R&R (Dkt. No. 59) at 7-8 (quoting Oct. 10, 2018 Tr. (Dkt. No. 55) at 4)) see Romandette v. Weetabix Co., 807 F.2d 309, 311 (2d Cir. 1986) ("Rule 4 of the Federal Rules is to be construed liberally to further the purpose of finding personal jurisdiction in cases...