Grp. One v. GTE GmbH
| Decision Date | 28 February 2022 |
| Docket Number | 20-CV-02205-MKB-JRC |
| Parties | GROUP ONE LTD., Plaintiff, v. GTE GmbH and RALF WEIGEL, Defendants. |
| Court | U.S. District Court — Eastern District of New York |
REPORT AND RECOMMENDATION
Introduction
Plaintiff Group One Ltd. (“Group One” or “plaintiff”) brings this action for patent infringement under the Patent Act, 35 U.S.C. §§ 100, et seq., false advertising under 15 U.S.C § 1125(c) of the Lanham Act; federal unfair competition in violation of Section 43(a) of the Lanham Act, 15 U.S.C § 1125(c); unfair and deceptive trade practices under New York law; unfair competition under the common law of the State of New York; false advertising in violation of N.Y Gen. Bus. Law § 350(e)(3); and trade libel against defendants GTE GmbH (“GTE”) and Ralf Weigel (“Weigel,” and collectively “defendants”).
Plaintiff alleges that defendants “have embarked on an international campaign of infringing several of Group One's duly issued patents directed to let-detection systems for tennis, and have knowingly spread malicious falsehoods about the capabilities of Group One's superior let-detection system to avoid losing customers to Group One.” First Amended Complaint (“Am. Compl.”), Dkt. 39, ¶ 1.
Defendants initially appeared in this action and responded to the Court's July 8, 2020 Order to Show Cause (“OTSC”) for Preliminary Injunction (“PI”), Temporary Restraining Order (“TRO”), and Order Authorizing Alternative Service (referred to as “2020 OTSC”), Dkt. 8. See Dkt. 12 (Defendants' Response to 2020 OTSC). On September 23, 2020, defendants moved to dismiss plaintiff's Complaint, Dkts. 21, 22, and on February 3, 2021, the Court granted in part defendants' motion with respect to Mr. Weigel for lack of personal jurisdiction, Dkt. 25.
On February 23, 2021, shortly after Mr. Weigel was terminated as a party defendant, GTE's counsel moved to withdraw. See Dkt. 29. On February 25, 2021, the Court granted the motion to withdraw and notified GTE that it would be deemed in default if its new counsel did not file a notice of appearance within 30 days. See Dkt. entry dated February 25, 2021.
Since the withdrawal of defendants' counsel, defendants have not appeared through new counsel, nor otherwise defended this action. On July 9, 2021, plaintiff moved for default judgment. See Dkts. 47, 48. Currently pending before this Court, on a referral from the Honorable Chief Judge Margo K. Brodie, is plaintiff's motion for default judgment. See Order Referring Motion dated July 10, 2021. For the reasons stated below, this Court recommends granting in part and denying in part plaintiff's motion, and denying an award of damages.
The following facts are taken from the Amended Complaint (Dkt. 39) and assumed to be true for purposes of plaintiff's motion. Plaintiff Group One is a limited liability company in the Isle of Man, with an administrative office at Viking House, St. Paul's Square, Ramsey, Isle of Man IM8 1GB. See Am. Compl. ¶ 3. Defendant GTE is a German corporation with its principal place of business at Im Brunnenrain 6, 74653 Ingelfingen-Lipfersberg, Germany, and Mr. Weigel is the CEO, sole employee, and sole Owner of GTE with a residence at Im Brunnenrain 6, 74653 Ingelfingen-Lipfersberg, Germany. See id. ¶¶ 5-6.
Plaintiff alleges that Fredric Goldstein (“Goldstein”) developed a novel let-detection system[1] that included features such as “tennis's first integrated shot clock,” i.e., a means to control the shot clock through the let-detection system (the “Net System”). See id. ¶ 25. Goldstein applied for several patents covering plaintiff's Net System and Group One, as the assignee, began marketing the system. See id.
Plaintiff also alleges that defendants' business is in direct competition with plaintiff's business in the let-detection market. See id. ¶ 24. Defendants marketed a let-detection system that was relatively unchanged from 1995 until 2018 (the “Old Trinity System”). See id. ¶ 29. In or around January 2015, the Association of Tennis Professionals (“ATP”) replaced defendants' let-detection system with plaintiff's Net System. See id. ¶ 26. To compete with plaintiff's system, defendants allegedly modified the Old Trinity System to include a shot clock control (referred to as the “present Trinity System”). See id. ¶¶ 29, 45.
On April 30, 2019, the United States Patent and Trademark Office (“USPTO”) issued Patent No. 10,272,307 (“the '307 patent”). See id. ¶¶ 40-41. On March 10, 2020, the USPTO issued Patent No. 10,583,341 (“the '341 patent). See id. ¶¶ 45, 49. Both patents are titled “Tennis New Tension System Including Service Let Indication Feature” and are designed to determine if a service let occurs through the detection and measurement of force exerted by the net. See id. ¶¶ 41, 49. Both patents included “the first integrated shot clock control in tennis.” See id. Before the USPTO issued each patent, Group One allegedly sent defendants notice of the issuance of the impending patents, requested information about defendants' contemplated use of the present Trinity System (that plaintiff alleges infringes its patents), and informed defendants that the present Trinity System “comprising a let detection system with shot clock control, falls squarely within the scope of the '341 patent.” Id. ¶¶ 40-49.
Plaintiff further alleges that defendants' present Trinity System, which they marketed and supplied to the United States Tennis Association (“USTA”) for the 2019 U.S. Open, directly infringes plaintiff's patents, as evidenced by a side-by-side comparison of the patent claims and the present Trinity System's specifications. See id. ¶¶ 30, 54-55, 82-83. Moreover, plaintiff alleges that defendants' Old Trinity System, used at the 2020 U.S. Open,[2] included a second handset with a shot clock control button that also directly infringes plaintiff's patents. See id. ¶¶ 56, 84. By using, selling, offering to sell, or importing the infringing products, plaintiff alleges that defendants are liable for induced infringement and contributory infringement of plaintiff's patents. See id. ¶¶ 61-78, 89-106.
In addition to the patent infringement allegations, plaintiff claims defendants' marketing materials misrepresented plaintiff's product to potential customers, and that these misrepresentations caused plaintiff to lose prospective customers and business opportunities. See id. ¶¶ 31-39. According to plaintiff, the statements in defendants' marketing documents to customers contained materially false information about plaintiff's product. See id.
Plaintiff seeks relief based on defendants' direct, induced, and contributory infringement of the '307 and '341 patents, in violation of 35 U.S.C. § 271 (Counts One through Six); defendants' false advertising under the Lanham Act and false description and representations (Counts Seven and Eight); and defendants' tortious interference with prospective business relations (Count Nine), unfair competition (Count Ten), deceptive trade practices (Count Eleven), false advertising (Count Twelve), and trade libel (Count Thirteen) under New York law. Plaintiff further seeks a permanent injunction and damages.
On May 15, 2020, plaintiff commenced this action against defendants for patent infringement, false advertising, and unfair competition under federal law, and for tortious interference with prospective business relations, unfair and deceptive trade practices, unfair competition, false advertising, and trade libel under New York law. See Compl., Dkt. 1. On July 6, 2020, before defendants were served with the Complaint, plaintiff moved for a Temporary Restraining Order and Preliminary Injunction against defendants, alleging that, without a TRO, defendants' infringing product would be used at the upcoming 2020 U.S. Open. See Dkt. 6.
On July 8, 2020, Chief Judge Brodie conducted a telephonic hearing on plaintiff's motion, and issued an Order to Show Cause for Preliminary Injunction, Temporary Restraining Order, and Order Authorizing Alternative Service. See Minute Entry dated July 8, 2020; Dkt. 8 (2020 OTSC). The Court granted the TRO and ordered defendants to show cause why the Court should not grant plaintiff a preliminary injunction. See Dkt. 8. On July 9, 2020, plaintiff served the Summons, Complaint, and TRO on defendants. See Dkt. 9.
On July 20, 2020, plaintiff filed a reply in support of its application for a preliminary injunction, Dkt. 10, and attached documents defendants had provided to plaintiff in response to the preliminary injunction motion. See Dkt. 10-2.
On July 22, 2020, the Court held a preliminary injunction hearing; counsel for plaintiff and defendant Ralf Weigel, appearing pro se, participated in the conference. See Minute Entry dated July 22, 2020. The Court adjourned the hearing to give defendants an opportunity to retain counsel. See id.
On July 28, 2020, counsel filed an appearance on behalf of defendants, and responded to the 2020 OTSC. See Dkts. 11-13. In response, defendants argued that: (1) the “accused product” and functionality (i.e., stop-clock control functionality) predates plaintiff's asserted patents; (2) the current version of the allegedly infringing Trinity System would not be used at the 2020 U.S. Open; and (3) the “accused product” or let detection system in use does not directly infringe the asserted patent. See generally Dkt. 12.
On July 29, 2020, the Court held a preliminary injunction hearing. All parties appeared through counsel. See Minute Entry dated July 29, 2020. The Court denied plaintiff's motion to strike defendants' response to the 2020 OTSC as untimely, and further adjourned the hearing to July 31, 2020 at which time the Court would hear testimony and receive...
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