Summit Industrial Supply, LLC v. Triple Crown Consulting, LLC
| Decision Date | 19 July 2021 |
| Docket Number | 1:20-cv-385 |
| Parties | SUMMIT INDUSTRIAL SUPPLY, LLC, Plaintiff, v. TRIPLE CROWN CONSULTING, LLC, Defendant. |
| Court | U.S. District Court — Southern District of Ohio |
ORDER GRANTING IN PART AND DENYING IN PART PLAINTIFF'S MOTION FOR DEFAULT JUDGMENT (DOC. 8)
This civil action is before the Court on Plaintiff Summit Industrial Supply, LLC's motion for default judgment. (Doc. 8). Defendant Triple Crown Consulting, LLC (“TCC”) did not respond.
Summit filed a complaint on May 14, 2020. (Doc. 1). TCC's registered agent was personally served with the summons and complaint on May 15, 2020. (Doc. 5). Pursuant to Fed.R.Civ.P. 12(a), TCC was required to file a responsive pleading by June 5, 2020. To date, TCC has not filed any responsive pleading or otherwise engaged in the action. On July 24, 2020, the Clerk issued an entry of default against TCC. (Doc. 7). Summit subsequently filed the instant motion for default judgment, seeking damages, a permanent injunction, attorney fees and costs, and pre- and post-judgment interest. (Doc. 8).
Summit is the assignee of U.S. Patent No. 10, 029, 188 (INTEGRATED DISTILLATION CHAMBER AND DISCHARGE UNIT WITH INTEGRATED KEY) (the '"188 patent"), which patent was issued to Elliot Kremerman on July 24, 2018. (Doc. 1 at ¶ 8; Doc. 1-1). The claims of the '188 patent cover an enhanced device for distillation. The distillation device facilitates heating of a solid or liquid to remove and collect gaseous vapors and allows distillation of small amounts of starting raw material and items which have close boiling points. (Doc. 1 at ¶ 9). An illustration of the device is as follows:
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At the direction of TCC, an infringing short path distillation head was imported, manufactured, and offered for sale during the MJBizCon trade sale in Las Vegas, Nevada from December 11-13, 2019. (Id. at ¶ 12). The device sold by TCC at the trade show was photographed:
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Summit also later discovered that TCC sold a distillation system for $32, 000, using the infringing short path distillation head, to a hemp distiller in Covington Kentucky in May 2019. (Doc. 1 at ¶ 11). TCC knows of the existence of Summit's ´188 patent and continues to infringe upon the patent by making, using, selling, and offering for sale infringing short path distillation heads. (Id. at ¶¶ 15- 18). TCC's short path distillation head literally uses, or under the doctrine of equivalents uses, the same elements as Summit's ´188 patent, including Summit's: (1) distillation unit, (2) distillation key attached to the top side of said distillation unit; (3) a fraction collector through which said distillation key extends through from end to end entirely; (4) a middle distillation tube narrower than said fraction collector through which said distillation key extends through from end to end entirely; and (5) a lower distillation tube wider than said middle distillation tube through which said distillation key extends at least partially therethrough. (Id. at ¶ 14).
On December 20, 2019, Summit sent a cease and desist letter to Across International, LLC, believing Across to be the infringer. (Doc. 8-13). Across International responded on January 8, 2020, informing Summit that Across International was merely a distributor, and the device was supplied by TCC. (Doc. 8-14). However, in the interim, on December 31, 2019, Summit received a letter from TCC's counsel, acknowledging Summit's accusations of infringement. (Doc. 8-15).
After Summit filed the instant action, Summit's counsel and an individual associated with TCC, Jonathan Belton, communicated via email about resolving the litigation early. (Doc. 8-16). However, after Summit requested information from TCC about its distillation head sales and a formal commitment to cease infringing activity, Mr. Belton stopped responding. (Id.)[1]
Applications for default judgment are governed by Fed.R.Civ.P. 55(b)(2). “Following the clerk's entry of default pursuant to Fed.R.Civ.P. 55(a) and the party's application for default under Rule 55(b), the complaint's factual allegations regarding liability are taken as true, while allegations regarding the amount of damages must be proven.” Wood v. Bronzie, No. 1:20-CV-231, 2020 WL 4015247, at *1 (S.D. Ohio July 16, 2020) (quotation and citations omitted). While liability may be shown by well-pleaded allegations, this Court is required to “conduct an inquiry in order to ascertain the amount of damages with reasonable certainty.” Osbeck v. Golfside Auto Sales, Inc., No. 07-14004, 2010 WL 2572713, at *4 (E.D. Mich. June. 23, 2010).
“Ordinarily, the District Court must hold ‘an evidentiary proceeding in which the defendant has the opportunity to contest the amount [of damages].'” Antoine v. Atlas Turner, Inc., 66 F.3d 105, 110 (6th Cir. 1995) (quoting Greyhound Exhibitgroup, Inc. v. E.L.U.L. Realty Corp., 973 F.2d 155, 158 (2d Cir. 1992)). However, “Rule 55 does not require an evidentiary hearing as a prerequisite to the entry of default judgment if damages are contained in documentary evidence or detailed affidavits and can be ascertained by computation on the record before the Court.” Caterpillar Fin. Servs. Corp. v. C &D Disposal Techs., No. 2:12-CV-00077, 2012 WL 12883333, at *1 (S.D. Ohio July 10, 2012).
TCC's failure to respond to the complaint, application for entry of default, or motion for default judgment has made it clear that TCC has no intention of defending this action. The factual allegations in the complaint, except those related to damages, are deemed true. Antoine, 66 F.3d at 110. Thus, upon review of the record, the Court finds that default judgment is warranted in this case. And, with liability established, the Court must determine the extent of damages.
First, Summit requests that TCC be permanently enjoined from future sale of the infringing short path distillation head or otherwise infringing upon the ´188 Patent. In determining whether to grant a permanent injunction, the Court considers the following four-factor test: (1) whether the plaintiff suffered an irreparable harm; (2) whether the remedies available at law are inadequate; (3) whether the balance of hardships favors granting an injunction; and (4) whether the public interest would be served in granting an injunction. Wynn Oil Co. v. Am. Way Service Corp., 943 F.2d 595, 608 (6th Cir. 1991).
Courts routinely find irreparable harm when the infringer and patent holder are direct competitors. Bendix Comer. Vehicle, Sys., LLC v. Haldex Brake Prod. Corp., No. 1:09cv176, 2011 WL 14367 (N.D. Ohio Jan. 3, 2011). Here, Summit and TCC are direct competitors. Summit offers for sale, and sells, short path distillation heads, in direct competition with TCC's sales of the same, illegally obtained, short path distillation head. TCC also uses the infringing distillation head when selling distillation systems, competing with Summit's sale of distillation systems. Also, TCC uses Summit's short path distillation head, without license or permission from Summit. These facts show that Summit will likely suffer irreparable harm if TCC is not legally enjoined from infringing upon the ´188 Patent.
By defaulting, TCC admits that it infringed upon Summit's patent. An “essential attribute of a patent grant is that it provides a right to exclude competitors from infringing the patent.” Acumed LLC v. Stryker Corp., 551 F.3d 1323, 1328 (Fed. Cir. 2008) (citing 35 U.S.C. § 154(a)(1) (2000)). Monetary damages would be insufficient to compensate for Summit's injury because monetary damages may not prevent TCC (or another competitor) from infringing upon the patent, knowing they would only need to pay
Summit money for infringement. Thus, there are no assurances, absent a permanent injunction, that TCC will not continue to sell infringing products again in the future.
An injunction will not unfairly harm TCC; the injunction prohibits TCC from continuing to infringe upon Summit's patent. “One who elects to build a business on a product found to infringe cannot be heard to complain if an injunction against continuing infringement destroys the business so elected.” Broadcom Corp. v. Qualcomm Inc., 543 F.3d 683, 704 (Fed. Cir. 2008). The balance of hardships favors Summit.
Finally, the public has a strong interest in maintaining the integrity of patents by enjoining patent infringement. See, e.g., Smith & Nephew, Inc. v. Synthes (U.S.A.), 466 F.Supp.2d 978, 985 (W.D. Tenn. 2006).
Thus, the four-factor test weighs heavily in favor of a permanent injunction. Summit's request for injunctive relief is GRANTED. TCC is enjoined and restrained from further infringement of the ´188 Patent.
Next, Summit seeks monetary damages under a lost profit theory.
Damages for patent infringement must be “adequate to compensate for the infringement, but in no event less than a reasonable royalty for the use made of the invention by the infringer.” 35 U.S.C. § 284. To establish entitlement to lost profits, “the patent owner has an initial burden to show a reasonable probability that he would have made the asserted sales ‘but for' the infringement.” Grain Processing Corp. v. American Maize-Prods., 185 F.3d 1341, 1349 (Fed. Cir. 1999). To meet this burden, a patent owner generally must prove four factors: (1) demand for the patented products; (2) absence of acceptable non-infringing alternatives; (3) manufacturing and marketing capability to exploit the demand; and (4) the amount of the profit it...
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