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Air Vent, Inc v. Vent Right Corporation

April 4, 2011

AIR VENT, INC., PLAINTIFF,
v.
VENT RIGHT CORPORATION, DEFENDANT.



The opinion of the court was delivered by: McVerry, J.

MEMORANDUM OPINION AND ORDER OF COURT

This is an action in patent infringement. On March 3, 2011, the Court conducted a hearing regarding the statutory damages and injunctive relief that Plaintiff seeks in this matter. Plaintiff was represented by Dariush Keyhani, Esquire of the law firm Lippes, Mathias, Wexler, Friedman LLP and Katherine E. Koop, Esquire of the law firm Tucker Arensberg, P.C. Defendant Vent Right Corporation ("Vent Right" or "Defendant") did not attend the hearing and was not represented by counsel.

BACKGROUND

On January 31, 2008, Plaintiff filed the instant patent infringement action in this Court against Vent Right in which it asserted that Defendant‟s product had infringed four (4) patents owned by Air Vent. In sum, Air Vent alleged that Defendant‟s Breasevent product was a "knock-off copy of Plaintiff‟s patented Shinglevent® II product."*fn1

On December 31, 2008, Air Vent filed an Amended Complaint in which it accused the Breasevent product of infringing only two (2) of its patents (the "517 Patent and "574 Patent), and added common law claims for unfair competition and unjust enrichment.*fn2 Defendant timely answered and asserted various affirmative defenses and counterclaims including, inter alia, noninfringement and invalidity of the patents at issue.

After the close of discovery, on January 18, 2010, the parties filed cross motions for summary judgment. Air Vent moved for partial summary judgment of infringement of the "517 patent and infringement of the "574 patent. Defendant moved for summary judgment on the basis that the patents were invalid as anticipated or obvious.

By Memorandum Opinion and Order of Court (Document No. 84), this Court granted partial summary judgment on infringement in favor of Air Vent, and denied Vent Right‟s motion for summary judgment on invalidity of the patents-in-suit. The Court further determined that "[w]ith Air Vent‟s claims for unfair competition and unjust enrichment remaining and the existence of genuine issues of material fact regarding the validity of the Patents-In-Suit, a trial must ensue." (Document No. 84 at 24).

On September 24, 2010, Mark A. Grace, Esquire and the law firm of Cohen & Grace, LLC, and Thomas C. Wettach, Esquire and the law firm of Cohen & Grigsby, P.C. (collectively "Movants") moved to withdraw as counsel for Defendant due to the failure of Vent Right to pay outstanding amount(s) owed to them for legal fees and costs. They had not been paid for more than twelve (12) months despite having rendered legal services throughout.

The Court granted the Movants request on November 30, 2010. In a Memorandum Opinion and Order of Court, the Court noted that Vent Right "concedes that it is not able to pay Movants their past due fees and costs" and "[t]he outstanding balance is very significant and will only increase exponentially if Movants are not permitted to withdraw as trial preparation is imminent." (Document No. 96 at 2). The Court further stated that it could not "ignore the fact that in March 2010, the President and Chief Operating Officer of Defendant, Vent Right Corporation, rejected a settlement of this action on a walk-away basis for all related cases," and that it did not "appear to have been reasonable under the circumstances that Defendant and Mario Kaseda declined that omnibus settlement offer, but they did and demanded to persevere onward irrespective of nonpayment of counsel." (Document No. 96 at 2-3). The Court warned that Vent Right must retain new counsel to avoid the entry of sanctions, including an adverse judgment.

Nonetheless, Vent Right did not retain new counsel, and Plaintiff filed a Motion for Default Judgment on February 4, 2011. (Document No. 98). Without opposition, the motion was granted on February 8, 2011 and a hearing on Plaintiff‟s damages was held on March 3, 2011.

Plaintiff seeks damages based on a lost profits theory of infringement. As such, Plaintiff seeks (1) recovery of lost profits pursuant to 35 U.S.C. § 284, including enhanced statutory damages; (2) prejudgment interest on the damages caused to Plaintiff by reason of Defendant‟s infringement; (3) post-judgment interest; (4) attorneys‟ fees pursuant to 35 U.S.C. § 285; and (5) a permanent injunction. (Document No. 100).

In support of its request for monetary damages, Plaintiff relies upon the expert report of Dennis M. Giuffr© of Econalysis Consulting. (Sealed Document No. 86, Ex. C). The economic analysis "considers a "lost profits‟ model for damages, based on the premise that but for the sale of infringing products by the defendant Vent Right, the plaintiff Air Vent would have otherwise made such sales and would have realized the incremental profits from such sales."

(Sealed Document No. 86, Ex. C). The Court from the bench found that Giuffr© is qualified to render an expert opinion and accepted his report.

For the reasons stated below, Plaintiff‟s request shall be granted and judgment entered in favor of Plaintiff, Air Vent, Inc., and against Defendant, Vent Right.

DISCUSSION

I. Default Judgment Standard for Damages

Default judgment establishes the defaulting party‟s liability for the well-pleaded allegations of the complaint. United States v. Grant, F. Supp. 2d 29, 32 (D.D.C. 2003). "A consequence of the entry of a default judgment is that the "factual allegations of the complaint, except those relating to the amount of damages, will be taken as true.‟" Comdyne I, Inc. v. Corbin, 980 F.2d 1142, 1149 (3d Cir. 1990) (quoting 10 C. Wright, A. Miller, & M. Kane, Federal Practice and Procedure, § 2688 at 444 (2d ed. 1983)). In other words, a party‟s default is almost universally deemed an admission of the plaintiff‟s well-pleaded allegations of fact pertaining to liability. See also Flaks v. Koegel, 504 F.2d 702, 707 (2d Cir. 1974) ("While a default judgment constitutes an admission of liability, the quantum of damages remains to be established by proof unless the amount is liquidated or susceptible of mathematical computation.").

II. Liability

The Court finds that Plaintiff has sufficiently established Defendant‟s liability in this matter. As established in the Court‟s Memorandum Opinion and Order of Court dated July 20, 2010, and given the facts pleaded in Plaintiff‟s Amended Complaint, Air Vent has sufficiently established ...


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