Seventh Coast Ventures LLC v. Xiamen Daysun Industrial Co., LTD, et al.
District Court, S.D. Texas
Seventh Coast Ventures LLC v. Xiamen Daysun Industrial Co., LTD, et al.
Trial Court Opinion
UNITED STATES DISTRICT COURT November 17, 2025
SOUTHERN DISTRICT OF TEXAS Nathan Ochsner, Clerk
HOUSTON DIVISION
Seventh Coast Ventures LLC, §
Plaintiff, §
§
v. § Civil Action H-22-4474
§
Xiamen Daysun Industrial Co., §
LTD, et al., §
Defendants. §
MEMORANDUM AND RECOMMENDATION
ON PLAINTIFF’S RENEWED MOTION FOR
ENTRY OF FINAL DEFAULT JUDGMENT
This case has been referred to the undersigned magistrate
judge pursuant to 28 U.S.C. § 636(b)(1). ECF No. 79. Pending
before the court is Plaintiff’s Renewed Motion for Entry of Final
Default Judgment. ECF No. 85. The court recommends that
Plaintiff’s Renewed Motion for Entry of Final Default Judgment,
ECF No. 85, be GRANTED in part.
1. Background
This suit involves a design patent infringement claim
between Seventh Coast Ventures LLC (SCV) and many
defendants. ECF No. 1. SCV moves for entry of final default
judgment against twenty-seven separate entities (collectively,
Defendants).1 ECF No. 85.
1 A list of defaulting defendants is appended to this Memorandum and
Recommendation. In the instant motion, SCV identifies thirty-one “Defaulting
Defendants”—Does 3, 6, 7, 9, 12–18, 20, 22, 24–38, 42, 45 and 46 on “Schedule A” (ECF
No. 1-6). ECF No. 85 at 5. The defendants listed as Does 35, 36, 37, and 38 were
dismissed from the case on July 7, 2023. ECF No. 69. Accordingly, this order does not
apply to those four defendants.
A. Defendants’ Alleged Infringement
SCV filed its Original Complaint on October 25, 2022, in the
Western District of Texas. ECF No. 1. SCV’s Complaint alleges
that Defendants—either directly or indirectly through acts of
contributory infringement or inducement—infringed upon its
design patent (167 Design Patent). ECF No. 1 § 151. SCV’s ‘167
Design Patent protects the ornamental design of its reflective
hydration backpacks. Id. § 150; see also SCV’s ‘167 Design Patent,
ECF No. 1-8 at 2.
According to SCV, Defendants, through Internet-based
e-commerce stores and their respective Seller IDs, advertised,
distributed, offered to sell, or shipped infringing hydration packs
to Texas and throughout the United States. ECF No.1
47 10, 57, 75; Chudy Decl., ECF No. 10-1 9 65. SCV alleges that
Defendants’ infringing hydration packs reproduce the main design
features of the ‘167 Design Patent, such that the infringing
products are the same as SCV’s hydration packs “in all material
respects.” ECF No. 1 § 151; ECF No. 1-1 at 18. The images below,
included in SCV’s Claim Chart, illustrate the similarities between
the design-figure illustrations in the ‘167 Design Patent (left) and
a representative sample of Defendants’ infringing hydration packs
(right). ECF No. 1-4 at 2-8.
SCV investigated the sale of Defendants’ hydration packs on
various internet webstores. Chudy Decl., ECF No. 10-1 ¶ 50. SCV
viewed the allegedly infringing products, “add[ed] products to the
online shopping cart, [and] proceed[ed] to a point of checkout.” Id.
¶ 54; see also ECF Nos. 7-2, 7-3, 7-4, 7-5, 7-6, 7-7 (showing
Defendants’ infringing products listed for sale on various internet
webstores). Then, SCV “placed certain test orders for products
from certain Defendants via their e-commerce stores.” ECF No. 10-
1 ¶ 67. After receiving the test-order products in Texas, SCV
“examined the products and determined that the products were
counterfeit products that were not authorized by SCV.” Id. ¶ 68.
SCV argues that Defendants’ infringement causes SCV to
suffer by way of lost profits, a decrease in “the size and value of
[SCV’s] legitimate marketplace and intellectual property rights,”
“erosion and destruction of the goodwill associated” with SCV’s
products, and direct and unfair competition with Defendants’
unauthorized products. ECF No. 1 ¶¶ 64–68. It claims the
“appearance of Defendants’ individual seller stores in search
engine results undermines [SCV’s] efforts to educate consumers
about the value of products sold under the” ‘167 Design Patent,
which ultimately harms SCV and the consuming public.
Id. ¶ 65, 77.
B. Transfer to the Southern District of Texas and
Subsequent Procedural History
In December 2022, the case was transferred to this court,
under 28 U.S.C. § 1404(a). ECF No. 12 at 2. About two weeks later,
the court authorized alternate service of process, allowing SCV to
serve filings upon Defendants via e-mail and website posting. ECF
No. 17 at 4. SCV served Defendants with the Complaint and
summons accordingly. See ECF Nos. 20, 21, 24, 37.
On January 9, 2023, the court granted SCV’s request for a
temporary restraining order against forty-three of the entities
listed on “Schedule A” (ECF No. 1-6), including twenty-six of the
Defendants.2 ECF No. 18. Among other provisions, the TRO barred
use of Defendants’ financial accounts and the ‘167 Design Patent.
Following a March 2023 preliminary injunction hearing, the
court determined that “the temporary restraints previously
granted in the TRO should remain in place through the pendency
of this litigation and that issuing [a] Preliminary Injunction [was]
warranted under Federal Rule of Civil Procedure 65.” ECF No. 64
at 3. The court specifically “determine[d] that the Defendants are
selling or offering to sell products that infringe on” the ‘167 Design
Patent, and that SCV would “suffer irreparable harm if the
injunction [was] not granted.” Id. at 2–3. The court granted
Plaintiff’s Motion for Preliminary Injunction (ECF No. 10) on
May 24, 2023. Id.
C. Defendants’ Default and SCV’s Motions for
Entry of Final Default Judgment
To date, none of the Defendants have filed an appearance,
answered the Complaint, or otherwise responded to this litigation.
On September 3, 2024, the Clerk entered default against
Defendants. ECF No. 77.
SCV filed a Motion for Entry of Final Default Judgment on
April 16, 2024. ECF No. 76. Six months later, SCV filed its first
Renewed Motion for Entry of Final Default Judgment “because
more than 90 days ha[d] expired since the original [motion’s]
filing[.]” ECF No. 78 at 1 n.1. The two motions were identical.
On April 9, 2025, the case was referred to the undersigned
magistrate judge pursuant to 28 U.S.C. § 636(b)(1). ECF No. 79.
Because SCV failed to properly serve the motions on Defendants,
the undersigned recommended denial of SCV’s Renewed Motion
2 The fact that Wei Ling Tech (Shenzhen Ronghuafigui E-commerce Co., LTD.)—the
party substituted in-place of the original Doe 45 (ECF No. 49)—was not included in
the TRO is immaterial to the court’s instant analysis.
for Entry of Final Default Judgment, ECF No. 78, without
prejudice to refiling, and denial of SCV’s Initial Motion for Entry
of Final Default Judgment, ECF No 76, as moot. ECF No. 84. On
August 25, 2025, the court adopted the undersigned’s
Memorandum and Recommendations in full. ECF No. 90.
On August 18, 2025, SCV filed the instant motion—its
second Renewed Motion for Entry of Final Default Judgment.
ECF No. 85. It is identical in content to SCV’s two prior motions
for default judgment. On September 24, 2025, the court entered an
order explaining that Defendants still had not properly been
served and ordered SCV to file proof of service by October 8, 2025.
ECF No. 90. On September 30, 2025, SCV filed proof that it
complied with Local Rule 5.5 and the court’s order authorizing
alternative service of process. ECF Nos. 91, 92. SCV sent a copy of
its Motion for Default Judgment to Defendants via the email
addresses associated with Defendants’ e- commerce stores.
ECF No. 92-3. SCV also publicly posted a copy of the documents in
this case, including the instant motion, on its designated website.
ECF No. 92-1 at 2.
Accordingly, the court considers SCV’s motion for default
judgment under Federal Rule of Civil Procedure 55(b). ECF No. 85
at 5. SCV moves the court to enter final default judgment against
Defendants. Id.
2. Legal Standards and Analysis
Judgment by default is a drastic remedy that is disfavored
by the court. Charlton L. Davis & Co. v. Fedder Data Ctr., Inc.,
556 F.2d 308, 309 (5th Cir. 1977); see also Lindsey v. Prive Corp.,
161 F.3d 886, 893 (5th Cir. 1998). In consideration of a motion for
default judgment “against a party who has failed to plead or
otherwise defend, the district court has an affirmative duty to look
into its jurisdiction both over the subject matter and the parties.”
Sys. Pipe & Supply, Inc. v. M/V VIKTOR KURNATOVSKIY, 242
F.3d 322, 324 (5th Cir. 2001).
The court has subject matter jurisdiction over this case. SCV
asserts a claim of design patent infringement under 35 U.S.C.
§ 271, which grants the court federal question jurisdiction.
28 U.S.C. § 1331; id. § 1338.
Additionally, the court has personal jurisdiction over the
parties. Federal Circuit law governs the jurisdictional issue
because it “is ‘intimately involved with the substance of the patent
laws.’” Autogenomics, Inc. v. Oxford Gene Tech. Ltd., 566 F.3d
1012, 1016 (Fed. Cir. 2009) (quoting Avocent Huntsville Corp. v.
Aten Int’l Co., 552 F.3d 1324, 1328 (Fed. Cir. 2008)). Though
Defendants reside or operate in foreign jurisdictions, the court can
exercise personal jurisdiction over Defendants because they
advertised, distributed, offered to sell, or shipped products to
Texas, including to this district, and throughout the United States.
ECF No. 1 ¶¶ 10, 52–58; Chudy Decl., ECF No. 10-1 ¶ 65; see also
Whirlpool Corp. v. Individuals, P’ships, & Unincorporated Ass’ns
that Own or Operate www.dfilters.com, No. 21-398, 2022 WL
1811372, at *2 (E.D. Tex. June 2, 2022); EyeVac, LLC v. VIP
Barber Supply, Inc., No. 22-902, 2024 WL 1556457 (W.D. Tex. Apr.
10, 2024), R. & R. adopted, 2024 WL 2064074 (W.D. Tex. May 7,
2024).
Once the court is satisfied of its jurisdiction over the subject
matter and the parties, the court must determine: (1) if a default
judgment is procedurally appropriate; (2) if the plaintiff has
presented a colorable claim; and (3) how to calculate damages or
equitable relief. Vela v. M&G USA Corp., No. 17-13, 2020 WL
421188, at *1 (S.D. Tex. Jan. 27, 2020).
A. Default Judgment is Procedurally Appropriate
To determine whether a motion for default judgment is
procedurally appropriate, the court must consider relevant factors,
including:
whether material issues of fact are at issue, whether
there has been substantial prejudice, whether the
grounds for default are clearly established, whether
the default was caused by a good faith mistake or
excusable neglect, the harshness of a default
judgment, and whether the court would think itself
obliged to set aside the default on the defendant’s
motion.
Lindsey, 161 F.3d at 893.
Here, the grounds for default are clearly established. The
court authorized alternate service of process via email and by
public posting on Plaintiff’s designated website. ECF No. 17.
SCV served Defendants with the Complaint, summons, instant
motion, and other documents in a manner consistent with the
court’s order. See ECF Nos. 20, 21, 24, 37, 50, 91, 92. Defendants
have not answered or otherwise responded. The Clerk
appropriately entered default against Defendants. See ECF No. 77.
There is no evidence that there is an issue of material fact.
There is no evidence that the Defendants’ default was caused by
good faith mistake or excusable neglect. And there is no evidence
that entering a default judgment would substantially prejudice
Defendants. SCV, on the other hand, has established that it suffers
substantial prejudice—in the form of lost profits, increased costs,
and destruction of business goodwill— from Defendants’ ongoing
violations of law. ECF No. 85 ¶¶ 65–68, 83.
Though Defendants were properly served in accordance with
the court’s order for alternative service, they appear to have
ignored this lawsuit entirely. In these circumstances, default
judgment is not unduly harsh. The court sees no reason that it
would later be obliged to set aside the default.
All six Lindsey factors weigh in favor of finding that default
judgment is procedurally appropriate. Accordingly, the court turns
to the question of whether SCV has presented a colorable claim.
B. Colorable Claim to Enter Default Judgment
An entry of default judgment “must be supported by well-
pleaded allegations and must have a sufficient basis in the
pleadings.” Wooten v. McDonald Transit Assocs., Inc., 788 F.3d
490, 498 (5th Cir. 2015). Well-pleaded factual allegations are
assumed to be true, except regarding damages. United States v.
Shipco Gen., Inc., 814 F.2d 1011, 1014 (5th Cir. 1987).
SCV alleges that Defendants have committed, and continue
to commit, either direct patent infringement or indirect patent
infringement, through contributory infringement or inducement,
in violation of 35 U.S.C. § 271. ECF No. 1 ¶ 151. SCV’s well-
pleaded factual allegations present a colorable claim for direct
infringement, but not for indirect infringement.
i. Direct Infringement
SCV’s well-pleaded factual allegations present a colorable
claim for direct patent infringement under 35 U.S.C. § 271(a). An
actor is liable for direct infringement when, without authority,
they “make[], use[], offer[] to sell, or sell[] any patented invention,
within the United States or import[] into the United States any
patented invention during the term of the patent . . . .” 35 U.S.C.
§ 271(a). A defendant’s mental state is not relevant to a claim
under Section 271(a). Commil USA, LLC v. Cisco Sys., Inc.,
575 U.S. 632, 639 (2015) (holding that direct infringement is a
strict-liability offense).
SCV alleges that it owns all rights in and to the ‘167 Design
Patent, which was valid and unexpired as of the time of filing. ECF
No. 1 ¶¶ 48, 150. SCV states that it has not granted permission to
Defendants to use the ‘167 Design Patent, in whole or in part, at
any time. Id. ¶ 98. SCV alleges that “Defendants have infringed
and continue to infringe the ‘167 Design Patent either directly or
indirectly through acts of contributory infringement or
inducement in violation of 35 U.S.C. § 271, by making, using,
selling, importing, and/or offering to sell infringing products.”
Id. ¶ 151. SCV states that Defendants’ products are the same “in
all material respects” as SCV’s products produced under the
‘167 Design Patent. Id. ¶ 152.
Accepting SCV’s well-pleaded factual allegations as true,
SCV has presented a colorable claim for direct patent infringement
under 35 U.S.C § 271(a).
ii. Indirect Infringement
SCV’s Complaint does not present a colorable claim for
indirect infringement. “Indirect infringement” is a collective term
used to refer to inducement infringement and contributory
infringement. Lifetime Indus., Inc. v. Trim-Lok, Inc., 869 F.3d
1372, 1379 (Fed. Cir. 2017). To sufficiently plead a claim for
indirect infringement, the plaintiff “must plead facts plausibly
showing that the accused infringer ‘specifically intended [a third
party] to infringe [the patent] and knew that the [third party]’s
acts constituted infringement.’” Id. (quoting In re Bill of Lading
Transmission & Processing Sys. Pat. Litig., 681 F.3d 1323, 1339
(Fed. Cir. 2012)). When a plaintiff fails to “allege facts sufficient to
allow an inference that another party directly infringed, . . . there
is no basis in the pleadings for default judgment on [plaintiff’s]
indirect infringement claims.” EyeVac, 2024 WL 1556457, at *4.
Here, SCV did not plead facts sufficient to allow the
inference that some third party, other than the Defendants,
directly infringed on its ‘167 Design Patent. Therefore, SCV has
not presented a colorable claim for indirect infringement, in the
form of either inducement infringement or contributory
infringement.
C. Calculation of Damages
After the court determines that default judgment is both
procedurally appropriate and that plaintiff has presented a
colorable claim, the court must determine whether plaintiff is
entitled to damages in the form of compensation or equitable relief.
Vela, 2020 WL 421188, at *1.
Here, SCV requests (1) the entry of a permanent injunction
under 35 U.S.C. § 283, (2) an award of statutory damages in the
amount of $250, trebled to $750, for each of the Defendants under
35 U.S.C. §§ 284 and 289, and (3) an award of SCV’s costs and
reasonable attorneys’ fees under 35 U.S.C. § 285. ECF No. 85 at 6.
i. Permanent Injunction
SCV moves for permanent injunction under 35 U.S.C. § 283.
ECF No. 85 at 6. The court is authorized to “grant injunctions in
accordance with the principles of equity to prevent the violation of
any right secured by patent, on such terms as the court deems
reasonable.” 35 U.S.C. § 283. To obtain injunctive relief, the patent
holder must demonstrate:
(1) that it has suffered an irreparable injury; (2) that
remedies available at law, such as monetary damages,
are inadequate to compensate for that injury; (3) that,
considering the balance of hardships between the
plaintiff and defendant, a remedy in equity is
warranted; and (4) that the public interest would not
be disserved by a permanent injunction.
eBay Inc. v. MercExchange, L.L.C., 547 U.S. 388, 391 (2006).
The court finds that SCV has established that is has
suffered, and will continue to suffer, irreparable injury if an
injunction is not issued. SCV has chosen not to license its
‘167 Design Patent. ECF No. 1 ¶ 50. SCV’s exclusive ownership of
its patent gives it the right to exclude all others from using the
design. Despite this, SCV has not succeeded in restraining
Defendants’ infringement of its patent. Defendants’ continuous
and persistent infringement of the patent has caused irreparable
injury to SCV’s established reputation and business goodwill.
Given Defendants’ default in this action, there is no evidence
that monetary damages alone will prevent future infringement.
The threat of continued infringement exists, and future damages
cannot be calculated. Without the court’s issuance of a permanent
injunction, SCV would likely be forced to engage in repeated
litigation against Defendants.
There is no evidence that Defendants will experience more
than minimal hardship by being enjoined. Defendants face the
“hardship” of no longer being able to sell and market the infringing
products. The irreparable injury that SCV faces in the absence of
a permanent injunction weighs heavily in favor of granting
injunctive relief.
The public interest will not be disserved by issuance of a
permanent injunction. Entry of a permanent injunction “protect[s]
patent rights and enforce[es] the applicable laws,” which best
serves the public interest. See MGM Well Servs., Inc. v. Mega Lift
Sys., LLC, 505 F. Supp. 2d 359, 379–80 (S.D. Tex. 2007) (citing
Abbott Laboratories v. Andrx Pharms., Inc., 452 F.3d 1331, 1348
(Fed. Cir. 2006)). As SCV asserts, “Defendants’ infringing
activities are likely to cause confusion, deception, and mistake in
the minds of consumers before, during[,] and after the time of
purchase.” ECF No. 85 ¶ 90. “[T]he consuming public will continue
to be harmed” in this manner if Defendants are not permanently
enjoined. Id. ¶ 89. Accordingly, issuance of a permanent injunction
in this case serves the public interest by protecting patent rights,
enforcing applicable laws, and reducing further injury to the
consuming public.
The court finds that all of the eBay factors weigh in favor of
granting a permanent injunction. Therefore, the court
recommends issuance of a permanent injunction. Under the
permanent injunction, Defendants should be enjoined from use of
SCV’s ‘167 Design Patent and restrained from generating
additional profits from their past, current, or future infringement
of SCV’s ‘167 Design Patent. Additionally, the permanent
injunction should require the internet marketplace platforms that
host Defendants’ internet stores (Alibaba, Aliexpress, Amazon,
and Walmart) to (1) permanently remove from Defendants’
internet stores all listings and associated images of goods that
infringe on SCV’s ‘167 Design Patent, and (2) destroy all of
Defendants’ infringing goods within their possession.
ii. Statutory Damages
SCV asks for a statutory damages award of $750 for each of
the twenty-seven defaulting Defendants—an award of $250 under
35 U.S.C. § 289, trebled to $750 under 35 U.S.C. § 284. ECF No. 85
at 6. Section 284 provides that in a case of patent infringement,
“the court shall award the claimant damages 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. In cases involving design patent
infringement, Section 289 provides for an award of damages up “to
the extent of [the infringer’s] total profit, but not less than
$250 . . . .” 35 U.S.C. § 289. “The awarding of damages involves a
subtle judicial function[, and] the statute allows considerable
latitude.” John Zink Co. v. Nat’l Airoil Burner Co., 613 F.2d
547, 559 (5th Cir. 1980).
SCV elects statutory damages and requests that the court
grant damages in the amount of $250 for each design patent
infringement claim under Section 289. ECF No. 85 at 12. The court
found above that each of the twenty-seven Defendants engaged in
direct infringement of SCV’s ‘167 Design Patent under 35 U.S.C.
§ 271(a). This finding is sufficient to justify the award of statutory
damages to SCV, in the amount of $250 for each of the
twenty- seven Defendants.
The court next considers SCV’s request that the court treble
the minimum statutory award to $750 for each of the defaulting
Defendants. ECF No. 85 at 12. Under Section 284, the court may
award enhanced damages in an amount “up to three times the
amount found or assessed.” 35 U.S.C. § 284. Enhanced damages
may be awarded only in “egregious cases” of patent infringement,
“typified by willful misconduct.” Halo Elecs., Inc. v. Pulse Elecs.,
Inc., 579 U.S. 93, 105 (2016).
SCV alleges that Defendants engaged in willful
infringement. ECF No. 1 ¶ 154. “To establish willful patent
infringement, a plaintiff must show that the defendant ‘(1) knew
of the patent-in-suit; (2) after acquiring that knowledge, it
infringed the patent; and (3) in doing so, it knew, or should have
known, that its conduct amounted to infringement of the patent.”’
EyeVac, 2024 WL 1556457, at *4 (quoting Parity Networks, LLC v.
Cisco Sys., No. 19- 207, 2019 WL 3940952, at *3 (W.D. Tex.
July 26, 2019)).
SCV pleads that, “[u]pon information and belief, at all times
relevant hereto, Defendants . . . had full knowledge of [SCV’s]
ownership of . . . the [‘167] Design Patent.” ECF No. 1 ¶ 86; see also
ECF No. 1 ¶ 154. However, SCV’s Complaint contains no facts to
support the allegation made “upon information and belief.”
SCV pleads that its products and its website contain a Patent
Notice to inform of the patented design. Id. ¶ 49; Chudy Decl., ECF
No. 10- 1 ¶ 46. Despite this, at no time has SCV asserted that
Defendants saw its Patent Notice or otherwise obtained actual
knowledge of its patent. Accepting SCV’s allegations as true, SCV
has not pleaded facts sufficient to establish a finding of willful
patent infringement by Defendants. Therefore, the court declines
to award treble damages under 35 U.S.C. § 284.
Even if SCV allegations were sufficient to establish a finding
of willful patent infringement, the court would exercise its
discretion to decline the award of treble damages in this case. See
In re Seagate Tech, LLC, 498 F.3d 1360, 1368 (Fed. Cir. 2007)
(en banc) (“[A] finding of willfulness does not require an award of
enhanced damages; it merely permits it.”). SCV did not proffer any
evidence to support the conclusion that Defendants intentionally
copied SCV’s patent; that SCV informed Defendants of their
infringement before filing this lawsuit; or that, once Defendants
received notice through service of SCV’s Complaint, Defendants
failed to investigate the scope of SCV’s patent. See Pat. Category
Corp. v. Happy Camper, Inc., No. 10-7573, 2011 WL 13217702,
at *5 n.30 (C.D. Cal. Dec. 31, 2011) (citing In re Hayes
Microcomputer Prods., Inc. Pat. Litig., 982 F.2d 1527, 1543 (Fed.
Cir. 1992) (detailing factors used to assess a defendant’s
willfulness and a plaintiff’s entitlement to treble damages)).
Accordingly, the court recommends that SCV be awarded
statutory damages under 35 U.S.C. § 289 in the amount of $250
for each of the twenty-seven Defendants, for a total statutory
damages award of $6,750.
iii. Attorney’s Fees and Costs
The court may award reasonable attorneys’ fees in
“exceptional cases.” 35 U.S.C. § 285. “[A]n ‘exceptional’ case is
simply one that stands out from others with respect to the
substantive strength of a party’s litigating position (considering
both the governing law and the facts of the case) or the
unreasonable manner in which the case was litigated.” Octane
Fitness, LLC v. ICON Health & Fitness, Inc., 572 U.S. 545, 554
(2014). The court makes a case-by-case determination considering
the totality of circumstances, including “frivolousness, motivation,
objective unreasonableness (both in the factual and legal
components of the case) and the need in particular circumstances
to advance considerations of compensation and deterrence.” Id.
at 554 n.6 (quoting Fogerty v. Fantasy, Inc., 510 U.S. 517,
534 n.19 (1994)). “There is no precise rule or formula for making
these determinations, but instead equitable discretion should be
exercised in light of the considerations . . . identified.” Octane
Fitness, 572 U.S. at 554 (internal quotations omitted). The
prevailing party must prove the case is exceptional by
preponderance of the evidence. Id. at 557.
This is an exceptional case. Defendants failed to appear and
defaulted after receiving proper service and notice of SCV’s
Complaint, the court’s entry of a temporary restraining order, the
court’s entry of preliminary injunction, and the instant motion for
default judgment. Though the court did not find that Defendants’
infringement constituted willful patent infringement (because
SCV did not sufficiently plead facts to establish that Defendants
knew about the ‘167 Design Patent), Defendants’ infringing
products are close replicas of SCV’s hydration products.
Defendants profited from their direct infringement of SCV’s ‘167
Design Patent, posed competition to SCV by offering their
infringing products to domestic consumers, caused SCV to lower
its prices, and harmed SCV’s profitability, reputation, and
goodwill. The court has no basis upon which to find that
Defendants’ actions were reasonable. Under these circumstances,
to advance the considerations of compensation and deterrence, the
court finds that an award of reasonable attorneys’ fees is
warranted.
In addition to attorneys’ fees, SCV seeks recovery of the
clerk’s filing fee of $402. ECF Nos. 85 at 14, 85-3 at 30. Fees of the
clerk are recoverable. 28 U.S.C. § 1920(1). Accordingly, the court
awards costs of $402 to SCV.
SCV asks the court to hold Defendants jointly and severally
responsible for its attorneys’ fees and costs. ECF No. 85 at 14–15.
“A court may hold defendants jointly and severally liable for
attorneys’ fees and costs if the plaintiff claims a ‘single indivisible
injury’ and such liability would not lead to inequitable results.”
Vela, 2020 WL 421188, at *4 (quoting Walker v. U.S. Dep’t Hous.
& Urb. Dev., 99 F.3d 761, 772 (5th Cir. 1996)). “In making this
determination, courts also consider whether the defendants played
a substantial role in the litigation.” Id. (internal quotations
omitted). However, defendants must act in concert as tortfeasors
for joint and several liability to apply. Id. (imposing joint and
several liability because defaulting defendants were “joint
employers” under the FLSA); see also Motionware Enters., Inc. v.
Individuals, Bus. Entities, No. 22-1225, 2024 WL 390385, at *1
(W.D. Tex. Feb. 1, 2024) (refusing to impose joint and several
liability for attorney’s fees where there was no showing that
defaulting defendants “acted in concert to produce a single,
indivisible injury”).
In the instant motion, SCV alleges that Defendants’ actions
have caused it to experience collective harm, so Defendants should
be jointly and severally responsible for its attorneys’ fees and costs.
ECF No. 85 at 14. Puzzlingly, in the instant motion, SCV also
states that “there are no allegations of joint liability” and “[t]here
are multiple defendants but no allegations of joint and several
liability with respect to the damages alleged.” ECF No. 85 at 5, 8.
At no point does SCV allege that Defendants acted in concert to
infringe on SCV’s ‘167 Design Patent and cause SCV’s injury.
Accordingly, because the court does not find that Defendants acted
in concert to produce SCV’s injury, the court does not find that
Defendants are jointly and severally liable for SCV’s attorneys’
fees and costs.
The court recognizes that SCV acted with great efficiency in
prosecuting this case. SCV greatly reduced the potential fees and
costs by prosecuting all twenty-seven of the Defendants together,
as many of the fees, such as the $402 filing fee, would have been
incurred in a case against an individual defendant. However,
SCV’s attorneys’ billing records reflect a number of entries that
apply solely to one defendant or to small groups of defendants. E.g.,
ECF No. 85-3 at 8 (“6 emails sent/reviewed regarding Amazon
seller Kuyou Sports . . . for settlement purposes only (0.90 hrs)”);
ECF No. 85-3 at 13 (“Notice of Voluntary Dismissal (DOE 40
[“eniecuangomall”]) edited and reviewed (0.30 hrs)”).3 The court is
unable to apportion SCV’s attorneys’ fees and costs without
additional briefing.
Within fourteen days from service of this Memorandum and
Recommendation, SCV shall submit a motion for attorneys’ fees.
In its motion, SCV shall explain how the court should apportion
attorneys’ fees and costs amongst Defendants.
3. Conclusion
The court recommends that Plaintiff’s Motion for Default
Judgment, ECF No. 85, be GRANTED in part.
3 The court notes that SCV voluntarily dismissed its claims against eniecuangomall
on February 20, 2023, and Kuyou Sports on April 6, 2023. ECF Nos. 30, 48, 57.
Eniecuangomall and Kuyou Sports are not included in the list of twenty-seven
Defendants against which SCV seeks default judgment.
Based on the evidence of record, the court recommends that
Plaintiff be awarded a permanent injunction and statutory
damages under 35 U.S.C. § 284 in the amount of $6,750.
Under the permanent injunction, Defendants should be
enjoined from use of SCV’s ‘167 Design Patent and restrained from
generating additional profits from their past, current, or future
infringement of SCV’s ‘167 Design Patent. Additionally, the
permanent injunction should require the internet marketplace
platforms that host Defendants’ internet stores to (1) permanently
remove from Defendants’ internet stores all listings and associated
images of goods that infringe on SCV’s ‘167 Design Patent, and
(2) destroy all of Defendants’ infringing goods within their
possession. Details of the permanent injunction will be set forth
more fully in the court’s final judgment.
Within fourteen days from service of this Memorandum and
Recommendation, the parties are ORDERED to file a proposed
form order for final default judgment, incorporating the
undersigned’s recommendations herein, for the Honorable Alfred
H. Bennett’s consideration.
While the court also recommends that SCV be awarded its
reasonable attorneys’ fees, as well as costs in the amount of $402,
at this time, the court is unable to determine the value of
attorneys’ fees to which SCV is entitled, as well as the proper
apportionment of attorneys’ fees and costs amongst Defendants.
Accordingly, within fourteen days from service of this
Memorandum and Recommendation, SCV shall submit a motion
for attorneys’ fees. In its motion, SCV shall explain how the court
should apportion attorneys’ fees and costs amongst Defendants.
The award of fees and costs shall be made by a separate
post- judgment order, as is permitted by Federal Rule of Civil
Procedure 54(d)(2)(B).
The parties have fourteen days from service of this
Memorandum and Recommendation to file written objections. 28
U.S.C. § 686(b)(1); Fed. R. Civ. P. 72. Failure to timely file
objections will preclude appellate review of factual findings or legal
conclusions, except for plain error. See Thomas v. Arn,
474 U.S. 140, 147-49 (1985); Rodriguez v. Bowen, 857 F.2d 275,
276-77 (5th Cir. 1988).
Signed at Houston, Texas on November 14, 2025.
Peter Bray 7
United States Magistrate Judge
19
Reference
- Status
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