Display Technologies, LLC v. Leantegra, Inc.

Background

Display Technologies, LLC alleged that Leantegra, Inc. directly infringed United States Patent No. 9,300,723 under 35 U.S.C. § 271. Display Technologies alleged that it owned the patent by assignment and that Leantegra made, used, or sold its Leantegra Proximity marketing system, which allegedly practiced at least claim 1 of the patent.

Leantegra was served but did not appear, answer, or otherwise respond. The clerk entered a certificate of default. Display Technologies then moved for default judgment under Federal Rule of Civil Procedure 55.

Court’s Analysis

A default admits the well-pleaded factual allegations of a complaint, but it does not automatically establish the legal conclusions drawn from those facts. The court therefore considered whether Display Technologies’ allegations were legally sufficient to establish infringement.

The court identified five required pleading elements: ownership of the patent, identification of the defendant, identification of the allegedly infringed patent, an explanation of how the defendant allegedly infringed, and citation to the relevant patent-law provisions. The court found that Display Technologies satisfied all five requirements. The complaint identified Display Technologies as the patent owner, identified Leantegra, cited the ’723 Patent and 35 U.S.C. § 271, and described how Leantegra’s advertised technology allegedly corresponded to the limitations of claim 1.

Damages and Fees

The court held that a default judgment establishing liability does not itself establish the amount of damages. Display Technologies requested $123,750 in damages and $10,000 in attorney’s fees. The court found that the materials supporting those amounts did not adequately explain the revenue estimates, royalty-rate assumptions, the claimed share of Leantegra’s business attributable to the patented technology, or the basis for the requested fees and costs.

The court also noted that attorney’s fees under 35 U.S.C. § 285 may be awarded in an exceptional case, but Display Technologies had not provided information showing that this was such a case or documentation sufficient to determine reasonable fees.

Disposition

The court’s conclusion states: “Default judgment on liability is GRANTED.” It referred the matter to a magistrate judge to determine the appropriate damages and to decide Display Technologies’ eligibility for, and the amount of, any attorney’s fees and other costs. The clerk was directed to close the docket entry for the motion, but not to close the case. The court also directed Display Technologies to send Leantegra a copy of the order through any previously used means of communication.