Aquavit Pharmaceuticals, Inc. v. U-Bio Med, Inc.

Background

Aquavit Pharmaceuticals, Inc. sued U-Bio Med, Inc. and Nyun Shi Eum a/k/a Nyon-Sik Eum over the use of the AQUAGOLD trademark and related marks for a micro-injection device with medical and cosmetic applications. On June 21, 2019, the Court entered a modified preliminary injunction restricting the defendants’ use of AQUAGOLD and certain other marks in the United States, South Korea, and other countries, subject to the terms stated in the injunction. The injunction also required disclaimers in certain circumstances and barred the defendants from associating their products with Aquavit’s trademarks or product and from disparaging Aquavit’s devices.

The Court found the defendants in contempt on four occasions for violating the injunction. After the defendants failed to comply with the fourth contempt order, the Court entered a default judgment against U-Bio Med and Eum on November 1, 2022, and made the relevant portions of the injunction permanent the next day. The Court referred damages, sanctions, Aquavit’s request to modify the permanent injunction, and Aquavit’s request for attorneys’ fees to Magistrate Judge Lehrburger.

Report and Recommendation

A report and recommendation, or R&R, is a magistrate judge’s recommended decision for the district judge to review. Judge Lehrburger recommended denying Aquavit’s request for a warrant for Eum’s arrest and denying its request to modify the permanent injunction. The R&R recommended awarding Aquavit:

- $5,871,316 in compensatory damages for breach of contract; - $3,000,000 in statutory damages for trademark counterfeiting; - $500,001 in nominal and punitive damages for defamation; - $678,349.21 in attorneys’ fees; and - $38,714.51 in costs.

The R&R also recommended requiring the defendants to pay $7,281,000 in monetary coercive sanctions to the Clerk of Court under the Court’s prior contempt orders. The parties were told that they had fourteen days to object and that failing to object would waive objections and prevent appellate review. No party objected.

Ruling

Because no party objected, Judge Caproni reviewed the R&R for clear error, meaning an obvious mistake apparent from the record. The Court found no clear error and adopted the R&R in full.

The Court entered judgment against the defendants for the compensatory, statutory, nominal, punitive, fee, and cost amounts recommended in the R&R. It separately ordered the defendants to pay $7,281,000 in monetary coercive sanctions to the Clerk of Court. The Court denied Aquavit’s requests to modify the permanent injunction and to issue a warrant for Eum’s arrest.

The Court stated that the lack of objections precluded appellate review of the decision. It also certified that any appeal would not be taken in good faith and denied permission to proceed without paying court fees for an appeal. The Clerk was directed to terminate the open motions and close the case.