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Kanga Care LLC v. Gogreen Enterprises LLC

United States District Court, D. Colorado

November 12, 2014

KANGA CARE LLC, Plaintiff,
v.
GOGREEN ENTERPRISES LLC, Defendant.

ORDER

PHILIP A. BRIMMER, District Judge.

This matter comes before the Court on the Motion for Default Judgment filed by plaintiff Kanga Care LLC ("Kanga Care") [Docket No. 20]. The Court has jurisdiction pursuant to 28 U.S.C. § 1331.

I. BACKGROUND

Due to the Clerk of Court's entry of default, the allegations in plaintiff's complaint, Docket No. 1, are deemed admitted. Olcott v. Del. Flood Co., 327 F.3d 1115, 1125 (10th Cir. 2003). Kanga Care, a Colorado limited liability company, designs and manufactures cloth diapers and diaper accessories. Docket No. 1 at 2, ¶ 9. Kang a Care is the owner of U.S. Patent No. 8, 425, 483 (the "'483 Patent") titled "Double Gusset Cloth Diaper Along With Method For Making The Same." Id. at 3, ¶ 10; Docket No. 1-1 at 2. Defendant GoGreen Enterprises LLC ("GoGreen"), also a Colorado limited liability company, is a direct competitor of Kanga Care. Docket No. 1 at 3, ¶ 14. GoGreen formerly marketed and sold a product called "Champ Cloth Diapers, " which it marketed as using "Dual Gussets Technology." Docket No. 1 at 3, ¶ 13. Kanga Care asserts that the Champ Cloth Diapers infringe the '483 Patent. Id.

On February 25, 2014, GoGreen, through its representative Joseph Leverich, filed a document titled "Response to Civil Action" stating that it did not at that time offer products for retail or wholesale sale. Docket No. 14 at 1. GoGreen explained that the company was unable to employ an attorney due to financial constraints and requested that the Court accept its response "as intention to resist entry of a default judgment and claim all rights to a jury trial under the Federal Rules of Civil Procedure." Id.

Kanga Care filed a motion for entry of default on May 2, 2014. Docket No. 18. The Clerk of Court found that GoGreen's response violated D.C.COLO.LCivR 11.1(a), which states that "[o]nly unrepresented individual parties and members of this court's bar may appear or sign a pleading, motion, or other document, " and D.C.COLO.LAttyR 5(b), which states that corporations may not appear without counsel admitted to the bar of this court. Docket No. 19. Accordingly, the Clerk of Court entered default on May 2, 2014. Id. Kanga Care filed the instant motion on May 13, 2014, and GoGreen has not filed a response.

II. ANALYSIS

In order to obtain a judgment by default, a party must follow the two-step process described in Fed.R.Civ.P. 55. First, the party must seek an entry of default from the Clerk of the Court under Rule 55(a). Second, after default has been entered by the Clerk, the party must seek default judgment according to the strictures of Rule 55(b). See Williams v. Smithson, 1995 WL 365988, at *1 (10th Cir. June 20, 1995) (citing Meehan v. Snow, 652 F.2d 274, 276 (2d Cir. 1981)).

The decision to enter default judgment is "committed to the district court's sound discretion.'" Olcott, 327 F.3d at 1124 (citation omitted). In exercising that discretion, the Court considers that "[s]trong policies favor resolution of disputes on their merits." Ruplinger v. Rains, 946 F.2d 731, 732 (10th Cir. 1991) (quotation and citations omitted). "The default judgment must normally be viewed as available only when the adversary process has been halted because of an essentially unresponsive party." Id. It serves to protect a plaintiff against "interminable delay and continued uncertainty as to his rights." Id. at 733. When "ruling on a motion for default judgment, the court may rely on detailed affidavits or documentary evidence to determine the appropriate sum for the default judgment." Seme v. E&H Prof'l Sec. Co., Inc., No. 08-cv-01569-RPM-KMT, 2010 WL 1553786, at *11 (D. Colo. Mar. 19, 2010).

A party may not simply sit out the litigation without consequence. See Cessna Fin. Corp. v. Bielenberg Masonry Contracting, Inc., 715 F.2d 1442, 1444-45 (10th Cir. 1983) ("[A] workable system of justice requires that litigants not be free to appear at their pleasure. We therefore must hold parties and their attorneys to a reasonably high standard of diligence in observing the courts' rules of procedure. The threat of judgment by default serves as an incentive to meet this standard"). One such consequence is that, upon the entry of default against defendant, the well-pleaded allegations in the complaint are deemed admitted. See Olcott, 327 F.3d at 1125; see also Charles Wright, Arthur Miller & Mary Kane, Fed. Prac. & Proc. § 2688 (3d. ed. 2010). "Even after default, however, it remains for the court to consider whether the unchallenged facts constitute a legitimate cause of action, since a party in default does not admit mere conclusions of law." Id. at 63. A court need not accept conclusory allegations. Moffett v. Halliburton Energy Servs., Inc., 291 F.3d 1227, 1232 (10th Cir. 2002). Although "[s]pecific facts are not necessary" in order to state a claim, Erickson v. Pardus, 551 U.S. 89, 93 (2007) (per curiam) (quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555 (2007)), the well-pleaded facts must "permit the court to infer more than the mere possibility of misconduct." Ashcroft v. Iqbal, 556 U.S. 662, 679 (2009) (internal quotation and alteration marks omitted). Thus, even though modern rules of pleading are somewhat forgiving, "a complaint still must contain either direct or inferential allegations respecting all the material elements necessary to sustain a recovery under some viable legal theory." Bryson v. Gonzales, 534 F.3d 1282, 1286 (10th Cir. 2008) (quotation and citation omitted).

A. Infringement of the '483 Patent

Plaintiff claims that defendant infringes the '483 patent directly and indirectly. Docket No. 1 at 4, ¶¶ 18, 20.

1. Direct Infringement

The sufficiency of a complaint alleging direct patent infringement is determined by Fed.R.Civ.P. 84 and Form 18. In re Bill of Lading Transmission & Processing Sys. Patent Litig., 681 F.3d 1323, 1334 (Fed. Cir. 2012). Rule 84 provides that "the forms in the Appendix suffice under these rules and illustrate the simplicity and brevity that ...


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