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Global Tech Led, LLC v. Hilumz International Corp.

United States District Court, M.D. Florida, Fort Myers Division

May 9, 2018

GLOBAL TECH LED, LLC, a Florida limited liability company, Plaintiff,
v.
HILUMZ INTERNATIONAL CORP., a Georgia corporation, HILUMZ, LLC, and HILUMZ USA, LLC, a Georgia limited liability company, Defendants/Third Party Plaintiffs JEFFREY J. NEWMAN, GARY K. MART, Third Party Defendants.

          OPINION AND ORDER

          JOHN E. STEELE, UNITED STATES DISTRICT JUDGE

         This matter comes before the Court on Plaintiff's Motion for Default Judgment (Doc. #133) filed on January 8, 2018. No. response has been filed, and the time to do so has passed. For the reasons set forth below, Plaintiff's Motion is granted in part and denied in part.

         I. Procedural History

         The procedural history of this lawsuit is relevant to the Court's resolution of Plaintiff's Motion for Default Judgment and thus is recounted in some detail:

         This case involves a patent infringement dispute between two business partners-turned-competitors in the retrofit light emitting diode (LED) lighting industry. In recent years, LED bulbs have become popular because they have a much longer lifespan than traditional incandescent bulbs, and the light they emit produces significantly less heat. The circuits that provide electrical current to LED bulbs do, however, produce a considerable amount of heat. This has motivated companies that manufacture LED bulbs to create - and seek patent protection for - apparatuses that both house the bulb and allow the heat generated by the circuitry to be dispersed efficiently.

         Plaintiff Global Tech LED, LLC (Global Tech) is one such company. Global Tech is the assignee of the ownership rights to United States Patent No. 9, 091, 424 (the ‘424 Patent), entitled “LED Light Bulb, ”[1] which comprises a retrofit LED apparatus[2] made up of: a screw connector, which is configured to be screwed into a receiving socket of an electric light fixture; a bracket, which is physically attached to the screw connector; and a housing, which is rotatably coupled to the bracket, and which includes one or more LED units for generating light and one or more electrically powered cooling devices to remove heat from the vicinity of the LED units. (Doc. #1-1, p. 2.) This design allows the face of the housing - along with the back-attached fan (or “heat sink”) - to be rotated “orthogonally” (ninety degrees) from the receptacle's connector base. This, in turn, enables the heat generated by the circuitry to be dispelled advantageously away from the LED units, thereby preserving the life of those units.

         Plaintiffs contend that this rotatable feature constitutes the “true innovation” of the ‘424 Patent and is being infringed by a retrofit LED apparatus (the Retrofit Kit) invented by Defendants HiLumz International Corp., HiLumz, LLC, and HiLumz USA, LLC (collectively, Defendants). On September 15, 2015, Global Tech filed a Complaint (Doc. #1) accusing Defendants of “making, using selling, or offering for sale” one or more lighting products that infringe the claims the ‘424 Patent, either literally or under the doctrine of equivalents. (Id. ¶ 36.) Defendants are also alleged to have “induced infringement of claims of at least the ‘424 Patent by having one or more of [their] distributors and other entities use, sell or offer for sale the Accused Products and others substantially identical to the Accused Products with knowledge of the ‘424 Patent.” (Doc. #1, ¶ 37.) The Complaint seeks injunctive relief and money damages for Defendants' willful direct and indirect patent infringement, in violation of 35 U.S.C. § 271.

         Defendants defended this case for almost two years, consistently denying the allegations of infringement. Specifically, they argued that (1) any product “substantially identical” to the Accused Products was sold prior to the issuance of the ‘424 Patent, and that (2) any Retrofit Kit sold after the issuance of the ‘424 Patent did not infringe that patent, despite the orthogonal rotation, because those Kits contained no “screw connector” component - that is, no connector piece that could be screwed into an electrical socket and through which electricity traveled to power the LED units - only a hose clamp that attached to the outside of the electrical socket through which no power was conveyed to the units. Defendants also asserted a number of affirmative defenses and counterclaims against Global Tech and filed a third party complaint against Mart and Newman (Doc. #63).[3]

         Additionally, Defendants moved for a preliminary injunction against Plaintiffs (Doc. #6), as well as sanctions pursuant to Rule 11 (Doc. # 64) - both of which Plaintiffs opposed (Docs. ## 22, 70), and both of which the Court denied (Docs. ## 62, 94). The Court also, upon Global Tech's Motion (Doc. #71), dismissed (i) Defendants' counterclaim seeking a declaratory judgment of inequitable conduct and patent unenforceability and (ii) three of the seven factual bases for Defendants' Lanham Act counterclaim. The Court denied dismissal of the remaining bases for the Lanham Act claim and the other three counterclaims (unfair competition, Florida Deceptive and Unfair Trade Practices Act, and trade libel).

         On January 19, 2017, the Court conducted a “Markman” hearing[4]for the purpose of construing the term “screw connector, ” as used in independent claims 1, 14, and 18 of the ‘424 Patent. Specifically, the construction question before the Court was whether, to be a “screw connector, ” the connector piece had to draw power from the electrical socket, which is what Defendants argued, [5] or merely had to serve as a support structure, as Plaintiffs argued. On May 23, 2017, the Court issued an order (Doc. #120) accepting in part Plaintiffs' proposed construction and rejecting Defendants' proposed construction.

         On June 30, 2017, counsel for Defendants filed a motion to withdraw on the ground that Defendants were “no longer able and willing to pay for the attorney's fees and costs necessary to pursue their claims and defenses in this civil action.” (Doc. #121, p. 2.) The Magistrate Judge granted that motion (Doc. #122) and directed Defendants to retain counsel on or before August 11, 2017, as is required for corporations under Middle District of Florida Local Rule 2.03(e). (Doc. #123.) Defendants failed to do so.

         On August 28, 2017, the Magistrate Judge issued a Report and Recommendation (Doc. #124) recommending that a Clerk's default be entered against Defendants, and that Defendants' pending counterclaims and third-party complaint be dismissed without prejudice. No. objections were filed. On September 22, 2017, the undersigned issued an Opinion and Order (Doc. #125) adopting the Report and Recommendations and ordering the Clerk to enter a default against Defendants and a judgment dismissing the third-party claims. A clerk's entry of default (Doc. #126) and a judgment dismissing the third-party claims (Doc. #127) were entered on September 25, 2017.

         On January 8, 2018, Global Tech filed the instant Motion for Default Judgment seeking the following relief: (1) entry of a final judgment on Global Tech's claims of willful patent infringement; (2) an award of damages, consisting of lost profits or, in the alternative, an award of a reasonable royalty, or a combination of both; (3) enhanced damages; (4) costs and attorneys' fees; (5) an Order requiring Defendants to produce sales and cost-of-goods-sold records for the Accused Products; and (6) entry of an Order permanently enjoining Defendants from making, selling, or offering to sell the Accused Products.

         II. Default Principles

         A. ...


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