KX Tech LLC v. Zuma Water Filters, Inc.

          RULING ON APPLICATION FOR ATTORNEY'S FEES AND COSTS

          CHARLES S. HAIGHT, JR. SENIOR UNITED STATES DISTRICT JUDGE

         Plaintiff KX TECHNOLOGIES, LLC ("Plaintiff") brought this action for patent infringement pursuant to 35 U.S.C. §§ 1, et seq.; for unfair trade practices pursuant to the Connecticut Unfair Trade Practices Act ("CUTPA"), Conn. Gen. Stat. § 42-110a, et seq.; and for unfair competition pursuant to the Lanham Act, 15 U.S.C. § 1125, et seq., seeking injunctive relief, damages, costs, and attorney's fees. Following entry of a default judgment in its favor, Plaintiff has filed a supplemental memorandum in support of its request for an award of attorney's fees and costs. Defendants have not opposed the fee application. This Ruling resolves it.

         I. PROCEDURAL HISTORY

         Plaintiff filed the Complaint in this action on August 23, 2016, Doc. 1, and on December 15, 2016, filed an Amended Complaint with leave of the Court. Doc. 57. After Defendants Dista Filter d/b/a Dista ("Dista") and Waterfall Filter Company d/b/a Waterfall Filter ("Waterfall") failed to appear in this action or otherwise respond to the Amended Complaint, Plaintiff filed a motion for default entry as to those two remaining Defendants, pursuant to Rule 55(a) of the Federal Rules of Civil Procedure, Doc. 101, which was granted by the Court on October 11, 2017. Doc. 102.

         Plaintiff thereafter filed a motion for default judgment as directed by this Court's Order pursuant to Federal Rule of Civil Procedure 55(b). Doc. 103. On April 19, 2018, the Court granted Plaintiff's unopposed motion for default judgment, in part, and entered default judgment for Plaintiff on its claims against Dista and Waterfall for patent infringement and for unfair trade practices. Doc. 104. The Court required Plaintiff to file a supplemental memorandum of law to the extent it wished to pursue its request for damages, costs and fees. See Id. at 11. On May 17, 2018, Plaintiff timely filed a supplemental memorandum of law in support of its request for attorney's fees and costs. Doc.105. Plaintiff withdrew its request for punitive damages. See Id. at 5. Defendants have filed no objection to Plaintiff's request for costs and fees.^[1]

         This Ruling resolves Plaintiff's request for attorney's fees and costs.

         II. LEGAL STANDARD

         "When the Court enters a default judgment, it must accept as true all of the factual allegations of the complaint, but the amount of damages are not deemed true." Tiffany (NJ) Inc. v. Luban, 282 F.Supp.2d 123, 124 (S.D.N.Y. 2003) (internal citation and quotation marks omitted). Accordingly, "[t]he district court must instead conduct an inquiry in order to ascertain the amount of damages with reasonable certainty." Credit Lyonnais Sec. (USA), Inc. v. Alcantara, 183 F.3d 151, 155 (2d Cir. 1999) (citation omitted). This inquiry requires the Court to determine the proper rule for calculating damages, and to assess Plaintiff's evidence supporting the damages to be determined under Rule 55. Id.

         As Defendants' liability has been established by virtue of the default order entered in this matter, it remains to be determined whether Plaintiff has provided adequate support for the fees and costs it seeks. Keystone Glob. LLC v. Auto Essentials, Inc., No. 12-CV-9077(DLC), 2015 WL 224359, at *3 (S.D.N.Y. Jan. 16, 2015) (collecting cases). Whether a hearing is required to determine damages is left to the discretion of the District Judge. See Fed.R.Civ.P. 55(b)(2); see also Fustok v. ContiCommodity Servs., Inc., 873 F.2d 39, 40 (2d Cir. 1989). A hearing is not necessary if the Court "ensure[s] that there was a basis for the damages specified in a default judgment." Fustok, 873 F.2d at 40. If the Court determines a hearing is not required, the Court may rely upon detailed affidavits and documentary evidence. Id.; see also Transatlantic Marine Claims Agency, Inc. v. Ace Shipping Corp., 109 F.3d 105, 111 (2d Cir. 1997).

         III. DISCUSSION

         In this matter, Plaintiff has provided two declarations and other documentary evidence supporting its claims for infringement, an award of attorney's fees and costs, and additional details concerning Defendants' post-judgment activities. See Doc. 105. No. response to these materials has been filed. The Court finds that Plaintiff's declarations and the documentary evidence submitted provide a basis for an award of fees and costs; accordingly, a hearing is not required.

         A. Exceptional Case

         Plaintiff contends that this case should be deemed "exceptional" under 35 U.S.C. § 285, warranting an award of attorney's fees to the prevailing party. In support of this position, Plaintiff points to Defendants' conduct; the strength of Plaintiff's litigation position; Defendant's willful infringement of Plaintiff's patents; Defendants' continuing actions to evade detection and enforcement; and the need for deterrence. See Doc. 105 at 10.

         "Section 285 of the Patent Act authorizes a district court to award attorney's fees in patent litigation. It provides, in its entirety, that '[t]he court in exceptional cases may award reasonable attorney fees to the prevailing party.'" Octane Fitness, LLC v. ICON Health & Fitness, Inc., 134 S.Ct. 1749, 1752 (2014) (quoting 35 U.S.C. § 285). In Octane Fitness, the Supreme Court held that

an "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. District courts may determine whether a case is "exceptional" in the case-by-case exercise of their discretion, considering the totality of the circumstances.

134 S.Ct. at 1756 (footnote omitted).

         In making this determination, "there is no precise rule or formula" to be followed, "but instead equitable discretion should be exercised" in light of the above considerations. Id. (quoting Fogerty v. Fantasy, Inc., 510 U.S. 517 (1994)). The Octane Fitness Court noted a nonexclusive list of factors that may be considered, 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 1756 n.6 (quotation marks and citation omitted).

         "Section 285 demands a simple discretionary inquiry; it imposes no specific evidentiary burden, much less such a high one. Indeed, patent-infringement litigation has always been governed by a preponderance of the evidence standard[.]" Id. at 1758 (citation omitted). Thus, in determining whether Plaintiff has established that this is an "exceptional" matter for the purposes of an award of attorney's ...