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Schaefer v. Invents Co., LLC

United States District Court, D. Oregon

December 15, 2017

KIMBERLEE SCHAEFER, Plaintiffs,
v.
INVENTS COMPANY LLC, Defendant.

          FINDINGS AND RECOMMENDATION

          STACIE F. BECKERMAN United States Magistrate Judge

         Kimberlee Schaefer (“Plaintiff”) brings this action against Invents Company LLC (“Defendant”), alleging claims of improper and deceptive invention promotion in violation of 35 U.S.C. §§ 297(a) and (b), and state law fraud, contract, and business name registration claims. (ECF No. 1.) Plaintiff now moves for entry of default judgment, pursuant to Federal Rule of Civil Procedure 55(b). (ECF No. 16.) The Court has jurisdiction over this matter pursuant to 28 U.S.C. § 1331. For the reasons that follow, the Court recommends that the district judge grant Plaintiff's motion for default judgment.

         BACKGROUND

         Plaintiff invented a sound-dampening attachment for electronic hair clippers that she refers to as “The Silencer.” (Compl. ¶ 16.) Defendant is an “invention promoter” that purports to provide “invention promotion services” to assist inventors with patenting and licensing their inventions for manufacturing. (Compl. ¶ 10.) Defendant promised to promote Plaintiff's invention. (Compl. ¶ 18.)

         Plaintiff entered into a contract with Defendant to secure Defendant's invention promotion services. (Compl., Ex. 3.) She entered into that contract in reliance on Defendant's false statements about its ability to market her invention and about its success on behalf of other inventors. (Compl. ¶¶ 34-36, 38-39.) Defendant failed to disclose all of the information required under 35 U.S.C. § 297(a) before entering into that agreement. (Compl. ¶ 24.) Defendant also failed to perform the services promised in the contract. (Compl. ¶¶ 30-31.) Additionally, Defendant was doing business in Oregon under an unregistered name. (Compl. ¶ 40.)

         As a result of Defendant's actions, Plaintiff's invention was published before Plaintiff secured a patent or other safeguard over her intellectual property. (Compl. ¶¶ 20-22.) She suffered economic loss as a result.

         Plaintiff filed a complaint on April 7, 2017. (ECF No. 1.) She served Defendant on May 23, 2017. (ECF No. 10.) Defendant has not appeared in this action.

         On May 23, 2017, Plaintiff moved for entry of default. (ECF No. 11.) Plaintiff served Defendant with a Request for Default. (ECF No. 12.) Defendant did not respond. Pursuant to the Court's order, the Clerk of Court entered default on June 8, 2017. (ECF Nos. 14, 15.) Plaintiff filed a motion for default judgment on September 14, 2017, with a declaration from patent attorney J. Curtis Edmondson supporting her requested monetary relief. (Mot. Default J.)

         ANALYSIS

         I. STANDARD OF REVIEW

         Pursuant to Rule 55(a), the Clerk of Court is required to enter an order of default if a party against whom affirmative relief is sought fails timely to plead or otherwise defend an action. Fed. R. Civ. P. 55(a). “The general rule is that upon default the factual allegations of the complaint, except those relating to the amount of damages, will be taken as true.” Geddes v. United Fin. Group, 559 F.2d 557, 560 (9th Cir. 1977) (citations omitted); see also City of N.Y. v. Mickalis Pawn Shop, LLC, 645 F.3d 114, 128 (2d Cir. 2011) (“[E]ntry of a default, while establishing liability, ‘is not an admission of damages[.]'”) (citation omitted).

         Rule 55 “provides that after the clerk's entry of default against a defendant, a court may enter default judgment against that defendant.” FirstBank P.R. v. Jaymo Props., LLC, 379 F. App'x 166, 170 (3d Cir. 2010). “The district court's decision whether to enter a default judgment is a discretionary one.” Aldabe v. Aldabe, 616 F.2d 1089, 1092 (9th Cir. 1980). In exercising this discretion, district courts in the Ninth Circuit consider the factors articulated in Eitel v. McCool, 782 F.2d 1470 (9th Cir. 1986). See U.S. v. Panter, No. 11-cv-03052, 2012 WL 2367369, at *4 (D. Or. May 24, 2012). The Eitel factors are: (1) the possibility of prejudice to Plaintiff; (2) the merits of Plaintiff's substantive claims; (3) the sufficiency of the operative complaint; (4) the sum of money at stake in the litigation; (5) the possibility of dispute concerning material facts; (6) whether the default was due to excusable neglect; and (7) the strong policy underlying the Federal Rules of Civil Procedure favoring decisions on the merits. Eitel, 782 F.2d at 1471-72. The “starting point” of the district court's analysis, however, “is the general rule that default judgments are ordinarily disfavored.” Id. at 1472.

         II. DISCUSSION

         A. Entry of ...


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