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Ceiva Logic Inc. v. Frame Media Inc.

United States District Court, C.D. California

December 19, 2014

Ceiva Logic Inc.
v.
Frame Media Inc., et al.

CIVIL MINUTES - GENERAL

JAMES V. SELNA, District Judge.

Proceedings: (IN CHAMBERS) Order Granting Plaintiff's Motion for Entry of Default Judgment and Permanent Injunction Against Defendant Frame Media (Fld 9-25-14) and Plaintiff's Motion for Entry of Default Judgment Against Defendant Digital Spectrum Solutions Inc. (Fld 11-10-14)

Plaintiff Ceiva Logic, Inc. ("Ceiva") moves for default judgment and a permanent injunction against Defendant Frame Media, Inc. ("Frame Media") (Docket No. 167) and Defendant Digital Spectrum Solutions, Inc. ("DSS") (Docket No. 170). Ceiva also requests that the Court designate this case an exceptional case and award reasonable attorneys' fees pursuant to 35 U.S.C. § 285. (Docket Nos. 167, 170.) Neither Frame Media nor DSS has replied.

For the following reasons, Ceiva's motions are GRANTED.

I. BACKGROUND

Ceiva brought this action for patent infringement on June 10, 2008. (Docket No. 1.) In its Complaint, Ceiva alleges that it owns all right, title, and interest in United States Patent No. 6, 442, 573 ("the '573 Patent") entitled "Method and Apparatus for Distributing Picture Mail to a Frame Device Community, " which issued on August 27, 2002. (Compl. ¶¶ 10, 11, Docket No. 1.) Frame Media provides photo sharing services that enable users of digital picture frames to receive and display photos using a web-based photo-sharing service called FrameChannel. ( Id. ¶ 15.) DSS makes and sells web-enabled picture frames and partnered with Frame Media to allow FrameChannel to provide photo-sharing services for its web-enabled picture frames. ( Id. ¶¶ 16, 17.) Ceiva alleges that these actions constitute infringement of the '573 Patent in violation of 35 U.S.C. § 271. ( Id. ¶¶ 18-24.)

On June 9, 2009, the Court granted summary judgment in favor of Ceiva, finding that Frame Media's photo sharing system infringed on claims 1, 6, and 7 of the '573 Patent. (Docket No. 116.) The Court also granted Frame Media's and DSS's motion to stay pending inter partes reexamination of the patent by the U.S. Patent and Trademark Office ("PTO"). (Docket No. 117.) Considering that the PTO's initial office action rejected claims 1 and 7, and considering that claim 6 was dependent on claim 1, the Court declined to issue a preliminary injunction because Ceiva did not demonstrate a likelihood of successfully demonstrating that claim 6 is valid. (See Docket No. 116, at 11-15.)

On reexamination, the PTO cancelled claims 1 and 7 of the '573 Patent. (Docket No. 146-1.) Claim 6 was not subject to reexamination. (Id.) Claim 6 is dependent on independent claim 1 and reads: [t]he system of claim 1 wherein input to said user interface is permitted when said user is authenticated by said at least one server system." (Keeton Decl., Ex. 1, Docket No. 100-1.)

II. LEGAL STANDARD Under Federal Rule of Civil Procedure 55(b)(2), a "party may apply to the court for a default judgment." Granting a motion for default judgment pursuant to Rule 55(b)(2) is within the discretion of the Court. Eitel v. McCool , 782 F.2d 1470, 1471 (9th Cir. 1986). The Court will consider the following factors: "(1) the possibility of prejudice to the plaintiff, (2) the merits of plaintiff's substantive claim, (3) the sufficiency of the complaint, (4) the sum of money at stake in the action; (5) the possibility of a 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. Local Rule 55-1 requires an application for default judgment to be accompanied by a declaration including the following information: "(a) when and against what party the default was entered; (b) the identification of the pleading to which default was entered; (c) whether the defaulting party is an infant or incompetent person...; (d) that the Servicemembers Civil Relief Act (50 U.S.C. App. § 521) does not apply; and (e) that notice has been served on the defaulting party, if required by F. R. Civ. P. 55(b)(2)."

On an application for a default judgment, the factual allegations in the complaint are taken as true, with the exception of those regarding damages. See Pope v. United States , 323 U.S. 1, 12 (1944); Geddes v. United Financial Group , 559 F.2d 557, 560 (9th Cir. 1977). However, "necessary facts not contained in pleadings, and claims which are legally insufficient, are not established by default." Cripps v. Life Ins. Co. of N. Am. , 980 F.2d, 1261, 1267 (9th Cir. 1992); cf. Trans World Airlines, Inc. v. Hughes , 449 F.2d 51, 69 (2d Cir. 1971), rev'd on other grounds, 409 U.S. 363 (1973) ("a default judgment entered on well-pleaded allegations in a complaint establishes a defendant's liability").

III. DISCUSSION

Ceiva's motions for default judgment seek liability as to the claim for infringement of the '573 Patent, permanent injunctive relief, and an exceptional case determination warranting attorneys' fees. The Court considers each request below.

A. Application of Default Judgment Standard

Local Rule 55-1 has been satisfied. Ceiva has set forth that the Court entered default against DSS on November 7, 2014, struck its answer and amended answer to the Complaint, and mailed the notice and motion to DSS's last known address.[1] (Covello Decl. re DSS ¶¶ 4-6, Docket No. 170-2.) Ceiva has also set forth that the Court entered default against Frame Media on July 1, 2014, struck its answer and amended answer to the Complaint, and mailed the notice and motion to Frame Media's last ...


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