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Judge Moses Holds Awards of More Than $1 are Not “Nominal”

Judge Paul G. Gardephe recently issued an Order of Default against Defendant Deep Blue Health New Zealand Ltd. (“Deep Blue Health”). Deep Blue Health had been accused of patent infringement by Plaintiff American Infertility of New York, P.C. (“American Infertility”), yet never defended the litigation. American Infertility sought compensatory damages of $10,000, attorneys’ fees of $24,250, consulting expenses of $19,250, and costs of $4,272.60. On December 30, 2019, Magistrate Judge Barbara Moses (S.D.N.Y.) recommended to Judge Gardephe that American Infertility be awarded $4,273.60 from Deep Blue Health, representative of the $4,272.60 of costs and only $1 of compensatory damages.

Deep Blue Health essentially ignored the lawsuit. For example, in October 2018, Judge Gardephe scheduled a hearing on American Infertility’s application for a default judgment. Deep Blue Health did not appear at the hearing. Nor did any attorney enter an appearance on Deep Blue Health’s behalf, nor were any documents filed on the docket. Judge Gardephe found that Deep Blue Health was properly on notice of the proceedings, “and has chosen not to appear.”

However, Judge Moses found that American Infertility was only entitled to $1 in compensatory damages. Since Deep Blue Health did not respond to the Complaint, there was no opportunity for American Infertility to take discovery on Deep Blue Health’s sales of the infringing product. The Court noted that there was no authority “for the proposition that nominal damages can be awarded under 35 U.S.C. § 284 in a non-nominal amount, such as the $10,000 requested here.”

Judge Moses also found that American Infertility was not entitled to attorney’s fees under 35 U.S.C. § 285. American Infertility argued that “the default permits an inference that defendant’s conduct was willful, and that inference, in turn, is enough to support the conclusion that this case is exceptional, warranting a fee award.” Judge Moses did not agree. The Court found that “the mere fact of a defendant’s default does not automatically render a case exceptional.”

The case is: American Infertility of New York, P.C. v. Deep Blue Health New Zealand Ltd., No. 17-cv-5666 (Dec. 30, 2019)