Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-cand-3_18-cv-01847/USCOURTS-cand-3_18-cv-01847-0/pdf.json

Nature of Suit Code: 830
Nature of Suit: Patent
Cause of Action: 35:271 Patent Infringement

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United States District Court

Northern District of California

UNITED STATES DISTRICT COURT

NORTHERN DISTRICT OF CALIFORNIA

TECHNICAL LED INTELLECTUAL 

PROPERTY, LLC,

Plaintiff,

v.

AEON LABS LLC,

Defendant.

Case No. 18-cv-01847-JSC 

ORDER OF REASSIGNMENT AND 

REPORT AND RECOMMENDATION 

RE: PLAINTIFF’S MOTION FOR 

DEFAULT JUDGMENT

Re: Dkt. Nos. 39, 45

Plaintiff Technical LED Intellectual Property, LLC (“Plaintiff”) filed suit against Aeon 

Labs LLC (“Aeon”), alleging infringement of one or more claims of Plaintiff’s patent, U.S. 

Reissue Patent No. 41,685 (“the ’685 Patent”), entitled “Light Source with Non-White and 

Phosphor-Based White LED Devices and LCD Assembly.” (Dkt. No. 1 at ¶¶ 7-10.)1 The Clerk of 

Court entered default as to Aeon on March 27, 2019 after it failed to appear or otherwise defend 

itself in this action. (Dkt. No. 34.) Plaintiff then filed an unopposed motion for default judgment 

pursuant to Federal Rule of Civil Procedure 55(b)(2), (Dkt. No. 39), and the Court issued an order 

permitting Plaintiff to seek discovery regarding the number of infringing units sold and thereafter 

file a supplemental memorandum and evidence regarding its remedy request, (Dkt. No. 41). Now 

before the Court is Plaintiff’s supplemental briefing. (Dkt. No. 45.) As Aeon has not appeared, 

the Court has not obtained consent from all parties pursuant to 28 U.S.C. § 636(c); accordingly, 

this matter must be REASSIGNED to a district court judge. After careful consideration of 

Plaintiff’s briefing the Court concludes that oral argument is not necessary and vacates the 

 

1 Record citations are to material in the Electronic Case File (“ECF”); pinpoint citations are to the 

ECF-generated page numbers at the top of the documents. 

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December 5, 2019 hearing. The Court RECOMMENDS that the newly-assigned district court 

judge GRANT IN PART Plaintiff’s motion for default judgment. 

BACKGROUND

The background of this case is set forth in the Court’s June 25, 2019 order (“June 2019 

Order”). (See Dkt. No. 41 at 1-2.) The Court includes it here for ease of reference. 

I. Complaint Allegations

Plaintiff alleges that Aeon violated 35 U.S.C. § 271(a) (the “Patent Act”) by “making, 

using, providing, supplying, distributing, selling, and/or offering for sale products . . . comprising 

a light source” that infringed on one or more claims of the ’685 Patent. (Dkt. No. 1 at ¶¶ 7-10.) 

Plaintiff seeks monetary and injunctive relief under the Patent Act based on Aeon’s infringement. 

Upon the Clerk’s entry of default, the well-pleaded factual allegations in the complaint, except 

those concerning damages, are deemed to have been admitted by the nonresponding party. 

Geddes v. United Fin. Grp., 559 F.2d 557, 560 (9th Cir. 1977). The Court thus accepts the 

following allegations as true.

A. The Parties

Plaintiff is “a Delaware limited liability company, with its principal place of business 

located at 251 Little Falls Dr., Wilmington, DE 19808.” (Dkt. No. 1 at ¶ 1.) Aeon is a California

limited liability corporation with “a principal place of business at 1228 Norvell Street, El Cerrito, 

CA 94530.” (Id. at ¶ 2.)

B. The Patent Infringement

Plaintiff’s ’685 Patent was issued on September 14, 2010 by the United States Patent and 

Trademark Office. (Dkt. No. 1 at ¶ 7 (citing Dkt. No. 1-1, Ex. A).) Aeon offers for sale and has 

sold to consumers in the United States the “Aeotec” LED light bulbs. (Id. at ¶ 8.) The Aeotec 

bulbs infringe on claims 10-14 of the ’685 Patent. (Id.; see also Dkt. Nos. 1-1, Ex. A at 17 & 1-2, 

Ex. B at 2-5.)

II. Procedural History

Plaintiff filed its complaint on March 26, 2018. (Dkt. No. 1.) Aeon did not appear 

following the August 3, 2018 service of summons on the California Secretary of State, and

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Plaintiff filed for entry of default with the Clerk on March 26, 2019. (Dkt. No. 33.) The Clerk 

entered default as to Aeon the next day. (Dkt. No. 34.) Plaintiff filed its motion for default 

judgment on May 28, 2019. (Dkt. No. 39.) Following the Court’s June 2019 Order permitting 

Plaintiff to seek “limited discovery to determine the amount of damages related to Aeon’s

infringement of the ’685 Patent” and file supplemental briefing regarding its requested remedies, 

(Dkt. No. 41), Plaintiff moved for an extension of time to file, (Dkt. No. 42), which the Court 

granted, (Dkt. No. 43). Plaintiff then filed its supplemental briefing on October 28, 2019. (Dkt. 

No. 45.) 

DISCUSSION

As set forth in the June 2019 Order, the Court has both subject matter jurisdiction over this 

case and personal jurisdiction over Aeon. (See Dkt. No. 41 at 3-4.) The Court also determined in 

the June 2019 Order that default judgment pursuant to Federal Rule of Civil Procedure 55(b) is

warranted based on consideration of the seven factors outlined in Eitel v. McCool, 782 F.2d 1470, 

1471-72 (9th Cir. 1986). (Id. at 4-7 (“In sum, the Eitel factors weigh in favor of granting default 

judgment.”).) The Court incorporates its analysis and conclusions from the June 2019 Order here 

and addresses the only outstanding issue—Plaintiff’s requested remedies. 

I. Remedies 

The Patent Act provides monetary and injunctive relief for violations of 35 U.S.C. § 

271(a). Here, Plaintiff seeks monetary damages “reflecting an average reasonable royalty rate” 

under 35 U.S.C § 284; attorneys’ fees under 35 U.S.C. § 285; and litigation costs under 28 U.S.C. 

§ 1920 and 35 U.S.C. § 285.

2

 (Dkt. No. 45 at 9.) 

A. Damages

Under the Patent Act, “[u]pon finding for the claimant the court shall award the claimant 

damages adequate to compensate for the infringement, but in no event less than a reasonable 

royalty for the use made of the invention by the infringer, together with interest and costs as fixed 

 

2 Plaintiff no longer seeks injunctive relief. (See Dkt. No. 45-1 at ¶ 2 (attesting that Plaintiff “has 

dropped its request for injunctive relief [because] the patent in suit expires December 28, 2019”).) 

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by the court.” 35 U.S.C. § 284. As the Federal Circuit has explained:

When actual damages cannot be adequately proved, a reasonable 

royalty may be employed. Fromson v. Western Litho Plate & Supply 

Co., 853 F.2d 1568, 1574, 7 USPQ2d 1606, 1612 (Fed.Cir.1988). “A 

reasonable royalty is the amount that ‘a person, desiring to 

manufacture [, use, or] sell a patented article, as a business 

proposition, would be willing to pay as a royalty and yet be able to 

make [, use, or] sell the patented article, in the market, at a reasonable 

profit.’” Trans–World Mfg. Corp. v. Al Nyman & Sons, Inc., 750 F.2d 

1552, 1568, 224 USPQ 259, 269 (Fed.Cir.1984) (alterations in 

original; citations omitted). When an established royalty does not 

exist, a court may determine a reasonable royalty based on 

“hypothetical negotiations between willing licensor and willing 

licensee.” Fromson, 853 F.2d at 1574, 7 USPQ2d at 1612. “The key 

element in setting a reasonable royalty . . . is the necessity for return 

to the date when the infringement began.” Hanson v. Alpine Valley 

Ski Area, Inc., 718 F.2d 1075, 1079, 219 USPQ 679, 682 

(Fed.Cir.1983) (quoting Panduit Corp. v. Stahlin Bros. Fibre Works, 

Inc., 575 F.2d 1152, 1158, 197 USPQ 726, 731 (6th Cir.1978)); see 

also Fromson, 853 F.2d at 1575, 7 USPQ2d at 1613 (hypothetical 

royalty negotiations methodology “speaks of negotiations as of the 

time infringement began”). 

Wang Labs., Inc. v. Toshiba Corp., 993 F.2d 858, 870 (Fed. Cir. 1993). Further, an infringer is 

“only liable for damages for six years prior to the filing of the infringement action.” Wang, 993 

F.2d at 870 (citing 35 U.S.C. § 286). As discussed below, Plaintiff submits evidence that Aeon’s

alleged infringement began in 2014. 

1. Reasonable Royalty Rate

Plaintiff seeks damages in the amount of $23,000, reflecting the “average reasonable 

royalty rate based upon [its] prior license agreements applied to $250,939,” which Plaintiff asserts 

is Aeon’s total sales of infringing products from 2014 through September 2019. (Dkt. No. 45 at 9-

10.) In support, Plaintiff submits the declaration of its counsel, Louis M. Heidelberger, who 

details the methodology and evidence used to determine the royalty rate. (See Dkt. No. 45-1, Ex. 

A at ¶¶ 9-14.) Mr. Heidelberger attests that Plaintiff was able to recover “previously deleted and 

unavailable” emails from an attorney, Timothy Nitsch, “who from March [2018] through about 

June 25, 2018,” indicated that he represented Aeon.3 (Id. at ¶ 9.) In an April 19, 2018 email, Mr. 

 

3 Mr. Heidelberger attests that on March 28, 2018, Mr. Nitsch “identified himself as [Aeon’s] 

attorney, [and] acknowledged [that] he had a copy of the Complaint and Notice Letter.” (Dkt. No. 

45-1 at ¶ 5.) Mr. Heidelberger further attests that he engaged in communications with Mr. Nitsch, 

“including settlement discussions,” until June 25, 2018, when Mr. Nitsch informed Mr. 

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Nitsch writes that Aeon sold the following number of infringing products between 2014 and 2017: 

2017 – 943 units

2016 – 466 units

2015 – 215 units

2014 – 243 units

Total: 1867 units 

(Dkt. No. 45-5, Ex. E at 2.) On May 1, 2019, Mr. Nitsch emailed Mr. Heidelberger clarifying that 

of the 1867 units sold between 2014 and 2017, “94 were sold on Amazon for $49.00” and “[t]he 

remaining 1773 we[re] sold direct to businesses for $28.” (Id. at 3.) Thus, total sales of the 

infringing products between 2014 and 2017 equaled $54,250. (Id.) 

As for total sales between 2018 and 2019, Mr. Heidelberger attests that Plaintiff could not 

obtain business-to-business sales information and “was only able to discover sales of [Aeon’s] 

infringing products through Amazon.” (Id. at ¶ 11.) Further, Amazon did not produce sales 

information for the two-year timeframe Plaintiff requested, and instead produced documents 

concerning sales from October 30, 2018 through September 30, 2019.

4

 (Id.) Mr. Heidelberger 

asserts that the sales for the 11-month period reflected in the documents obtained from Amazon 

“totaled $15,425 for 352 units.” (Id.; see also Dkt. No. 44-4, Ex. G (filed under seal).) Further, 

Mr. Heidelberger asserts that the total sales from January 1, 2019 through September 30, 2019 are 

$202,689 and combined with the $54,250 in total sales from 2014 through 2017, the sum total of 

infringing sales is at least $250,939. (Dkt. No. 45-1, Ex. A at ¶¶ 12-13.) Plaintiff’s methodology 

is flawed, however. 

The sales information obtained from Amazon consists of a spreadsheet listing 352 separate 

entries. (See Dkt. No. 44-4, Ex. G.) However, the spreadsheet includes a “quantity” column 

indicating that for some entries, more than a single unit was sold and for others, “0” units were 

 

Heidelberger “that he was no longer retained by [Aeon].” (Id. at ¶¶ 5, 9; see also Dkt. No. 27-7, 

Ex. C at 2 (email from Mr. Nitsch to Plaintiff’s counsel stating that “Aeon Labs has not retained 

[Mr. Nitsch] to represent them [i]n this matter.”).) 

4 On August 13, 2019, Plaintiff served a third-party subpoena on Amazon requesting documents 

containing sales information regarding the infringing products from January 1, 2018 through 

December 28, 2019. (Dkt. Nos. 45-1, Ex. A at ¶ 3 & 45-2, Ex. B at 8 ¶ 18.) Amazon objected to 

the subpoena on various grounds, (see Dkt. No. 45-3, Ex. C), but after meeting and conferring 

with Mr. Heidelberger, Amazon agreed to produce “limited product sales information” regarding 

Aeon’s products, (Dkt. No. 45-1, Ex. A at ¶ 3). 

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sold. (Id.) In other words, the number of entries (352) does not equal the number of units sold. 

The Court manually calculated the data from the spreadsheet and arrived at 562 units sold for a 

total of $ 25,221.58 in sales (30 units at $49.99 (sold between October 30, 2018 and November 27, 

2018) and 532 units at $44.59 (sold between November 28, 2018 and September 30, 2019)). The 

Court did not include entries indicating that a quantity of “0” was sold or where the listed price 

was “0.” 

Mr. Heidelberger provides two methods for estimating the “total infringing sales for 2018-

2019” to account for the missing sales information from Amazon for the period from January 1, 

2018 to October 29, 2018, and for business-to-business sales from 2018 and 2019. Only one is 

satisfactory. First, Mr. Heidelberger asserts that the ratio of business-to-business sales versus 

Amazon sales reflected in the 2014 through 2017 totals (95% business-to-business and 5% 

Amazon) derived from Mr. Nitsch’s email can be used to determine the business-to-business sales 

for 2018 and 2019 when compared to the available Amazon sales information. (Dkt. No. 45-1, 

Ex. A at ¶ 12.) The Court declines to use the “95% versus 5% model” because it is unclear from 

Mr. Nitsch’s email when Aeon Labs began selling the infringing products on Amazon. In other 

words, it is possible, and perhaps even most likely, that the 94 units sold by Amazon from 2014 to 

2017 were actually all sold in 2017 given that for the 11-month period from October 2018 to 

September 2019, Amazon’s records show it sold 562 units. Plaintiff’s methodology therefore

likely overestimates the number of business-to-business sales for 2018 and 2019 given the 

increase in Amazon sales for those years.

Second, Mr. Heidelberger asserts that the Court can assume that the total infringing sales 

doubled from 2017 to 2018 through 2019 because the units sold doubled each year between 2015

and 2017. (See Dkt. No. 45-1, Ex. A at ¶ 12.) The Court declines to adopt Mr. Heidelberger’s 

calculations because he incorrectly uses the total units sold from 2014 to 2017 (1867) as the 

number of units sold only in 2017. (Id.) He then asserts that it is reasonable to assume that 

Aeon’s 2017 sales of “1867 units doubled to 3734 units for 2018 and stayed the same in 2019.” 

(Dkt. No. 45-1, Ex. A at ¶ 12.) However, Mr. Heidelberger is correct that the total number of 

units sold roughly doubled each year from 2015 to 2017 according to the totals set forth in Mr. 

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Nitsch’s email. (See Dkt. No. 45-5, Ex. E at 2 (noting 215 units sold in 2015; 466 units sold in 

2016; and 943 units sold in 2017).) By doubling the number of units sold in 2017, it is thus 

reasonable to estimate that there were 1886 total units sold in 2018 and 3772 total units will be 

sold in 2019 (roughly 314 per month). 

The question then becomes what sales price to assign to those units to estimate the total 

sales for 2018 and 2019. Plaintiff’s briefing offers no direction in this regard. Using the sales 

information obtained from Amazon, between January 1, 2019 and September 30, 2019, Aeon Labs 

sold 443 units on Amazon at $44.59 per unit for $19,753.37 in sales. (See Dkt. No. 44-4, Ex. G at 

10-45.) Using the total-units-sold figure for 2019 estimated above (314 per month), there were 

roughly 2826 total units sold between January and September 2019. Subtracting the units sold 

through Amazon from that figure leaves 2383 units in business-to-business sales. Using the 2014-

2017 price of $28.00 for business-to-business sales, the estimated total sales for 2019 would be

$86,477.37 ($19,753.37 in Amazon sales plus $66,724.00 in business-to-business sales). 

As for 2018, Aeon Labs sold 30 units through Amazon at $49.99 per unit between October 

30, 2018 and November 27, 2018. (Id. at 2-3.) Extrapolating that data, it is reasonable to estimate 

that Aeon Labs sold an additional 300 units through Amazon at $49.99 per unit from January 2018 

through October 29, 2018. The sales information from Amazon further indicates that Aeon Labs 

sold 90 units from November 28, 2018 through December 31, 2018 at $44.59. (Id. at 4-10.) Thus, 

Aeon Labs’ total estimated sales through Amazon for 2018 would be $20,509.80 for 420 units. 

Because it is reasonable to estimate that Aeon Labs sold 1886 units in 2018 and 420 of those were 

sold through Amazon, it follows that 1466 of those units were business-to-business sales at $28.00 

per unit. Using those figures, the estimated total sales for 2018 would be $61,557.80 ($20,509.80 

in Amazon sales plus $41,048.00 in business-to-business sales). 

Thus, the sum total of infringing sales is not “at least $250,939,” as Mr. Heidelberger 

asserts, but is instead closer to $202,285.17. As for the reasonable royalty rate based upon those 

sales, Mr. Heidelberger references his previous declaration, which details Plaintiff’s licensing 

program for the ’685 Patent. (See Dkt. No. 45-1, Ex. A at ¶ 14 (incorporating by reference Dkt. 

No. 39-1 at ¶¶ 4-6).) Mr. Heidelberger’s previous declaration attests that “[t]he average licenses 

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under the ’685 Patent involved minimal sales of less than $500,000 of infringing products at the 

time of settlement; the licensees agree to reasonable royalties between $14,500 and $25,000.” 

(Dkt. No. 39-1 at ¶ 6.) Further, in support of the instant motion, Plaintiff submits six “exemplary 

license agreements” dated February 2018 through October 2019 that involve the ’685 Patent, and 

which Plaintiff asserts involved business-to-business sales of under $250,000.

5

 (Dkt. No. 44-5, 

Ex. H (filed under seal).) Using the total sales figure of $250,939, which the Court finds 

erroneous for the reasons explained, supra, and citing the agreements, Plaintiff asserts that the 

“sales of infringing products by [Aeon Labs] would amount to a base royalty and damages of 

$23,000.” (See Dkt. No. 45 at 10 (citing Dkt. No. 45-1, Ex. A at ¶ 14).) 

It appears that Plaintiff arrived at the $23,000 figure by adopting the amount reflected in 

one of the submitted agreements—a June 2019 settlement agreement with a defendant in another 

infringement action. (See Dkt. No. 44-5, Ex. H at 2-11.) The agreement grants the defendant “a 

fully paid-up, personal, non-exclusive, non-transferable, worldwide license to make, have made, 

import, export, offer for sale, sell, and/or use products falling within the scope of one or more 

claims of” the ’685 Patent. (Id. at 4.) The defendant agreed to pay Plaintiff $23,000 “[i]n 

consideration of release and license granted” by Plaintiff under the agreement. (Id. at 5.) Because 

the agreement is contemporaneous and concerns the patent at issue, it provides guidance for 

determining the reasonable royalty rate. See Prism Techs. LLC v. Sprint Spectrum L.P., 849 F.3d 

1360, 1370-71 (Fed. Cir. 2017) (noting that consideration of “sufficiently comparable licenses” is 

appropriate to determine the reasonable royalty rate and finding no abuse of discretion where 

district court considered settlement agreement that “covered the patents at issue”); see also Boston 

Sci. Corp. v. Johnson & Johnson, 550 F. Supp. 2d 1102, 1120 (N.D. Cal. 2008) (“Where little or 

no satisfactory evidence of a reasonable royalty is presented, the court should award such 

reasonable royalties as the record evidence will support.”). Further, Plaintiff’s request does not 

appear unreasonable on its face. That said, Plaintiff’s request for $23,000 appears flawed to the 

 

5 Five of the agreements submitted by Plaintiff contain a “License” provision whereby Plaintiff 

granted the defendant a personal, non-exclusive, non-transferable, license to sell products that fall 

within the claims of the “Covered Patents,” including the ’685 Patent, subject to the defendant’s 

payment of the settlement amount. (See Dkt. No. 44-5, Ex. H at 4, 22-23, 30-31, 38-39, 48.) 

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extent it is based on Plaintiff’s assertion that Aeon’s total infringing sales between 2014 and 2019 

equal $250,939. 

Plaintiff’s requested amount of $23,000 would equal a royalty rate of roughly 9% of 

$250,939. Because the Court believes that Plaintiff’s calculation of Aeon’s total revenues from 

sales of infringing products is not accurate, the Court recommends determining the damages by 

multiplying the reasonable royalty rate of 9% by the total sales figure discussed above

($202,285.17), resulting in damages of $18,206. This figure is closer to the amount Plaintiff 

requested in its initial briefing—$17,500. (See Dkt. No. 39-1 at ¶ 7 (“Based upon the forgoing 

royalties paid by the prior licensees, Aeon would owe a reasonable royalty of $17,500.”).) 

2. Enhanced Damages Based on Willful Infringement 

Plaintiff requests “damages of up to three times” the amount determined based on Aeon’s 

“willful, wanton[,] and deliberate infringement of the ’685 Patent and [its] conduct throughout this 

litigation.” (Dkt. No. 45 at 10.) Under the Patent Act it is within a district court’s discretion to 

“increase the damages up to three times the amount” determined. See 35 U.S.C. § 284. Such

enhanced damages may be awarded in a “case of willful or bad-faith infringement.” Halo Elecs., 

Inc. v. Pulse Elecs., Inc., 136 S. Ct. 1923, 1930 (2016). The Supreme Court has instructed that 

enhanced damages should “not be meted out in a typical infringement case, but are instead 

designed as a ‘punitive’ or ‘vindictive’ sanction for egregious infringement behavior.” Id. at 1932. 

Enhanced damages may be appropriate where the defendant’s conduct related to infringement is 

“willful, wanton, malicious, bad-faith, deliberate, consciously wrongful, flagrant, or—indeed—

characteristic of a pirate.” Id. Even where such conduct is shown, however, enhanced damages 

are not required. Id. at 1933. Instead, a court must “take into account the particular circumstances 

of [the] case” in determining whether enhanced damages are warranted. Id.

a. Prelitigation Conduct

“[A] willfulness claim asserted in the original complaint must necessarily be grounded 

exclusively in the accused infringer’s pre-filing conduct.” In re Seagate Tech., LLC, 497 F.3d 

1360, 1374 (Fed. Cir. 2007) (noting that “willful infringement in the main must find its basis in 

prelitigation conduct”), abrogated on other grounds by Halo, 136 S. Ct. 1923. To plead willful 

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infringement, Plaintiff must assert facts plausibly showing that Aeon knew of the patent at the 

time of infringement and engaged in conduct it knew or should have known infringed on that 

patent. See Halo, 136 S. Ct. at 1933. 

As previously discussed, Plaintiff submits evidence that Aeon’s infringement began in 

2014; however, Plaintiff’s complaint does not address willful infringement or allege that Aeon 

knew or should have known of the ’685 Patent at the time infringement began. (See generally

Dkt. No. 1.) Indeed, the Court’s June 2019 Order noted that “the complaint itself is devoid of any

allegations of willful infringement” and concluded that Plaintiff failed to show “that it is entitled 

to enhanced damages for the infringement of the ’685 Patent.” (Dkt. No. 41 at 9.) Plaintiff’s 

arguments regarding Aeon’s willful behavior instead concern Aeon’s conduct during this 

litigation. (See Dkt. Nos. 45 at 10-11 & 45-1, Ex. A at ¶¶ 5-8.) Because Plaintiff fails to allege 

willful infringement in the underlying complaint, the Court recommends denying enhanced 

damages to the extent Plaintiff asserts such damages are warranted based on Aeon’s prelitigation

conduct. 

b. Aeon’s Conduct Since Plaintiff Initiated this Action

As for Aeon’s conduct since this litigation began, Mr. Heidelberger attests that Plaintiff 

notified Aeon of its infringement by filing the underlying complaint and forwarding a notice letter 

of same to Aeon in March 2018. (See Dkt. No. 45-1, Ex. A at ¶ 5; see also Dkt. No. 45-4, Ex. D 

(Notice Letter dated March 26, 2018).) Mr. Heidelberger attests that Mr. Nitsch contacted him 

two days later, “identified himself as Defendant’s attorney, acknowledged he had a copy of the 

Complaint and Notice Letter[,] and engaged in communications . . ., including settlement 

discussions, through June 25, 2018.” (Dkt. No. 45-1, Ex. A at ¶ 5.) Mr. Heidelberger further 

attests that “[d]uring discussions with Defendant’s principal, Winston Cheng, in September 2018 

and in the beginning of October 2018, Cheng indicated that he would close up Aeon Labs rather 

than pay the reasonable royalties due Plaintiff for infringement of the ’685 Patent.” (Id. at ¶ 7.) 

Further, Mr. Heidelberger attests that Aeon continues to sell the infringing products, as shown by 

the sales information Plaintiff obtained from Amazon. (Id.) Mr. Heidelberger asserts that Aeon’s 

actions since being notified of its infringement in March 2018 constitute continued willful and 

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deliberate infringement. (Id. at ¶ 8.) The Court agrees. 

Although Plaintiff did not move for a preliminary injunction, “which generally provides an 

adequate remedy for combating post-filing willful infringement,” see Seagate, 497 F.3d at 1374, 

“there is no rigid rule that a patentee must seek a preliminary injunction in order to seek enhanced 

damages,” see Mentor Graphics Corp. v. EVE-USA, Inc., 851 F.3d 1275, 1295-96 (Fed. Cir. 2017) 

(internal quotation marks and citations omitted). Aeon’s continued infringement of the ’685 

Patent despite notice of both the infringement and this litigation constitutes willful behavior. 

Thus, the Court recommends awarding enhanced damages, but only for the royalty on sales 

occurring between April 2018 and September 2019; specifically: $11,938.12.

6

 

In sum, the Court recommends awarding Plaintiff $30,144.12 in damages. 

B. Attorneys’ Fees 

Plaintiff requests an award of $67,329.50 in attorneys’ fees. (Dkt. No. 45 at 13.) Courts 

may award attorneys’ fees to prevailing parties in patent actions only in “exceptional cases.” 35 

U.S.C. § 285. This is such a case. 

1. Exceptional Case

“[A]n ‘exceptional’ case is simply one that stands out from others with respect to the 

substantive strength of a party’s litigation position (considering both the governing law and the 

facts of the case) or the unreasonable manner in which the case was litigated.” Octane Fitness, 

LLC v. ICON Health & Fitness, Inc., 572 U.S. 545, 554 (2014). Thus, “courts may determine 

whether a case is ‘exceptional’ in the case-by-case exercise of their discretion, considering the 

totality of the circumstances.” Id. In making that determination, courts may consider such factors 

as “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 n.6 (internal quotation marks and citation omitted). Courts 

 

6 As previously discussed, based on the evidence submitted by Plaintiff the Court estimates that 

Aeon sold $61,557.80 worth of infringing products in 2018 (roughly $5,129.82 per month) and 

$86,477.37 worth in 2019. Thus, from April 2018 through September 2019, Aeon sold 

$132,645.75 worth of infringing products. The Court recommends applying the same 9% royalty 

rate used to determine statutory damages and finding Aeon liable for $11,938.12 in enhanced 

damages. 

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in this District “applying the Octane Fitness analysis commonly find that willful infringement, in 

conjunction with non-participation in litigation, makes a case ‘exceptional.’” ADG Concerns, Inc. 

v. Tsalevich LLC, No. 18-cv-00818-NC, 2018 WL 4241967, at *13 (N.D. Cal. Aug. 31, 2018)

(collecting cases), report and recommendation adopted, No. 18-cv-00818-JSW, 2018 WL 

6615139 (N.D. Cal. Nov. 1, 2018). 

A finding that this case is “exceptional” is warranted. The email correspondence between 

Plaintiff’s counsel and Mr. Nitsch indicates that Aeon was initially amenable to settling this action 

and then stopped engaging with Plaintiff. Mr. Heidelberger attests to subsequent direct 

communications with Aeon’s principal, Mr. Cheng, who “indicated that he would close up Aeon 

Labs rather than pay the reasonable royalties due Plaintiff for infringement of the ’685 Patent.” 

(Dkt. No. 45-1, Ex. A at ¶ 7.) Aeon then continued to willfully infringe the ’685 Patent as shown 

by the sales information Plaintiff obtained from Amazon. (Id.) Further, Aeon’s refusal to appear 

in this action required Plaintiff to expend additional funds to obtain discovery from a third-party, 

Amazon. Such willful infringement and deliberate behavior in failing to appear in this action 

makes this an “exceptional” case, and attorneys’ fees are warranted. See, e.g., Sream, Inc. v. 

Sahebzada, No. 18-CV-05673-DMR, 2019 WL 2180224, at *10 (N.D. Cal. Mar. 6, 2019) (finding 

case “exceptional” and recommending award of attorneys’ fees on motion for default judgment 

based on defendant’s willful infringement and failure to appear), report and recommendation 

adopted, No. 18-CV-05673-RS, 2019 WL 2180215 (N.D. Cal. Mar. 28, 2019); ADG Concerns, 

2018 WL 4241967, at *14 (same); Govino, LLC v. WhitePoles LLC, No. 4:16-cv-06981-JSW 

(KAW), 2017 WL 6442187, at *11 (N.D. Cal. Nov. 3, 2017) (same), report and recommendation 

adopted, No. 16-CV-06981-JSW, 2017 WL 6442188 (N.D. Cal. Dec. 11, 2017). 

The Court next considers the reasonableness of the fees requested and finds that while the 

rates requested are reasonable, the hours purportedly expended are not supported by Plaintiff’s 

submissions. 

2. Reasonableness of Fees

To calculate an award of attorneys’ fees, district courts apply “the lodestar method, 

multiplying the number of hours reasonably expended by a reasonable hourly rate.” Ryan v. 

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Editions Ltd. W., Inc., 786 F.3d 754, 763 (9th Cir. 2015) (citing Hensley v. Eckerhart, 461 U.S. 

424, 433 (1983)). “A reasonable hourly rate is ordinarily the prevailing market rate in the relevant 

community.” Kelly v. Wengler, 822 F.3d 1085, 1099 (9th Cir. 2016) (internal quotation marks and 

citation omitted). “[T]he burden is on the fee applicant to produce satisfactory evidence—in 

addition to the attorneys’ own affidavits—that the requested rates are in line with those prevailing 

in the community for similar services by lawyers of reasonably comparable skill, experience and 

reputation.” Camancho v. Bridgeport Fin., Inc., 523 F.3d 973, 980 (9th Cir. 2008) (internal 

quotation marks and citation omitted). The party requesting fees also bears “the burden of 

submitting billing records to establish that the number of hours” requested are reasonable. 

Gonzalez v. City of Maywood, 729 F.3d 1196, 1202 (9th Cir. 2013). The number of hours should 

not exceed the number of hours reasonable competent counsel would bill for similar services. 

Hensley, 461 U.S. at 434. Courts may reduce the hours expended “where documentation of the 

hours is inadequate; if the case was overstaffed and hours are duplicated; if the hours expended are 

deemed excessive or otherwise unnecessary.” Chalmers v. City of Los Angeles, 796 F.2d 1205, 

1210 (9th Cir. 1986) (citing Hensley, 461 U.S. at 433-34).

Here, Plaintiff requests $67,329.50 in fees purportedly reflecting a total of 113.8 attorney 

hours7and 51.5 paralegal hours expended on this case “over the course of approximately 21 

months.” (Dkt. No. 45 at 12-13.) In support of that request, Plaintiff submits declarations from its 

counsel at Carr & Ferrell, LLP and The Law Offices of Louis M. Heidelberger, Esq. LLC, 

counsel’s billing records for this case, and attorney biographies. (See Dkt. Nos. 27-1; 27-2, Ex. A; 

27-3, Ex. B; 27-4; 27-8, Ex. D; 27-9, Ex. E; 39-1; 45-1, Ex. A; 45-9, Ex. I.) 

Mr. Heidelberger graduated from Temple University School of Law in 1975 and has been 

a patent litigator since that time. (Dkt. No. 27-3, Ex. B at 2.) He is admitted to practice in the 

District of Columbia, New York, Pennsylvania, and before the United States Patent and 

Trademark Office. (Id.) His billing rate in this case was $500 per hour. (Dkt. No. 45-1, Ex. A at 

 

7 Plaintiff requests fees for attorneys Louis Heidelberger and Ilene H. Goldberg; Plaintiff does not 

request fees for Carr & Ferrell, LLP attorneys Robert J. Yorio or John S. Ferrell. (See generally

Dkt. No. 45 at 12-13.) 

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¶¶ 15-16.) 

Ilene H. Goldberg is the Global Patent Manager in the Intellectual Property Practice Group 

of Carr & Ferrell. (Dkt. No. 27-4 at ¶ 1.) She graduated from the University of San Francisco 

School of Law and has been practicing for over 20 years. (Id. at ¶ 4; see also Dkt. No. 27-9, Ex. E 

at 2.) Her billing rate in this case was $375.00 per hour. (Dkt. No. 27-4 at ¶ 4.) Carr & Ferrell 

paralegals Julie Burillo, Jodi Kudlow, and Laura Ripley supported Ms. Goldberg in this case; their 

individual billing rates were $210 per hour. (Dkt. No. 45 at 13.) 

Plaintiff’s counsel’s rates are in line with those found reasonable in similar cases in this 

Circuit and are thus reasonable. See, e.g., Secalt S.A. v. Wuxi Shenxi Const. Mach. Co., 668 F.3d 

677, 689 (9th Cir. 2012) (affirming attorneys’ fee award in trademark infringement case based on 

rates of $320–$685/hour), abrogated on other grounds by SunEarth, Inc. v. Sun Earth Solar 

Power Co., Ltd., 839 F.3d 1179 (9th Cir. 2016); Chanel, Inc. v. Hsiao Yin Fu, No. 16-cv-02259-

EMC, 2017 WL 1079544, at *5 (N.D. Cal. Mar. 22, 2017) (granting $35,640 in attorneys’ fees in 

a trademark infringement case based on rates of $325–$500/hour for partners and $325/hour for an 

associate); see also Superior Consulting Servs., Inc. v. Steeves-Kiss, No. 17-cv-06059-EMC, 2018 

WL 2183295, at *5 (N.D. Cal. May 11, 2018) (noting that “district courts in Northern California 

have found that rates of $475-$975 per hour for partners and $300-$490 per hour for associates are 

reasonable.”).

The hours Plaintiff’s counsel expended, although “high for a case that did not proceed past 

default judgment,” also appear reasonable to the extent they are supported by the billing records. 

See ADG Concerns, 2018 WL 4241967, at *14 (recommending award of $70,018.00 in attorneys’ 

fees for 214 hours billed in trademark infringement case). The specific task entries in the billing 

records for Mr. Heidelberger, (see Dkt. Nos. 27-2, Ex. A & 45-9, Ex. I at 2-5), and those for Carr 

& Ferrell, (see Dkt. Nos. 27-8, Ex. D at 2-18 & 45-9, Ex. I at 8-9, 13-15, 19-21), “account for 

these hours with what appear to be legitimate efforts at advancing the litigation and advocating for 

their client.” See ADG Concerns, 2018 WL 4241967, at *14. However, Plaintiff’s numbers are 

off with regard to Carr & Ferrell because the billing records submitted for the firm mistakenly 

include records from another case, Tech. LED Intellectual Prop., LLC v. Revogi, LLC, No. 18-cvCase 3:18-cv-01847-WHA Document 49 Filed 12/02/19 Page 14 of 16
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03827-JSC, (see Dkt. No. 45-9, Ex. I at 6-7, 10-12, 16-18). Upon review of the records and by the 

Court’s own calculations, Ms. Goldberg billed 40.1 hours on this case at $375 per hour 

($15,037.50) and Carr & Ferrell’s paralegals billed 50.8 hours at $210 per hour ($10,668). 

Plaintiff is correct as to the hours billed by Mr. Heidelberger—71.8 hours at $500 per hour 

($35,900). 

Plaintiff’s counsels’ rates and the hours expended are reasonable and would result in an 

award of $61,605.50. However, the Court recommends deducting 10% from that amount to 

reflect counsels’ erroneous calculations and repeated submission of evidence related to Tech. LED 

Intellectual Prop., LLC v. Revogi, LLC, No. 18-cv-03827-JSC. Time spent on such tasks should 

not be charged to Defendant. Accordingly, the Court recommends awarding Plaintiff attorneys’ 

fees in the amount of $55,444.95. 

C. Litigation Costs

As with Plaintiff’s request for attorneys’ fees, Plaintiff seeks an award of its non-taxable 

litigation costs pursuant to 35 U.S.C. § 285 because this is an “exceptional” case. (Dkt. No. 45 at 

13.) The Court agrees that this is an “exceptional” case, however, Plaintiff is also entitled to costs 

as the prevailing party under the Patent Act. See 35 U.S.C. § 284 (providing that a prevailing 

plaintiff is entitled to “costs as fixed by the court”); see also Gryphon Mobile Elecs., LLC v. 

Brookstone, Inc., SACV 15-2056-DOC (JCGx), 2016 WL 7637987, at *11 (C.D. Cal. July 12, 

2016) (awarding costs pursuant to 35 U.S.C. § 284); IP Power Holdings Ltd. v. Bam Brokerage, 

Inc., SACV 11-01234-JVS (ANx), 2014 WL 12589630, at *6 (C.D. Cal. Mar. 3, 2014) (“A 

patentee may recover costs incurred in litigating an infringement action ‘upon finding for the 

claimant.’”) (quoting 35 U.S.C. § 284). 

Mr. Heidelberger attests that Plaintiff’s counsel has expended $2,542.06 in litigation costs. 

(Dkt. No. 45-1 at ¶ 17.) Again, however, Plaintiff’s numbers do not add up. In support of its 

request, Plaintiff submits invoices from counsel reflecting $2,458.75 in litigation costs. (See Dkt. 

No. 45-9, Ex. I; see also Dkt. Nos. 27-5, Ex. A at 2-3 & 27-8, Ex. D at 3-18.) Those invoices 

include costs related to Tech. LED Intellectual Prop., LLC v. Revogi, LLC, No. 18-cv-03827-JSC 

in the amount of $126.66. (See Dkt. No. 45-9, Ex. I at 6-7, 10-12, 16-18.) Accordingly, the Court 

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recommends awarding Plaintiff $2,332.09 in costs. 

CONCLUSION

For the reasons stated above, the Court recommends that the newly-assigned district court 

judge GRANT IN PART Plaintiff’s motion for default judgment. The Court recommends 

awarding damages in the amount of $30,144.12, attorneys’ fees in the amount of $55,444.95, and 

litigation costs in the amount of $2,332.09. 

Any party may file objections to this report and recommendation with the district judge 

within 14 days after being served with a copy. See 28 U.S.C. § 636(b)(1)(C); Fed. R. Civ. P. 

72(b); N.D. Cal. Civ. L.R. 72. Failure to file an objection may waive the right to review of the 

issue in the district court. 

IT IS SO ORDERED.

Dated: December 2, 2019

JACQUELINE SCOTT CORLEY

United States Magistrate Judge

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