UNITED STATES DISTRICT COURT

EASTERN DISTRICT OF MICHIGAN

SOUTHERN DIVISION

ZEN DESIGN GROUP, LTD.,

Plaintiff,

v.

PAUL CLINT,

Defendant.

 /

Case No. 08-cv-14309

HONORABLE STEPHEN J. MURPHY, III

OPINION AND ORDER GRANTING PLAINTIFF'S MOTION 

FOR DEFAULT JUDGMENT AND ISSUING PERMANENT INJUNCTION

Plaintiff Zen Design Group, Ltd. ("Zen") sued defendant Paul Clint ("Clint") for patent

infringement, seeking a declaration of liability, injunctive relief, compensatory damages,

attorneys' fees, and costs. Clint was personally served with the complaint on November

4, 2008. Clint failed to appear and to answer the complaint. No attorney has filed an

appearance on his behalf. On January 13, 2009, the Clerk entered a default as to Clint.

On July 14, 2009, Zen moved for a default judgment against Clint pursuant to Fed.

R. Civ. P. 55(b)(2). In its motion, Zen withdrew its original request for compensatory

damages. On October 26, 2009, the Court ordered Zen to show cause: 1) why its request

for a permanent injunction restraining Clint from infringing claims in Zen's patent should not

be dismissed as moot, by providing evidence of current infringement; and 2) provide

support for why its request for attorneys' fees should not be denied for not complying with

Local Rule 54.1.2.

On November 9, 2009, Zen responded to the Court's order indicating that it was

withdrawing its request for attorneys fees, "leaving only the issue of whether an injunction

should issue." Zen's Response to Order to Show Cause, docket no. 12, p. 1.

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With respect to its request for an injunction, the Court is satisfied with Zen's response

that although Clint's eBay username is not currently associated with infringing activity, it is

highly likely that Clint and his associates or agents are still infringing the '616 patent under

other eBay names or through other means such that Zen is entitled to injunctive relief to

prevent further infringement. The Court will enjoin Clint, together with any agents,

servants, employees, and attorneys, and such other persons in active concert or

participation with Clint who receive actual notice of the order, from further infringement of

the '616 patent.

FACTUAL BACKGROUND

Zen designs and markets various consumer products, including hand-held lighting

products. Its products are marketed throughout the United States. Zen's president, Sun

Yu, filed a patent application for an ultraviolet lighting instrument on October 4, 2002. The

instrument is a pen with invisible ink that glows when exposed to ultraviolet light. The pen

contains a standard writing tip on one end. On the other end is a ultraviolet LED light that,

when activated and directed at the invisible ink on paper, causes the ink to glow and

become visible. The United States Patent and Trademark Office issued a patent for the

invention on March 1, 2005 entitled "Ultraviolet Light Writing System." U.S. Patent No.

6,860,616 ("'616 patent"). Zen is the owner of the patent by assignment and has since

marketed an embodiment of its invention in various toy retailers.

 Zen maintains one count of patent infringement. According to the complaint, Clint

has marketed at least two products under the name "007 Spy Pen." These products are

nearly direct reproductions of pens patented, manufactured, and sold by Zen. When it

learned that Clint was infringing its patent, Zen contacted Clint, asked him to cease

infringing, and even offered to sell Clint a license for the patent. Clint refused and instead

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threatened to sue Zen if it sought to have Clint's products removed from eBay. Zen brought

this action in July 2008.

DISCUSSION

Fed. R. Civ. P. 55(b)(2) provides that a party may apply to the Court for a default

judgment when its claim is not for a sum certain or a sum that can be made certain by

computation. The Court need not conduct a hearing on a motion for default judgment

unless it needs to conduct an accounting, determine the amount of damages, establish the

truth of any allegation by evidence, or investigate any other matter. Fed. R. Civ. P.

55(b)(2). Additionally, notice to the defaulting party is not required when the defaulting

party has not appeared personally or by a representative. Id.

A. Jurisdiction

In order to render a valid judgment, a court must have jurisdiction over the subject

matter and the parties, and must act in a manner consistent with due process. Antoine v.

Atlas Turner, Inc., 66 F.3d 105 (6th Cir. 1995). A district court must determine whether it

has jurisdiction over a defendant who has not appeared in the case before entering a

judgment by default against that defendant. The failure to do so requires reversal. Dennis

Garberg and Assocs., Inc. v. Pack-Tech Int'l Corp., 115 F.3d 767 (10th Cir. 1997). 

The Court has subject matter jurisdiction over this dispute. The sole claim in the

complaint is for patent infringement, which Court has original jurisdiction to entertain

pursuant to 28 U.S.C. § 1338 and 28 U.S.C. § 1331. When subject matter jurisdiction is

based on the existence of a federal question, personal jurisdiction over a defendant exists

if the defendant is amenable to service of process under the forum state's long-arm statute,

and if the exercise of personal jurisdiction comports with due process. See Bird v. Parsons,

289 F.3d 865, 871 (6th Cir. 2002); Fed. R. Civ. P. 4(k)(1)(A).

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Michigan's long-arm statute provides, in part, that a defendant's transaction of any

business within the state provides a sufficient basis upon which a court may exercise

limited personal jurisdiction and render personal judgments against the defendant. M.C.L.

§ 600.705. The Michigan Supreme Court has held that this statute confers the broadest

possible grant of personal jurisdiction consistent with due process. Sifers v. Horen, 385

Mich. 195, 198-99 (1971). Accordingly, the personal jurisdiction analysis reduces to the

single question of whether the exercise of jurisdiction over the defendant comports with due

process. See Michigan Coalition of Radioactive Material Users, Inc. v. Griepentrog, 954

F.2d 1174, 1176 (6th Cir. 1992) (interpreting Michigan long-arm statute); Audi AG and

Volkswagon of America, Inc. v. D'Amato, 341 F. Supp. 2d 734, 742 (E.D. Mich. 2004)

(same).

To satisfy due process, a plaintiff must first establish that significant minimum

contacts exist sufficient to satisfy “traditional notions of fair play and substantial justice.”

The Sports Authority of Michigan, Inc. v. Justballs, Inc., 97 F. Supp. 2d 806, 810 (E.D.

Mich. 2000) (citation omitted). In the Sixth Circuit, three criteria must be met before a court

may exercise personal jurisdiction consistent with the dictates of due process: 1) the

defendant must purposefully avail himself of the privilege of acting in the forum state or

causing a consequence in the forum state; 2) the cause of action must arise from the

defendant's activities there; and 3) the acts of the defendant or consequences caused by

the defendant must have a substantial enough connection with the forum state to make the

exercise of jurisdiction over the defendant reasonable. Id. Where purposeful availment

and a cause of action arising from the defendant's contacts with the forum are established,

an inference arises that the exercise of personal jurisdiction over the defendant is

reasonable. CompuServe, Inc. v. Patterson, 89 F.3d 1257, 1268 (6th Cir. 1996). 

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When the lawsuit involves the internet, the level of interactivity of the website is

indicative of the existence of purposeful availment. A defendant purposefully avails himself

of the privilege of acting in a state through his website if the website “is interactive to a

degree that reveals specifically intended interaction with residents of the state.” Neogen

Corp v. Neo Gen Screening, Inc., 282 F.3d 883, 890 (6th Cir. 2002). Internet auctions,

such as those provided by eBay are, by nature, interactive. Dedvukaj v. Maloney, 447 F.

Supp. 2d 813, 821 (E.D. Mich. 2006). Auctions constitute more than a passive website

containing only posted information, and will support a finding of purposeful availment, but

are probably insufficient to create purposeful availment alone. Id.

Here, Clint purposefully availed himself of the benefits and burdens of acting in

Michigan. Once a default is entered against a defendant, that party is deemed to have

admitted all of the well pleaded allegations in the complaint, including jurisdictional

averments. Ford Motor Co v. Cross, 441 F. Supp. 2d 837, 846 (E.D. Mich. 2006) (citing

Visioneering Constr. v. U.S. Fidelity and Guar., 661 F.2d 119, 124 (6th Cir. 1981)).

Paragraph five in the complaint indicates that upon information and belief, Clint has offered

for sale, and sold, infringing products and/or committed infringing acts in Michigan. The

Court must accept as true the fact that Clint has sold the infringing product in Michigan.

By actively selling his product in Michigan, Clint has purposefully availed himself of the

benefits of Michigan.

Alternatively, the fact that Clint advertised his product on eBay also demonstrates

purposeful availment in Michigan. Clint chose to place his spy pens for sale on the auction

site of eBay, an interactive website that reveals specifically intended interaction with

residents of Michigan. In so doing, Clint should be aware that a purchaser in any state

could bid for, and later purchase, the item placed for sale on eBay. Moreover, the eBay

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advertisement itself, posted by Clint, expressly indicated that the items for sale would be

shipped "Worldwide," or to "United States, Europe, Canada, Australia." Compl., Ex. B. 

With respect to the second element of the due process analysis, whether the current

controversy is related to the defendant's forum-related activities, the Court finds that Zen's

action for patent infringement relates to Clint's conduct in Michigan. As alleged in the

complaint, and accepted as true for purposes of default judgment, Clint offered for sale,

and sold, infringing products and/or committed infringing acts in Michigan. Zen maintains

an action for patent infringement that partially arises out of sales of the infringing products

in Michigan. Alternatively, Zen's claim for patent infringement alleges that Clint also offered

the infringing product for sale. This offer was done by posting his product on eBay, where

it could easily be purchased by persons in Michigan, and afterwards, shipped to Michigan.

Therefore, the Court finds that Zen's claim of patent infringement arises out of Clint's

conduct in Michigan. 

Because the Court finds the first two prongs of the due process analysis -- purposeful

availment and cause of action related forum-related conduct -- an inference arises that the

third prong -- that the exercise of jurisdiction is reasonable -- is also satisfied. See

CompuServe, 89 F.3d at 1268. From the foregoing analysis, therefore, it is clear that the

Court has jurisdiction over the subject matter of the dispute and over Clint personally. 

B. Claim for Patent Infringement

Zen's sole claim is for patent infringement. Determination of patent infringement is

a two-step process in which the Court must first construe the meaning of the patent's

claims and then compare the properly construed claims to the allegedly infringing device.

Markman v. Westview Instruments, Inc., 52 F.3d 967, 976 (Fed. Cir. 1995) (en banc), aff'd,

517 U.S. 370 (1996). A device infringes a patent claim if it contains every limitation set

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forth in that claim, either literally or by equivalence. See Johnson Worldwide Assocs. v.

Zebco Corp., 175 F.3d 985, 988 (Fed. Cir. 1999). “A patent is infringed if any claim is

infringed, for each claim is a separate statement of the patented invention.” Pall Corp. v.

Micron Separations, Inc., 66 F.3d 1211, 1220 (Fed. Cir. 1995) (citation omitted).

From the Court's review of the claims listed in the patent attached to the complaint,

pictures and description of the infringing product, as well as the well-pleaded allegations

in the complaint, which the Court must accept as true, the Court finds that Zen owns the

'616 patent and that Clint's "007 Spy Pen" infringes at least Claim 1 in the patent, if not

other claims. A finding of infringement of one claim in the patent is sufficient for a finding

of patent infringement. See Pall, 66 F.3d at 1220.

Claim 1 in the patent consists of a pen-light with a battery in a holder, switch, lightemitting diode module within the battery holder, pen assembly with a cap end and a pen

tip, and ink or dye refill in fluid communication with a pen tip extending from the pen tip end

and fluorescing in the visible portion of the light spectrum upon exposure to light with a

wavelength of less than 420 nanometers. Considering Clint's "007 Spy Pen," which is a

virtually identical imitation of Zen's patented product, it is clear that Clint's spy pen contains

each and every limitation included in Claim 1 of the '616 patent. This is sufficient to

establish patent infringement. Therefore, Zen is entitled to judgment by default on its claim

of patent infringement.

C. Injunctive Relief

Zen requests permanent injunctive relief restraining "Clint together with any agents,

servants, employees, and attorneys, and such other persons in active concert or

participation with Clint who receive actual notice of the order, from further infringement of

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the '616 patent." Compl., Prayer for Relief. The Court will grant this request and issue an

injunction. 

The Patent Act provides that in cases of patent infringement, "a court may grant

injunctions in accordance with the principles of equity to prevent the violation of any right

secured by patent, on such terms as the court deems reasonable." 35 U.S.C. § 283. The

traditional four-factor test applied by courts of equity when considering whether to award

permanent injunctive relief applies to disputes arising under the Patent Act. eBay Inc. v.

MercExchange, L.L.C., 547 U.S. 388, 391 (2006) (finding erroneous circuit court's

application of purported "general rule" that courts will automatically issue permanent

injunctions against patent infringement absent exception circumstances). Under this fourpart test, the plaintiff must demonstrate: 1) that it has suffered an irreparable injury; 2) that

remedies available at law, such as monetary damages, are inadequate to compensate for

that injury; 3) that, considering the balance of hardships between the plaintiff and

defendant, a remedy in equity is warranted; and 4) that the public interest would not be

disserved by a permanent injunction. Id. The decision whether to grant or deny injunctive

relief rests within the equitable discretion of the district court. Id. at 934. In exercising its

discretion, however, a court does not write on a clean slate or "on a whim," and should be

mindful of the long-standing historical practice of granting injunctive relief upon a finding

of infringement in the vast majority of cases. Id. at 395 (Roberts, C.J., concurring).

Consideration of the four equitable factors as applied to the facts in this case leads

the Court to conclude that a permanent injunction is an appropriate remedy for Clint's

infringement. Courts frequently treat the first two factors -- irreparable injury and adequacy

of money damages -- together, and the Court will do so here. See, e.g., Sanofi-Synthelabo

v. Apotex Inc., 492 F. Supp. 2d 353, 397 (S.D.N.Y. 2007); Acumed LLC v. Stryker Corp.,

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551 F.3d 1323, 1327 (Fed. Cir. 2008). Zen has suffered, and will continue to suffer

irreparable injury absent an injunction. The essential attribute of a patent is the right to

exclude others from using or selling the invention. See id. at 392; Acumed, 551 F.3d at

1328. In view of that right, infringement may cause a patentee irreparable harm not

remediable by a reasonable royalty. If a reasonable royalty were the exclusive remedy

here, Zen would effectively lose its right to exclude others from using its patent.

Additionally, in the absence of an injunction, of which Clint will certainly receive notice,

Clint may continue to infringe by selling the 007 spy pens on eBay without being forced to

stop. This is because eBay has recently begun to require proof of an injunction prior to

removing infringing items from its website. See Declaration of Sun Yu, docket no. 13, at

¶ 10. Without an injunction, Clint could continue to market his infringing product online and

if sued again, could again refuse to answer the complaint. Clint could continue to infringe

without impunity, thereby preventing Zen from vindicating its exclusivity rights under the

patent.

Furthermore, Clint's infringement has caused, or is likely to cause, irreparable price

erosion as well as injury to Zen's goodwill in the market. Such injury may be irreparable.

See Sanofi-Synthelabo, 492 F. Supp. 2d at 397. Without an injunction, Clint and others will

continue to flood eBay with infringing products that appear identical to Zen's patented

products. The others will have a significant advantage since they did not incur costs in

developing the patent, yet are able to reap the significant benefits of patent ownership.

Lack of development costs will allow them to offer the infringing product at a lower price,

thus eroding the price of the product, potentially driving Zen out of the market. Clint's

infringement also harms Zen's goodwill and reputation because the infringing products are

not manufactured in accordance with the quality standards utilized by Zen in creating its

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pens. Therefore, as the number of consumers purchasing Clint's infringing products of an

inferior quality increases, the lower the reputation of Zen's pen becomes. Consumers

begin to associate Zen's name with the inferior pens, thus harming Zen's goodwill and

reputation. 

Finally, an award of money damages would be inadequate here because Clint's

refusal to appear in this proceeding has prevented Zen from discovering the extent of

damages it could recover from Clint. This reinforces the inadequacy of a remedy at law

and the irreparability of the harm absent an injunction. Therefore, the first two prongs

weigh in favor of granting Zen's request for a permanent injunction.

The third factor -- the balance of hardship between plaintiff and defendant -- also

weighs in favor of a permanent injunction. Zen has invested time and resources in

developing its designs, obtaining patents, and protecting its intellectual property. Fully

aware of Zen's patent, Clint continued to sell the infringing products. It would be unfair to

continue to allow Clint to continue its infringement. The hardship to Clint in enjoining him

from selling the infringing product is of his own creation and should not be considered in

the analysis. Clint could have requested a license from Zen or designed his own noninfringing patent. He chose not to and must face the consequences associated with

infringement. On the other hand, the hardship to Zen of preventing it from excluding

infringing products from the market would be severe, as discussed above.

Finally, the Court must consider whether the public interest would be disserved by

issuance of a permanent injunction. The Court finds this factor weighs in favor of granting

injunctive relief. Enjoining Clint from selling his product would not keep from the public the

benefits of the '616 patent because the patented design is lawfully available for sale to the

public. Conversely, the public's interest is served by permanently enjoining Clint because

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by failing to do so, the Court would effectively deny Zen its exclusive right to exclude,

reducing the patent's actual value to a fraction of its intended value. Such a result would

disincentivize scientific progress. See Smith Int'l Inc. v. Hughes Tool Co., 718 F.2d 1573,

1578 (Fed. Cir. 1983). Therefore, the fourth factor also weighs in favor of granting Zen's

request for a permanent injunction. 

CONCLUSION AND ORDER 

The Court finds that Zen is entitled to judgment by default against Clint. Clint failed

to appear in this matter so the Clerk appropriately entered a default against him. Zen has

demonstrated that Clint has infringed, and is likely to continue to infringe its patent unless

a permanent injunction is issued. Furthermore, the principles of equity, as applied to the

facts of this case indicate that a permanent injunction is a appropriate remedy. 

WHEREFORE, it is hereby ORDERED that Zen Design Group does have and

recovers the relief prayed for it its complaint as follows:

• Clint is LIABLE for infringement of Zen's '616 patent;

• Clint, together with any agents, servants, employees, and attorneys, and such

other persons in active concert or participation with Clint who receive actual notice

of this order, are PERMANENTLY ENJOINED from further infringing the '616

patent;

• Zen's request for attorneys' fees has been WITHDRAWN and the Court expresses

no opinion as to the merits of the request;

• Zen's request for costs is GRANTED. Zen must comply with E.D. Mich. LR 54.1

to collect costs. 

SO ORDERED.

s/Stephen J. Murphy, III 

Stephen J. Murphy, III

United States District Judge

Dated: November 23, 2009

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I hereby certify that a copy of the foregoing document was served upon the parties

and/or counsel of record on November 23, 2009, by electronic and/or ordinary mail.

s/Alissa Greer 

Case Manager

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