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Genedics, LLC v. Meta Co.

United States District Court, D. Delaware

August 13, 2019

GENEDICS, LLC, Plaintiff,
v.
META COMPANY, Defendant.

          MEMORANDUM ORDER

          CHRISTOPHER J. BURKE, UNITED ST ATES MAGISTRATE JUDGE

         Presently before the Court is Plaintiff Genedics, LLC's ("Genedics" or "Plaintiff) Motion for Judgment Upon Default and Injunctive Relief (the "Motion"). (D.I. 55) With its Motion and a related proposed order, Genedics seeks, inter alia, to bar Defendant Meta Company ("Meta" or "Defendant") and Meta executives Meron Gribetz and John Sines from further infringing United States Patent Nos. 8, 319, 773; 8, 477, 098; 8, 730, 165; 8, 902, 225; 9, 110, 563; and 9, 335, 890 (the "patents-in-suit") and to preclude them (a) from manufacturing, importing, offering to sell, selling, or using within the United States, either alone or with others in active concert or participation with any of them, systems containing Meta 1 or Meta 2 headsets and any associated software, or any colorable variation thereof, or (b) from inducing or contributing to the manufacturing, importing, offering to sell, selling, or using within the United States, either alone or with others in active concert or participation with any of them, systems containing Meta 1 or Meta 2 headsets (and any associated software) or any colorable variation thereof. (D.I. 63) For the reasons set out below, the Court GRANTS this portion of Plaintiff s Motion.

         I. BACKGROUND

         A. Factual Background

         Plaintiff is a limited liability company organized under the laws of Massachusetts. (D.I. 1 at ¶ 2) It has its principal place of business in Lenox, Massachusetts. (Id.) Defendant is a Delaware corporation and its principal place of business is located in San Mateo, California. (Id. at ¶ 3) Defendant was created in 2012 and is a maker of augmented reality hardware and software products. (D.I. 1 at ¶ 10; D.I. 57, ex. B) Meron Gribetz is Defendant's Chief Executive Officer and Founder, (D.I. 57, ex. E), while John Sines serves as Defendant's Chief Financial Officer, (D.I. 53).

         Plaintiff accuses Defendant of directly and indirectly infringing the six patents-in-suit, inter alia, by making, selling, offering to sell, using, and/or importing the Meta 1 development kit ("Meta 1") and the Meta 2 development kit ("Meta 2," and collectively with Meta 1, the "accused products"). (D.I. 1 at ¶¶ 10, 23-383) The accused products are augmented reality head mounted displays that are employed in computer user interface systems. (Id. at ¶¶ 10, 33) In its Complaint, Plaintiff requested, inter alia, permanent injunctive relief. (Id. at 69)

         Both parties participated in the early stages of the litigation process, including through the duration of a motion to dismiss, (D.I. 11), and a motion to transfer, (D.I. 13), both filed by Defendant.[1] However, on November 2, 2018, Defendant's counsel filed a motion to withdraw. (D.I. 43) In a November 8, 2018 Order, the Court granted the motion to withdraw and stayed the case; since this left Defendant unrepresented, the Court also ordered that within 30 days of the Order, Defendant should retain counsel and have counsel enter an appearance.

         Thereafter, in a January 9, 2019 joint status report letter to the Court, Mr. Sines stated that Defendant's "lender exercised its remedies as first priority secured lender and foreclosed and sold all assets to a third party in a UCC foreclosure sale at a value below the outstanding loan amount," leaving Defendant "insolvent." (D.I. 47 at 1) He further explained that "Meta does not have the resources to retain legal counsel or to provide a settlement offer." (Id.)

         On January 10, 2019, the Court entered a further Order in which it: (1) noted that, under the law, Defendant could not participate in this litigation without counsel; (2) ordered that Defendant obtain counsel by January 24, 2019; and (3) stated that if Defendant did not obtain counsel by that date, Defendant's Answer would be deemed stricken and a default would be entered against Defendant. (D.I. 48 at 2) After Defendant did not obtain counsel by this deadline, on January 29, 2019, the Court ordered Defendant's Answer stricken and ordered the Clerk of Court to enter default against Defendant. (D.I. 51) Entry of default was entered that same day.

         On February 19, 2019, Mr. Sines filed a letter on Defendant's behalf, requesting that the Court vacate the default. (D.I. 53) The letter stated that as of late January 2019, "Meta's assets were in the process of being sold" and "the company was initiating its dissolution process and was therefore unable to retain counsel." (Id.) However, Mr. Sines wrote that as of the date of the letter, Defendant expected that "[w]ithin the next 45 days, [it] will have the resources" to obtain counsel "and it is extremely important for us to defend against what we consider to be a completely unjustified claim against us." (Id.) Because Defendant was a corporation that was not then represented by counsel, the Court noted that it could not consider this letter. (March 12, 2019 Docket Entry) The Court further explained that to the extent that Defendant had counsel enter an appearance while the case was still pending, and to the extent that such counsel then moved for relief on behalf of Defendant, the Court would consider any such request at that time. (Id.)

         In an April 1, 2019 e-mail exchange between the parties, Plaintiffs counsel asked Mr. Sines, inter alia, if Defendant had any interest in settling this litigation. (D.I. 57, ex. D at 1) In response, Mr. Sines indicated that Defendant did not wish to make a settlement offer and added that Defendant "is no longer selling the Meta[]2 and does not have any remaining assets, including inventory of units." (Id.) The next day, in a follow-up e-mail, Mr. Sines confirmed that Defendant "[did] not have a settlement offer and [was] without legal representation due to our lack of funds." (Id. at 2)

         To date, Defendant has not retained counsel.

         B. Procedural Background

         Plaintiff filed its Complaint on August 1, 2017. (D.I. 1) The parties thereafter jointly consented to the Court's jurisdiction to conduct all proceedings in the case, including trial, the entry ...


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