United States District Court, D. Montana, Missoula Division
W. MOLLOY, DISTRICT JUDGE.
suit arises out of Defendant Better Than Logs, Inc.'s
infringement of a patent for simulated log siding held by
Plaintiff Concrete Log Systems, Inc. d/b/a Everlog Systems
("Everlog"). Pending before the Court is
Everlog's application for default judgment. (Doc. 29.)
Everlog seeks money damages and an injunction prohibiting
Better Than Logs from making, using, advertising, or selling
infringing products. Everlog is entitled to judgment against
Better Than Logs for $978, 909.00, and a permanent
is a Montana corporation that manufactures cement-based
building materials that have the appearance of logs but are
more resilient than wood. (Doc. 31 at ¶ 3.) It holds
five U.S. patents for simulated log products. (Id.
at ¶ 5.) On February 15, 2018, Everlog filed this suit
against Better Than Logs, bringing federal claims for patent
infringement, false designation of origin and unfair
competition, and false advertising, and a state law claim for
unfair competition. (Doc. 1.) Specifically, Everlog alleged
Better Than Logs's sale of simulated log siding infringes
U.S. Patent No. 9, 695, 598 ("'598 patent"),
(id. at ¶¶ 7-23), and that Better Than
Logs falsely advertised its products as made in the United
States when the products were substantially manufactured in
China, (id. at ¶¶ 25-59).
Than Logs waived service, (Doc. 4), and filed an answer and
counterclaim on May 15, 2018, (Doc. 7). On July 17, 2018, the
parties attended a preliminary pretrial conference in
Missoula, Montana. (Doc. 19 at 1.) On July 19, 2018, the
Court denied Better Than Logs's motion for a stay pending
the Patent and Trademark Office's reexamination of the
patent at issue. (Doc. 20.) The Patent and Trademark Office
has since confirmed the validity of the '598 patent.
March 1, 2019 discovery deadline and May 1, 2019 motions
deadline passed without any further filings. On May 16, 2019,
the Court ordered the parties to file a status report. (Doc.
21.) Everlog advised of its intent to proceed to trial as
scheduled. (Doc. 24.) However, counsel for Better Than Logs
moved to withdraw. (Doc. 22.) The Court granted the motion
but ordered Better Than Logs to retain new counsel by June 7,
2019, or be subject to default. (Doc. 25.) Better Than Logs
did not comply. The Clerk of Court entered its default on
June 11, 2019. (Doc. 28.)
now applies for a default judgment. (Doc. 29.) It has
submitted affidavits and other documentary evidence in
support of its application. (Docs. 30-1, 31, 31-1 to 31-17,
33.) A hearing was held on July 9, 2019. Everlog served
written notice of the application and hearing on Better Than
Logs. (Doc. 36.) However, Better Than Logs did not file a
response to Everlog's application or appear at the
hearing. At the hearing, the Court struck Better Than
Logs's answer and directed the Clerk of Court to enter
Better Than Logs's default on its counterclaims. Then,
testimony was heard from Stewart Hansen, Everlog s president,
and Dale Williams, Everlog's retained accounting expert.
The Court found Hansen and Williams to be credible. In
addition, Williams's experience qualifies him to offer
expert opinions on business accounting, and his opinions in
this case were based on sufficient facts and data and were
the product of reliable principles and methods.
55(b) allows a court to enter default judgment following a
defendant's default. Fed.R.Civ.P. 55(b)(2). "The
general rule of law is that upon default the factual
allegations of the complaint, except those relating to the
amount of damages, will be taken as true." TeleVideo
Sys., Inc. v. Heidenthal, 826 F.2d 915, 917-18 (9th Cir.
1987) (quoting Geddes v. United Fin. Grp., 559 F.2d
557, 560 (9th Cir. 1977)). Accordingly, while default
establishes a defendant's liability on all well-pled
claims, see Cripps v. Life Ins. Co. o/N. Am., 980
F.2d 1261, 1268 (9th Cir. 1992), courts must determine the
damages to be awarded, if any, in the default judgment,
see Fed. R. Civ. P. 55(b)(2).
a default, whether to enter default judgment against a
defendant is a matter of discretion. Eitel v.
McCool, 782 F.2d 1470, 1471 (9th Cir. 1986). Before
entering a default judgment, a court must have subject matter
jurisdiction over the action and personal jurisdiction over
the defendant. In re Tuli, 172 F.3d 707, 712 (9th
Cir. 1999). Otherwise, "Rule 55 gives the court
considerable leeway as to what it may require as a
prerequisite to the entry of a default judgment."
Tele Video Sys., 826 F.2d at 917. Factors to
(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.
is entitled to default judgment against Better Than Logs.
Everlog's claims for patent infringement under 35 U.S.C.
§ 271 (Count 1), false designation of origin and unfair
competition under 15 U.S.C. § 1125(a)(1)(A) (Count 2),
false advertising under 15 U.S.C. § 1125(a)(1)(B) (Count
3), and unfair competition under Montana law (Count 4) are
well-pled, establishing Better Than Logs's liability on
each count of the Complaint. See TeleVideo Sys.,
Inc., 826 F.2d at 917-18. Subject matter jurisdiction
exists under 15 U.S.C. § 1121(a) and 28 U.S.C.
§§ 1331, 1367, and 1338(a). Personal jurisdiction
over Better Than Logs exists because Better Than Logs is
incorporated in and has its principal place of business in
Montana. Daimler AG v. Bauman,571 U.S. 117, 137
(2014). Further, the Eitel factors weigh in favor of
entering default judgment. (See Doc. 30 at 17-42.)