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Chief Judge Sleet: Default Granted in Patent Case

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Last month, Chief Judge Sleet issued a default judgment in a patent and trademark infringement action by Hesco Bastion Limited (Hesco Bastion Limited v. ACS Holdings, USA, LLC, C.A. No. 08-266-GMS). The Court issued a permanent injunction, and awarded Hesco $2 million in damages and $1,954,391.08 in attorney’s fees, plus costs.

How did this happen? Apparently, ACS simply ran out of money to pay its counsel. According to its counsel (during a conference on its counsel’s motion to withdraw), “ACS lacked funds to pay [its counsel], had no cash flow, and . . . shut down its business in Bogata, Columbia.”

ACS had apparently filed an answer, but no expert report on non-infringement, and failed to meet its obligations under the scheduling order to “cooperate with Hesco in connection with required pretrial activities.” On April 16, 2010, ACS’s counsel filed their motion to withdraw due to a failure to receive payment, which was granted, and ACS was unable to obtain substitute counsel. On May 10, 2010, Hesco filed a motion for default.

On January 5, 2011, the Court issued an order to show cause; ACS replied that it lacked the funds to hire substitute counsel. On Feb. 28th the clerk entered default, and on March 30, 2011, the Court held a hearing on the motion for default judgment. Finally, on April 14th, 2011, the Court granted Hesco’s motion for default, and awarded the permanent injunction and damages.


08-266

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