A recent decision from the United States Court of Appeals for the Seventh Circuit highlights the importance of complete and timely appearances, pleadings, and discovery responses. Quincy Bioscience, LLC is the maker of the dietary supplement PREVAGEN, which is also sometimes prescribed as a memory aid. Quincy sued Ellishbooks and others for trademark infringement and related claims based on the defendants’ selling PREVAGEN branded supplements on Amazon.com that Quincy claimed were known by the defendants to be stolen.
Despite being served with valid process, Ellishbooks did not answer Quincy’s complaint. Quincy duly moved for an entry of default and, subsequently, default judgment. Only then did Ellishbooks show up to defend the case. The district court granted the default judgment and set a hearing for the prove-up of damages. At the prove-up hearing, the court awarded Quincy an award of $480,968.13. Ellishbooks appealed.
In Quincy Bioscience LLC v. Ellishbooks, No. 19-cv-1799 (7th Cir. April 24, 2020), the Seventh Circuit had little trouble finding ample reason to reject Ellishbooks’s appeal. To start, Ellishbooks could do little to explain why it had ignored the complaint and defaulted. Therefore, the district court had properly taken all well-pled allegations contained in the complaint as true, including that the defendants sold PREVAGEN products that they knew or had reason to know were stolen. The Court of Appeals also pointed out that Ellishbooks failed to fully respond to discovery requests, supporting Quincy’s allegation that the defendants’ products were stolen. As stated by the Court of Appeals, “Ellishbooks came forward with no evidence to challenge the fact, established by way of default, that it knew or had reason to know that some of the Prevagen products it sold were stolen. Indeed, the fact that it could not account for the origin of 80% of the Prevagen products it sold provides an additional basis for the district court’s conclusion.”
Additionally, Ellishbook’s arguments challenging the district court’s factual determinations and decision to enter a permanent injunction were brushed aside. The fact that the products were stolen was alleged in the complaint and established by the default. And despite numerous opportunities, Ellishbook failed to contest that fact with evidence of its own.
While not an especially novel decision, Quincy Bioscience LLC v. Ellishbooks emphasizes for litigants the importance of following proper procedure. Judges often have little patience for parties who do not timely respond to valid process, and even less for parties who compound their offense by flouting other rules, such as those governing discovery, once they do appear.
Where a party’s case requires an appeal to the court’s sense of justice and equity, it is important that the party (and its counsel) comport itself in a way that communicates to the court that it is not the “bad guy.” While simply showing up on time and displaying respect for the rules of court will not necessarily win a case, it can sure lose one.
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