Taser International, Inc. v. Phazzer Electronics, Inc. ( 2018 )

NOTE: This disposition is nonprecedential.
United States Court of Appeals
for the Federal Circuit
______________________
TASER INTERNATIONAL, INC.,
Plaintiff-Appellee
v.
PHAZZER ELECTRONICS, INC.,
Defendant-Appellant
______________________
2017-2637
______________________
Appeal from the United States District Court for the
Middle District of Florida in No. 6:16-cv-00366-PGB-KRS,
Judge Paul G. Byron.
______________________
Decided: October 26, 2018
______________________
PAMELA BETH PETERSEN, Axon Enterprise, Inc.,
Scottsdale, AZ, argued for plaintiff-appellee. Also repre-
sented by RYAN SANTURRI, Allen, Dyer, Doppelt, Milbrath
& Gilchrist, P.A., Orlando, FL.
JOSEPH A. DAVIDOW, Willis & Davidow, LLC, Naples,
FL, argued for defendant-appellant. Also represented by
TAYLOR CLARKE YOUNG, Mandel Young PLC, Phoenix, AZ.
______________________
2 TASER INT’L, INC. v. PHAZZER ELECS., INC.
Before O’MALLEY, CHEN, and STOLL, Circuit Judges.
O’MALLEY, Circuit Judge.
Phazzer Electronics, Inc. (“Phazzer”) appeals from the
district court’s order granting Taser International, Inc.’s
(“Taser”) motion for sanctions. Taser Int’l, Inc. v. Phazzer
Elecs., Inc., No. 6:16-cv-366, 2017 WL 3584906 (M.D. Fla.
July 21, 2017). Specifically, the district court: (1) struck
Phazzer’s motion to dismiss the amended complaint;
(2) entered default judgment in favor of Taser;
(3) awarded Taser compensatory and treble damages as
well as attorney fees and costs; and (4) entered a perma-
nent injunction against Phazzer. Id. at *3. As explained
below, we affirm.
I. BACKGROUND
Taser manufactures and sells conducted electrical
weapons (“CEWs”), commonly known as stun guns. Taser
is the sole owner of U.S. Patent No. 7,234,262 (“the ’262
patent”), which is entitled “Electrical Weapon Having
Controller For Timed Current Through Target and
Date/Time Recording.” Taser also owns U.S. Trademark
Registration No. 4,423,789 (“the ’789 registration”) for
“launching devices comprising projectiles in the nature of
wire tethered darts for use with electronic control devices
used as weapons.” Taser explains that the trademark
encompasses the shape of the CEW dart cartridge, as
shown below:
TASER INT’L, INC. v. PHAZZER ELECS., INC. 3
In March 2016, Taser filed a four-count complaint
against Phazzer alleging patent and trademark infringe-
ment, false advertising, and unfair competition stemming
from Phazzer’s sale of its “Enforcer” CEW and associated
dart cartridges. The complaint also named as a co-
defendant Sang Min International Co. (“Sang Min”),
Phazzer’s Taiwanese CEW manufacturer. Phazzer moved
to dismiss the complaint, arguing that Taser impermissi-
bly “lumped together” Phazzer’s conduct with that of Sang
Min, such that Phazzer was not on notice of the allega-
tions against it. The motion alternatively sought a more
definite statement and redesignation of the case to “track
three,” which would add another year to the scheduling
order deadlines.
Phazzer subsequently supplemented its motion to
dismiss and alternatively moved to stay the case based on
the Patent and Trademark Office’s (“PTO”) institution of
an ex parte reexamination of the ’262 patent. Although a
first office action in the reexamination rejected all 18
claims of the ’262 patent, the PTO ultimately (in April
2017) issued an ex parte reexamination certificate deem-
ing claims 1–5 patentable as amended and confirming the
patentability of claims 6–18 as stated.
In September 2016—six months after Taser filed this
case—Phazzer filed a trademark cancellation action
against Taser’s ’789 registration and moved to stay the
district court litigation the same day. The Trademark
Trial and Appeal Board (“TTAB”) instituted the cancella-
tion action in September 2016, but subsequently suspend-
ed proceedings pending resolution of the district court
case. Given the TTAB’s suspension order, the district
court denied Phazzer’s motion to stay as moot.
On February 24, 2017, Taser filed an amended com-
plaint, asserting the same causes of action, but adding an
additional defendant. That same day, the district court
denied Phazzer’s original motion to dismiss and its sup-
4 TASER INT’L, INC. v. PHAZZER ELECS., INC.
plement as moot. Phazzer filed a motion to dismiss the
amended complaint and a stay application based in part
on then-co-pending reexamination proceedings.
Phazzer filed a second ex parte reexamination request
in April 2017, and the PTO instituted on all claims.
Phazzer then filed what it captioned as an “emergency”
motion to stay the district court proceedings pending the
outcome of the second reexamination. The district court
denied that motion, cautioning Phazzer that unwarranted
designation of a motion as an emergency could result in
the imposition of sanctions. The second reexamination
remains pending. 1
Over the course of the litigation, Taser filed three
separate motions to compel discovery, all of which were
granted in large part, and Phazzer was ordered to produce
responsive documents. Taser, 2017 WL 3584906, at *1.
After Phazzer failed to produce witnesses for depositions
for five months on grounds that they were all unavailable,
the magistrate judge held a discovery conference in May
2017. Id. at *2. At the conference, the parties agreed to
dates for the depositions of Phazzer witnesses. Three
days before those depositions were set to begin, however,
counsel for Phazzer requested a conference “to discuss its
‘controlled default’ in these proceedings,” stating that
Phazzer “has very limited financial resources at this time
and can no longer financially participate in the defense of
this action.” Phazzer’s Mot. for Conference at 1–2, Taser
Int’l, Inc. v. Phazzer Elecs., Inc., No. 6:16-cv-366 (M.D.
Fla. June 14, 2017), ECF No. 147. The magistrate judge
held a telephone conference the next day, at which coun-
sel for Phazzer sought to postpone depositions and the
1 In April 2018, the examiner in the second reexam-
ination issued a rejection of all claims of the ’262 patent.
As discussed below, Taser appealed that decision, and
proceedings are ongoing.
TASER INT’L, INC. v. PHAZZER ELECS., INC. 5
upcoming technology tutorial, citing financial difficulties.
Phazzer’s motion stated that it had offered a “default
and/or stipulated default judgment” as part of preliminary
settlement negotiations, but Phazzer ultimately declined
to stipulate to liability or entry of default at the confer-
ence. Order at 1, Taser Int’l, Inc. v. Phazzer Elecs., Inc.,
No. 6:16-cv-366 (M.D. Fla. June 15, 2017), ECF No. 151.
The court stated that, “because it appears that Phazzer,
with the assistance of its counsel, is attempting in bad
faith to further delay this litigation rather than in a good
faith attempt to resolve this case, I will not recommend
that the Court stay the litigation.” Id. at 2.
In June 2017, the magistrate judge entered an order
setting dates for the Rule 30(b) representative’s deposi-
tion and the depositions of five fact witnesses. The court
further ordered the parties and their counsel to attend the
technology tutorial. The parties were cautioned that
failure to comply with that order might result in the
imposition of sanctions, including entry of default judg-
ment against Phazzer. Order at 2, Taser Int’l, Inc. v.
Phazzer Elecs., Inc., No. 6:16-cv-366 (M.D. Fla. June 15,
2017), ECF No. 152. That same day, counsel for Phazzer
moved to withdraw, citing both irreconcilable differences
and Phazzer’s failure to pay. The court denied the motion
without prejudice, noting that it could be reasserted after
Phazzer obtained substitute counsel.
After Phazzer failed to appear at the technology tuto-
rial, the court set a status hearing and informed Phazzer
that failure to attend “may result in the imposition of
sanctions, including entry of default or default judgment
against the offending party or counsel.” Taser, 2017 WL
3584906, at *2. Counsel for Phazzer filed a renewed
motion to withdraw, notifying the court that Phazzer had
terminated his representation in writing, claiming to be
insolvent and advising that no substitute counsel would
be retained. The court issued a notice of hearing and
ordered a representative of Phazzer to personally appear.
6 TASER INT’L, INC. v. PHAZZER ELECS., INC.
Phazzer failed to do so, and the court granted its attor-
ney’s motion to withdraw.
On June 26, 2017, Taser filed a motion for sanctions
pursuant to Rule 37 of the Federal Rules of Civil Proce-
dure, asking the district court to strike Phazzer’s respon-
sive pleading, enter default judgment, issue a permanent
injunction, and award Taser its damages, attorney fees,
and costs. Therein, Taser argued that Phazzer engaged in
bad faith litigation conduct and deliberately violated
numerous district court orders.
New counsel entered an appearance on behalf of
Phazzer and responded to the motion for sanctions. In its
response, Phazzer indicated that it “is defaulting in this
matter.” Def.’s Resp. in Opp’n to Pl.’s Mot. for Sanctions
at 7, Taser Int’l, Inc. v. Phazzer Elecs., Inc., No. 6:16-cv-
366 (M.D. Fla. July 10, 2017), ECF No. 178. Phazzer
argued that: (1) Taser’s requested order demanded relief
in excess of that requested in the complaint; (2) the pro-
posed order cannot enjoin all of the named nonparties to
the case; and (3) the PTO is “best equipped to determine
the validity of the patent and trademark at issue.” Id. at
3–7. Phazzer acknowledged, however, that, “[u]nder a
default granting the relief sought in the Amended Com-
plaint, a declaratory judgment of general validity and
enforceability of the patent and trademark would have no
additional effect on Phazzer, who would already be bound
on [sic] infringers.” Id. at 8.
On July 21, 2017, the district court entered the order
at issue in this appeal, granting Taser’s motion for sanc-
tions. The court explained that, “[s]ince the outset of this
litigation, Phazzer has engaged in a pattern of bad faith
conduct designed and intended to delay, stall, and in-
crease the cost of this litigation.” Taser, 2017 WL
3584906, at *1. Given Phazzer’s “egregious conduct,” the
court struck the pending motion to dismiss the amended
complaint, entered default judgment in favor of Taser,
TASER INT’L, INC. v. PHAZZER ELECS., INC. 7
awarded compensatory damages and treble damages for
willful infringement of the ’262 patent and willful false
advertisement as alleged in the complaint, awarded
attorney fees and costs, and entered a permanent injunc-
tion against Phazzer. Id. at *3.
With respect to the patent claims, the district court
“deemed” the ’262 patent “valid, enforceable, and in-
fringed by Phazzer.” Id. at *5. Specifically, the court
found that “the Phazzer Enforcer CEW violates claim 13
of the ’262 patent.” Id. The court enjoined Phazzer and
its officers, agents, and other persons in active concert or
participation with them from making, using, offering,
selling, donating, distributing, importing, or exporting the
Enforcer CEW “and any device not colorably different
from the Enforcer CEW.” Id.
With respect to the trademark claims, the district
court found that: (1) Taser owns the ’789 registration “for
the non-functional shape. . . of cartridges used to launch
darts,” (2) Phazzer sells several versions of cartridges that
bear a confusingly similar shape to the shape of the
TASER trademark; and (3) prospective purchasers are
likely to be misled as to their source. Id. The court
“deemed” the ’789 registration “valid and enforceable, not
generic, functional, or merely descriptive, and infringed
by Phazzer.” Id. at *6. The court then enjoined Phazzer
and its officers, agents, or other persons in active concert
or participation with them from making, using, offering,
selling, donating, distributing, importing or exporting the
offending cartridge product numbers and colorable imita-
tions. Id. The injunction further barred Phazzer from
challenging or continuing to challenge “the validity or
enforceability of the ’789 Registration in any manner in
any forum, including the USPTO.” Id.
Phazzer timely appealed the district court’s order
granting the motion for sanctions. We have jurisdiction
pursuant to 28 U.S.C. §§ 1292(c)(1) and 1295(a)(1).
8 TASER INT’L, INC. v. PHAZZER ELECS., INC.
II. STANDARD OF REVIEW
Because a decision to sanction a litigant pursuant to
Rule 37 of the Federal Rules of Civil Procedure is one that
is not unique to patent law, we apply the law of the re-
gional circuit. Transclean Corp. v. Bridgewood Servs.,
Inc., 290 F.3d 1364, 1370 (Fed. Cir. 2002). In the Elev-
enth Circuit, it “is well settled that ‘the standard of re-
view for an appellate court in considering an appeal of
sanctions under rule 37 is sharply limited to a search for
an abuse of discretion and a determination that the
findings of the trial court are fully supported by the
record.’” BankAtlantic v. Blythe Eastman Paine Webber,
Inc., 12 F.3d 1045, 1048 (11th Cir. 1994) (quoting Pe-
saplastic C.A. v. Cincinnati Milacron Co., 799 F.2d 1510,
1519 (11th Cir. 1986)).
We likewise review the scope of a district court’s in-
junction for abuse of discretion. ePlus, Inc. v. Lawson
Software, Inc., 700 F.3d 509, 516 (Fed. Cir. 2012). Abuse
of discretion is a deferential standard that requires a
showing that “the court made a clear error of judgment in
weighing relevant factors or exercised its discretion based
upon an error of law or clearly erroneous factual find-
ings.” Titan Tire Corp. v. Case New Holland, Inc., 566
F.3d 1372, 1375 (Fed. Cir. 2009) (quoting Genentech, Inc.
v. Novo Nordisk, A/S, 108 F.3d 1361, 1364 (Fed. Cir.
1997)).
III. DISCUSSION
On appeal, Phazzer argues that the district court
abused its discretion in entering default judgment as a
discovery sanction without first ruling on the pending
motion to dismiss. Phazzer further argues that:
(1) default judgment was inappropriate because its non-
compliance was neither intentional nor in bad faith and
equally effective sanctions were available; (2) the relief
granted in the injunction exceeds that requested in the
amended complaint; and (3) new developments in the
TASER INT’L, INC. v. PHAZZER ELECS., INC. 9
PTO office actions “relating to the validity of Appellee’s
patent requires reversal of the lower court’s sanctions
Order.” Appellant Br. 9. 2 We address each argument in
turn.
A. The District Court Did Not Abuse
its Discretion in Entering Default Judgment
Rule 37 of the Federal Rules of Civil Procedure gives
district courts “broad discretion to fashion appropriate
sanctions for violation of discovery orders.” Malautea v.
Suzuki Motor Co., 987 F.2d 1536, 1542 (11th Cir. 1993).
In relevant part, the rule expressly authorizes sanctions
where a party fails to comply with a discovery order or
fails to attend its own deposition. Fed. R. Civ. P.
37(b)(2)(A), (d)(1)(A)(i). The rule provides that, where
appropriate, the court is authorized to strike pleadings,
stay proceedings, dismiss the action or any part thereof,
or render a judgment by default against a disobedient
party. Fed. R. Civ. P. 37(b)(2)(A); 37(d)(3).
The Eleventh Circuit has stated that, although Rule
37 gives district courts broad discretion, that discretion is
“not unbridled.” United States v. Certain Real Prop.
Located at Route 1, Bryant, Ala., 126 F.3d 1314, 1317
(11th Cir. 1997). The decision to dismiss a claim or enter
default judgment “ought to be a last resort—ordered only
if noncompliance with discovery orders is due to willful or
bad faith disregard for those orders.” Id. (quoting Cox v.
Am. Cast Iron Pipe Co., 784 F.2d 1546, 1556 (11th Cir.
1986)). “Violation of a discovery order caused by simple
negligence, misunderstanding, or inability to comply will
not justify a Rule 37 default judgment or dismissal.”
Malautea, 987 F.2d at 1542.
2 Phazzer does not appeal the district court’s award
of compensatory and treble damages or the award of
attorney fees and costs.
10 TASER INT’L, INC. v. PHAZZER ELECS., INC.
Here, the district court found that Phazzer engaged in
bad faith litigation misconduct “with the subjective intent
to abuse the judicial process.” Taser, 2017 WL 3584906,
at *3. The court further found that imposition of sanc-
tions including the entry of default judgment was “neces-
sary to adequately punish Phazzer for its wanton and
repetitive disregard of this Court’s orders and as a conse-
quence of its willful abuse of the discovery process.” Id.As Taser points out, Phazzer waived all issues con-
cerning the propriety of the district court’s entry of de-
fault judgment against it. Indeed, it was Phazzer who
first requested a judicial conference to discuss its “con-
trolled default.” Phazzer’s Mot. for Conference at 1–2,
Taser Int’l, Inc. v. Phazzer Elecs., Inc., No. 6:16-cv-366
(M.D. Fla. June 14, 2017), ECF No. 147. Even if it had
not invited default as a sanction, however, the record is
clear that Phazzer failed to attend its own Rule 30(b)(6)
deposition, failed to produce other company witnesses for
deposition, failed to attend the technology conference, and
failed to attend the status of counsel hearing, all in viola-
tion of express court orders warning of potential default
sanctions for noncompliance. Given these circumstances,
the district court did not abuse its discretion in finding
that sanctions were warranted, and that entry of default
was appropriate.
On appeal, Phazzer argues—for the first time—that
the district court erred in entering default judgment
without first ruling on its pending motion to dismiss. In
particular, Phazzer cites Chudasama v. Mazda Motor
Corp., 123 F.3d 1353 (11th Cir. 1997), for the proposition
that “[f]acial challenges to the legal sufficiency of a claim
or defense, such as a motion to dismiss based on failure to
state a claim for relief, should . . . be resolved before
discovery begins.” Appellant Br. at 34 (quoting Chuda-
sama, 123 F.3d at 1367). As explained below, however,
Phazzer’s reliance on Chudasama is misplaced.
TASER INT’L, INC. v. PHAZZER ELECS., INC. 11
First, despite Phazzer’s suggestion to the contrary,
nothing in Chudasama states that discovery must be
stayed pending a decision on a motion to dismiss or that
such a motion must be resolved before discovery can
begin. Instead, it stands “for the much narrower proposi-
tion that courts should not delay ruling on a likely meri-
torious motion to dismiss while undue discovery costs
mount.” Koock v. Sugar & Felsenthal, LLP, No. 8:09-cv-
609, 2009 WL 2579307, at *2 (M.D. Fla. Aug. 19, 2009)
(quoting In re Winn Dixie Stores, Inc., No. 3:04-cv-194,
2007 WL 1877887, at *1 (M.D. Fla. June 28, 2007)).
Indeed, the Eleventh Circuit has since clarified that it
“only found an abuse of discretion [in Chudasama] be-
cause the district court ordered the parties to engage in
substantive discovery despite failing to rule on the de-
fendants’ motion to dismiss for over eighteen months.”
Zow v. Regions Fin. Corp., 595 F. App’x 887, 889 (11th
Cir. 2014). Courts have recognized, moreover, that a
“request to stay discovery pending a resolution of a mo-
tion is rarely appropriate unless resolution of the motion
will dispose of the entire case.” McCabe v. Foley, 233
F.R.D. 683, 685 (M.D. Fla. 2006). Here, however, Phazz-
er’s motion to dismiss the amended complaint did not
seek dismissal of the false advertising claim (count two)
and thus could not have disposed of the case in its entire-
ty.
Second, the facts in Chudasama are readily distin-
guishable from those in this case. The district court in
Chudasama delayed resolution of a motion to dismiss for
more than a year and a half and repeatedly failed to rule
on the defendants’ objections to abusive discovery re-
quests. 123 F.3d at 1356–60. Resolution of that motion
would have narrowed the relevant issues by eliminating a
“dubious” fraud claim. Id. at 1368. “Thus, when faced
with a motion to dismiss a claim for relief that significant-
ly enlarges the scope of discovery,” the Chudasama court
12 TASER INT’L, INC. v. PHAZZER ELECS., INC.
held, “the district court should rule on the motion before
entering discovery orders, if possible.” Id.Here, by contrast, Phazzer’s motion to dismiss the
amended complaint had only been pending for four
months, and the district court was actively managing
discovery. Although Phazzer submits that it was “strug-
gling to meet [Taser’s] premature and abusive discovery
tactics,” it fails to point to any improper conduct on behalf
of Taser. Appellant Br. at 38. Indeed, the district court
found that it was Phazzer—not Taser—that “engaged in a
pattern of bad faith conduct designed and intended to
delay, stall, and increase the cost of this litigation” since
its inception. Taser, 2017 WL 3584906, at *1. According-
ly, Chudasama is factually inapposite.
Finally, Phazzer argues that its noncompliance was
neither intentional nor in bad faith and that “less draco-
nian but equally effective sanctions were available.”
Appellant Br. at 40. Phazzer did not raise these argu-
ments in response to the motion for sanctions before the
district court, and cannot do so for the first time on ap-
peal. See Stauffer v. Brooks Bros. Group, Inc., 758 F.3d
1314, 1322 (Fed. Cir. 2014) (“Issues not properly raised
before the district court are waived on appeal.”); BUC Int’l
Corp. v. Int’l Yacht Council Ltd., 489 F.3d 1129, 1140
(11th Cir. 2007) (“As a general rule, we do not consider
issues not presented in the first instance to the trial
court.”).
In any event, the district court specifically found that
Phazzer “engaged in a pattern of bad faith conduct” “since
the outset of this litigation” and that “no sanction short of
entry of a default judgment in favor of Taser, along with
an award of compensatory and treble damages, an award
of reasonable attorneys’ fees and costs, and injunctive
relief is adequate to address these violations.” Taser,
2017 WL 3584906, at *1. The record fully supports these
findings. And, although Phazzer now argues that the
TASER INT’L, INC. v. PHAZZER ELECS., INC. 13
district court should have imposed lesser sanctions and
allowed the case to be tried on the merits, it expressly told
the court that it was “defaulting in this matter.” Def.’s
Resp. in Opp’n to Pl.’s Mot. for Sanctions at 7, Taser Int’l,
Inc. v. Phazzer Elecs., Inc., No. 6:16-cv-366 (M.D. Fla. July
10, 2017), ECF No. 178.
On this record, we find that the district court did not
abuse its discretion in striking Phazzer’s motion to dis-
miss and entering default judgment in favor of Taser as a
sanction.
B. The Scope of the Injunction
Next, Phazzer argues that the injunction the district
court entered exceeds the scope of the relief requested in
the amended complaint because it deemed Taser’s trade-
mark valid when the prayer for relief only requested an
injunction prohibiting infringement. Because a default
judgment is limited to the relief demanded in the com-
plaint, Phazzer contends that the injunction order is void.
Pursuant to Rule 54(c) of the Federal Rules of Civil
Procedure, “[a] default judgment must not differ in kind
from, or exceed in amount, what is demanded in the
pleadings.” The rule for default judgments contrasts with
“[e]very other final judgment,” which “should grant the
relief to which each party is entitled, even if the party has
not demanded that relief in its pleadings.” Fed. R. Civ. P.
54(c). Indeed, it “was well settled even before the adop-
tion of the Rules of Civil Procedure that in rendering a
default judgment the Court can only give to the plaintiff
such relief as was proper upon the face of the bill.” Nat’l
Disc. Corp. v. O’Mell, 194 F.2d 452, 456 (6th Cir. 1952)
(citing Thomson v. Wooster, 114 U.S. 104, 113–14 (1885)).
It is well established that the defendant, by its de-
fault, is deemed to admit the plaintiff’s well-pleaded
allegations of fact. Cotton v. Mass. Mut. Life Ins. Co., 402
F.3d 1267, 1278 (11th Cir. 2005). That said, the defaulted
14 TASER INT’L, INC. v. PHAZZER ELECS., INC.
defendant “is not held to admit facts that are not well-
pleaded or to admit conclusions of law.” Id. (quoting
Nishimatsu Constr. Co. v. Houston Nat’l Bank, 515 F.2d
1200, 1206 (5th Cir. 1975)).
Here, Taser’s amended complaint alleged that
“TASER is the owner of a federal trademark registration,
Registration No. 4,423,789, issued by the United States
Patent and Trademark Office on October 29, 2013 for the
non-functional shape . . . of cartridges used to launch
darts.” Amended Complaint at 6, Taser Int’l, Inc. v.
Phazzer Elecs., Inc., No. 6:16-cv-366 (M.D. Fla. Feb. 24,
2017), ECF No. 95. The ’789 registration was attached as
an exhibit to the amended complaint and incorporated by
reference therein. As noted, the amended complaint
contained four counts: patent infringement, false advertis-
ing, trademark infringement, and common law trademark
infringement and unfair competition. The prayer for
relief requested that the court enter judgment in favor of
Taser and requested, among other things: (1) “a declara-
tion that the Phazzer Enforcer CEW is within the scope of
the claims of the ’262 Patent;” (2) a permanent injunction
prohibiting patent and trademark infringement and
Phazzer’s false advertising practices; (3) compensatory
and treble damages; and (4) attorney fees and costs. Id.
at 12.
Although nothing in the amended complaint request-
ed an assessment of trademark validity, the district
court’s permanent injunction order stated that “Taser’s
U.S. Trademark Registration No. 4,423,789, issued on
October 29, 2013, for the non-functional shape of cartridg-
es used to launch darts, is deemed valid and enforceable,
not generic, functional, or merely descriptive, and in-
fringed by Phazzer.” Taser, 2017 WL 3584906, at *6. 3
3 The permanent injunction also stated that the
’262 patent “is deemed valid, enforceable, and infringed
TASER INT’L, INC. v. PHAZZER ELECS., INC. 15
The court further stated that “Phazzer shall not challenge
or continue to challenge the validity or enforceability of
the ’789 Registration in any manner in any forum, includ-
ing the USPTO.” Id. Both of these statements were
included in the proposed order attached as an exhibit to
Taser’s motion for sanctions.
In its response to the motion for sanctions, Phazzer
acknowledged that the amended complaint “calls for relief
in the form of . . . a permanent injunction prohibiting
infringement, including making, using, importing, offer-
ing for sale, and selling Phazzer cartridges that infringe
on TASER’s Trademark.” Def.’s Resp. in Opp’n to Pl.’s
Mot. for Sanctions at 7–8, Taser Int’l, Inc. v. Phazzer
Elecs., Inc., No. 6:16-cv-366 (M.D. Fla. July 10, 2017),
ECF No. 178. Phazzer then admitted that, “[u]nder a
default granting the relief sought in the Amended Com-
plaint, a declaratory judgment of general validity and
enforceability of the patent and trademark would have no
additional effect on Phazzer, who would already be bound
on [sic] infringers.” Id. at 8. In other words, Phazzer
conceded that the validity language in the proposed order
added nothing to the requested infringement declaration
as it relates to Phazzer. 4
by Phazzer. Specifically, the Phazzer Enforcer CEW
violates claim 13 of the ’262 patent.” Taser, 2017 WL
3584906, at *5. Because Phazzer’s Rule 54(c) arguments
on appeal seem to focus solely on the declaration of validi-
ty with respect to the ’789 registration, we do not address
the declaration of validity as to the ’262 patent. Appellant
Br. 11–16.
4 On appeal, Phazzer cites a district court decision
where the court found that, because the complaint did
“not seek a declaration that the patents [we]re enforcea-
ble and valid, including this proposed language in the
default judgment would violate Rule 54(c) of the Federal
16 TASER INT’L, INC. v. PHAZZER ELECS., INC.
Phazzer expressed concern, however, that a declarato-
ry judgment of validity would “serve to prejudice third
parties who may come into conflict with Taser in the
future.” Id. But, as counsel for Taser admitted at oral
argument, “those folks would not be bound by a default
order or an injunction specific to Phazzer.” Oral Arg. at
21:06–21:35, available at
http://oralarguments.cafc.uscourts.gov/
default.aspx?fl=2017-2637.mp3. Indeed, it is well estab-
lished that “no court can make a decree which will bind
any one but a party; a court of equity is as much so lim-
ited as a court of law; it cannot lawfully enjoin the world
at large, no matter how broadly it words its decree.”
Alemite Mfg. Corp. v. Staff, 42 F.2d 832, 832 (2d Cir.
1930) (Hand, J.). This rule was codified in Rule 65(d) of
the Federal Rules of Civil Procedure, which provides that
an injunction “binds only the following who receive actual
notice of it by personal service or otherwise: (A) the
parties; (B) the parties’ officers, agents, servants, employ-
ees, and attorneys; and (C) other persons who are in
active concert or participation” with them. Fed. R. Civ. P.
65(d)(2). Accordingly, while the district court’s injunction
is binding with respect to Phazzer, and those working on
behalf of or in concert with it, and while the court’s judg-
ment resolves all disputes between these parties with
Rules of Civil Procedure.” Appellant Br. at 13 (quoting
LG Elecs., Inc. v. Advance Creative Comput. Corp., 212 F.
Supp. 2d 1171, 1176 (N.D. Cal. 2002)). That decision is
distinguishable, however. While the defaulting parties in
LG Electronics never appeared in the case or responded to
the motion for default, Phazzer appeared before the
district court and admitted that the validity language in
the proposed order had no effect on it. Importantly, as the
LG Electronics court recognized, injunctions are “discre-
tionary depending on the facts of the case.” Id. at 1175.
TASER INT’L, INC. v. PHAZZER ELECS., INC. 17
respect to the products specified in the order, it does not,
and indeed cannot, bind unrelated third parties.
On appeal, Phazzer submits that “the validity of the
trademark should be referred back to the TTAB for sub-
stantive determination.” Appellant Br. at 16. Specifical-
ly, Phazzer: (1) explains that the TTAB stayed the
cancellation proceedings because it was under the impres-
sion that the district court would address whether the
mark was functional; and (2) requests “leave to prosecute
its TTAB proceeding to fruition.” Id. at 16–17. Phazzer
cites no authority for its request that we refer the issue of
validity to the TTAB. Nor could it, given that this appeal
arises from the district court’s decision granting Taser’s
motion for sanctions and for a permanent injunction.
In any event, Phazzer did not object to the language
in the proposed order precluding Phazzer from challeng-
ing or continuing to challenge the validity or enforceabil-
ity of the ’789 registration. As Taser points out,
moreover, a default judgment in an infringement proceed-
ing can operate as res judicata in a subsequent cancella-
tion proceeding before the TTAB. See Nasalok Coating
Corp. v. Nylok Corp., 522 F.3d 1320, 1330 (Fed. Cir.
2008). As we explained in Nasalok, to hold otherwise
would allow “success in the cancellation proceeding” to
“negate relief secured . . . in the infringement proceeding.”
Id. at 1329. “Such a collateral attack is barred by claim
preclusion.” Id. at 1330 (“Because Nasalok’s claim of
trademark invalidity, in its petition to cancel the ’840
Registration, amounted to a collateral attack on the
district court’s judgment in the earlier infringement suit,
the rules of defendant preclusion are properly applied to
bar Nasalok from asserting that claim.”). 5
5 Of course, as the district court made clear in its
order on Taser’s motion for contempt, the TTAB has the
18 TASER INT’L, INC. v. PHAZZER ELECS., INC.
Because Phazzer conceded that a declaratory judg-
ment of general validity of the ’789 registration would not
affect it, and because we interpret the scope of the injunc-
tion as limited to these parties and the particular prod-
ucts identified therein (and those not colorably different
therefrom), we find no error in the district court’s perma-
nent injunction.
C. Phazzer’s Remaining Arguments
Concerning PTO Proceedings Are Without Merit
Phazzer also argues that reversal is warranted be-
cause: (1) Taser engaged in “misconduct and/or fraud on
the PTO” in connection with the ’789 registration; and
(2) enforcement of the injunction “is no longer proper or
equitable due to changed conditions” stemming from the
PTO’s rejection of Taser’s patent claims in the second
reexamination. Appellant Br. at 19–32. Neither argu-
ment has merit.
As to the first point, Phazzer did not allege fraud or
misconduct before the PTO in the district court proceed-
ings, and cannot do so for the first time on appeal.
authority to determine the preclusive effect of the default
judgment on the cancellation proceeding. See Smith v.
Bayer Corp., 564 U.S. 299, 307 (2011) (“After all, a court
does not usually ‘get to dictate to other courts the preclu-
sion consequences of its own judgment.’ Deciding whether
and how prior litigation has preclusive effect is usually
the bailiwick of the second court . . . .”(internal citation
omitted)). Indeed, to the extent the original order could
have been read to direct the TTAB’s conduct of its pro-
ceedings, the district court clarified that it did not intend
for its order to sweep so broadly. See Order at 7, Taser
Int’l, Inc. v. Phazzer Elecs., Inc., No. 6:16-cv-366 (M.D.
Fla. May 4, 2018), ECF No. 271.
TASER INT’L, INC. v. PHAZZER ELECS., INC. 19
As to the second point, Phazzer points to the fact that
the PTO examiner recently issued a final rejection of all
18 claims of the ’262 patent in the pending reexamination.
According to Phazzer, the PTO’s finding that all claims of
the ’262 patent are unpatentably obvious is a change in
factual conditions that warrants reversal of the sanctions
order. As Taser points out, however, Phazzer’s argument
is premature, not properly before this court, and is subject
to Taser’s appellate rights before the Board. Because the
reexamination proceedings are ongoing, they do not affect
the district court’s permanent injunction.
IV. CONCLUSION
We have considered Phazzer’s remaining arguments
and find them unpersuasive. Because the district court
did not abuse its discretion in entering default judgment
against Phazzer, and because we interpret the resulting
permanent injunction as limited to resolving all disputes
between these parties with respect to the particular
products at issue, we affirm the district court’s order
imposing sanctions in its entirety.
AFFIRMED