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002152706 Ontario Ltd. v. Changer & Dresser, Inc.

United States District Court, N.D. Alabama, Eastern Division

January 28, 2019




         Plaintiffs 002152706 Ontario Limited and JEC Distributors, Inc. (“JEC”) initiated this lawsuit against Defendant Changer & Dresser, Inc. (“Changer & Dresser”). Plaintiffs allege infringement by Changer & Dresser of four patents, U.S. Patent Numbers 8, 742, 281; 9, 168, 609; 9, 393, 639; and 9, 757, 814 (the “patents-in-suit”). This matter is before the court on Changer & Dresser's motion to dismiss the fifth amended complaint for lack of standing (doc. 101) and Plaintiffs' motion to substitute Copperhead Industrial, Inc. (“Copperhead”) as a party plaintiff in place of 002152706 Ontario Limited (doc. 103).

         For the reasons explained below, the court GRANTS Plaintiffs' motion to substitute and GRANTS IN PART and DENIES IN PART Changer & Dresser's motion to dismiss.

         I. BACKGROUND

         A. Relevant Facts

         Copperhead is a Canadian corporation that distributes automotive manufacturing industry products, including cap changers, tip dressers, sensors, weld gun covers, cutter blades and holders, and force gauges. (Doc. 100 at ¶¶ 1, 6; Doc. 104 at ¶ 3). Copperhead is incorporated under the laws of Ontario, Canada. (Doc. 104-3 at 4; Doc. 136-1 at 6).

         Under Ontario law, to come into existence and be considered a valid legal entity, a domestic Ontario corporation is required to file articles under the Business Corporations Act (Ontario), R.S.O. 1990, c. B.16 (the “Act”) and register with the Ontario Ministry of Government and Consumer Services (the “Ministry”). (Doc. 136-1 at ¶ 2; Doc. 137-2 at 28). At the time of registration, the Ministry assigns an Ontario Corporation Number to every corporation incorporated under the Act. (Doc. 136-1 at ¶¶ 6-7; Doc. 137-2 at 30). The Ontario Corporation Number must be specified in the corporation's certificate of incorporation. (Doc. 136-1 at ¶ 7; Doc. 137-2 at 24). If an incorporator does not specify a corporation name in the articles of incorporation, the Ministry assigns a number name comprised of the Ontario Corporation Number, the word “Ontario, ” and a business designation or abbreviation. (Doc. 136-1 at ¶ 6; Doc. 137-2 at 24).

         An Ontario Corporation Number is a unique identifier. No two corporations may be assigned the same Ontario Corporation Number. (Doc. 136-1 at ¶ 7). A corporation may not transfer or change its Ontario Corporation Number, and if a company merges with another corporation, the new corporation receives a new Ontario Corporation Number. (Doc. 136-1 at ¶ 7).

         Joseph Ruggiero incorporated Copperhead in 2007. (Doc. 136-1 at 7-14). When Copperhead was incorporated, Copperhead was issued Ontario Corporation Number 002152706. (Doc. 104 at ¶ 2; Doc. 136-1 at ¶ 6; Doc. 136-1 at 6). The number appears on Copperhead's certificate of incorporation and on its articles of incorporation. (Doc. 136-1 at 6-7).

         Mr. Ruggiero has been the sole director and president of Copperhead since it was incorporated in 2007, and he has been the sole owner of Copperhead since 2011. (Doc. 104 at ¶¶ 1, 12(e)). Between November 2012 and February 2013, Mr. Ruggiero and Werner Kaeseler had discussions about Copperhead's potential purchase of Mr. Kaeseler's intellectual property rights to certain spot welding cap changers. (Doc. 100 at ¶ 4). On February 16, 2013, Mr. Kaeseler and Mr. Ruggiero signed a Patent Purchase Agreement which listed Mr. Kaeseler as the “Vendor, ” and 002152706 Ontario Limited as the “Purchaser.” (Doc. 104-1). The Patent Purchase Agreement incorporates a Patent Assignment (the “original assignment”). (Doc. 103-1 at 1; Doc. 104-2). Pursuant to the original assignment, Mr. Kaesler assigned and transferred his rights to the patents-in-suit to 002152706 Ontario Limited. (Doc. 104-2). Mr. Ruggiero, on behalf of 002152706 Ontario Limited, signed the original assignment. (Doc. 104-2 at 2). Bank statements reflect that all required payments due Mr. Kaeseler under the Patent Purchase Agreement were drawn from an account owned in the name of Copperhead. (Doc. 104 at ¶¶ 16-18; Doc. 104-5; Doc. 104-6).

         On December 14, 2016, an attorney representing Mr. Ruggiero submitted proposed corrective assignments to the United States Patent and Trademark Office (“USPTO”). (Doc. 104 at 2; see Doc. 104-7; Doc. 104-8; Doc. 104-9; Doc. 104-10). The December 2016 corrective assignments are identical to the original assignment except the name “002152706 Ontario Ltd.” is crossed out by hand and replaced with “Copperhead Industrial Inc.” (Doc. 104-7 at 3-4; Doc. 104-8 at 3-4; Doc. 104-9 at 3-4; Doc. 104-10 at 5-6). Mr. Ruggiero initialed and dated each change. (Id.).

         Mr. Ruggiero submitted identical declarations in support of the corrective assignments. (Doc. 104-7 at 6-7; Doc. 104-8 at 6-7; Doc. 104-9 at 6-7; Doc. 104-10 at 8-9). According to the declarations, the reference to “002152706 Ontario Ltd.” in the original assignment “was due to an inadvertent mistake of identifying Copperhead by its Ontario corporation number (2152706) rather than by its corporate name (Copperhead Industrial Inc.).” (See e.g., Doc. 104-7, p. 6 at ¶ 2). In the declarations, Mr. Ruggiero claimed that when he signed the original assignment “and until only recently, ” he mistakenly believed that 002152706 Ontario Limited was the legal corporate name for Copperhead and that the corporation was “doing business as” Copperhead. (See e.g., Doc. 104-7, p. 6 at ¶ 3). Mr. Ruggiero also asserted that “inclusion of ‘002152706 Ontario Ltd.' as a party to the [original a]ssignment was due to an error that did not accurately reflect my, Copperhead's, or Mr. Kaeseler's intentions. The [original a]ssignment was always intended to be between Mr. Kaeseler and Copperhead.” (See e.g., Doc. 104-7 at 7, ¶ 4).

         On April 14, 2017, the USPTO accepted the corrective assignments and issued Notices of Recordation that correspond to each of the patents-in-suit. (Doc. 104 at 21; see Doc. 104-11).

         B. Relevant Procedural History

         Plaintiffs 002152706 Ontario Limited and JEC filed this lawsuit in the Western District of New York on January 6, 2015. (Doc. 1). 002152706 Ontario Limited and JEC amended their complaint of right on February 10, 2015. (Doc. 5). With Changer & Dresser's consent or the court's leave, 002152706 Ontario Limited and JEC filed three more amended complaints between December 7, 2015 and November 11, 2016. (Docs. 12, 27, 54).

         Plaintiffs first moved to substitute Copperhead for 002152706 Ontario Limited on December 22, 2016 in response to Changer & Dresser's motion to dismiss the fourth amended complaint. (Doc. 65). While the original motion to substitute was pending, Plaintiffs moved to amend their complaint again to add another patent-in-suit. (Doc. 91). A magistrate judge granted the motion to amend without addressing ...

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