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Copperhead Industrial, Inc. v. Changer & Dresser, Inc.

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

December 19, 2019

COPPERHEAD INDUSTRIAL, Inc., Plaintiff/Counter Defendant,
v.
CHANGER & DRESSER, Inc. Defendant/Counter Claimant.

          MEMORANDUM OPINION AND ORDER

          ANNEMARIE CARNEY AXON UNITED STATES DISTRICT JUDGE.

         This matter is before the court on Plaintiff Copperhead Industrial, Inc.'s (“Copperhead”) motion for leave to file a sixth amended complaint to rejoin JEC Distributors, Inc. (“JEC”) as a party plaintiff. (Doc. 149).

         Defendant Changer & Dresser (“C&D”) opposes amendment, arguing that amendment would be futile because the proposed allegations do not establish that JEC has standing; that Copperhead unduly delayed requesting leave to amend; and that Copperhead's proposed amendment is prejudicial. (Doc. 162).

         As explained below, amendment would be futile. Therefore, the court DENIES Copperhead's motion to amend.

         I. RELEVANT PROCEDURAL HISTORY

         Copperhead and JEC filed this patent infringement action in January 2015. (Doc. 1). Between February 2015 and November 2017, Copperhead and JEC filed five amended complaints, all before this case was transferred to this district from the Western District of New York. (Docs. 5, 12, 27-1, 54, 100). In each of the six complaints, Copperhead and JEC alleged that JEC was the “non-exclusive” licensee of the patents-in-suit. (Doc. 1 at ¶ 15; Doc. 5 at ¶ 15; Doc. 12 at ¶ 16; Doc. 27-1at ¶ 19; Doc. 54 at ¶ 18; Doc. 100 at ¶ 24).

         In January 2019, the court dismissed JEC's claims without prejudice for lack of standing because the fifth amended (and operative) complaint did not allege that JEC was an exclusive licensee, or facts from which the court could make such an inference. (Doc. 139 at 15-16).

         Eight months later, Copperhead filed a motion for leave to amend to rejoin JEC as a party plaintiff. (Doc. 149). Copperhead supports it motion with a declaration from Joseph Ruggerio, dated August 15, 2019. (Doc. 149-2). In his declaration, Mr. Ruggerio states that he is the sole owner, director, and president of both Copperhead and JEC. (Doc. 149-2 at ¶¶ 2-3). According to Mr. Ruggerio, the two companies share the same physical location and other resources, including office supplies and labor. (Doc. 149-2 at ¶ 4). Copperhead distributes automotive manufacturing products, including spot welding cap changers. (Doc. 149-2 at ¶ 5). Copperhead owns the patents-in-suit, which relate to its cap changers. (Id.). JEC distributes Copperhead's cap changers that make use of the patents-in-suit. (Doc. 149-2 at ¶ 6). Copperhead profits from each cap changer that JEC sells. (Doc. 149-2 at ¶ 8).

         According to Mr. Ruggerio, as owner of both Copperhead and JEC, he formed an unwritten licensing agreement pursuant to which JEC licenses from Copperhead the patents-in-suit. (Doc. 149-2 at ¶ 7). JEC has licensed the patents-in-suit continuously since 2013. (Doc. 149-2 at ¶ 9). Mr. Ruggerio states that it has always been his “intention to grant to JEC, on behalf of Copperhead, all rights needed to make, use and sell the patented spot welding cap changers in the United States, to control prosecution of the patents-in-suit, and to control the enforcement of the patents-in-suit, while reserving Copperhead's patent ownership.” (Doc. 149-2 at ¶ 9). Mr. Ruggerio also states that JEC has always been Copperhead's “sole licensee for all of the patents-in-suit, ” and “no other party has been authorized to practice the patents-in-suit, and no other party has ever enforced or been authorized to enforce the patents-in-suit.” (Doc. 149-2 at ¶ 10).

         In 2014, Mr. Ruggerio, as President of JEC, communicated with C&D relating to C&D's alleged infringement of the patents-in-suit. (Doc. 149-2 at ¶ 11). And JEC, on behalf of Copperhead, negotiated a potential license arrangement with C&D. (Doc. 149-2 at ¶ 12). Although no agreement was reached, Mr. Ruggerio claims that JEC's negotiations “evidence its broad rights to the patents- in-suit and demonstrate its extremely close relationship with Copperhead.” (Doc. 149-2 at ¶ 12).

         Based on Mr. Ruggerio's declaration, Copperhead wishes to remove from the complaint the reference to JEC as a “non-exclusive” licensee and more fully describe the licensing relationship between Copperhead and JEC through the following six specific allegations:

• The licensing agreement between the parties was not in writing;
• A single person, Mr. Ruggerio, owns, controls and is President of both companies, and the relationship between Copperhead and JEC is an extremely close one;
• Copperhead profits from each sale of a cap changer made by JEC;
• JEC is the only party authorized to practice the patented invention in the United States, and has always been the sole ...

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