United States District Court, D. Connecticut
MEMORANDUM OF DECISION GRANTING MOTION FOR LEAVE TO
AMEND COMPLAINT [DKT. 53]
Vanessa L. Bryant, United States District Judge
the Court is LEGO's Motion for Leave to Amend the
Complaint. See [Dkt. 53]. LEGO seeks to join Rubicon
Communications, LLC; Jamie Thompson; and James Thompson as
new Defendants. Id. at 1. LEGO contends that since
July 28, 2015, it has extensively sought discovery regarding
Defendants' corporate structure and transactions, [Dkt.
53-1, at 2-3], but it was not until after LEGO conducted
depositions in December 2016 that it realized it would be
prudent to join the three proposed Defendants. Id.
at 3. As a result of the depositions, LEGO is now aware that
Rubicon Communications, LLC was formed and participated in
the allegedly infringing activities and that Jamie and James
Thompson, in their capacities as officers and directors of
the purportedly infringing entities, directed these entities
to infringe Plaintiff's patents. See Id. at 4-5.
Shortly thereafter, LEGO moved for leave to amend the
complaint on February 3, 2017.
to amend is to be given freely “when justice so
requires, ” Fed.R.Civ.P. 15(a), unless the moving party
acted with “undue delay, bad faith or dilatory motive .
. ., repeated failure to cure deficiencies by amendments
previously allowed, ” or the amendment would create
undue prejudice to the opposing party or be futile. Foman
v. Davis, 371 U.S. 178, 182 (1962). However,
“where the proposed amendment seeks to add new parties,
Fed.R.Civ.P. 21 governs.” Jones v. Smith, No.
9:09-cv-1058 (GLS/ATB), 2015 WL 5750136, at *25 (N.D.N.Y.
Sept. 30, 2015); see Fed. R. Civ. P. 21 (“On
motion or on its own, the court may at any time, on just
term, add . . . a party.”). Such a distinction is a
mere technicality as “the same standard of liberality
applies under either Rule.” Duling v.
Gristede's Operating Corp., 265 F.R.D. 91, 96-97
(S.D.N.Y. 2010); Faryniarz v. Ramirez, 62 F.Supp.3d
240, 249 n.4 (D. Conn. 2014) (same); Brown v.
Tuttle, No. 3:13 CV 1444 (JBA), 2014 WL 3738066, at *2
n.5 (D. Conn. July 30, 2014) (same in a prisoner's civil
rights case). When there exists a scheduling order, the
lenient standard of Rule 15(a) “must be balanced
against the requirement under Rule 16(b) that the Court's
scheduling order ‘shall not be modified except upon a
showing of good cause.'” Grochowski v. Phoenix
Const., 318 F.3d 80, 86 (2d Cir. 2003); Velez v.
Burge, 483 F. App'x 626, 628 (2d Cir. 2012).
does not object to adding Rubicon Communications, LLC as a
Defendant in this suit, and accordingly the Court GRANTS
LEGO's motion as to this party by consent. See
[Dkt. 57, at 1].
respect to James and Jamie Thompson, SmallWorks objects to
the motion only on the grounds of futility. SmallWorks argues
the motion is futile because (1) LEGO has not pleaded
sufficient facts to establish Defendants' specific intent
to knowingly induce infringement as required under 35 U.S.C.
§ 271(b), (2) LEGO's allegations are insufficient to
pierce the corporate veil, and (3) the Court should not
pierce the corporate veil because the Thompsons kept their
personal finances separate from their business entities.
should deny leave to amend for futility when the proposed
amended complaint would not withstand a motion to dismiss
under Fed.R.Civ.P. 12(b)(6). See Dougherty v. Town of N.
Hempstead Bd. of Zoning Appeals, 282 F.3d 83, 88 (2d
Cir. 2002); Echeverria v. Utitec, Inc., No.
3:15-cv-1840 (VLB), slip op. at 3 (D. Conn. Mar. 17, 2017);
On Track Innovations Ltd. v. T-Mobile USA, Inc., No.
12 Civ. 2224 (AJN) (JCF), 2014 WL 406497, at *4 (S.D.N.Y.
Feb. 3, 2014) (noting in a patent case that “[a] court
may deny a motion to amend for futility only where no
colorable grounds exist to support a claim or
defense.”). In considering a motion to dismiss for
failure to state a claim, the Court should follow a
“two-pronged approach” to evaluate the
sufficiency of the complaint. Hayden v. Paterson,
594 F.3d 150, 161 (2d Cir. 2010). “A court ‘can
choose to begin by identifying pleadings that, because they
are no more than conclusions, are not entitled to the
assumption of truth.'” Id. (quoting
Iqbal, 556 U.S. at 679). “At the second step,
a court should determine whether the ‘well-pleaded
factual allegations, ' assumed to be true,
‘plausibly give rise to an entitlement to
relief.'” Id. “The plausibility
standard is not akin to a probability requirement, but it
asks for more than a sheer possibility that a defendant has
acted unlawfully.” Iqbal, 556 U.S. at 678
(quotations omitted). As with a motion to dismiss, all
inferences must be drawn in favor of the plaintiff.
amendments to the Federal Rules of Civil Procedure adopted in
April of 2015, effective December 1, 2015, abrogated Rule 84.
That Rule consisted of various forms, including Form 18:
Complaint for Patent Infringement. The 2015 Advisory Committee
Notes on Rule 84 state, “Rule 84 and the Appendix of
Forms are no longer necessary and have been abrogated. The
abrogation of Rule 84 does not alter existing pleading
standards or otherwise change the requirements of Civil Rule
8.” The Committee explained that the forms were
originally adopted to illustrate the simplicity and brevity
of the rules, a purpose which has now been fulfilled.
Fed.R.Civ.P. 84 advisory committee's note to 2015
to the abrogation of Rule 84 and Form 18, a claim of induced
infringement was required to meet the Twombly/Iqbal
pleading standard. See Lyda v. CBS Corp., 838 F.3d
1331, 1339 (Fed. Cir. 2016) (citing Superior Indus., LLC
v. Thor Glob. Enters. Ltd., 700 F.3d 1287, 1295 (Fed.
Cir. 2012)). To state a claim for inducement of patent
infringement under 35 U.S.C. § 271(b), “the
patentee must establish first that there has been direct
infringement, and second that the alleged infringer knowingly
induced infringement and possessed specific intent to
encourage another's infringement.” ACCO Brands,
Inc. v. ABA Locks Mfrs. Co., Ltd., 501 F.3d 1307, 1312
(Fed. Cir. 2007); On Track Innovations Ltd., 2014 WL
406497, at *4 (citing ACCO Brand, Inc. at the motion
to dismiss stage); see also Global-Tech Appliances, Inc.
v. SEB S.A., 563 U.S. 754, 766 (2011) (holding that
§ 271(b) requires “knowledge that the induced acts
constitute patent infringement”); In re Bill of
Lading Transmission and Processing Sys. Patent Litig.,
681 F.3d 1323, 1339 (Fed. Cir. 2012) (same). More
specifically, unlike direct infringement “the patentee
must show that the accused inducer took an affirmative
act to encourage infringement with the
knowledge that the induced acts constitute patent
infringement.” Microsoft Corp. v. DataTern,
Inc., 755 F.3d 899, 904 (Fed. Cir. 2014) (citing
Global-Tech Appliances, Inc., 563 U.S. at 765-66)
(emphasis added). Knowledge is attributable to a defendant
who acts with willful blindness. Global-Tech Appliances,
Inc., 563 F.3d at 766-67.
the proposed amended complaint alleges “Defendants have
manufactured, sold, offered to sell and imported and/or
currently manufacture, sell, offer to sell, and import, in
the United States, a family of LEGO® brick-compatible
cases for iPhone, iPod, iPad, and similar devices.”
[Dkt. 53-2, ¶ 13]. The proposed amended complaint also
alleged Defendants operated a website accessible to
individuals in the United States where it sells and
advertises its products, and it advertises and sells on other
sites such as Amazon. See Id. ¶ 14-19. All
“Defendants had and/or have knowledge of the Asserted
Patents” as at least two were subject to a Disclosure
Statement submitted to the United States Patent &
Trademark Office. Id. ¶ 20. At all relevant
times, Jamie and James Thompson are and have been
“exclusive owners and officers of Rubicon
Communications, LP, Rubicon Communications, LLC, and
SmallWorks, LLC. They have directed and managed the three
corporate entities' conduct.” Id. ¶
aspects of the proposed amended complaint constitute legal
conclusions. See, e.g., [Dkt. 53-2, ¶ 13
(incorporating language found in 35 U.S.C. § 271(a))].
However, allegations of “active steps taken to
encourage direct infringement, such as advertising an
infringing use or instructing how to engage in an infringing
use, ” can satisfy the pleading standard. See
Metro-Goldwyn-Mayer Studios Inc. v. Grokster, Ltd., 545
U.S. 913, 936 (2005) (acknowledging at the summary judgment
stage that evidence of active steps is sufficient to show
affirmative intent to induce); Smartwater, Ltd. v.
Applied DNA Sciences, Inc., No. 12-CV-5731 (JS) (AKT),
2013 WL 5440599, at *9 (E.D.N.Y. Sept. 27, 2013). Assuming
the allegations to be true, the fact that the Thompsons were
officers and structured the advertising is sufficient to
plead the Thompsons acted with willful blindness when acting
as the owners and officers, directing, and managing the three
has rightly pointed out, “corporate officers who
actively assist with their corporation's infringement may
be personally liable for inducing infringement
regardless of whether the circumstances are such
that a court should disregard the corporate entity and pierce
the corporate veil.” Wordtech Sys., Inc. v.
Integrated Networks Sols., Inc., 609 F.3d 1308, 1316
(Fed. Cir. 2010); Global Traffic Techs. LLC v.
Morgan, 620 F. App'x 895 (Fed. Cir. 2015) (citing
same). The proposed amended complaint alleges Jamie and James
Thompson were exclusive owners and officers of all three
entities, and they directed and managed the corporate
conduct. See [Dkt. 53-2, ¶ 21]; see
also [Dkt. 53-6, at 173:4-13 (wherein James Thompson
testified that he and his wife were corporate officers of at
least Rubicon Communications, LP)]. Given that these
allegations and the additional allegations pertaining to the
proposed Defendants' direct and indirect infringement of
the four patents, the Court finds LEGO has pleaded
“enough facts to state a claim to relief that is
plausible on its face.” See Bell Atl. Corp. v.
Twombly, 550 U.S. 544, 570 (2007). It is not necessary
to address the issue of piercing the corporate veil.
Global Traffic Techs. LLC, 620 F. App'x at 907
(upholding jury determination of defendant's direct
personal liability for inducing infringement despite the
absence of finding defendant pierced the corporate veil
applicable to derivative liability). Accordingly, granting
leave to amend the complaint would not be futile.
discovery has revealed that James and Jamie Thompson were the
owners, partners, and/or members of Rubicon
Communications, LP; Rubicon, Communications, LLC; and
SmallWorks, LLC. [Dkt. 57-4 (James Thompson Dec.), ¶ 2].
Rubicon Communications, LP was formed on September 27, 2004,
as a Texas Limited Partnership pursuant to the laws of Texas.
[Dkt. 53-8 (Rubicon Communications, LLC Certificate of
Formation)]. It operated as such until it was converted to
Rubicon Communications, LLC on June 27, 2014. Id.
James Thompson testified that Rubicon Communications, LP
(d/b/a SmallWorks) sold the iPhone and iPad cases. [Dkt.
53-6, at 43:15-20]. Although the requisite corporate
structure documents have not yet been disclosed to Plaintiff
through discovery, the assertion that the Thompsons were
“partners” sufficiently alleges at this early
stage of the case that Plaintiff claims one or both of them
were general partners who ...