Addiction and detoxification institute LLC v. Carpenter et al

Filing 21

OPINION AND ORDER granting 12 Motion to Dismiss; denying 16 Motion for Leave to File First Amended Complaint. Signed by District Judge John Corbett O'Meara. (WBar)

UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF MICHIGAN
SOUTHERN DIVISION

ADDICTION & DETOXIFICATION
INSTITUTE, L.L.C.,

Case No. 14-10021

Plaintiff,

Honorable John Corbett O’Meara

v.
JAMES CARPENTER, RICARDO BORREGO,
and MICHAEL MICHAEL, d/b/a EAGLE
ADVANCEMENT INSTITUTE,
Defendants.
/
OPINION AND ORDER
GRANTING DEFENDANTS’ MAY 14, 2014 MOTION TO DISMISS AND
DENYING PLAINTIFF’S JUNE 11, 2014 MOTION TO AMEND COMPLAINT
This matter came before the court on defendants James Carpenter, Ricardo Borrego and
Michael Michael’s May 15, 2014 motion to dismiss and plaintiff Addiction & Detoxification
Institute’s June 11, 2014 motion for leave to file an amended complaint. The issues were fully
briefed; and oral argument was heard July 24, 2014.
BACKGROUND FACTS
Defendant Eagle Advancement Institute (“Eagle”) is a Michigan corporation whose officers
and directors are defendants James Carpenter, Michael Michael and Ricardo Borrego. Eagle
provides substance abuse reversal and abstinence treatments that help patients overcome addiction.
On January 3, 2014, plaintiff Addiction & Detoxification Institute (“ADI”) filed suit against
Eagle and the individually named defendants, claiming infringement of ADI’s Patent No. 5,789,411
(“ the 411 Patent”), a method of detoxifying opioid-addicted patients. Defendants contend the ‘411
Patent requires the step of administering a diarrhea suppressant to a patient and that any potential

infringer must perform that step; however, Defendants insist they do not administer the suppressant,
and ADI has not alleged that Defendants do so.
In their motion to dismiss, the individual defendants argue that ADI has not made any
allegations in the Complaint sufficient for this court to pierce the corporate veil. In addition,
Defendants argue that ADI’s indirect infringement claim must be dismissed because ADI failed to
plead any facts suggesting that Defendants had the specific intent to cause infringement. Finally,
Defendants argue that ADI’s willful infringement claim should be dismissed because the Complaint
fails to plead any facts suggesting that Defendants knew of the ‘411 Patent prior to this lawsuit.
In an attempt to cure some of these defects, Plaintiff responded briefly to Defendants’ motion
and filed a motion for leave to amend the Complaint. Although the Proposed Amended Complaint
added a few paragraphs, Plaintiff still has failed to allege, among other things, that Defendants had
actual notice of the patent at issue until after this lawsuit was filed.
LAW AND ANALYSIS
“District courts must evaluate complaints alleging direct infringement by reference to Form
18 of the Appendix of Forms to the Federal Rules of Civil Procedure.” K-Tech Telecomm., Inc. v.
Time Warner Cable, Inc., 714 F.3d 1277, 1279 (Fed. Cir. 2013). Form 18 requires a complaint to
contain “a statement that the plaintiff has given the defendant notice of its infringement.” In re Bill
of Lading Transmission and Sys. Patent Litig., 681 F.3d 1323, 1334 (quoting McZeal v. Sprint
Nextel Corp., 501 F.3d 1354, 1357 (Fed. Cir. 2007). This court has previously held
The language of Form 18 specifically contemplates that plaintiff afford defendants
notice of their infringement before filing the complaint. Paragraph 4 of Form 18
provides that a sufficient pleading must contain a statement that, “[t]he plaintiff ...
has given the defendant written notice of the infringement. (emphasis added). The
usage of the past tense indicates that notice of infringement must, in fact, precede the
complaint in which such a statement appears. Furthermore, plaintiff’s interpretation
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of Form 18 would render the notice of infringement element completely superfluous
as any plaintiff could satisfy this requirement by merely filing suit.
Littlefuse, Inc. v. Pacific Eng’g Corp., 2013 WL 4026918 (E.D. Mich. 2013) at *2.
In its Proposed Amended Complaint, Plaintiff alleges that “Defendants have had constructive
notice of [Patent ‘411] since it issued on August 4, 1998.” Prop. Am. Compl. at ¶ 13. The Proposed
Amended Complaint also alleges “Defendants Carpenter, Borrego and Michael have had actual
knowledge of [Patent ‘411] since the filing of the original Complaint on January 3, 2014 . . . .” Id.
at ¶ 17. Therefore, Plaintiff has failed to meet the requirements of Form 18; and the court will
dismiss Plaintiff’s direct infringement claim.
Indirect infringement, which Plaintiff has also alleged, is governed by 35 U.S.C. §§ 271(b)
and (c). Subsection (b) covers a type of indirect infringement referred to as “induced infringement”
and provides that whomever “actively induces infringement of a patent shall be liable as an
infringer.”1 Liability for indirect infringement requires specific intent. In other words, the accused
indirect infringer must act with knowledge that its conduct will cause an act of direct infringement.
See Akamai Tech., Inc. v. Limelight Networks, Inc., 692 F.3d 1301(Fed. Cir. 2012), rev’d on other
grounds, 134 S. Ct. 2111 (2014). In order to plead that a party has willfully infringed a patent, the
party must have had knowledge of the patent; and post-filing knowledge is not sufficient to support
such a claim. Unisone Strategic IP v. Life Tech. Corp., 2013 WL 5729487 (S.D. Cal. Oct. 22, 2013)
at *5. Again, the court must grant Defendants’ motion to dismiss the indirect infringement claim,
as Plaintiff has failed to state facts that allege that Defendants had knowledge of the ‘411 Patent

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Section 272(c) covers a second type of indirect infringement referred to as “contributory
infringement.” It appears that Plaintiff has abandoned this claim in its Proposed Amended
Complaint.
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before this lawsuit was filed and has failed to state facts that allege that Defendants specifically
intended to cause infringement.
“While a complaint attacked by a Rule 12 (b)(6) motion to dismiss does not need detailed
factual allegations, a plaintiff’s obligation to provide the grounds of his entitlement to relief requires
more than labels and conclusions, and a formulaic recitation of the elements of a cause of action will
not do.” Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 555 (2007). In this case Plaintiff ADI has
failed to allege sufficient facts to withstand Defendants’ motion to dismiss. Likewise, the Proposed
Amended Complaint, although adding a few paragraphs, is merely a formulaic recitation of the
elements of Plaintiff’s infringement claims. Therefore, granting leave to file the Proposed Amended
Complaint would be futile.
ORDER
It is hereby ORDERED that plaintiff ADI’s June 11, 2014 motion for leave to file an amended
complaint is DENIED.
It is further ORDERED that Defendants’ May 14, 2014 motion to dismiss is GRANTED.

s/John Corbett O'Meara
United States District Judge
Date: August 4, 2014

I hereby certify that a copy of the foregoing document was served upon the parties of record
on this date, August 4, 2014, using the ECF system and/or ordinary mail.

s/William Barkholz
Case Manager

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