Addiction & Detoxification Institute, LLC v. Aharonov et al

Filing 28

OPINION AND ORDER granting 22 Motion to Dismiss. Signed by District Judge John Corbett O'Meara. (WBar)

UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF MICHIGAN
SOUTHERN DIVISION

ADDICTION AND DETOXIFICATION
INSTITUTE, L.L.C.,

Case No. 14-10026
Honorable John Corbett O’Meara

Plaintiff,
v.
JULIA AHARONOV and JOSEPH A.
GEORGE, d/b/a MDS DRUG DETOX
CLINIC,
Defendants.
/

OPINION AND ORDER
GRANTING DEFENDANTS’ MOTION TO DISMISS
This matter came before the court on Defendants’ August 29, 2014 motion to
dismiss. Plaintiff Addiction and Detoxification Institute (“ADI”) filed a response
September 25, 2014; and Defendants filed a reply brief October 7, 2014. Oral
argument was scheduled for October 16, 2014; however, on October 14, 2014, the
court entered an order canceling the motion hearing. For the reasons that follow, the
court will grant Defendants’ motion to dismiss.
BACKGROUND FACTS
This case was reassigned to this court as a companion to Case No. 14-10021,

Addiction & Detoxification Institute v. Carpenter, which was recently dismissed. In
this case the plaintiff is the same, but the defendants are different individuals and a
different clinic as those sued in Carpenter. The complaints, however, are nearly
identical.
Defendant MDS Drug Detox Clinic is a Michigan corporation whose owners are
defendant Julia Aharonov and Joseph A. Geoge. MDS provides substance abuse
reversal and abstinence treatments that help patients overcome addiction.
On January 3, 2014, plaintiff ADI filed suit against Defendants, claiming
infringement of ADI’s Patent No. 5,789,411 (“ the 411 Patent”), a method of
detoxifying opioid-addicted patients. Any potential infringer of the ‘411 Patent must
perform all of the steps in the claims of the patent, and Defendants claim ADI has not
alleged that the defendant individuals or MDS performed such steps.
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.
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LAW AND ANALYSIS
In order for a court to pierce the corporate veil, the corporation must be a mere
instrumentality of another individual or entity, must have been used to commit a
wrong or fraud, and must have caused an unjust injury or loss to the plaintiff.
Florence Cement Co. v. Vettriano, 292 Mich. App. 461 (2011). In this case ADI’s
complaint fails to plead with particularity facts sufficient to determine the role of
defendants Aharonov or George; rather, it simply states that the two are owners of
MDS. The complaint does not allege that MDS is the alter ego of the two individuals
or that MDS is a sham. To the extent that the complaint has pleaded allegations
regarding activities of the defendant individuals, all of those acts fall within the scope
of their employment with MDS. Therefore, they are protected by the corporate veil
and are entitled to dismissal.
As for Plaintiff’s allegations of direct infringement, “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, among other things, “a statement that the plaintiff has
given the defendant notice of its infringement.” In re Bill of Lading Transmission and

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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 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 this case, just as in Carpenter and Littlefuse, ADI’s complaint fails to claim
that it gave Defendants notice of the alleged infringement before filing suit.
Therefore, ADI’s claim for direct infringement must be dismissed.
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.” 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,
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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 before this lawsuit was
filed and has failed to state facts that allege that Defendants specifically intended to
cause infringement.
Finally, ADI’s willful infringement claim also fails for the same reason its
indirect infringement claims fail: the complaint does not recite specific facts
explaining if and when the defendants had knowledge of the ‘411 Patent. “[A]
willfulness claim asserted in the original complaint must necessarily be grounded
exclusively in the accused infringer’s pre-filing conduct. In re Seagate Tech., L.L.C.,
497 F.3d 1360, 1374 (Fed. Cir. 2007). “[A] party cannot be found to have ‘willfully’
infringed a patent of which the party had no knowledge.” See Gustafson, Inc. v.
Intersystems Indus. Prods., Inc., 897 F.2d 508, 511 (Fed. Cir. 1990). Therefore, the
court must also dismiss ADI’s claims for willful 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
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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.
ORDER
It is hereby ORDERED Defendants’ August 29, 2014 motion to dismiss is
GRANTED.
s/John Corbett O'Meara
United States District Judge
Date: February 13, 2015

I hereby certify that a copy of the foregoing document was served upon counsel
of record on this date, February 13, 2015, using the ECF system.

s/William Barkholz
Case Manager

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