Conceivex, Inc. v. RINOVUM WOMEN'S HEALTH, INC.

Filing 50

OPINION and ORDER Granting Plaintiff's 42 and 43 Motions to Amend. Signed by District Judge Judith E. Levy. (SBur)

UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF MICHIGAN
SOUTHERN DIVISION
Conceivex, Inc.,
Plaintiff,
v.
Rinovum Women’s Health, Inc.,
Rinovum Women’s Health, LLC,
and The Stork IB2C, Inc.,

Case No. 15-cv-14239
Judith E. Levy
United States District Judge
Mag. Judge Elizabeth A. Stafford

Defendants.
________________________________/
OPINION AND ORDER GRANTING PLAINTIFF’S MOTION TO
AMEND [42, 43]
Before the Court is plaintiff Conceivex, Inc.’s motion to amend the
complaint. (Dkts. 42, 43.)
For the reasons set forth below, plaintiff’s motion is granted.
I.

Background
This case arises out of defendants’ alleged infringements of

plaintiff’s copyright of the manual for its CONCEPTION KIT. Plaintiff
alleges that it holds the copyright to the “Instructions for Use” document
included with its CONCEPTION KIT. Defendants sell The Stork OTC

Home Conception Device, and the instruction manual included with
defendants’ product allegedly copied or used language substantially
similar to the copyrighted material in plaintiff’s manual.
Plaintiff filed this complaint on December 3, 2015, and filed a first
amended complaint on March 2, 2016.

(Dkts. 1, 6.)

The original

scheduling order permitted the parties to amend the pleadings until May
12, 2016. (Dkt. 16.) Under the current scheduling order, the cutoff for
fact discovery is October 2, 2017, and expert discovery closes February 2,
2018. (Dkt. 36.)
On March 29, 2017, plaintiff filed a motion seeking leave to file a
second amended complaint, and seeks to add Mr. Stephen Bollinger, an
executive officer of defendants, as a defendant. (Dkts. 42, 43)
II.

Legal Standard
Fed. R. Civ. P. 15(a)(2) instructs courts to “freely give leave [to

amend] when justice so requires.” But “[a] motion to amend a complaint
should be denied if the amendment is brought in bad faith, for dilatory
purposes, results in undue delay or prejudice to the opposing party, or
would be futile.” Colvin v. Caruso, 605 F.3d 282, 294 (6th Cir. 2010)
(internal citations omitted). “Ordinarily, delay alone, does not justify
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denial of leave to amend.” Morse v. McWhorter, 290 F.3d 795, 800 (6th
Cir. 2002). “A proposed amendment is futile if the amendment could not
withstand a Rule 12(b)(6) motion to dismiss.” Riverview Health Inst.,
LLC v. Med. Mut. of Ohio, 601 F.3d 505, 512 (6th Cir. 2010).
III. Analysis
Plaintiff seeks to amend the complaint to add Stephen Bollinger, an
executive officer of defendant organizations, as a defendant. Defendants
argue that the motion has been brought with undue delay; in bad faith to
embarrass Mr. Bollinger; and will prejudice defendants because the case
has been handled under the assumption that plaintiff was not seeking
any personal liability. Further, defendants argue that an amendment
would be futile, as plaintiff fails to allege that Mr. Bollinger was
personally involved in the copyright infringement. Finally, defendants
argue that the Court lacks personal jurisdiction over Mr. Bollinger. (Dkt.
45.)
Undue Delay, Bad Faith, and Prejudice
The parties first dispute whether the motion was filed with undue
delay. Plaintiff claims the motion is timely because “[o]nly as discovery
has progressed has it become clear that Bollinger was personally involved
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in and/or directed Defendants’ infringing activities,” and “many of the
documents relied upon . . . were not produced by Defendants until March
8, 2017.” (Dkt. 43 at 16.) Defendants argue the motion was filed with
undue delay because, “[s]ince the beginning of their dealings, [plaintiff]
knew that Mr. Bollinger was the CEO or principal of Rinovum,” and
failed to amend the complaint during the time permitted under the
scheduling order.

(Dkt. 45 at 16.)

Further, defendants claim that

plaintiff’s “recently obtained” argument is “disingenuous” given that
plaintiff relies mostly on publicly available information in the proposed
second amended complaint. (Id. at 17.)
That plaintiff knew of Mr. Bollinger’s existence when the lawsuit
was filed does not indicate it knew at that time the extent of his
involvement with the alleged copyright infringement. Thus, defendants
cannot rely on this to demonstrate undue delay.

Further, although

defendants argue that most of the information about Mr. Bollinger is
publicly available, they offer no support for this contention. For example,
plaintiff alleges that “Mr. Bollinger personally directed the Defendants
to engage in the alleged activities” and “was personally involved in the
development of Defendants’ products and instructions; [and] in
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Defendants’ use of Plaintiff’s copyright.” (Dkt. 43-2 at 5, 7.) It may be
public information that Mr. Bollinger is CEO of defendants, and that he
likes to make technology “user friendly.” (Dkt. 43 at 19.) But that in
itself does not determine or indicate the extent of his involvement in all
aspects of the business, including whether he was personally involved in
writing or marketing the allegedly infringing instructions or in directing
employees to do so. Defendants have not refuted plaintiff’s claim that
they recently obtained documents showing Mr. Bollinger’s personal
involvement in infringement, and therefore cannot demonstrate undue
delay. Gen. Elec. Co. v. Adv. Stores Co., Inc., 285 F. Supp. 2d 1046, 1049–
50 (N.D. Ohio 2003) (plaintiff permitted to amend complaint to add new
claim based on information obtained in discovery despite the fact that
complaint was first filed one and a half years earlier).
Moreover, to the extent that plaintiff has alleged the discovery of
new information that inculpates Mr. Bollinger, it has demonstrated good
cause for seeking to amend after the scheduling order deadline has
passed. See Leary v. Daeschner, 349 F.3d 888, 909 (6th Cir. 2003) (“[o]nce
the scheduling order’s deadline passes, a plaintiff first must show good
cause . . . for failure earlier to seek leave to amend”).
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Next, the parties disagree as to whether the motion was filed in
bad faith. Plaintiff argues the motion was filed in good faith and “reflects
a necessary step for Plaintiff to protect its interests.” (Dkt. 43 at 14.)
Defendants argue that plaintiff knows “there is insurance coverage that
may apply to any judgment or damages,” and therefore that “the only
reason to add Mr. Bollinger to this case is to embarrass him, create a
distraction, . . . to cause him problems in the future, and to needlessly
increase the expense of this litigation.” (Dkt. 45 at 17–18.)
Although defendants’ potential liability may be covered by
insurance, it is not an act of bad faith to seek to add a corporate officer
who is liable for infringement, especially if the complaint also seeks
injunctive relief, as it does here.

That plaintiff seeks to hold all

potentially liable parties responsible is not itself sufficient to suggest bad
faith. See United States v. Atlast Lederer Co., 215 F.R.D. 539, 543 (S.D.
Ohio 2003) (no bad faith where government sought to add two corporate
officers potentially liable in CERCLA case). Further, defendants offer no
evidence to suggest that plaintiff has filed this motion to harass Mr.
Bollinger or to unnecessarily increase the cost or duration of litigation.
See id.; see also Wimm v. Jack Eckerd Corp., 3 F.3d 137, 141 (5th Cir.
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1993) (bad faith where plaintiff’s motion to amend was attempt to avoid
summary judgment).
Finally, the parties disagree as to whether a second amended
complaint would prejudice defendants. Plaintiff argues that because
discovery has not yet ended and defendants have already agreed to
produce many of Mr. Bollinger’s documents, defendants will not suffer
prejudice. (Dkt. 43 at 15.) Defendants argue that they will be prejudiced
because they have been “strategically and tactically” proceeding with the
case since 2015 “as if no personal liability was being sought,” and
changing this now would require them to “serve new interrogatories and
requests for documents.”

(Dkt. 45 at 18.)

Further, the amended

complaint would require the parties to conduct more discovery and the
time for identifying lay witnesses has already passed. (Id. at 19.)
Here, although the case has been pending for nearly two years, the
parties have not proceeded past discovery. Fact discovery continues until
October 2017 and expert discovery until February 2018. Thus, even
though defendants may have to issue more interrogatories or change
strategy, they will not be unduly prejudiced given that there is significant
time for them to complete both fact and expert discovery. Moreover,
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although the initial deadline for disclosing lay witnesses has passed, Fed.
R. Civ. P. 16(b)(4) permits the Court to modify the scheduling order,
including to add witnesses, if a party shows good cause. See, e.g., Dunn
ex rel. Albery v. State Farm Mut. Auto. Ins. Co., 724 F. Supp. 2d 701, 707
(E.D. Mich. 2010); Station Enters., Inc. v. Ganz, Inc., Case No. 07-cv14294, 2009 WL 3059148, at *5 (E.D. Mich. Sept. 24, 2009). What the
Federal Rules seek to prevent is a party surprising an opposing party by
disclosing a witness on the eve of trial, not to prevent a party from adding
witnesses whose identities are learned over the course of litigation. Id.
Thus, defendants have not made a “significant showing of prejudice” that
would weigh in favor of denying the motion. Duggins v. Steak ‘N Shake,
Inc., 195 F.3d 828, 834 (6th Cir. 1999); see also Chapman v. Michigan,
Case No. 06-cv-10126, 2007 WL 172537, at *2 (E.D. Mich. Jan. 19, 2007)
(denying motion where plaintiff waited until 17 days before discovery
closed to seek to add a new claim).
Futility
Defendants next argue that plaintiff’s amendment is futile because
Mr. Bollinger cannot be held personally liable under the Copyright Act.
(Dkt. 45 at 20.) Specifically, defendants argue that plaintiff failed to
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allege that they “copied and sold the Instructions for Use (‘IFU’s’) in
connection with [their] product.” Instead, defendant argues that plaintiff
alleges only “some similarity between certain words or phrases in that
IFU with the IFU for the Stork OTC conception aid.” (Dkt. 45 at 20.)
Under the Copyright Act, a corporate officer may be held liable for
copyright infringement under the following conditions:
(1)
the officer personally
participated
in
the
actual infringement; or (2) the officer derived financial
benefit from the infringing activities as either a major
shareholder in the corporation, or through some other means
such as receiving a percentage of the revenues from the
activity giving rise to the infringement; or (3) the officer used
the corporation as an instrument to carry out a
deliberate infringement of copyright; or (4) the officer was the
dominant influence in the corporation, and determined the
policies which resulted in the infringement; or (5) on the basis
of some combination of the above criteria.
Sailor Music v. IML Corp., 967 F. Supp. 565, 569 (E.D. Mich. 1994)
(quoting Marvin Music Co. v. BHC Ltd. P’ship, 830 F. Supp. 651, 654–55
(D. Mass. 1993)); see also Bridgeport Music, Inc. v. Rhyme Syndicate
Music, 376 F.3d 615, 621 (6th Cir. 2004); Innovation Ventures, L.L.C. v.
Aspen Fitness Prods., Inc., Case No. 11-cv-13537, 2015 WL 11071470, at
*16 (E.D. Mich. 2015).
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Here, plaintiff alleges that Mr. Bollinger was “personally involved
in the development of Defendants’ products and instructions; in
Defendants’ use of Plaintiff’s copyright; and in marketing and promoting
Defendants [sic] Products.” (Dkt. 43 at 23.) Further, Mr. Bollinger is the
founder, CEO, and president of defendant organizations, (id. at 4), and
he “personally directed the Defendants to engage in the alleged activities
. . . and specifically directed its employees to do so.” (Id. at 5.) Plaintiff
also alleges that he “directed and controlled, and continues to direct and
control, Defendants’ sales of THE STORK OTC Home Conception Device
into Michigan,” (Dkt. 43-2 at 4), that all defendants “have financially
profited from their infringement,” (id. at 14), and that the allegedly
infringing warnings were “in the documentation included with THE
STORK OTC HOME CONCEPTION DEVICE.” (Id. at 10.)
Taking these allegations as true, plaintiff has sufficiently alleged a
claim for personal liability against Mr. Bollinger. The proposed second
amended complaint alleges (1) that he “personally directed” defendants
and employees to infringe plaintiff’s copyright, and (2) that he and the
corporate entities financially benefited from the sale of the infringing
items. And defendants’ argument that the proposed second amended
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complaint does not indicate that the infringing manual was sold with
defendants’ products fails to consider the proposed complaint as a whole.
As set forth above, plaintiff alleged (1) that Mr. Bollinger directed and
controlled sales of THE STORK OTC in Michigan, and (2) that the
infringing instructions were included with the product. These allegations
are sufficient to reasonably infer that the infringing manual was sold
with the product. Accordingly, plaintiff’s claim is not futile.
Personal Jurisdiction
Defendants argue that the Court lacks personal jurisdiction over
Mr. Bollinger.
In the Sixth Circuit, “personal jurisdiction over a defendant exists
if the defendant is amenable to service of process under the [forum]
state’s long-arm statute and if the exercise of personal jurisdiction would
not deny the defendant due process.” Bird v. Parsons, 289 F.3d 865, 871
(6th

Cir.

2002)

(internal

quotation

and

citation

omitted).

“Personal jurisdiction can be either general or specific, depending upon
the nature of the contacts that the defendant has with the forum state.”
Id.

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MICH. COMP. LAWS § 600.701 provides for general personal
jurisdiction over an individual if “any of the following relationships”
exists: (1) presence in the state at the time when process is served; (2)
domicile in the state at the time when process is served; or (3) consent.”
Mr. Bollinger’s contacts with Michigan, as alleged by plaintiff, do
not satisfy any of these statutory requirements. Accordingly, the Court
lacks general personal jurisdiction over him.
MICH. COMP. LAWS § 600.705 provides for limited jurisdiction over
individuals if any of the following relationships exist: (1) transaction of
any business within the state; [or] (2) doing or causing an act to be done,
or consequences to occur, in the state resulting in an action for tort.” 1
“Michigan’s long-arm statute ‘extends to the limits imposed by
federal constitutional due process requirements and thus, the [statutory
and due process inquiries] become one.’” Id. (quoting Mich. Coal. of
Radioactive Material Users, Inc. v. Griepentrog, 954 F.2d 1174, 1176 (6th
Cir. 1992)). And in the Sixth Circuit, to ensure that jurisdiction comports
with due process, “the following three criteria must be met: (1) the
defendant must purposefully avail himself of the privilege of acting in the

1

Additional relationships are listed in the statute but are not relevant here.

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forum state or causing a consequence in the forum state; (2) the cause of
action must arise from the defendant’s activities there; and (3) the acts
or consequences must have a substantial enough connection with the
forum state to make the exercise of jurisdiction reasonable. Neogen Corp.
v. Neo Gen Screening, Inc., 282 F.3d 883, 889–90 (6th Cir. 2002) (quoting
S. Mach. Co. v. Mohasco Indus., Inc., 401 F.2d 374, 381 (6th Cir. 1968)).
Further, where no evidentiary hearing on jurisdiction has been
conducted, the plaintiff “need only make a prima facie showing of
jurisdiction.” Bird, 289 F.3d at 871. 2
Plaintiff alleges that Mr. Bollinger is the “Founder, President, and
CEO of the Corporate Defendant organizations,” and “continues to direct
and control [] Defendants’ sales of THE STORK OTC Home Conception
Device into Michigan.” (Dkt. 42-3 at 4 (para. 10).) Further, Mr. Bollinger
was aware of plaintiff’s proprietary rights and that it was a Michigan
corporation. (Id. at 6 (para. 20).) And plaintiff alleges that Mr. Bollinger

“An evidentiary hearing may be conducted if the district court concludes that the
written submissions have raised issues of credibility or disputed issues of fact which
require resolution.” SFS Check, LLC v. First Bank of Del., 990 F. Supp. 2d 762, 770
(E.D. Mich. 2013) (quoting Amer. Greetings Corp. v. Cohn, 839 F.2d 1164, 1169 (6th
Cir. 1988)). As set forth below, the allegations are not disputed; instead, the parties
dispute whether the allegations are sufficient. Accordingly, the Court declines to
exercise its discretion to hold an evidentiary hearing on this issue.
2

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personally directed the Defendants to engage in the alleged activities . . .
and specifically directed its employees to do so,” and also “was personally
involved in the development of Defendants’ products and instructions; in
Defendants’ use of Plaintiff’s copyright; and in marketing and promoting
Defendants [sic] Products.” (Dkt. 43-2 at 5, 7.)
Taking the allegations as true, plaintiff has sufficiently alleged that
Mr. Bollinger intended to infringe plaintiff’s copyrights through his
participation in developing the instruction manual and his control and
direction of corporate employees. “With that assumption, [Mr. Bollinger]
certainly should have anticipated being haled into court,” and through
this conduct “did, in fact, unfairly injure [a Michigan] corporation.”
Amer. Energy Corp. v. Amer. Energy Ptrs., Case No. 13-cv-886, 2014 WL
1908290, at *10 (S.D. Ohio May 9, 2014). Thus, his contact with Michigan
is “not the result of random, fortuitous, or attenuated contacts, nor the
unilateral activity of another party—it is the result of [Mr. Bollinger’s]
own intentionally tortious conduct purposefully directed to this forum.”
Id. Accordingly, the purposeful availment prong has been met.
Because Mr. Bollinger’s alleged contact with Michigan included
control of or direction to employees to infringe plaintiff’s copyright, the
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cause of action for copyright infringement directly arises from his
contacts with this state. There is therefore a substantial connection or
relationship between Mr. Bollinger’s contacts with Michigan and the
cause of action, which satisfies the second prong of the due process
analysis.
Once the first two prongs are satisfied, “[a]n inference arises that
the third factor is satisfied.” Bird, 289 F.3d at 875 (internal quotation
omitted). Reasonableness is determined by assessing several factors:
“the burden on the defendant, the interest of the forum state, the
plaintiff’s interest in obtaining relief, and the interest of other states in
securing the most efficient resolution of controversies.” Id.
Here, Mr. Bollinger may be burdened by defending in Michigan, but
this burden is diminished by the fact that he is represented by the same
counsel as the corporate defendants. Michigan’s interest in protecting
the business interests of its citizens and corporations and plaintiff’s
legitimate interest in obtaining relief in its home forum also weigh in
favor of jurisdiction. Gen. Motors L.L.C. v. Autel. US Inc., Case No. 14cv-1223357, 2016 WL 1223357, at *6 (E.D. Mich. Mar. 29, 2016). And
“[f]inally, because the defendant[s’] alleged actions targeted intellectual
15

property located in Michigan, no other place would be a more appropriate
forum to afford an efficient resolution of the conflict.”

Id.

Thus,

exercising jurisdiction over Mr. Bollinger is reasonable and satisfies the
due process inquiry.
Accordingly the Court has personal jurisdiction over Mr. Bollinger
with respect to the copyright infringement claims.
Venue
Defendants argue that even if the Court has jurisdiction, this Court
is the improper venue.
Venue in a copyright case is governed by 28 U.S.C. § 1400(a), which
provides for venue “in the district in which the defendant or his agent
resides or may be found.” “The general rule of construction of § 1400(a)
is that a defendant ‘may be found’ in any district where he is subject to
personal jurisdiction or where he may validly be served with process.”
Avanti Press v. Quackenbush, Case No. 13-cv-12185, 2014 WL 12658960,
at *3 (E.D. Mich. Feb. 5, 2014) (quoting Mihalek Corp. v. Michigan, 595
F. Supp. 903, 906 (E.D. Mich. 1984), aff’d, 814 F.2d 290 (6th Cir. 1987)).
In this case, the Court has already determined it has personal
jurisdiction over Mr. Bollinger, and he therefore “may be found” here.
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Accordingly, venue is proper. Brink v. Ecologic, Inc., 987 F. Supp. 958,
965 (E.D. Mich. 1997); Big Guy’s Pinball, LLC v. Lipham, Case No. 14cv-14185, 2015 WL 4209042, at *4 (E.D. Mich. July 10, 2015).
IV.

Conclusion

For the reasons set forth above, plaintiff’s motion to amend (Dkts.
42, 43) is GRANTED.
IT IS SO ORDERED.
Dated: August 15, 2017
Ann Arbor, Michigan

s/Judith E. Levy
JUDITH E. LEVY
United States District Judge

CERTIFICATE OF SERVICE
The undersigned certifies that the foregoing document was served
upon counsel of record and any unrepresented parties via the Court’s
ECF System to their respective email or First Class U.S. mail addresses
disclosed on the Notice of Electronic Filing on August 15, 2017.
s/Shawna Burns
SHAWNA BURNS
Case Manager

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