UNITED STATES DISTRICT COURT 

SOUTHERN DISTRICT OF OHIO 

WESTERN DIVISION 

COPPERHEAD INDUSTRIAL INC. 

AND JEC DISTRIBUTORS, INC. 

 Plaintiffs, 1:17cv609 

v. 

 

G.E. SCHMIDT, INC. AND Judge Dlott 

KYOKUTOH CO., LTD., Magistrate Judge Bowman 

 Defendants. 

ORDER 

 This matter is before the Court pursuant to Defendants’ motion for partial judgment 

on the pleadings (Doc. 56) and Plaintiffs’ motion for leave to amend the complaint (Doc. 

60). Both motions are fully briefed, including Plaintiffs’ Notice of Supplemental Authority 

and Defendants response there to, and are ripe for decision. This case has been referred 

to the undersigned pursuant to 28 USC §636. (See Doc. 26). 

Defendants move to dismiss Plaintiff JEC Distributors Inc. (“JEC”) and all claims 

that it brings from this action. As this court previously mentioned in a footnote in a prior 

Report and Recommendation, the current complaint alleges only that JEC is a “nonexclusive licensee” of the asserted patents – which, Defendants’ argue, means JEC lacks 

standing to bring its claims. This Court all but invited Defendants to raise the standing 

issue by stating, “the parties may wish to revisit the question of JEC’s standing at a later 

point in the litigation.” (See Doc. 31, FN6). Defendants then raised JEC’s lack of standing 

as an affirmative defense in its answer and then subsequently filed this motion arguing 

that JEC suffers from no legal injury from infringement. Defendants rely on Ortho 
2

Pharmaceutical Corp. v. Genetics Institute, Inc., 52 F.3d n 1026 (Fed. Cir. 2005) and 

Morrow v. Microsoft Corp., 499 F.3d 1332 (Fed. Cir. 2007) to support their argument. 

Defendants are correct. As alleged in the original complaint, JEC does not have standing. 

However, in response to Defendants’ motion for partial judgement on the pleadings, 

Plaintiffs have moved for leave to file its first amended complaint.1 

Rule 15(a) of the Federal Rules of Civil Procedure provides that “[t]he court should 

freely give leave [to amend] when justice so requires.” Fed. R. Civ. P. 15(a)(2). Rule 15 

reinforces “the principle that cases ‘should be tried on their merits rather than the 

technicalities of pleadings.’” Moore v. City of Paducah, 790 F.2d 557, 559 (6th Cir. 1986) 

(quoting Tefft v. Seward, 689 F.2d 637, 639 (6th Cir.1982)). The grant or denial of a 

request to amend a complaint is left to the broad discretion of the trial court. Gen’l Elec. 

Co. v. Sargent & Lundy, 916 F.2d 1119, 1130 (6th Cir. 1990). In exercising this discretion, 

the trial court may consider such factors as “undue delay, bad faith or dilatory motive on 

the part of a movant, repeated failure to cure deficiencies by amendments previously 

allowed, undue prejudice to the opposing party by virtue of allowance of the amendment 

[and] futility of the amendment[.]” Foman v. Davis, 371 U.S. 178, 182 (1962). See also 

Brumbalough v. Camelot Care Ctrs., Inc., 427 F.3d 996, 1001 (6th Cir. 2005). 

                                                             1 Of note, there is related litigation in the Northern District of Alabama between the same Plaintiffs in 

this case and Changer & Dresser, Inc. (“C&D”), a subsidiary of Defendant Kyokutoh Co. In the NDAL 

case, the Judge dismissed JEC’s claims for lack of standing. See 0021526706 Ontario Ltd. v. Changer & 

Dresser, Inc., 1:18-cv-01228, 2019 WL 339177 (N.D. Ala. Jan. 28, 2019). However, after a review of the 

briefs in that case, it is apparent to this Court that neither party focused on the “non-exclusive licensee” 

issue but instead C&D was seeking to have Cooperhead dismissed for lack of standing for reasons that 

this Court previously denied. In the NDAL case, Plaintiffs had already filed their fifth amended complaint 

and did not seek leave to further amend as has been done in this matter. Furthermore, JEC has recently 

filed a motion for leave to file a (sixth) amended complaint to rejoin JEC as a Plaintiff in the NDAL case. 

(Id. at Doc. 149, filed August 22, 2019). 
3

“Amendment of a complaint is futile when the proposed amendment would not 

permit the complaint to survive a motion to dismiss.” Miller v. Calhoun Cnty., 408 F.3d 

803, 817 (6th Cir. 2005). To survive a motion to dismiss, a complaint must contain 

sufficient factual allegations to state a claim that is plausible. Ashcroft v. Iqbal, 556 U.S. 

662 (2009); Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 570. 

Plaintiffs now argue that the allegations set forth in the first amended complaint 

are sufficient to show that JEC does, in fact, have standing. The Court agrees. Plaintiffs 

ask to amend their complaint to allege that JEC has a non-written license with its related 

entity Copperhead thereby requiring the Court to “look to the parties’ intentions and the 

realities of their arrangement to determine whether the licensee maintains sufficient rights 

over the patents-in-suit.” (Doc. 60, PageID 1820-1821, 1847). Plaintiffs propose to allege 

that one person, Giuseppe Ruggiero, owns and controls both JEC and Copperhead and 

that the relationship between the two corporations is “an extremely close one.” (Id. at 

PageID 1822, 1844). They further propose to allege that “JEC is the only party authorized 

to practice the patented invention in the United States, and has always been the sole 

licensee of the patents-in-suit” and that “Copperhead intended to grant JEC all rights 

needed to make, use and sell the patented products in the United States.” (Id. at PageID 

1823, 1847-1848). 

In response, Defendants argue that the amendment is futile, is too late, is 

prejudicial and is brought in bad faith. Defendants argue Copperhead has the ability to 

grant a license to others and therefore JEC lack’s standing. However, the proposed 

allegations state otherwise. Defendants argue that prior to this litigation being filed 

Copperhead had offered to grant a license to Defendants thereby demonstrating that JEC 
4

was not the exclusive licensee of the patents-in-suit. The weakness in this argument is 

two-fold. First, there is evidence that Defendants were, in fact, negotiating with Mr. 

Ruggiero on behalf of JEC. (See Doc. 65-6, PageID1949). Second, the amended 

complaint alleges that Mr. Ruggiero is the decision maker for both Copperhead and JEC. 

Thus, in contemplating any agreement that Copperhead would make in regards to a 

licensee, it is alleged that it was done so with the consent and knowledge of JEC. 

In addition, Defendants argue that Mr. Ruggiero’s deposition testimony contradicts 

the proposed allegations and his “unsupported declaration.” Mr. Ruggiero testified in his 

deposition that JEC was a nonexclusive licensee. However, a review of the entire 

deposition transcript shows that Mr. Ruggiero was “getting confused.” At a hearing in the 

Alabama action the Court asked Plaintiffs’ counsel to confirm that JEC is a non-exclusive 

licensee. (See Doc. 65, PageID 1883). Counsel responded by stating “there’s a question 

about that” but then ultimately does confirm that there is no written agreement prohibiting 

Copperhead from granting a license to an entity other than JEC. (emphasis added). The 

Court is not permitted to make credibility determinations at this stage. 

Although this case has been pending for two years, the Court does not find that 

Plaintiffs unduly delayed in requesting leave to amend. It was not until September of last 

year that an answer was finally filed, with an amended answer being filed in October, 

2018. The motion to amend the complaint was filed in March, only in response to 

Defendants’ motion for judgment on the pleadings. Defendants argue that the proposed 

amended complaint would be prejudicial because if JEC remains a Plaintiff its potential 

exposure increases. However, that is not a relevant factor for the court to consider at this 

time. The theory of Plaintiffs’ case has not changed and the opportunity for Defendants 
5

to pursue discovery on the issue of the license agreement has been known to Defendants 

for quite some time, and in fact, Mr. Ruggiero was asked about it his disposition. However, 

should additional discovery be necessary, the Court will permit it . 

Thus, for the reasons set forth above, the Court hereby GRANTS, Plaintiffs’ motion 

for leave to amend their complaint. (Doc. 60). Plaintiffs shall, within 7 days, electronically 

file the amended complaint as a stand-alone document. Defendants’ motion for judgment 

on the pleadings (Doc. 56) is hereby DENIED as MOOT in light of the granting of Plaintiffs’ 

motion for leave to file an amended complaint.2 

IT IS SO ORDERED. 

 

 s/Stephanie K. Bowman 

 Stephanie K. Bowman 

 United States Magistrate Judge 

                                                            

2 See Yates v. Applied Performance Techs, Inc., 205 F.R.D. 497, 499 (S.D.Ohio 2002)(the amended complaint will

supersede the original complaint and render pending motion moot).