BTL INDUSTRIES INC v. REJUVA FRESH LLC

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UNITED STATES DISTRICT COURT
DISTRICT OF MAINE
BTL INDUSTRIES, INC., 	)
)
Plaintiff, 	)
)
v. 	) 	No. 1:23-cv-00032-LEW
)
REJUVA FRESH LLC and 	)
POLLY JACOBS, 	)
)
Defendants 	)
DECISION AND ORDER
Plaintiff BTL Industries, Inc., holds patents pertaining to the use of “focused
electromagnetic technology in non-invasive aesthetic body-contouring devices.” 	Am.
Compl. 	¶ 2. 	BTL 	markets 	the 	devices 	under 	various 	trademarks, 	including 	the
“EMSCULPT” and “EMSCULPT NEO” mark. 	Among other claims, BTL alleges that
Defendants Rejuva Fresh LLC and Polly Jacobs infringe its patents by importing, offering
for sale, or selling competing devices that infringe BTL’s patents. Id. ¶ 3.
The matter is before the Court on Defendant Rejuva Fresh LLC’s Motion to Dismiss
Claims of Indirect Infringement (ECF No. 19) and Defendant Polly Jacobs’s Motion to
Dismiss (ECF No. 33). With the former motion, Rejuva Fresh contends that the Amended
Complaint fails to state claims of induced infringement. With the latter motion, Ms. Jacobs
contends that she is not properly made a party defendant because she is protected by the
Rejuva Fresh corporate veil.
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A. 	Motion to Dismiss Claims of Indirect Infringement
Counts I through V of the Amended Complaint assert claims of infringement against
Rejuva Fresh and Polly Jacobs—one count for each patent-in-suit.1 Each count describes
one exemplar claim from each patent by providing each of the claim’s limitations and
alleges that the Rejuva Fresh devices include the limitations of the claim. 	Each count
alleges that Rejuva Fresh and Jacobs necessarily induced infringement by end users
because the basic use and/or the instructed use of the Rejuva Fresh devices infringes at
least one claim of each of the patents-in-suit.
Rejuva Fresh and Polly Jacobs argue that BTL has failed to allege a plausible claim
of induced infringement because it would be unreasonable to infer the existence of (1) pre-
suit knowledge on their part of the patents-in-suit, (2) actions on their part amounting to
encouragement 	of 	direct 	infringement 	by 	others, 	and 	(3) 	specific 	intent 	to 	cause
infringement.
The Patent Act prohibits direct infringement of a patent by providing that “whoever
without authority makes, uses, offers to sell, or sells any patented invention, within the
United States . . . during the term of the patent therefor, infringes the patent.” 	35 U.S.C.
§ 271(a). The Patent Act also provides that “[w]hoever actively induces infringement of a
patent shall be liable as an infringer.” 	Id. § 271(b). 	A claim of induced infringement is
only viable in a case in which there is actual, underlying direct infringement. 	Limelight
Networks, Inc. v. Akamai Techs., Inc., 572 U.S. 915, 925 (2014). “In addition to showing
1 Counts VI through IX assert claims under other statutes and are not at issue for purposes of this motion.
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direct infringement . . . the patentee must also show that the alleged infringer knowingly
induced infringement and possessed specific intent to encourage another’s infringement.”
Niazi Licensing Corp. v. St. Jude Med. S.C., Inc., 30 F.4th 1339, 1351 (Fed. Cir. 2022)
(internal quotation marks omitted). 	Whether the additional requirements of an induced
infringement claim are met is a question of fact. Id.
BTL alleges that Defendants’ promotion of the devices and the provision of
instructions for the devices’ use have resulted in customer use that necessarily amounts to
direct infringement of the identified claims. 	Through a letter dated July 14, 2022, BTL
informed Rejuva Fresh of its contention that the Rejuva Fresh’s devices infringe its patents
and provided Rejuva Fresh with a link to a webpage that publishes BTL’s patents for its
EMSCULPT device. BTL also alleges that marketing and instructional materials created
by Rejuva Fresh not only crib language found in BTL’s materials but also describe the
technology as patented and occasionally even use the EMSCULPT mark.
For purposes of pleading, the Federal Rules of Civil Procedure require “a short and
plain statement of the claim showing . . . entitle[ment] to relief.” Fed. R. Civ. P. 8(a)(2).
To make the requisite showing, the complaint must provide “enough facts to state a claim
to relief that is plausible on its face.” Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007).
Plausible “means something more than merely possible,” Schatz v. Republican State
Leadership Comm., 669 F.3d 50, 55 (1st Cir. 2012), but is “not akin to a probability
requirement.” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (quotation marks omitted). In
applying this standard, the Court will accept all factual allegations as true and consider
whether the facts, along with reasonable inferences that may arise from them, describe a
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plausible, as opposed to merely conceivable, claim. Ocasio-Hernandez v. Fortuno-Burset,
640 F.3d 1, 12 (1st Cir. 2011); Sepúlveda–Villarini v. Dep’t of Educ. of P.R., 628 F.3d 25,
29 (1st Cir. 2010).
Based on my reading of the Amended Complaint, it is plausible that Defendants
knowingly induced infringement and possessed specific intent to encourage customer
infringement through the use of the Rejuva Fresh products. A finding of such knowledge
and intent might be based on either BTL’s July 14, 2022, letter or Defendants’ alleged use
of BTL’s materials, or both. 	The letter plausibly educated Defendants about the alleged
patent infringement to a sufficient degree to support a finding of knowledge and intent.
Moreover, the alleged use of or cribbing of BTL materials plausibly suggests that
Defendants were already aware of and intended to infringe BTL’s patents. 	Defendants’
more technical contentions (Mot. at 6–8) that the inducement claims are undone by the
potential for a customer to use one of their devices “in professional mode” at a “magnetic
flux density” setting (or other setting) falling outside the parameters taught by BTL’s patent
claims can be revisited after discovery, although the contention appears to be an inaccurate
statement of the law.2
B. 	Jacobs’s Motion to Dismiss
Polly Jacobs is the sole member of Rejuva Fresh LLC. Following Rejuva Fresh’s
filing of a corporate disclosure statement so stating, BTL amended its complaint to include
Jacobs as a party defendant. To support the amendment, BTL alleges on information and
2 See Sanofi v. Watson Lab’ys Inc., 875 F.3d 636, 646 (Fed. Cir. 2017); Cleveland Med. Devices Inc. v.
ResMed Inc., No. 22-CV-794, 2023 WL 6389628, at *3 (D. Del. Oct. 2, 2023).
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belief that Jacobs is the “moving, conscious, and active force behind Rejuva Fresh’s
infringing conduct” (Compl. ¶ 46) because she is the sole owner and officer; participates
directly in responding to customer concerns; and exercises exclusive authority over
wholesale purchases, the importation of infringing devices, and the design and content of
promotional and instructional materials. BTL also alleges that Jacobs maintains a personal
residence at Rejuva Fresh’s Ellsworth location. (Id. ¶¶ 46–53.) BTL asserts all nine of its
counts against Jacobs.
Through her Motion to Dismiss, Jacobs argues that the claims must be dismissed as
to her because BTL has not plausibly alleged grounds for piercing the corporate veil.
Jacobs’s Motion to Dismiss (ECF No. 33). 	BTL disagrees, arguing that its allegations
suffice to state plausible claims for relief under the applicable statutes.
“Infringement is a tort and officers of a corporation are personally liable for tortious
conduct of the corporation if they personally took part in the commission of the tort or
specifically directed other officers, agents, or employees of the corporation to commit the
tortious act.” Orthokinetics, Inc. v. Safety Travel Chairs, Inc., 806 F.2d 1565, 1579 (Fed.
Cir. 1986) (internal citation omitted) (patent infringement case). “The cases are legion in
which courts have recognized and imposed personal liability on corporate officers for
participating in, inducing, and approving acts of patent infringement.” 	Id. 	Thus, “a
corporate officer who directs, controls, ratifies, participates in, or is the moving force
behind the infringing activity, is personally liable for such infringement without regard to
piercing of the corporate veil.” Babbit Elecs., Inc. v. Dynascan Corp., 38 F.3d 1161, 1184
(11th Cir. 1994) (trademark case).
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Although the standard for personal liability is easier to meet in these kinds of cases,
it is not a foregone conclusion that the recitation of such language concerning a corporate
officer based on information and belief will suffice for purposes of the plausibility
standard. See, e.g., Segment Consulting Mgmt., Ltd. v. Bliss Nutraceticals, LLC, No. 20-
CV-1837, 2022 WL 252309, at *6 (N.D. Ga. Jan. 27, 2022); Diaz v. Doctors Best Weight
Loss & Wellness Ctr., LLC, No. 21-CV-22386, 2021 WL 4502292, at *7 (S.D. Fla. Oct. 1,
2021); Steven Madden, Ltd. v. Jasmin Larian, LLC, No. 18-CV-2043, 2019 WL 294767,
at *4 (S.D.N.Y. Jan. 22, 2019). Nevertheless, it is at least plausible to infer that a corporate
officer was the “‘moving, active[,] conscious force” behind a company’s infringement
when the officer ‘was either the sole shareholder and employee, and therefore must have
approved of the infringing act, or a direct participant in the infringing activity.’”
Innovation Ventures, LLC v. Ultimate One Distrib. Corp., 176 F. Supp. 3d 137, 155
(E.D.N.Y. 2016) (alteration in original) (quoting Chloe v. Queen Bee of Beverly Hills, LLC,
No. 06-CV-3140, 2011 WL 3678802, at *4 (S.D.N.Y. Aug. 19, 2011)).
The plausibility standard allows for information and belief pleadings to state a
claim. See, e.g., Arista Records LLC v. Doe 3, 604 F.3d 110, 120 (2d Cir. 2010). However,
“[t]he mere fact that someone believes something to be true does not create a plausible
inference that it is true.” In re Darvocet, Darvon, & Propoxyphene Prod. Liab. Litig., 756
F.3d 917, 931 (6th Cir. 2014). 	Information and belief allegations are typically reviewed
with greater favor when “the facts are peculiarly within the possession and control of the
defendant or where the belief is based on factual information that makes the inference of
culpability plausible.” Arista Records, 604 F.3d at 120 (internal citation omitted).
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Based on my review of the Amended Complaint’s allegations, I am persuaded that
it is a plausible inference to draw that Jacobs is the moving, active, conscious force behind
Rejuva Fresh and, by extension, the events that give rise to this action based. 	I base the
finding on her status as the sole shareholder, the evidence that she participates in routine
activity normally expected of a corporate employee, like responding to customer feedback,
and the fact that the extent of her involvement is a mater peculiarly within the possession
of the Defendants. The inference is sufficient to overcome Jacobs’s challenges as to both
direct and indirect claims.
C ONCLUSION
For the reasons set forth above, the Motions to Dismiss (ECF Nos. 19 and 33) are
DENIED.
SO ORDERED.
Dated this 18th day of October, 2023.
/s/ Lance E. Walker
UNITED STATES DISTRICT JUDGE
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