B&P Littleford, LLC v. Prescott Mach., LLC
| Citation | 530 F.Supp.3d 729 |
| Decision Date | 30 March 2021 |
| Docket Number | Case No. 20-CV-13025 |
| Parties | B&P LITTLEFORD, LLC, Plaintiff, v. PRESCOTT MACHINE, LLC, and Ray Miller, Defendants. |
| Court | U.S. District Court — Eastern District of Michigan |
Cristina Almendarez, Benesch, Friedlander, Coplan & Aronoff LLP, Chicago, IL, Deborah J. Swedlow, Sarah E. Waidelich, J. Michael Huget, Honigman LLP, Ann Arbor, MI, Shannon C. Duggan, Honigman LLP, Detroit, MI, for Plaintiff.
Jordan S. Bolton, Clark Hill PLC, Birmingham, MI, Stuart M. Schwartz, Clark Hill PLC, Detroit, MI, for Defendants.
THOMAS L. LUDINGTON, United States District Judge On November 11, 2020, Plaintiff B&P Littleford, LLC filed a complaint against Defendants Prescott Machine, LLC and Ray Miller alleging copyright infringement and violation of the Digital Millennium Copyright Act, 17 U.S.C. §§ 1201 et seq. ("DMCA"), and the Lanham Act, 15 U.S.C. § 1051 et seq. ECF No. 1. On January 19, 2021, Defendants filed a joint motion to dismiss. ECF No. 16. Timely response and reply briefs have been filed. ECF Nos. 23, 24. For the reasons set forth below, Defendants’ Motion to Dismiss will be denied.
Plaintiff B&P Littleford, LLC is a Saginaw-based company that manufactures "a wide variety of high quality, highly engineered equipment for large- and small-scale manufacturing applications such as mixers, dryers, extruders, compounders, kneaders, reaction vessels, Podbielniak Centrifuges, and centrifugal separation equipment."1 ECF No. 1 at PageID.5. Plaintiff's earliest predecessor was Baker Perkins, Inc., which was formed in 1911. Id. at PageID.2. Baker Perkins, Inc., later merged with APV Chemical Machinery, Inc., and from 1987 until 1995, conducted business as "APV." Id. at PageID.2–3. "Through the merger, APV purchased, succeeded to, and retained all of the rights and liabilities of Baker Perkins, Inc., including all of Baker Perkins, Inc.’s assets, contractual obligations, and rights." Id. APV later sold "the assets of [the] chemical machinery business to B&P Process Equipment and Systems, L.L.C., a newly formed Delaware limited liability company with a principal place of business in Michigan." Id. at PageID.3. On January 1, 2017, B&P Process reincorporated as B&P Littleford, LLC, which "succeeded to and retained all the assets, rights, and liabilities of [B&P Process]." Id.
"In order to preserve institutional knowledge and assist vendors and customers," B&P employees created "detailed drawings comprising engineering schematics ... of B&P's devices." Id. at PageID.5. These drawings "are the product of many hundreds of thousands of dollars spent on research and development and thousands of engineering hours." Id. at PageID.6. Plaintiff claims that these drawings "are, by their nature, the subject of copyright protection under the laws of the United States." Id. at PageID.6.
In addition to engineering schematics, the B&P drawings also include certain "copyright management information" ("CMI"), including the name of the author and the owner of the drawing. The CMI appears in a box at the bottom of the drawing. As an example, B&P Drawing 113-945 is reprinted below.
ECF No. 1 at PageID.7. B&P Drawing 113-945 apparently depicts "a planetary support housing, i.e., an exterior case for the specialized planetary gearbox, for a vertical planetary batch mixer."2 Id. Though difficult to read, the CMI at the bottom of the drawing appears to state that the drawing was prepared in 1962, that "Conzelmann" was the author, and that "[the] drawing is the property of Baker Perkins, Inc." Id. at PageID.8. The CMI box is reprinted in greater detail below.
Id. The language on the left side of the CMI box purportedly shows that revisions were made to the drawing in 1964, 1967, 1983, and 1985. Id. at PageID.9.
Defendant Ray Miller's relationship with Plaintiff began in 1991, when he worked as national sales manager for APV. ECF No. 1 at PageID.19. After B&P Process acquired APV's chemical division in 1995, Miller became the President and CEO of B&P Process, as well as a shareholder and board member. Id. While working for Plaintiff, Miller had access to "B&P's drawings from various sources in both their physical (paper and microfilm) and digital file formats." Id. at PageID.20.
Plaintiff terminated Miller's employment in 2008. Id. Shortly thereafter, Miller formed Defendant Prescott Machine, LLC ("Prescott") where he serves as CEO and President. Id. "Prescott now competes directly with B&P in the field of manufacturing equipment for the process industries and aftermarket service of such manufacturing equipment." Id.
This case arises from two events that occurred after Miller and Plaintiff went their separate ways.
In April 2020, one of Plaintiff's vendors, Cambron Engineering, Inc., notified Plaintiff that it had received "a series of drawings from a third party in connection with a request for parts for a vertical planetary batch mixer on behalf of a job for Prescott." Id. at PageID.22. Cambron forwarded the drawings to Plaintiff, which immediately recognized them as "CAD [computer-aided design] copies of its own original hand-drawn drawings for the same parts of its very own mixer, but with title blocks identifying Prescott as owner of the drawings." Id. One of the drawings appeared to be a copy of B&P Drawing 113-945, discussed above.
To illustrate, below is a side-by-side comparison of B&P Drawing 113-945 and Prescott Drawing 411.3017 provided in the Complaint. The highlighting is original to the Complaint and purports to represent similarities between the B&P and the Prescott drawings.
ECF No. 1 at PageID.7, 24. Plaintiff alleges that, in addition to B&P Drawing 113-845, Prescott copied at least three other B&P drawings. See id. at PageID.28–37 (). Like B&P Drawing 113-945, the CMI for the other three B&P drawings indicates that they were prepared by "Conzelmann" in 1962, that "Baker Perkins, Inc." is the owner, and that revisions were made in 1985 (among other years). Id.
The Complaint also contains copyright registrations for the four B&P drawings at issue—all of which state that the drawings were completed in 1962 and that "Baker and Perkins" is the author. See ECF Nos. 1-4, 1-6, 1-8, 1-10.
In October 2020, Plaintiff learned that Prescott had serviced a B&P-manufactured "14 PNM Vertical Mixer" (the "Vertical Mixer"). ECF No. 1 at PageID.16, 46. Plaintiff's predecessor sold the Vertical Mixer in 1977 to Thiokol Corporation. Id. at PageID.16. Sometime in the 1990s, the Vertical Mixer was acquired by the United States Army and moved to the McAlester Army Ammunition Plant in Oklahoma. Id. at PageID.18. When the Vertical Mixer was sold to Thiokol Corporation, the exterior of the machine was equipped with Plaintiff's trademarks, including the Baker Perkins Globe Logo. Id. at PageID.14–18. The Vertical Mixer now bears a Prescott mark where the Baker Perkins logo plate would have been. Id. at PageID.47. Accordingly, Plaintiff claims that Defendants replaced the Baker Perkins logo with the Prescott logo while servicing the Vertical Mixer. Id.
Plaintiff brought this action against Defendants Prescott and Miller on November 12, 2020 seeking damages and injunctive relief.3 ECF No. 1. The Complaint alleges seven counts including copyright infringement (Count I), removal or falsification of copyright management information in violation of the DMCA (Counts II and III), vicarious liability for Miller (Counts IV, V, and VI), and "reverse passing off" in violation of the Lanham Act (Count VII). Id. at PageID.49–58.
Defendants moved to dismiss the Complaint for failure to state a claim on January 19, 2021. ECF No. 16. Timely response and reply briefs have been filed. ECF Nos. 23, 24.
Under Rule 12(b)(6), a pleading fails to state a claim if it does not contain allegations that support recovery under any recognizable theory. Ashcroft v. Iqbal , 556 U.S. 662, 678, 129 S.Ct. 1937, 173 L.Ed.2d 868 (2009). In considering a Rule 12(b)(6) motion, the Court construes the pleading in the non-movants’ favor and accepts the allegations of facts therein as true. See Lambert v. Hartman , 517 F.3d 433, 439 (6th Cir. 2008). The pleader need not provide "detailed factual allegations" to survive dismissal, but the "obligation to provide the ‘grounds’ of his ‘entitle[ment] 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, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007). In essence, the pleading "must contain sufficient factual matter, accepted as true, to state a claim to relief that is plausible on its face" and "the tenet that a court must accept as true all of the allegations contained in a complaint is inapplicable to legal conclusions."
Iqbal , 556 U.S. at 679, 129 S.Ct. 1937 (quotations and citation omitted).
Count I alleges that Defendants infringed on Plaintiff's copyrights by using the B&P drawings to create the Prescott drawings discussed in Section I.A., supra. ECF No. 1 at PageID.49–50. Count IV appears to allege an alternative theory against Miller whereby he would be vicariously liable for Prescott's infringement. Id. at PageID.53–54.
A copyright is a form of intellectual property subsisting "in original works of authorship fixed in any tangible medium of expression," including "pictorial, graphic, and sculptural works." 17 U.S.C. § 101(a). The copyright owner enjoys certain exclusive rights with respect to the copyrighted work, including the right "to reproduce the copyrighted work in copies" and "to prepare derivative works based upon the copyrighted work." Id. § 106. Importantly, the copyright in an original work is typically broader in scope than the copyright in any subsequent derivative work. The copyright in a derivative work "extends only to the...
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