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Tang v. Northpole Ltd.

United States District Court, W.D. Arkansas, Fayetteville Division

April 29, 2016

LARRY TANG PLAINTIFF
v.
NORTHPOLE Ltd. and TOFASCO OF AMERICA, INC. DEFENDANTS NORTHPOLE Ltd. and TOFASCO OF AMERICA, INC. COUNTER-CLAIM PLAINTIFFS
v.
LARRY TANG COUNTER-CLAIM DEFENDANT

MEMORANDUM OPINION AND ORDER

TIMOTHY L. BROOKS Judge

Before the Court are Plaintiff Larry Tang's Amended Motion for Joinder (Doc. 147) and Brief in Support (Doc. 148), Defendant Tofasco of America, Inc.'s ("Tofasco") Response in Opposition (Doc. 158), Tang's Motion to Strike (Doc. 160) and Brief in Support (Doc. 161), and Tofasco's Response in Opposition (Doc. 162). For the reasons stated herein, Tang's Motion for Joinder is GRANTED IN PART AND DENIED IN PART. Tang's Motion to Strike is DENIED AS MOOT.

I. BACKGROUND

This is a patent infringement case involving a patented design for collapsible chairs. While a thorough review of the case's procedural history is unnecessary to contextualize Tang's Motions, it suffices to state that the history is tortured. The case has seen over 160 docket entries, three judges, and a nearly 11-month stay, all over a period of five years. The facts of this case are also somewhat tortured, and do require a detailed recounting.

Tang filed his patent number 6, 322, 138 ("Tang's Patent" or "the Patent") on April 28, 2000, and the United States Patent and Trademark Office ("USPTO") approved it on November 27, 2001. Tang's Patent is for a collapsible patio chair-the kind you might take to a youth sporting event, or bring to a campsite to set up around the fire. Of particular importance is Tang's inclusion of "open connectors" on the upper-front legs of the chair. In short, having open, as opposed to closed, connectors makes the chair easier and safer to operate, and allows for more efficient manufacturing and shipping. In early 2002, Tang's attorney Charles L. Brodsky sent two letters to Northpole Ltd. and Tofasco, respectively, alleging that certain of their products fell within the scope of Tang's Patent. Tang did not file suit to enforce his patent against Northpole and Tofasco until April 28, 2011. At some point during the discovery phase of litigation, Tang began to suspect that another entity associated with Tofasco may have been selling products that infringed upon his Patent. He now seeks to join that entity, Macsports, Inc., to this suit.

The history of Macsports is convoluted and somewhat opaque. Around the same time that Edward Zheng founded Tofasco in 1993, Zheng or his wife, Carol Peng, incorporated an entity named Unity New-Tech, Inc. A few years later, in 1997 or 1998, Zheng and Peng began selling chairs under an entity or brand named Maccabee Sports. This entity or brand eventually became associated with several other entities or brands with names like Mac Kids, Mac Garden, and Mac Home. At some point, the name Maccabee Sports was shortened to Macsports because it is easier to pronounce.

On October 19, 2005, Peng-acting as President and Secretary of Unity New-Tech- filed a Certificate of Amendment of Articles of Incorporation with the California Secretary of State changing the corporation's name to Macsports, Inc.

On April 30, 2009, Peng, in her capacity as President of Macsports, entered into an Asset Purchase Agreement to sell all of Macsports' assets to Highmark Group Limited, a Cayman Islands company ("Highmark"). The director of Highmark at the time was Lin Bi Yu, a/k/a Bi Yu Lin ("Lin")-a relative of Peng's and Zheng's.[1] As part of the Asset Purchase Agreement, Highmark acquired the name "Macsports, Inc." Also per the Agreement, the former Macsports, Inc. changed its name to "MCS Corp." and dissolved within nine months.

Even after being acquired by Highmark, Macsports continues to have a close, if not indistinguishable, relationship with Tofasco. Macsports has no employees; all of its labor and management are supplied by Tofasco. Macsports and Tofasco apparently share the same physical location and facilities. Information tags on chairs sold by Macsports and Tofasco contain both companies' names. Macsports utilizes certain of Tofasco's patents in the chairs it sells. Macsports and Tofasco sell chairs using the same Federal Registration Number. Macsports' registered agent is Gang Peng, who is Peng's brother and a long-term employee of Tofasco's. Finally, Tofasco owns the rights to several Macsports trademarks, which it acquired from the USPTO three years after Macsports' assets were sold to Highmark.

Tofasco contends that it stopped selling the allegedly infringing chairs in 2004, just over six years before Tang filed suit in this Court. Tang suspects that Tofasco, Zheng, and Peng continued to sell the chairs through the Macsports entity thereafter, perhaps in an effort to distance Tofasco from the infringing products. Accordingly, Tang now seeks to have all three added as parties to this suit. He includes Zheng and Peng as individuals under his theory that they may have been operating Macsports as an unincorporated entity, potentially opening themselves up to personal liability.

II. LEGAL STANDARD FOR JOINDER

Tang insists that joinder in this patent infringement case is governed by 35 U.S.C. § 299, which was enacted as part of the Leahy-Smith America Invents Act, Pub. L. 112-29, 125 Stat. 284 (2011). Leahy-Smith was enacted on September 16, 2011- several months after Tang initiated his lawsuit-and does not apply retroactively. See 125 Stat, at 333, § 19(e) (codified as note to 28 U.S.C. § 1295). Thus, instead, joinder in this case is governed by the Federal Rules of Civil Procedure. A party can be joined to an action under either Rule 19 or Rule 20. Rule 19 pertains to required, or compulsory, joinder of parties. Rule 20 pertains to permissive joinder of parties. Because Tang's Motion incorrectly identifies 35 U.S.C. § 299 as the appropriate source of law, it does not explicitly specify whether he is seeking compulsory or permissive joinder. However, the Court finds that his Motion can be reasonably construed as one for permissive joinder under Rule 20. See Doc. 147, U 5 (asserting that "parties that are accused infringers may be joined" under the standard codified at 35 U.S.C. § 299) (emphasis added); In re EMC Corp., 677 F.3d 1351, 1355-56 (Fed. Cir. 2012) (treating 35 U.S.C. § 299 and Fed.R.Civ.P. 20 as corollaries).

Pursuant to Rule 20, defendants may be joined in one action if: "(A) any right to relief is asserted against them jointly, severally, or in the alternative with respect to or arising out of the same transaction, occurrence, or series of transactions or occurrences; and (B) any question of law or fact common to all defendants will arise in the action." Fed.R.Civ.P. 20(a)(2). "The purpose of [Rule 20] is to promote trial convenience and expedite the final determination of disputes, thereby preventing multiple lawsuits." Mosley v. Gen. Motors Corp., 497 F.2d 1330, 1332 (8th Cir. 1974). Thus, "all logically related events ...


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