THE LAW OFFICES OF _____________

 

Lawyers for Defendant,

ABC.

 

 

UNITED STATES DISTRICT COURT

CENTRAL DISTRICT OFCALIFORNIA

 

XYZ

Plaintiffs,

 

v.

 

ABC

Defendants.

 

Case No.:

 

 

Before the Honorable __________

United States District Judge

 

DEFENDANT ABC’s MOTION TO DISMISS FOR FAILURE TO STATE A CLAIM (F.R.Civ.P. 12(b)(6)) AND MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT THEREOF

 

 

 

Pursuant to Rule 12(b)(6) of the Federal Rules of Civil Procedure (“Rule”), Defendant ABC (“ABC”) moves the Court for an Order dismissing the _____, 2011 Complaint (“Complaint”) of Plaintiffs XYZ (“Plaintiffs”) for failure to state a claim upon which relief may be granted.

 

 

Table of Contents

I.          Introduction …………………………………………………………………………………………….

II.         Plaintiffs’ Pleadings ………………………………………………………………………………….

III.       Argument ………………………………………………………………………………………………..

A.        Legal Standard For a Rule 12(b)(6) Motion ………………………………………

B.        Plaintiffs’ Complaint Fails to Satisfy the Pleading Standards of Iqbal ………

IV.       Conclusion ……………………………………………………………………………………………….

Table of Authorities

Ashcroft v. Iqbal, ‑‑‑U.S. ‑‑‑‑, 129 S.Ct. 1937, 1949, 173 L.Ed.2d 868 (2009) …………….

Bell Atl. Corp. v. Twombly, 550U.S. 544, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007) ……..

Cal. Inst. of Computer Assisted Surgery, Inc. v. Med-Surgical Servs., 2010 U.S. Dist. LEXIS 80599 (N.D. Cal. Aug. 3, 2010) ……….

DSU Med. Corp. v. JMS Co., 471 F.3d 1293 (Fed. Cir. 2006) ……..

Elan Microelectronics Corp. v. Apple, Inc., 2009U.S. Dist. LEXIS 83715 (N.D.Cal. Sept. 14, 2009) …………

Fujitsu Ltd. v. Belkin Int’l, Inc., 2011U.S. Dist. LEXIS 34076 (N.D.Cal. Mar. 29, 2011) …

Halton Co. v. Streivor, Inc., 2010 U.S. Dist. LEXIS 50649 (N.D. Cal. May 21, 2010) …..

Hewlett-Packard Co. v. Intergraph Corp., 2003U.S. Dist. LEXIS 26092, (N.D.Cal. Sept. 6, 2003) ……………

Lucent Techs. v. Gateway, Inc., 580 F.3d 1301 (Fed. Cir. 2009) ……..

Sharafabadi v. Pac. Northwest Farmers Coop., Inc., 2010 U.S. Dist. LEXIS 24212 (W.D. Wash. Feb. 22, 2010) …………

View Eng’g, Inc. v. Robotic Vision Sys., 208 F.3d 981 (Fed. Cir. 2000) ……

Vita-Mix Corp. v. Basic Holding, Inc., 581 F.3d 1317 (Fed. Cir. 2009) ……….

 

F.R.Civ.P. 12(b)(6) …………………………………………………………………………………………………

35 U.S.C. ‘271 ………………………………………………………………………………………………………

 

I.          INTRODUCTION

Plaintiffs= Complaint alleges that ABC infringes one or more claims of United States Patents No. 0,000,123 (“’123 patent”), 0,000,456 (“’456 patent”), and 0,000,789 (“’789 patent”) by  “manufacturing, using, selling or offering to sell, importing, selling for importation, and/or importing components to assemble widgets.”  See Complaint, & 42.
Plaintiffs’ Complaint further alleges that ABC infringes United States Patent No. D000,111 (“D’111 patent”) by “manufacturing, using, selling or offering to sell, importing, selling for importation, and/or importing components to assemble Widgets as shown and described in the D’111 patent.”  See Complaint, & 44.

Plaintiffs’ Complaint further alleges that ABC has actively and knowingly aided and abetted direct infringement of these patents by un-named third parties (See Complaint, & 49).

These allegations, as well as the others in the Complaint, fail to state a claim upon which relief can be granted.

Plaintiffs have failed to identify a single accused product by model name or number.  They have failed to specify any claim of any asserted patent.  They have failed to specify which third parties ABC allegedly induced to infringe the asserted patents, and they have failed to identify which products, methods, or systems ABC sells or has sold “are especially adapted for uses that are prohibited by” the patents.  See Complaint, & 59.  Further, they have failed to sufficiently plead that ABC was on notice of the asserted patents or that ABC had the specific intent to encourage another’s infringement.

Plaintiffs’ infringement allegations are generic and universal — identical for each Defendant, even though the Defendants have distinct products.

Lacking factual allegations legally sufficient to provide a basis for a claim of patent infringement, Plaintiffs’ Complaint fails to state a claim upon which relief may be granted and, therefore, must be dismissed.

 

 

II.        PLAINTIFFS’ PLEADING

Plaintiffs= Complaint contains numerous conclusory paragraphs relevant to its patent infringement claims against all Defendants (24, 41, 42, 43, 44, 45, 49, 50, 53, 54, 56, 57, 59, and 63), set forth here:

24.       XYZ is informed and believes, and on that basis alleges, that Defendants manufacture Widgets in facilities in foreign countries and import their Widgets into the United States for sale throughout, manufacture Widgets in facilities in the United States and sell those Widgets throughout, and/or import Widget components into the United States for assembly and then sale throughout this country. XYZ is informed and believes, and on that basis alleges, that Defendants’ Widgets are also sold by third party retailers throughout theUnited Statesafter importation, manufacture, and/or assembly.

41.       Defendants have manufactured, used, sold or offered to sell, imported, sold for importation, and/or imported components to assemble Widgets that infringe each of the elements of one or more claims of the ‘123, ‘456, and/or’ 789 patents, without license from XYZ, in this judicial district and elsewhere throughout the United States.

42.       By manufacturing, using, selling or offering to sell, importing, selling for importation, and/or importing components to assemble Widgets that [perform specified acts] on Widgets, Defendants have directly infringed, and will continue to infringe of, one or more claims of the ‘123, ‘456, and/or ‘789 patents under 35 U.S.C. § 271(a).

43.       Defendants have manufactured, used, sold or offered to sell, imported, sold for importation, and/or imported components to assemble Widgets that infringe the D’111 patent, without license from XYZ, in this judicial district and elsewhere throughout the United States.

44.       By manufacturing, using, selling or offering to sell, importing, selling for importation, and/or importing components to assemble Widgets that employ the ornamental design as shown and described in the D’111 patent, Defendants have directly infringed, and  will continue to infringe the D’111 patent under 35 U.S.C. § 271(a).

45.       As a direct and proximate result of Defendants’ direct patent infringement of the ‘123, ‘456, ‘789, and D’111 patents, XYZ has sustained and continues to sustain damages in an amount to be proven at trial.

49.       XYZ is informed and believes, and on that basis alleges, that Defendants have actively and knowingly aided and abetted direct infringement of the ‘123, ‘456, ‘789 and D’111 patents by third parties.

50.       XYZ is informed and believes, and on that basis alleges, that Defendants either perform the steps contained in one or more claims of the ‘123, ‘456, and/or ‘789 patents and the D’111 patent, or exercise control or direction over the performance of those steps such that every step is attributable to Defendants.

53.       Defendants have actively induced infringement of the ‘123, ‘456, ‘789 and D’111 patents. Defendants exercise control and/or discretion over third parties who perform one or more steps of the methods claimed in the ‘123, ‘456, ‘789 and/or D’111 patents, and are therefore liable as infringers under 35 U.S.C. § 271(b).

54.       As a direct and proximate result of Defendants’ active inducement of patent infringement of the ‘123, ‘456, ‘789, and D’111 patents, XYZ has sustained and continues to sustain damages in an amount to be proven at trial.

56.       By manufacturing, using, selling or offering to sell, importing, selling for importation, and/or importing components to assemble Widgets with the features described in paragraphs 24 through 39 above, Defendants have sold to its customers a component especially designed for use in a patented combination or process.

57.       XYZ is informed and believes, and on that basis alleges, that in addition to the products, methods, and/or systems, referred to in paragraphs 24 through 39 above, Defendants have sold Widgets with instructions, directions, and advice regarding infringing uses.

59. Defendants know and have reason to know that the products, methods, and/or systems they sell and have sold to their customers, as referred to in paragraphs 24 through 39 above, are especially adapted for uses that are prohibited by the ‘123, ‘456, ‘789, and D’111 patents.

63.       As a direct and proximate result of Defendants’ contributory patent infringement of the ‘123, ‘456, ‘789, and D’111 patents, XYZ has sustained and continues to sustain damages in an amount to be proven at trial.

 

Plaintiffs= Complaint contains only two paragraphs specific to its patent infringement claims against ABC:

32.       XYZ is informed and believes, and on that basis alleges, that ABC sells for importation, imports or sells after importation into the United States, Widgets that [have certain features] that restrict access to data on Widgets.

33.       XYZ is informed and believes, and on that basis alleges, that ABC is making, importing into the United States, selling for importation into the United States, and/or selling after importation into the United States, Widgets that employ the ornamental design for a portable data storage device as shown and described in the D’111 patent.

 

However, these “specific” allegations are also made against other Defendants, who sell different products.

 

III.      ARGUMENT

A.        LEGAL STANDARD FOR A RULE 12(b)(6) MOTION

Rule 12(b)(6) provides that Aa party may assert the following defenses by motion: … (6) failure to state a claim upon which relief can be granted.@  ABC brings this Motion under Rule 12(b)(6) challenging the sufficiency of Plaintiffs= Complaint.

According to Rule 8(a), a well-pled complaint must contain a Ashort and plain statement of the claim showing that the pleader is entitled to relief@.  In its 2007 decision, Bell Atl. Corp. v. Twombly, 550 U.S. 544, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007), leading up to the now-renowned Ashcroft v. Iqbal,  ‑‑‑ U.S. ‑‑‑‑, 129 S.Ct. 1937, 173 L.Ed.2d 868 (2009) decision, the Supreme Court held that a complaint must state Aenough facts to state a claim to relief that is plausible on its face.@  Twombly, 550 U.S. at 570 (emphasis added).  In Iqbal, the Supreme Court revisited Twombly and elaborated on the facial plausibility requirement:

As the Court held in Twombly, the pleading standard Rule 8 announces does not require Adetailed factual allegations,@ but it demands more than an unadorned, the‑defendant‑unlawfully‑ harmed‑me accusation.  A pleading that offers Alabels and conclusions@ or Aa formulaic recitation of the elements of a cause of action will not do.@  Nor does a complaint suffice if it tenders Anaked assertion[s]@ devoid of Afurther factual enhancement.@  To survive a motion to dismiss, a complaint must contain sufficient factual matter, accepted as true, to Astate a claim to relief that is plausible on its face.@  A claim has facial plausibility when the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged.  The plausibility standard is not akin to a Aprobability requirement,@ but it asks for more than a sheer possibility that a defendant has acted unlawfully.  Where a complaint pleads facts that are Amerely consistent with@ a defendant’s liability, it Astops short of the line between possibility and plausibility of Aentitlement to relief.@

Iqbal , 129 S.Ct. at 1949 (internal citations omitted).

The Supreme Court articulated a two‑step process for determining whether a complaint meets this plausibility standard.  First, the court identifies allegations that are not entitled to an assumption of truth, because they are no more than conclusions.  Id., 129 S.Ct. at 1951.  AThreadbare recitals of the elements of a cause of action, supported by mere conclusory statements, do not suffice.@  Although the pleading requirements of Rule 8 mark Aa notable and generous departure from the hyper‑technical, code‑pleading regime of a prior era … it does not unlock the doors of discovery for a plaintiff armed with nothing more than conclusions.@  Id., 129 S.Ct. at 1950.

Second, where well‑pled factual allegations are found, the court should assume their truth and then determine whether they plausibly give rise to an entitlement to relief.  Id., 129 S.Ct. at 1951.

 

B.        PLAINTIFFS= COMPLAINT FAILS TO SATISFY THE PLEADING STANDARDS OF IQBAL

The allegations of Plaintiffs= Complaint are virtually identical to those found deficient in  Halton Co. v. Streivor, Inc., 2010 U.S. Dist. LEXIS 50649 (N.D. Cal. May 21, 2010)The complaint in Halton included claims which the defendant moved to dismiss pursuant to Rule 12(b)(6), as follows :

11. On information and belief, during the term of the >421 Patent, Streivor has infringed and continues to infringe; has contributorily infringed and continues to contributorily infringe; and/or has induced and continues to induce others to infringe one or more claims of the >421 Patent.  Streivor=s infringing activities in the United States and in this District include making, using, selling and/or offering to sell commercial kitchen products with exhaust hoods, including, but not limited to, Wall Canopy Box Design Hoods with Smart Aire.

 

12. In April 2009, Halton provided Streivor with actual written notice of the ‘421 Patent and Streivor’s infringing activity, and demanded that Streivor cease and desist from infringing the ‘421 Patent.

13. Streivor has intentionally and willfully infringed the >421 Patent and continues to intentionally and willfully infringe the >421 Patent.

Id. 

Plaintiffs= Complaint suffers from more serious defects than those at issue in Halton.  Both the Halton complaint and Plaintiffs=s Complaint rely on conclusory allegations, on Ainformation and belief,@ mimicking the statutory language (Amaking, using,@ etc.), naming general product types (Acommercial kitchen products with exhaust hoods@ in Halton and “Widgets@ here), but otherwise failing to set forth allegations legally sufficient to state a claim of patent infringement.

Similarly, in the HP case, the court found a lack of the required specificity:

 

Here, the complaint simply alleges:[Defendant], in violation of 35 U.S.C. § 271, has been and is currently infringing, contributorily infringing, or inducing infringement of [the patents-in-suit] by, among other things,  making, using, offering to sell and/or selling infringing software and hardware products without authority or license from [Plaintiff]….
However, Defendant “produces some 150 core technology platforms which are implemented in over 4000 end-user application products.” See Motion to Dismiss or For a More Definite Statement (“Motion”) at 7:15-17. In light of these facts, Plaintiff’s claim must be read as follows: one or more of Defendant’s 4000-plus products directly infringes, contributorily infringes, or induces infringement of at least one claim in each of the patents-in-suit. Form 16 simply does not address a factual scenario of this sort. Not only is the example in Form 16 limited to a single “type” of product (i.e., electric motors) there is no indication as to the number of different electric motors the hypothetical defendant made, sold, or used. In this case, there are at least 150 different “types” of products (i.e. core technology platforms) with more than 4000 end-user applications. Based on these facts, the Court finds that Plaintiff’s allegations do not provide Defendant with “fair notice” of what Plaintiff’s claim  or claims are and, therefore, fail to satisfy Rule 8(a)(2). See Conley, 355U.S. at 47-48 (1957). n2
Hewlett-Packard Co. v. Intergraph Corp., 2003U.S. Dist. LEXIS 26092, 5-7 (N.D.Cal. Sept. 6, 2003)

Here, ABC produces over 100 models of Widgets and the other defendants produce at least 500.   The Complaint provides no guidance as to which of these devices allegedly infringe which claims of which patents-in-issue and thus ABC and the other defendants have no “fair notice” of Plaintiff’s claims.

Other District Court decisions have reached the same results where a patent infringement claim is pled sparely.  See, e.g.Elan Microelectronics Corp. v. Apple, Inc., 2009 U.S. Dist. LEXIS 83715 (N.D. Cal. Sept. 14, 2009).

In Elan, the Court found that Defendant Apple=s patent infringement counterclaim was so lacking in Aat least some facts as to why it is reasonable to believe there is infringement,@ that the plaintiff was left to speculate or guess as to what Apple=s claim implicated.  Id.

In addition, Plaintiffs must specify not only the products that allegedly infringe, but also how those products or services allegedly infringe the specific claims of the patents-in-suit.

In Cal. Inst. of Computer Assisted Surgery, Inc. v. Med-Surgical Servs., 2010 U.S. Dist. LEXIS 80599 (N.D. Cal. Aug. 3, 2010), the complaint alleged that defendant

has and continues to directly infringe, contributorily infringe, and/or induce the infringement of [the patents] by making, using, offering to sell, licensing, and/or selling products, systems, and/or processes that are covered by the claims of the inventions contained in [the patents]. Specifically, Med-Surgical’s use of CBYON Systems infringes on one or more of the claims of [the patent].

Id.  The court noted that

Plaintiff’s complaint merely reiterates the bare elements of patent infringement. It fails to allege with any specificity what CBYON systems is and how it infringes upon any of its four patents. Because it fails to provide the factual grounds on which its infringement claims rest, it does not state a legally cognizable claim. Defendant’s motion to dismiss is, therefore, granted.

Id.  Here, generic references to “Widgets” are even less specific than “CYBON systems,” and Plaintiffs have provided no details on what patent claims ABC has allegedly infringed or in what way it has infringed such claims.
Plaintiffs’ Rule 11 pre-filing obligations required Plaintiffs to “apply the claims of each and every patent that is being brought into the lawsuit to an accused device and conclude that there is a reasonable basis for a finding of infringement of at least one claim of each patent so asserted.”  View Eng’g, Inc. v. Robotic Vision Sys., Inc., 208 F.3d 981, 986 (Fed. Cir. 2000).  They have failed to demonstrate the results of this analysis by setting forth a single such claim or identifying a single specific accused device.

In addition to their claims of direct patent infringement, Plaintiffs also claim indirect infringement.  A claim of indirect patent infringement may be predicated on either infringement by inducement or contributory infringement.  Sharafabadi v. Pac. Northwest Farmers Coop., Inc., 2010 U.S. Dist. LEXIS 24212 (W.D. Wash. Feb. 22, 2010).

With respect to infringement by inducement, A[i]nducement requires a showing that the alleged inducer knew of the patent, knowingly induced the infringing acts, and possessed a specific intent to encourage another’s infringement of the patent.@  Vita‑Mix Corp. v. Basic Holding, Inc., 581 F.3d 1317, 1328 (Fed.Cir.2009), emphasis added.

With respect to contributory infringement, Ain addition to proving an act of direct infringement, plaintiff must show that defendant >knew that the combination for which its components were especially made was both patented and infringing= and that defendant=s components >have no substantial non‑infringing uses.= @  Lucent Techs., Inc. v. Gateway, Inc., 580 F.3d 1301, 1320 (Fed.Cir.2009) (quoting Cross Med. Prods., 424 F.3d at 1312), emphasis added.

But it is not enough to allege that ABC “knew” of the patents.  In fact, it is not enough even to say that the Plaintiffs gave ABC notice of the patents (which they do not allege in the Complaint):

D-Link Systems  and ZyXEL U.S.also argue that Fujitsu’s  complaint fails to properly allege specific intent. As support that it has pled specific intent, Fujitsu  relies on Kilopass Tech. Inc. v. Sidense Corp., No. C 10-02066, 2010 U.S.Dist. LEXIS 136345, 2010 WL 5141843, at *4 (N.D. Cal.Dec. 13, 2010). In that case, however, the plaintiffs complaint alleged that the defendant had been aware of the patents at issue at a specific time, which was years before the plaintiff filed the lawsuit. Id. Here, Fujitsu  has only alleged in conclusory terms that the defendants have received notice of the patents. Thus, the allegations in Fujitsu’s  complaint do not rise to the level of specificity of those pled in the complaint at  [*66] issue in Kilopass. At the hearing, Fujitsu’s  counsel suggested that it was aware of an approximate time when D-Link Systems  and ZyXEL U.S. became aware of the Ozawa Patent. Without including such allegations in its complaint, Fujitsu  did not put D-Link Systems  and ZyXEL U.S. on notice of the basis for its induced infringement claims against them. Accordingly, Fujitsu’s  claims for induced infringement against D-Link Systems  and ZyXELU.S. are dismissed with leave to amend.

Fujitsu Ltd. v. Belkin Int’l, Inc., 2011 U.S. Dist. LEXIS 34076, 65-66 (N.D. Cal. Mar. 29, 2011), emphasis added.

In addition, a claim of inducement requires not only knowledge of the patents, and not just intent to cause the acts that produce the alleged infringement, but also the specific intent to cause another’s infringement, which Plaintiffs have not alleged in the Complaint.

In DSU Med. Corp. v. JMS Co., Ltd., 471 F.3d 1293, 1304 (Fed.Cir.2006) (en banc in relevant part), the court held:

Although this court stated “that proof of actual intent to cause the acts which constitute the infringement is a necessary prerequisite to finding active inducement,” Hewlett-Packard, 909 F.2d at 1469, Grokster has clarified that the intent requirement for inducement requires more than just intent to cause the acts that produce direct infringement. Beyond that threshold knowledge, the inducer must have an affirmative intent to cause [**27]  direct infringement. In the words of a recent decision, inducement requires “‘that the alleged infringer knowingly induced infringement and possessed specific intent to encourage another’s infringement.'” MEMC Elec., 420 F.3d at 1378 (Fed. Cir. 2005) (quoting Minn. Mining & Mfg. Co. v. Chemque, Inc., 303 F.3d 1294, 1304-05 (Fed. Cir. 2002)). Accordingly, inducement requires evidence of culpable conduct, directed to encouraging another’s infringement, not merely that the inducer had knowledge of the direct infringer’s activities. Grokster, 125 S. Ct. at 2780; Manville, 917 F.2d at 553.

DSU, 471 F.3d 1293, 1306 (Fed. Cir. 2006), emphasis added.

Plaintiffs have failed to adequately plead any of the elements of indirect infringement.  Plaintiffs have not pled that they gave ABC notice of the patents at issue, nor have they stated even the “approximate time” by which ABC allegedly knew of the patents.  They have not specified the nature of the third party “infringing acts” or “uses.”  They have not alleged that ABC “knowingly induced infringement and possessed specific intent to encourage another’s infringement,” nor have they offered any facts to support such a claim.

Accordingly, for all of the reasons above, Plaintiffs’ infringement allegations against ABC should be dismissed.

 

IV.       CONCLUSION

Plaintiffs= Complaint fails to allege facts sufficient to state a claim for direct patent infringement, active inducement of patent infringement, or contributory patent infringement.

For the reasons stated above, Defendant ABC respectfully requests that the Court issue an Order dismissing Plaintiffs= Complaint.

Respectfully submitted,

Dated:                         ___, 2011                                            THE LAW OFFICES OF _______

 

 

By: _______________________________

Lawyers for Defendant,

ABC