Pagemelding, Inc v. ESPN, Inc.

Filing 38

ORDER GRANTING DEFENDANT'S MOTION TO DISMISS AND VACATING HEARING by Judge William Alsup [granting 13 Motion to Dismiss]. (whasec, COURT STAFF) (Filed on 3/13/2012)

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IN THE UNITED STATES DISTRICT COURT

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FOR THE NORTHERN DISTRICT OF CALIFORNIA
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PAGEMELDING, INC,

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For the Northern District of California

United States District Court

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Plaintiff,

No. C 11-06263 WHA

Defendant.

ORDER GRANTING DEFENDANT’S
MOTION TO DISMISS AND
VACATING HEARING

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v.
ESPN, INC.,
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INTRODUCTION
In this patent infringement action, defendant moves to dismiss for failure to state a claim
upon which relief may be granted. For the reasons stated below, the motion is GRANTED.

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STATEMENT
Plaintiff PageMelding, Inc. is the owner of United States Patent No. 6,442,577.

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The ’577 patent “enables internet service and content providers to form mutually beneficial

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collaborations wherein website content is customized in accordance with those collaborations.”

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Plaintiff contends that defendant ESPN, Inc. has infringed the ’577 patent. Plaintiff asserts that

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examples of defendant’s infringement include but are not limited to defendant’s ESPN3 and

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WatchESPN websites. Plaintiff alleges direct and indirect infringement (Compl. ¶¶ 1–17).

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Defendant now moves to dismiss for failure to state a claim upon which relief may be granted.

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This order follows full briefing.

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ANALYSIS

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“To survive a motion to dismiss, a complaint must contain sufficient factual matter,

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accepted as true, ‘to state a claim to relief that is plausible on its face.’” Ashcroft v. Iqbal,

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129 S.Ct. 1937, 1949 (2009) (quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007)).

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A claim is facially plausible when there are sufficient factual allegations to draw a reasonable

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inference that the defendants are liable for the misconduct alleged. While a court “must take

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all of the factual allegations in the complaint as true,” it is “not bound to accept as true a legal

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conclusion couched as a factual allegation.” Id. at 1949–50.

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DIRECT INFRINGEMENT.

Section 271(a) of the United States Patent Act states that “whoever without authority

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For the Northern District of California

United States District Court

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makes, uses, offers to sell, or sells any patented invention, within the United States or imports

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into the United States any patented invention during the term of the patent therefor, infringes

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the patent.” 35 U.S.C. 271(a).

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Plaintiff alleges that it is the owner of the ’577 patent which “enables Internet service

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and content providers to form mutually beneficial collaborations wherein website content is

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customized in accordance with those collaborations” (Compl. ¶ 4). Plaintiff has identified two

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of defendant’s products — the ESPN3 and WatchESPN websites — as products that infringe the

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’577 patent because “dynamically form[ed] web pages” are found at these locations (id. at ¶ 15).

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Defendant contends that plaintiff’s claim for direct infringement is insufficient because

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it fails to “identify with any meaningful specificity the particular methods or products that are

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accused of infringement” and fails to provide in any detail “what the ’577 patent is supposed to

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cover, or identify any specific methods or products of ESPN that are alleged to be within the

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scope of the ’577 patent’s claims” (Br. 2).

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In opposition to defendant’s motion, plaintiff places great weight on the fact that its

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pleading is in compliance with Rule 84 and Form 18. Rule 84 states that the “forms in the

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Appendix suffice under these rules and illustrate the simplicity and brevity that these rules

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contemplate.” Plaintiff contends that it has sufficiently pleaded direct infringement using

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Form 18 (Opp. 8). While it is true that the Federal Circuit has held that Form 18 complies with
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the pleading standard set forth in Twombly, there has been no similar ruling subsequent to the

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Supreme Court’s decision in Iqbal which further clarified Rule 8’s pleading requirements.

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McZeal v. Sprint Nextel Corp., 501 F.3d 1354, 1356–57 (Fed. Cir. 2007).

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McZeal stated that a complaint would be sufficient if it “places the alleged infringer

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on notice as to what he must defend” and that compliance with Form 18 meets this basic

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requirement. Id. at 1357. As mentioned, McZeal was decided prior to Iqbal, which held that

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“Twombly expounded the pleading standard for all civil actions” and Rule 8 “demands more than

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an unadorned, the-defendant-unlawfully-harmed-me accusation.” Iqbal, 129 S.Ct. at 1949–53

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(internal quotations omitted) (emphasis added).
In light of this, plaintiff’s argument fails for two reasons. First, Form 18 provides for

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For the Northern District of California

United States District Court

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nothing more than the type of “defendant-unlawfully-harmed-me accusation” expressly rejected

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in Iqbal. See FRCP Appendix of Forms, Form 18 (recommending in a “Complaint for Patent

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Infringement” a statement that “defendant has infringed and is still infringing the Letters Patent

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by making, selling, and using [the accused products] that embody the patented invention”).

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Second, the Supreme Court surely was aware of existing precedent, the Federal Rules of Civil

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Procedure, and the forms contained within. Absent any evidence that it intended to exempt

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patent infringement claims from the standard set forth in Iqbal, this order concludes that McZeal

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was disapproved to the extent that compliance with Form 18 was sufficient to withstand a motion

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to dismiss for failure to state a claim. To do otherwise would require blatant disregard for the

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Supreme Court’s holding.

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For the foregoing reasons, plaintiff’s claims must therefore be examined under the

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Iqbal standard. Here, the claims are nothing more than legal conclusions couched as factual

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allegations. Simply alleging that plaintiff is the owner of a patent, stating in the most general

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terms what that product does without identifying how the product accomplishes any of its

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functions, and alleging two potentially infringing products are owned by defendant, without

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explanation as to the how or why these products infringe, does not lead to any inference that

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plaintiff may be entitled to relief. There can be no dispute that one of the most important, if not

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key, purposes of a complaint is to provide notice to defendant of its alleged wrongdoing and
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allow it to respond. See Twombly, 550 U.S. 565 n. 10. Where, as here, “a defendant seeking to

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respond to plaintiff’s[] conclusory allegations . . . would have little idea where to begin,” the

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notice function of Rule 8 is unfulfilled. Ibid.

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For the foregoing reasons, defendant’s motion to dismiss plaintiff’s claim for direct
infringement is GRANTED.

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INDIRECT INFRINGEMENT.

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There are two theories under which a party may be held liable for indirect infringement:

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(1) induced infringement under 35 U.S.C. 271(b) and (2) contributory infringement under

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35 U.S.C. 271(c). Plaintiff has alleged claims for relief for both forms of indirect infringement

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For the Northern District of California

United States District Court

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(Compl. ¶ 15).
Induced infringement under 35 U.S.C. 271(b) requires the direct infringement by another

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entity, and that this direct infringement be “actively induce[d]” by the party accused under

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Section 271(b). See i4i Ltd. Partnership v. Microsoft Corp., 598 F.3d 831, 851 (Fed. Cir. 2010).

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Plaintiff has made no allegation that any entity other than defendant directly infringed the

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’577 patent. Moreover, there are insufficient facts supporting a plausible inference of active

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inducement. Plaintiff has alleged no facts to show a “specific intent to encourage another’s

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infringement.”

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Similarly, the complaint is devoid of facts to support a plausible inference of contributory

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infringement. “A party is liable for contributory infringement if that party sells, or offers to sell,

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a material or apparatus for use in practicing a patented process. That material or apparatus must

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be a material part of the invention, have no substantial noninfringing uses, and be known (by the

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party) to be especially made or especially adapted for use in an infringement of such patent.”

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Id. at 850–51 (internal quotations omitted). Plaintiff has made no allegation that the accused

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products — defendant’s websites — were a component of a patented product or process

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constituting a material part of the patented invention or that the accused websites are not capable

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of substantial noninfringing use. Ibid.

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In opposing defendant’s motion, plaintiff relies exclusively on Rule 84 to argue that such

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allegations are not required. This argument has already been addressed above in regard to direct
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infringement claims. Plaintiff’s argument fails for another reason as well, namely that Form 18

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is silent as to any theory of indirect patent infringement. See generally FRCP Appendix of

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Forms, Form 18. Nowhere are theories and elements of induced infringement or contributory

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infringement referenced. Given this silence, this order finds that plaintiff cannot hide behind

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Form 18.

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For these reasons, defendant’s motion to dismiss plaintiff’s indirect infringement claims
is GRANTED.

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CONCLUSION
For the foregoing reasons, defendant’s motion to dismiss is GRANTED. The hearing
scheduled for March 22, 2012, is VACATED. Plaintiff may seek leave to amend and will have

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For the Northern District of California

United States District Court

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FOURTEEN CALENDAR DAYS from

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35-day track, for leave to file an amended complaint. A proposed amended complaint must be

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appended to the motion. The motion should clearly explain how the amendments to the

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complaint cure the deficiencies identified herein.

the date of this order to file a motion, noticed on the normal

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IT IS SO ORDERED.

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Dated: March 13, 2012.

WILLIAM ALSUP
UNITED STATES DISTRICT JUDGE

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