Ziptronix, Inc v. Omnivision Technologies, Inc. et al

Filing 67

ORDER, Motions terminated: 52 MOTION to Dismiss filed by Ziptronix, Inc. Case Management Conference set for 1/26/2012 03:30 PM. VIA TELEPHONE. Signed by Judge ARMSTRONG on 11/7/11. (lrc, COURT STAFF) (Filed on 11/8/2011)

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1 UNITED STATES DISTRICT COURT 2 FOR THE NORTHERN DISTRICT OF CALIFORNIA 3 OAKLAND DIVISION 4 5 ZIPTRONIX, INC., Plaintiff, 6 vs. 7 8 OMNIVISION TECHNOLOGIES, INC., et Case No: C 10-5525 SBA ORDER GRANTING PLAINTIFF’S MOTION TO DISMISS COUNTERCLAIMS Docket 52 al., 9 Defendants. 10 11 Plaintiff Ziptronix, Inc. (“Plaintiff”) brought the instant patent infringement action 12 13 14 15 16 17 18 19 20 21 22 23 24 against Defendants Omnivision Technologies, Inc. (“Omnivision”), Taiwan Semiconductor Manufacturing Company Ltd. and TSMC North America Corp. pursuant to 35 U.S.C. § 271. The parties are presently before the Court on Plaintiff’s motion to dismiss the patent infringement counterclaims of Defendants Taiwan Semiconductor Manufacturing Company Ltd. and TSMC North America Corp. (“Defendants”) for failure to state a claim under Federal Rule of Civil Procedure 12(b)(6). Dkt. 52. Having read and considered the papers filed in connection with this matter and being fully informed, the Court hereby GRANTS Plaintiff’s motion to dismiss for the reasons stated below. The Court, in its discretion, finds this matter suitable for resolution without oral argument. See Fed. R. Civ. P. 78(b); N.D. Cal. Civ. L.R. 7-1(b). I. BACKGROUND Plaintiff is a North Carolina corporation that develops technologies concerning 25 semiconductor integration processes and owns patents related to these processes, including 26 U.S. Patent No. 7,387,944; U.S. Patent No. 7,335,572; U.S. Patent No. 7,553,744; U.S. 27 Patent No. 7,037,755; U.S. Patent No. 6,864,585; and U.S. Patent No. 7,807,549. On 28 December 6, 2010, Plaintiff filed a complaint asserting patent infringement against 1 Omnivision and Defendants. Dkt. 1. After Omnivision and Defendants brought motions to 2 dismiss, Plaintiff, Omnivision and Defendants stipulated to the filing of an amended 3 complaint by Plaintiff, which was filed on April 20, 2011. Dkt. 43, 44. In response to the 4 amended complaint, Omnivision and Defendants withdrew their motions to dismiss. Dkt. 5 45, 46. 6 In the amended complaint, Plaintiff alleges that Omnivision and Defendants violated 7 each of these patents when they “made, used, offered to sell, sold, and/or imported into the 8 United States image sensors including at least OV 5642, OV 5650, OV 5653, OV 8812, OV 9 8810 and OV 9726” without Plaintiff’s permission. See, e.g., Dkt. 44 ¶¶ 9, 10, 13, 24, 47, 10 61, 83, 84, 98, 121, 135, 158, 173, 195, 196, 210, 211. Plaintiff alleges that Omnivision 11 and Defendants violated its patents by using each step of the method covered by its patents 12 when creating the image sensors in OV 5642, OV 5650, OV 5653, OV 8812, OV 8810 and 13 OV 9726. See, e.g., id. ¶¶ 10, 13, 24, 47, 61, 98, 121, 135, 158, 172, 195, 196, 210, 211. 14 Plaintiff specifically identifies each of the steps used by Omnivision and Defendants that 15 allegedly violate each of the patents. See, e.g., id. 11, 12, 25, 43, 47, 61, 85, 98, 99, 117, 16 121, 136, 154, 159, 173, 191, 197, 212. Plaintiff alleges that Omnivision and Defendants 17 have directly infringed and induced infringement of each of the patents, and the 18 infringement has been willful and deliberate. Id. With regard to the allegations that 19 Omnivision induced infringement, Plaintiffs allege that third-parties Original Equipment 20 Manufacturers (“OEMS”), VARs (“Value Added Resellers”) and Distributors “use, offer 21 for sale, sell, and/or import” the OV 5642, OV 5650, OV 5653, OV 8812, OV 8810 and 22 OV 9726 image sensors. See, e.g., id. 21, 58, 60, 100, 94, 131, 169, 207, 230. Plaintiff 23 avers that Defendants induced Omnivision to “use, offer for sale, sell, and/or import” the 24 OV 5642, OV 5650, OV 5653, OV 8812, OV 8810 and OV 9726 image sensors. See, e.g., 25 id. 37, 74, 112, 148, 185, 224. 26 On May 4, 2011, Defendants filed their answer to the amended complaint and also 27 asserted counterclaims against Plaintiff. Dkt. 49. Defendants own five patents, including 28 U.S. Patent No. 6,682,981; U.S. Patent No. 7,307,020; U.S. Patent No. 6,765,279; U.S. -2- 1 Patent No. 7,385,835; and U.S. Patent No. 6,350,694. Dkt. 49 ¶¶ 7-55. In the First and 2 Third through Seventh Counterclaims, Defendants allege that Plaintiff directly infringes 3 their patents by “making, using, offering for sale, and/or selling” Direct Bond Interconnect 4 (“DBI”) technology “related to thinned integrated circuits, three-dimensional integration of 5 integrated circuits and three-dimensional interconnection of integrated circuits.” See, e.g., 6 Id. ¶ 11, 30, 40, 50. In these counterclaims, Defendants also allege that Plaintiff 7 contributorily infringed and/or induced infringement by licensing the DBI technology to 8 “OEMs, IDMs, fabless companies and foundries, including Raytheon Vision Systems.”1 9 See, e.g.,, id. ¶¶ 13, 32, 33, 41-43, 51-53. With regard to the Second Counterclaim, 10 Defendants allege that Plaintiff induced infringement and/or contributorily infringed U.S. 11 Patent 7,307,020 by licensing the DBI technology to OEMs, IDMs, fabless companies and 12 foundries, including Raytheon Vision Systems. See, e.g., id. 20, 21, 22. In stark contrast to 13 the detail in Plaintiff’s amended complaint, Defendants’ counterclaims do not identify any 14 alleged infringing product manufactured by Plaintiff and do not detail specific infringing 15 steps of the method allegedly infringing the method protected by Defendants’ patents. 16 Moreover, again in contrast to Plaintiff’s specific factual allegations, Defendants 17 conclusorily allege that Plaintiff’s infringement was deliberate and willful. See, e.g., id. 24. 18 Defendants include references to certain websites in their counterclaims, but, as of the 19 present date, the websites have expired, and therefore the information contained therein 20 cannot be accessed. 21 On May 31, 2011, Plaintiff brought the instant motion to dismiss Defendants’ 22 counterclaims under Federal Rule of Civil Procedure 12(b)(6). Plaintiff argues that 23 Defendants’ patent infringement counterclaims must be dismissed because they do not 24 provide Plaintiff with adequate notice of the alleged infringement, including by failing to 25 identify infringing products. On October 4, 2011, Defendants filed their opposition, 26 27 1 28 Defendants do not define “IDMs” or “fabless companies and foundries” in their counterclaim. -3- 1 asserting that their patent infringement counterclaims involved method claims, not product 2 claims, and therefore the claims were pleaded with sufficient specificity. 3 II. 4 LEGAL STANDARD Rule 8 of the Federal Rules of Civil Procedure requires that a complaint contain a 5 “short and plain statement of the claim showing that the pleader is entitled to relief.” 6 Fed.R.Civ.P. 8(a)(2). If a complaint fails to satisfy Rule 8, it “must be dismissed” under 7 Rule 12(b)(6) for failure to state a claim upon which relief can be granted. Bell Atl. Corp. 8 v. Twombly, 550 U.S. 544, 570 (2007). To survive a motion to dismiss, the plaintiff must 9 allege “enough facts to state a claim to relief that is plausible on its face.” Id. The 10 pleadings must “give the defendant fair notice of what . . . the claim is and the grounds 11 upon which it rests.” Erickson v. Pardus, 551 U.S. 89, 93 (2007) (internal quotation marks 12 omitted). “[A] plaintiff's obligation to provide the ‘grounds’ of his ‘entitlement to relief’ 13 requires more than labels and conclusions, and a formulaic recitation of the elements of a 14 cause of action will not do.” Twombly, 550 U.S. at 555. 15 When considering a motion to dismiss under Rule 12(b)(6), a court must take the 16 allegations as true and construe them in the light most favorable to plaintiff. See 17 Leatherman v. Tarrant Cnty Narcotics Intelligence & Coordination Unit, 507 U.S. 163, 164 18 (1993). However, “the tenet that a court must accept as true all of the allegations contained 19 in a complaint is inapplicable to legal conclusions. Threadbare recitals of the elements of a 20 cause of action, supported by mere conclusory statements, do not suffice.” Ashcroft v. 21 Iqbal, ––– U.S. ––––, 129 S.Ct. 1937, 1949–50 (2009). “While legal conclusions can 22 provide the complaint’s framework, they must be supported by factual allegations .” Id. at 23 1950. Those facts must be sufficient to push the claims “across the line from conceivable 24 to plausible[.]” Id. at 1951 (quoting Twombly, 550 U.S. at 557). In the event dismissal is 25 warranted, it is generally with leave to amend, unless it is clear the complaint cannot be 26 saved by any amendment. See Sparling v. Daou, 411 F.3d 1006, 1013 (9th Cir.2005); 27 Gompper v. VISX, Inc., 298 F.3d 893, 898 (9th Cir.2002). 28 -4- 1 Defendants contend that the Twombly/Iqbal standard does not apply to direct patent 2 infringement claims, but does to indirect patent infringement claims. As noted by 3 Plaintiffs, this Court has already determined that the Twombly/Iqbal standard applies to 4 both direct and indirect patent infringement claims. Bender v. Motorola, Inc., C 09-1245 5 SBA, 2010 WL 726739, **3-4 (N.D. Cal. 2010) (Armstrong, J.). Nevertheless, even if the 6 Twombly/Iqbal standard does not apply to direct patent claims, Defendants’ allegations are 7 inadequate for the reasons stated below. 8 III. 9 DISCUSSION Direct infringement claims are governed by 35 U.S.C. § 271(a), which states, 10 “whoever without authority makes, uses, offers to sell, or sells any patented invention . . . 11 during the term of the patent therefor, infringes the patent.” Form 18 in the Appendix to 12 the Federal Rules of Civil Procedure provides a sample complaint for direct patent 13 infringement. See also Fed.R.Civ.P. 84 (“The forms in the Appendix suffice under these 14 rules and illustrate the simplicity and brevity that these rules contemplate.”). The form 15 instructs a plaintiff to include: 16 17 18 19 20 21 1) an allegation of jurisdiction; 2) a statement that the plaintiff owns the patent; 3) a statement that defendant has been infringing the patent “by making, selling, and using [the device] embodying the patent”; 4) a statement that the plaintiff has given the defendant notice of its infringement; and 5) a demand for an injunction and damages. McZeal v. Sprint Nextel Corp., 501 F.3d 1354, 1357 (Fed.Cir.2007) (emphasis added). The third element of Form 18 involves allegations of infringement by, among other 22 means, “using” the patent. “Use” of a patented method or process is fundamentally 23 different from “use” of a patented system or device. NTP, Inc. v. Research In Motion, Ltd., 24 418 F.3d 1282, 1317 (Fed. Cir. 2005). A distinction exists between a patent infringement 25 claim with regard to a product, device, or apparatus, all of which are tangible items, and a 26 claim to a process, which consists of a series of acts or steps. In re Kollar, 286 F.3d 1326, 27 1332 (Fed.Cir.2002). “[A process] consists of doing something, and therefore has to be 28 carried out or performed.” Id.; see also Joy Techs., Inc. v. Flakt, Inc., 6 F.3d 770, 773 -5- 1 (Fed.Cir.1993) (“The law is unequivocal that the sale of equipment to perform a process is 2 not a sale of the process within the meaning of section 271(a).”). Hence, “a method or 3 process consists of one or more operative steps, and, accordingly, ‘[i]t is well established 4 that a patent for a method or process is not infringed unless all steps or stages of the 5 claimed process are utilized.’” NTP, Inc., 418 F.3d at 1317 (quoting Roberts Dairy Co. v. 6 United States, 530 F.2d 1342, 1354 (1976)). Thus, with a method patent infringement 7 claim, to properly allege “use” of the patent, the patentee must identify the steps of the 8 claimed infringing process that allegedly violated the protected method and must allege that 9 all the protected steps have been used by the infringer. Roberts Dairy Co., 530 F.2d at 10 1354 (“Thus, in order to find infringement in [a method] case, each and every step of each 11 of the claims of the patents in suit, or an equivalent thereof, must have been practiced by 12 the defendant.”); Desenberg v. Google, Inc., 392 Fed. Appx. 868, 870-71, 2010 WL 13 3452493, **2-3 (Fed. Cir. 2010) (affirming district court’s decision to grant Rule 12(b)(6) 14 motion to dismiss for failure to state a claim for infringement of a patented method because 15 the complaint failed to allege that the infringer performed all the steps of the claimed 16 method or that the infringer directed or controlled the performance by multiple parties of all 17 the steps of the claimed method) (citing BMC Resources v. Paymentech, L.P., 498 F.3d 18 1373, 1380-81 (Fed. Cir. 2007)). 19 Although Defendants contend they assert method claims, they have set forth none of 20 the steps of Plaintiff’s alleged infringing method. Moreover, their counterclaims contain no 21 allegation that all steps and stages of their protected process have been used by Plaintiff. 22 Consequently, Defendants’ claims of direct infringement are insufficient to provide 23 Plaintiff with notice of the alleged infringement, and, as to these claims, the Court 24 GRANTS Plaintiff’s motion to dismiss. 25 Turning to Defendants’ indirect claims, to prevail on an indirect patent infringement 26 claim, the patentee must establish first that there has been direct infringement. Bender, 27 2010 WL 726739, at *4; DSU Medical Corp. v. JMS Co. Ltd., 471 F.3d 1293, 1303 (2006) 28 (“the patentee always has the burden to show direct infringement for each instance of -6- 1 indirect infringement”); Joy Techs., Inc., 6 F.3d at 774 (“Liability for either active 2 inducement of infringement or contributory infringement is dependent upon the existence 3 of direct infringement.”). As Defendants have failed to establish direct infringement, their 4 indirect infringement claims are insufficient. See Bender, 2010 WL 726739, at *4 (finding 5 allegations of indirect claims insufficient because allegations of direct claims were 6 insufficient). Consequently, the Court GRANTS Plaintiff’s motion to dismiss Defendants’ 7 indirect patent infringement claims. 8 IV. 9 CONCLUSION For the reasons set forth above, 10 IT IS HEREBY ORDERED THAT: 11 1. Plaintiff’s motion to dismiss Defendants’ counterclaims is GRANTED, with 12 leave to amend. Defendants shall file their amended counterclaims within fourteen (14) 13 days from the date this Order is filed. The failure to timely amend will result in the 14 dismissal of said counterclaims with prejudice. 15 2. The parties shall appear for a telephonic Case Management Conference on 16 January 26, 2012 at 3:30 p.m. Prior to the date scheduled for the conference, the parties 17 shall meet and confer and prepare a joint Case Management Conference Statement. 18 Plaintiff is responsible for filing the joint statement no less than seven (7) days prior to the 19 conference date. The joint statement shall comply with the Standing Order for All Judges 20 of the Northern District of California and the Standing Orders of this Court. Plaintiff is 21 responsible for setting up the conference call. On the specified date and time for the Case 22 Management Conference, Plaintiff shall call (510) 637-3559 with all parties on the line. 23 3. 24 IT IS SO ORDERED. 25 This Order terminates Docket 52. Dated: November 7, 2011 _______________________________ SAUNDRA BROWN ARMSTRONG United States District Judge 26 27 28 -7-

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