Fujitsu Limited v. Belkin International, Inc. et al

Filing 101

ORDER by Judge Koh granting in part and denying in part 46 Motion to Dismiss; granting in part and denying in part 48 Motion to Dismiss; denying 53 Motion to Dismiss; denying 54 Motion to Dismiss. (lhklc4, COURT STAFF) (Filed on 3/29/2011)

Fujitsu Limited v. Belkin International, Inc. et al

Doc. 101

1 2 3 4 5 6 7 8 9 10 United States District Court For the Northern District of California 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 This Order addresses four separate motions to dismiss, each filed by a different Defendant. D-Link Corporation ("D-Link Corp.") moves to dismiss Plaintiff Fujitsu Limiteds claims against it pursuant to Federal Rules of Civil Procedure 12(b)(5) for insufficient service of process and 12(b)(2) for lack of personal jurisdiction. Dkt. No. 53 ("D-Link Corp. Mot."). ZyXEL Communications Corporation ("ZyXEL Corp.") moves to dismiss Fujitsus claims against it pursuant to Rule 12(b)(5) for insufficient service of process. Dkt. No. 54 ("ZyXEL Corp. Mot."). D-Link Systems, Inc. ("D-Link Systems") and ZyXEL Communications, Inc. ("ZyXEL U.S.") move for dismissal pursuant to Rule 12(b)(6) for failure to state a claim. Dkt. Nos. 46 ("D-Link Sys. Mot."), 48 ("ZyXEL U.S. Mot."). Fujitsu opposes all of the motions. Dkt. Nos. 87 ("Dismiss Oppn"), 88 ("Process Oppn"). After considering the parties' submissions and oral arguments, the 1
Case No.: 10-CV-03972-LHK ORDER RE: D-LINK CORPORATION, D-LINK SYSTEMS, INC., ZYXEL COMMUNICATIONS CORPORATION, AND ZYXEL COMMUNICATIONS, INC.S MOTIONS TO DISMISS

UNITED STATES DISTRICT COURT NORTHERN DISTRICT OF CALIFORNIA SAN JOSE DIVISION FUJITSU LIMITED, ) ) Plaintiff, ) ) v. ) ) BELKIN INTERNATIONAL, INC.; BELKIN, ) INC.; D-LINK CORPORATION; D-LINK ) SYSTEMS, INC.; NETGEAR, INC.; ZYXEL ) COMMUNICATIONS CORPORATION; and ) ZYXEL COMMUNICATIONS, INC., ) ) Defendants. ) ) Case No.: 10-CV-03972-LHK ORDER RE: D-LINK CORPORATION, D-LINK SYSTEMS, INC., ZYXEL COMMUNICATIONS CORPORATION, AND ZYXEL COMMUNICATIONS, INC.S MOTIONS TO DISMISS

Dockets.Justia.com

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Court hereby DENIES D-Link Corp. and ZyXEL Corp.s motions to dismiss pursuant to Rule 12(b)(5) for insufficient service of process, but quashes Fujitsus service of process; DENIES DLink Corp.s motion to dismiss pursuant to Rule 12(b)(2) for lack of personal jurisdiction; and GRANTS in part and DENIES in part D-Link Systems and ZyXEL U.S.s motions to dismiss pursuant to Rule 12(b)(6) for failure to state a claim. I. BACKGROUND A. Fujitsu's Complaint In its complaint, Fujitsu asserts direct and indirect patent infringement claims against Belkin International, Inc., Belkin, Inc., D-Link Corp., D-Link Systems, Netgear, Inc., ZyXEL Corp., and ZyXEL U.S. (collectively "the Defendants"). Dkt. No. 1 ("Compl."). Fujitsu claims that the Defendants are infringing United States Patent No. Re. 36,769 (the "Ozawa Patent"). Compl., Ex. A. According to Fujitsus complaint, the Ozawa Patent, which issued on July 11, 2000, is a reissue of United States Patent No. 5,357,091, which issued on October 18, 1994. Compl. ¶ 11.1 As described by Fujitsu in its complaint, the Ozawa Patent concerns card type input/output interface devices. Id. Fujitsu alleges that it owns and has the right to enforce the Ozawa Patent. Id. ¶ 12. Fujitsu claims that each of the Defendants make, use, offer to sell, sell, or import devices within the scope of one or more of the claims of the Ozawa Patent. Id. ¶ 13. Furthermore, Fujitsu alleges that each of the Defendants is actively inducing others to infringe the Ozawa Patent and is contributing to the infringement of the Ozawa Patent. Id. ¶ 14. This allegedly infringing activity by each of the Defendants involves the making, using, offering to sell, selling, or importing of wireless interface cards, access points, and routers. Id. ¶¶ 14-18. B. Service of Process on D-Link Corp. and ZyXEL Corp. D-Link Corp. and ZyXEL Corp. are both corporations organized under the laws of Taiwan with their principal place of business in Taiwan. On October 15, 2010, Chi-yun Hsiao, an attorney in Taiwan, executed service of process on both D-Link Corp. and ZyXEL Corp. by hand delivering
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Fujitsu further alleges that the United States Patent and Trademark Office (the "PTO") issued a Reexamination Certificate for the Ozawa Patent on December 9, 2009. Id., Ex. B. 2
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Fujitsus complaint, summons, and other documents to D-Link Corp. and ZyXEL Corp.s respective headquarters. Process Oppn 5-6. A D-Link Corp. employee signed a receipt dated October 15, 2010 for D-Link Corp. Id. at 6. A ZyXEL Corp. mailroom stamp served as acknowledgment of receipt for ZyXEL Corp. Id. There is no indication that the documents served were translated into Chinese. C. D-Link Corp.'s Connections to California In its complaint, Fujitsu alleges that all of the Defendants committed acts of patent infringement within the State of California. Compl. ¶ 7. Fujitsu also alleges that Defendants purposefully and voluntarily placed their infringing products into the stream of commerce with the expectation that they would be purchased by consumers in the Northern District of California. Id. D-Link Corp. is a Taiwanese corporation and the parent corporation of D-Link Systems, a California corporation. D-Link Corp. Mot. 1. According to D-Link Corp., D-Link Corp. has not sold any products to D-Link Systems since May 2006. Id. at 4.2 Furthermore, D-Link Corp. claims that it does not do any business in California. Id. at 4-5. According to Fujitsu, D-Link Corp. markets itself as a global company with a regional headquarters in Fountain Valley, California. Process Oppn 4. Fujitsu also claims that D-Link Corp. maintains a website from which California residents can purchase D-Link Corp.s products. Id. According to D-Link Corp., D-Link Systems owns and operates the website where U.S. customers can purchase products and D-Link Systems provides those goods purchased by U.S. customers. Dkt. No. 92 ("D-Link Corp. Reply"), at 5. Furthermore, D-Link represents that D-Link Systems conducts and manages its own corporate business with its own management and control structure. Id. at 2. D. Procedural History Belkin International, Belkin, and Netgear have all answered Fujitsus complaint. Dkt. Nos. 21, 23. On October 28, 2010, D-Link Systems and ZyXEL U.S., both California corporations, moved pursuant to Rule 12(b)(6) to dismiss Fujitsus claims against them for failure to state a
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D-Link Corp. does admit that it shipped sixteen items to D-Link Systems from May 2006 to August 2008 but represents that none of those were potentially infringing devices. D-Link Corp. Mot. 4. 3
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claim. On November 5, 2010, D-Link Corp., a Taiwanese corporation, moved pursuant to Rule 12(b)(5) and Rule 12(b)(2) to dismiss Fujitsus claims against it for insufficient service of process and for lack of personal jurisdiction. Also on November 5, 2010, ZyXEL Corp., a Taiwanese corporation, moved pursuant to Rule 12(b)(5) to dismiss Fujitsus claims against it for insufficient service of process. The Court held a hearing on Defendants motions on March 17, 2011.3 II. ANALYSIS A. Motions to Dismiss for Insufficient Service of Process D-Link Corp. and ZyXEL Corp. both argue that Fujitsus complaint against them should be dismissed pursuant to Federal Rule of Civil Procedure 12(b)(5) because Fujitsus attempted service on them did not comply with the laws of either Taiwan or the United States. D-Link Corp. Mot. 1; ZyXEL Corp. Mot. 1.4 Fujitsu argues that its service of D-Link Corp. and ZyXEL Corp. complied with the Federal Rules of Civil Procedure and with the accepted practice under Taiwanese law. Process Oppn 16. 1. Legal Standard "Before a federal court may exercise personal jurisdiction over a defendant, the procedural requirement of service of summons must be satisfied." Omni Capital Int'l v. Rudolf Wolff & Co., 484 U.S. 97, 104, 108 S. Ct. 404, 98 L. Ed. 2d 415 (1987); see also Murphy Bros. v. Michetti Pipe Stringing, 526 U.S. 344, 350, 119 S. Ct. 1322; 143 L. Ed. 2d 448 (1999) ("In the absence of service of process (or waiver of service by the defendant), a court ordinarily may not exercise power over a party the complaint names as defendant."). "Once service is challenged, plaintiffs bear the burden of establishing that service was valid under Rule 4." Brockmeyer v. May, 383 F.3d 798, 801 (9th Cir. 2004) (citing 4A CHARLES A. WRIGHT & ARTHUR R. MILLER, Federal Practice and Procedure § 1083 (3d ed. 2002 & Supp. 2003); Butcher's Union Local No. 498 v. SDC Inv., Inc., 788 F.2d 535, 538 (9th Cir. 1986)). Rule 4(h)(2) governs service of process on a corporation "at a place not
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The Court originally set all four motions for hearing on February 10, 2011. On December 22, 2010, however, the Court granted Netgears motion to disqualify Fujitsus counsel. Dkt. No. 64. In order to allow Fujitsu time to find new counsel and respond to Defendants motions, the Court continued the hearing to March 17, 2011. Dkt. No. 66. 4 The content of D-Link Corp.s and ZyXEL Corp.s motions to dismiss pursuant to Rule 12(b)(5) are nearly identical. For simplicity, the Court will refer to only D-Link Corp.s motion in this section. 4
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within any judicial district of the United States" and allows for such process to be made "in any manner prescribed by Rule 4(f) for serving an individual, except personal delivery under (f)(2)(C)(i)." FED. R. CIV. P. 4(h)(2). 2. Fujitsu's Method of Service Here, Fujitsu seeks to rely on Rule 4(f)(2)(A).5 Process Oppn 16. Under Rule 4(f)(2)(A), "if there is no internationally agreed means" of service, a corporation may be served at a place not within any judicial district of the United States "by a method that is reasonably calculated to give notice . . . as prescribed by the foreign countrys law for service in that country in an action in its courts of general jurisdiction." FED. R. CIV. P. 4(f)(2)(A). D-Link Corp. and ZyXEL Corp. claim that Taiwans rules do not provide a procedure for a private person to effect service of process on a corporation in Taiwan. D-Link Corp. Mot. 6 (citing Dkt. No. 53-2 ("Weng Decl.")). According to Vanessa Weng, an attorney in Taiwan, Article 123 of the R.O.C. Code of Civil Procedures provides that service shall be effected motu proprio by the Clerk of the Court, except as where it is otherwise provided. Weng Decl. ¶ 4. Article 5 of the R.O.C. Law Governing Extension of Assistance to Foreign Courts allows foreign parties to request, by letters rogatory, the assistance of the courts of Taiwan in serving civil litigation documents. Id. ¶ 3. When foreign parties make such a request, they must provide Chinese translations and verifications of the translations. Id., Ex. A, at 2. The courts of Taiwan then execute service of process in accordance with the R.O.C. Code of Civil Procedures. Id. Weng also claims that two opinions rendered by the Supreme Court of Taiwan establish that a foreign judgment is not valid unless the Taiwanese defendant is served with the judicial assistance of the R.O.C. Id. ¶ 5. Weng concludes that according to the R.O.C. Code of Civil Procedures and the Supreme Court of Taiwan, the service received by D-Link Corp. and ZyXEL Corp. is inadequate. Id. ¶ 6.

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Because Taiwan is not a signatory to the Hague Convention, Rule 4(f)(1) does not apply here. See Emine Tech. Co. v. Aten Int'l Co., No. C 08-3122 PJH, 2008 WL 5000526, *3 (N.D. Cal. Nov. 21, 2008) (citing Cosmetech Int'l, LLC v. Der Kwei Enters., 943 F. Supp. 311, 316. (S.D.N.Y. 1996)). Rule 4(f)(3) does not apply because the Court has not directed or ordered service in this case. Rule 4(f)(2)(C)(ii) also does not apply because Fujitsu does not claim to have mailed its complaint to D-Link Corp. or ZyXEL Corp. 5
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D-Link Corp. and ZyXEL Corp. also argue that Wengs conclusion regarding service of process in Taiwan is consistent with the district courts holding in Emine Tech. Co. v. Aten Int'l Co., No. C 08-3122 PJH, 2008 WL 5000526 (N.D. Cal. Nov. 21, 2008). In Emine Technology, both the plaintiff and the defendant were Taiwanese corporations with their principal places of business in Taiwan. Id. at *1. In an attempt to serve the defendant, a legal assistant to the plaintiffs counsel went to the defendants principal place of business and left the complaint with the receptionist at the front desk. Id. The defendant moved to dismiss the complaint pursuant to Rule 12(b)(5), arguing that the plaintiffs attempted service failed to comply with Rules 4(h)(2) and 4(f). Id. at *2. The court granted the defendants motion. As part of its reasoning, the court cited two provisions of the R.O.C. Code of Civil Procedures6 that it found, when read together, established that the plaintiffs attempted service did not comply with Taiwanese law. These provisions were Article 123 of the R.O.C. Code of Civil Procedures, which states that "[e]xcept as otherwise provided, service of process will be administered by the court clerk on his/her own authority," id. at *3, and Article 131 of the R.O.C. Code of Civil Procedures, which provides that "[i]n an action regarding a business, service may be effectuated upon the manager," id. at *5. In reading the two articles together, the court concluded that "Article 131 allows service upon the manager of a business, but it does not permit an individual or entity other than the court clerk to properly effectuate service." Id. at *5. Here, Fujitsu effected service on D-Link Corp. and ZyXEL Corp. by having a local Taiwanese attorney hand-deliver the complaint, summons, and other required documents to the headquarters of both D-Link Corp. and ZyXEL Corp. Process Oppn 16. In serving D-Link Corp., Fujitsu obtained an employee receipt signature. Id. In serving ZyXEL Corp., Fujitsu obtained a company stamp. Id. Based on Wengs declaration and the courts holding in Emine Technology,

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The court in Emine Technology refers to the Taiwan Code of Civil Procedure as the set of rules governing Taiwanese procedures for effecting service in Taiwan in actions in the Taiwanese courts. Weng refers to the same rules as the R.O.C. Code of Civil Procedures. This Court will refer to these rules as the R.O.C. Code of Civil Procedures. 6
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Fujitsus service does not comply with Taiwanese law because the court clerk of Taiwan did not administer service of process.7 In opposition, Fujitsu argues that its method of service satisfies Rule 4(f)(2)(A) because Fujitsu followed the procedures for effecting service on a Taiwanese corporation as set forth on the U.S. State Department website and because D-Link Corp. and ZyXEL Corp. have received adequate notice. Process Oppn 19. The U.S. State Departments website specifies that service by a local Taiwanese attorney is an acceptable form of service in Taiwan. Id. at 16 (citing Dkt. No. 89 ("Zapf Decl."), Ex. 18). Fujitsu argues that a decision in this district, Power Integrations, Inc. v. Sys. Gen. Corp., No. C 04-02581 JSW, 2004 WL 2806168 (N.D. Cal. Dec. 7, 2004), supports its reliance on the State Department guidance and shows that a method of service other than service by the clerk of the Taiwanese court is acceptable. Process Oppn 17. In Power Integrations, the plaintiff, a U.S. corporation, effected service on a defendant Taiwanese corporation by requesting that the Clerk of the Court in the Northern District of California perfect service on the defendant via Federal Express. 2004 WL 2806168, at *1. The Clerk of the Court dispatched the package and the defendant received and signed for it several days later. Id. The defendant moved to dismiss the plaintiffs complaint pursuant to Rule 12(b)(5), arguing that the plaintiffs method of service was not "prescribed" by Taiwanese law. Id. at *2. The court denied the defendants motion and held that the plaintiffs method of service was valid because it complied with Federal Rule of Civil Procedure 4(f)(2)(C)(ii). Id. at *3. Rule 4(f)(2)(C)(ii) provides that "unless prohibited by the foreign countrys law," a corporation may be served at a place not within any judicial district of the United States by "using any form of mail that the clerk addresses and sends to the [corporation] and that requires a signed receipt." FED. R. CIV. P. 4(f)(2)(C)(ii). As support for the proposition that Taiwanese law does not prohibit service by mail, the court considered information from the U.S. State Departments website. Id. Although the Power Integrations decision did involve a defendant Taiwanese corporation, the courts holding does not apply here. As noted, the plaintiff in Power Integrations attempted
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Under Wengs declaration, Fujitsus service also fails because the documents were not translated into Chinese. 7
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service in accordance with Rule 4(f)(2)(C)(ii), not Rule 4(f)(2)(A). Unlike Rule 4(f)(2)(A), which allows for service "prescribed" by Taiwanese law, Rule 4(f)(2)(C)(ii) allows for certain service by mail unless such service is "prohibited" by Taiwanese law. According to the court in Power Integrations, this difference in wording is "not a distinction without a difference." Power Integrations, 2004 WL 2806168, at * 2. The Power Integrations courts holding that Taiwanese law does not prohibit service by postal channels does not support the proposition that personal service on a corporation, or any means other than service by the clerk of the court of Taiwan, is prescribed by Taiwanese law. Fujitsu also argues that two district court decisions support its position that personal service on a corporation is valid under Taiwanese law. In Cosmetech Int'l, LLC v. Der Kwei Enter. & Co., 943 F. Supp. 311 (S.D.N.Y. 1996), a plaintiff New York corporation attempted to serve a defendant Taiwanese corporation by personally delivering the summons and complaint to the defendant corporations general manager and sales vice president at the defendant corporations office in Taiwan. Id. at 316. Despite the defendants claim that it had not been properly served, the court held that "Taiwan law expressly permits service upon a corporation by delivery to ,,the manager concerned" and upheld the service as proper. Id. (citing R.O.C. Code of Civil Procedures Article 131).8 Fujitsus reliance on Cosmetech has persuasive weight. The holding is on point and directly supports Fujitsus position. Nevertheless, the Court is hesitant to rely on a nearly fifteen year old interpretation of Taiwanese law for two reasons. First, although an unpublished decision, the courts holding in Emine Technology is also on point and was rendered less than three years ago. Second, in her declaration, Weng cites and interprets the current version of the R.O.C. Code of Civil Procedures. According to Exhibit B of the Weng Declaration, the R.O.C. Code of Civil Procedures was amended as recently as July 8, 2009. Thus, it is possible, though not explicitly argued by either of the parties, that the court in Cosmetech interpreted a now outdated version of the R.O.C. Code of Civil Procedures. Even though Weng did not provide the Court with a full
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The other case cited by Fujitsu, Taylor Made Golf Co. v. Carsten Sports, Ltd., 175 F.R.D. 658 (S.D. Cal. 1997), simply cites Cosmetech for the holding stated. 8
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copy of the R.O.C. Code of Civil Procedures, a benefit the court in Emine Technology had, Fujitsu did not provide any opposing declaration showing that Wengs interpretation of the current R.O.C. Code of Civil Procedures was incorrect. Fujitsu attempts to overcome these arguments by citing a recent Federal Circuit decision, Nuance Commc'ns, Inc. v. Abbyy Software House, 626 F.3d 1222 (Fed. Cir. 2010). That case involved service of process effected on a Russian corporation in Moscow by personal delivery. Id. at 1238. The district court dismissed the plaintiffs complaint for failure to serve the defendant Russian corporation in accordance with the Hague Convention. Id. at 1237. The Federal Circuit, however, found that the Russian Federation had suspended judicial cooperation with the United States and that service in accordance with the Hague Convention was not possible. The Russian corporation, nevertheless, challenged the plaintiffs method of service on the grounds that Rule 4 prohibits personal service on foreign corporations outside the United States. Id. The Federal Circuit rejected this argument and held that "a corporation can be served by personal delivery under Rules 4(h)(2) and 4(f)(2)(A), provided that personal delivery is prescribed by the foreign countrys laws for service in that country in an action in its courts of general jurisdiction." Id. As support for its reasoning, the court cited the Cosmetech decision. Id. The Federal Circuit in Nuance did dispel any possibility that Rule 4 uniformly prohibits personal delivery on foreign corporations. In addition, the Federal Circuit cited Cosmetech in support of the proposition that courts have upheld personal service on corporations under Rule 4(f)(2)(A) when that service is prescribed by the foreign countrys laws for service in that country in an action in its courts of general jurisdiction. However, the Federal Circuit in Nuance did not suggest that personal service is currently prescribed by the laws of Taiwan. Therefore, the Nuance decision does not persuade this Court to adopt the Cosmetech courts holding when more recent law suggests that a different holding is proper. Fujitsu also argues that the Court should not rely on Emine Technology because the court in that case did not consider the U.S. State Departments guidance or the district courts holding in Cosmetech. Process Oppn 18. Fujitsu is correct that the court in Emine Technology stated that the plaintiff had "not provided the court with authority establishing that anyone other than the court 9
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clerk is permitted to carry out service in Taiwanese courts governed by Taiwanese law." 2008 WL 5000526, at *5. Thus, Fujitsus argument that this Court should not follow Emine Technology can succeed only if the U.S. State Departments guidance and the Cosmetech holding are authority that personal service is currently available under Taiwanese law. Fujitsus argument fails, however, because neither the U.S. State Departments guidance nor the courts holding in Cosmetech establishes that personal service on corporations is allowed under Taiwanese law. First, the webpage containing the U.S. State Departments guidance on service of process in Taiwan has a clear disclaimer at the top of the page: "DISCLAIMER: THE INFORMATION IN THIS CIRCULAR IS PROVIDED FOR GENERAL INFORMATION ONLY AND MAY NOT BE TOTALLY ACCURATE IN A PARTICULAR CASE. QUESTIONS INVOLVING INTERPRETATION OF SPECIFIC FOREIGN LAWS SHOULD BE ADDRESSED TO FOREIGN COUNSEL." See Zapf Decl., Ex. 18; Dkt. No. 90 ("Process Reply"), at 2. Moreover, the paragraph containing the guidance on which Fujitsu seeks to rely explicitly states that "[i]f enforcement of a judgment is anticipated, . . . Taiwan may not consider service by registered mail or by agent acceptable and may require that service be effected pursuant to a letter rogatory." Id. These are clear textual indications that the U.S. State Departments guidance does not constitute authority establishing that anyone other than the court clerk is permitted to carry out service in Taiwanese courts governed by Taiwanese law. Secondly, the Court is not persuaded that an almost fifteen year old U.S. district court decision interpreting Taiwanese law is sufficient authority to outweigh both Wengs opinion that Taiwanese law does not allow for personal service on corporations and the Emine Technology courts finding of the same. Even though it is possible that both Weng and the court in Emine Technology have incorrectly interpreted Taiwanese law, Fujitsu has the burden to show that the service of process effected on D-Link Corp. and ZyXEL Corp. complied with Rule 4. Fujitsu had the opportunity to submit evidence rebutting Wengs declaration and supporting the U.S. State

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Departments guidance, but failed to do so. Therefore, the Court holds that Fujitsus attempted service of D-Link Corp. and ZyXEL Corp. did not comply with Rule 4.9 3. Fujitsu's Request for Court Ordered Service Fujitsu claims that even if the Court determines that Fujitsus service was defective, Defendants request for dismissal is inappropriate because Fujitsu can still effect service. Process Oppn 19. Fujitsu requests that the Court order service on Defendants U.S. counsel pursuant to Federal Rule of Civil Procedure 4(f)(3). Id. Both D-Link Corp. and ZyXEL Corp. oppose this request. Process Reply 6-7. "[S]ervice of process under Rule 4(f)(3) is neither a ,,last resort nor ,,extraordinary relief. It is merely one means among several which enables service of process on an international defendant." Rio Properties, Inc. v. Rio Int'l Interlink, 284 F.3d 1007, 1015 (9th Cir. 2002) (internal citation omitted). "Under Rule 4(f)(3), federal courts have discretionary authority to direct service ,,by other means not prohibited by international agreements." Nuance Commc'ns, 626 F.3d at 1239 (quoting FED. R. CIV. P. 4(f)(3)); see also Rio Properties, 284 F.3d at 1016 (holding "the task of determining when the particularities and necessities of a given case require alternate service of process under Rule 4(f)(3)" is "commit[ed] to the sound discretion of the district court"). Furthermore, "The choice between dismissal and quashing service of process is in the district courts discretion." Stevens v. Sec. Pac. Nat. Bank, 538 F.2d 1387, 1389 (9th Cir. 1976) (citation omitted). "Dismissal is not appropriate when there is a reasonable prospect that service may yet be obtained." Nuance Commc'ns, 626 F.3d at 1240 (quoting Chapman v. Teamsters Local 853, No. 07-1527, 2007 WL 3231736, at *3 (N.D. Cal. Oct. 30, 2007)) (quotation marks omitted). If a court orders service, "[t]he court-ordered method of service must still be reasonable and comport with constitutional notions of due process." Id. "To meet this requirement, the method of service crafted by the court must be ,,reasonably calculated, under all the circumstances, to apprise interested parties of the pendency of the action and afford them an opportunity to present their objections." Id. (quoting Mullane v. Cent. Hanover Bank & Trust Co., 339 U.S. 306, 314, 70
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Even if the Court were to find that personal service is available, it does not appear that Fujitsus service complied with the Cosmetech courts holding because Fujitsu did not serve the "manager concerned." 943 F. Supp. at 316. 11
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S. Ct. 652, 94 L. Ed. 865 (1950)). "Courts have authorized a wide variety of alternative methods of service under Rule 4(f)(3)." Id. at 1239 (citing Rio Properties, 284 F.3d at 1016-19). In In re TFTLCD (Flat Panel) Antitrust Litig., 270 F.R.D. 535, 537-38 (N.D. Cal. 2010), the district court approved service of process on a defendant Taiwanese corporation through its U.S. counsel. Fujitsu points out that D-Link Corp. has previously been served pursuant to Rule 4(f)(3) through its U.S. counsel. Process Oppn 20 (citing Network-1 Sec. Solutions, Inc. v. D-Link Corp. et al., No. 6:05-CV-291-LED, Dkt. No. 55 (E.D. Tex. Feb. 8, 2006)).10 It appears the same may be true for ZyXEL Corp. See id. at 20-21. Fujitsu also claims that D-Link Corp. and ZyXEL Corp. are represented by the same counsel in this case that represented D-Link Corp. in Network-1. Id. at 21 n.7. Furthermore, Fujitsu represents that this same counsel has appeared on behalf of D-Link Corp. in at least two patent cases in California and on behalf of D-Link Systems and ZyXEL U.S. in other patent litigations. Id. In their consolidated reply brief, D-Link Corp. and ZyXEL Corp. do not appear to contest Fujitsus assertions about their counsel or argue that service on them through their counsel would cause them any prejudice.11 Instead, D-Link Corp. and ZyXEL Corp. argue that Fujitsus request should be denied because Fujitsu has not cited a California decision that rejects personal delivery on a foreign corporation but then orders service on a defendants U.S. counsel. Process Reply 6. D-Link Corp. and ZyXEL Corp. also argue that Fujitsu had six months from filing its complaint to execute the letters rogatory process and properly serve them. Id. Finally, D-Link Corp. and ZyXEL Corp. argue that "the Court should not indulge Fujitsus whim in vacillating between effective formal service and the informal service" that D-Link Corp. and ZyXEL Corp. claim Fujitsu knew to be ineffective. Id. at 7. The Court certainly appreciates Fujitsus legitimate reasons for asking this Court to order service on D-Link Corp. and ZyXEL Corp. through their U.S. counsel. According to the court in
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Fujitsu provided the Court a copy of this decision. See Zapf Decl., Ex. 19. It does not appear that D-Link Corp. or ZyXEL Corp. would be prejudiced by service through its U.S. counsel. Both D-Link Corp., ZyXEL Corp., and their U.S. counsel are fully aware of this litigation. The same counsel that represented D-Link Corp., and accepted service on D-Link Corp.s behalf in the Network-1 case, also represents D-Link Corp. here. Moreover, this same counsel has already filed motions to dismiss on behalf of D-Link Corp., D-Link Systems, ZyXEL Corp., and ZyXEL U.S. 12
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In re TFT-LCD, effecting service of process through the letters rogatory process is expensive and time consuming. 270 F.R.D. at 537. Thus, if Fujitsu is required to serve D-Link Corp. and ZyXEL Corp. through the letters rogatory process, Fujitsus case against D-Link Corp. and ZyXEL Corp. will be significantly delayed. Such a delay will prohibit Fujitsu from coordinating discovery activities with all of the Defendants. Moreover, Fujitsus position that service on D-Link Corp. and ZyXEL Corp. through their counsel would put them on notice of Fujitsus claims against them is reasonable given that both D-Link Corp. and ZyXEL Corp. appear to have previously accepted service through their attorneys. Despite these concerns, the Court finds that the circumstances at issue here do not justify ordering service on D-Link Corp. and ZyXEL Corp. in a manner that is not prescribed by their countrys laws. The facts at issue here distinguish this case from the cases cited by Fujitsu. First, in Rio Properties, Inc. v. Rio Int'l Interlink, 284 F.3d 1007, 1016 (9th Cir. 2002), the Ninth Circuit affirmed the district courts decision to order service on a foreign business through its attorney, U.S. affiliated courier, and e-mail address because that foreign business had shown itself to be "an elusive international defendant, striving to evade service of process." Fujitsu has not presented any facts to suggest that D-Link Corp. and ZyXEL Corp. are evading service. Although D-Link Corp. and ZyXEL Corp. disagree with Fujitsus method of service, they have not shown any unwillingness to accept service in conformity with Taiwanese law. Thus, the facts at issue in Rio Properties do not support Fujitsus request for court ordered service here. Second, in Network-1 Sec. Solutions, Inc. v. D-Link Corp. et al., No. 6:05-CV-291-LED, Dkt. No. 55 (E.D. Tex. Feb. 8, 2006), the court ordered service on D-Link Corp.s counsel pursuant to Rule 4(f)(3) after D-Link Corp.s counsel represented at oral argument that he would waive service under Rule 4(d). Zapf. Decl., Ex. 19 at 3. At the hearing on D-Link Corp.s motion in the instant case, D-Link Corp.s counsel explicitly stated that he did not have authority from D-Link Corp. to waive service. Furthermore, in the Network-1 case, D-Link Corp. filed a motion to consolidate before the Judicial Panel on Multidistrict Litigation. Id. at 1. Accordingly, the facts in Network-1 are distinguishable from those at issue here. 13
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12

Third, in In re TFT-LCD (Flat Panel) Antitrust Litig., 270 F.R.D. 535, 537-38 (N.D. Cal. 2010), the court ordered service on a defendant Taiwanese corporations counsel pursuant to Rule 4(f)(3). Unlike here, the plaintiffs case in In re TFT-LCD was consolidated with a Multidistrict Litigation ("MDL"). The actions in the MDL were consolidated for pretrial proceedings, and the plaintiffs case in In re TFT-LCD was, as a result of consolidation, part of a coordinated discovery schedule. The court in In re TFT-LCD noted that significant discovery had already taken place in the MDL and that any delay in serving the defendant Taiwanese corporation would keep the plaintiff from coordinating his discovery with the other MDL plaintiffs. This was significant because the defendant Taiwanese corporation in In re TFT-LCD appeared to have already been a defendant in the related MDL for several years. Also significant to the courts decision was the fact that the defendant Taiwanese corporations U.S. counsel had been representing it for several years in the MDL lawsuits. Id. at 538. These facts are distinguishable from those of the instant case. At the hearing, Fujitsu argued that if the Court does not order service on D-Link Corp. and ZyXEL Corp., it will be unable to coordinate its discovery with all the Defendants in this case in the same way that the plaintiff in In re TFT-LCD would have been unable to coordinate discovery with the MDL plaintiffs. In In re TFT-LCD, however, significant discovery in the related MDL lawsuits had already occurred by the time the plaintiff filed its complaint against the defendant Taiwanese corporation. Here, discovery is just commencing.12 Thus, because the circumstances of Rio Properties, In re TFT-LCD, and Network-1 are not present here, the Court finds it inappropriate to order service on D-Link Corp. and ZyXEL Corp. through their U.S. counsel, a manner that is not prescribed by Taiwanese law.13 Moreover, Fujitsu Furthermore, any inability to coordinate discovery in this case is a result of Fujitsus own defective service. Fujitsu claims that it effected personal service on both D-Link Corp. and ZyXEL Corp. because of the guidance it found on the U.S. State Departments website. That website, however, not only disclaimed the absolute accuracy of its information but also suggested that readers should address questions about foreign law to foreign counsel. See Zapf Decl., Ex. 18. Fujitsu has not provided the Court with any evidence that it consulted foreign counsel before serving D-Link Corp. and ZyXEL Corp. 13 D-Link Corp. and ZyXEL Corp. also point out that in both Fujitsu Ltd. v. Nanya Tech. Corp., 2007 WL 484789, at *5 (N.D. Cal. Feb. 9, 2007), and Moletech Global Hong Kong Ltd. v. Pojery 14
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itself concedes that it likely must serve D-Link Corp. and ZyXEL Corp. through the letters rogatory process in order to ensure that the Taiwanese courts will assist with the enforcement of any judgment obtained in this case. Process Oppn 21 n. 8. During the hearing, counsel for DLink Corp. confirmed that even if the initial service of process was insufficient, Fujitsu could cure the insufficiency through the letters rogatory process during the litigation and thus ensure that the Taiwanese courts will assist with enforcement of any judgment obtained in this case. Because there is a reasonable prospect that service may yet be obtained, dismissal is not appropriate. Nuance Commc'ns, 626 F.3d at 1240. Moreover, D-Link Corp. and ZyXEL Corp. are fully aware of this lawsuit and have already had an opportunity to present their objections by filing motions to dismiss. Accordingly, the Court denies D-Link Corp.s and ZyXEL Corp.s motions to dismiss for insufficient service of process, but quashes Fujitsus insufficient service to allow Fujitsu an opportunity to serve D-Link Corp. and ZyXEL Corp. in a manner that is prescribed by Taiwanese law. B. Motion to Dismiss for Lack of Personal Jurisdiction D-Link Corp. moves to dismiss Fujitsus complaint pursuant to Federal Rule of Civil Procedure 12(b)(2). D-Link Corp. alleges that because D-Link Corp. lacks both general contacts with this forum and specific contacts related to Fujitsus claims, Fujitsus claims against it must be dismissed for lack of personal jurisdiction. D-Link Corp. Mot. 1. Fujitsu argues that this Court can properly exercise personal jurisdiction over D-Link Corp. because D-Link Corp. sold infringing products in California during the term of the Ozawa Patent. Process Oppn 2. Moreover, Fujitsu claims that personal jurisdiction exists as to D-Link Corp. because D-Link Corp. continues to this day to offer for sale at least one infringing product to consumers in the United States and California via D-Link Corp.s website. Id. 1. Legal Standard "Personal jurisdiction over an out-of-state defendant is appropriate if the relevant states long-arm statute permits the assertion of jurisdiction without violating federal due process." Trading Co., 2009 WL 506873, at *3 (N.D. Cal. Feb. 27, 2009), the district court quashed the attempted service without ordering service on the defendants counsel. 15
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Nuance Commc'ns, Inc. v. Abbyy Software House, 626 F.3d 1222, 1230 (Fed. Cir. 2010) (quoting 3D Sys., Inc. v. Aarotech Labs., Inc., 160 F.3d 1373, 1376-77 (Fed. Cir. 1998)) (quotation marks omitted).14 "Because Californias long-arm statute is co-extensive with federal due process requirements, the jurisdictional analyses under California law and federal law are the same." Id. at 1230-31 (citing Schwarzenegger v. Fred Martin Motor Co., 374 F.3d 797, 801 (9th Cir. 2004)). "The ,,constitutional touchstone of the due process inquiry ,,remains whether the defendant purposefully established "minimum contacts" in the forum State." Patent Rights Prot. Group, LLC v. Video Gaming Techs., Inc., 603 F.3d 1364, 1369 (Fed. Cir. 2010) (quoting Burger King Corp. v. Rudzewicz, 471 U.S. 462, 474, 105 S. Ct. 2174, 85 L. Ed. 2d 528 (1985)). "The requirement for purposeful minimum contacts helps ensure that non-residents have fair warning that a particular activity may subject them to litigation within the forum." Beverly Hills Fan Co. v. Royal Sovereign Corp., 21 F.3d 1558, 1565 (Fed. Cir. 1994) (citations omitted). This "minimum contacts" requirement can be satisfied in two ways. First, the court may exercise general jurisdiction "where the defendant has continuous and systematic contacts with the forum state, even if those contacts are not related to the cause of action." Elecs. for Imaging, Inc. v. Coyle, 340 F.3d 1344, 1349 (Fed. Cir. 2003) (citing Helicopteros Nacionales de Colombia, S.A. v. Hall, 466 U.S. 408, 416, 104 S. Ct. 1868, 80 L. Ed. 2d 404 (1984)). Second, the court may exercise specific jurisdiction where "the defendant ,,has purposefully directed his activities at residents of the forum and the litigation results from alleged injuries that arise out of or relate to those activities." Deprenyl Animal Health, Inc. v. Univ. of Toronto Innovations Found., 297 F.3d 1343, 1350-51 (Fed. Cir. 2002) (quoting Inamed Corp. v. Kuzmak, 249 F.3d 1356, 1360, 58 U.S.P.Q.2D (BNA) 1774, 1776 (Fed. Cir. 2001)). "Once it has been decided that a defendant purposefully established minimum contacts within the forum State, these contacts may be considered in light of other factors to determine whether the assertion of personal jurisdiction would comport with ,,fair play and substantial
14

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The law of the Federal Circuit applies in determining whether the court should exercise personal jurisdiction over an out-of-state accused infringer. See Nuance Commc'ns, Inc. v. Abbyy Software House, 626 F.3d 1222, 1230 (Fed. Cir. 2010) (citing Akro Corp. v. Luker, 45 F.3d 1541, 1543 (Fed. Cir. 1995)). 16
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justice." Burger King, 471 U.S. at 476, 105 S. Ct. 2174, 85 L. Ed. 2d 528 (quoting International Shoe Co. v. Washington, 326 U.S. 310, 320, 66 S. Ct. 154, 90 L. Ed. 95 (1945)). "The unique burdens placed upon one who must defend oneself in a foreign legal system should have significant weight in assessing the reasonableness of stretching the long arm of personal jurisdiction over national borders." Touchcom, Inc. v. Bereskin & Parr, 574 F.3d 1403, 1417 (Fed. Cir. 2009) (quoting Asahi Metal Indus. Co. v. Super. Ct. of Cal., 480 U.S. 102, 114, 107 S. Ct. 1026, 94 L. Ed. 2d 92 (1987)) (quotation marks omitted). Nevertheless, the Federal Circuit has recognized that "progress in communications and transportation has made the defense of a lawsuit in a foreign tribunal less burdensome." Id. (quoting World-Wide Volkswagen v. Woodson, 444 U.S. 286, 294, 100 S. Ct. 559, 62 L. Ed. 2d 490 (1980)) (quotation marks omitted). When no jurisdictional discovery has occurred, a plaintiff "is required ,,only to make a prima facie showing of jurisdiction to defeat the motion to dismiss." Trintec Indus. v. Pedre Promotional Prods., 395 F.3d 1275, 1282 (Fed. Cir. 2005) (quotation omitted). "[A] district court must accept the uncontroverted allegations in the plaintiffs complaint as true and resolve any factual conflicts in the affidavits in the plaintiff's favor." Electronics for Imaging, 340 F.3d at 1349 (citations omitted). "If the district court concludes that the existing record is insufficient to support personal jurisdiction, . . . [jurisdictional] discovery is appropriate where the existing record is ,,inadequate to support personal jurisdiction and ,,a party demonstrates that it can supplement its jurisdictional allegations through discovery." Trintec, 395 F.3d at 1283 (quotation and citation omitted). 2. Specific Jurisdiction D-Link Corp. argues that specific jurisdiction is improper because it has no contacts with California that are specific to this case. D-Link Corp. Mot 13. Fujitsu argues that D-Link Corp. is subject to specific personal jurisdiction because D-Link Corp. does not dispute that it sold or shipped accused products to California prior to May 2006. Process Oppn 10-11. The Federal Circuit has "outlined a three-factor test for specific jurisdiction, which considers whether (1) the defendant purposefully directed its activities at residents of the forum, (2) the claim arises out of or relates to the defendants activities with the forum, and (3) assertion of 17
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personal jurisdiction is reasonable and fair." Synthes (U.S.A.) v. G.M. Dos Reis Jr. Ind. Com. De Equip. Medico, 563 F.3d 1285, 1297 (Fed. Cir. 2009) (citations omitted). "Under this test, a court may properly assert specific jurisdiction, even if the contacts are isolated and sporadic, so long as the cause of action arises out of or relates to those contacts." Id. (citing Silent Drive, Inc. v. Strong Indus., Inc., 326 F.3d 1194, 1200 (Fed. Cir. 2003)). "Indeed, a ,,substantial connection with a forum arising out of a ,,single act can support jurisdiction." Id. (quoting Burger King, 471 U.S. at 475 n.18). Fujitsu argues that its allegations that D-Link Corp. sold accused products into the forum prior to May 2006 constitutes a prima facie showing that the Court has specific personal jurisdiction over D-Link Corp. Process Oppn 11.15 D-Link Corp. does not disclaim that it sold products into the U.S. prior to May 2006 but argues that the six year time limitation on infringement damages weighs against subjecting it to specific personal jurisdiction for sales occurring nearly five years ago. D-Link Corp. Reply 9 (citing 35 U.S.C. § 286). The Court finds this argument unpersuasive. As D-Link Corp. concedes in its brief, the Federal Circuit has looked at facts five years prior to the time of filing in considering whether to exercise personal jurisdiction over a defendant. Id. (citing Synthes, 563 F.3d at 1299; Autogenomics, Inc. v. Oxford Gene Tech. Ltd., 566 F.3d 1012, 1018 (Fed. Cir. 2009)). Thus, the question becomes whether Fujitsus uncontroverted allegations that D-Link Corp. sold goods into the forum prior to May 2006 is a prima facie showing that personal jurisdiction exists. As support for its position, Fujitsu relies on Telemac Corp. v. Phonetec LP, No. C 04-1486, 2005 WL 701605 (N.D. Cal. Mar. 25, 2005) and Beverly Hills Fan Co. v. Royal Sovereign Corp., 21 F.3d 1558 (Fed. Cir. 1994). In Telemac, the court held that the defendants were subject to specific personal jurisdiction in a patent infringement suit because defendants sold allegedly infringing phones to California customers through a California distributor. 2005 WL 701605, at *5. According to the court, this "gave them fair warning that their activities might subject them to
15

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Fujitsu also alleges that D-Link Corp. continues to market and sell infringing products to California customers through its website. Process Oppn 11-12. D-Link Corp. maintains that DLink Systems, Inc. and not D-Link Corp. manages and hosts the websites which sell products to U.S. consumers. 18
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litigation within the forum." Id. In Beverly Hills, the Federal Circuit held that personal jurisdiction existed where the defendants purposefully shipped the allegedly infringing product into the forum state through an established distribution channel. 21 F.3d at 1565. Here, Fujitsus allegations go beyond those in Telemac and Beverly Hills. Fujitsu alleges, unlike the defendants in Telemac and Beverly Hills, that D-Link Corp. sold allegedly infringing products directly into the forum without using a distributor. It is clear that D-Link Corp. does not dispute that it sold goods into the U.S. prior to May 2006. It is not clear, however, whether D-Link Corp. is admitting that it sold these goods directly to U.S. customers or only sold them to D-Link Systems, Inc. In any case, accepting Fujitsus uncontroverted allegations as true, Fujitsu has made a prima facie case of personal jurisdiction. D-Link Corp. purposefully directed its activities at residents of the forum by selling allegedly infringing goods into California, either through D-Link Systems, Inc. or directly to California customers, and Fujitsus claim arises out of or relates to those sales. Furthermore, D-Link Corp.s sale of goods into California gave them fair warning that they may be subject to litigation here. 3. Reasonable and Fair The third prong of the test for specific jurisdiction requires that the assertion of personal jurisdiction is reasonable and fair. Synthes, 563 F.3d at 1297. "With respect to the [this] prong, the burden of proof is on the defendant, which must ,,present a compelling case that the presence of some other considerations would render jurisdiction unreasonable under the five-factor test articulated by the Supreme Court in Burger King." Breckenridge Pharm., Inc. v. Metabolite Labs., Inc., 444 F.3d 1356, 1362 (Fed. Cir. 2006) (quoting Burger King, 471 U.S. at 476-77). These factors are: "[1] the burden on the defendant, [2] the forum States interest in adjudicating the dispute, [3] the plaintiff's interest in obtaining convenient and effective relief, [4] the interstate judicial system's interest in obtaining the most efficient resolution of controversies, and [5] the shared interest of the several States in furthering fundamental substantive social policies." Avocent Huntsville Corp. v. Aten Int'l Co., 552 F.3d 1324, 1331 (Fed. Cir. 2008) (quoting Burger King, 471 U.S. at 476) (quotation marks omitted). In general, the presence of minimum contacts is enough. Cases where the exercise of personal jurisdiction is unreasonable are "limited to the rare situation 19
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in which the plaintiffs interest and the states interest in adjudicating the dispute in the forum are so attenuated that they are clearly outweighed by the burden of subjecting the defendant to litigation within the forum." Beverly Hills, 21 F.3d at 1568. D-Link Corp. argues that exercising jurisdiction over it would offend traditional notions of fair play and substantial justice because it has no contacts or relationship with California. D-Link Corp. Mot. 17. D-Link Corp. asserts that it did not manufacture the products accused of infringing Fujitsus patent. Id. D-Link Corp also represents that it has not sold the allegedly infringing products to D-Link Systems since May 2006. Id. Furthermore, D-Link Corp. argues that California has little interest in hearing a patent dispute between two foreign parties. Even though the Court understands that D-Link Corp. will be burdened by litigating this case in California, this burden does not outweigh the other four factors outlined in Burger King. D-Link Corp. has conceded that it sold allegedly infringing products into California prior to May 2006. California has an interest in discouraging patent infringement injuries that occur within its state. See Beverly Hills, 21 F.3d at 1568. Even though D-Link Corp. is located in Taiwan, "it is recognized that progress in communications and transportation has made the defense of a lawsuit in a foreign tribunal less burdensome." Id. at 1569 (quoting World-Wide Volkswagen, 444 U.S. at 294, 100 S. Ct. 559, 62 L. Ed. 2d 490) (quotation marks omitted). Moreover, D-Link Corp.s assertions in its marketing materials that it has a worldwide presence undercut its claim that litigation in the United States will be unduly burdensome. See Zapf Decl., Exs. 5, 9. Because Fujitsu has established a prima facie case that D-Link Corp. has minimum contacts with California that are related to Fujitsus claims against D-Link and because the exercise of personal jurisdiction would not be unreasonable or unfair, the Court denies D-Link Corp.s motion to dismiss for lack of personal jurisdiction.16 /// /// ///
16

Because the Court finds that Fujitsu has established a prima facie case for specific personal jurisdiction as to D-Link Corp., the Court need not address the parties arguments regarding general personal jurisdiction or jurisdiction under Federal Rule of Civil Procedure 4(k)(2). 20
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17

C. Motions to Dismiss for Failure to State a Claim D-Link Systems and ZyXEL U.S. move to dismiss Fujitsus complaint pursuant to Federal Rule of Civil Procedure 12(b)(6). D-Link Sys. Mot. 1.17 D-Link Systems and ZyXEL U.S. make two arguments in favor of dismissal. First, D-Link Systems and ZyXEL U.S. argue that Fujitsus claims against them are premised on an indirect infringement theory and must be dismissed because Fujitsus complaint does not contain factual allegations of knowledge, use, and lack of substantial non-infringing uses. Id. Second, D-Link Systems and ZyXEL U.S. argue that all of the Ozawa Patents claims call for at least three separate devices and that Fujitsus complaint must be dismissed because it does not allege that D-Link Systems and ZyXEL U.S. directly infringe any of the Ozawa Patents claims. Fujitsu contends that dismissal is improper because its complaint properly alleges facts to support claims against D-Link Systems and ZyXEL U.S. for direct and indirect infringement. Dismiss Oppn 1. After outlining the legal standard applicable to a Rule 12(b)(6) motion to dismiss, the Court will address D-Link Systems and ZyXEL U.S.s arguments in reverse order. 1. Legal Standard "Federal Rule of Civil Procedure 8(a)(2) requires only ,,a short and plain statement of the claim showing that the pleader is entitled to relief, in order to ,,give the defendant fair notice of what the . . . claim is and the grounds upon which it rests." Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555, 127 S. Ct. 1955, 167 L. Ed. 2d 929 (2007) (quoting Conley v. Gibson, 355 U.S. 41, 47, 78 S. Ct. 99, 2 L. Ed. 2d 80 (1957)). "Dismissal under Rule 12(b)(6) is appropriate only where the complaint lacks a cognizable legal theory or sufficient facts to support a cognizable legal theory." Mendiondo v. Centinela Hosp. Med. Ctr., 521 F.3d 1097, 1104 (9th Cir. 2008) (citing Balistreri v. Pacifica Police Dep't, 901 F.2d 696, 699 (9th Cir. 1990)). "While a complaint attacked by a Rule 12(b)(6) motion to dismiss does not need detailed factual allegations, a plaintiffs obligation to provide the ,,grounds of his ,,entitlement to relief requires more than labels and conclusions, and a

D-Link Systems and ZyXEL U.S.s motions to dismiss are nearly identical. In fact, Fujitsu filed a consolidated opposition to D-Link Systems and ZyXEL U.S.s motions. For simplicity, the Court will refer to only D-Link Systems motion unless there is a significant difference. 21
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formulaic recitation of the elements of a cause of action will not do." Twombly, 550 U.S. at 555, 127 S. Ct. 1955, 167 L. Ed. 2d 929 (citations, quotations, and alterations omitted). "To survive a motion to dismiss, a complaint must contain sufficient factual matter, accepted as true, to ,,state a claim to relief that is plausible on its face." Ashcroft v. Iqbal, 129 S. Ct. 1937, 1949, 173 L. Ed. 2d 868 (2009) (citing Twombly, 550 U.S. at 570, 127 S. Ct. 1955, 167 L. Ed. 2d 929). "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." Id., 173 L. Ed. 2d 868 (citing Twombly, 550 U.S. at 556, 127 S. Ct. 1955, 167 L. Ed. 2d 929). In determining whether a claim has facial plausibility, the court need not accept as true a plaintiffs legal conclusions. See id., 173 L. Ed. 2d 868 ("[T]he tenet that a court must accept as true all of the allegations contained in a complaint is inapplicable to legal conclusions."). Therefore, "[t]hreadbare recitals of the elements of a cause of action, supported by mere conclusory statements, do not suffice." Id., 173 L. Ed. 2d 868 (citation omitted). "Determining whether a complaint states a plausible claim for relief [is] a context-specific task that requires the reviewing court to draw on its judicial experience and common sense." Id. at 1950, 173 L. Ed. 2d 868 (citation omitted). "The plausibility standard is not akin to a ,,probability requirement, but it asks for more than a sheer possibility that a defendant has acted unlawfully." Id. at 1949, 173 L. Ed. 2d 868 (citing Twombly, 550 U.S. at 556, 127 S. Ct. 1955, 167 L. Ed. 2d 929). "Where a complaint pleads facts that are ,,merely consistent with a defendants liability, it ,,stops short of the line between possibility and plausibility of ,,entitlement to relief." Id., 173 L. Ed. 2d 868 (citing Twombly, 550 U.S. at 557, 127 S. Ct. 1955, 167 L. Ed. 2d 929). "Factual allegations must be enough to raise a right to relief above the speculative level." Twombly, 550 U.S. at 555, 127 S. Ct. 1955, 167 L. Ed. 2d 929 (citations omitted). "[A] district court should grant leave to amend . . . unless it determines that the pleading could not possibly be cured by the allegation of other facts." Lopez v. Smith, 203 F.3d 1122, 1130 (9th Cir. 2000) (citation and quotation marks omitted). /// 22
Case No.: 10-CV-03972-LHK ORDER RE: D-LINK CORPORATION, D-LINK SYSTEMS, INC., ZYXEL COMMUNICATIONS CORPORATION, AND ZYXEL COMMUNICATIONS, INC.S MOTIONS TO DISMISS

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2. Fujitsu's Claim for Direct Patent Infringement D-Link Systems and ZyXEL U.S. argue that all of the Ozawa Patents claims are "divided infringement" claims. D-Link Sys. Mot. 8. According to D-Link Systems and ZyXEL U.S., this means that in order to infringe the Ozawa Patents claims, they must operate three separate and distinct devices together. Id. D-Link Systems and ZyXEL U.S. claim that Fujitsus complaint fails to state a claim against them because the complaint does not allege that they make, use, or sell all the devices required by the Ozawa Patents claims. Id. at 10. Fujitsu, in opposition, argues that D-Link Systems and ZyXEL U.S.s argument rests on an erroneous construction of the Ozawa Patents claims. Dismiss Oppn 8. According to Fujitsu, it is possible to infringe some of the Ozawa Patents claims with only a single device. See id. at 3. Besides arguing that it is not relying on a divided infringement theory, Fujitsu argues that it is not required to plead divided infringement and that arguments regarding divided infringement are premature. Id. at 10-12. "[W]hoever without authority makes, uses, offers to sell, or sells any patented invention, within the United States or imports into the United States any patented invention during the term of the patent therefor, infringes the patent." 35 U.S.C. § 271(a). "Infringement requires, as it always has, a showing that a defendant has practiced each and every element18 of the claimed invention." BMC Res., Inc. v. Paymentech, L.P., 498 F.3d 1373, 1380 (Fed. Cir. 2007) (citation omitted); see also General Mills, Inc. v. Hunt-Wesson, Inc., 103 F.3d 978, 981 (Fed. Cir. 1997) ("Literal infringement requires that every limitation of the patent claim be found in the accused infringing device." (citing Read Corp. v. Portec, Inc., 970 F.2d 816, 821, 23 U.S.P.Q.2D (BNA) 1426, 1432 (Fed. Cir. 1992))).19 "Thus, liability for infringement requires a party to make, use, sell, or offer to
18

Courts use the terms "element" and "limitation" inconsistently. At least one panel of the Federal Circuit expressed a preference "to use the term ,,limitation when referring to claim language and the term ,,element when referring to the accused device." Lockheed Martin Corp. v. Space Systems/Loral, Inc., 324 F.3d 1308, 1315 (Fed. Cir. 2003). The Court will follow this practice here. See also Perkin-Elmer Corp. v. Westinghouse Elec. Corp., 822 F.2d 1528, 1533 n.9 (Fed. Cir. 1987) (discussing the various meanings of the word "elements"). 19 "Infringement under the doctrine of equivalents requires that the accused product contain each limitation of the claim or its equivalent." See AquaTex Indus. v. Techniche Solutions, 419 F.3d 1374, 1382 (Fed. Cir. 2005) (citing Warner-Jenkinson Co. v. Hilton Davis Chem. Co., 520 U.S. 17, 40, 117 S. Ct. 1040, 137 L. Ed. 2d 146 (1997)). "An element in the accused product is equivalent to a claim limitation if the differences between the two are insubstantial." Id. "The analysis 23
Case No.: 10-CV-03972-LHK ORDER RE: D-LINK CORPORATION, D-LINK SYSTEMS, INC., ZYXEL COMMUNICATIONS CORPORATION, AND ZYXEL COMMUNICATIONS, INC.S MOTIONS TO DISMISS

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sell the patented invention, meaning the entire patented invention." Id.; see also General Foods Corp. v. Studiengesellschaft Kohle mbH, 972 F.2d 1272, 1274 (Fed. Cir. 1992) ("[E]ach claim is an entity which must be considered as a whole."). "It is a bedrock principle of patent law that the claims of a patent define the invention to which the patentee is entitled the right to exclude." NTP, Inc. v. Research in Motion, Ltd., 418 F.3d 1282, 1293 (Fed. Cir. 2005) (quoting Phillips v. AWH Corp., 415 F.3d 1303, 1312 (Fed. Cir. 2005) (en banc)) (quotation marks omitted). As stated, Iqbal asks this Court to determine whether "the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged." 129 S. Ct. at 1949, 173 L. Ed. 2d 868 (citation omitted). Here, Fujitsu claims, in part, that D-Link Systems and ZyXEL U.S. directly infringed the Ozawa Patent. Thus, under Iqbal,20 Fujitsus complaint must allege facts that allow the Court to draw the reasonable inference that D-Link Systems and ZyXEL U.S. have practiced each and every limitation of an invention claimed in the Ozawa Patent. Fujitsu claims that the following allegations make it reasonable for the Court to infer that D-Link Systems and ZyXEL U.S. infringe its patent: (1) Fujitsu owns the Ozawa Patent and has the right to enforce it, Compl. ¶ 12; (2) D-Link Systems has made, used, offered to sell, sold or imported devices within the scope of one or more of the claims of the Ozawa Patent, including but not limited to "the D-Link Xtreme and RangeBooster series of wireless interface cards, access points, and routers, including the DWA-652 Xtreme N Notebook Adapter," id. ¶ 16; (3) ZyXEL focuses on whether the element in the accused device ,,performs substantially the same function in substantially the same way to obtain the same result as the claim limitation." Id. (quotation omitted). 20 Although some district courts have not applied Iqbal to direct infringement claims, see e.g., Xpoint Technologies, Inc. v. Microsoft Corp., 730 F. Supp. 2d 349, 352 (D. Del. 2010) (quoting McZeal v. Sprint Nextel Corp., 501 F.3d 1354, 1357 (Fed. Cir. 2007)); Vellata, LLC v. Best Buy Co., Inc., 2011 WL 61620, *4 (C.D. Cal. Jan. 7, 2011) (citing Phonometrics, Inc. v. Hospitality Franchise Sys., Inc., 203 F.3d 790, 794 (Fed. Cir. 2000)), none of the parties here argue that Iqbal does not apply. Those courts not applying Iqbal only require a plaintiff to plead: "(1) an allegation of jurisdiction; (2) a statement that 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." Xpoint Technologies, 730 F. Supp. 2d at 352 (quoting McZeal, 501 F.3d at 1357) (quotation marks and alterations omitted); see also Vellata, LLC, 2011 WL 61620, at *4 ("A claim for direct infringement must state only: (1) ownership of the allegedly infringed patent; (2) the infringer's name; (3) a citation to the patent; (4) the infringing activity; and (5) citations to the applicable federal patent law.") (citing Phonometrics, 203 F.3d at 794). 24
Case No.: 10-CV-03972-LHK ORDER RE: D-LINK CORPORATION, D-LINK SYSTEMS, INC., ZYXEL COMMUNICATIONS CORPORATION, AND ZYXEL COMMUNICATIONS, INC.S MOTIONS TO DISMISS

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U.S. has made, used, offered to sell, sold or imported devices within the scope of one or more of the claims of the Ozawa Patent, including but not limited to "the ZyXEL ZyAIR series of wireless interface cards, access points, and routers, including the G-162 Wireless CardBus Card," id. ¶ 18; (4) Fujitsu has suffered damage as a result of infringement, id. ¶ 19. Dismiss Oppn 7. In its complaint, Fujitsu claims that its Ozawa Patent concerns card type input/output interface devices. Id. ¶ 11. From Fujitsus description of the Ozawa Patent and the facts alleged in the complaint, the Court can draw a reasonable inference that D-Link Systems and ZyXEL U.S. have infringed Fujitsus patent. Fujitsu alleges that the Ozawa Patent covers card type interface devices. Fujitsu also alleges that D-Link Systems and ZyXEL U.S. made, used, offered to sell, or sold a specific line of products that appear, from their names, to be card type interface devices. These devices, as alleged in Fujitsus complaint, are the D-Link Xtreme and RangeBooster series of wireless interface cards and the ZyXEL ZyAIR series of wireless interface cards. Fujitsu has thus done more than provide a threadbare recital of the elements of a patent infringement cause of action. By alleging what it believes the Ozawa Patent covers and naming specific lines and types of products that allegedly infringe the Ozawa Patent, Fujitsu has put D-Link Systems and ZyXEL U.S. on notice of its claims against them. D-Link Systems and ZyXEL U.S., nonetheless, argue that Fujitsus claims against them fail because Fujitsus complaint does not identify any of their products that infringes every limitation of an invention claimed in the Ozawa Patent. According to D-Link Systems and ZyXEL U.S., every independent claim outlined in the Ozawa Patent requires at least three separate devices. These three devices are: (1) a "card"; (2) an "electronic device"; and (3) an "external device." DLink Sys. Mot. 8. In addition, D-Link Systems and ZyXEL U.S. argue that to infringe the Ozawa Patents claims, the electronic device must have a slot, and the card must be inserted into the slot. Id. D-Link Systems and ZyXEL U.S. argue that because Fujitsus complaint does not allege that they have made, used, or sold an electronic device having a slot into which a card may be inserted, it must be dismissed. Id. at 10. 25
Case No.: 10-CV-03972-LHK ORDER RE: D-LINK CORPORATION, D-LINK SYSTEMS, INC., ZYXEL COMMUNICATIONS CORPORATION, AND ZYXEL COMMUNICATIONS, INC.S MOTIONS TO DISMISS

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In opposition, Fujitsu argues that D-Link Systems and ZyXEL U.S. have erroneously interpreted the Ozawa Patents claims. According to Fujitsu, the Ozawa Patent includes three categories of claims: (1) claims that are directed to a "card type input/output interface device"; (2) claims directed to a "system" that includes a card interface plus an "external device"; and (3) claims directed to a "system" that includes a card interface plus an "external device" and an "electronic device." Dismiss Oppn 3. Thus, on Fujitsus reading of the Ozawa Patents claims, D-Link Systems and ZyXEL U.S. made, used, or sold products that infringe claims in both the first and second categories. Id. at 9-10. Moreover, Fujitsu argues that D-Link Systems and ZyXEL U.S.s arguments regarding the proper scope of the Ozawa Patents claims are premature. Id. at 10-11. According to Fujitsu, the Court should first determine the scope of the Ozawa Patents claims in accordance with the claim construction schedule set out in the Patent Local Rules. Id. In response, D-Link Systems and ZyXEL U.S. maintain that their interpretation of Fujitsus claims is correct and continue to request that Fujitsus complaint be dismissed. Dkt. No. 91, at 2-9. In addition, D-Link Systems and ZyXEL U.S. argue that the Court need not delay resolution of this issue until claim construction and can resolve the issue at the motion to dismiss stage. Id. at 10. Despite D-Link Systems and ZyXEL U.S.s arguments to the contrary, the Court finds that this issue turns on claim construction. D-Link Systems and ZyXEL U.S. spend much of their reply brief making arguments about what the Ozawa Patents claims cover. This is exactly what claim construction is meant to answer. According to the Federal Circuit, "[t]he purpose of claim construction is to ,,determine the meaning and scope of the patent claims asserted to be infringed." O2 Micro Int'l Ltd. v. Beyond Innovation Tech. Co., 521 F.3d 1351, 1360 (Fed. Cir. 2008) (quoting Markman v. Westview Instruments, Inc., 52 F.3d 967, 976 (Fed. Cir. 1995) (en banc), aff'd 517 U.S. 370, 116 S. Ct. 1384, 134 L. Ed. 2d 577 (1996)) (alterations omitted). The court in O2 Micro went on to expound on this purpose, explaining that ",,claim construction is a matter of resolution of disputed meanings and technical scope, to clarify and when necessary to explain what the patentee covered by the claims, for use in the determination of infringement." Id. at 1362 (quoting

26
Case No.: 10-CV-03972-LHK ORDER RE: D-LINK CORPORATION, D-LINK SYSTEMS, INC., ZYXEL COMMUNICATIONS CORPORATION, AND ZYXEL COMMUNICATIONS, INC.S MOTIONS TO DISMISS

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United States Surgical Corp. v. Ethicon, Inc., 103 F.3d 1554, 1568 (Fed. Cir. 1997)) (alterations omitted). 21 If the Court were to construe the Ozawa Patents claims at the motion to dismiss stage, it would be starting the process of evaluating the merits of Fujitsus case. "Determination of a claim of infringement involves a two step inquiry." Advanced Cardiovascular Sys. v. Scimed Life Sys., 261 F.3d 1329, 1336 (Fed. Cir. 2001). "First, the claims are construed, a question of law in which the scope of the asserted claims is defined." Id. (citing Cybor Corp. v. FAS Techs., Inc., 138 F.3d 1448, 1454-56, 46 U.S.P.Q.2D (BNA) 1169, 1172-74 (Fed. Cir. 1998) (en banc)). "Second, the claims, as construed, are compared to the accused device." Id. (citing Cybor Corp., 138 F.3d at 1454-56). "This is a question of fact." Id. (citing WMS Gaming, Inc. v. Int'l Game Tech., 184 F.3d 1339, 1346, 51 U.S.P.Q.2D (BNA) 1385, 1389 (Fed. Cir. 1999)). "To prevail, the plaintiff must establish by a preponderance of the evidence that the accused device infringes one or more claims of the patent either literally or under the doctrine of equivalents." Id. (citing WMS Gaming, 184 F.3d at 1346). To accept D-Link Systems and ZyXEL U.S.s arguments, the Court would not only be required to construe the Ozawa Patents claims, but it would need to compare those claims to the accused device. Claim construction and infringement analysis should not be resolved on a motion to dismiss. A motion to dismiss is not the proper time to initiate claim construction for at least two additional reasons. First, this Districts Patent Local Rules establish the proper procedure for claim construction proceedings. See PATENT L.R. 4. Under Patent Local Rule 4, claim construction proceeds in an orderly fashion after the parties disclose their asserted claims, infringement contentions, and invalidity contentions. Other district courts have denied motions to dismiss counterclaims in patent cases because doing so would undermine local patent rules. See e.g., Pfizer Inc. v. Apotex Inc., 726 F. Supp. 2d 921, 938 (N.D. Ill. 2010) (denying dismissal of the defendants counterclaims for failure to satisfy Rule 8(a) because doing so would undermine the courts local
21

The purposes of claim construction differ from the purposes of motions to dismiss for failure to state a claim. "[D]ismissal for failure to state a claim is ,,proper only where there is no cognizable legal theory or an absence of sufficient facts alleged to support a cognizable legal theory." Shroyer v. New Cingular Wireless Servs., 622 F.3d 1035, 1041 (9th Cir. 2010) (quoting Navarro v. Block, 250 F.3d 729, 732 (9th Cir. 2001)). 27
Case No.: 10-CV-03972-LHK ORDER RE: D-LINK CORPORATION, D-LINK SYSTEMS, INC., ZYXEL COMMUNICATIONS CORPORATION, AND ZYXEL COMMUNICATIONS, INC.S MOTIONS TO DISMISS

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patent rules, which require more detailed disclosures at a later stage). Second, claim construction often requires the consideration of extrinsic evidence not generally considered on a motion to dismiss.22 Because a motion to dismiss is not the proper time to raise claim construction arguments, the Court will not consider D-Link Systems and ZyXEL U.S.s arguments regarding the proper scope of the Ozawa Patents claims. Accordingly, the Court finds that Fujitsu has stated a claim for direct patent infringement against both D-Link Systems and ZyXEL U.S. and thus denies these Defendants motion to dismiss Fujitsus direct infringement claim. 3. Fujitsu's Claim for Indirect Infringement Fujitsus complaint presents two theories of indirect infringement: (1) induced infringement under 35 U.S.C. § 271(b), and (2) contributory infringement under 35 U.S.C. § 271(c). Under 35 U.S.C. § 271(b), "[w]hoever actively induces infringement of a patent shall be liable as an infringer." 35 U.S.C. § 271(b). "To prevail on inducement, ,,the patentee must show, first that there has been direct infringement, and second that the alleged infringer knowingly induced infringement and possessed specific intent to encourage anothers infringement." Kyocera Wireless Corp. v. ITC, 545 F.3d 1340, 1353-54 (Fed. Cir. 2008) (quoting Minn. Mining & Mfg. Co. v. Chemque, Inc., 303 F.3d 1294, 1304-05 (Fed. Cir. 2002)). "[T]he specific intent necessary to induce infringement ,,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 direct infringement." Id. at 1354 (quoting DSU Med. Corp. v. JMS Co., 471 F.3d 1293, 1306 (Fed. Cir. 2006) (en banc review of intent requirement)).
22

"The words of a claim are generally given their ordinary and customary meaning as understood by a person of ordinary skill in the art in question at the time of the invention." Kara Tech. Inc. v. Stamps.com Inc., 582 F.3d 1341, 1345 (Fed. Cir. 2009) (citation omitted). "[T]he person of ordinary skill in the art is deemed to read the claim term not only in the context of the particular claim in which the disputed term appears, but in the context of the entire patent, including the specification." Phillips v. AWH Corp., 415 F.3d 1303, 1313 (Fed. Cir. 2005). "Because the meaning of a claim term as understood by persons of skill in the art is often not immediately apparent, and because patentees frequently use terms idiosyncratically, the court looks to ,,those sources available to the public that show what a person of skill in the art would have understood disputed claim language to mean." Id. at 1314 (quotation omitted). "Those sources include ,,the words of the claims themselves, the remainder of the specification, the prosecution history, and extrinsic evidence concerning relevant scientific principles, the meaning of technical terms, and the state of the art." Id. (quotation and citations omitted). 28
Case No.: 10-CV-03972-LHK ORDER RE: D-LINK CORPORATION, D-LINK SYSTEMS, INC., ZYXEL COMMUNICATIONS CORPORATION, AND ZYXEL COMMUNICATIONS, INC.S MOTIONS TO DISMISS

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Under 35 U.S.C. § 271(c), "[w]hoever offers to sell or sells within the United States . . . a component of a patented machine . . . for use in practicing a patented process" is liable for contributory infringement if: (1) the component constitutes "a material part of the invention"; (2) the alleged infringer knows that the component is "especially made or especially adapted for use in an infringement of [the] patent"; and (3) the component is "not a staple article or commodity of commerce suitable for substantial noninfringing use." 35 U.S.C. § 271(c); see also i4i Ltd. P'ship v. Microsoft Corp., 598 F.3d 831, 850-851 (Fed. Cir. 2010) (discussing the legal elements of a contributory infringement claim). As with induced infringement, a plaintiff must also show direct infringement by a third party in order to succeed on a claim of contributory infringement. See Anton/Bauer, Inc. v. PAG, Ltd., 329 F.3d 1343, 1349 (Fed. Cir. 2003) (holding that the plaintiff must prove that the end users directly infringed its patent in order to succeed on its claim of contributory infringement) (citation omitted). D-Link Systems and ZyXEL U.S. argue that Fujitsus complaint relies on conclusory allegations and thus does not properly state a claim against them for either induced infringement or contributory infringement. D-Link Sys. Mot. 5-8. In support of their argument, D-Link Systems and ZyXEL U.S. analogize Fujitsus complaint to the complaint at issue in Halton, Co. v. Streivor, Inc., No. C. 10-00655, 2010 WL 2077203 (N.D. Cal. May 21, 2010). In Halton, a defendant corporation accused of patent infringement moved to dismiss the plaintiffs claims for indirect infringement. 2010 WL 2077203, at *1. In its complaint, the plaintiff claimed that: (1) the defendant "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" of the plaintiffs patents claims; (2) the defendant made, used, or sold infringing products; (3) the plaintiff had sent the defendant written notice of its patent and demanded that the defendant cease infringing the patent; and (4) the defendant "has intentionally and willfully infringed" the plaintiffs patent "and continues to intentionally and willfully infringe" the plaintiffs patent. Id. The court found these allegations insufficient to state a claim for either induced or contributory infringement. Id. at *2. According to D-Link Systems and ZyXEL U.S., Fujitsus pleading is similarly deficient. 29
Case No.: 10-CV-03972-LHK ORDER RE: D-LINK CORPORATION, D-LINK SYSTEMS, INC., ZYXEL COMMUNICATIONS CORPORATION, AND ZYXEL COMMUNICATIONS, INC.S MOTIONS TO DISMISS

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In defending its induced and contributory infringement claims, Fujitsu points to two paragraphs from its complaint. These paragraphs allege as follows: 14. On information and belief, defendants have been and still are infringing one or more of the claims of the Ozawa Patent by actively inducing others to infringe and contributing to the infringement by others of the Ozawa Patent. Defendants induce and contribute to the infringement by their end-users, as well as their resellers, partners and distributors who, on information and belief, make, use, offer to sell, sell, or import devices that infringe one or more of the claims of the Ozawa Patent, including but not limited to wireless interface cards, access points, and routers and combinations of wireless interface cards, access points, and routers. .... 20. To the extent that defendants have continued or do continue their infringing activities after receiving notice of the Ozawa Patent, such infringement is willful, entitling Fujitsu to the recovery of increased damages under 35 U.S.C. § 284. Compl. ¶¶ 14, 20. Fujitsus complaint does allege at least one fact not pled in the complaint at issue in Halton; Fujitsus complaint specifically identifies alleged third-party direct infringers: "end-users." D-Link Systems and ZyXEL U.S. argue that these end-users do not qualify as direct infringers for at least two reasons. First, D-Link Systems and ZyXEL U.S. argue that these end-users do not qualify as direct infringers because D-Link Systems and ZyXEL U.S. do not control their infringement activity. D-Link Sys. Mot. 11-12. Even if this is factually correct, it has no legal significance. DLink Systems and ZyXEL U.S. have not cited any authority that a defendant must "control" a thirdparty direct infringer to be liable for induced infringement. The case cited by D-Link Systems and ZyXEL U.S. in support of their argument is inapposite. In Centillion Data Sys., LLC v. Qwest Commc'ns Int'l, Inc., 631 F.3d 1279, 1284 (Fed. Cir. 2011), the Federal Circuit held that in order for an end-user to directly infringe a system through "use," the end-user must use "each and every element of a claimed system." (alterations and quotation marks omitted). The court held, nevertheless, that the user need not have physical control over every element of the system. Id. Rather, the end user uses "every element of the system by putting every element collectively into service." Id. Here, Fujitsus complaint alleges that these end-users used infringing devices and combinations of infringing devices. This is sufficient to plead direct infringement by end-users. 30
Case No.: 10-CV-03972-LHK ORDER RE: D-LINK CORPORATION, D-LINK SYSTEMS, INC., ZYXEL COMMUNICATIONS CORPORATION, AND ZYXEL COMMUNICATIONS, INC.S MOTIONS TO DISMISS

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Second, D-Link Systems and ZyXEL U.S. argue that these "end-users" are not direct infringers because Fujitsus complaint does not allege that the "end-users" insert the card interfaces into an electronic device with a slot. D-Link Sys. Mot. 12. As the Court noted above, this is a claim construction argument and is not properly raised on a motion to dismiss. D-Link Systems and ZyXEL U.S. also argue that Fujitsus 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 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 Fujitsus complaint do not rise to the level of specificity of those pled in the complaint at issue in Kilopass. At the hearing, Fujitsus 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, Fujitsus claims for induced infringement against D-Link Systems and ZyXEL U.S. are dismissed with leave to amend. Fujitsu concedes that it has not pled facts supporting each element of contributory infringement. Dismiss Oppn 14-15. Accordingly, Fujitsus claims for contributory infringement against D-Link Systems and ZyXEL U.S. are dismissed with leave to amend. /// /// /// /// /// /// /// /// 31
Case No.: 10-CV-03972-LHK ORDER RE: D-LINK CORPORATION, D-LINK SYSTEMS, INC., ZYXEL COMMUNICATIONS CORPORATION, AND ZYXEL COMMUNICATIONS, INC.S MOTIONS TO DISMISS

1 2 3 4 5 6 7 8 9 10 United States District Court For the Northern District of California 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 Dated: March 29, 2011

III. CONCLUSION For the foregoing reasons, the Court holds as follows: (1) D-Link Corp. and ZyXEL Corp.s motions to dismiss pursuant to Rule 12(b)(5) are DENIED. However, the Court hereby QUASHES Fujitsus service on Defendants DLink Corp. and ZyXEL Corp. Fujitsus request that the Court order service pursuant to Rule 4(f)(3) is DENIED. (2) Defendant D-Link Corp.s motion to dismiss pursuant to Rule 12(b)(2) is DENIED. (3) Defendants D-Link Systems and ZyXEL U.S.s motions to dismiss pursuant to Rule 12(b)(6) are GRANTED in part and DENIED in part. D-Link Systems and ZyXEL U.S.s motions to dismiss Fujitsus claims for direct infringement are DENIED. D-Link Systems and ZyXEL U.S.s motions to dismiss Fujitsus claims for induced and contributory infringement are GRANTED with leave to amend. Plaintiff shall file an amended complaint, if any, within twenty-one (21) days of the date of this Order to cure the deficiencies discussed herein. Plaintiff may not add new causes of action or parties without leave of Court or by stipulation of the parties pursuant to Federal Rule of Civil Procedure 15. IT IS SO ORDERED.

_________________________________ LUCY H. KOH United States District Judge

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Case No.: 10-CV-03972-LHK ORDER RE: D-LINK CORPORATION, D-LINK SYSTEMS, INC., ZYXEL COMMUNICATIONS CORPORATION, AND ZYXEL COMMUNICATIONS, INC.S MOTIONS TO DISMISS