Telecomm Innovations LLC v. Ricoh Company Ltd. et al

Filing 38

MEMORANDUM OPINION. Signed by Judge Sue L. Robinson on 8/6/2013. (nmfn)

IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF DELAWARE
TELECOMM INNOVATIONS, LLC,

)
)
Plaintiff,
)
)
) Civ. No. 12-1277-SLR
v.
)
RICOH COMPANY, LTO., RICOH
)
AMERICAS CORPORATION, LANIER )
WORLDWIDE, INC., AND SAVIN
)
)
CORPORATION,
)
)
Defendants.

Stamatios Stamoulis, Esquire, and Richard C. Weinblatt, Esquire, of Stamoulis &
Weinblatt LLC, Wilmington, Delaware. Counsel for Plaintiff.
Karen Jacobs Louden, Esquire, and Michael J. Flynn, Esquire, of Morris, Nichols, Arsht

& Tunnell LLP, Wilmington, DE. Counsel for Defendants. Of Counsel: Paul Devinsky,
Esquire, Robert Walters, Esquire, and Roozbeh Gorgin, Esquire of McDermott Will &
Emery LLP.

MEMORANDUM OPINION

Dated: August G , 2013
Wilmington, Delaware

~0 , istr~ct Judge
I. INTRODUCTION
On October 4, 2012, plaintiff Telecomm Innovations, LLC ("plaintiff') filed this
patent infringement action against defendants Ricoh Company, Ltd. ("Ricoh"), Ricoh
Americas Corporation ("Ricoh Americas"), Lanier Worldwide, Inc. ("Lanier"), and Savin
Corporation ("Savin") (collectively "defendants"). (D.I. 1) Plaintiff alleges that certain
technical support and services provided by defendants induce defendants' customers to
infringe plaintiffs U.S. Patent No. 5,396,519 ("the '519 patent"). (/d. at

,.m 16-17)

Pending before the court is defendants' motion to dismiss plaintiffs indirect infringement
claims. (D.I. 24) The court has jurisdiction over this matter pursuant to 28 U.S.C.

§§ 1331 and 1338(a). For the reasons that follow, the motion to dismiss plaintiffs
indirect infringement claims is denied.

II. BACKGROUND
Plaintiff is a limited liability company formed and existing under the laws of the
State of Delaware with its principal place of business in Wilmington, Delaware. (D. I. 1
at ~ 2) Defendant Ricoh is a corporation formed and existing under the laws of Japan
with its principal executive offices in Ch06, Tokyo, Japan. (/d.

at~

3) Ricoh Americas is

a corporation formed and existing under the laws of the State of Delaware with its
principal executive offices in West Caldwell, New Jersey. (/d.

at~

4) Lanier is a

corporation formed and existing under the laws of the State of Delaware with its
principal executive offices in Newark, Delaware. (/d.

at~

5) Savin is a corporation

formed and existing under the laws of the State of Idaho with its principal executive
offices in West Caldwell, New Jersey. (/d.

at~

6)

Plaintiff alleges in its complaint that "each of the [d]efendants has and continues
to directly infringe" and that "[d]efendants' customers and others have infringed and are
continuing to infringe" the '519 patent. (/d.

at~~

3-6, 14, 17) Plaintiff also alleges that

defendants provide "technical support and services, as well as detailed explanations,
instructions and information as to arrangements, applications and uses," which induce
defendants' customers to infringe the '519 patent through use of certain "[a]ccused
[i]nstrumentalities." (/d.

at~~

16-17) The "[a]ccused [i]nstrumentalities," which are

incorporated by reference in the allegations of induced infringement, are defined in the
complaint as "fax-capable products such as Fax 551 OL, Aficio SP C231 SF, Fax 1190L,
LD520CSPF, 3770NF, 3515MF, and others." (/d.

at~

14) Plaintiff additionally claims

that the defendants "specifically intended to induce infringement by its customers and
others ... knowing that such acts would cause infringement and/or were willfully blind to
the possibility that their inducing acts would cause infringement." (/d.

at~

17)

Ill. STANDARD OF REVIEW
A motion filed under Federal Rule of Civil Procedure 12(b)(6) tests the sufficiency
of a complaint's factual allegations. Bell At!. Corp. v. Twombly, 550 U.S. 544, 555; Kost
v. Kozakiewicz, 1 F .3d 176, 183 (3d Cir. 1993). A complaint must contain "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."
Twombly, 550 U.S. at 545 (internal quotation marks omitted) (interpreting Fed. R. Civ.

2

P. 8(a)). Consistent with the Supreme Court's rulings in Twombly and Ashcroft v. Iqbal,
556 U.S. 662 (2009), the Third Circuit requires a two-part analysis when reviewing a
Rule 12(b)(6) motion.

Edwards v. A.H. Cornell & Son, Inc., 610 F.3d 217, 219 (3d Cir.

201 0); Fowler v. UPMC Shadyside, 578 F.3d 203, 210 (3d Cir. 2009). First, a court
should separate the factual and legal elements of a claim, accepting the facts and
disregarding the legal conclusions. Fowler, 578 F.3d. at 210-11. Second, a court
should determine whether the remaining well-pled facts sufficiently show that the
plaintiff "has a 'plausible claim for relief."' /d. at 211 (quoting Iqbal, 556 U.S. at 679). As
part of the analysis, a court must accept all well-pleaded factual allegations in the
complaint as true, and view them in the light most favorable to the plaintiff. See

Erickson v. Pardus, 551 U.S. 89, 94 (2007); Christopher v. Harbury, 536 U.S. 403, 406
(2002); Phillips v. Cnty. of Allegheny, 515 F.3d 224, 231 (3d Cir. 2008). In this regard, a
court may consider the pleadings, public record, orders, exhibits attached to the
complaint, and documents incorporated into the complaint by reference. Tellabs, Inc. v.

Makar Issues & Rights, Ltd., 551 U.S. 308, 322 (2007); Oshiver v. Levin, Fishbein,
Sedran & Berman, 38 F.3d 1380, 1384-85 n.2 (3d Cir. 1994).
The court's determination is not whether the non-moving party "will ultimately
prevail" but whether that party is "entitled to offer evidence to support the claims."

United States ex ref. Wilkins v. United Health Grp., Inc., 659 F.3d 295, 302 (3d Cir.
2011). This "does not impose a probability requirement at the pleading stage," but
instead "simply calls for enough facts to raise a reasonable expectation that discovery
will reveal evidence of [the necessary element]." Phillips, 515 F.3d at 234 (quoting

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Twombly, 550 U.S. at 556). The court's analysis is a context-specific task requiring the
court "to draw on its judicial experience and common sense." Iqbal, 556 U.S. at 663-64.
IV. DISCUSSION
Under 35 U.S.C. § 271 (b), "[w]hoever actively induces infringement of a patent
shall be liable as an infringer." To demonstrate inducement, the patentee must
establish that there has been direct infringement and that the alleged infringer had
"knowledge that the induced acts constitute patent infringement." Global-Tech
Appliances, Inc. v. SEB S.A.,- U.S.-, 131 S.Ct. 2060, 2068 (2011). "Inducement
requires evidence of culpable conduct, directed to encouraging another's infringement,
not merely that the inducer had knowledge of the direct infringer's activities." DSU Med.
Corp. v. JMS Co., 471 F.3d 1293, 1306 (Fed. Cir. 2006) (en bane in relevant part).
This court has previously held that there is no requirement that a plaintiffs
induced infringement claim be limited to presuit knowledge and facts. See Walker
Digital, LLC v. Facebook, Inc., 852 F. Supp. 2d 559, 565 (D. Del. 2012) (finding "there is
no legal impediment to having an indirect infringement cause of action limited to postlitigation conduct"). For a post-complaint claim of induced infringement to pass muster
under Federal Rule of Civil Procedure 8, plaintiff need only identify the patent-at-issue,
the allegedly infringing conduct, the notice afforded by service of the original complaint,
and the apparent decision to continue the inducement post-service. 1 Aeritas, LLC, 893

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Form 18 does not apply to induced infringement claims, as "Form 18 should be
strictly construed as measuring only the sufficiency of allegations of direct infringement,
and not indirect infringement." Aeritas, LLC v. Alaska Air Grp., Inc., 893 F. Supp. 2d
680, 683 (D. Del. 2012) (citing In re Bill of Lading Transmission & Processing Sys.
Patent Litig., 681 F.3d 1323, 1336 (Fed. Cir. 2012)).

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F. Supp. 2d at 683-84 (citing Walker Digital, LLC, 852 F. Supp. 2d 559); see also E. I.

DuPont de Nemours & Co. v. Heraeus Holding GmbH, Civ. No. 11-773, 2012 WL
4511258, *6 (D. Del. Sept. 28, 2012). To the extent defendants argue that plaintiff failed
to assert "presuit knowledge" of the '519 patent, plaintiff has explicitly limited itself to
post-complaint inducement of infringement. (D. I. 17 at 4) Therefore, plaintiff's induced
infringement claims are confined to a post-complaint analysis.
Defendants do not challenge the sufficiency of plaintiff's complaint as to direct
infringement by either defendants or defendants' customers. (D .I. 14 at 1; D .I. 18 at 1)
Rather, defendants argue that plaintiff has not pled with sufficient "factual detail" that
there was at least one direct infringer and that defendants knew of and specifically
intended to induce infringement. (D.I. 14 at 3, 6-7; D. I. 18 at 3-4) Critically, the test for
pleading under Twombly is sufficient facts that allow the court to infer that a claim is
plausible. In re Bill of Lading, 681 F.3d at 1340.
With respect to properly alleging that at least one direct infringer exists, plaintiff is
not required to specifically identify the customers who are induced to infringe, as this is
a "proper question for discovery." Minkus Elec. Display Sys., Inc. v. Adaptive Micro
Sys. LLC, Civ. No. 10-666, 2011 WL 941197, *3 (D. Del. Mar. 16, 2011 ). Thus, plaintiff
need only plead "facts sufficient to allow an inference that at least one direct infringer
exists." Aeritas, LLC, 893 F. Supp. 2d at 683 (citing In re Bill of Lading, 681 F.3d at
1336). Since plaintiff has pled that "[d]efendants' customers and others have infringed
and are continuing to infringe" the '519 patent, the requirement for pleading facts to
allow an inference that at least one direct infringer exists has been met. (D. I. 1 at 1J17)

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To adequately plead induced infringement, plaintiff must also allege that
defendants had knowledge of the '519 patent. Walker Digital, 852 F. Supp. 2d at 56364. Plaintiff alleges that defendants received notice of the '519 patent "at least as early
as the filing of this complaint," which was October 4, 2012. (D.I. 1 at 1115) Plaintiff
does not allege that defendants had knowledge of the '519 patent before this date and
argues in briefing for post-complaint relief only. (/d. at 111115-17; D. I. 17 at 4) Under the
standard promulgated by this court, "a plaintiff's filing (and a defendant's receipt) of the
complaint are facts that establish such knowledge- at least as of the date of filing."

See E. I. DuPont de Nemours, 2012 WL 4511258 at *5-6 & n.3 (citing several cases for
support). Plaintiff, therefore, has sufficiently pled defendants' knowledge of the '519
patent for purposes of post-complaint relief.
Plaintiff must also plead facts sufficient to allow an inference that defendants
"specifically intended [their] customers to infringe ... and knew that the customer's acts
constituted infringement." Aeritas, LLC, 893 F. Supp. 2d at 683 (citing In re Bill of

Lading, 681 F.3d at 1339). Plaintiff's complaint must extend beyond the merely
formulaic "makes, uses, offers to sell, or sells" language provided in 35 U.S.C. § 271 to
sufficiently plead induced infringement. See E./. DuPont de Nemours, 2012 WL
4511258 at *6 (citing In re Bill of Lading, 681 F.3d at 1339, 1346).
Defendants argue that plaintiff does not provide any facts to show that
defendants had the specific intent to induce their customers to infringe. (D.I. 18 at 1-2)
The court disagrees. Notably, both plaintiff and defendants brief at length this court's
decision in Netgear, Inc. v. Ruckus Wireless, Inc., 852 F. Supp. 2d 470 (D. Del. 2012),

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which held that Netgear sufficiently pled induced infringement because it had pled or
otherwise plausibly inferred a direct infringer, Ruckus's knowledge of the '519 patent,
and Ruckus's specific intent to induce infringement. /d. at 475-76. With respect to
specific intent, Netgear alleged:
Ruckus has knowingly induced infringement of the '035 patent with
specific intent to do so by its activities relating to the marketing and
distribution of its ZoneDirector, FlexMaster, and/or ZonePianner products
to manage the use of ZoneFiex products.

/d. Similarly, plaintiff at bar has alleged:
16. Each of the [d]efendants is, on information and belief, inducing
infringement of one or more claims of the '519 patent by, without limitation,
making, using, importing, selling and/or offering for sale the [a]ccused
[i]nstrumentalities for use by customers and others and also providing
those customers and others with technical support and services, as well
as detailed explanations, instructions and information as to arrangements,
applications and uses of the [a]ccused [i]nstrumentalities that promote and
demonstrate how to use the [a]ccused [i]nstrumentalities in a manner that
would infringe the '519 patent.
17. Defendants specifically intended to induce infringement by [their]
customers and others by at least the acts set forth in paragraph 16,
knowing such acts would cause infringement ... Upon information and
belief, [d]efendants' customers and others have infringed and are
continuing to infringe the '519 patent.
(D. I. 1 at 1J1J16-17) Essentially, plaintiff at bar alleges that defendants provided
technical support and instructions to their customers on how to use products in such a
way as to infringe the patented invention. Like the pleading in Netgear, plaintiffs
complaint alleges that defendants have the requisite intent by encouraging their
customers to infringe the '519 patent- whether through marketing, or support and
instructions. See also In re Bill of Lading, 681 F.3d at 1341-46 (holding that advertising
directed toward customers to encourage the customers to utilize the patented invention

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was sufficient to plead defendants' specific intent). Additionally, plaintiff alleges that
"each of the defendants is ... inducing infringement," suggesting that defendants are
continuing to act in the aforementioned manner post-filing of plaintiff's complaint. (D.I. 1
at ,-r,-r 16-17)
In contrast, the claim of induced infringement at issue in E./. DuPont was
insufficient because of a dearth of factual allegations regarding defendants' specific
intent. E./. DuPont de Nemours, 2012 WL 4511258 at *6. In that case, the plaintiff
merely pled that defendants "specifically intended that others will use the unauthorized
products" in a manner that infringes. /d. at *7. Notably, the plaintiff did not plead any
acts by the defendants beyond the formulaic recitation provided in 35 U.S.C. § 271 for
showing culpable conduct. The complaint at bar contains factual allegations, not mere
legal elements, showing an intent to induce infringement and those allegations are
similar to the pleadings that passed muster in Netgear and In re Bill of Lading. Thus,
the court finds that plaintiff has sufficiently pled defendants' knowledge of, and specific
intent to, induce patent infringement.
Accordingly, given the factual allegations regarding customers' direct
infringement, defendants' knowledge of the '519 patent, and defendants' specific intent
to induce infringement, all of which were "at least as early as the filing of this
[c]omplaint" (D. I. 1 at ,-r,-r 15-17), plaintiff has sufficiently alleged that defendants induced
direct infringement after the filing of the instant suit.

V. CONCLUSION

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For the foregoing reasons, defendants' motion to dismiss the indirect
infringement claims is denied. An appropriate order shall issue.

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