IP Communication Solutions, LLC vs. Viber Media (USA) Inc.

Filing 40

MEMORANDUM. Signed by Judge Gregory M. Sleet on 4/5/2017. (mdb)

IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF DELAWARE
IP COMMUNICATION SOLUTIONS, LLC,
Plaintiff,

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v.

VIBER MEDIA (USA) INC.

C.A. No. 16-134-GMS

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JURY TRIAL DEMANDED

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Defendant.

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MEMORANDUM
I.

INTRODUCTION

Plaintiff IP Communications Solutions, LLC ("IPCS") filed a patent infringement suit
against Viber Media (USA) Inc. ("Viber");on March 4, 2016. (D.I. 1). Plaintiffs subsequently
filed an Amended Complaint on May 31, 2016. (D.I. 14). The Amended Complaint accused
Defendant of direct and induced infringement of U.S. Patent No. 9,247,071 ("the '071 patent"),
directed to Methods and Systems for Providing Portable VoIP Services. Id. Presently before the
court is Viber's Motion to Dismiss for Failure to State a Claim, filed June 14, 2016. (D.I. 16).
For the reasons discussed below, the court grants Defendant's motion in-part and denies it
in-part.
II.

BACKGROUND

In the Amended Complaint, Plaintiff accuses_ Defendant of infringing at least claims 49,
51, 52, 54 and 56 of the '071 patent by "making, using, selling, offering to sell, and/or selling

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within, and/or importing into, the United States, a VoIP server system that supports its Viber
Mobile VoIP application." (D.I. 14,

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if 12). The Amended Complaint includes a claim chart

comparing each element of the asserted claims and Viber' s sever system that supports its VoIP
-'111rt'

application. Id at Ex. 2. Plaintiff also includes print-outs from Defendant's webpage, as well as
Defendant's privacy policy, to support their allegations about Defendant's system's functionality
in the claim chart. Id at Addendum.
The Amended Complaint also alleges indirect infringement-specifically, induced
infringement-of claims 49, 51, 52, 54 and 56 ofthe '071 patent. Id

if 15.

Plaintiff alleges that

Defendant has "been on notice of the '071 patent since at least service of the original complaint in
this matter." Id

if

16. Plaintiffs provide exemplary evidence from Defendant's website to

demonstrate that Defendant "instructs and encourage[s] users to use the Viber VoIP app, and the
VoIP server system that supports the Viber VoIP app, in a manner that infringes the '071 patent."

Id.

ir 19.

Such examples include: (1) a webpage that instructs and encourages users to use the

VoIP application to make VoIP calls; (2) a webpage that provides support and instruction to users
on how to make VoIP calls using the Viber VoIP application; and (3) a webpage detailing a "Media
Kit" that further encourages users to make VoIP calls using the Viber VoIP app and the server
system. Id.

ifif 20-22.

Viber filed a Motion to Dismiss for Failure to State a Claim in which it argues that IPCS'
Amended Complaint fails to satisfy the pleading standards for both direct and induced
infringement. For the reasons that follow, the court will deny the Motion for claims of direct
infringement, but grant the Motion, without prejudice, for allegations of induced infringement.

III.

LEGAL STANDARD
Rule 12(b)(6) of the Federal Rules of Civil Procedure provides for dismissal where the

plaintiff "fail[s] to state a claim upon which relief can be granted." Fed. R. Civ. P. 12(b)(6). In
considering a motion to dismiss, the court "accept[s] all factual allegations as true, construe[s] the
complaint in the light most favorable to the plaintiff, and determine[ s] whether, under any

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reasonable reading of the complaint, the plaintiff may be entitled to relief." Phillips v. Cnty. of

Allegheny, 515 F.3d 224, 233 (3d Cir. 2008). Plaintiffs must provide sufficient factual allegations
"to state a claim to relief that is plausible on its face." Bell At!. Corp. v. Twombly, 550 U.S. 544,
570 (2007). This requirement of plausibility is satisfied when "the plaintiff pleads factual content
that allows the court to draw the reasonable inference that the defendant is liable for the misconduct
alleged." Iqbal, 556 U.S. at 678 (citing Twombly, 550 U.S. at 556). "Determining whether a
complaint states a plausible claim for relief will ... be a context-specific task that requires the
reviewing court to draw on its judicial experience and common sense." Ashcroft v. Iqbal, 556 U.S.
662, 679 (2009). 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." Bell At!. Corp., 550 U.S. at 545.

IV.

DISCUSSION
Viber contends the Amended Complaint fails to satisfy the Twombly/Iqbal pleading

standard for direct infringement because it does not adequately identify the accused
instrumentality. (D.I. 17 at 1). Viber also contends that the Amended Complaint fails to plead all
necessary elements of a claim for induced infringement. (D.I. 17 at 7.) The court will address
each in turn.

A. Direct Infringement
As an initial matter, Form 18 no longer provides the proper measure for the sufficiency of
a complaint that alleges direct infringement. Because the Advisory Committee for the Federal
Rules of Civil Procedure abrogated Rule 84 and the Appendix of Forms effective December 1,
2015, the court must apply the Twombly/Iqbal pleading standard to the plaintiffs' complaint which

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was filed on March 4, 2016. 1 The court finds that IPCS has met its burden under Twombly/Iqbal.
This District's local rules provide that "[w]ithin 30 days after the Rule 16 Conference and
for each defendant, the plaintiff shall specifically identify the accused products and the asserted .
patent(s) they allegedly infringe, and produce the file history for each asserted patent." D. Del.
Default Std. §4.a. These rules were promulgated post Twombly/Iqbal and are consistent with the
Federal Rules of Civil Procedure's and courts' concern that a complaint "give[s] the defendant fair
notice of what the ... claim is and the grounds upon which it rests." 2 Twombly, 550 U.S. 544, 555
(2007); Iqbal, 556 U.S. 662, 698 (2009).
Viber contends that IPCS' Amended Complaint fails to place Viber on notice of what is
accused because the Complaint makes "generic infringement allegations[s]," "directed to an
undefined 'V[o]IP server system that supports Viber's application. (D.I. 17 at 6). Defendant cites

Bender v. LG Elecs. US.A., Inc., No. C 09-02114 JF (PVT), 2010 WL 889541, at *1 (N.D. Cal.
Mar. 11, 2010), Wistron Corp. v. Phillip M Adams & Assocs. LLC, No. C-10-4458 EMC, 2011
WL 4079231, *1 (N.D. Cal. Sept. 12, 2011), and Fifth Marker Inc. v. CME Group, Inc.', C.A. No.
08-520-GMS, 2009 WL 5966836, *1 (D. Del. May 14, 2009) in support of its argument that the

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Unlike Raindance Tech. v. JOXGenomics, inc., C.A. No. 11-1092, 2016 WL 927143 (D. Del. Mar. 4, 2016) where
Judge Andrews applied the post-December 1, 2015 direct infringement pleading standard to the amended complaint
"in the interest of justice," here, this court finds such an exercise of discretion unnecessary because the Amended
Complaint was filed after the effective date. See Avago Techs. Gen. IP (Singapore) PTE Ltd. v. Asustek Computer,
Inc., No. 15-CV-04525-EMC, 2016 WL 1623920, at *4 (N.D. Cal. Apr. 25, 2016) (citing Maybe Pharma Int'! PTY
Ltd. v. Merck & Co., No. 15-438-LPS-CJB, 2015 U.S. Dist. LEXIS 162912, at *4-5 n.l (D. Del. Dec. 3, 2015)
(noting that "[a]mendments to the Federal Rules of Civil Procedure taking effect on December 1, 2015 abrogate
Rule 84 and the Appendix of Forms, including Form 18" and that, "[u]nder the new rules, allegations of direct
infringement will be subject to the pleading standards established by Twombly and Iqbal, requiring plaintiffs to
demonstrate a 'plausible claim for relief'").
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See In re Ins. Brokerage Antitrust Litig., 618 F.3d 300, 319 (3d Cir. 2010) (recognizing that a claim to relief is
plausible when the complaint alleges enough facts to create a reasonable expectation that discovery will yield
evidence of illegality); Cf Windy City Innovations, LLC, v. Microsoft Corp., No. 16-cv-01729-YGR, 2016 WL
3361858, at *5 (N.D. Cal. June 17, 2016) (denying a motion to dismiss in which the defendant alleged plaintiffs
were obligated to explain which specific products infringed each specific claim asserted because the district's local
rules delegated such disclosure to discovery).

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direct infringement claim should be dismissed.
In Bender, the court dismissed a complaint which accused only "categories of products"
the defendants produced "by way of example and without limitation." 2010 WL 889541, at *2.
The Bender court explained that "[s]sufficient allegations would include, at a minimum, a brief
description of what the patent at issue does, and an allegation that certain named and specifically
identified products or product components also do what the patent does." Id at *6. Similarly, in
Wistron, the court dismissed the complaint because it only listed the categories of allegedly

infringing products without identifying any specific examples of a particular infringing computer
chip, motherboard, or computer. 2011 WL 4079231, at *3. In Fifth Marker, this court found that
the defendants were not provided with fair notice of how they infringe the patents-in-suit because
none of Fifth Marker's claims contained any reference to a single infringing product or method.
2009 WL 5966836, at * 1. In fact, the only reference to the defendant's product was in the facts
section of the complaint. Id Here, Viber argues that IPCS' allegation that an "undefined" server
system infringes the '071 patent is analogous to Bender's and Wistron 's allegations naming broad
categories of infringing products. See (D.I. 17 at 6-7). Accordingly, Viber states that IPCS'
Amended Complaint fails to provide meaningful identification of the accused instrumentality.
(D.I. 19 at 3). The court is not persuaded.
IPCS' Amended Complaint provides specific details of how Defendant's application and
servers infringe the '071 patent claims. (D.I. 14, Ex.2). Defendants acknowledge that fact, but
state that they must be on notice of specifically what products infringe. This case is easily
distinguishable from the cases that Defendants cite, however, because the patent-in-suit is directed
to methods and systems for providing a service. (D.I. 1). The cases that Defendant cites all dealt
primarily with product claims. See Wistron, 2011 WL 4079231 at *3; Bender, 2010 WL 889541,

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at *2; Fifth Marker, 2009 WL 5966836, at * 1. The patent at issue in Bender, for instance, was
directed to electrical circuity-a buffered transconductance amplifier. 2010 WL 889541 at *2.
IPCS' patent is not directed to a specific product, but instead, to a server system that comprises a
number of components. '071 patent, col. 34, 1. 28--col.35, 1.27. The way those components work
together to communicate with a plurality of portable endpoints is the novelty of the invention. Id
col. 2, 1. 30--col. 3, 1. 3.
IPCS' claim chart plausibly alleges how Viber's network-based system provides VoIP
services in a way that meets all of the claim limitations of the patents-in-suit. (D.I. 14, Ex. 2). For
example, Viber's Privacy Policy describes the functionality of its servers-"[a] copy of the phone
numbers and names in your address book ... will be stored on our servers." (D.I. 14, Addendum
at 2). One limitation of claim 49 of the '071 patent requires "a database that includes a plurality
of VoIP subscriber identifiers associated with a respective plurality of users." Col. 41, 11. 6-8. To
require that IPCS name a specific infringing product would be nonsensical in this instance. It is
unclear how IPCS can be any more specific about what aspects of Viber's technology infringe its
patent when IPCS likely does not have access to Viber' s computer code.
It is also worth noting that the primary function of a complaint is to put defendants on

"notice as to what [they] must defend." McZeal v. Sprint Nextel Corp., 501F.3d1354, 1357 (Fed.
Cir. 2007). In two of the cases Defendants cite, the alleged infringers marketed a number of
products that could possibly infringe the asserted patents, at least according to the plaintiffs' broad
allegations in the complaints. See Wistron, 2011 WL 4079231 at *3; Bender, 2010 WL 889541.
Here, Viber provides a mobile VoIP client application program. (D.I. 17 at 1). The program is
supported by a server that performs a number of functions, as is made clear from Viber's own
documentation. See (D.I. 14, Addendum). Accordingly, Viber cannot persuasively argue that it

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is not on notice of what it must defend in this suit. Thus, the court concludes that IPCS' Amended
Complaint contains averments sufficient to withstand Viber's Motion to Dismiss.

B. Induced Infringement
To adequately plead a claim of induced infringement, a plaintiff must demonstrate that "the
plaintiffs patent is directly infringed," Cipla Ltd v. Sunovion Pharm. Inc., 174 F. Supp. 3d 869,
872 (D. Del. 2016), "allege that the defendant knew of the patent[,] and that the induced acts
constitute patent infringement. Addiction & Detoxification Inst. L.L. C. v. Carpenter, 620 F. App'x
934, 938 (Fed. Cir. 2015). A plaintiff must allege facts that support the belief that the defendant
had knowledge not only of the existence of the patent-in-suit, but also, that the acts it induced
would infringe that patent. Commit USA, LLC v. Cisco Sys., Inc., 135 S. Ct. 1920, 1926, 191 L.
Ed. 2d 883 (2015).
Viber contends that "[n]othing in IPCS' Amended Complaint plausibly shows that Viber
specifically intend that 'end users of Viber Mobile infringe the asserted patent, or that Viber knew
the acts of such unspecified 'end users' constituted infringement." (D .I. 17 at 6). The court agrees.
IPCS failed to provide facts that would allow the court to reasonably infer that Defendant had the
specific intent to induce infringement.
IPCS' Amended Complaint states that "Defendant was on notice of the '071 patent,
Defendant knowingly induced infringement of the '071 patent ... and possessed specific intent to
encourage others' infringement." (D.I. 14

if 17). IPCS' Amended Complaint includes links to

Viber' s website and specific webpages that it claims "instructs and encourages users to use its
VoIP app to make VoIP calls." Id

if 20. IPCS also clc:iims that specific webpages provide "detailed

support for" Viber' s app, "aiding and instructing users on how to make VoIP calls using its VoIP
app." Id

if 21. Those links, however, do not support the existence of Viber's specific intent to

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induce infringement.
IPCS cites to Cipla for the proposition that induced infringement can be supported by
allegations that the defendant sold or offered to sell a product to consumers, who-it can be
reasonably inferred-will use the products in an infringing way. 174 F. Supp. 3d at 872. Cipla is
more persuasive for Defendant's position, however. In Cipla, Judge Stark found that the plaintiff
adequately pled a claim for induced infringement because "the patented compound [was]
(allegedly) the only active ingredient" in the allegedly infringing product, and "the prescribing
information for the drug instruct[ed] consumers to use the drug in a way that allegedly infringe[d]
the patent." Id. Here, IPCS only provides examples ofwebpages that relate to Viber's application
, and customers' interaction with the VoIP application. IPCS fails to allege facts supporting how
Viber specifically instructed or directed customers to use the Viber application and corresponding
server system in a manner that would infringe the '071 patent.

IPCS also cites to ReejEdge Networks, LLC v. Juniper Networks, Inc., 29 F. Supp. 3d 455
(D. Del. 2014) for its argument that providing examples of websites, webpages, or marketing
instructions that promote the use of products in an infringing manner is enough for an induced
infringement claim to survive the motion to dismiss stage. 29 F. Supp. at 460. In ReejEdge, Judge
Stark cited to Judge Robinson's opinion in Telecomm Innovations, LLC v. Ricoh Co., Ltd., 966 F.
Supp. 2d 390, 395 (D. Del. 2013), to support his finding that Plaintiffs pled "specific intent to
induce infringement with sufficient particularity." 29 F. Supp. at 460. In Telecomm Innovations,
Judge Robinson found specific intent to induce infringement because the defendant provided
"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 promoted the use
of those instrumentalities in an infringing manner. 966 F. Supp. 2d at 395. As previously

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mentioned, the main issue here is not the use of support or marketing webpages to evidence
specific intent to induce infringement. Instead, IPCS failed to adequately allege how Viber
provided technical support services or detailed instructions promoting the use of the VoIP
application and the server system in an infringing manner. Thus, the court grants Defendant's
Motion with regard to the induced infringement claims.

IV.

CONCLUSION
For the foregoing reasons, the court will grant, without prejudice, Defendant's Motion as

to Plaintiff's allegations of induced infringement but deny the Motion as to direct infringement.

Dated: April.£_, 2017

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