T-Jat Systems 2006 Ltd. v. Expedia, Inc. (DE), et al.
REPORT AND RECOMMENDATIONS re 13 MOTION to Dismiss for Failure to State a Claim filed by Expedia, Inc. (WA), Expedia Inc. (DE), Orbitz Worldwide, Inc. Please note that when filing Objections pursuant to Federal Rule of Civil Procedure 72(b)(2), b riefing consists solely of the Objections (no longer than ten (10) pages) and the Response to the Objections (no longer than ten (10) pages). No further briefing shall be permitted with respect to objections without leave of the Court. Objections to R&R due by 3/24/2017. Signed by Judge Mary Pat Thynge on 3/7/17. (cak)
IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF DELAWARE
T-JAT SYSTEMS 2006 LTD.,
EXPEDIA, INC. (DE), EXPEDIA, INC.
(WA), and ORBITZ WORLDWIDE INC.,
C. A. No. 16-581-RGA-MPT
REPORT AND RECOMMENDATION
On July 7, 2016, T-Jat Systems 2006 Ltd. (“T-Jat”) initially brought this action
against Expedia, Inc. (“Expedia-DE”), alleging infringement of U.S. Patent Nos.
8,064,434 (“the ‘434 patent”) and 9,210,142 (“the ‘142 patent”).1 T-Jat filed a first
amended complaint on September 27, 2016, joining Expedia, Inc. (WA) (“Expedia-WA”)
and Orbitz Worldwide, Inc. (“Orbitz”) as defendants with Expedia-DE.2
Presently before the court is Defendants’ joint motion to dismiss the first
amended complaint pursuant to FED. R. CIV. P. 12(b)(6) for failure to state a claim upon
which relief can be granted.3 This court has subject matter jurisdiction because the
action arises under 35 U.S.C. § 101 et seq.4 For the purposes of this motion, personal
D.I. 10; reference to all three parties simultaneously, Expedia-DE, Expedia-WA,
and Orbitz, shall be as “Defendants.”
See 28 U.S.C. § 1331 (federal question jurisdiction); § 1338(a) (“The district
courts shall have original jurisdiction of any civil action arising under any Act of
jurisdiction is not disputed.5 Venue is proper under 28 U.S.C. §§ 1391(c) and 1400(b).6
This Report and Recommendation is issued pursuant to 28 U.S.C. § 636(b)(1)(B), FED.
R. CIV. P. 72(b)(1), and D. DEL. LR 72.1.
A. Factual Allegations
Expedia-DE is incorporated in the state of Delaware.7 Expedia-WA is a whollyowned subsidiary of Expedia-DE.8 Expedia-WA is incorporated in Washington state.9
Orbitz is a wholly-owned subsidiary of Expedia-WA, and is incorporated in Delaware
with its principal place of business in Chicago, Illinois.10 T-Jat is an Israeli corporation
with its principal place of business in Israel.11
T-Jat owns the ‘142 and ‘434 patents.12 The patents-in-suit are methods or
systems for providing telephone users with internet capabilities without configuring the
phone to communicate with the internet application directly.13 The patents cover the
method, system, and medium for coordination of a request from the phone to a first
Congress relating to patents . . . .”).
See D.I. 14.
28 U.S.C. § 1391(c) (“[A]n entity . . ., whether or not incorporated, shall be
deemed to reside, if a defendant, in any judicial district in which such defendant is
subject to the court’s personal jurisdiction with respect to the civil action . . . .”);
§ 1400(b) (“Any civil action for patent infringement may be brought in the judicial district
where the defendant resides, or where the defendant has committed acts of
infringement and has a regular and established place of business.”).
D.I. 10 ¶ 3.
Id. ¶ 4.
Id. ¶ 6.
Id. ¶ 2.
Id. ¶¶ 17-18.
Id. ¶ 19.
server to access an internet-based application located on a second server only for the
time of the communication session.14 The first server may have a virtual client entity
that helps communicate with the second server and back to the phone, allowing the
phone’s user to access the internet application in real-time.15
T-Jat alleges Expedia-DE and its subsidiary Expedia-WA “operate as a single
entity,” such that Expedia-DE operates and controls Expedia-WA.16 It contends there is
a high degree of intermingling between Expedia-DE and Expedia-WA, including a
shared corporate headquarters, a shared principal executive office address, and shared
directors and executive officers.17 T-Jat also maintains intermingling exists between
Expedia and Orbitz.18 It alleges Expedia19 “controls or otherwise directs and authorizes”
Orbitz’s activities and the companies share executive officers.20 Further, T-Jat
maintains Expedia-DE and Expedia-WA are, among other things, agents, alter-egos, or
principals of each other.21 It makes the same contentions regarding Expedia-WA and
D.I. 10 ¶¶ 19, 23.
Id. ¶ 19.
Id. ¶ 5.
Id. ¶ 7.
References to Expedia by T-Jat mean both Expedia-DE and Expedia-WA are
implicated. See id. ¶ 4.
Id. ¶ 7 (citing Expedia Form 10-K Annual Report for fiscal year ending
December 31, 2015,
Id. ¶ 13.
Id. ¶ 14.
T-Jat alleges Expedia has a mobile application (app)23 and a web site24 that
provide telephone users with access to the internet to research and book travel
arrangements through Group Distribution Systems (GDS).25 It contends Expedia’s
mobile app operates by transmitting a request to a first server to be connected to an
internet-based location at a second server.26 The app then works with the website to
provide the user with a menu from which to choose an internet-based application.27
Once the user makes a selection, the first server connects to a second server, which
provides information about travel services back to the user’s phone via the first server.28
T-Jat also alleges a virtual client entity is created on Expedia’s first server to provide the
phone user access to internet-based applications, with the connection only lasting for
the length of the user’s request for and receipt of information.29 This virtual client entity
is unique to the specific internet application requested, and a new virtual entity is
created if the user makes a new request.30 The virtual client entity allows
communication between the user’s phone and the internet-based application residing at
the second server, providing the user with travel updates in real-time.31
EXPEDIA, INC., Travel Apps, https://www.expedia.com/app (last visited Jan. 23,
EXPEDIA, INC, https:/www.expedia.com (last visited Jan. 23, 2017).
D.I. 10 ¶¶ 24-25.
Id. ¶ 26.
Id. ¶ 27.
Id. ¶ 28.
Id. ¶¶ 29-30.
Id. at ¶ 30.
Id. ¶ 31.
T-Jat similarly alleges Orbitz’s mobile app32 and web site33 provide phone users
with the ability to use internet-based applications for travel reservations through GDS
B. Positions of the Parties
T-Jat argues Defendants infringe both its ‘434 and ‘142 patents.35 It alleges
Expedia-DE and Expedia-WA together infringe claim 1 of the ‘434 patent and claims 1,
9, and 12 of the ‘142 patent.36 T-Jat contends Orbitz separately infringes claim 1 of the
‘434 patent and claims 1, 9, and 12 of the ‘142 patent.37
Defendants maintain that the first amended complaint fails to satisfy the pleading
requirements of FED. R. CIV. P. 8(a) because it does not set forth facts sufficient for a
facially plausible claim from which the court can infer the alleged misconduct, as
stipulated by Bell Atlantic Corp. v. Twombly and Ashcroft v. Iqbal.38 In particular,
Defendants argue T-Jat’s allegations that Expedia-DE and Expedia-WA acted as one
entity because of the companies’ parent-subsidiary relationship to be far fetched, and
the first amended complaint fails to show “facts that justify piercing the corporate veil.”39
ORBITZ, Travel Apps, https://www.orbitz.com/app (last accessed Jan. 23,
ORBITZ, https://www.orbitz.com (last accessed Jan. 23, 2017).
D.I. 10 ¶ 57. See id. ¶¶ 58-83.
Id. ¶ 1.
Id. ¶¶ 23-53.
Id. ¶¶ 54-85.
See D.I. 14 at 6 (citing Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 555
(2007); Ashcroft v. Iqbal, 556 U.S. 662, 663 (2009)).
Id. (quoting M2M Sols. LLC v. Telit Commc’ns PLC, No. 14-1103-RGA, 2015
WL 4640400, at *3 (D. Del. Aug. 5, 2015)).
Defendants particularly fault T-Jat’s lack of facts to show fraud.40 Additionally,
Defendants posit T-Jat fails to accurately identify which defendant it seeks to hold liable
for each count of alleged infringement because of T-Jat’s collective referral to ExpediaDE and Expedia-WA as “Expedia” and to all three defendants simply as “Defendants.”41
In response, T-Jat argues the first amended complaint is well-pled and alleges
sufficient facts for parent-subsidiary liability either based on agency or alter-ego
theory.42 T-Jat also asserts it raises a plausible independent claim of infringement
against Expedia-DE based on the alleged infringing actions of its subsidiary companies,
Expedia-WA and Orbitz.43 Additionally, T-Jat states the first amended complaint
adequately identifes each defendant and the alleged infringement for which it seeks to
hold the defendant liable.44
In their reply brief, Defendants outline four arguments: (1) T-Jat fails to
adequately plead that Expedia-DE owns and operates the allegedly infringing
technology; (2) the first amended complaint’s generic referrals to multiple defendants
insufficiently alleges each individual defendant’s infringement; (3) T-Jat relies on
Id. at 1; Defendants also claim that their counsel initially informed T-Jat that it
had sued the wrong entity (Expedia-DE), prompting T-Jat to join Expedia-WA and
Orbitz as co-defendants. Additionally, Defendants note that T-Jat agreed to dismiss its
claims against Expedia-DE “but only if the remaining Defendant [sic] agreed ‘that it will
not contest or seek to transfer venue.’“ Id. (emphasis removed) (quoting D.I.15 Ex. E).
See also id. at 3-7 (“T-Jat’s Gamesmanship and Improper Litigation Tactics”). The court
will not address these concerns because they are irrelevant to the current analysis.
Id. at 8.
D.I. 16 at 4-5.
Id. at 5-10.
Id. at 10-11.
material outside the first amended complaint in its answering brief;45 and (4) T-Jat’s
answering brief does not properly address Defendant’s argument about T-Jat’s
allegations regarding Defendants’ corporate structure and the insufficiency of T-Jat’s
claims that Expedia-DE is responsible for Expedia-WA’s actions vis-a-vis agency and/or
an alter-ego theory.46
III. STANDARD OF REVIEW
Motion to Dismiss for Failure to State a Claim
FED. R. CIV. P. 12(b)(6) governs a motion to dismiss a complaint for failure to
state a claim upon which relief can be granted. The purpose of a motion under Rule
12(b)(6) is to test the sufficiency of the complaint, not to resolve disputed facts or decide
the merits of the case.47 “The issue is not whether a plaintiff will ultimately prevail, but
whether the claimant is entitled to offer evidence to support the claims.”48 A motion to
dismiss may be granted only if, after “accepting all well-pleaded allegations in the
complaint as true, and viewing them in the light most favorable to the plaintiff, plaintiff is
D.I. 18 at 5. Here, Defendants argue that the court should disregard these
outside materials with respect to T-Jat. See D.I. 17 (containing T-Jat’s attorney affidavit
and exhibits). However, Defendants also submitted outside materials with their opening
brief in support of their motion to dismiss in the form of an attorney affidavit and
exhibits. See generally D.I. 15; D.I. 16 (T-Jat’s answering brief stating Defendants’
materials in their opening brief were inappropriate for consideration, “inapposite,” and
“inconsistent.”) Each side accuses the other of the same sin, namely, not following Fed.
R. Civ. P. 7. Therefore, the court will consider, when appropriate, the information
provided by both sides.
See generally id.
Kost v. Kozakiewicz, 1 F.3d 176, 183 (3d Cir. 1993).
In re Burlington Coat Factory Sec. Litig., 114 F.3d 1410, 1420 (3d Cir. 1997)
(internal quotations and citations omitted); see also Twombly, 550 U.S. at 563 n.8
(2007) (“[W]hen a complaint adequately states a claim, it may not be dismissed based
on a district court's assessment that the plaintiff will fail to find evidentiary support for his
allegations or prove his claim to the satisfaction of the factfinder.”).
not entitled to relief.”49 While the court draws all reasonable factual inferences in the
light most favorable to a plaintiff, it rejects unsupported allegations, “bald assertions,”
and “legal conclusions.”50
To survive a motion to dismiss, a plaintiff’s factual allegations must be sufficient
to “raise a right to relief above the speculative level . . . .”51 Plaintiffs are therefore
required to provide the grounds of their entitlement to relief beyond mere labels and
conclusions.52 Although heightened fact pleading is not required, “enough facts to state
a claim to relief that is plausible on its face” must be alleged.53 A claim has facial
plausibility when a plaintiff pleads factual content sufficient for the court to draw the
reasonable inference that the defendant is liable for the misconduct alleged.54 Once
stated adequately, a claim may be supported by showing any set of facts consistent
with the allegations in the complaint.55 Courts generally consider only the allegations
Maio v. Aetna, Inc., 221 F.3d 472, 481-82 (3d Cir. 2000) (citing Burlington, 114
F.3d at 1420).
Morse v. Lower Merion Sch. Dist., 132 F.3d 902, 906 (3d Cir. 1997) (citations
omitted); see also Schuylkill Energy Res., Inc. v. Pa. Power & Light Co., 113 F.3d 405,
417 (3d Cir. 1997) (citations omitted) (rejecting “unsupported conclusions and
unwarranted inferences”); Associated Gen. Contractors of Cal., Inc. v. Cal. State
Council of Carpenters, 459 U.S. 519, 526 (1983) (“It is not . . . proper to assume
[plaintiff] can prove facts that it has not alleged or that the defendants have violated the .
. . laws in ways that have not been alleged.”).
Twombly, 550 U.S. at 555 (citations omitted); see also Victaulic Co. v. Tieman,
499 F.3d 227, 234 (3d Cir. 2007) (citing Twombly, 550 U.S. at 555).
See Twombly, 550 U.S. at 555 (citing Papasan v. Allain, 478 U.S. 265, 286
Twombly, 550 U.S. at 570; see also Phillips v. County of Allegheny, 515 F.3d
224, 233 (3d Cir. 2008) (“In its general discussion, the Supreme Court explained that
the concept of a ‘showing’ requires only notice of a claim and its grounds, and
distinguished such a showing from ‘a pleader's bare averment that he wants relief and is
entitled to it.’”) (quoting Twombly, 550 U.S. at 555 n.3).
Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (citing Twombly, 550 U.S. at 556).
Twombly, 550 U.S. at 563 (citations omitted).
contained in the complaint, exhibits attached to the complaint, and matters of public
record when reviewing a motion to dismiss.56
Defendants assert the first amended complaint fails to satisfy the Twombly/Iqbal
standard for pleading direct infringement because its alter-ego and agency theories and
its claims against each individual defendant are facially lacking. These arguments will
be addressed in turn.
A. Alter-Ego Theory
T-Jat alleges Expedia-DE and Expedia-WA are alter-egos of each other.57
Defendants assert that T-Jat’s allegations are conclusory,58 because they do not provide
facts showing an arrangement between all defendants to operate the websites and
mobile applications,59 and fail to allege an arrangement that relates directly the
underlying matter and perpetrates a fraud.60 Defendants also emphasize that T-Jat not
only raises alter-ego against Expedia-DE and Expedia-WA, but also against Orbitz and
Expedia.61 However, T-Jat alleges Orbitz, independent of its corporate parent,
individually infringes the ‘434 and ‘142 patents.62
Therefore, the governing issues are whether T-Jat alleges sufficient facts to
implicate both Expedia-DE and Expedia-WA as joint infringers because of their
See, e.g., Pension Benefit Guar. Corp. v. White Consol. Indus., Inc., 998 F.2d
1192, 1196 (3d Cir. 1993) (citations omitted).
D.I. 10 ¶ 13.
D.I. 14 at 2, 8.
Id. at 8.
Id. at 1, 7.
Id. at 3.
D.I. 10 ¶¶ 54-85.
corporate relationship, and whether Expedia-DE and/or Expedia-WA may be implicated
by their control over Orbitz’s activity. Defendants reasoning in regard to these issues is
misplaced.63 T-Jat’s response, although emphasizing that a showing of fraud is not
required, fails to address how, in the absence of fraud, Defendants’ actions meet the
essential element of “injustice or fundamental unfairness.”64
In addition to the element of injustice or unfairness, the Third Circuit considers
eight factors when assessing an alter ego claim: “gross undercapitalization, failure to
observe corporate formalities, nonpayment of dividends, insolvency of debtor
corporation, siphoning of funds from the debtor corporation by the dominant
stockholder, nonfunctioning of officers and directors, absence of corporate records, and
whether the corporation is merely a façade for for the operations of the dominant
stockholder.”65 A plaintiff must establish through alleging these factors that “in all
aspects of the business, the . . . corporations actually functioned as a single entity and
should be treated as such.”66 There must be a showing that the corporate form was
misused in a way “akin to fraud.”67 Actual fraud, however, is not required to pierce the
See D.I. 14 at 7 (citing In re Sunstates Corp. Shareholder Litig., 788 A.2d 530,
534 (Del. Ch. 2001)) (“Rather, to pierce the corporate veil based on an agency or “alter
ego” theory, ‘the corporation must be a sham and exist for no other purpose than as a
vehicle for fraud.’”); but see StrikeForce Techs., Inc. v. Phonefactor, Inc., No. 13-490RGA-MPT, 2013 WL 6002850, at *4-5 (D. Del. Nov. 13, 2013) (“a plaintiff . . . must
allege facts supporting the fraud or injustice requirement for alter ego liability to
establish a well-pleaded complaint” - a rigid test for proof of actual fraud is not required).
D.I. 16 at 5 (quoting Blair v. Infineon Techs. AG, 720 F. Supp. 2d 462 (D. Del.
Pearson v. Component Tech. Corp., 247 F.3d 471, 484-85 (3d Cir. 2001).
Id. at 485.
Energy Marine Servs., Inc. v. DB Mobility Logistics AG, No. 15-24-GMS, 2016
WL 284432, at *3 (D. Del. Jan. 22, 2016).
corporate veil.68 Nonetheless, a combination of factors and “an overall element of
injustice or unfairness” are necessary for veil-piercing.69
T-Jat has, at best, alleged sufficient facts to establish two of the eight factors: a
failure to observe corporate formalities and subsidiary companies acting as a façade for
the parent companies. T-Jat plausibly alleges commingling and parent company control
over the subsidiary between Expedia-DE and Expedia-WA, and between Expedia and
Orbitz. Expedia-DE and Expedia-WA share certain officers and directors, as well as a
business headquarters and a principal executive offices address in Delaware, and they
refer to themselves as “Expedia, Inc.” collectively as one entity on marketing and
promotional materials.70 Similarly, Expedia shares executive officers with Orbitz, and
Expedia’s 2015 Form 10-K names Orbitz as an entity that Expedia “control[s] or in
which [Expedia] ha[s] a variable interest and [is] the primary beneficiary of expected
cash profits or losses.”71
However, T-Jat does not allege the second element of fraud or injustice of use of
the corporate form in either case.72 Recent case law from this court establishes that
Trs. of the Nat’l Elevator Indus. Pension, Health Benefit & Educ. Funds v.
Lutyk, 332 F.3d 188, 194 (3d Cir. 2003).
United States v. Golden Acres, Inc., 702 F. Supp. 1097, 1104 (D. Del. 1998).
D.I. 10 ¶ 5.
Id. ¶¶ 7-8.
Compare Pontiaki Special Maritime Enter. v. Taleveras Group, No. 16-247LPS, 2016 WL 4497058, at *2-6 (D. Del. Aug. 26, 2016) (finding plaintiff made sufficient
factual allegations for six of eight alter ego factors and the element of unfairness or
injustice, warranting denial of motion to dismiss); c.f. Energy Marine, 2016 WL 284432,
at *3 (granting motion to dismiss because plaintiff’s “naked assertions” that defendant
met two of eight alter ego factors, that it did not adhere to corporate formalities and
subsidiaries were only façade for parent company, were insufficiently supported by
claims of whole ownership of subsidiaries, shared branding with subsidiaries, and
indicia of operational control over subsidiaries, and did not meet the 12(b)(6) standard).
factual allegations of “nothing more than a close relationship and coordination among
defendants,” including operational control of the parent company over subsidiaries, is
insufficient under Rule 12(b)(6).73 As such, the alter-ego theory against all three
defendants is inadequate to meet the minimum pleading requirements.
B. Agency Theory
T-Jat alleges Expedia-DE “controls or otherwise directs and authorizes the
activities” of Expedia-WA.74 It also alleges Expedia controls, directs, or authorizes
Orbitz’s activities as its wholly-owned subsidiary.75 Defendants argue T-Jat’s agency
claims do not relate directly to the underlying patent infringement allegations.76
Under agency theory, a parent corporation is held liable for the actions of its
subsidiary if the parent directed or authorized those actions.77 When assessing whether
there is an agency relationship, the court considers: if there is an arrangement where
one corporation acts in place of the other, and whether the arrangement is directly
related to the underlying cause of action.78 “The fundamental question is whether the
parent and subsidiary entered into a limited agency relationship for the transaction
giving rise to the claim.”79
Pontiaki, 2016 WL 4497058, at *5 (citing Energy Marine, 2016 WL 284432, at
D.I. 10 ¶ 5.
Id. ¶ 7.
D.I. 19 at 2, 4.
See StrikeForce, 2013 WL 6002850, at *4 (“Under this theory, only the conduct
shown to be instigated by the parent may be attributed to the parent.”).
Energy Marine, 2016 WL 284432, at *4 (citing Phoenix Canada Oil Co. v.
Texaco, Inc., 842 F.2d 1466, 1477 (3d Cir. 1988)).
However, evidence of agency required at the pleading stage is minimal.80
Because of their fact-specific nature, agency claims implicitly survive a 12(b)(6) attack
for facial implausibility if they provide sufficient facts connecting the parent and
subsidiary companies, and the control of the parent over the acts of the subsidiary,
which results in the ultimate cause of action.81
One can reasonably infer Expedia-DE’s control over Expedia-WA and Expedia’s
control over Orbitz from the alleged facts. Further, the court can reasonably deduce
Expedia-DE directed Expedia-WA’s actions, and likewise Expedia directed Orbitz’s
activities relating to the underlying cause of action, the allegedly infringing mobile and
website applications, based on the close connection between the respective
companies.82 Although this corporate closeness may not be sufficient to succeed on
agency theory at later stages in litigation, it is sufficient to survive a motion to dismiss, if
the parties are properly and individually identified.83
Jurimex Kommerz Transit G.M.B.H. v. Case Corp., 65 Fed. Appx. 803, 808
(citing In re Craftmatic Sec. Litig. v. Kraftsow, 890 F.2d 628, 645 (3d Cir. 1989))
(“[P]laintiffs cannot be expected to have personal knowledge of the details of corporate
internal affairs [at the pleading stage].”).
Id. at 807-08. See also E.I. DuPont de Nemours & Co. v. Rhone Roulenc Fiber
& Resin Intermediates, 269 F.3d 187, 198 (3d Cir. 2001) (plaintiff must “demonstrate
that the agent was acting on behalf of the principal and that the cause of action arises
out of that relationship.”); Canavan v. Beneficial Fin. Corp., 553 F.2d 860, 865 (3d Cir.
1977) (finding agency relationship as fact-specific, which makes discovery essential to
plaintiff’s argument preparation).
See supra notes 75, 76 explaining the alleged corporate intermingling. There
is information that further supports this claim appended to the answering brief. See
generally D.I. 17. For example, D.I. 17 Ex. B (Expedia-DE’s Standard & Poor’s
Corporate Description Report dated Sept. 3, 2014) explains that Expedia, Inc. along
with its subsidiaries, “facilitates the booking of hotel rooms, airline seats, car rentals,
and destination services,” which may be construed to relate directly to the underlying
cause of action.
See StrikeForce, 2013 WL 6002850, at *5; but see infra Section C.
C. Sufficiency of Claims Against Individual Defendants
T-Jat alleges Expedia-DE and Expedia-WA and Orbitz and Expedia were
“at all relevant times the agents, affiliates, alter egos, partners, assignees, successorsin-interest, or principals, of each other or were otherwise responsible for or participated
in the acts of infringement alleged herein and thereby incurred liability therefore.”84 TJat also details Expedia’s infringing activities and Orbitz’s infringing activities85 before
referring to all three Defendants in the plural.86 Defendants argue that T-Jat improperly
lumps multiple defendants together either by referring to two defendants as Expedia or
all three as Defendants.87 T-Jat responds by pointing to one paragraph in the first
amended complaint that provides information about Expedia-DE’s business,88 which
fails to address Defendants’ point about conflating the parties, and also continues to
refer to Expedia-DE and Expedia-WA singularly as Expedia.89 Additionally, T-Jat
asserts Orbitz’s individual liability based on the first amended complaint.90 Finally,
Defendants assert T-Jat’s first amended complaint and answering brief fail to provide
facts to support its contention that Expedia-DE individually owns and operates the
allegedly infringing server system.91
Recent decisions in this court make clear that plaintiffs cannot combine
D.I. 10 ¶¶ 14-15.
Id. ¶¶ 23-85
Id. at 46-47.
D.I. 14 at 8.
D.I. 16 at 5-6 (citing D.I. 10 ¶ 3).
Id. at 10.
Id. at 11.
D.I. 19 at 1-2.
allegations against multiple defendants.92 Unlike in Mayne Pharma, T-Jat does not
incorporate preceding paragraphs in its allegations against Defendants in its demand for
relief in the first amended complaint,93 and fails to explicitly allege that Expedia-DE sells
or owns the infringing technology.94 Although T-Jat’s assertions of Orbitz’s individual
infringement may be facially plausible, the allegations as to Expedia-DE and ExpediaWA do not clarify that each defendant committed at least one infringing act. Therefore,
the first amended complaint fails to provide Defendants with adequate notice of the
direct infringement allegations against them and fails to meet the minimum pleadings
VI. RECOMMENDATION DISPOSITION
See M2M Sols. LLC, 2015 WL 4640400, at *3 (finding “lump[ing] two
defendants together” in direct infringement claim insufficient under now-expired Form
18); Mayne Pharma Int’l PTY Ltd. v. Merck & Co., Inc., No. 15-438-LPS-CJB, 2015 WL
7833206 (D. Del. Dec. 3, 2015) (finding pleadings sufficient despite plaintiff “lumping
together its allegations against three Defendants” because that section of plaintiff’s
complaint “incorporated ‘each of the [complaint’s] preceding paragraphs,’” including
sections that identified each defendant’s individual infringing activities and sale of
infringing product). Although both cases apply the Form 18 standard, as Defendants
note in their opening brief, the Iqbal/Twombly standards are more demanding than Form
18. See D.I. 14 at 8. Pleadings insufficient under Form 18 would also be insufficient
under Twombly and Iqbal. See Princeton Dig. Image Corp. v. Konami Dig. Entm’t Inc.,
No. 12-1461-LPS-CJB, 2017 WL 239326, at *5 n.12 (D. Del. Jan. 19, 2017).
D.I. 10 at 46-47.
Id. ¶ 3 (stating Expedia-DE “is an online travel company” that “‘provides travel
products and services’” through a “‘portfolio of brands’” and “makes travel services
available through websites, including www.expedia.com”) (quoting Metasearch Sys.,
LLC v. Expedia, Inc., C.A. 12-1188-LPS, 2013 WL 11021894 (D. Del. Sept. 19, 2013)
Consistent with the findings herein, it is recommended that:
Defendants’ motion to dismiss the first amended complaint95 (D.I. 13) be granted
in part and denied in part.
This Report and Recommendation is filed pursuant to 28 U.S.C. § 636(b)(1)(B),
FED. R. CIV. P. 72(b)(1), and D. Del. LR 72.1. The parties may serve and file specific
written objections within fourteen (14) days after being served a copy of this Report and
Recommendation.96 The objections and response to the objections are limited to ten
(10) pages each.
The parties are directed to the Court’s standing Order in Non-Pro Se matters for
Objections Filed under FED. R. CIV. P. 72, dated October 9, 2013, a copy of which is
available on the Court’s website, www.ded.uscourts.gov.
Dated: March 7, 2017
/s/ Mary Pat Thynge
Chief U. S. Magistrate Judge
Although sufficient facts may be alleged in T-Jat’s answering brief in opposition
to Defendants’ motion to dismiss and its attached exhibits, these cannot be the basis for
the court’s decision. Com. of Pa. ex rel. Zimmerman v. PepsiCo. Inc., 836 F.2d 173,
181 (3d Cir. 1988) (citation omitted) (“It is axiomatic that the complaint may not be
amended by the briefs in opposition to a motion to dismiss.”); see also M2M Sols. LLC,
2015 WL 4640400, at *3.
FED. R. CIV. P. 72(b)(2).
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