Blackberry Limited v. Nokia Corporation et al

Filing 47

MEMORANDUM ORDER: The Motion to Dismiss Claims of Willful Infringement, Indirect Infringement, and Direct Infringement (D.I. 26 ) is GRANTED-IN-PART. Signed by Judge Richard G. Andrews on 3/20/2018. (nms)

IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF DELA WARE

BLACKBERRY LIMITED,
Plaintiff,
v.
NOKIA CORPORATION, NOKIA
SOLUTIONS AND NETWORKS OY,
NOKIA SOLUTIONS AND NETWORK
HOLDINGS USA, INC., & NOKIA
SOLUTIONS AND NETWORKS US LLC,

Civil Action No. 17-cv-155-RGA

Defendants.

MEMORANDUM ORDER

Presently before the Court is Defendants' Motion to Dismiss Plaintiffs Claims of Willful
Infringement, Indirect Infringement, and Direct Infringement in Its Amended Complaint (D.I. 26).
The issues have been fully briefed. (D.1. 27, 33, 38). For the reasons stated herein, Defendants'
motion is GRANTED-IN-PART.
I.

BACKGROUND

On February 14, 2017, Plaintiff BlackBerry Limited filed this patent infringement action
against Defendants Nokia Corporation, Nokia Solutions and Networks Oy ("NSN Oy"), Nokia
Solutions and Network Holdings USA, Inc. ("NSN Holdings USA"), and Nokia Solutions and
Networks US LLC ("NSN US"). (D.I. 1). Nokia Corporation and NSN Oy are Finnish companies,
each having its principal place of business in Finland. (D.1. 21, iii! 9-10). NSN Holdings USA and
NSN US are entities organized under the laws of Delaware, each having its principal place of
business in Texas.

(Id

iii! 11-12).

NSN Oy and NSN Holdings USA are wholly-owned

subsidiaries ofNokia Solutions and Networks B.V., which is a wholly-owned subsidiary of Nokia
Finance International B.V., which is a wholly-owned subsidiary of Nokia Corporation. (Id
11). NSN US is a wholly-owned subsidiary ofNSN Holdings USA. (Id

ifif 10-

if 12).

Defendants filed a motion to dismiss Plaintiff's complaint on June 5, 2017. (D.I. 14).
Plaintiff filed an amended complaint on June 26, 2017. (D.I. 21). Plaintiff's amended complaint
accuses all four Nokia Defendants (collectively referred to as "Nokia" 1 throughout the amended
complaint) of infringing U.S. Patent Nos. 6,996,418 ("the '418 patent"); 8,254,246 ("the '246
patent"); 8,494,090 ("the '090 patent"); 7,529,305 ("the '305 patent"); 8,861,433 ("the '433
patent"); 9,426,697 ("the '697 patent"); 9,253,772 ("the '772 patent"); 8,897,192 ("the '192
patent"); 9,125,202 ("the '202 patent"); 8,243,683 ("the '683 patent"); and 8,644,829 ("the '829
patent") owned by Plaintiff. (D .I. 21, if 6). Plaintiff asserts claims of direct infringement, indirect
infringement, and willful infringement against Nokia. (E.g., id iii! 116-120, 125).

II.

LEGAL STANDARD
Rule 8 requires a complainant to provide "a short and plain statement of the claim showing

that the pleader is entitled to relief .... " Fed. R. Civ. P. 8(a)(2). Rule 12(b)(6) allows the accused
party to bring a motion to dismiss the claim for failing to meet this standard. A Rule 12(b)(6)
motion may be granted only if, accepting the well-pleaded allegations in the complaint as true and
viewing them in the light most favorable to the complainant, a court concludes that those
allegations "could not raise a claim of entitlement to relief." Bell At/. Corp. v. Twombly, 550 U.S.
544, 558 (2007).
"Though 'detailed factual allegations' are not required, a complaint must do more than
simply provide 'labels and conclusions' or 'a formulaic recitation of the elements of a cause of

1

References in this opinion to "Nokia" also refer to all four Nokia Defendants collectively.

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action."' Davis v. Abington Mem'l Hosp., 765 F.3d 236, 241 (3d Cir. 2014) (quoting Twombly,
550 U.S. at 555). I am "not required to credit bald assertions or legal conclusions improperly
alleged in the complaint." In re Rockefeller Ctr. Props., Inc. Sec. Litig., 311 F.3d 198, 216 (3d
Cir. 2002). A complaint may not be dismissed, however, "for imperfect statement of the legal
theory supporting the claim asserted." See Johnson v. City ofShelby, 135 S.Ct. 346, 346 (2014).
A plaintiff must plead facts sufficient to show that a claim has "substantive plausibility."

Id. at 347. That plausibility must be found on the face of the complaint. Ashcroft v. Iqbal, 556
U.S. 662, 678 (2009). "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. Deciding whether a claim is plausible will "be a context-specific task that requires
the reviewing court to draw on its judicial experience and common sense." Id. at 679.

III.

DISCUSSION
A. Direct Infringement
The parties dispute whether Plaintiff's standards-based infringement pleading alleges

sufficient facts to connect the accused products to the asserted claims. (D.I. 27, pp. 17-20; D.I. 33,
pp. 18-20). I conclude that the amended complaint's infringement pleadings are adequate in this
regard.
Defendants also assert that Plaintiff has not pled sufficient facts to support a direct
infringement claim against any single Defendant. (D.I. 27, p. 16). Since the amended complaint
combines infringement allegations against all four Defendants, referring to them collectively as
"Nokia," Defendants maintain that the amended complaint "does not provide adequate notice as
to each Defendant's role in allegedly infringing the patents-in-suit." (Id. p. 16). Plaintiff responds

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that it has adequately charged each Defendant with conduct sufficient to support a direct
infringement claim. (D.I. 33, pp. 16-17 (citing D.I. 21, iii! 10-13, 67-71)).
Plaintiffs induced infringement claims and portions of the amended complaint
incorporated by reference in Plaintiffs direct infringement claims allege direct infringement by
NSN US and NSN Oy. (See, e.g., D.I. 21, iii! 67, 123, 144). I find plausible Plaintiffs claim that
NSN US directly infringes. Plaintiff has alleged no facts, however, to support its claim that NSN
Oy, a Finnish company, makes, uses, sells, or offers to sell the accused products in the United
States. Plaintiffs unsupported allegation that, "[o]n information and belief, NSN Oy ... oversees
the Nokia Networks business unit," does not provide a sufficient factual basis to support a plausible
direct infringement claim against NSN Oy, regardless of the activities of the Nokia Networks
business unit. (See id.

if 10).

The amended complaint otherwise alleges direct infringement of each asserted patent by
Nokia. (E.g., id.

iii! 116, 133). Plaintiffs direct infringement claims against NSN Holdings USA

and Nokia Corporation appear to be based entirely on these entities' relationships to NSN US.
(See id.

iii! 9, 11, 13). "[T]o state a claim based on an alleged parent-subsidiary relationship, a

plaintiff would have to allege (1) the existence of a parent-subsidiary relationship, and 2) facts that
justify piercing the corporate veil." M2M Solutions LLC v. Telit Commc'ns PLC, 2015 WL

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4640400, at *3 (D. Del. Aug. 5, 2015) (citation omitted). The second condition may be satisfied
by the "existence of an agency relationship between the entities where the parent effectively
controls the conduct of the subsidiary." Id. (citation omitted). The complaint does not state facts
supporting the existence of an agency relationship between any of the Defendants, nor does it state
facts that justify piercing the corporate veil.

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Therefore, I will dismiss without prejudice Plaintiffs direct infringement claims against
Nokia Corporation, 2 NSN Holdings USA, and NSN Oy. I will deny Defendants' motion with
respect to Plaintiffs direct infringement claims against NSN US.

B. Willfulness
Defendants contend that Plaintiffs willful infringement claims should be dismissed for
failure to adequately plead Defendants' pre-suit knowledge of the asserted patents and their
infringement, and failure to adequately plead Defendants' post-suit knowledge of infringement of
the asserted patents. (D.I. 27, pp. 4-6).
Having concluded that Plaintiff has adequately pled direct infringement claims against
NSN US only, I consider the sufficiency of Plaintiffs willful infringement claims against NSN
US only. I will dismiss without prejudice Plaintiffs pre-suit and post-suit willful infringement
claims against Nokia Corporation, NSN Holdings USA, and NSN Oy.
"The subjective willfulness of a patent infringer, intentional or knowing, may warrant
enhanced damages, without regard to whether his infringement was objectively reckless." Halo
Elecs., Inc. v. Pulse Elecs., Inc., 136 S. Ct. 1923, 1933 (2016). See also WBIP, LLCv. Kohler Co.,

829 F .3d 1317, 1341 (Fed. Cir. 2016) ("Knowledge of the patent alleged to be willfully infringed
continues to be a prerequisite to enhanced damages."). A party's pre-suit knowledge of the patent
is not sufficient by itself, however, to find "willful misconduct" such that the Court can award
enhanced damages. See Halo, 136 S. Ct. at 1936 (Breyer, J., concurring). Subjective willfulness
may be found when "the risk of infringement 'was either known or so obvious that it should have

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The parties agree that Nokia Corporation exercised its option to a limited license of the '090 patent on December 23,
2013. (D.I. 42, p. I). Plaintiff has offered to stipulate to dismiss its '090 patent infringement claims against Nokia
Corporation only. (D.I. 31, p. 2).

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been known to the accused infringer."' Id at 1930 (quoting Jn re Seagate Technology, LLC, 497
F.3d 1360, 1371 (Fed. Cir. 2007) (en bane)).
I find that Plaintiffs amended complaint fails to state a claim for pre-suit willful
infringement against NSN US because the complaint does not adequately plead pre-suit knowledge
of the asserted patents by NSN US. Plaintiffs willful infringement claims suffer from a similar
defect as the majority of its direct infringement claims-they fail to plead pre-suit knowledge by
any single Defendant. See T-Jat Sys. 2006 Ltd v. Expedia, Inc. (DE), 2017 WL 896988, at *7 (D.
Del. Mar. 7, 2017) ("Recent decisions in this court make clear that plaintiffs cannot combine
allegations against multiple defendants."); M2M, 2015 WL 4640400, at *3. The majority of the
allegations in the amended complaint plead pre-suit knowledge of the asserted patents by Nokia,
rather than charging knowledge by NSN US. (E.g., D.I. 21,

ifif 72-90, 108, 120-22, 125). The

amended complaint also alleges pre-suit knowledge of the '305, '418, '246, and '202 patents by
Nokia Siemens Networks, which "became wholly owned by the Nokia Group and was renamed
Nokia Networks and Solutions on or about August 7, 2013." (Id

ifif 91, 96, 99, 102, 104). The

amended complaint fails to draw any connection, however, between Nokia Siemens Networks and
NSN US. Pleading pre-suit knowledge by Nokia and Nokia Siemens Networks does not plausibly
allege pre-suit knowledge by NSN US in this case. See M2M, 2015 WL 4640400, at *3.
I conclude that Plaintiff has adequately pied post-suit willful infringement against NSN US
as of the date NSN US was served with the amended complaint. Contrary to Plaintiffs assertions,
the original complaint did not adequately plead direct infringement against NSN US. (Compare,
e.g., D.I. 1,

if 67 with D.I. 21, if 67). Plaintiffs original complaint therefore cannot support a

willful infringement claim against NSN US. Since Plaintiffs amended complaint adequately
pleads direct infringement of the asserted patents by NSN US, I find the amended complaint

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sufficient to place NSN US on notice of the asserted patents and its allegedly infringing activity.
(See D.I. 21,

~

67). This is sufficient to support a willful infringement claim at the motion to

dismiss stage. See DermaFocus LLC v. Ulthera, Inc., 201 F. Supp. 2d 465, 473 (D. Del. 2016)
(noting that post-Halo, that "mere notice of the charge of infringement gleaned from service of the
complaint" is sufficient for willful infringement claims to withstand a motion to dismiss).
Therefore, I will dismiss without prejudice each of Plaintiff's willful infringement claims
against Nokia Corporation, NSN Oy, and NSN Holdings USA.

I will also dismiss without

prejudice Plaintiff's pre-suit willful infringement claim against NSN US.
C. Indirect Infringement
Under 35 U.S.C. § 271(b), "whoever actively induces infringement of a patent shall be
liable as an infringer." In order to plead induced infringement, the patentee "must show direct
infringement, and that the alleged infringer knowingly induced infringement and possessed
specific intent to encourage another's infringement." Toshiba Corp. v. Imation Corp., 681 F.3d
1358, 1363 (Fed. Cir. 2012). To survive a motion to dismiss under Rule 12(b)(6), a plaintiff must
plead facts "plausibly showing that [the defendant] specifically intended [a third party] to infringe
[the asserted patents] and knew that the [third party's] acts constituted infringement." In re Bill of
Lading, 681 F.3d 1323, 1339 (Fed. Cir. 2012). To state a contributory infringement claim, a
plaintiff must plausibly allege that a defendant "offers to sell or sells within the United States or
imports into the United States a component of a patented machine ... knowing the same to be
especially made or especially adapted for use in an infringement .... " 35 U.S.C. § 271(c).
Many of Plaintiff's induced infringement and contributory infringement claims charge
conduct to Nokia. (E.g., D.I. 21,

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118, 121-22). These claims do not meet the plausibility

standard. See M2M, 2015 WL 4640400, at *5 (dismissing contributory infringement claim as

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"insufficiently stated" when claim stated allegations against two related entities using an "umbrella
term"). A handful of Plaintiff's induced infringement and contributory infringement claims charge
Nokia Corporation and NSN Oy with induced infringement and contributory infringement based
solely on the parent-subsidiary relationship between these entities and NSN US. (See, e.g., DJ.
21, iii! 123-24). They provide no factual basis to infer that foreign entities Nokia Corporation or
NSN Oy knew of the actions ofNSN US, and they amount to little more than boilerplate recitations
of the elements of induced infringement and contributory infringement claims. These claims thus
fail to meet the plausibility standard. See Davis, 765 F.3d at 241. Therefore, I will dismiss each
of Plaintiff's indirect infringement claims without prejudice.
I will GRANT without prejudice Defendants' motion to dismiss Plaintiff's direct
infringement claims and post-suit willful infringement claims against Nokia Corporation, NSN
Oy, and NSN Holdings USA. I will DENY Defendants' motion to dismiss Plaintiff's direct
infringement claims and post-suit willful infringement claims against NSN US. I will GRANT
without prejudice Defendants' motion to dismiss Plaintiff's indirect infringement and pre-suit
willful infringement claims against all Defendants.
IV.

CONCLUSION

For the reasons stated above, Defendants' Motion to Dismiss Plaintiff's Claims of Willful
Infringement, Indirect Infringement, and Direct Infringement in Its Amended Complaint is
GRANTED-IN-PART without prejudice.

IT IS SO ORDERED.
Entered this~day of March, 2018.

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