DoDots Licensing Solutions LLC v. Lenovo Holding Co., Inc. et al

Filing 52

MEMORANDUM OPINION. Signed by Judge Maryellen Noreika on 7/12/2019. (mdb)

IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF DELAWARE
DODOTS LICENSING SOLUTIONS LLC,
Plaintiff,
V.

LENOVO HOLDING COMPANY, INC.,
LENOVO (UNITED STATES) INC. and
MOTOROLA MOBILITY LLC,
Defendants.

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C.A. No. 18-098 (MN)

MEMORANDUM OPINION

Brian Farnan, Michael J. Farnan, FARNAN LLP, Wilmington, DE; Peny Goldberg, PROGRESS
LLP, Los Angeles, CA attorneys for Plaintiff
Frederick L. Cottrell, III, Renee M. Mosley, RICHARDS, LAYTON & FINGER, P.A., Wilmington,
DE; Charanjit Brahma, Anup M. Shah, Oscar A. Figueroa, TROUTMAN SANDERS LLP, San
Francisco, CA attorneys for Defendants

July 12, 2019
Wilmington, Delaware

Presently before the Comt is Defendants Lenovo (United States) Inc.'s, Lenovo Holding
Co., Inc.'s, and Motorola Mobility LLC's (collectively, "Defendants" or "Lenovo") partial motion
to dismiss (D.I. 33) the Second Amended Complaint (D.I. 30) for failure to state a claim on the
grounds that Plaintiff DoDots Licensing Solutions LLC ("Plaintiff') does not plausibly allege
induced infringement of the asserted patents. For the reasons set fo1th below, the Court GRANTS­
IN-PART and DENIES-IN-PART Defendants' motion.

I.

BACKGROUND
This is the second time that the Court is addressing the sufficiency of Plaintiffs

infringement allegations. On December 19, 2018, the Comt granted-in-part and denied-in-part
Defendants' partial motion to dismiss the First Amended Complaint under Federal Rule of Civil
Procedure 12(b)(6), finding that Plaintiff failed to plausibly allege various theories of direct and
indirect infringement of U.S. Patent Nos. 9,369,545 ("the '545 Patent"), 8,020,083 ("the
'083 Patent") and 8,510,407 ("the '407 Patent") ( collectively, "the Patents-in-Suit"). (See
D.I. 28 & 29). 1 Although Plaintiff had adequately pleaded direct infringement of the '083 and
'407 Patents, the Comt dismissed Plaintiffs claim of direct infringement of the '545 Patent based
on any activity other than Defendants' use of the accused products.2 (See D.I. 28 at 4-6). As to
indirect infringement, the Comt dismissed the claims of induced infringement for each of the
Patents-in-Suit because Plaintiff failed to plausibly allege that Defendants possessed the requisite
knowledge of infringement or the specific intent to induce infringement. (Id at 8-9).

The procedural history before the filing of Second Amended Complaint is set forth in the
Court's prior opinion. (See D.I. 28 at 1).
2

The '545 Patent contains only method claims, and direct infringement of a method claim
under§ 27l(a) requires performance of every step of the claimed method.

On January 9, 2019, and in response to the Cout1's order dismissing certain claims of direct
and indirect infringement, Plaintiff filed a Second Amended Complaint, which continues to allege
that Defendants directly and indirectly infringe various claims of the Patents-in-Suit. (See D.I. 30).
As to direct infringement, Plaintiff now alleges only that Defendants infringe the '545 Patent by
using the accused products (see D.I. 30 ,r 32), and the allegations of direct infringement of the '083
and '407 Patents remain the same. As to induced infringement, the Second Amended Complaint
includes additional allegations regarding Defendants' purported knowledge of infringement and
specific intent to induce infringement. (Compare D.I. 30 ,r 29, with D.I. 15 ,r 29). On January 28,
2019, Defendants filed the present motion to dismiss under Rule 12(b)(6), claiming that the Second
Amended Complaint still fails to plausibly allege induced infringement of any of the three Patents­
in-Suit. (See D.I. 33 & 34).

II.

LEGALSTANDARDS
In ruling on a motion to dismiss under Rule 12(b)(6), the 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 Mayer v. Belichick, 605 F.3d 223, 229 (3d Cir. 201O); see also Phillips v. Cnty. of

Allegheny, 515 F.3d 224, 232-33 (3d Cir. 2008). "[A] court need not 'accept as true allegations
that contradict matters properly subject to judicial notice or by exhibit,' such as the claims and the
patent specification." Secured Mail Sols. LLC v. Universal Wilde, Inc., 873 F.3d 905, 913
(Fed. Cir. 2017) (quoting Anderson v. Kimberly-Clark Corp., 570 F. App'x 927, 931
(Fed. Cir. 2014)). Nor is the Court required to accept as true bald assertions, unsupported
conclusions or unwarranted inferences. See TriPlay, Inc. v. WhatsApp Inc., No. 13-1703-LPS­
CJB, 2018 WL 1479027, at *3 (D. Del. Mar. 27, 2018). Dismissal under Rule 12(b)(6) is only
appropriate if a complaint does not contain "sufficient factual matter, accepted as true, to 'state a

2

claim to relief that is plausible on its face."' Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (quoting
Bell Atl. Corp. v. Twombly, 550 U.S. 544,570 (2007)); see also Fowler v. UPMC Shadyside, 578
F.3d 203,210 (3d Cir. 2009). This plausibility standard obligates a plaintiff to provide "more than
labels and conclusions, and a formulaic recitation of the elements of a cause of action." Twombly,
550 U.S. at 555. Instead, the pleadings must provide sufficient factual allegations to allow the
Court to "draw the reasonable inference that the defendant is liable for the misconduct alleged."
Iqbal, 506 U.S. at 678.
III.

DISCUSSION
A.

Plaintiffs Claims of Post-Suit Induced Infringement

As with the prior pleading, the Second Amended Complaint includes allegations that
Defendants indirectly infringe "one or more claims" of each of the Patents-in-Suit. (See D.I. 30

,r,r

32, 38, 44; see also D.I. 15

,r,r

32, 38, 44 (First Amended Complaint)). As to induced

infringement, Plaintiff now alleges:
As alleged below, Defendants induce infringement of the Patents­
in-Suit by their customers, and intend to do so, through their
marketing materials, brochures, product manuals, and other
materials
such
as
their
website,
https://www.lenovoappexplorer.com/en_us/, with knowledge of the
Patents-in-Suit and their customers' infringement of them. Lenovo
actively markets its "Lenovo App Explorer," which it touts at the
Lenovo App Explorer website as a "one stop shop to discover,
evaluate, choose and install apps." Lenovo also states at that website
that Lenovo gives users a selection of the "most popular" apps,
which shows that Lenovo not only knows its customers are using
the apps but Lenovo encourages the use by providing the selection
of popular apps directly to the customers. For the same reasons that
Lenovo knows its own use infringes the patents-in-suit, Lenovo also
knows that its customers' use likewise infringes the patents-in-suit.
Lenovo has been aware of all three patents-in-suit since at least the
filing of the First Amended Complaint in this action, yet continues
its own infringing activity as well as its inducement of infringement
by its customers. On information and belief,Lenovo in fact has been
aware of all three patents-in-suit even before the filing the First

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Amended Complaint, at least from shortly after the filing of the
original Complaint.
(D.I. 30 ,i 29). The Second Amended Complaint does not include any other theories of indirect
infringement liability and there are no further allegations of inducement.3
Induced infringement under§ 27l(b) requires that "the alleged inducer knew of the patent,
knowingly induced the infringing acts, and possessed a specific intent to encourage another's
infringement of the patent." Vita-Mix C01p. v. Basic Holding, Inc., 581 F.3d 1317, 1328 (Fed. Cir.
2009). To give rise to inducement liability, the accused infringer must know that the induced acts
constitute infringement of another's patent. Global-Tech Appliances, Inc. v. SEB S.A., 563 U.S.
754, 766 (2011). Therefore, to state a claim of inducement sufficient to withstand a motion to
dismiss, a plaintiff must plead facts that plausibly support an inference that the accused inducer
"specifically intended [another] to infringe the [patent] and knew that the [induced] acts constituted
infringement." In re Bill ofLading Transmission & Processing Sys. Patent Litig., 681 F.3d 1323,
1339 (Fed. Cir. 2014). A plaintiff must also plead facts that support an inference that an underlying
act of direct infringement has occurred. See id. at 1336; see also Linear Tech. Corp. v. Impala

Linear Corp., 379 F.3d 1311, 1326 (Fed. Cir. 2004) ("There can be no inducement or contributory
infringement without an underlying act of direct infringement.").
As mentioned above, the claims of induced infringement in the First Amended Complaint
were previously dismissed because Plaintiff did not adequately plead the requisite knowledge and
specific intent elements necessary to support a claim of inducement. The Second Amended

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In its Second Amended Complaint, Plaintiff again fails to identify whether its indirect
infringement allegations stem from § 271(b) or (c), which was an issue in the prior
pleading. (See D.I. 28 at 7 n.5). Despite being on notice that the Court did not consider
contributory infringement under§ 271(c) to be at issue in this case, Plaintiff has not added
allegations directed to that theory of infringement in its Second Amended Complaint.
Therefore, Plaintiff's indirect allegations continue to be limited to inducement.
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Complaint now alleges that Defendants have knowledge of the Patents-in-Suit and knowledge of
the purported infringement of the Patents-in-Suit since at least the filing of the First Amended
Complaint. (D.I. 30129). Although briefly mentioned in reply (D.I. 38 at 4), Defendants do not
seriously challenge the sufficiency of Plaintiff's allegations of knowledge based on the filing of
the First Amended Complaint. Instead, Defendants argue that Plaintiff's claims of inducement
must fail because there are no facts to support the allegation that Defendants possess the requisite
specific intent to induce infringement. (D.I. 34 at 6-7; see also D.I. 38 at 1-3). The Court disagrees.
In the Second Amended Complaint, Plaintiff alleges that Defendants have knowledge of
the Patents-in-Suit from the First Amended Complaint, and Plaintiff also alleges that the
infringement allegations from that earlier pleading provide sufficient notice of how use of the
accused products by Defendants (or their customers) constitutes infringement of the Patents-in­
Suit. (D.I. 30 1 29). Further, Plaintiff alleges that Defendants are continuing their marketing
activities despite receiving notice of these allegations from the First Amended Complaint. (Id.).
Given that the First Amended Complaint provided Defendants with knowledge of the Patents-in­
Suit and also with knowledge of the purpmted infringement caused by using the accused products
in conjunction with certain applications, one plausible inference for Defendants' continued
marketing of those products and applications is that Defendants specifically intend to induce their
customers to infringe the Patents-in-Suit. 4 See Bill of Lading, 681 F.3d at 1340 ("Nothing in

4

To the extent that Defendants take issue with Plaintiff not identifying a specific application
offered on the "Lenovo App Explorer" (see D.I. 34 at 7), the Court is unpersuaded under
the present facts. In alleging that the accused products satisfy each limitation of select
claims of the Patents-in-Suit, Plaintiff identifies "the weather app" as an example
application that satisfies certain claim elements. (See D.I. 30 11 24, 26, 28). One of the
"Lenovo App Explorer" applications highlighted on the website cited by Plaintiff is a
weather application. Moreover, Plaintiff is not required to allege that use of all applications
offered on the "Lenovo App Explorer" would result in infringement of the Patents-in-Suit,
as Defendants seem to suggest. (D.I. 34 at 7).
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Twombly or its progeny allows a comt to choose among competing inferences as long as there are
sufficient facts alleged to render the non-movant's asserted inferences plausible."). Indeed, other
courts in this District have reached similar conclusions, finding a specific intent to induce to be
sufficiently pleaded where a plaintiff alleges that the defendant continues marketing the accused
products despite receiving notice of an asserted patent and its purported infringement from an
earlier pleading. See ReejEdge Networks, LLC v. Juniper Networks, Inc., 29 F. Supp. 3d 455,460
(D. Del. 2014) ("ReefEdge's allegations of Juniper's marketing activities and instructions to
customers to use the accused products in an infringing manner, even after Juniper had actual notice
of the alleged infringement by specific accused products as a result of the filing of the original
complaint, pleads specific intent to induce infringement with sufficient particularity."); see also

Telecomm Innovations, LLC v. Ricoh Co., 966 F. Supp. 2d 390, 395 (D. Del. 2013).
Plaintiffs allegations in the Second Amended Complaint may be borderline in terms of
sufficiency,but the Comt finds that Plaintiff has pleaded just barely enough to render plausible the
inference that Defendants specifically intend to induce infringement of the Patents-in-Suit. Thus,
because the Second Amended Complaint plausibly alleges that Defendants possess the requisite
knowledge and specific intent to induce infringement since the First Amended Complaint was
filed, Plaintiff has sufficiently stated a claim of post-suit inducement for the Patents-in-Suit.
B.

Plaintiffs Claims of Pre-Suit Induced Infringement

Although the Court finds that Plaintiff has adequately pleaded induced infringement since
the filing of the First Amended Complaint,the Cowt agrees with Defendants that the allegations
regarding pre-suit inducement are deficient. (See D.I. 34 at 8-9; D.I. 38 at 4-5). As with the prior
pleading, the Second Amended Complaint still includes no factual allegations that plausibly
suggest Defendants possessed the requisite knowledge of infringement of any of the Patents-in-

6

Suit prior to filing the original Complaint or the First Amended Complaint.5 Indeed, despite being
on notice that the allegations of pre-suit lmowledge were deficient (D.I. 28 at 8-9), Plaintiff added
only the following conclusory assertion in the Second Amended Complaint: "On information and
belief, Lenovo in fact has been aware of all three patents-in-suit even before the filing the First
Amended Complaint, at least from shortly after the filing of the original Complaint" (D.I. 30, 29).
The Court is not required to accept as true such unsupported allegations, especially as related to
the '083 and '407 Patents, which were not accused in the original Complaint. See HSM Portfolio
LLC v. Fujitsu Ltd, No. 11-770-RGA, 2012 WL 2580547, at *1 (D. Del. July 3, 2012) ("Stating
that the defendant was on notice of a patent as of a certain date is insufficient to provide a factual
basis for alleging knowledge [to support a claim of inducement]."). There are no other allegations
relating to pre-suit knowledge for any of the Patents-in-Suit. Because the Second Amended
Complaint does not adequately plead that Defendants possessed the requisite knowledge prior to
Plaintiff asse1iing the Patents-in-Suit, any claim of pre-suit inducement must be dismissed.
Plaintiff argues that the Comi should not "chop off' the claim of pre-suit inducement at
this stage; instead, according to Plaintiff, the Court should allow the case to proceed with pre-suit
inducement at issue as long as the post-suit claim is found to be adequately pleaded. (See D.I. 36
at 5-6). Plaintiff does not cite any case to support the argument that a claim of induced
infringement should proceed as to all time periods simply because post-suit inducement may be
sufficiently pleaded. Indeed, other courts in this District have come to the opposite conclusion,

5

Plaintiff only asserted the '545 Patent in the original Complaint (see D.I. 1 ,, 20-24), and
the '083 and '407 Patents were added to the case in the First Amended Complaint (see
DJ. 15 ,, 36-47). Therefore, as Defendants point out, the cut-off for pre-suit inducement
for the '545 Patent is the date of the original Complaint, whereas the cut-off for pre-suit
inducement for the '083 and '407 Patents is the date of the First Amended Complaint. (See
D.I. 34 at 8-9; see also D.I. 38 at 4-5).
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paring inducement claims down by time period when Plaintiff fails to adequately plead pre-suit
inducement. See, e.g., ReefEdge, 29 F. Supp. 3d at 459-60 ( dismissing pre-suit inducement claims
but allowing Plaintiff to proceed with post-suit inducement claims); see also Valmont Indus., Inc.
v. Lindsay Corp., No. 15-042-LPS-CJB, 2018 WL 503255, at *3-4 (D. Del. Jan. 22, 2018).
Regardless of the sufficiency of Plaintiffs allegations for post-suit inducement, the Court will not
allow Plaintiff to pursue a claim of pre-suit inducement where there are insufficient allegations to
render that claim plausible. Therefore, Plaintiffs claim of induced infringement of the '545 Patent
is limited to the time since the original Complaint was filed, and Plaintiffs claims of induced
infringement of the '083 and '407 Patents are limited to the time since the First Amended
Complaint was filed. If Plaintiff later discovers facts that plausibly suggest Defendants possessed
the requisite knowledge of the Patents-in-Suit to support a claim of pre-suit inducement, Plaintiff
may, if appropriate, seek leave to further amend its complaint. 6
IV.

CONCLUSION

For the foregoing reasons, Defendants' partial motion to dismiss (DJ. 33) is GRANTED­
IN-PART and DENIED-IN-PART. An appropriate order will follow.

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For Plaintiff to request such leave to amend, it should follow the Court's procedure for
doing so.
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