Radiation Stabilization Solutions LLC v. Varian Medical Systems, Inc. et al

Filing 94

MEMORANDUM Opinion and Order. Signed by the Honorable Virginia M. Kendall on 8/28/2012: Mailed notice(rj, )

IN THE UNITED STATES DISTRICT COURT
FOR THE NORTHERN DISTRICT OF ILLINOIS
EASTERN DIVISION
RADIATION STABILIZATION
SOLUTIONS, INC.,
Plaintiff,
v.
VARIAN MEDICAL SYSTEMS, INC.,
LOYOLA UNIVERSITY MEDICAL
CENTER, CANCER TREATMENT CENTERS
OF AMERICA, AND UROPARTNERS LLC,
Defendants.

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Case No. 11 C 7701
Judge Virginia M. Kendall

MEMORANDUM OPINION AND ORDER
Radiation Stabilization Solutions ("RSS") sued Defendants Varian Medical Systems, Inc.
("Varian"), Loyola University Medical Center ("Loyola"), Cancer Treatment Centers of America
("CTCA") and Uropartners LLC ("Uropartners," and, together with Loyola and CTCA, the "Hospital
Defendants") for infringement of U.S. Patent No. 6,118,848 (the "‘848 Patent"). The Defendants
move to dismiss on grounds that the Complaint's allegations are inadequate under Bell Atlantic Corp.
v. Twombly, 550 U.S. 544 (2007) and Ashcroft v. Iqbal, 556 U.S. 662 (2009). For the reasons stated
herein, Defendant's Motion to Dismiss is granted with leave to amend.
I.

RSS’ ALLEGATIONS
For purposes of this motion to dismiss, the Court accepts the following well-pleaded

allegations as true. Tamayo v. Blagojevich, 526 F.3d 1074, 1081 (7th Cir. 2008). RSS is the
exclusive licensee of the ‘848 Patent, titled “System to Stabilize an Irradiated Internal Target.”
(Cmplt. ¶8). Varian is a Delaware corporation headquartered in Palo Alto, CA. The Hospital
Defendants are each health care facilities operating in the Chicago area. RSS alleges, with no

factual support or context, that each of the Defendants directly and/or indirectly infringes the ‘848
Patent because the Defendants either use, offer for sale, sell, import, or induce others to use, offer,
sell, or import systems that use Image Guided Radiation Therapy (“IGRT”).
II. STANDARD
A Rule 12(b)(6) motion to dismiss for failure to state a claim “is a purely procedural question
not pertaining to patent law,” so the Court applies Seventh Circuit precedent notwithstanding the
patent-based nature of this suit. See In re Bill of Lading Transmission and Processing Sys. Patent
Lit., 681 F.3d 1323, 1331 (Fed. Cir. 2012) (citing McZeal v. Sprint Nextel Corp., 501 F.3d 1354,
1356 (Fed. Cir. 2007)). To state a claim upon which relief can be granted, a complaint must contain
a “short and plain statement of the claim showing that the pleader is entitled to relief.” Fed. R. Civ.
P. 8(a)(2). The standard of pleading required by Rule 8 does not rise to “detailed factual
allegations” but must be more than “an unadorned, the defendant-unlawfully-harmed-me
accusation.” Twombly, 550 U.S. at 555. To survive a motion to dismiss, a complaint must be
“plausible on its face.” Iqbal, 556 U.S. at 678 (quoting Twombly, 550 U.S. at 570); see also
Swanson v. Citibank, N.A., 614 F.3d 400, 404 (7th Cir. 2010). A claim is facially plausible “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. Determining whether a
complaint states a plausible claim for relief requires “the reviewing court to draw on its judicial
experience and common sense.” Id. at 679. In short, under Iqbal, “the plaintiff must give enough
details about the subject-matter of the case to present a story that holds together . . . the court will
ask itself could these things have happened, not did they happen.” Swanson, 614 F.3d at 404. If the

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allegations are insufficient to state a plausible claim for relief, the Court may dismiss the complaint.
Twombly, 550 U.S. at 555-57.
III. DISCUSSION
A.

Direct Infringement

RSS alleges that each of the Hospital Defendants directly infringed the ‘848 patent. The
Defendants contend that RSS’s complaint does not state a claim for direct infringement because it
does not allege specific products other than “at least the” Novalis Tx and/or Trilogy systems, and
the catch-all “systems that use IGRT.” RSS responds that its allegations of direct infringement
comply with the federal rules form for a patent infringement case, Form 18, and therefore should
pass muster under Rule 8. In McZeal, the Federal Circuit discussed the federal rules form for a
patent infringement case (then Form 16, now Form 18), noting that form requires only “(1) an
allegation of jurisdiction; (2) a statement that the plaintiff owns the patent; (3) a statement that
defendant has been infringing the patent ‘by making, selling and using [the device] embodying the
patent;” (4) a statement that the plaintiff has given the defendant notice of its infringement; and (5)
a demand for injunction for damages.” McZeal, 501 F.3d at 1356-57; see also Fed. R. Civ. P. Form
18 (using the example of “electric motors” as “the device”); accord In re Bill of Lading, 681 F.3d
at 1334 (“whether [plainitff’s] amended complaints adequately plead direct infringement is to be
measured by the specificity required by Form 18.”)
Form 18 may provide limited requirements for satisfaction of pleading standards under Rule
8 and In re Bill of Lading, but RSS’ complaint fails even to meet those minimum standards. RSS
asserts (in its opposition to the Motion to Dismiss, not in the Complaint) that the mention of
products on the Defendants’ websites in the context of its direct infringement allegations against the

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Hospital Defendants (and its induced infringement allegations against Varian, addressed below)
constitutes sufficient pleading under Form 18 and puts Defendants on notice that IGRT products,
including but not limited to Trilogy and Novalis Tx are the infringing products at issue. But it is far
from obvious from the Complaint that Trilogy and Novalis are the sole products at issue, given RSS’
continued use of the “at least” qualifier before every mention of one of the two specific products.
It is also unclear from the Complaint that RSS gave the Defendants any notice of infringement; to
the contrary, the Complaint asserts that infringement has been occurring since “at least as of the date
of filing” of this Complaint. Such deliberately vague language provides absolutely no context for
the Defendants and cannot constitute notice to the Defendants of the conduct they are alleged to
have committed. It is entirely possible, however, that amendment of the Complaint would cure
these deficiencies. Therefore, RSS’ claims for direct infringement against the Hospital Defendants
are dismissed with leave to amend the Complaint to limit the allegedly infringing products to those
RSS can specify with clarity.
B.

All Defendants - Indirect Infringement

The Defendants all assert that RSS has insufficiently plead both types of indirect
infringement: contributory infringement (35 U.S.C. § 271(c)) and inducing infringement (35 U.S.C.
§ 271(f)). To demonstrate inducement of infringement, the patentee must establish “first that there
has been direct infringement, and second that the alleged infringer knowingly induced infringement
and possessed specific intent to encourage another’s infringement.” Broadcom Corp. v. Qualcomm
Inc., 543 F.3d 683, 697-98 (Fed. Cir. 2008). As for contributory infringement, RSS must ultimately
show direct infringement by one or more of the Defendants and that the Defendants each (1) knew
of the patents at issue; (2) knew that the product it allegedly sold was especially made or adapted

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for infringing uses; and (3) knew that the product was not suitable for substantial non-infringing
uses. See 35 U.S.C. § 271(c)); see also Lucent Techs. v. Gateway, Inc., 580 F.3d 1301, 1320 (Fed.
Cir. 2009). For both types of indirect infringement, the complaint must allege both knowledge of
the patent and intent. See e.g., Malinckrodt Inc. v. E-Z-EM Inc., 670 F. Supp. 2d 349, 354 (D. Del.
2009).
As an initial matter, the Hospital Defendants assert that the claims of indirect infringement
must be dismissed because the Hospital Defendants cannot be guilty of both direct and indirect
infringement at the same time. Both induced infringement and contributory infringement require
the defendant to have aided a third party direct infringer. See, e.g., RF Delaware, Inc. V. Pacific
Keystone Techs., Inc., 326 F.3d 1255, 1268 (Fed. Cir. 2003) (liability for either active inducement
of infringement or for contributory infringement is dependent on upon the existence of direct
infringement by customers); Broadcom Corp. 543 F.3d at 697 (induced infringement requires intent
“to encourage another’s infringement”); Joy Techs., Inc. v. Flakt, Inc., 6 F.3d 770, 774 (Fed. Cir.
1993) (contributory infringement is “dependent upon the existence of direct infringement”).
RSS’ complaint of indirect infringement fails as to the Hospital Defedannts and as to Varian
because RSS does not allege any third party direct infringer aided by any of the Defendants. As
shown by the brevity of Section I above, RSS’ Complaint is exceptionally sparse in terms of factual
context for the allegations. The Complaint contains no allegation of any third party who may have
been aided or induced to infringe by any of the Defendants. While it may be the case that Varian
supplies the Hospital Defendants, thereby making Varian the alleged indirect infringer and the
Hospital Defendants the alleged direct infringers, the Complaint is so brief that it makes no such
statement. In fact, but for Varian’s name, the Complaint is so cursory that RSS failed to include any

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allegation that Varian is even in the field of medical devices. “Where the well-pleaded facts do not
permit the court to infer more than the mere possibility of misconduct, the complaint has alleged,
but it has not shown, that the pleader is entitled to relief.” Iqbal, 556 U.S. at 679. With so little
information provided in the Complaint, the Defendants cannot be considered to be on notice of what
they are alleged to have done, and with whom, in order to be indirectly infringing the ‘848 Patent.
For that reason alone, RSS’ allegations of indirect infringement are dismissed with leave to amend.
RSS’ allegations of indirect infringement against each of the Defendants fail for another
reason. Both induced infringement and contributory infringement require a pleading of knowledge
and/or specific intent. See DSU Med. Corp. v. JMS Co., 471 F.3d 1293, 1034 (Fed. Cir. 2006)
(defendants must possess specific intent to encourage infringement); Lucent Techs., Inc. v.
Gateway, Inc. 580 F.3d 1301, 1320 (Fed. Cir. 2009) (contributory infringement requires knowledge
that its components had no substantial non-infringing uses). The Complaint provides absolutely no
factual detail about how (or even if) the Defendants had knowledge of the ‘848 Patent, let alone
knowledge that infringement was ongoing. RSS improperly relies solely on the conclusory
allegation that each Defendant “had specific intent” to infringe with no facts, even contextual facts,
to support that allegation. See Iqbal, 556 U.S. at 679 (“While legal conclusions can provide the
framework of a complaint, they must be supported by factual allegations.”) Alleging the legal
conclusion with no supporting factual basis whatsover does not pass the bar of Iqbal and Twombly.

IV.

CONCLUSION
For the foregoing reasons, Defendants’ Motion to Dismiss the Complaint (Doc. 45) is

granted and RSS’ Complaint is dismissed in its entirety. By September 10, 2012, RSS must amend

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its Complaint and address the multiple deficiencies identified in this opinion, so as to give the
Defendants appropriate basis to determine whether they have committed actions constituting either
direct or indirect infringement. In light of the complete dismissal of the Complaint, the Defendants’
Motion to Sever (Docket No. 76) is stricken without prejudice.

Should RSS elect to file an

Amended Complaint, the Defendants may request that this Court apply the fully briefed Motion to
Sever to that Amended Complaint, or may request that they be permitted to file a new motion to
sever.

________________________________________
Virginia M. Kendall
United States District Court Judge
Northern District of Illinois
Date: August 28, 2012

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