Rosetta-Wireless Corp. v. Apple Inc. et al
MEMORANDUM Opinion and Order Signed by the Honorable Joan H. Lefkow on 11/10/2015: Defendants' motion to sever the proceedings (dkt. 92) is granted. The claims against the following defendant groups are dismissed without prejudice: (1) Samsung Electronics Co. Ltd. and Samsung Electronics America, Inc.; (2) Motorola Mobility LLC; (3) LG Electronics Co. and LG Electronics USA Inc.; and (4) HTC Corp. and HTC America Inc. Rosetta may file separate lawsuits against these four defendant groups. Defendants' motion to dismiss (dkt. 88) is denied with respect to Apple and HTC's motion to dismiss for improper venue (dkt. 95) is denied, without prejudice, as moot. Status hearing is set for 12/8/2015 at 11:00 AM. Mailed notice(mad, )
IN THE UNITED STATES DISTRICT COURT
FOR THE NORTHERN DISTRICT OF ILLINOIS
ROSETTA-WIRELESS CORP., an
APPLE INC., a
California Corporation, et al.,
Case No. 15 C 799
Judge Joan H. Lefkow
OPINION AND ORDER
On June 1, 2015, Rosetta-Wireless Corp. (“Rosetta”), the holder of U.S. Patent No.
7,149,511 (“the ’511 patent”), filed an amended complaint for direct patent infringement against
Apple Inc. (“Apple”); Samsung Electronics Co. Ltd. and Samsung Electronics America, Inc.
(collectively, “Samsung”); Motorola Mobility LLC (“Motorola”); LG Electronics Co. and LG
Electronics USA Inc. (collectively, “LG”); and HTC Corporation and HTC America Inc.
(collectively, “HTC”). (Dkt. 82 (“Am. Compl.”).) Rosetta alleges that defendants “infringed
directly and continue to infringe directly” the ’511 patent by manufacturing, using, selling, or
offering for sale within the United States, or by importing into the United States, products that
embody the patented invention. (Id. ¶ 15.) Defendants have moved to dismiss for failure to state
a claim, or, in the alternative, for a more definite statement (dkt. 88) and to sever the proceedings
(dkt. 92), while HTC has separately moved to dismiss the claims against it for improper venue.
(Dkt. 95.) For the reasons stated below, the motions are granted in part and denied in part. 1
The court has jurisdiction under 28 U.S.C. §§ 1331 and 1338(a). The parties do not dispute that
venue is proper in this district with respect to the non-HTC defendants under 28 U.S.C. §§ 1391(c)(3) and
1400(b). As discussed infra, HTC’s motion to dismiss for improper venue will be denied as moot given
its dismissal without prejudice from this case.
Rosetta is an Illinois corporation engaged in the business of developing and marketing
novel solutions to consumers’ wireless Internet access problems. (Am. Compl. ¶ 1.) Rosetta is
the holder of the eighty-claim ’511 patent, entitled, “Wireless Intelligent Personal Server,” which
“receives data transmitted over a wireless communications channel and automatically processes
it so as to maintain a copy of at least one electronic file stored in a source computer.” (Id. ¶ 14;
dkt. 1-1 at 7.) Defendants are foreign and domestic corporations whose business activities
include, among other things, marketing, selling, and offering for sale cellular telephone devices
in the United States. (Am. Compl. ¶¶ 2–12.) Of particular relevance to the present motions is
the citizenship of the HTC entities: HTC Corporation is a foreign corporation with its corporate
headquarters in Taiwan. (Id. ¶ 10.) HTC America Inc. is a Washington corporation with its
principal place of business in Washington. (Id. ¶ 11.)
Factual and Procedural History
On January 27, 2015, Rosetta filed suit for direct and indirect patent infringement against
ten entities affiliated with Apple, Samsung, Motorola, LG, or HTC. (Dkt. 1.) According to the
original complaint, defendants had “infringed directly and indirectly” the ’511 patent by
manufacturing, using, selling, or offering for sale within the United Sates, or by importing into
the United States, products that embodied the patented invention. (Id. ¶ 18.) Rosetta attached a
copy of the patent to its original complaint (see dkt. 1-1) and also appended a list of
approximately 300 products (specifically, smartphones and tablets) that allegedly infringed the
Given the brevity of the amended complaint, the court has culled this background from the
original and amended complaints, as well as the docket. The facts taken from the amended complaint are
presumed true for the purpose of resolving the pending motions. See Active Disposal, Inc. v. City of
Darien, 635 F.3d 883, 886 (7th Cir. 2011) (motion to dismiss for failure to state a claim); Faulkenberg v.
CB Tax Franchise Sys., LP, 637 F.3d 801, 806 (7th Cir. 2011) (motion to dismiss for improper venue).
’511 patent, complete with retail names, model numbers, and release dates (if known). (See dkt.
1-2.) The list included, for example, various models of Apple’s iPhone. (See id.)
After voluntarily dismissing two defendants (see dkts. 9, 37), Rosetta filed an amended
complaint on June 1, 2015. (See Am. Compl.) In the amended complaint, Rosetta states that the
court has subject-matter jurisdiction under 28 U.S.C. §§ 1331 and 1338(a) and that “[v]enue is
proper in this federal district pursuant to 28 U.S.C. §§ 1391(b)–(c) and 1400(b) in that each
Defendant has done business [and] . . . committed acts of infringement in this District.” (Id.
¶ 13.) Rosetta also alleges ownership over the patent in suit and asserts that defendants
have infringed directly and continue to infringe directly the ’511
Patent. The infringing acts include, but are not limited to, the
manufacture, use, sale, or offer for sale within the United States, or
the importation into the United States of products that embody the
patented invention, including the products listed for each
Defendant in the attached Exhibit B. 3
(Id. ¶¶ 14–15.) As a remedy, Rosetta requests damages and injunctive relief. (Id. ¶ 16.)
Defendants have filed three motions directed at the amended complaint: (1) defendants’
motion to dismiss for failure to state a claim under Federal Rule of Civil Procedure 12(b)(6) or,
in the alternative, for a more definite statement under Rule 12(e) (dkt. 88); (2) defendants’
motion to sever the proceedings under 35 U.S.C. § 299 and Rule 21 (dkt. 92); and (3) HTC’s
motion to dismiss the claims against it for improper venue under Rule 12(b)(3). (Dkt. 95.)
Because defendants’ motion to sever is dispositive with respect to the non-Apple defendants, the
court addresses it first before turning to defendants’ motion to dismiss and HTC’s motion to
dismiss for improper venue.
Although Rosetta did not attach a copy of the ’511 patent or the list of allegedly infringing
products to its amended complaint, the parties do not dispute that these documents are considered part of
Rosetta’s amended pleading as they are concededly authentic, referenced in the amended complaint, and
central to Rosetta’s claims. (See Am. Compl. ¶¶ 14–15); Adams v. City of Indianapolis, 742 F.3d 720,
729 (7th Cir. 2014).
Defendants’ Motion to Sever
Defendants move to sever the proceedings into five separate suits on the ground that
defendants were impermissibly joined. Although Federal Rule of Civil Procedure 20 typically
governs joinder in federal court, 35 U.S.C. § 299, enacted as part of the Leahy-Smith America
Invents Act (“the AIA”), Pub. L. No. 112-29, 125 Stat. 284 (2011), details when joinder of
accused patent infringers is proper:
(a) . . . [P]arties that are accused infringers may be joined in one
action as defendants or counterclaim defendants, or have their
actions consolidated for trial, only if—
(1) any right to relief is asserted against the parties
jointly, severally, or in the alternative with respect
to or arising out of the same transaction, occurrence,
or series of transactions or occurrences relating to
the making, using, importing into the United States,
offering for sale, or selling of the same accused
product or process; and
(2) questions of fact common to all defendants or
counterclaim defendants will arise in the action.
35 U.S.C. § 299(a). Additionally, § 299(b) provides that “accused infringers may not be joined
in one action as defendants or counterclaim defendants, or have their actions consolidated for
trial, based solely on allegations that they each have infringed the patent or patents in suit.” Id.
§ 299(b). “The AIA’s joinder provision is more stringent than Rule 20, and adds a requirement
that the transaction or occurrence must relate to making, using, or selling of the same accused
product or process.” In re Nintendo Co., Ltd., 544 Fed. App’x 934, 939 (Fed. Cir. 2013). If
joinder is improper, a court may sever the proceedings under Rule 21. See Fed. R. Civ. P. 21.
Here, Rosetta does not argue that all defendants are jointly and severally liable for
infringing the ’511 patent, or that any right to relief arises out of the same transaction or
occurrence. Indeed, it would be difficult to do so, as even under the more-lenient standard of
Rule 20, courts in this district and others have repeatedly “concluded that a party fails to satisfy
[the] requirement of a common transaction or occurrence where unrelated defendants, based on
different acts, are alleged to have infringed the same patent.” Rudd v. Lux Prods. Corp. Emerson
Climate Techs. Braeburn Sys., LLC, No. 09 C 6957, 2011 WL 148052, at *3 (N.D. Ill. Jan 12,
2011) (collecting cases). Rather, Rosetta states that it does not oppose defendants’ motion and
merely requests that, should the court sever the actions, “the five defendant groups . . . maintain
consolidated pretrial proceedings, including a common schedule, coordinated discovery,
consolidated depositions, and consolidated Markman proceedings.” (Dkt. 100 at 1–2.)
Because Rosetta does not oppose severance, the court will exercise its discretion under
Rule 21 to sever the claims against the five defendant groups (Apple, Samsung, Motorola, LG,
and HTC). With respect to Rosetta’s accompanying request for consolidation, the court notes
that such a request is inappropriate at this time, as all defendants but Apple will be dismissed
without prejudice so that Rosetta can file separate suits against each defendant group. With that
said, the court notes that consolidation in the future may serve the interest of judicial economy
and allow the cases to be efficiently resolved. See Fed. R. Civ. P. 42(a).
Defendants’ Motion to Dismiss for Failure to State a Claim
Defendants also move to dismiss for failure to state a claim, or, in the alternative, for a
more definite statement. Because the non-Apple defendants will be dismissed without prejudice
pursuant to the court’s ruling on defendants’ motion to sever, the court addresses this motion
with respect to Apple only.
Claims for direct infringement are governed by 35 U.S.C. § 271(a), which provides that
“whoever without authority makes, uses, offers to sell, or sells any patented invention, within the
United States or imports into the United States any patented invention during the term of the
patent therefor, infringes the patent.” The parties’ first dispute is what legal standard should
determine the sufficiency of the amended complaint. Defendants argue that Seventh Circuit law,
and in particular, the Supreme Court’s interpretation of Federal Rule of Civil Procedure 8
governs, while Rosetta contends that Form 18 of the Federal Rules of Civil Procedure supplies
the controlling standard. Rosetta is correct. The amended complaint need only comply with
Because a Rule 12(b)(6) motion for failure to state a claim “is a purely procedural
question not pertaining to patent law,” the court applies Seventh Circuit precedent
notwithstanding the patent-based nature of the suit. See McZeal v. Spring Nextel Corp., 501 F.3d
1354, 1356 (Fed. Cir. 2007); see also In Re Bill of Lading Transmission & Processing Sys.
Patent Litig., 681 F.3d 1323, 1331 (Fed. Cir. 2012). In this circuit, as in all others, a motion to
dismiss under Rule 12(b)(6) challenges a complaint for failure to state a claim on which relief
may be granted. Fed. R. Civ. P. 12(b)(6). To survive a Rule 12(b)(6) motion, the complaint
must not only provide the defendant with fair notice of a claim’s basis but must also establish
that the requested relief is plausible on its face. See Ashcroft v. Iqbal, 556 U.S. 662, 678, 129 S.
Ct. 1937, 173 L. Ed. 2d 868 (2009); Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555, 127 S. Ct.
1955, 167 L. Ed. 2d 929 (2007); Bissessur v. Ind. Bd. of Trs., 581 F.3d 599, 602 (7th Cir. 2009).
The allegations in the complaint must be “enough to raise a right to relief above the speculative
level.” Twombly, 550 U.S. at 555; Bissessur, 581 F.3d at 602.
Although Seventh Circuit law applies, the Federal Rules of Civil Procedure provide a
series of forms that “suffice under the rules and illustrate the simplicity and brevity that the
rules contemplate.” Fed. R. Civ. P. 84. Form 18 in the Appendix of Forms sets forth the
following elements of a claim for direct patent infringement, which a plaintiff must plead to
survive dismissal: “(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 an injunction and damages.” McZeal,
501 F.3d at 1357 (alteration in original) (quoting current Fed. R. Civ. P. Form 18). A pleading
that properly adheres to the specificity of Form 18 “cannot be successfully attacked,” In re Bill of
Lading, 681 F.3d at 1334 (quoting 12 Charles Alan Wright, Arthur R. Miller & Richard L.
Marcus, Federal Practice and Procedure § 3162 (2d ed. 1997)), and this is true regardless of the
law of the applicable regional circuit. See K-Tech Telecomm., Inc. v. Time Warner Cable, Inc.,
714 F.3d 1277, 1283 n.1 (Fed. Cir. 2013). Indeed, “[a]ny changes to the Federal Rules of Civil
Procedure ‘must be obtained by the process of amending the Federal Rules, and not by judicial
interpretation.” Id. at 1283 (quoting Leatherman v. Tarrant Cnty. Narcotics Intelligence &
Coordination Unit, 507 U.S. 163, 168, 113 S. Ct. 1160, 122 L. Ed. 2d 517 (1993)). “[T]o the
extent any conflict exists between Twombly (and its progeny) and the Forms regarding pleading
requirements, the Forms control.” 4 Id. (citation omitted).
Defendants argue that even if Form 18 controls, Rosetta’s amended complaint still fails to
state a claim on which relief can be granted. The parties do not dispute that Rosetta has pleaded
elements 1, 2, and 5 of Form 18, but disagree as to whether prongs 3 and 4 are satisfied. Element
4 can be dealt with swiftly, as defendants’ only argument on this point is that Rosetta has failed
to plead that it gave notice to defendants of the alleged infringement before filing suit. Contrary
Although Rule 84 has been abrogated, and with it, the Appendix of Forms, that change does not
go into effect until December 1, 2015. See Fed. R. Civ. P. 84 (“[Text of Rule 84 abrogated effective
December 1, 2015, absent contrary Congressional action.]”). As such, the court looks to Form 18 for
purposes of this suit and declines to hold Rosetta to a different pleading standard at this juncture.
to defendants’ contention, Form 18 does not require pre-suit notice of infringement, as the filing
of a complaint constitutes sufficient notice. See 35 U.S.C. § 287(a) (“Filing of an action for
infringement shall constitute such notice.”); Addiction & Detoxification Inst. L.L.C. v.
Carpenter, --- Fed. App’x ---, 2015 WL 4430128, at *2 (Fed. Cir. July 21, 2015) (“Pre-filing
notice, however, is not required to bring a suit for direct infringement.” (citing 35 U.S.C. § 287)).
Accordingly, defendants’ argument does not counsel in favor of dismissal.
Nor is the court persuaded that the amended complaint fails to comply with element 3.
That paragraph of Form 18 requires, by way of example, a statement that “[t]he defendant has
infringed and is still infringing the Letters Patent by making, selling, and using electric motors
that embody the patented invention.” Fed. R. Civ. P. Form 18 (emphasis omitted). Rosetta
satisfies this standard by alleging that defendants “have infringed directly and continue to
infringe directly the ’511 Patent” by manufacturing, using, selling, or offering for sale within the
United States, or by importing into the United States, products that embody the patented
invention. (Am. Compl. ¶ 15.) Rosetta also lists approximately 300 of defendants’ smartphones
and tablets in Exhibit B as examples of products that embody the patented invention, and for
each product, Rosetta provides the retail name and model number, as well as the release date (if
known). (See dkt. 1-1.) These allegations satisfy Form 18 because they notify defendants “what
is being accused of infringement”—specific smartphones and tablets—and therefore
“allow . . . defendant[s] to understand the nature of the suit and prepare an answer.” Addiction
& Detoxification Inst. L.L.C., 2015 WL 4430128, at *3; see also In re Bill of Lading, 681 F.3d at
1336 (noting that “as long as the complaint . . . meet[s] the requirements of Form 18, the
complaint has sufficiently pled direct infringement”).
Defendants argue that the asserted patent and accused products in this case are
significantly more complex than the electric motor example described in Form 18 and that
therefore, Rosetta must provide more detail to state a plausible claim for relief. Specifically,
defendants contend that, in contrast to Form 18, the ’511 patent includes eighty claims, some of
which require the presence of multiple devices, and that the accused smartphones and tablets
have hundreds of different features and functionalities. Thus, defendants maintain, Rosetta must
identify “what features or functionalities of Defendants’ products are accused of infringement,
and what these features or functionalities purportedly ‘map to’ within the claims of the ’511
patent.” (Dkt. 89 at 8.) Defendants, however, cite to no controlling authority holding that such
information is required under Form 18. Indeed, although they cite the Federal Circuit’s general
statement in K-Tech that “[t]he adequacy of the facts pled depends on the breadth and
complexity of both the asserted patent and the accused product or system,” that case reversed the
district court’s dismissal of the suit and found that the plaintiff’s compliance with Form 18 was
sufficient to state a claim. See K-Tech, 714 F.3d at 1286–87. Moreover, the vast majority of
decisions that have dismissed complaints for failure to comply with Form 18 have involved
complaints that did not identify any specific products that allegedly infringed the patent in suit.
See, e.g., Addiction & Detoxification Inst. L.L.C., 2015 WL 4430128, a *3 (affirming dismissal
of the plaintiff’s complaint and noting that “[t]here must be some allegation of specific services
or products of the defendants which are being accused”); Prism Techs., LLC v. AT&T Mobility,
LLC, No. 8:12-CV-122, 2012 WL 3867971, at *5 (D. Neb. Sept. 6, 2012) (dismissing complaint
when the plaintiff broadly accused AT&T’s “various wireless products and data services” of
infringement); see also Bender v. LG Elecs. U.S.A., Inc., No. C 09-02114 JF (PVT), 2010 WL
889541, at *4 (N.D. Cal. Mar. 11, 2010) (noting that “[s]everal recent district court cases have
held that the factual allegations in a patent infringement complaint must identify the specific
products accused” (collecting cases)). That concern is not present here, as Rosetta has identified
specific, accused products. Because the amended complaint complies with Form 18, defendants’
motion to dismiss must be denied. The court declines to order Rosetta to provide a more definite
HTC’s Motion to Dismiss for Improper Venue
Finally, HTC has moved to dismiss for improper venue. Because HTC will be dismissed
without prejudice, the court will deny this motion as moot, without prejudice.
CONCLUSION AND ORDER
For the foregoing reasons, defendants’ motion to sever the proceedings (dkt. 92) is
granted. The claims against the following defendant groups are dismissed without prejudice: (1)
Samsung Electronics Co. Ltd. and Samsung Electronics America, Inc.; (2) Motorola Mobility
LLC; (3) LG Electronics Co. and LG Electronics USA Inc.; and (4) HTC Corp. and HTC
America Inc. Rosetta may file separate lawsuits against these four defendant groups.
Defendants’ motion to dismiss (dkt. 88) is denied with respect to Apple and HTC’s motion to
dismiss for improper venue (dkt. 95) is denied, without prejudice, as moot.
Date: November 10, 2015
U.S. District Judge Joan H. Lefkow
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