SUNRISE TECHNOLOGIES, INC. v. CIMCON LIGHTING, INC.

Filing 35

Judge Nathaniel M. Gorton: ENDORSED ORDER entered. MEMORANDUM AND ORDER. "the motion of defendant Cimcom Lighting, Inc. to dismiss (Docket No. 20), is, with respect to the claims of direct infringement, induced infringement and willful infringement, DENIED, but is, with respect to the claimof contributory infringement, ALLOWED."(Caruso, Stephanie)

United States District Court
District of Massachusetts

Sunrise Technologies, Inc.,
Plaintiff,
v.
Cimcon Lighting, Inc.,
Defendant.

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Civil Action No.
15-11545-NMG

MEMORANDUM & ORDER
GORTON, J.
Plaintiff Sunrise Technologies, Inc. (“plaintiff”) alleges
defendant Cimcom Lighting, Inc. (“defendant”) is liable for
direct, contributory, induced and willful infringement of one of
its patents for a mesh network of wirelessly linked
communication nodes mounted on utility poles.
Defendant has filed this motion to dismiss asserting that
plaintiff has not stated claims for any kind of infringement.
For the following reasons, defendant’s motion to dismiss will be
denied, in part, and allowed, in part.
I.

Factual and Procedural Background
Plaintiff is the assignee of United States Patent No.

7,825,793 (“’793 patent”), which was filed in May, 2007, and
issued in November, 2010.

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The ’793 patent, entitled “Remote Monitoring and Control
System,” is an invention that allows people to monitor and
control from afar household and building parameters such as home
security settings, fire alarm systems, air conditioning and
water heating.

The patent is directed toward a communication

system that relays information between an end user device and a
remote end user via a node mounted on a utility pole, such as a
telephone pole.
In April, 2015, plaintiff filed this action for patent
infringement.

After this Court allowed several extensions of

time to file a responsive pleading, defendant moved to dismiss
the complaint in March, 2016.

Plaintiff subsequently filed an

amended complaint alleging patent infringement under theories of
direct, contributory, induced and willful infringement.
Defendant’s dispositive motion followed.
II.

Defendants’ Motion to Dismiss
A.

Legal Standard for a Motion to Dismiss

To survive a motion to dismiss for failure to state a claim
under Fed. R. Civ. P. 12(b)(6), a complaint must contain
“sufficient factual matter” to state a claim for relief that is
actionable as a matter of law and “plausible on its face.”
Ashcroft v. Iqbal, 556 U.S. 662, 667 (2009) (quoting Bell Atl.
Corp. v. Twombly, 550 U.S. 544, 570 (2007)).

A claim is

facially plausible if, after accepting as true all non-

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conclusory factual allegations, the court can draw the
reasonable inference that the defendant is liable for the
misconduct alleged. Ocasio-Hernandez v. Fortuno-Burset, 640 F.3d
1, 12 (1st Cir. 2011).

A court may not disregard properly pled

factual allegations even if actual proof of those facts is
improbable. Id.

Rather, the relevant inquiry focuses on the

reasonableness of the inference of liability that the plaintiff
is asking the court to draw. Id. at 13.
When rendering that determination, a court may not look
beyond the facts alleged in the complaint, documents
incorporated by reference therein and facts susceptible to
judicial notice. Haley v. City of Boston, 657 F.3d 39, 46 (1st
Cir. 2011).
B.

Application

Plaintiff alleges one count of “infringement” in its
complaint.

Both plaintiff and defendant have, however,

submitted memoranda presenting arguments with respect to four
different kinds of infringement:
and willful.

direct, contributory, induced

Accordingly, the Court will construe the amended

complaint as alleging those four causes of action.

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1.

Direct Infringement
a.

Legal standard for direct infringement

The parties first dispute whether pleading in conformity
with Fed. R. Civ. P. Form 18 is sufficient to state a claim for
direct infringement.
The Federal Circuit Court of Appeals has held that for
claims of direct infringement, the pleading requirements of Form
18 are sufficient to survive a motion to dismiss. Lyda v. CBS
Corp., Docket No. 2015-1923, 2016 WL 5539875, at *4 (Fed. Cir.
Sept. 30, 2016).

But in 2015, Fed. R. Civ. P. 84 and the

Appendix of Forms, which contained Form 18, were eliminated from
the Federal Rules of Civil Procedure.

In adopting the amended

rules, the United States Supreme Court ordered that the rule
changes
shall govern in all proceedings in civil cases
thereafter commenced [after December 1, 2015] and,
insofar as just and practicable, all proceedings then
pending.
Id. at *4 n.2 (alteration in original) (quoting Supreme
Court of the United States, Order Regarding Amendments to
the Federal Rules of Civil Procedure (U.S. Apr. 29, 2015),
https://www.supremecourt.gov/orders/courtorders/frcv15(upda
te)_1823.pdf).
District courts have since been at odds as to whether
the requirements of Form 18 still apply in claims of direct

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infringement. Compare Footbalance Sys. Inc. v. Zero Gravity
Inside, Inc., Docket No. 15-CV-1058, 2016 WL 5786936, at *3
(S.D. Cal. Oct. 4, 2016) (applying the Twombly/Iqbal
plausibility standard instead of Form 18 to plaintiff’s
second amended complaint which was filed after the new
rules went into effect), with Hologram USA, Inc. v. Pulse
Evolution Corp., Docket No. 14-cv-0772, 2016 WL 199417, at
*2 n.1 (D. Nev. Jan. 15, 2016) (applying the Form 18
standard).
In the absence of authority from the Circuit Courts of
Appeals, this Court finds instructive the reasoning of several
district courts which have decided this issue, concluding that
the pleading requirements of Form 18 no longer apply to direct
infringement claims. See, e.g., Tannerite Sports, LLC v. Jerent
Enters., LLC, Docket No. 15-cv-00180, 2016 WL 1737740, at *3-5
(D. Or. May 2, 2016).
Citing the Supreme Court’s order, plaintiff contends that
defendant has not shown that applying the Twombly/Iqbal standard
would be “just and practicable” in this case.
disagrees.

The Court

Plaintiff should have been aware that Form 18 was

abolished when it filed its amended complaint in March, 2016,
three months after the new rules went into effect and nearly one
year after the Supreme Court first announced the rule changes.

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Accordingly, the Court will apply the Twombly/Iqbal
plausibility standard in determining whether plaintiff has
sufficiently stated a claim for direct infringement to survive a
motion to dismiss under Rule 12(b)(6). See id. at *5 (applying
Twombly and Iqbal to defendant’s amended counterclaims filed on
December 25, 2015, in part, because “defendant knew (or should
have known) about the imminent amendments to the Rules”).
b.

Application

To succeed on a claim for direct infringement, the
allegedly infringing product must practice all elements of a
patent claim. Southwall Techs., Inc. v. Cardinal IG Co., 54 F.3d
1570, 1575 (Fed. Cir. 1995).

Therefore, in applying Twombly and

Iqbal after the elimination of Form 18, plaintiff must allege
that defendant’s product practices all the elements of at least
one of the claims of the subject patent. TeleSign Corp. v.
Twilio, Inc., Docket No. CV 16-2106, 2016 WL 4703873, at *3-4
(C.D. Cal. Aug. 3, 2016).
Defendant asserts that plaintiff’s claim of direct
infringement fails because its accused products do not have
certain elements included in the claims of the ’793 patent, such
as a “street light pole” or an “end user.”

Plaintiff responds

that it has sufficiently alleged facts to put defendant on
notice of the claims against it.

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Although defendant contends that plaintiff does not allege
that defendant’s product includes a “street light pole” or an
“end user,” plaintiff alleges exactly that.

For example, in

paragraph 12 of its amended complaint, plaintiff claims,
Cimcon’s street light pole-mounted wireless lighting
controllers communicate with third party end user
devices . . . to transmit information . . . to an end
user.
Similarly, defendant maintains that plaintiff has not
alleged that its accused products include a “watchdog function.”
In paragraph 12, however, plaintiff alleges that defendant’s
accused products
have watchdog and reset functions such as “fault
monitoring” and “ON/OFF Control,” as well as photocell
sensor control.
Because, for the purpose of the pending motion, the Court
must construe plaintiff’s allegations as true, it concludes that
plaintiff has stated a claim for direct infringement. See
Delavau, LLC v. Corbion NV, Docket No. 15-1183, 2016 WL 341076,
at *3 (D.N.J. June 16, 2016) (accepting plaintiff’s
interpretation of the factual allegations and exhibits and
denying defendant’s motion to dismiss direct infringement
claim).

Thus, the Court will deny defendant’s motion with

respect to the claim of direct infringement.

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2.

Contributory Infringement

Defendant contends that plaintiff fails to state a claim
for contributory infringement because it fails 1) to indicate
which claims are infringed, 2) to allege facts that support
direct infringement by a third party and 3) to allege facts that
indicate the accused products have no substantial non-infringing
uses and that the accused products are especially made or
adapted for infringing uses.
With respect to defendant’s first contention, plaintiff
responds that it specifically identifies claims 1, 2, 4-8, 19,
20 and 22-26 of the ’793 patent.

Although plaintiff’s amended

complaint is perhaps circuitous, it identifies those claims in
paragraph 11 thereof.

Accordingly, the Court concludes that

plaintiff has properly indicated which claims are allegedly
subject to contributory infringement.
Next, the Court agrees with plaintiff that it has
sufficiently alleged facts of infringement by a third party.

To

support a claim for contributory infringement, plaintiff must
plead enough facts “to allow an inference that at least one
direct infringer exists.” In re Bill of Lading Transmission &
Processing Sys. Patent Litig., 681 F.3d 1323, 1336 (Fed. Cir.
2012).

In its amended complaint, plaintiff avers that defendant

markets its accused products by depicting a hypothetical
customer using the products in a manner that infringes the ’793

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patent.

Such allegations are sufficient to allow an inference

that a direct infringer exists.
Finally, with respect to defendant’s third argument,
plaintiff responds that it restates the statutory requirements
for contributory infringement in 35 U.S.C. § 271(c) “word-forword.”

Recitation of the statute is not sufficient, however, to

defeat a motion to dismiss.

Plaintiff has not pled any facts

that show that the accused products have no substantial noninfringing uses or that the accused products are especially made
or adapted for infringing uses. See Addiction & Detoxification
Inst. L.L.C. v. Carpenter, 620 Fed. App’x 934, 938 (Fed. Cir.
2015) (Simply to repeat the legal conclusion that a party has
contributorily infringed does not plead “factual content that
allows the court to draw the reasonable inference that the
defendant is liable for the misconduct alleged.” (quoting Iqbal,
556 U.S. at 678)).

Accordingly, the Court will dismiss the

claim for contributory infringement.
3.

Induced Infringement

Defendant claims that plaintiff has not stated a claim for
induced infringement because plaintiff 1) does not indicate
which claims are infringed and 2) does not plead facts
explaining that defendant induced a third party.

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Both parties agree that to state a claim for induced
infringement, plaintiff must allege facts showing that
defendant:
(1)
(2)
(3)

knew of the patent;
actively and knowingly aided and abetted
another’s direct infringement; and
possessed specific intent.

Mass. Inst. of Tech. v. Shire, PLC, Docket No. 1:13-CV-10020,
2014 WL 404696, at *8 (Feb. 2, 2014) (emphasis omitted)
(internal quotation marks omitted) (quoting DSU Med. Corp. v.
JMS Co., 471 F.3d 1293, 1305 (Fed. Cir. 2006)).
As explained above, defendant’s first argument is
unavailing because plaintiff specifically identifies claims 1,
2, 4-8, 19, 20 and 22-26 in the ’793 patent.
Plaintiff also has pled facts sufficient to support an
inference that a third party was induced by defendant to
infringe the ’793 patent.

Plaintiff alleges that defendant’s

marketing materials provide a description of the functionality
of the accused products and the intended use of such products
and thereby infringes the ’793 patent.

Such allegations are

sufficient to support an inference that there is at least one
direct infringer. See Carson Optical Inc. v. eBay, Inc., Docket
No. 12-CV-3793, 2016 WL 4385998, at *4 (E.D.N.Y. Aug. 17, 2016)
(concluding that “a list of allegedly infringing items available

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for sale on defendant’s website” is sufficient to establish the
direct infringement element at the pleading stage).
Consequently, the Court will deny defendant’s motion with
respect to plaintiff’s induced infringement claim.
4.

Willful Infringement

Both parties concur that to state a claim for willful
infringement, plaintiff must allege facts that show that
1) defendant knew about the patent and 2) knew of his alleged
infringement. See Select Retrieval, LLC v. Bulbs.com Inc.,
Docket No. 12-10389, 2012 WL 6045942, at *6 (D. Mass. Dec. 4,
2012).
Defendant avers that plaintiff has not stated a claim for
willful infringement because plaintiff has not sufficiently
stated a claim for direct infringement.

Plaintiff in response

relies on its earlier arguments that it has stated a claim for
direct infringement.
Because the Court concluded above that plaintiff has stated
a claim for direct infringement, the Court concludes that
plaintiff has stated a claim for willful infringement as well.
The Court will therefore deny defendant’s motion with respect to
plaintiff’s willful infringement claim.

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ORDER
For the forgoing reasons, the motion of defendant Cimcom
Lighting, Inc. to dismiss (Docket No. 20), is, with respect to
the claims of direct infringement, induced infringement and
willful infringement, DENIED, but is, with respect to the claim
of contributory infringement, ALLOWED.

So ordered.

/s/ Nathaniel M. Gorton_____
Nathaniel M. Gorton
United States District Judge
Dated November 23, 2016

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