Smartwater, LTD. v. Applied DNA Sciences, Inc.

Filing 65

MEMORANDUM & ORDER granting in part and denying in part 57 Motion to Amend/Correct/Supplement; denying as moot 12 Motion to Dismiss for Failure to State a Claim. For the foregoing reasons, Defendant's partial motion to dismiss is DENI ED AS MOOT. Plaintiff's motion to amend is GRANTED IN PART and DENIED IN PART. Specifically, Plaintiffs motion is GRANTED insofar as the PAC alleges claims for direct infringement of the patents-in-suit, knowledge of the patents-in-suit as of June 2012, and induced infringement of the 152 Patent. Plaintiff's motion to amend is otherwise DENIED. The Clerk of the Court is directed to docket the PAC (Docket Entry 61, Ex. A) as the Amended Complaint. However, the Amended Complaint remains operative only insofar as it is consistent with the Court's rulings explained above. So Ordered by Judge Joanna Seybert on 9/27/2013. C/ECF (Valle, Christine)

UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF NEW YORK
---------------------------------------X
SMARTWATER, LTD.,
Plaintiff,
MEMORANDUM & ORDER
12-CV-5731(JS)(AKT)

-againstAPPLIED DNA SCIENCES, INC.,

Defendant.
---------------------------------------X
APPEARANCES
For Plaintiff:
Jeffrey E. Francis, Esq.
Joseph Maraia, Esq.
Margaret M. O’Keefe, Esq.
Pierce Atwood LLP
100 Summer Street, Suite 2250
Boston, MA 02110
Suzanna Marie Meyers Morales, Esq.
William R. Hansen, Esq.
Lathrop & Gage LLP
230 Park Avenue, Suite 2400
New York, NY 10169
David S. Brafman, Esq.
Akerman Senterfitt
222 Lakeview Ave., Suite 400
West Palm Beach, FL 33401
For Defendant:

Joseph P. Zammit, Esq.
James R. Crawford, Esq.
Felice B. Galant, Esq.
Jami Elizabeth Mills Vibbert, Esq.
Fullbright & Jaworski LLP
666 Fifth Avenue
New York, NY 10103

SEYBERT, District Judge:
Currently pending before the Court are: (1) Defendant
Applied DNA Sciences, Inc.’s (“Defendant” or “ADNAS”) partial
motion

to

dismiss

(Docket

Entry

12)

and

(2)

Plaintiff

Smartwater, Ltd.’s (“Plaintiff” or “Smartwater”) motion to amend
the Complaint (Docket Entry 57).

For the following reasons,

Defendant’s motion is DENIED AS MOOT and Plaintiff’s motion is
GRANTED IN PART and DENIED IN PART.
BACKGROUND
I. Factual Background
Plaintiff
relevant

United

Patent”)

and

¶¶ 1-2.)

is

States

Patent
The

a

foreign

Patents:

5,811,152

original

corporation
Patent

(the

5,605,650

“‘152

Complaint

that

owns
(the

Patent”).

contains

few

allegations, the entirety of which are as follows:
7. [Defendant] makes, uses, sells or offers
for sale products including, but not limited
to: (i) SmartDNA Intruder Tagging Systems;
(ii)
Signature
DNA,
and
(iii)
DNANet
products that infringe one or more claims of
the ‘650 [Patent].
8.
[Defendant] has also infringed one or
more claims of the ‘650 Patent by knowingly
and actively inducing others to infringe, by
contributing to the infringement of others
and by intentionally aiding, assisting and
encouraging
the
infringement
of
others
through
the
sale,
offer
for
sale,
manufacture
and
use
of
[Defendant’s]
products including, but not limited to: (i)
SmartDNA
Intruder
Tagging
Systems;
(ii)
Signature DNA, and (iii) DNANet products.
. . .
11.
[Defendant] makes, uses, sells or
offers for sale products including, but not
limited to: (i) SmartDNA Intruder Tagging
Systems; (ii) Signature DNA, and (iii)
2

two
“‘650

(Compl.
factual

DNANet products that infringed one or more
claims of the ‘152 Patent.
12.
[Defendant] has also infringed one or
more claims of the ‘152 Patent by knowingly
and actively inducing others to infringe, by
contributing to the infringement of others
and by intentionally aiding, assisting and
encouraging
the
infringement
of
others
through
the
sale,
offer
for
sale,
manufacture
and
use
of
[Defendant’s]
products including, but not limited to: (i)
SmartDNA
Intruder
Tagging
Systems;
(ii)
Signature DNA, and (iii) DNANet products.
(Compl. ¶¶ 7-8, 11-12.)
Plaintiff

asserts

two

claims

in

the

original

Complaint--one for infringement of the ‘650 Patent and one for
infringement of the ‘152 Patent.
Plaintiff’s

Proposed

Amended

Complaint

(“PAC”)

contains the same two causes of action, but alleges additional
factual allegations.

Specifically, Plaintiff alleges that it

“provides a forensic marking technology - a water-based, clear
solution that dries invisibly but is later detectable under UV
light - that marks goods and persons coming in contact with the
solution.”

(PAC ¶ 7.)

uses,

or

sells

offers

Defendant, Plaintiff alleges “makes,
for

sale

products

including,

but

not

limited to colorless, odorless SigNature® DNA, Cashield™, Smart
DNA and DNAnet™ products (the ‘Marking Products’).”
The

PAC

further

alleges

that

(PAC ¶ 8.)

Defendant

directly

infringed claim one of the ‘650 Patent and claim ten of the ‘152

3

Patent, as well as the other claims in the patents-in-suit, by
carrying out testing and demonstrations of the Marking Products
in

the

United

States,

“longislandreport.org” 1
(PAC ¶¶ 8, 16.)

as

exemplified

(“Video

1”)

by

videos

youTube 2

and

posted

(“Video

on
2”).

Video 1 depicts a demonstration in which a

“fake criminal” attempts to leave a pharmacy with a stolen item.
As

he

leaves,

he

is

sprayed

appears to be a clear mist.

by

the

smartDNA

system,

which

The video then shows how the mist

would glow under a particular light, thus marking the suspect.
Video

2

incorporates

Video

1

and

includes

a

slideshow

presentation regarding Defendant’s products.
In

addition,

Plaintiff

alleges

indirectly infringed the patents-in-suit.

that

Defendant

According to the PAC,

Defendant had knowledge of the patents-in-suit because in March
2008, Defendant tasked an employee to investigate Plaintiff’s
patents and to ask its patent attorney to initiate a search.
(PAC

¶¶

9-10,

17-18.)

Moreover,

Plaintiff

alleges

that

Defendant had knowledge of Plaintiff’s allegations that it was
infringing the patents-in-suit since “at least June 2012.”
¶¶

11,

19.)

Furthermore,

Plaintiff

asserts

that

(PAC

Defendant

1

See http://longislandreport.org/multimedia/video-dna-spraysecurity-system-could-help-protect-pharmacies/13050 (last
visited Sept. 17, 2013).
2

See
http://www.youtube.com/watch?v=RDiuxDBZWlg&feature=channel&list=
UL (last visited Sept. 17, 2013).
4

indirectly
inducing

infringed
others

instructions,

the

to

‘650

Patent

infringe

directions,

and

the

and

the

patents

promotional

the

PAC

alleges

that

Patent

by

by

providing

materials

the Marking Products on certain websites.
Finally,

‘152

regarding

(PAC ¶¶ 12, 20.)

Defendant

contributed

to

the

infringement of the ‘650 Patent and the ‘152 Patent by selling
the Marking Products to consumers.

(PAC ¶¶ 14, 21.)

II. Procedural Background
According
“virtually

.

.

to

.

Defendant,

identical

Plaintiff

complaint”

initially

in

the

filed

District

a
of

Massachusetts on June 6, 2012, but later voluntarily withdrew
the

suit.

(See

Def.’s

Br.

in

Support

of

Mot.

to

Dismiss

(“Def.’s Br. to Dismiss”), Docket Entry 12, at 1.)
Thereafter, Plaintiff filed the instant Complaint in
the Middle District of Florida on August 24, 2012.

Defendant

moved to transfer venue, which the Florida court granted, and
the case was transferred to this Court in November 2012.
Docket Entries 29-30.)

(See

Prior to transfer, however, Defendant

moved to dismiss, and that motion is now pending before this
Court.

Approximately

seven

months

after

transfer,

Plaintiff

although

primarily

cross-moved to amend the Complaint.
DISCUSSION
Defendant’s
mooted

by

Plaintiff’s

motion
motion

to
to
5

dismiss,
amend,

provides

a

general

framework

for

positions.

understanding

the

parties’

arguments

and

Accordingly, the Court will focus its attention on

Plaintiff’s motion to amend, discussing Defendant’s motion to
dismiss

where

appropriate.

First,

however,

the

Court

will

address the applicable legal standards of review.
I.

Standards of Review
A.

General Standards
Courts should grant leave to amend “when justice so
FED. R. CIV. P. 15(a)(2).

requires.”
granted

unless

there

is

evidence

Leave to amend should be

of

undue

delay,

undue prejudice to the non-movant, or futility.
Rust–Oleum

Corp.,

244

F.3d

104,

110

(2d

bad

faith,

See Milanese v.

Cir.

2001).

To

determine whether an amended claim is futile, courts analyze
whether

the

proposed

pleading

would

withstand

a

motion

dismiss under Federal Rule of Civil Procedure 12(b)(6).

to
See

Dougherty v. Town of N. Hempstead Bd. of Zoning Appeal, 282 F.3d
83, 88 (2d Cir. 2002).
In
Court

deciding

applies

a

Rule

12(b)(6)

“plausibility

“[t]wo working principles.”

motions

standard,”

to

which

dismiss,
is

guided

the
by

Ashcroft v. Iqbal, 556 U.S. 662,

678, 129 S. Ct. 1937, 173 L. Ed. 2d 868 (2009); accord Harris v.
Mills, 572 F.3d 66, 71-72 (2d Cir. 2009).
Court

must

accept

“inapplicable

to

all

allegations

legal

as

conclusions;”
6

First, although the

true,

this

thus,

“tenet”

is

“[t]hreadbare

recitals of the elements of a cause of action, supported by mere
conclusory statements, do not suffice.”
accord Harris, 572 F.3d at 72.

Iqbal, 556 U.S. at 678;

Second, only complaints that

state a “plausible claim for relief” can survive a Rule 12(b)(6)
motion to dismiss.

Iqbal, 556 U.S. at 679.

Determining whether

a complaint does so is “a context-specific task that requires
the

reviewing

court

common sense.”

to

draw

on

its

judicial

experience

and

Id.; accord Harris, 572 F.3d at 72.

In deciding a motion to dismiss, the Court is confined
to “the allegations contained within the four corners of [the]
complaint.”

Pani v. Empire Blue Cross Blue Shield, 152 F.3d 67,

71 (2d Cir. 1998).
any

document

This has been interpreted broadly to include
to

the

Complaint,

incorporated

documents

attached

in

the

Complaint

any
by

statements
reference,

or
any

document on which the Complaint heavily relies, and anything of
which

judicial

notice

may

be

taken.

See

Chambers

v.

Time

Warner, Inc., 282 F.3d 147, 152-53 (2d Cir. 2002) (citations
omitted); Kramer v. Time Warner Inc., 937 F.2d 767, 773 (2d Cir.
1991).
B.

Form 18 and Claims of Patent Infringement
The aforementioned standard, however, is somewhat more

liberal

for

claims

of

direct

infringement,

as

the

Federal

Circuit has confirmed that, as per Rule 84 of the Federal Rules,
claims for direct patent infringement are governed by Form 18 of
7

the Appendix to the Federal Rules. See In re Bill of Lading
Transmission & Processing Sys. Patent Litig., 681 F.3d 1323,
1336-37 (Fed. Cir. 2012).
Form 18,
requires
only:
(1)
an
allegation
of
jurisdiction; (2) a statement that the
plaintiff owns the patent; (3) a statement
that the 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.
Gradient Enters., Inc. v. Skype Techs. S.A., 848 F. Supp. 2d
404, 407 (W.D.N.Y. 2012); see also Bill of Lading, 681 F.3d at
1334.

Thus, a complaint that conforms to Form 18 simply states

the bare elements of a claim and does not comport with the
standard articulated by the Supreme Court in Twombly and Iqbal.
However, Rule 84 of the Federal Rules of Civil Procedure states
that “[t]he forms in the Appendix suffice under these rules and
illustrate

the

contemplate.”

simplicity

and

brevity

that

these

rules

FED. R. CIV. P. 84.

“Not surprisingly, then, the combination of Twombly,
Iqbal,

.

.

.

Form

18,

and

Rule

84,

has

led

to

differing

conclusions among the lower courts about whether a complaint
that complies with the minimum requirements of Form 18 suffices
to state a claim for direct patent infringement.”

Gradient, 848

F.

of

Supp.

2d

at

407.

Nevertheless,
8

the

weight

authority

suggests and the Federal Circuit has informed us that “whether
[a complaint] adequately plead[s] direct infringement is to be
measured

by

the

specificity

required

by

Form

18.”

Bill

of

Lading, 681 F.3d at 1334; see, e.g., Loftex USA LLC v. Trident
Ltd., No. 11-CV-9349, 2012 WL 5877427, at *3 (S.D.N.Y. Nov. 20,
2012) (stating that “Official Form 18 in the Appendix of Forms
to

the

Federal

Rules

of

Civil

Procedure

.

.

.

governs

the

pleading standards for a claim of direct patent infringement”);
Automated Transactions, L.L.C. v. First Niagara Fin. Grp., Inc.,
No. 10–CV–0407, 2010 WL 5819060, at *5 (W.D.N.Y. Aug. 31, 2010)
(“[U]nless or until Rule 84 is amended, I conclude that the
sufficiency
allegations

of
is

[the

plaintiffs]’s

governed

by

Appendix

direct
Form

18,

infringement
not

by

the

requirements of Twombly and Iqbal.”), adopted by 2011 WL 601559
(W.D.N.Y.

Feb.

11,

2011);

see

also,

e.g.,

CreAgri,

Inc.

v.

Pinnaclife, Inc., No. 11-CV-6635, 2013 WL 11569, at *2 (N.D.
Cal. Jan. 1, 2013); Execware, L.L.C. v. Staples, Inc., No. 11CV-0836, 2012 WL 6138340, at *2 (D. Del. Dec. 10, 2012), adopted
by 2013 WL 171906 (D. Del. Jan. 16, 2013); Select Retrieval, LLC
v. Bulbs.com Inc., No. 12-CV-10389, 2012 WL 6045942, at *3 (D.
Mass. Dec. 4, 2012); Select Retrieval, LLC v. L. L. Bean, Inc.,
No. 12-CV-0003, 2012 WL 5381503, at *2 (D. Me. Oct. 31, 2012);
PB & J Software, L.L.C. v. Backup Agent B.V., No. 12-CV-0691,
2012 WL 4893678, at *2 (E.D. Mo. Oct. 15, 2012).
9

Further, the

Federal

Circuit

looked

to

Form

18

in

analyzing

whether

a

complaint adequately pled direct infringement, stating that to
the extent that “Twombly and its progeny conflict with the Forms
and create differing pleadings requirements, the Forms control.”
Bill of Lading, 681 F.3d at 1334.
However, the courts that have applied Form 18 over
Iqbal/Twombly
strictly

have

construed

allegations

of

infringement.”
Corp.,

made
as

it

at

that

“Form

only

measuring

direct
Id.

clear

the

infringement,
1336;

see

18

should

be

sufficiency

of

and

also

not

Pecorino

indirect
v.

Vutec

--- F. Supp. 2d ----, 2012 WL 5989918, at *21 (E.D.N.Y.

Nov. 30, 2012); Gradient, 848 F. Supp. 2d at 408.

Thus, to the

extent that the PAC pleads claims of direct infringement the
Court will apply Form 18, and to the extent that it pleads
claims

of

indirect

infringement

the

Court

will

apply

the

Iqbal/Twombly plausibility standard.
II.

Direct Infringement
As defined by statute, direct infringement occurs when

“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.”

35

U.S.C.

§

271(a).

Particularly with respect to claims of infringement of method
patents, “[t]o establish liability for direct infringement of a
10

claimed method or process under 35 U.S.C. § 271(a), a patentee
must prove that each and every step of the method or process was
performed.”

Travel Sentry, Inc. v. Tropp, 497 F. App'x 958, 965

(Fed. Cir. 2012); see also Ill. Comp. Research LLC v. Harper
Collins Publishers, Inc., No. 10-CV-9124, 2011 WL 3279065, at *2
(S.D.N.Y.

July

28,

2011)

(“In

order

to

establish

direct

infringement of method claims, a patent owner must show that the
accused infringer performs every step of the claimed method.”).
A.

The ‘650 Patent
Defendant maintains that Plaintiff’s PAC has failed to

allege direct infringement of the ‘650 Patent because, in part,
“Video 1 portrays what the accompanying text describes as ‘a
security

system

criminal.’”

that

spritzes

plant

DNA

onto

a

fleeing

(Def.’s Opp. Br. to Pl.’s Mot. to Amend (“Def.’s

Opp. Br.”), Docket Entry 59, at 12 3 (quoting Video 1, available
at

http://longislandreport.org/multimedia/video-dna-spray-

security-system-could-help-protect-pharmacies/13050).)

According

to Defendant, “[t]his is completely different from claim 1 of
the ‘650 Patent, which describes a method entailing applying a
composition as a film to the surface of an object, and directly
transferring

the

composition

from

3

the

object

to

a

person

The Court notes that the parties have filed their briefs in
connection with Plaintiff’s motion to amend under seal.
However, those portions of the briefs to which the Court cites
in the instant Memorandum and Order do not appear to be
restricted under the governing Confidentiality Order.
11

tampering with it.”
Claim 1.)

(Def.’s Opp. Br. at 12 (citing PAC, Ex. 1,

Claim one of the ‘650 Patent states,
A method for detecting tampering, comprising
applying to at least a portion of a surface
of an object a composition comprising at
least one fluorescent material and a solvent
medium
therefor,
said
solvent
medium
containing a volatile solvent and said
composition being colorless, odorless and
having no feel thereto upon application as a
film to the surface of said object, and
being capable of transfer from the surface
of said object to another surface, and
directly transferring said composition from
said object to a person tampering therewith.

(Compl. Ex. 1, Claim 1.)
Plaintiff

argues

that,

although

Defendant

has

set

forth its interpretation of the claim, this is really an issue
of claim construction, and therefore Defendant’s argument “is
not

appropriate

at

the

Docket Entry 62, at 9.)
“A

pleading

stage.”

(Pl.’s

Reply

Br.,

The Court agrees.

determination

that

a

claim

term

‘needs

no

construction’ or has the ‘plain and ordinary meaning’ may be
inadequate when a term has more than one ‘ordinary’ meaning or
when reliance on a term’s ‘ordinary’ meaning does not resolve
the parties’ dispute.”

O2 Micro Int’l Ltd. v. Beyond Innovation

Tech. Co., Ltd., 521 F.3d 1351, 1361 (Fed. Cir. 2008).
Defendant
claim

seemingly

and,

relies

specifically,

upon

the

the

phrase

ordinary
“directly

meaning

Here,
of

the

transferring.”

Plaintiff counters that Defendant’s interpretation is “contrary
12

to the plain language of the claim.”

(Pl.’s Reply Br. at 9.)

Thus, the parties apparently maintain that there is more than
one ordinary meaning.
of

terms

in

the

appropriate.

“Because the parties dispute the meaning

asserted

Trading

Tech.

1340, 1350 (Fed. Cir. 2010).

claims,”
Int’l

v.

claim

construction

eSpeed,

Inc.,

595

is
F.3d

As this requires an inquiry beyond

the pleadings, see id. at 1351-52; see also Aristocrat Tech.
Australia Pty Ltd. v. Int’l Game Tech. & IGT, 709 F.3d 1348,
1354-55 (Fed. Cir. 2013) (noting that the court can consider
intrinsic

and

extrinsic

evidence

in

construing

a

claim),

it

cannot be determined at the motion to dismiss stage.
Additionally, Defendant maintains that its claim for
direct infringement of the ‘650 Patent fails because Video 1 is
“a

mere

staged

video,

utilizing

fictional robbery . . . .”

actors

and

portraying

(Def.’s Opp. Br. at 11.)

a

However,

“[i]n cases in which more than one entity performs the steps of
a claimed method or process, a party [can be] liable for direct
infringement
direction’

.

.

over

the

.

if

that

performance

party
of

exercises

each

step

‘control

of

or

the

claim,

including those that the party does not itself perform.”

Move,

Inc. v. Real Estate Alliance Ltd., 709 F.3d 1117, 1122 (Fed.
Cir.

2013).

Although

this

determination

is

a

fact-specific

inquiry, see Travel Sentry, Inc., 497 F. App’x at 965, here
Plaintiff alleges that Defendant’s employee or a hired actor
13

performed

the

remaining

steps

at

Defendant’s

direction

and

control, which is sufficient to state a claim.
Defendant

takes

this

argument

one

step

further

asserting that an actor following a script is not “tampering”
with the object.

(Def.’s Opp. Br. at 11.)

requires claim construction.

Again, however, this

Accordingly, Plaintiff’s motion to

amend in this regard is GRANTED.
B.

Direct Infringement of the ‘152 Patent
Defendant similarly argues that Plaintiff has failed

to allege a claim of direct infringement of the ‘152 Patent.
More specifically, Defendant argues that Video 2, upon which
Plaintiff bases its direct infringement claim of the ‘152 Patent
(PAC ¶ 16), post-dates the patent’s expiration.
Br. at 12.)
March

29,

(Def.’s Opp.

The webpage indicates that the video was posted on
2012.

(See

Video

2,

available

at

http://www.youtube.com/watch?v-RDiuxDBZWlg&feature=channel&list=
UL.)

The ‘152 Patent expired on or about October 2, 2011.

(Def.’s Opp. Br. at 12 n.6.)
However, as Plaintiff correctly notes, “Video 2 is not
merely

comprised

includes

footage

of

footage

from

demonstrating

Video

1,

[Defendant’s]

but

additionally

system

at

Gold

Coast Bank, which had the systems in place before Video 1 was
created.”

(Pl.’s

Reply

Br.

at

10.)

Thus,

it

is

at

least

plausible that “the content of Video 2 predated February 16,
14

2012 since [the] systems were already in place at all Gold Coast
Banks on Long Island.”
The
Video

2

Court

does

not

required

elements

4

(Pl.’s Reply Br. at 10.)

finds
show,
of

Defendant’s
describe,

claim

10

remaining

or

and

suggest
its

argument
“a

that

number

dependent

of

claims,

including the use of at least five separately identifiable trace
materials,

a

database

of

unique

combinations

of

such

trace

materials, a volatile solvent, or a composition that is odorless
and without feel after the volatile solvent evaporates” (Def.’s
Opp.

Br.

narrative

at

12-13)

generally

to

be

meritless.

describing

the

trace

The

video

materials,

includes
what

it

looked like, and how a thief could be traced. 5
Accordingly,

Plaintiff’s

motion

to

amend

in

this

regard is GRANTED.

4

The Court takes this opportunity to note Plaintiff’s additional
argument that it has other evidence to support its claim. (See
Pl.’s Reply Br. at 10 (“This video, along with the other
supporting evidence, is merely illustrative and not the only
evidence upon which SmartWater bases its amended factual
allegations.”).)
Insofar as Plaintiff seems to seek
discovery, and flesh out its claims later, this is
inappropriate. See Bridgewater v. Taylor, 745 F. Supp. 2d 355,
358 (S.D.N.Y. 2010) (“As a general proposition, a litigant has
to state a claim before he or she is entitled to discovery.”);
KBL Corp. v. Arnouts, 646 F. Supp. 2d 335, 346 n.6 (S.D.N.Y.
2009) (“[A]llowing the plaintiff to conduct discovery in order
to piece together a claim would undermine the purpose of Federal
Rule of Civil Procedure 12(b)(6) . . . .”).
5

For the same general reasons, the Court rejects Defendant’s
similar argument regarding the ‘650 Patent and Video 1.
15

III. Indirect Infringement
In

addition

to

claims

of

direct

infringement,

the

original Complaint and PAC also allege indirect infringement,
both by induced infringement and contributory infringement.

The

relevant statute provides:
(b) Whoever actively induces infringement of
a patent shall be liable as an infringer.
(c) Whoever offers to sell or sells within
the United States or imports into the United
States a component of a patented machine,
manufacture, combination or composition, or
a
material
or
apparatus
for
use
in
practicing a patented process, constituting
a material part of the invention, knowing
the same to be especially made or especially
adapted for use in an infringement of such
patent,
and
not
a
staple
article
or
commodity
of
commerce
suitable
for
substantial
noninfringing
use,
shall
be
liable as a contributory infringer.
35 U.S.C. § 271(b)-(c).
In

its

motion

to

dismiss

and

in

opposition

to

Plaintiff’s motion to amend, Defendant argues that Plaintiff’s
indirect infringement claims fail because: (1) Plaintiff has not
adequately
essential
Plaintiff

alleged
element
has

knowledge
of

not

any

of

the

indirect

adequately

patents-in-suit,

infringement

plead

facts

claim;

an
(2)

establishing

affirmative acts of inducement with specific intent in order to
maintain a claim for induced infringement; and (3) Plaintiff has
failed

to

plead

facts

identifying

16

a

component

with

no

substantial noninfringing uses in order to maintain a claim for
contributory infringement.

The Court will address each argument

in turn.
A.

Knowledge
Unlike direct infringement, indirect infringement is

not

a

strict

liability

statute

and,

thus,

both

induced

infringement and contributory infringement require knowledge of
the

patents-in-suit.

See

Akami

Tech.,

Inc.

v.

Limelight

Networks, Inc., 692 F.3d 1301, 1308 (Fed. Cir. 2012); Pecorino,
2012 WL 5989918, at *21-23.
In

opposition

to

Defendant’s

motion

to

dismiss,

Plaintiff had initially pointed to the complaint that it filed
against Defendant in the District of Massachusetts on June 6,
2012.

(Pl.’s Opp. Br. to Def.’s Mot. to Dismiss (“Pl.’s Opp.

Br.”),

Docket

Entry

20,

at

11.)

Through

the

Massachusetts

complaint, Plaintiff argued, Defendant had obtained knowledge of
the

patents-in-suit

and

of

Plaintiff’s

allegations

that

Defendant’s conduct infringed upon the ‘650 Patent and the ‘152
Patent.
In the PAC, Plaintiff has taken a somewhat different
approach, now alleging the following:
9/17: At least as early as
tasked
an
employee
SmartWater’s patents and
patent attorney to initiate

17

March 2008, ADNAS
to
investigate
to ask ADNAS’s
a search.

10/18: By July 2008, an ADNAS employee had
reviewed SmartWater’s patents and identified
two patents for further review by ADNAS’s
Chief Executive Officer and others.
11/19: On information and belief, ADNAS has
been aware of the ‘650 Patent since at least
July 2008, and of SmartWater’s allegation
that it is infringing the ‘650 Patent [and
the ‘152 Patent], since at least June 2012.”
(PAC ¶¶ 9-11, 17-19.)

Plaintiff refers to particular documents

which were filed under seal pursuant to a confidentiality order.
Thus,

to

preserve

the

potential

confidentiality

of

the

documents, the Court will not summarize the particulars of the
correspondences.

Nonetheless, Defendant maintains that these

documents do not demonstrate that Defendant actually knew of the
patents-in-suit.

(Def.’s Opp. Br. at 5-7.)

The Court agrees.

As Plaintiff’s allegations in the PAC make clear, in
March 2008, Defendant allegedly contemplated a search.

Four

months later, an employee, whom Defendant maintains was not an
attorney or patent agent (Def.’s Opp. Br. at 6), identified two
patents.

These two patents were not the patents-in-suit.
From

this,

Plaintiff

asks

the

Court

to

infer

that

Defendant was aware of the patents-in-suit or willfully blind to
their

existence.

argumentative

“However,

inferences

in

the

the

Court

plaintiff’s

‘will
favor,’

not
and

draw
the

Court is ‘not bound to accept as true a legal conclusion couched
as a factual allegation.’”

Byun v. Amuro, No. 10-CV-5417, 2011

18

WL 10895122, at *3 (S.D.N.Y. Sept. 6, 2011) (quoting Robinson v.
Overseas Military Sales Corp., 21 F.3d 502, 507 (2d Cir. 1994);
Jazini v. Nissan Motor Co., 148 F.3d 181, 185 (2d Cir. 1998)).
Furthermore,

even

putting

aside

actual

knowledge,

willful

blindness still requires “both that a person believed there was
a high probability that a fact exists and then took active steps
to avoid learning of that fact.”
MTU

Onsite

Energy

3990919, at

Corp.,

On Site Entery Co., Inc. v.

No.

10-CV-1671(JS)(WDW),

*6 (E.D.N.Y. Aug. 2, 2013).

2013

WL

Nothing in Plaintiff’s

purported allegations suggest that Defendant knew or had reason
to know of the patents-in-suit.

Accordingly, Plaintiff’s motion

to amend in this regard is DENIED.
This analysis, though, does not end the inquiry, as
the

PAC

Defendant

alleges,
was

similar

made

to

aware

the

of

original

the

Complaint,

patents-in-suit

that

and

of

Plaintiff’s claims of infringement as of June 2012, apparently
referring
Although

to

the

Massachusetts

patent

Defendant
obtained

had

only

complaint.

initially
through

a

argued

(PAC
that

complaint

¶¶

11,

knowledge

was

19.)
of

a

insufficient,

(Def.’s Br. to Dismiss at 9-10), “in this Circuit at least, prefiling knowledge of the patents is not essential to a claim of
induced
5819060,

infringement,”

Simatelex

at

*6

Automated

(citing

Manufactory

Wing

Co.,

Transactions,

Shing

Ltd.,
19

479

Prods.
F.

LLC,

2010

WL

(BVI),

Ltd.

v.

Supp.

2d

388,

408

(S.D.N.Y. 2007); SEB, S.A. v. Montgomery Ward & Co., Inc., 412
F. Supp. 2d 336, 344 (S.D.N.Y. 2006)).

In addition, and while

strategic filing and withdrawing of complaints is not suggested
practice,

there

is

nothing

inherently

wrong

in

Plaintiff’s

proposition in this particular case that Defendant learned of
the patents-in-suit through the Massachusetts complaint.
Proxyconn
1835680,

Inc.
at

*6

v.

Microsoft

(C.D.

Cal.

Corp.,

May

16,

No.

11-CV-1681,

2012)

(“In

See

2012

fact,

WL

nothing

prevents a plaintiff from filing a new lawsuit alleging that the
knowledge requirement is established because the Defendant is
aware of the previous lawsuit.”).
Accordingly,

Plaintiff’s

motion

to

amend

is

DENIED

insofar as it alleges knowledge of the patent-in-suit based on
the

aforementioned

insofar

as

it

sealed

alleges

correspondences,

knowledge

based

but

it

is

GRANTED

on

the

Massachusetts

amend

its

Complaint

complaint.
B.

Induced Infringement
Plaintiff

further

moves

to

to

allege claims of induced infringement of both the ‘650 Patent
and the ‘152 Patent.

In support, Plaintiff includes factual

allegations not previously included in the original Complaint.
Defendant maintains that Plaintiff’s amendment in this regard is
futile

because

Plaintiff

has

still

failed

to

essential elements of an induced infringement claim.
20

allege

the

The Court

agrees

with

respect

to

the

‘650

Patent

but

disagrees

with

respect to the ‘152 Patent.
“To state a claim for induced infringement pursuant to
35

U.S.C.

§

271(b),

the

patentee

must

plead

facts

showing,

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.’”
Pecorino, 2012 WL 5989918, at *21 (quoting EON Corp. IP Holdings
LLC v. FLO TV Inc., 802 F. Supp. 2d 527, 533 (D. Del. 2011)).
With

respect

to

method

claims,

Plaintiff

must

allege

that

Defendant “induced the performance of the steps of the method
claimed in the patent . . . .”
1.

Akamai, 692 F.3d at 1318.

The ‘650 Patent

The PAC alleges that Defendant “indirectly infringed
claim 1 and other claims of the ‘650 Patent” because it induced
others to infringe by providing instructions, directions, and
promotional

materials.

(PAC

¶

12.)

More

specifically,

Plaintiff alleges that Defendant “actively induces customers and
potential customers to apply its Marking Products, comprising
DNA and a fluorescent material detectable with UV light in a
solvent medium containing a volatile solvent, as a colorless,
odorless

film

to

product packaging.”

fabrics,

plastics,

(PAC ¶ 12.)

21

metals,

narcotics

and

Plaintiff
website.

cites

to

two

examples

from

Defendant’s

However, the Court agrees with Defendant that “[o]ne

will search these materials in vain . . . for any instruction,
direction, or promotion of activity that satisfies the elements
of the claims of the patents-in-suit” (Def.’s Opp. Br. at 8), at
least insofar as the ‘650 Patent is concerned.

Claim one of the

‘650 Patent includes the step of “directly transferring said
composition from said object to a person tampering therewith.”
(Compl.

Ex.

1,

Claim

1.)

The

websites,

though,

promote

Defendant’s products and encourage potential customers to mark
items with a “stealth DNA marker” or mount a DNAnet system near
an exit door.

See http://www.adnas.com/DNA-marking-for-police-

and-security-agencies

(last

visited

Sept.

17,

2013);

http://www.adnas.com/DNAnet_forensic_tagging_systems
visited Sept. 17, 2013).
that

Defendant

induces

(last

Nothing in these materials suggests
all

steps

of

the

method,

including

transfer to a person tampering with an item.
In fact, the PAC glosses over this step, alleging that
“[c]ustomers are instructed and directed to apply the Marking
Products

to

various

objects

with

the

express

purpose

and

expectation that the fluorescent marking will be transferred to
any person tampering with such marked object.”

(PAC ¶ 12.)

This assertion reveals that the alleged inducement pertains to

22

applying the Marked Products, but not to other steps of the
method claims.
Certainly Plaintiff is correct in its contention that
advertising

materials,

and

particularly

instructions,

can

sufficiently allege specific intent to induce infringement.

See

Wyeth v. Sandoz, Inc., 703 F. Supp. 2d 508, 519 (E.D.N.C. 2010)
(“Evidence

of

infringement,
instructing

active
such

how

to

as

steps

taken

advertising

engage

in

an

to
an

encourage
infringing

infringing

use,

direct
use

or

show

an

affirmative intent that the product be used to infringe . . . .”
(internal quotation marks and citation omitted)).

Furthermore,

as the Federal Circuit held in Akamai, induced infringement does
not require that all of the steps of infringement be committed
by a single entity.

See Akamai Tech., Inc., 692 F.3d at 1306.

However, Akamai
address[ed] the question [of] whether a
defendant may be held liable for induced
infringement if the defendant has performed
some of the steps of a claimed method and
has induced other parties to commit the
remaining steps . . ., or if the defendant
has induced other parties to collectively
perform all the steps of the claimed method,
but no single party has performed all of the
steps itself . . . .
Id.
Here,

Plaintiff’s

allegations

assert

only

that

Defendant induces customers and potential customers to apply its

23

Marking Products to particular merchandise or materials.
PAC

does

not

allege

that

Defendant

induces

other

The

parties

to

collectively perform all of the steps of the claimed method.
See Bascom Research LLC v. Facebook, Inc., No. 12-CV-6293, 2013
WL 968210, at *6 (N.D. Cal. Mar. 12, 2013) (dismissing induced
infringement claim where “the complaints do not actually allege
that defendants induce[d] performance of all of the steps, in
some combination or other”).
Moreover,

Plaintiff

must

allege

that

the

Defendant

acted with the specific intent to induce a third party or third
parties

to

infringe

the

‘650

Patent.

See

Advanced

Optical

Tracking, LLC v. Koninklijke Philips N.V., No. 12-CV-1292, 2013
WL 4786463, at *4 (D. Del. Sept. 9, 2013); Air Vent, Inc. v.
Owens

Corning

(W.D.

Pa.

June

Defendant’s
encouraging
Assocs.,

Corp.,
30,

No.

2011).

promotional
another’s

Int’l,

10-CV-1699,

Inc.,

The

2011

PAC

materials

522

F.3d

fails

were

infringement,”

WL

in

not

Symantec

1279,

2601043,

1292

this

at

regard.

“directed
Corp.

(Fed.

*4

v.

Cir.

to

Comp.
2008),

because the acts that Defendant encouraged were not infringing.
Accordingly,

Plaintiff’s

motion

to

amend

in

this

respect is DENIED.
2.
The
infringed

The ‘152 Patent
PAC

claim

10

also
and

alleges
other

that

claims
24

of

Defendant
the

‘152

“indirectly
Patent”

by

providing

instructions,

(PAC ¶ 20.)

directions

and

promotional

materials.

Again, Plaintiff cites to particular websites. 6

Claim ten of the ‘152 Patent states:
A
method
for
identifying
comprising the steps of:
selecting
a
plurality
of
identifiable trace materials;

a

surface,

separately

establishing a database in which a unique
combination of at least five said trace
materials is assigned to a unique source;
formulating a composition containing said
unique
combination
together
with
an
indicator material and a solvent system
therefor, said solvent system comprising a
solvent which is volatile under conditions
of application;
applying said composition to a surface, and
permitting said solvent to evaporate, said
composition
after
evaporating
being
colorless, odorless and having no feel
thereto;
detecting said composition on the basis of
said indicator material and identifying the
plurality of trace materials therein; and
determining the unique source from said
database.
(Compl. Ex. 2, Claim 10.)
Unlike the ‘650 Patent, the Court finds that the PAC
adequately pleads induced infringement of the ‘152 Patent.

As

noted previously, Defendant had knowledge of the ‘152 Patent at
6

More specifically, Plaintiff cites to
http://www.adnas.com/texiles-and-apparel-applications and
http://www.youtube.com/watch?v=RDiuxDBZWlg&feature=channel&list=
UL. (PAC ¶ 20.)
25

least as of June 2012 when Plaintiff served the Massachusetts
complaint.
specific

See supra pp. 19-20.

intent,

the

Court

As to active inducement with

turns

Plaintiff cites in the PAC.

to

the

websites

to

which

For example, Defendant’s website

includes a page entitled “Textile and Apparel,” which advertises
that “Defendant works with you and your business to develop and
implement an authentication system that best suits your needs.”
See

http://www.adnas.com/textile-and-apparel-applications.

Further,

Video

2

describes

the

process

of

how

the

smartDNA

system works, including marking a suspect, screening the suspect
with

a

UV

light,

and

taking

a

sample

for

detection.

See

http://youtube.com/watch?v=RDiuxDBZWlg&feature=channel&list=UL.
It also contains a demonstration with narrative discussing a
mist, which appears to dry clear, that contains a DNA marker
specifically

assigned

to

a

particular

vault and which can be traced.

location

on

file

in

a

See id.

Such advertisements and statements at least plausibly
suggest

inducement

of

the

‘152

Patent.

See

Automated

Transactions, LLC, 2010 WL 5819060, at *6 (allegations that the
plaintiff

provides

instructions

and

customers

information

“with

as

to

detailed

explanations,

arrangements,

applications

and uses of [a product] that promote and demonstrate how to use
[that

product]

in

an

infringing

manner

.

.

.

supports

a

reasonable inference that it induced its customers to use the
26

alleging

infringing

citation omitted)).

device”

(internal

quotation

marks

and

Therefore Plaintiff’s motion to amend in

this regard is GRANTED.
C.

Contributory Infringement
Finally,

Plaintiff

also

seeks

to

contributory infringement of both patents.

allege

claims

for

Defendant maintains

that Plaintiff “merely parrots the legal requirements” for such
a claim.

(Def.’s Opp. Br. at 9.)

The Court agrees.

Contributory infringement requires “1) that there is
direct infringement, 2) that the accused infringer had knowledge
of

the

patent,

3)

that

the

component

has

no

substantial

noninfringing uses, and 4) that the component is a material part
of the invention.”

Fujitsu Ltd. v. Netgear Inc., 620 F.3d 1321,

1326 (Fed. Cir. 2010).

“With regard to the third prong, a

substantial non-infringing use is any use that is ‘not unusual,
far-fetched,

illusory,

experimental.’”

impractical,

Pecorino,

2012

WL

occasional,

aberrant,

5989918,

*23

at

or

(quoting

Vita-Mix Corp. v. Basic Holdings, Inc., 581 F.3d 1317, 1327-29
(Fed. Cir. 2009)).
Plaintiff raises similar allegations for both patentsin-suit.

For example, for the ‘650 Patent, Plaintiff alleges

that
[Defendant]
has
contributed
to
the
infringement of the ‘650 Patent, literally
or under the Doctrine of Equivalents, by the
27

sale of the Marking Products to customers in
the United States.
[Defendant] has made
such sales with knowledge of [Plaintiff’s]
‘650 Patent and with knowledge that the
Marking Products are specially made and/or
adapted for use in the infringement of
[Plaintiff’s] ‘650 Patent, and are not
staple articles or commodities of commerce
suitable for substantial noninfringing uses.
(PAC ¶ 14.)
Other
noninfringing

than
uses,

factual support.

reciting

that

there

however,

Plaintiff

are

no

offers

substantial

virtually

no

Plaintiff merely identifies its products and

Defendant’s “Marking Products,” and then repeats the elements of
a contributory infringement claim.

This is insufficient.

See

BIAX Corp. v. Motorola Solutions, Inc., No. 10-CV-3013, 2012 WL
502727, at *3 (D. Colo. Feb. 15, 2012) (dismissing plaintiff’s
contributory

infringement

claim

where

the

complaint

“merely

recites statutory language”); Weiland Sliding Doors & Windows,
Inc. v. Panda Windows & Doors, Inc., No. 10-CV-0677, 2011 WL
3490471,

at

contributory

*4

(S.D.

Cal.

infringement

Aug.
claim

10,

2011)

because

(dismissing

the

a

plaintiff’s

“allegation does nothing more than mirror statutory language”).
Accordingly,

Plaintiff’s

motion

to

amend

is

DENIED

insofar as its contributory infringement claims are concerned.
IV.

Prejudice
Finally, the Court finds that amendment, in accordance

with the rulings above, would not prejudice Defendant.
28

As Defendant correctly notes, “‘[l]eave to amend is
routinely denied where the motion is made after an inordinate
delay, no satisfactory explanation is offered for the delay, and
the

amendment

would

prejudice

other

parties,

or

where

the

belated motion would unduly delay the course of proceedings by,
for example, introducing new issues for discovery.’”

(Def.’s

Opp. Br. at 13 (quoting Chiaro v. Cnty. of Nassau, 488 F. App’x
518, 519 (2d Cir. 2012)).

However, and although Plaintiff moved

to amend approximately seven months after Defendant filed its
motion

to

amendment.

dismiss,

Defendant

would

not

be

prejudiced

by

the

See Block v. First Blood Assocs., 988 F.2d 344, 350

(2d Cir. 1993) (“Mere delay . . . absent a showing of bad faith
or undue prejudice, does not provide a basis for a district
court to deny the right to amend.” (internal quotation marks and
citation omitted)).
Here, Plaintiff moved to amend its Complaint after the
parties had initiated discovery.

Plaintiff’s PAC does not add

any new claims or necessarily require any new discovery, but
rather

fleshes

out

its

previous

claims

and

includes

factual

allegations not in the original Complaint.
Accordingly,

Plaintiff’s

motion

to

amend

insofar as the PAC conforms to the rulings above.

29

is

GRANTED

CONCLUSION
For the foregoing reasons, Defendant’s partial motion
to dismiss is DENIED AS MOOT.

Plaintiff’s motion to amend is

GRANTED IN PART and DENIED IN PART.

Specifically, Plaintiff’s

motion is GRANTED insofar as the PAC alleges claims for direct
infringement of the patents-in-suit, knowledge of the patentsin-suit as of June 2012, and induced infringement of the ‘152
Patent.

Plaintiff’s motion to amend is otherwise DENIED.
The Clerk of the Court is directed to docket the PAC

(Docket Entry 61, Ex. A) as the Amended Complaint.
Amended

Complaint

remains

operative

only

However, the

insofar

as

it

is

consistent with the Court’s rulings explained above.

SO ORDERED.

/s/JOANNA SEYBERT______
Joanna Seybert, U.S.D.J.
Dated:

September 27, 2013
Central Islip, NY

30