Actus, LLC v. Bank of America Corp. et al

Filing 101

***WITHDRAWN PER ORDER # 172 *** MOTION to Dismiss Under Fed. R. Civ. P. 12(B)(1), 12(B)(6), and 12(B)(7) by Visa, Inc.. Responses due by 6/29/2009 (Attachments: # 1 Text of Proposed Order Proposed Order)(Micallef, Joseph A) Modified on 8/14/2009 (ch, ).

Actus, LLC v. Bank of America Corp. et al

Doc. 101

IN THE UNITED STATES DISTRICT COURT FOR THE EASTERN DISTRICT OF TEXAS MARSHALL DIVISION

ACTUS, LLC, PLAINTIFF, (1 ) BANK OF AMERICA CORPORATION; (2 ) BLAZE MOBILE, INC.; (3 ) CAPITAL ONE FINANCIAL CORP. ; (4 ) ENABLE HOLDINGS, INC.; (5 ) GOOGLE, INC.; (6 ) GREEN DOT CORPORATION; (7 ) JAVIEN DIGITAL PAYMENT SOLUTIONS, INC.; (8 ) JPMORGAN CHASE & CO. ; (9 ) MASTERCARD INTERNATIONAL, INC.; (1 0) META FINANCIAL GROUP, INC.; (1 1) M&T BANK CORPORATION; (1 2) OBOPAY, INC.; (1 3) SONIC SOLUTIONS; (1 4) VISA, INC.; (1 5) VIVENDI UNIVERSAL U.S. HOLDING CO.; (1 6) VIVENDI UNIVERSAL, S.A.; (1 7) WAL-MART STORES, INC.; (1 8) THE WALT DISNEY CO.; (1 9) THE WESTERN UNION CO.; (2 0) WILDTANGENT, INC.; (2 1) AGILECO, DEFENDANTS.

) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) )

CIVIL ACTION NO.: 2:09-CV-102-TJW

JURY TRIAL DEMANDED DEFENDANT VISA INC.'S MOTION TO DISMISS PLAINTIFF'S CLAIMS UNDER FED. R. CIV. P. 12(B)(1), 12(B)(6) AND 12(B)(7). ORAL ARGUMENT REQUESTED

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TABLE OF CONTENTS Page

STATEMENT OF ISSUES TO BE DECIDED BY THE COURT .................................. 1 ARGUMENT .................................................................................................................. 2 I. II. THE FIRST AMENDED COMPLAINT FAILS TO ALLEGE A PLAUSIBLE PATENT INFRINGEMENT CAUSE OF ACTION ............................................ 2 THE FIRST AMENDED COMPLAINT SHOULD BE DISMISSED BECAUSE ACTUS LACKS STANDING AND BECAUSE THE FIRST AMENDED COMPLAINT FAILS TO NAME AN INDISPENSABLE PARTY ..................... 3

CONCLUSION ............................................................................................................... 4

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TABLE OF AUTHORITIES Page(s) CASES Bell Atl. Corp. v. Twombly, 550 U.S. 544 (2007) .............................................................................................................. 2 BMC Res., Inc. v. Paymentech, L.P., 498 F.3d 1373 (Fed. Cir. 2007).............................................................................................. 2 Golden Hour Data Sys., Inc. v. emsCharts Inc., No. 2:06-CV-381, 2009 WL 943273 (E.D. Tex. April 3, 2009) ............................................. 2 Hill Phoenix, Inc. v. Systematic Refrigeration, Inc., 117 F. Supp. 2d 508 (E.D. Va. 2000) ..................................................................................... 3 InternetAd Sys., LLC v. Opodo Ltd., 481 F. Supp. 2d 596 (N.D. Tex. 2007) ................................................................................... 3 MuniAuction, Inc. v. Thompson Corp., 532 F.3d 1318 (Fed. Cir. 2008).......................................................................................... 1, 2 Prima Tek II, LLC, v. A-Roo Co., 222 F.3d 1372 (Fed. Cir. 2000).............................................................................................. 3 Rite-Hite Corp. v. Kelley Co., Inc, 56 F.3d 1538 (Fed. Cir. 1995)................................................................................................ 3 Textile Prods., Inc. v. Mead Corp., 134 F.3d 1481 (Fed. Cir. 1998).............................................................................................. 3 STATUTES 35 U.S.C. § 281........................................................................................................................... 3 OTHER AUTHORITIES Civil Rule 7(a)(1) ........................................................................................................................ 1 Fed. R. Civ. P. 12(b)(1) ............................................................................................................... 3 Fed. R. Civ. P. 12(b)(7) ............................................................................................................... 3 Fed. R. Civ. P. 19(c).................................................................................................................... 3 Federal Rules of Civil Procedure 12(b)(1), 12(b)(6) and 12(b)(7) ............................................ 1, 2

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Rule 19 of the Federal Rules o f Civil Procedure .......................................................................... 3 Rule 12(b)(6) ...................................................................................................................... 1, 2, 3 U.S. Patent No. 7,249,099 ........................................................................................................... 2 U.S. Patent No. 7,328,189 ........................................................................................................... 2

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Defendant Visa Inc. ("Visa") hereby mo ves to dismiss Plaint iff Actus, LLC's ("Actus") First Amended Complaint for Patent Infringement ("First Amended Co mplaint") insofar as it alleges infringement by Visa pursuant to Federal Rules of Civil Procedure 12(b)(1), 12(b)(6) and 12(b)(7). Visa's Motion is based on the same arguments advanced by Defendants MasterCard International Incorporated ("MasterCard) and Bank of America Corporation ("Bank of America") in their mot ions to dismiss filed on June 3, 2009 and June 4, 2009, respectively. Specifically, Actus has failed to sufficient ly allege a theory o f "jo int infringement" under MuniAuction, Inc. v. Thompson Corp., 532 F.3d 1318, 1329-30 (Fed. Cir. 2008), which is the only plausible basis on which Visa could be held liable for infringement of the patents asserted against Visa. Actus has also failed to sufficient ly allege standing to sue, and to jo in an indispensable party, the patent owner. Accordingly, for the reasons stated herein and in the mot ions of MasterCard and Bank o f America, Visa respectfully requests that the First Amended Complaint be dismissed.1 STATEMENT OF ISSUES TO BE DECIDED BY THE COURT Pursuant to Local Civil Rule 7(a)(1), the issues to be decided by the Court in connect ion with this motion are as follows: 1. Whether the complaint against Visa should be dismissed with prejudice under Rule 12(b)(6) for failure to state an actionable claim o f infringement, where the patent claims at issue require the combined act ion of several part ies, and Actus has not pleaded that Visa is a "mastermind" exercising "control or direct ion" over other parties sufficient to render Visa vicariously liable for the conduct of those parties.

1

The motions of MasterCard and Bank of Amer ica more tha n adequately raise the issues to be decided by Visa's motion and Visa has no desire to cr eate redundant reading for the Court. In the interest of judicia l economy, Visa ther efor e incorporates by refer ence the facts and arguments advanced by MasterCard and Bank of Amer ica in their respective motions.

2. Whether this case should be dismissed under Rule 12(b)(1), 12(b)(6) and 12(b)(7) where Actus has failed to plead that it has "all substant ial rights" in the asserted patents and the patent owner is not named as a party. ARGUMENT I. THE FIRST AMENDED COMPLAINT FAILS TO ALLEGE A PLAUSIBLE PATENT INFRINGEMENT CAUSE OF ACTION As demonstrated in the moving papers of both MasterCard and Bank of America, jo int infringement is the only plausible theory under which Visa could be held liable for the infringement of U.S. Patent No. 7,249,099 and U.S. Patent No. 7,328,189, the only patents asserted here against Visa and the same two patents asserted against MasterCard. MasterCard Br. 3, 9­10; Bank of America Br. 6­7; First Amended Complaint ¶¶ 60, 71. Plaint iff, however, advances no such theory against Visa in its First Amended Co mplaint, and fails to allege any facts that could support a conclusio n that Visa is a "mastermind" exercising "control or direct ion" over other parties sufficient to render Visa vicariously liable for the conduct of those parties. First Amended Co mplaint ¶¶ 60, 71; MuniAuction, Inc. v. Thompson Corp., 532 F.3d 1318, 1329-30 (Fed. Cir. 2008); Golden Hour Data Sys., Inc. v. emsCharts Inc., No. 2:06-CV381, 2009 WL 943273, at *3 (E.D. Tex. April 3, 2009). Plaint iff has therefore failed to allege "enough facts to state a claim to relief that is plausible on its face." Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007). Accordingly, for the reasons stated herein and in the motions of MasterCard and Bank of America, Visa respect fully requests that the First Amended Co mplaint be dismissed with prejudice, pursuant to Fed.R.Civ.P. 12(b)(6), for failure to state a claim upon which relief can be granted.2
2

The dismissal should be with prejudice, as it is evident from the claims of the patents asserted against Visa that any theory of infringement advanced by Plaintiff would be insufficient because the various parties who would be necessary to satisfy all the elements of the claims --such as Visa, vendors and customers--ma y enter into, and indeed ha ve entered into, "arms-length agreements" that avoid infringement. BMC Res., Inc. v. Paymentech, L.P., 498 F.3d 1373, 1381 (Fed. Cir. 2007).

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II.

THE FIRST AMENDED COMPLAINT SHOULD BE DISMISSED BECAUSE ACTUS LACKS STANDING AND BECAUSE THE FIRST AMENDED COMPLAINT FAILS TO NAME AN INDISPENSABLE PARTY The right to sue for patent infringement is created by statute, and standing to bring such a

claim is granted only to the "patentee," which includes the original patentee, and any successors in t it le. See 35 U.S.C. § 281; Rite-Hite Corp. v. Kelley Co., Inc, 56 F.3d 1538, 1551 (Fed. Cir. 1995). An "exclusive licensee," such as Plaint iff here, may have a right to sue in its own name, provided it previously received "all substant ial rights" in the patent at the time of the alleged infringement. Textile Prods., Inc. v. Mead Corp., 134 F.3d 1481, 1484 (Fed. Cir. 1998); InternetAd Sys., LLC v. Opodo Ltd., 481 F. Supp. 2d 596, 604 (N.D. Tex. 2007). Plaint iff, however, alleges only that it is an "exclusive licensee," and makes no allegat ion that it is the ho lder in all substant ial rights of the asserted patents. See, e.g., First Amended Co mplaint ¶¶ 47, 64. Because the First Amended Complaint fails to allege facts sufficient to support Actus's standing to sue, it should be dismissed for lack o f jurisdict ion and for failure to state a claim on which relief can be granted. See Fed. R. Civ. P. 12(b)(1) and 12(b)(6); MasterCard Br. 12­13. The First Amended Complaint should also be dismissed for failure to join the patent owner, an indispensable party pursuant to Rule 19 of the Federal Rules of Civil Procedure. See Fed. R. Civ. P. 12(b)(7) (permitting a motion to dismiss before pleading based on "failure to jo in a party under Rule 19"). Joining the patent owner here is necessary to create standing. See, e.g., Prima Tek II, LLC, v. A-Roo Co., 222 F.3d 1372, 1377 (Fed. Cir. 2000); Hill Phoenix, Inc. v. Systematic Refrigeration, Inc., 117 F. Supp. 2d 508, 511 (E.D. Va. 2000) ("[A]n exclusive licensee has been given sufficient rights in a patent to obtain standing, but only if the patent owner is jo ined in the lawsuit ") (emphasis added). Actus, however, has failed to do so, or to offer any explanat ion in its First Amended Complaint regarding its failure to comply wit h Fed.

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R. Civ. P. 19(c). Accordingly, the case should be dismissed on this basis as well. MasterCard Br. 13­14. CONCLUSION For reasons set forth above, Visa respect fully mo ves the Court to dismiss the First Amended Co mplaint with prejudice, inso far as it alleges infringement by Visa.

Dated: June 11, 2009

Respect fully submitted, _/s/ Joseph A. Micallef __________ Joseph A. Micallef (admitted Pro Hac Vice) David P. Gersch (admitted Pro Hac Vice) ARNOLD & PORTER LLP 555 Twelft h Street, NW Washington, DC 20004-1206 Tel. [phone] Fax [phone] E-mail: [e-mail] [e-mail] Michael P. Lynn LYNN TILLOTSON PINKER & COX LLP 2100 Ross Avenue Suite 2700 Dallas, TX 75201 Tel. [phone] Fax [phone] Email: [e-mail] m ATTORNEYS FOR DEFENDANT VISA INC.

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CERTIFICATE OF SERVICE The undersigned cert ifies that the foregoing document was filed electronically in compliance with Local Rule CV-5(a). As such, the foregoing was served on all counsel o f record who have consented to electronic service. Pursuant to Fed. R. Civ. P. 5(d) and Local Rule CV5(d), all others not deemed to have consented to electronic service were served wit h a true and correct copy o f the foregoing via email on this 11th day o f June, 2009.

/s/ Joseph A. Micallef Joseph A. Micallef

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