InMotion Imagery Technologies, LLC v. Brain Damage Films et al

Filing 50

MEMORANDUM OPINION and ORDER - GRANTS-IN-PART and DENIES-IN-PART the Motion to Dismiss Pursuant to Rule 12(b)(6) (Dkt. No. 8). The Court GRANTS InMotion leave to amend its Complaint within fourteen days of the date of this Order to comply with Rule 8 as described herein. Signed by Judge Rodney Gilstrap on 8/10/12. (ehs, )

UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF TEXAS
MARSHALL DIVISION
INMOTION IMAGERY
TECHNOLOGIES
Plaintiff,
V.
BRAIN DAMAGE FILMS, et al.,
Defendants.

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CAUSE NO. 2:11-CV-414-JRG

MEMORANDUM OPINION & ORDER
I.

INTRODUCTION
Before the Court is Defendant Galaxy Internet Group, LLC’s (“Galaxy”) Motion to

Dismiss Pursuant to Rule 12(b)(6) (Dkt. No. 8). After carefully considering the parties’ written
submissions, the Court GRANTS-IN-PART and DENIES-IN-PART the Motion.
II.

FACTUAL AND PROCEDURAL BACKGROUND
On September 15, 2011, InMotion Imagery Technologies (“InMotion”) filed this lawsuit

accusing thirteen defendants of infringing U.S. Patent No. 6,526,219 entitled “Picture-Based
Video Indexing System” (“the ‘219 patent”).
Defendant are substantially identical.

The infringement allegations against each

Representative of such (and with regard to Galaxy

specifically), the Complaint asserts:
41. Upon information and belief, Galaxy has infringed and
continues to infringe one or more claims of the’291 patent by
making, using, providing, offering to sell, and selling (directly or
through intermediaries), in this district and elsewhere in the United
States, video indexes with images that are displayed in windows
wherein at least one window displayed motion imagery.
42. Upon information and belief, Galaxy has also contributed to
the infringement of one or more claims of the ‘219 patent and/or
actively induced others to infringe one or more claims of the ‘219
patent, in this district and elsewhere in the United States.

(Dkt. No. 1.) In the present Motion Galaxy moves to dismiss the Complaint’s direct, indirect and
willful infringement claims under Fed. R. Civ. P. 12(b)(6). (Dkt. No. 8.)
III.

LEGAL STANDARDS
By written motion, a party may move to dismiss a complaint for failure to state a claim

upon which relief can be granted. Fed. R. Civ. P. 12(b)(6). Motions to dismiss are purely
procedural questions to which the Federal Circuit applies the law of the regional circuit.
CoreBrace LLC v. Star Seismic LLC, 566 F.3d 1069, 1072 (Fed. Cir. 2009). In the Fifth Circuit,
motions to dismiss under Rule 12(b)(6) are viewed with disfavor and rarely granted. Lormand v.
U.S. Unwired, Inc., 565 F.3d 228, 232 (5th Cir. 2009); Lowrey v. Texas A&M Univ. Sys., 117
F.3d 242, 247 (5th Cir. 1997).
When reviewing a motion to dismiss, courts look only to the allegations in the complaint
to determine whether they are sufficient to survive dismissal. See Jones v. Bock, 549 U.S. 199,
215 (2007). A “patentee need only plead facts sufficient to place the alleged infringer on notice
as to what he must defend.” McZeal v. Sprint Nextel Corp., 501 F.3d 1354, 1355-56 (Fed. Cir.
2007).

Federal Rule of Civil Procedure 8(a)(2) requires only that a complaint contain a “short

and plain statement of the claim showing that the pleader is entitled to relief.” The Supreme
Court has held that a complaint does not need detailed factual allegations to survive a Rule
12(b)(6) motion to dismiss, but the pleader’s obligation to state the grounds of entitlement to
relief requires “more than labels and conclusions.” Bell Atl. Corp. v. Twombly, 550 U.S. 544,
555 (2007).
Whether a complaint adequately pleads direct infringement is to be measured by the
specificity required by Form 18. In re Bill of Lading Transmission and Processing System
Patent Litigation, 681 F.3d 1323, 1331 (Fed. Cir. 2012); Fed. R. Civ. P. 84 (“The forms in the

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Appendix suffice under these rules and illustrate the simplicity and brevity that these rules
contemplate”). The Federal Circuit recently reiterated that Form 18 has five requirements:
(1) an allegation of jurisdiction
(2) a statement that 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 notice of its infringement; and
(5) a demand for damages
Bill of Lading, 681 F.3d at 1334 (citing McZeal, 501 F.3d at 1356-57); see also Patent Harbor
LLC v. Dreamworks Animation SKG, Inc., 6:11-cv-229 (E.D. Tex. July 27, 2012). To the
“extent that Twombly and its progeny conflict with Form 18 and suggest different pleading
requirements, ‘the Forms’ control.” Patent Harbor, 6:11-cv-229 at 6 (citing In re Bill of Lading,
361 F.3d at 1331). Form 18 does not apply, however, to indirect infringement claims. Bill of
Lading, 361 F.3d at 1331. Rather, such claims must be judged by the pleading standards of
Twombly and Iqbal. Id. (“[B]ecause Form 18 addresses only direct infringement, we must look
to Supreme Court precedent for guidance regarding the pleading requirements for claims of
direct infringement”).
IV.

ANALYSIS
1. Direct Infringement
Galaxy argues that the Complaint fails to sufficiently plead direct infringement because it

does not specifically identify any particular products as infringing the ‘219 patent. (Dkt. No. 8,
at 6.) According to Galaxy, the Complaint’s reference to “videos indexed with images that are
displayed in windows wherein at least one window displays motion imagery” does not specify a
particular product because Galaxy “cannot identify the accused products without first
determining how InMotion is construing the ‘219 patent and whether any of their video products
may meet this construction.” (Dkt. No. 8. at 6.) Galaxy responds that the level of detail
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provided in the Complaint is more than sufficient to satisfy the requirement of Form 18. As the
recent Federal Circuit decision in Bill of Lading established, the requirements of Form 18, not
Iqbal and Twombly, control whether a Complaint sufficiently pleads an allegation of direct
infringement. Form 18’s sample complaint for patent infringement recites:
The defendant has infringed and is still infringing the Letters
Patent by making, selling, and using electric motors that embody
the patented invention, and the defendant will continue to do so
unless enjoined by this court.
Fed. R. Civ. P. Form 18 (2007). Here, the Complaint’s description of “videos indexed with
images” is analogous to the “electric motors” example provided by Form 18 and is therefore
sufficient. Accordingly, Galaxy’s Motion to Dismiss the Complaint’s direct infringement claims
is DENIED.
2. Indirect Infringement
Galaxy also contends that the Complaint fails to plead sufficient facts to support a claim
for either inducement or contributory infringement. (Dkt. No. 8.) Specifically, Galaxy contends
that “there is no charge that Movants sold a non-staple ‘component’ of a patented machine, that
Movants had the requisite knowledge required for contributory infringement liability, or that
Movants possessed specific intent to induce infringement.” Id. Galaxy also argues that the
Complaint “fails to allege any facts showing direct infringement by a third party, which is a
necessary element of both indirect infringement claims.” Id.
i.

Inducement

“Whoever actively induces infringement of a patent shall be liable as an infringer.” 35
U.S.C. § 271(b).

Liability “requires knowledge that the induced acts constitute patent

infringement.” Global-Tech Appliances v. SEB S.A. 131 S. Ct. 2060, 2068 (2011); In re Bill of
Lading, 681 F.3d at 1339. To survive a motion to dismiss, a “Complaint must contain sufficient
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facts plausibly showing that Defendants specifically intended a third party to infringe the []
patent and knew the third party’s acts constituted infringement.” Patent Harbor, 6:11-cv-229 at
8. However, this requirement does not mean that the Plaintiff “must prove itself at the pleading
stage.”

Id.

Failing to allege pre-suit knowledge of the patent “is not a basis to dismiss

[Plaintiff’s] indirect infringement claims; as it cannot be disputed that [Plaintiff] does sufficiently
plead that the Moving Defendants had knowledge of the asserted patent for at least some time
during the infringing period.” Lochner Technologies, 2012 WL 2595288 at *3; see also Bill of
Lading, 361 F.3d at 1345-46.

In this case, there can be no dispute that Galaxy has actual notice

of the ‘219 patent at least as of the time of the filing of this lawsuit. While the Complaint does
not explicitly plead facts to show that Galaxy had a specific intent to induce infringement, it is
not necessary to provide detailed factual support for each and every element of inducement.
Patent Harbor; 6:11-cv-229 at 8; Bill of Lading, 681 F.3d at 1336. In this case, the Court
concludes that InMotion’s inducement allegations are sufficient to support an inference that
Galaxy is inducing others to infringe its video indexing technology. Accordingly, Galaxy’s
Motion to Dismiss the Complaint’s inducement claim is DENIED.
ii.

Contributory Infringement

“Contributory infringement occurs if a party sells or otherwise offers to sell, a material or
apparatus for use in practicing a patented process, and that ‘material or apparatus’ is material to
practicing the invention, has no substantial non-infringing uses, and is known by the party to be
‘especially made or especially adapted for use in an infringement of such patent.” Patent
Harbor, 6:11-cv-229 (quoting Bill of Lading, 681 F.3d at 1337). To state a claim for contributory
infringement, Galaxy must at least (1) identify the “material or apparatus for use in practicing

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[the] patented process” that is sold or offered for sale by Defendants and (2) plead facts that
allow an inference that [these] components … have no substantial non-infringing uses.” Id.
In this case, the Complaint does not identify the components used in the infringing
method, nor does it allege any facts adequate for the Court to find an inference that such
components have no substantial non-infringing uses. Therefore, Galaxy’s Motion to Dismiss the
Complaint’s contributory infringement claim is GRANTED.
3. Willful Infringement
Galaxy also asks the Court to dismiss the Complaint’s willful infringement claims. To
establish a claim for willful infringement, a plaintiff must demonstrate infringement as well as
the following additional elements: (1) that there was an objectively high likelihood that the
defendant’s activities constituted infringement of a valid patent, and (2) either that the defendant
subjectively knew of the risk of infringement or that the risk of infringement was so obvious, the
defendant should have known of the risk. See In re Seagate Technology, LLC, 497 F.3d 1360,
1371 (Fed. Cir. 2007); see also Bard Peripheral Vascular, Inc. v. W.L. Gore & Assoc., Inc., 682
F.3d 1003 (Fed. Cir. 2012). At the pleading stage, the Plaintiff must establish a good faith basis
for alleging willful infringement. Seagate, 497 F.3d 1374.
The Complaint does not allege any particular facts that would demonstrate InMotion’s
good faith basis for alleging willful infringement. Therefore, Galaxy’s Motion to Dismiss the
Complaint’s willful infringement claim is GRANTED. Should factual support for InMotion’s
willful infringement claims be uncovered during the course of discovery, InMotion is entitled to
move the Court for leave to supplement in its Complaint in this regard, at that time.

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.

V.

CONCLUSION
For the reasons discussed above, Galaxy’s Motion to dismiss is GRANTED-IN-PART

and DENIED-IN-PART.

Additionally, the Court GRANTS InMotion leave to amend its

Complaint within fourteen days of the date of this Order to comply with Rule 8 as described
herein.

SIGNED this 19th day of December, 2011.
So ORDERED and SIGNED this 10th day of August, 2012.

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RODNEY GILSTRAP
UNITED STATES DISTRICT JUDGE

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