Bedrock Computer Technologies, LLC v. Softlayer Technologies, Inc. et al

Filing 98

SUR-REPLY to Reply to Response to Motion re #71 MOTION to Dismiss for Failure to State a Claim filed by Bedrock Computer Technologies, LLC. (Attachments: #1 Exhibit 1, #2 Exhibit 2, #3 Exhibit 3)(Baxter, Samuel)

Bedrock Computer Technologies, LLC v. Softlayer Technologies, Inc. et al

Doc. 98

IN THE UNITED STATES DISTRICT COURT FOR THE EASTERN DISTRICT OF TEXAS TYLER DIVISION BEDROCK COMPUTER TECHNOLOGIES LLC, Plaintiff, v. SOFTLAYER TECHNOLOGIES, INC., et al. Defendants. § § § § § § § § § § §

CASE NO. 6:09-cv-269 Jury Trial Demanded

PLAINTIFF BEDROCK COMPUTER TECHNOLOGIES LLC'S SUR-REPLY IN OPPOSITION TO MYSPACE, AMAZON.COM, AOL, CME GROUP, AND YAHOO!'S MOTION TO DISMISS FOR FAILURE TO STATE A CLAIM I. INTRODUCTION The Movants read too much into Iqbal. Iqbal did not create an exception to Rule 84, and Iqbal did not overrule McZeal. Iqbal simply extended the Twombly standard to all civil cases. The Movants' so-called "proper interpretation" of Iqbal, however, would judicially amend Rule 84, despite Supreme Court precedent prohibiting such amendment. In any event, Bedrock's Complaint meets the pleading standards as set out by Iqbal, especially when the Complaint is considered in the context of the patent-in-suit that was attached to the Complaint. II. The Movants' Interpretation of Iqbal Ignores McZeal and Further Would Require a Special Carve-Out of Rule 84. The Federal Circuit already vetted Form 18 post-Twombly. The McZeal court cited Form 18 to show the pleading requirements applicable to patent infringement actions under Twombly and the Federal Rules. McZeal, 501 F.3d at 1356. The court relied on Form 18 in holding that "[i]t logically follows that a patentee need only plead facts sufficient to place the alleged Page 1 of 5
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infringer on notice as to what he must defend." Id. (citing Twombly, 127 S. Ct. at 1971).1 Bedrock does not ask the court to exempt patent cases in this district from the strictures of the Federal Rules. Instead, by conforming to McZeal and Form 18, Bedrock satisfies the Federal Rules, the Federal Circuit's interpretation of Twombly and, by extension, Iqbal. Defendants ask the Court to ignore McZeal as a "pre-Iqbal" case. See Reply at 3. But Iqbal simply extended Twombly to all civil cases, and did not attempt to expound new pleading standards. See Iqbal, 129 S. Ct. at 1950-51 ("Under Twombly's construction of Rule 8, we conclude that the respondent's complaint [fails to state a claim.]"); id. at 1953 ("Our decision in Twombly expounded the pleading standard `in all civil actions[.]'"). For the same reasons that Form 18 complied with Twombly in McZeal, Bedrock's compliance with Form 18 is sufficient under Iqbal. Finally, Movants' position ignores the plain text of the Federal Rules. The Movants' interpretation of Iqbal requires a carve-out of Form 18 from Rule 84, which states that "[t]he forms in the Appendix suffice under these rules and illustrate the simplicity and brevity that these rules contemplate." The Twombly court recognized the continuing vitality of these forms in interpreting the Federal Rules. See Twombly, 127 S. Ct. at 1970 n.10 ("This lack of notice contrasts sharply with the model form for pleading negligence, Form 9 . . . . A defendant wishing to prepare an answer in the simple fact pattern laid out in Form 9 would know what to answer . . . ."). The Movants respond to this point by asserting that Rule 84, like Form 18, must be While the Federal Circuit noted that McZeal involved a pro se plaintiff, the McZeal court also recognized that "regardless of whether the plaintiff is proceeding pro se or is represented by counsel, conclusory allegations or legal conclusions masquerading as factual conclusions will not suffice to prevent a motion to dismiss" and ultimately relied on Form 18 in reversing the district court. See 501 F.3d at 1356 (inner quotations removed). Thus, there is no indication that Form 18 is sufficient for pro se plaintiffs but not sufficient for plaintiffs that are represented by counsel. Further, the Movants offer no justification as to why Form 18 is not available to all plaintiffs litigating under the Federal Rules of Civil Procedure.
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"interpreted" in light of Iqbal. Presumably, the Movants want Rule 84 interpreted to be: "The forms in the Appendix may suffice under these rules and may illustrate the simplicity and brevity that these rules contemplate." This interpretation is untenable and contravenes the reasoning in Twombly and McZeal. Neither this Court--nor the Supreme Court--can rewrite or amend the plain language of Rule 84. See Leatherman v. Tarrant Cty. Narcotics Intelligence &

Coordination Unit, 507 U.S. 163, 168 (1993) ("Perhaps if Rules 8 and 9 were rewritten today, claims against municipalities under § 1983 might be subjected to the added specificity requirement of Rule 9(b). But that is a result which must be obtained by the process of amending the Federal Rules, and not by judicial interpretation."). III. The Movants' Reading of Iqbal Would Collapse P. R. 3-1(c) Contentions into the Complaint. The Movants repeatedly state that Form 18 must be interpreted in light of Iqbal. See Reply at 3. This begs the question: What is the result of this interpretation? The Movants do not directly identify what alleged, new requirements fall out of a so-called "proper interpretation" of Form 18 in light of Iqbal, and if the Movants succeed in their Motion, then Rule 84 and Form 18 will come under Iqbal-challenge after Iqbal-challenge until this question is resolved. Although the Movants do not directly identify the alleged, new requirements of Form 18 post-Iqbal, their Reply hints at what those requirements would be. In an attempt to summarily brush off every fact contained in the patent-in-suit2 as irrelevant to the merits of their Motion, the Movants state that the patent "appears to claim a generic algorithm and purports to describe a method for processing certain data", but they go on to complain that "[t]here is no indication as The Court must consider the patent-in-suit, which was attached to the Complaint, as part of the Complaint itself. See United States v. St. Luke's Episcopal Hosp., 355 F.3d 370, 375 (5th Cir. 2004) ("The exhibits attached to the complaint, however, are part of the complaint `for all purposes.'") The Movants do not dispute this.
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to where this apparent algorithm may be supported or used by Movants . . . ." See Reply at 5. It certainly seems that the Movants expect "[a] chart identifying specifically where each element of each asserted claim is found within each Accused Instrumentality . . ." per P. R. 3-1(c).3 The fact that the Movants state that they are not seeking "P. R. 3-1-like disclosures" in a complaint, see Reply at 8, is a tacit admission that this would be an undesirable result. IV. Bedrock's Complaint Satisfies Iqbal Even Absent Rule 84 and McZeal Even if the Movants are correct that McZeal is irrelevant and the plain text of Rule 84 was somehow amended by judicial interpretation, Bedrock's Complaint still passes muster under the "plausible inference" test set out in Iqbal. Iqbal recognizes that its teachings are flexible and context-specific. See Iqbal, 129 S. Ct. at 1950 ("Determining whether a complaint states a plausible claim for relief will . . . be a context-specific task that requires the reviewing court to draw on its judicial experience and common sense."); id. at 1948 (recognizing that the elements that a litigant must plead depends on the claim at issue). Bedrock's Complaint satisfies Iqbal by alleging that "[i]n the course of their business operations, Defendants use the method and apparatus falling within one or more claims of the `120 Patent." Complaint at ¶ 16. The allegations of infringement in the Complaint do not stand alone; they must be considered in light of the patent's claims. These claims are not unduly numerous; there are only eight in total. Further, for the claims elements that are governed by 35 U.S.C. § 112 ¶ 6, the attached patent-in-suit provides extensive support for these elements in the form of descriptive text, flowcharts, and pseudocode. See Ex. 3 at cols. 3-14. These claims,
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Incidentally, Bedrock served its P. R. 3-1(c) contentions on the defendants in this case on Friday, October 9, 2009. These contentions contain citations to specific data structures and routines at a granular, source code level of detail. See, e.g. Ex. 2. It is hard to imagine how Bedrock could have given an "indication where [the claimed] algorithm may be supported or used by Movants" without launching into a full-blown P. R. 3-1(c) claim chart.

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thus, provide context to the factual statement that "Defendants use the method and apparatus falling within one or more claims of the '120 Patent." The Movants attempt to sidestep this issue by asserting that "[t]he asserted patent in this case appears to claim a generic algorithm and purports to describe a method for processing certain data." See Reply at 5. Because the Movants have failed to make a genuine effort to address the attached patent-in-suit, which is a part of allegations in the Complaint, the Movants have failed to show that there is not a facial plausibility that the Movants are liable for patent infringement. See Iqbal, 129 S. Ct. at 1949 ("A claim has facial plausibility when the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged."). V. CONCLUSION For the reasons stated in Bedrock's Response and in this sur-reply, Bedrock respectfully requests that the Court deny the Movants' Motion.4

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If the Court chooses to grant Movants' Motion, Bedrock respectfully requests a stay of the dismissal and leave to replead.

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DATED: October 16, 2009

Respectfully submitted, McKOOL SMITH, P.C. _/s/ Sam F. Baxter_________ Sam F. Baxter, Lead Attorney Texas Bar No. 01938000 McKOOL SMITH, P.C. [e-mail] 104 E. Houston Street, Suite 300 P.O. Box 0 Marshall, Texas 75670 Telephone: [phone] Facsimile: [phone] Douglas A. Cawley Texas Bar No. 04035500 [e-mail] Theodore Stevenson, III Texas Bar No. 19196650 [e-mail] J. Austin Curry Texas Bar No. 24059636 [e-mail] McKOOL SMITH, P.C. 300 Crescent Court, Suite 1500 Dallas, Texas 75201 Telephone: [phone] Facsimile: 214-978-4044 Robert M. Parker Texas Bar No. 15498000 Robert Christopher Bunt Texas Bar No. 00787165 PARKER, BUNT & AINSWORTH, P.C. 100 E. Ferguson, Suite 1114 Tyler, Texas 75702 Telephone: [phone] Facsimile: 903-533-9687 E-mail: [e-mail] E-mail: [e-mail] ATTORNEYS FOR PLAINTIFF BEDROCK COMPUTER TECHNOLOGIES LLC

CERTIFICATE OF SERVICE The undersigned certifies that the foregoing document was filed electronically in compliance with Local Rule CV-5(a). As such, this document was served on all counsel who have consented to electronic service on this, the 16th day of October, 2009. Local Rule CV53(a)(3)(A). /s/ Austin Curry Austin Curry