Eolas Technologies Incorporated v. Adobe Systems Incorporated et al

Filing 365

SUR-REPLY to Reply to Response to Motion re 309 MOTION to Dismiss Eolas's Amended Indirect Infringement Claims filed by Eolas Technologies Incorporated. (McKool, Mike)

IN THE UNITED STATES DISTRICT COURT FOR THE EASTERN DISTRICT OF TEXAS TYLER DIVISION Eolas Technologies Incorporated, Plaintiff, vs. Adobe Systems Inc., Amazon.com, Inc., Apple Inc., Blockbuster Inc., CDW Corp., Citigroup Inc., eBay Inc., Frito-Lay, Inc., The Go Daddy Group, Inc., Google Inc., J.C. Penney Company, Inc., JPMorgan Chase & Co., New Frontier Media, Inc., Office Depot, Inc., Perot Systems Corp., Playboy Enterprises International, Inc., Rent-A-Center, Inc., Staples, Inc., Sun Microsystems Inc., Texas Instruments Inc., Yahoo! Inc., and YouTube, LLC Defendants. § § § § § § § § § § § § § § § § § § § §

Civil Action No. 6:09-cv-446

JURY TRIAL

EOLAS' SUR REPLY IN OPPOSITION TO DEFENDANT JPMORGAN CHASE & CO.'S MOTION TO DISMISS EOLAS' AMENDED INDIRECT INFRINGEMENT CLAIMS

Plaintiff Eolas Technologies Inc. ("Eolas") files this Sur Reply in opposition to defendant JPMorgan Chase & Co.'s ("JPMorgan") Reply in Support of its Motion to Dismiss Eolas' Amended Indirect Infringement Contentions ("Reply"). I. INTRODUCTION Like its opening brief, JPMorgan's Reply never contends that Eolas failed to comply with the Court's prior Order denying in part and granting in part JPMorgan's first motion to dismiss. See Court's Memorandum Opinion and Order (dkt. 282) ("Order"). The Court's Order faulted Eolas' original complaint for failing to allege a direct infringer as a predicate to Eolas' indirect infringement claims. Id. at 5. Eolas' Amended Complaint, filed in response to the Court's Order, corrected this shortcoming by specifically alleging a direct infringer: the "users" of the accused products. See dkt. 285 at ¶ 42. II. ARGUMENT In its opening brief, JPMorgan argued that Eolas' amended complaint failed to comply with the Clayton case from a court in the Central District of California. See JPMorgan's Motion to Dismiss Eolas' Amended Indirect Infringement Claims at 2 (dkt. 309) (citing the Clayton case). Its Reply abandons this argument, nowhere discussing the Clayton case, and, apparently conceding its inapplicability here. The inapplicability of Clayton--together with the lack of any authority whatsoever in JPMorgan's Reply--is fatal, particularly in light of this Court's Order. Instead of relying on Clayton (or any other authority), JPMorgan's Reply instead argues that while Eolas' amended complaint alleges direct infringers, this allegation is deficient because those direct infringers are "unidentified." Reply at 1. Not so. Eolas' amended Complaint identifies the direct infringers as follows: 42. *** JPMorgan Chase indirectly infringes one or more claims of the '906 Patent and/or the '985 Patent by active inducement under 35 U.S.C. § 271(b). JPMorgan Chase has induced and continues to induce users of the web pages, software, and computer equipment identified above to directly infringe one or more claims of the '906 Patent and/or the '985 Patent. JPMorgan Chase indirectly
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infringes one or more claims of the '906 Patent and/or the '985 Patent by contributory infringement under 35 U.S.C. § 271(c). By providing the web pages, software, and computer equipment identified above, JPMorgan Chase contributes to the direct infringement of users of said web pages, software, and computer equipment. See dkt. 285 at ¶ 42 (emphasis added). JPMorgan cites no law for the proposition that a specific allegation of direct infringement against "users" of the accused instrumentalities is insufficient to support an indirect infringement claim. Nor does JPMorgan cite any law for its apparent--but unstated--proposition that Eolas must identify the directly infringing "users" by name. Notably, Eolas' amended complaint tracks the language of the patent statute 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) (emphasis added)by alleging that "users of the web pages, software, and computer equipment identified above directly infringe." See dkt. 285 at ¶ 42. As such, Eolas' amended complaint is more than sufficient to comply with the notice pleading requirements of the Federal Rules, in addition to the Court's Order. JPMorgan's Reply pays lip service to the Court's Order by noting that "[t]his Court has observed there is no requirement for `detailed factual support for each element of indirect infringement.'" Reply at 1. Yet, on the same page, JPMorgan disagrees with the Court's holding, arguing that in addition to identifying the "users" by name, Eolas was required to plead "a specific instance of direct infringement" and "an affirmative intent to cause direct infringement." Id. JPMorgan cannot square its arguments about what it contends Eolas was required to plead with this Court's Order. See Order at 5 (emphasis added) ("Although Rule 8 does not require detailed factual support for each element of indirect infringement, Eolas has not alleged a direct infringer in relation to its indirect infringement claims. See PA Advisors, 2008 WL 4136426 at *8 (requiring only the pleading of direct infringers and not other `material elements').")

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Eolas has plead a direct infringer (i.e., the "users") and complied with the Court's Order. Order at 5. Contrary to JPMorgan's assertions, Eolas was not required to plead "other `material elements'" of an indirect infringement claim as JPMorgan now contends. JPMorgan disagrees with the Court's Order is not a basis to revisit it. Finally, JPMorgan's Reply contains a discussion of what it terms "issues of `divided infringement' and `authority.'" Reply at 2. Eolas does not understand JPMorgan's argument, but to the extent JPMorgan is presenting a theory of non-infringement or suggesting a license defense, a motion to dismiss a pleading is not the proper vehicle. Rather, such substantive arguments are properly addressed after fact discovery in the context of a case dispositive motion (e.g. a motion for summary judgment). The Court has set a schedule for hearing such motions. See dkt. 242. III. CONCLUSION There is no basis for the Court to reconsider its prior Order. Eolas' amended complaint corrected the defect identified in the Court's Order, and specifically alleged the "direct infringer" as required by the Court. The Court should therefore deny JPMorgan's Motion. See id. That

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Dated: July 16, 2010.

MCKOOL SMITH, P.C. /s/ Mike McKool Mike McKool Lead Attorney Texas State Bar No. 13732100 [e-mail] Douglas Cawley Texas State Bar No. 04035500 [e-mail] Luke McLeroy Texas State Bar No. 24041455 [e-mail] MCKOOL SMITH, P.C. 300 Crescent Court, Suite 1500 Dallas, Texas 75201 Telephone: [phone] Telecopier: [phone] Sam F. Baxter Texas State Bar No. 01938000 [e-mail] McKool Smith, P.C. 104 E. Houston St., Ste. 300 P.O. Box O Marshall, Texas 75670 Telephone: [phone] Telecopier: [phone] Kevin L. Burgess Texas State Bar No. 24006927 [e-mail] Steven J. Pollinger Texas State Bar No. 24011919 [e-mail] Josh W. Budwin Texas State Bar No. 24050347 [e-mail] MCKOOL SMITH, P.C. 300 West Sixth Street, Suite 1700 Austin, Texas 78701 Telephone: [phone] Telecopier: [phone] ATTORNEYS FOR PLAINTIFF EOLAS TECHNOLOGIES, INC.

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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 services on this the 16th day of July, 2010. Local Rule CV5(a)(3)(A). /s/ Josh Budwin Josh Budwin

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