Iron Oak Technologies, LLC v. Dell Inc.

Filing 42

ORDER STRIKING Iron Oak's 24 Second Amended Complaint. ORDER GRANTING Dell's 19 Second Partial Motion to Dismiss. ORDER DISMISSING without prejudice Iron Oak's contributory infringement claims. ORDER GRANTING Iron Oak's motion for leave to amend its complaint contained within 23 . Signed by Judge Robert Pitman. (lt)

IN THE UNITED STATES DISTRICT COURT
FOR THE WESTERN DISTRICT OF TEXAS
AUSTIN DIVISION
IRON OAK TECHNOLOGIES, LLC,
Plaintiff,
v.
DELL, INC.,
Defendant.

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1:17-cv-999-RP

ORDER
Before the Court is Defendant Dell, Inc.’s (“Dell”) Partial Motion to Dismiss for Failure to
State a Claim. (Dkt. 19). In its motion, Dell asks the Court to dismiss Plaintiff Iron Oak
Technologies, LLC’s (“Iron Oak”) claims for contributory patent infringement. (Id. at 5). Iron Oak
responded by filing an amended complaint. (See Resp. Mot. Dismiss, Dkt. 23, at 2; Second Am.
Compl., Dkt. 24). Having reviewed the parties’ filings and the relevant law, the Court finds that
Dell’s motion should be granted.
I. BACKGROUND
Iron Oak filed a complaint on October 18, 2017, in which it alleges that Dell directly and
indirectly infringes United States Patent Nos. 5,699,275 (the “‘275 patent”) and 5,966,658 (the “‘658
patent”). (Compl., Dkt. 1). Dell responded to Iron Oak’s original complaint with a partial motion to
dismiss pertaining to Iron Oak’s induced and contributory infringement claims. (See First Mot.
Dismiss, Dkt. 10, at 7). Iron Oak responded to that motion by amending its complaint as a matter of
course under Federal Rule of Civil Procedure 15(a)(1)(B). (See Resp. First Mot. Dismiss, Dkt. 14, at
1; Am. Compl., Dkt. 15). Like the original complaint, the First Amended Complaint alleged claims

for direct, induced, and contributory infringement of two patents against Dell. (Am. Compl., Dkt.
15).
Dell then filed another partial motion to dismiss under Federal Rule of Civil Procedure
12(b)(6), this time pertaining only to the contributory infringement claims in the amended
complaint. (See Second Mot. Dismiss, Dkt. 19, at 5). Iron Oak responded by asserting that Rule
15(a)(1)(B) permitted it to amend its complaint again as a matter of course and filing another
amended complaint. (Resp. Mot. Dismiss, Dkt. 23, at 2; Second Am. Compl., Dkt. 24).
II. SECOND AMENDED COMPLAINT
Federal Rule of Civil Procedure 15(a)(1) provides that a party “may amend its pleadings once
as a matter of course . . . .” Fed. R. Civ. P. 15(a)(1). Rule 15 “allows a party to amend his pleading
only once as a matter of course.” Carson v. Polley, 689 F.2d 562, 583 (5th Cir. 1982). After amending
once as a matter of course, a party “may amend . . . only with the opposing party’s written consent
or the court’s leave.” Fed. R. Civ. P. 15(a)(2).
Iron Oak amended once as a matter of course when it filed its First Amended Complaint.
(Dkt. 15). Having done so, it may only amend its complaint again upon receiving the opposing
party’s written consent or the Court’s leave. Because Iron Oak obtained neither before filing its
Second Amended Complaint, the Court must strike that pleading. The Court will consider Iron
Oak’s response to Dell’s second motion to dismiss as a request for leave to file a second amended
complaint. (Resp. Second Mot. Dismiss, Dkt. 23, at 2).
III. MOTION TO DISMISS
A. Legal Standard
In patent cases, regional circuit law applies to motions to dismiss under Federal Rule of Civil
Procedure 12(b)(6). McZeal v. Sprint Nextel Corp., 501 F.3d 1354, 1355–56 (Fed. Cir. 2007). Although
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Form 18 of the Federal Rules of Civil Procedure is relevant to the sufficiency with which a direct
infringement claim is pleaded, K-Tech Telecommunications, Inc. v. Time Warner Cable, Inc., 714 F.3d 1277,
1284 (Fed. Cir. 2013), the general principles of Bell Atl. Corp. v. Twombly, 550 U.S. 544 (2007), and
Ashcroft v. Iqbal, 556 U.S. 662 (2009), must be applied to indirect infringement claims. In re Bill of
Lading Transmission & Processing Sys. Patent Litig., 681 F.3d 1323, 1336 (Fed. Cir. 2012). Accordingly,
Iron Oak’s First Amended Complaint must plead “enough factual matter” that, when taken as true,
“state[s] a claim to relief that is plausible on its face.” Twombly, 550 U.S. at 570. This plausibility
standard is met when “the plaintiff pleads factual content that allows the court to draw the
reasonable inference that the defendant is liable for the misconduct alleged.” Iqbal, 556 U.S. at 678.
Although the Court “accepts all well-pleaded facts as true” and “view[s] them in the light most
favorable to the plaintiff,” In re Katrina Canal Breaches Litig., 495 F.3d 191, 205 (5th Cir. 2007)
(citation and internal quotation marks omitted), “[t]he tenet that a court must accept as true all of
the allegations contained in a complaint is inapplicable to legal conclusions.” Iqbal, 556 U.S. at 678.
“Threadbare recitals of the elements of a cause of action, supported by mere conclusory statements,
do not suffice.” Id.
B. Discussion
Dell argues that Iron Oak’s contributory infringement claims should be dismissed because
Iron Oak fails to plead facts that would plausibly establish several elements of a contributory
infringement claim under 35 U.S.C. § 271(c). (Second Mot. Dismiss, Dkt. 19, at 2–5). A party is
liable for contributory infringement if it (1) “offers to sell or sells a component of a patented
machine . . . or a material or apparatus for use in practicing a patented process” that (2) constitutes
“a material part of the invention,” if (3) the party knows the material or apparatus “to be especially
made or especially adapted for use in an infringement of such patent, and not a staple article or
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commodity of commerce suitable for substantial noninfringing use.” 35 U.S.C. § 271(c); see also Cross
Med. Prods., Inc. v. Medtronic Sofamor Danek, Inc., 424 F.3d 1293, 1312 (Fed. Cir. 2005) (“In order to
succeed on a claim of contributory infringement, in addition to proving an act of direct
infringement, plaintiff must show that defendant knew that the combination for which its
components were especially made was both patented and infringing and that defendant’s
components have no substantial non-infringing uses.”) (citation and internal quotation marks
omitted). Dell argues that Iron Oak’s amended complaint does not identify the “component” that
contributes to the infringement of its patents and that it makes no more than conclusory allegations
that the unspecified component(s) have no substantial noninfringing uses. (Second Mot. Dismiss,
Dkt. 19, at 3–4).
The Court agrees with each of Dell’s positions. First, Iron Oak’s amended complaint does
not identify the component, material, or apparatus that allegedly contributes to the direct
infringement of either patent. (Am. Compl., Dkt. 15, at 4, 7). Second, Iron Oak’s conclusory
allegation that “[t]he components provided by [Dell] are not staple articles of commerce suitable for
substantial non-fringing use,” (id.), is no more than a “threadbare recital” of one of the elements of a
contributory infringement claim. Iqbal, 556 U.S. at 678. Because the amended complaint fails to
allege facts that, if true, would state a plausible claim for relief, the Court will dismiss Iron Oak’s
contributory infringement claim for each patent.
Iron Oak has requested leave to amend. (Resp. Second Mot. Dismiss, Dkt. 23, at 2). Rule 15
favors giving leave to amend, and so the Court will permit Iron Oak to amend its complaint again.
See Lyn–Lea Travel Corp. v. Am. Airlines, 283 F.3d 282, 286 (5th Cir. 2002) (“[Rule] 15(a) requires the
trial court to grant leave to amend freely, and the language of this rule evinces a bias in favor of
granting leave to amend.”) (citation and internal quotation marks omitted).
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IV. CONCLUSION
For these reasons, the Court ORDERS as follows. Iron Oak’s Second Amended Complaint,
(Dkt. 24), is STRICKEN from the record and the Court’s docket. Dell’s second partial motion to
dismiss, (Dkt. 19), is GRANTED. Iron Oak’s contributory infringement claims are DISMISSED
WITHOUT PREJUDICE for failure to state a claim. Iron Oak’s motion for leave to amend its
complaint, (Dkt. 23), is GRANTED. Iron Oak shall file an amended pleading, if any, within 14
days of the date of this order.
SIGNED on April 4, 2018.

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ROBERT PITMAN
UNITED STATES DISTRICT JUDGE

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