Interval Licensing LLC v. AOL, Inc. et al

Filing 130

REPLY, filed by Defendants Google Inc, YouTube LLC, TO RESPONSE to #62 MOTION to Dismiss For Failure to State Claim Upon Which Relief can be Granted Pursuant to Fed. R. Civ. P. 12(B)(6) (Jost, Shannon)

Interval Licensing LLC v. eBay, Inc. et al

Doc. 130

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 v. AOL, INC, et al., Defendants.

HONORABLE MARSHA J. PECHMAN

UNITED STATES DISTRICT COURT WESTERN DISTRICT OF WASHINGTON AT SEATTLE INTERVAL LICENSING LLC, Plaintiff, Case No.: 2:10-cv-01385-MJP DEFENDANTS GOOGLE INC. AND YOUTUBE, LLC'S REPLY IN SUPPORT OF THEIR MOTION TO DISMISS FOR FAILURE TO STATE A CLAIM UPON WHICH RELIEF CAN BE GRANTED PURSUANT TO FED. R. CIV. P. 12(B)(6) Note on Motion Calendar: November 12, 2010 Oral Argument Requested

Defendants Google Inc. and YouTube, LLC (together "Google"), submit this reply in support of their motion to dismiss Interval Licensing LLC's ("Interval") Complaint for Patent Infringement (the "Complaint") for failure to state a claim upon which relief can be granted pursuant to Fed. R. Civ. P. 12(b)(6). Interval has asserted four patents containing nearly two hundred claims against eleven disparate Defendants, yet has failed to identify a single specific product that it accuses of infringement. If Interval has conducted the Rule 11 investigation it was required to perform before bringing its Complaint, it should easily be able to at least identify the specific products

DEFENDANTS GOOGLE INC. AND YOUTUBE, LLC'S REPLY IN SUPPORT OF THEIR MOTION TO DISMISS FOR FAILURE TO STATE A CLAIM UPON WHICH RELIEF CAN BE GRANTED PURSUANT TO FED. R. CIV. P. 12(B)(6) - 2:10-cv-01385-MJP
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STOKES LAWRENCE, P.S.
800 FIFTH AVENUE, SUITE 4000 SEATTLE, WASHINGTON 98104-3179 [phone]

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accused of infringement. It is Interval's refusal to do so that necessitates this motion practice and any resulting delay is squarely the fault of Interval. Because the filing of a complaint begins the "litigation clock," it is unfair to Google (and the other Defendants) to allow this clock to run without notice being given as to what products, services, or offerings are alleged to infringe. While Google can begin to investigate defenses such as invalidity and unenforceability, Google cannot properly begin to analyze its noninfringement defenses because Plaintiff has failed to identify accused products or services. Plaintiff's argument that the Local Rules require infringement contentions does not excuse or mitigate the flaws in its Complaint. For example, the local rules of the Northern District of California have similar infringement contention requirements and its courts have not hesitated to dismiss deficient complaints regardless of this discovery device. See generally, e.g., Bender v. LG Elecs. U.S.A., Inc., No. 09-cv-02114, 2010 WL 889541 (N.D. Cal. Mar. 11, 2010); California Inst. of Computer Assisted Surgery, Inc. v. Med-Surgical Servs., Inc., No. 10-cv02042, 2010 WL 3063132 (N.D. Cal. Aug. 3, 2010); Enlink Geoenergy Servs., Inc. v. Jackson & Sons Drilling & Pump, Inc., No. 09-cv-03524, 2010 WL 1221861 (N.D. Cal. Mar. 24, 2010); Bender v. Motorola, Inc., No. 09-cv-1245, 2010 WL 726739 (N.D. Cal. Feb. 26, 2010). I. ARGUMENT A. Interval's Complaint Does Not Identify a Specific Product Accused of Infringement

Plaintiff does not dispute that a complaint for patent infringement must, in order to satisfy the requirements of notice pleading, put a defendant on notice of both the patents alleged to be infringed and the defendant's products, services, or offerings that are alleged to infringe. (Dkt. No. 123 at 4:17-21). Plaintiff's argument that its disclosure of Google's "website" as the allegedly infringing instrumentality somehow satisfies the minimal standards of notice pleading should be seen for what it is ­ a disingenuous and unproductive end-run around the requirements of Rule 8 of the Federal Rules of Civil Procedure. Plaintiff's allegations are fatally deficient and, as a matter of black letter law, Plaintiff's Complaint should be dismissed.
DEFENDANTS GOOGLE INC. AND YOUTUBE, LLC'S REPLY IN SUPPORT OF THEIR MOTION TO DISMISS FOR FAILURE TO STATE A CLAIM UPON WHICH RELIEF CAN BE GRANTED PURSUANT TO FED. R. CIV. P. 12(B)(6) - 2:10-cv-01385-MJP
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STOKES LAWRENCE, P.S.
800 FIFTH AVENUE, SUITE 4000 SEATTLE, WASHINGTON 98104-3179 [phone]

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Plaintiff's argument with respect to continued sufficiency of Form 18 is a red herring ­ Plaintiff has not satisfied even the minimal pleading requirements suggested by the form. Moreover, as explained in Google's opening brief, following the Supreme Court decisions in Bell Atlantic Corp. v. Twombly, 550 U.S. 544 (2007) ("Twombly") and Ashcroft v. Iqbal, 129 S. Ct. 1937 (2009) ("Iqbal"), several courts have questioned whether Form 18 is sufficient to meet the pleading requirements for a patent infringement matter. (Dkt. No. 62 at 6:21-7:9).1 Notwithstanding Interval's assertions to the contrary, generically referencing a website (for only two of the four asserted patents) and other unspecified "products that display information in a way that occupies the peripheral attention of the user as claimed in the patent" (for the `652 and `314 patents), does not identify a specific product accused of infringement. (Dkt. No. 123 at 8:17-22 & 10:5-14). Such generic statements that Google's "website" infringes no more satisfies the requirement of notice pleading than if Plaintiff had accused a conglomerate with allegations that it infringes because it manufactures "things." Websites are not specific products. Even a cursory inspection of www.Google.com shows that there are dozens if not hundreds of products and services accessible through Google's numerous websites and webpages. (See, e.g., www.googlelabs.com and www.google.com/intl/en/options). Interval's Complaint never identifies any specific products, services, or offerings that it accuses of infringement. Thus, Interval has been no more specific in its identification of the products accused of infringement, or the bases for such claims, than the deficient plaintiffs in the cases cited in Google's opening brief. (Dkt. No. 62 at 5:1 to 7:9). As part of its argument, Interval also suggests that its "website" allegations are sufficient because "the patent itself is attached to and incorporated in the Complaint." (Dkt. No. 123 at 10). This argument is specious. Merely attaching the patent does not give a defendant notice of what is accused of infringement. Even under the minimal pleading of Form 18, it is not

In this regard, Interval's reliance on Ware v. Circuit City Stores, Inc., 4:05-CV-0156, 2010 WL 767094 (N.D. Ga. Jan. 5, 2010), as suggesting that Form 18 is sufficient following the decisions in Twombly and Iqbal, is misplaced as the court in Ware never even references the Twombly or Iqbal decisions.

DEFENDANTS GOOGLE INC. AND YOUTUBE, LLC'S REPLY IN SUPPORT OF THEIR MOTION TO DISMISS FOR FAILURE TO STATE A CLAIM UPON WHICH RELIEF CAN BE GRANTED PURSUANT TO FED. R. CIV. P. 12(B)(6) - 2:10-cv-01385-MJP
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STOKES LAWRENCE, P.S.
800 FIFTH AVENUE, SUITE 4000 SEATTLE, WASHINGTON 98104-3179 [phone]

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sufficient to merely identify a patent without also identifying a specific product or offering alleged to infringe the patent. B. Form 18 Does Not Supplant the Iqbal and Twombly Pleading Standards

This Court need not address the question of whether Form 18 satisfies the pleading requirements for a patent case in light of the Supreme Court's decisions in Twombly and Iqbal because Plaintiff's Complaint fails to meet even the minimal requirements for pleading in a patent case suggested by Form 18. Nevertheless, Plaintiff misstates the Federal Circuit's holding in McZeal v. Sprint Nextel Corp., 501 F.3d 1354 (Fed. Cir. 2007) (split decision). McZeal was decided prior to the Supreme Court's decision in Iqbal and involved the "low bar for pro se litigants." See Koninklijke Philips Elecs. N.V. v. The ADS Grp., 694 F. Supp. 2d 246, 252 n.8 (S.D.N.Y. 2010) ("The decision in McZeal, however, was motivated by a (perhaps) misplaced indulgence of the pleadings of a pro se plaintiff."). Most importantly, the Federal Circuit in McZeal never "expressly upheld the continuing validity of Form 18 and notice pleading in patent cases" as Interval alleges. (Dkt. No. 123 at 5:21-24.) In fact, numerous courts have noted and held to the contrary. See, e.g., Bender v. Motorola, Inc., No. C 09-1245, 2010 WL 726739, at *3 (N.D. Cal. Feb. 26, 2010) (criticizing plaintiff for "misplaced" reliance on McZeal as "read[ing] too much into" that case); Bender v. LG Elecs. U.S.A., Inc., No. C 09-02114, 2010 WL 889541, at *3 (N.D. Cal. Mar. 11, 2010) (discounting McZeal's precedential authority because it was decided before Iqbal). Interval's Complaint, which does not even satisfy the requirements of Form 18, much less the pleading requirements set forth in Twombly and Iqbal, should be dismissed. To compound Interval's misstatement of the law, Interval tries to distinguish Iqbal as factually inapposite because it was not a patent infringement case. (D.I. 123, at 5.) This argument is meritless because, as Interval acknowledges, the Supreme Court in Iqbal held that the plausibility pleading standards of Twombly "applied to any civil case." (Id.) Therefore, patent pleadings must be assessed in view of these Supreme Court cases.

DEFENDANTS GOOGLE INC. AND YOUTUBE, LLC'S REPLY IN SUPPORT OF THEIR MOTION TO DISMISS FOR FAILURE TO STATE A CLAIM UPON WHICH RELIEF CAN BE GRANTED PURSUANT TO FED. R. CIV. P. 12(B)(6) - 2:10-cv-01385-MJP
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STOKES LAWRENCE, P.S.
800 FIFTH AVENUE, SUITE 4000 SEATTLE, WASHINGTON 98104-3179 [phone]

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C.

Interval's Preliminary Infringement Contentions Are Not a Substitute for Compliance with Rule 8

Interval improperly suggests that providing preliminary infringement contentions somehow supersedes its obligation to comply with Rule 8 of the Federal Rules of Civil Procedure. (Dkt. No. 123 at. 6:14-24, 10:17-11:4.) Interval cites no authority to suggest that because this district has adopted local rules that require disclosure of infringement contentions Rule 8 is no longer applicable. Common sense and Supreme Court precedent mandate the contrary conclusion. See, e.g., Iqbal, 129 S. Ct. at 1950 ("Rule 8 ... does not unlock the doors of discovery for a plaintiff armed with nothing more than conclusions.") & 1953 ("[T]he question presented by a motion to dismiss a complaint for insufficient pleadings does not turn on the controls placed on the discovery process."). Several courts, including the Northern District of California, have (for years) had patent local rules that required certain disclosures as part of discovery. Nonetheless, as shown by the decisions Google cited in its opening brief, courts in such districts have repeatedly dismissed complaints that fell short of the pleading requirements of Rule 8. (Dkt. No. 62 at 5:15-16, 6:9-12 & 7:10-18.) Moreover, infringement contentions are due months after the complaint and Google is already being prejudiced in the preparation of its defenses by not having a specific identification of the products accused of infringement. If Interval has done the proper investigation under Rule 11, it should have had no problem indentifying accused products with specificity. Interval's self-serving proposal to have the Court pardon its deficient Complaint in favor of preliminary infringement contentions should be rejected. D. Interval Could Avoid Any Alleged "Delay" by Amending Its Complaint Now

Lacking legal authority for its other arguments, Interval tries to frame Google's motion to dismiss as a delay tactic. It is not. Google simply seeks to have Interval comply with the Federal Rules by giving Google notice, based on factual allegations rather than legal conclusions, of what it is that Google is
DEFENDANTS GOOGLE INC. AND YOUTUBE, LLC'S REPLY IN SUPPORT OF THEIR MOTION TO DISMISS FOR FAILURE TO STATE A CLAIM UPON WHICH RELIEF CAN BE GRANTED PURSUANT TO FED. R. CIV. P. 12(B)(6) - 2:10-cv-01385-MJP
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STOKES LAWRENCE, P.S.
800 FIFTH AVENUE, SUITE 4000 SEATTLE, WASHINGTON 98104-3179 [phone]

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doing that is allegedly harming Interval. Cf. Iqbal, 129 S. Ct. at 1949 ("Threadbare recitals of the elements of a cause of action, supported by mere conclusory statements, do not suffice."). Interval's Complaint provides no notice as to what Google (or any of the other named disparate Defendants) does that purportedly infringes the patents-in-suit. Google is not seeking such information for the purposes of delay; instead, Google is seeking such information so that it can properly prepare its defenses, as is its right. Any delay caused by Interval's failure to meet the pleading requirements is both irrelevant and of Interval's own making. If Interval was truly concerned with delay, it should have pleaded sufficient facts in its original Complaint or amended its Complaint immediately to conform to the requirements of Rule 8. Interval should not now complain of a delay that it alone caused. II. CONCLUSION For the reasons stated above and in Google's original motion to dismiss, the Court should dismiss Interval's Complaint against Google because Interval's Complaint fails to meet the pleading standards of Rule 8 of the Federal Rules of Civil Procedure. DATED this 12th day of November, 2010. STOKES LAWRENCE, P.S.

By: s/ Shannon M. Jost Shannon M. Jost (WSBA #32511) Scott A.W. Johnson (WSBA #15543) Aneelah Afzali (WSBA #34552) and

DEFENDANTS GOOGLE INC. AND YOUTUBE, LLC'S REPLY IN SUPPORT OF THEIR MOTION TO DISMISS FOR FAILURE TO STATE A CLAIM UPON WHICH RELIEF CAN BE GRANTED PURSUANT TO FED. R. CIV. P. 12(B)(6) - 2:10-cv-01385-MJP
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STOKES LAWRENCE, P.S.
800 FIFTH AVENUE, SUITE 4000 SEATTLE, WASHINGTON 98104-3179 [phone]

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Admitted Pro Hac Vice Kevin X. McGann Dimitrios T. Drivas John E. Handy Aaron Chase WHITE & CASE LLP 1155 Avenue of the Americas New York, NY 10036-2787 Warren S. Heit Wendi R. Schepler WHITE & CASE LLP 3000 El Camino Real Building 5, 9th Floor Palo Alto, CA 94306 Attorneys for Defendants Google Inc. and YouTube, LLC

DEFENDANTS GOOGLE INC. AND YOUTUBE, LLC'S REPLY IN SUPPORT OF THEIR MOTION TO DISMISS FOR FAILURE TO STATE A CLAIM UPON WHICH RELIEF CAN BE GRANTED PURSUANT TO FED. R. CIV. P. 12(B)(6) - 2:10-cv-01385-MJP
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STOKES LAWRENCE, P.S.
800 FIFTH AVENUE, SUITE 4000 SEATTLE, WASHINGTON 98104-3179 [phone]

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CERTIFICATE OF SERVICE I hereby certify that on November 12, 2010, I caused the foregoing DEFENDANTS GOOGLE INC. AND YOUTUBE, LLC'S REPLY IN SUPPORT OF THEIR MOTION TO DISMISS FOR FAILURE TO STATE A CLAIM UPON WHICH RELIEF CAN BE GRANTED PURSUANT TO FED. R. CIV. P. 12(b)(6) to be: electronically filed with the Clerk of the Court using the CM/ECF system which will send notification of such filing to the following: Attorneys for Plaintiff Interval Licensing LLC Justin A. Nelson ([e-mail]) Eric J. Enger ([e-mail]) Matthew R. Berry ([e-mail]) Max L. Tribble ([e-mail]) Michael F. Heim ([e-mail]) Nathan J. Davis ([e-mail]) Edgar G. Sargent ([e-mail]) Attorneys for OfficeMax, Inc. Kevin C. Baumgardner ([e-mail]) Steven W. Fogg ([e-mail]) Jeffrey D. Neumeyer ([e-mail]) John S. Letchinger ([e-mail]) Douglas S. Rupert ([e-mail]) Attorneys for Yahoo! Mark P. Walters ([e-mail]) Dario A. Machleidt ([e-mail]) Francis Ho ([e-mail]) Richard S. J. Hung ([e-mail]) Michael Jacobs ([e-mail]) Matthew I. Kreeger ([e-mail]) Eric W. Ow ([e-mail]) Attorneys for eBay Inc., NetFlix, Inc., Office Depot, Inc. and Staples, Inc. J. Christopher Carraway ([e-mail]) John D. Vandenberg ([e-mail]) Arthur W. Harrigan, Jr. ([e-mail]) Christopher T. Wion ([e-mail]) Kristin L. Cleveland ([e-mail]) Klaus H. Hamm ([e-mail]) Attorneys for Apple Inc. Scott T. Wilsdon ([e-mail]) Jeremy E. Roller ([e-mail]) David S. Almeling ([e-mail]) George A. Riley ([e-mail]) Brian M. Berliner ([e-mail]) Neil L. Yang ([e-mail])
DEFENDANTS GOOGLE INC. AND YOUTUBE, LLC'S REPLY IN SUPPORT OF THEIR MOTION TO DISMISS FOR FAILURE TO STATE A CLAIM UPON WHICH RELIEF CAN BE GRANTED PURSUANT TO FED. R. CIV. P. 12(B)(6) - 2:10-cv-01385-MJP
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STOKES LAWRENCE, P.S.
800 FIFTH AVENUE, SUITE 4000 SEATTLE, WASHINGTON 98104-3179 [phone]

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Attorneys for Facebook Inc. Christopher B. Durbin ([e-mail]) Christen M. R. Dubois ([e-mail]) Heidi L. Keefe ([e-mail]) Elizabeth L. Stameshkin ([e-mail]) Mark R. Weinstein ([e-mail]) Michael G. Rhodes ([e-mail]) Attorneys for AOL Inc. Gerald F. Ivey ([e-mail]) Cortney S. Alexander ([e-mail]) Eliot C. Cook ([e-mail]) Robert L. Burns ([e-mail])

s/ Shannon M. Jost Shannon M. Jost (WSBA #32511) Attorney for Defendants Google Inc. and YouTube, LLC Stokes Lawrence, P.S. 800 Fifth Avenue, Suite 4000 Seattle, WA 98104 [phone] Fax: [phone] [e-mail]

DEFENDANTS GOOGLE INC. AND YOUTUBE, LLC'S REPLY IN SUPPORT OF THEIR MOTION TO DISMISS FOR FAILURE TO STATE A CLAIM UPON WHICH RELIEF CAN BE GRANTED PURSUANT TO FED. R. CIV. P. 12(B)(6) - 2:10-cv-01385-MJP
49345-001\ 591184.DOC

STOKES LAWRENCE, P.S.
800 FIFTH AVENUE, SUITE 4000 SEATTLE, WASHINGTON 98104-3179 [phone]

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