Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-casd-3_13-cv-01278/USCOURTS-casd-3_13-cv-01278-0/pdf.json

Nature of Suit Code: 830
Nature of Suit: Patent
Cause of Action: 35:0271 Patent Infringement

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UNITED STATES DISTRICT COURT

SOUTHERN DISTRICT OF CALIFORNIA

UNISONE STRATEGIC IP, INC.,

Plaintiff,

v.

LIFE TECHNOLOGIES

CORPORATION; DOES 1 through 10,

inclusive,

Defendants.

 

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Case No. 3:13-cv-1278-GPC-JMA

ORDER GRANTING

DEFENDANT LIFE

TECHNOLOGIES

CORPORATION’S MOTION TO

DISMISS PLAINTIFF UNISONE

STRATEGIC IP, INC.’S

COMPLAINT

(ECF NO. 10)

INTRODUCTION

Before the Court is defendant Life Technologies Corporation’s (“Defendant”)

Motion to Dismiss plaintiff Unisone Strategic IP, Inc’s (“Plaintiff”) Complaint

(“Motion to Dismiss”). (ECF No. 1.) Plaintiff filed an opposition to the Motion to

Dismiss, (ECF No. 17), and defendant filed a reply, (ECF No. 18). For the reasons set

forth below, Defendant’s Motion to Dismiss is GRANTED WITH LEAVE TO

AMEND.

BACKGROUND

On June 3, 2013, Plaintiff filed its Complaint for patent infringement, alleging

Defendant’s software infringes U.S. Patent No. 6,996,538 (“the ‘538 patent”), of which

Plaintiff alleges it is the sole owner by assignment. (ECF No. 1.) More specifically,

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Plaintiff alleges Defendant’s Supply Chain Management System (“SCMS”) software

infringes one or more claims of the ‘538 patent. The ‘538 patent describes “[a] system

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and method which allows third-parties to monitor company inventory via the Internet

and World Wide Web (“web”) and automatically order needed items.” Plaintiff alleges

Defendant’s SCMS software providesreal-time tracking and management ofinventory

between Life Tech’s customers and suppliers.

DISCUSSION

I. Legal Standard

A motion under Federal Rule of Civil Procedure 12(b)(6) tests the legal

sufficiency of a claim. Navarro v. Block, 250 F.3d 729, 732 (9th Cir. 2001). In federal

court, a pleading must contain “a short and plain statement of the claim showing that

the pleader is entitled to relief.” Fed. R. Civ. P. 8(2). A complaint is deficient if it fails

to state a plausible claim for relief on its face. Bell Atl. Corp. v. Twombly, 550 U.S.

544, 570 (2007). “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.” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009).

In resolving a 12(b)(6) motion, courts accept all well-pleaded allegations of

material fact as true and construes them in a light most favorable to the nonmoving

party. Wyler Summit P’ship v. Turner Broad. Sys., Inc., 135 F.3d 658, 661 (9th

Cir.1998). In addition to the complaint itself, a court “may consider certain

materials-documents attached to the complaint, documents incorporated by reference

in the complaint, or matters ofjudicial notice–without converting the motion to dismiss

into a motion for summary judgment.” United States v. Ritchie, 342 F.3d 903, 907 (9th

Cir. 2003).

Where a motion to dismiss is granted, “leave to amend should be granted ‘unless

the court determines that the allegation of other facts consistent with the challenged

Defendant notes in its Motion to Dismiss that its software is actually called “Supply Center 1

Management System.”

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pleading could not possibly cure the deficiency.’” DeSoto v. Yellow Freight Sys., Inc.,

957 F.2d 655, 658 (9th Cir. 1992) (quoting Schreiber Distrib. Co. v. Serv-Well

Furniture Co., 806 F.2d 1393, 1401 (9th Cir. 1986)). In other words, where leave to

amend would be futile, the Court may deny leave to amend. See Desoto, 957 F.2d at

658.

II. Analysis

Defendant moves to dismiss Plaintiff’s claims for induced, contributory, and

willful infringement because Plaintiff has alleged no facts demonstrating Defendant

“had the intent to cause infringement . . . or that [Defendant] willfully infringed the

patent.” (ECF No. 10-1.) Defendant asserts Plaintiff “does not even allege that

[Defendant] had knowledge of the ‘538 patent.” Defendant further argues Plaintiff’s

contributory infringement claim fails because Plaintiff has not alleged “the necessary

facts detailing how [Defendant’s] accused product is ‘especially made or adapted for

use in an infringement [of the ‘538 patent].”

A. Induced Infringement

“Whoever actively induces infringement of a patent shall be liable as an

infringer.” 35 U.S.C. § 271(b). To state a claim for induced infringement, a plaintiff

must allege facts showing the alleged infringer (1) knew of the patent, (2) knowingly

induced the infringing acts, and (3) possessed a specific intent to encourage another’s

infringement of the patent. DSU Med. Corp. v. JMS Co., 471 F.3d 1293, 1304 (Fed.

Cir. 2006); Pacing Techs., LLC v. Garmin Int’l, Inc., 2013 WL 444642, at *2 (S.D. Cal.

Feb. 5, 2013).

1. Knowledge

District court decisions vary as to whether knowledge of a patent based on the

filing of a complaint is sufficient to meet the knowledge requirement for an induced

infringement claim. See Pacing Techs., 2013 WL 444642, at *2 (concluding that

post-filing knowledge of a patent suffices to state a claim for induced infringement);

see also EON Corp. IP Holdings, LLC v. Sensus USA, Inc., 2012 WL 4514138, at *1

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(N.D. Cal. Oct.1, 2012) (concluding that “ post-filing knowledge is sufficient to meet

thisrequirement”); but see Mallinckrodt Inc. v. E-Z-EM Inc., 670 F. Supp. 2d 349, 354

(D. Del. 2009) (finding the plaintiffs’ contention that knowledge can be established by

the filing of a complaint unpersuasive). 

This Court adopts the view that post-filing knowledge is sufficient to meet the

knowledge requirement asto any infringement occurring after the filing of a complaint

because there is

no reason why a defendant who is directly infringing on a product should

avoid liability for an indirect infringement claim when it continues to sell

the allegedly infringing product and encourages othersto infringe, simply

because it happened to learn of the patent in connection with a lawsuit.

Pacing Techs., 2013 WL 444642, at *2 (quoting Trading Tech. Int’l., Inc. v. BCG

Partners, Inc., 2011 WL 3946581, at *4 (N.D. Ill. Sept. 2, 2011)).

Even though the Court adopts the post-filing rule, Plaintiff still fails to allege

sufficient facts establishing Defendant had knowledge of the patent. No where in the

Complaint did Plaintiff allege that the filing of the Complaint satisfied the knowledge

requirement for induced infringement. In fact, Plaintiff does not allege Defendant had

knowledge of the ‘538 patent at all. In opposition to Defendant’s Motion to Dismiss,

Plaintiff nevertheless argues its “indirect infringement claims are presently limited to

[Defendant’s] post-filing conduct” and that Defendant gained knowledge of the patent

from the filing of the Complaint. (ECF No. 17.) While alleging necessary facts in an

opposition brief may suffice to acquire leave to amend a deficient complaint, such new

facts do not save a deficient complaint from dismissal. Because Plaintiff did not

sufficiently allege Defendant’s knowledge of the patent, Plaintiff fails to state a claim

for induced infringement.

2. Specific Intent

Plaintiff also fails to sufficiently allege Defendant had the specific intent to

induce others to infringe.

The Supreme Court has made clear that “inducement must involve the taking of

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affirmative steps to bring about the desired result.” Global-Tech Appliances, Inc. v.

SEB S.A., 131 S.Ct. 2060, 2065 (2011). This goes hand in hand with the requirement

that a plaintiff demonstrate the alleged infringer had the specific intent to encourage

another’s infringement. See DSU Med. Corp., 471 F.3d at 1304. “[T]he specific intent

necessary to induce infringement ‘requires more than just intent to cause the acts that

produce direct infringement . . . . , the inducer must have an affirmative intent to cause

direct infringement.’” Kyocera Wireless Corp. v. Int’l Trade Com’n, 545 F.3d 1340,

1354 (Fed. Cir. 2008) (quoting DSU Med. Corp., 471 F.3d at 1306.)

Plaintiff does not allege facts showing Defendant took affirmative steps to

induce others to infringe. Plaintiff alleges Defendant “has the specific intent to

encourage its customers and suppliers to infringe the ‘538 patent directly by (among

other things) intentionally encouraging and/or aiding its customers and suppliersto use

[Defendant’s] SCMS software.” This allegation fails because Plaintiff must allege

“more than just an intent to cause the acts that produce direct infringement.” See

Kyocera, 545 F.3d at 1354. 

Plaintifffurther alleges Defendant “intentionallydesigns,manufactures, markets,

promotes, sells, services, supports (including technical support), provides updated

software, and educates its customers and suppliers about its SCMS software.” Even

taken as true, these allegations also fail because they merely indicate that Defendant

provides instruction, technical support, and training for using its own software, and

nothing more. As such, Plaintiff’s allegations are concuslory and not sufficient to

plausibly infer that Defendant had the specific intent to induce others to infringe.

Plaintiff cites Petter Investments, Inc. v. Hydro Engineering, Inc., 664 F. Supp.

2d 816, 827 (W.D. Mich. 2009), in arguing its conclusory allegation that Defendant has

encouraged others to infringe is “precisely enough to state a claim for inducement.” 

Plaintiff’s reliance on Petter, however, is misplaced. The Petter court did not address

the sufficiency of a claimfor induced infringement under Rule 12(b)(6). See id. at 827. 

Rather, the court addressed the sufficiency of the patentee’s evidence in adjudicating

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a motion for summary judgment. Id. 

Because Plaintiff has not alleged facts demonstrating Defendant had the specific

intent to encourage othersto infringe the ‘538 patent, Plaintiff has failed to sufficiently

state a claim for induced infringement. Accordingly, Defendant’s Motion to Dismiss

Plaintiff’s claim for induced infringement is GRANTED.

B. Contributory Infringement

Defendant moves to dismiss Plaintiff’s claim for contributory infringement

because Plaintiff failed to allege Defendant had knowledge of the ‘538 patent or the

specific intent to cause infringement. Defendant also asserts that Plaintiff failed to

allege Defendant’s software is “especially made or especially adapted for use in an

infringement.”

Contributory infringement occurs if a party sells or offers to sell, a

material or apparatus for un 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.”

In re Bill of Lading Transmission & Processing Sys. Patent Lit., 681 F.3d 1323, 1337

(Fed. Cir. 2012) (citing & quoting 35 U.S.C. § 271(c)).

The Court has reviewed the case law to determine whether a claim for

contributory infringement requires a showing ofspecific intent. The Court agrees with

Plaintiff that, unlike a claim for induced infringement, a claim for contributory

infringement does not require a showing of specific intent to cause infringement. See

e.g., INVISTA North America S.a.r.l. v. M & G USA Corp., 2013 WL 3196817, at *13

n.12 (D. Del. June 25, 2013) (“Intent to cause infringement is not a requirement of

contributory infringement under 35 U.S.C. § 271(c).”).

Nonetheless,Plaintiff’s reliance on the Supreme Court’s decision in Global-Tech

is misguided. In Global-Tech, the Supreme Court merely held that “induced

infringement under § 271(b) requires knowledge that the induced acts constitute patent

infringement.” 131 S. Ct. at 2068. Although the phrase “nor has Congress seen fit to

alter § 271(c)’s intent requirement,” (emphasis added), appeared in dicta, the plain

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reading of the § 271(c) suggests that any reference to § 271(c) having an intent

requirement relates to the phrase: “knowing the same to be especially made or

especially adapted for use in an infringement.” Id. 

Given the historical view that induced infringement was a type of contributory

infringement, the Supreme Court analyzed § 271(c)’s “knowing” phrase in an effort to

determine the type of knowledge required for an induced infringement claim. Citing

its decision in Aro Manufacturing. Co. v. Convertible Top Replacement Co., Inc., 377

U.S. 476, 488(1964), the Supreme Court observed that § 271(c)’s “knowing” phrase

required an infringer to have knowledge of the patent—rather than mere knowledge

that the component was especially adapted for use in a product that happened to

infringe the patent. Id. at 2067-68. The Court thus extended that interpretation to the

knowledge element of an induced infringement claim. No where in the opinion did the

Supreme Court suggest § 271(c)’s “knowing” phrase required an infringer to possess

the specific intent required for an induced infringement claim. Accordingly, the

Supreme Court’s decision in Global-Tech does not support the proposition that a claim

for contributory infringement requires a showing of specific intent to cause

infringement.2

Here, Plaintiff fails to adequately allege a claim for contributory infringement.

As discussed above, Plaintiff has failed to allege Defendant’s knowledge of the ‘538

patent. Plaintiff also fails to allege facts showing how any component of Defendant’s

SCMS software is especially made or especially adapted for use in an infringing

“material or apparatus.” Plaintiff alleges Defendant

has been and is currently willfully and intentionally infringing the ‘538

patent by . . . importing, offering to sell, or more components of

Defendant’s SCMS software knowing such components to be especially

Defendant also cites Discflo Corp. v. American Process Equip., Inc., 2011 WL 6888542, * 2

at 3 (S.D. Cal., Dec. 29, 2011), for the proposition that a specific intent to cause infringement is

required to state a contributory infringement claim. Discflo, however, does not support this

proposition. While the court found that the plaintiff had “failed to adequately allege specific intent

to induce or contribute to infringement,” the court must have meant the “specific intent” intent

reference to refer only to the plaintiff’s claim for induced infringement because, in setting forth the

elements of a contributory infringement claim, the court did not include a specific intent requirement.

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made or adapted for use in infringing the ‘538 patent and not staple

articles or commodities suitable for substantial noninfringing use.

(ECF No. 1 at 3-4.)

Plaintiff merely recites the statutory language of § 271(c) but does not allege any

facts regarding which component of Defendant’s SCMS software is made or adapted

for use in an infringement. Because Plaintiff has not alleged facts as to Defendant’s

knowledge of the ‘538 patent and did not identify which component of Defendant’s

SCMS software is made or adapted for use in an infringement, Plaintiff fails to allege

facts to support a claim for contributory infringement. Accordingly, Defendant’s

Motion to Dismiss Plaintiff’s claim for contributory infringement is GRANTED.

C. Willful Infringement

Defendant moves to dismiss Plaintiff’s claim for willful infringement because

Plaintiff has not alleged Defendant had knowledge of the ‘538 patent.

“[A] party cannot be found to have willfully infringed a patent of which the party

had no knowledge.” Gustafson, Inc. v. Intersystems Indus. Prods., Inc., 897 F.2d 508,

511 (Fed. Cir. 1990). Willful infringement differs frominducement in that, allegations

of post-filing knowledge are generally insufficient to support a claim. In re Seagate

Tech., LLC, 497 F.3d 1360, 1374 (Fed. Cir. 2007); Pacing Techs., 2013 WL 444642,

at * 3. “A bare recitation of the required legal elements for willful infringement or a

mere allegation, without more, that [d]efendants knew of the patents-in-suit will not

survive a Rule 12(b)(6) motion.” Pacing Techs., 2013 WL 444642 at * 3. At a

minimum, a plaintiff must make out “the barest factual assertion of knowledge.” See

Avocet Sports Tech., Inc. v. Garmin Int’l, Inc., 2012 WL 2343163, at *3 (N.D. Cal.

June 5, 2012). 

Again, Plaintifffailsto allege facts establishing Defendant had knowledge ofthe

‘538 patent. Plaintiff merely alleges it “believes . . . [Defendant’s] infringement is

willful.” (ECF No. 1 at 2.) As such, Plaintiff fails to meet the minimum standard of

pleading even the “barest factual assertion of knowledge.” Avocet Sports Tech., Inc.,

2012 WL 2343163, at *3. Accordingly, Defendant’s Motion to Dismiss Plaintiff’s

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claim for willful infringement is GRANTED.

D. Leave to Amend

Finding it possible for Plaintiff to cure the aforementioned deficiencies, the

Court concludes leave to amend should be GRANTED. See DeSoto, 957 F.2d at 658.

CONCLUSION

For the foregoing reasons, IT IS HEREBY ORDERED that:

1. Defendant’s Motion to Dismiss is GRANTED as to Plaintiff’s claims for

induced, contributory, and willful infringement;

2. If Plaintiff wishes to file an amended Complaint, Plaintiff shall do so on

or before November 15, 2013; and

3. The hearing on Defendant’s Motion to Dismiss, currently set for October

25, 2013, is VACATED.

DATED: October 22, 2013

HON. GONZALO P. CURIEL

United States District Judge

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