Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-cand-4_18-cv-01886/USCOURTS-cand-4_18-cv-01886-0/pdf.json

Nature of Suit Code: 830
Nature of Suit: Patent
Cause of Action: 35:271 Patent Infringement

---

IN THE UNITED STATES DISTRICT COURT 

FOR THE DISTRICT OF DELAWARE 

KONINKLIJKE PHILIPS N.V. and ) 

U.S. PHILIPS CORPORATION, ) 

) 

Plaintiffs, ) 

) 

v. ) C.A. No.15-1125-GMS 

- ) 

ASUSTeK COMPUTER INC. and ) 

ASUS COMPUTER INTERNATIONAL, ) 

) 

Defendants. ) 

KONINKLIJKE PHILIPS N.V. and ) 

U.S. PHILIPS CORPORATION, ) 

) 

Plaintiffs, ) 

) 

v. ) C.A. No. 15-)126-GMS 

) 

HTC CORP. and ) 

HTC AMERICA, INC. ) . 

) 

Defendants. ) 

KONINKLIJKE PHILIPS N.V. and ) 

U.S. PHILIPS CORPORATION, ) 

) 

Plaintiffs, ) 

) 

v. ) C.A. No. 15-1127-GMS 

) 

VISUAL LAND, INC., ) 

) 

Defendant. ) 

U.S. PHILIPS CORPORATION, ) 

) 

Plaintiffs, ) 

) 

v. ) C.A. No. 15-1128-GMS 

) 

SOUTHERN TELECOM INC., ) 

Case 4:18-cv-01886-HSG Document 59 Filed 10/25/16 Page 1 of 10
) 

Defendant. ) 

KONINKLIJKE PHILIPS N.V. and ) 

U.S. PHILIPS CORPORATION, ) 

) 

Plaintiffs, ) 

) 

v. ) -C.A. No. 15-1130-GMS 

) 

DOUBLE POWER TECHNOLOGY, INC., ) 

ZOWEE MARKETING CO., LTD., and ) 

SHENZEN ZOWEE TECH. CO., LTD., ) 

) 

Defendants. ) 

KONINKLIJKE PHILIPS N.V. and ) 

U.S. PHILIPS CORPORATION, ) 

) 

_ Plaintiffs, ) 

) 

v. ) C.A. No. 15-1131-GMS 

) 

YIF ANG USA, INC., d/b/a ) 

E-FUN, INC., ) 

) 

Defendant. ) 

KONINKLIJKE PHILIPS N.V. and ) 

U.S. PHILIPS CORPORATION, ) 

) 

Plaintiffs, ) 

) 

v. ) C.A. No. 15-1170-GMS 

) 

ACER INC. and ) 

ACER AMERICA CORPORATION, ) 

) 

Defendants. ) 

Case 4:18-cv-01886-HSG Document 59 Filed 10/25/16 Page 2 of 10
MEMORANDUM 

I. INTRODUCTION 

The plaintiffs Koninklijke Philips N.V. and U.S. Philips Corporation (collectively, 

"Philips") initiated patent infringement lawsuits against ASUSTeK Computer Inc. et al., HTC 

Corp. et al. ("HTC"), Visual Land Inc., Southern Telecom Inc., Double Power Technology Inc. et 

al., YiFang USA, Inc., and Acer Inc. et al. (collectively, "the defendants") between December 7, 

2015 and December 18, 2015. The plaintiffs subsequently filed First Amended Complaints 

("PAC") against each of the defendants on April 11, 2016. The PAC accused each defendant of 

direct, induced, and contributory infringement of either nine or ten asserted patents. 1 Presently 

before the court is HTC's Motion to Dismiss for Failure to State a Claim filed April 29, 2016. 

(D.I. 19.)2 3 

For the reasons discussed below, the court grants defendant HTC's motion in part and 

denies it in part. 

II. BACKGROUND 

The plaintiffs in their F AC accuse the defendants of infringing an assortment of their 

method and device patents relating to "systems for which users can control apparatuses, displays, 

and content in an intuitive manner" in "present-day smartphones and tablet computers and other 

electronic devices." (D.I. 16, 'if 21.) The PAC provides a list of "non-limiting examples" of 

1 The plaintiffs allege all seven defendants infringe U.S. Patent Nos. RE 44,913 ("the '913 Patent"), 

6,690,387 (''the '387 Patent"), 7,184,064 (''the '064 Patent"), 7,529,806 (''the '806 Patent"), 5,910,797 ("the '797 

Patent"), 6,522,695 ("the '695 Patent"), RE 44,006 ("the '006 patent"), 6,772,114 ("the '114 Patent"), and RE 

43,564 ("the '564 Patent"). The plaintiffs further allege defendants ASUSTeK et al., HTC Corp. et al., and Acer 

Inc. et al. infringe U.S. Patent No. 8,543,819 (the '"819 Patent"). 

2 Each of the defendants have effectively joined HTC's Motion to Dismiss. (Visual Land Inc., Southern 

Telecom Inc., Double Power Tech. et al., and YiFang USA joined HTC's Motion to Dismiss (D.I. 19)); Acer Inc. et 

al., YiFang USA, Double Power Tech. et al., ASUSTeK et al., and Southern Telecom Inc. joined HTC's Reply in 

Support of its Motion to Dismiss (D.1. 28)). 3 For simplicity, all references to the parties' briefing will use the docket item numbering from C.A. No. 

15-1126-GMS. 

3 

Case 4:18-cv-01886-HSG Document 59 Filed 10/25/16 Page 3 of 10
smartphones and tablets that the plaintiffs allege the defendants manufacture or manufactured, use, 

sell, and/or offer to sell within or import into the United States, including 'families' of particular 

product lines and specific product models. (D.I. 16, if 34.) 

For each patent-in-suit, the plaintiffs provide at least one example of each type of claim 

allegedly infringed. (D.I. 16;ifif 39-40.) For example, the FAC explains that Claim 1 of the '913 

Patent "is directed toward a method for inputting a character to a device including a keypad" and 

describes at length the scope of the claim. (Id., 'if 39.) It explains that Claim 4 of the '913 patent 

"is directed toward a device for receiving character input having a keypad having a plurality of 

keys." (Id., 'if 40.) The FAC then identifies at least one S}lecific product the defendant 

manufactures, (Id., 'if 43), and describes the manner in which it directly infringes those enumerated 

claims (the "Accused Functionality" of the device). (Id., 'if 44.) The FAC then alleges that the 

defendant has induced and continues to induce others to infringe at least one of the enumerated 

.claims of the patent-in-suit through similar specific examples. (Id., if 49.) For example, the FAC 

explains how the user manual for the HTC One M8 smartphone instructs users to perform the 

Accused Functionality which the plaintiff avers infringes Claim 1 of the '913 Patent. (Id.) 

The F AC also alleges contributory infringement of each patent-in-suit by offering to sell, 

selling within, or importing into the United States, devices which offer the Accused Functionality. 

(Id., 'if 50.) It defines such devices as "Accused Devices" for each respective patent-in-suit. (Id.) 

The F AC alleges that HTC knows that these Accused Devices contain the Accused Functionalities, 

that the Accused Functionality includes or constitutes a material part of the inventions within the 

scope of the claims of each patent-in-suit, and that "such functionality is not a staple article or 

commodity of commerce suitable for substantial, non-infringing use." (Id., 'if'il 48, 50.) 

4 

Case 4:18-cv-01886-HSG Document 59 Filed 10/25/16 Page 4 of 10
HTC has filed a Motion to Dismiss for Failure to State a Claim in which it argues Philips' 

F AC fails to satisfy the pleading standards for both direct infringement and contributory 

infringement. For the reasons that follow, the court will deny the Motion for claims of direct 

infringement and grant the Motion for claims of contributory infringement. 

III. LEGAL STANDARD 

Rule 12(b)(6) of the Federal Rules of Civil Procedure provides for dismissal where the 

pl~intiff "fail[ s] to state a claim upon which relief can be granted." Fed. R. Civ. P. l 2(b )( 6). In 

considering a motion to dismiss, the court "accept[ s] all factual allegations as true, construe[ s] the 

complaint in the light most favorable to the plaintiff, and determine[s] whether, under any 

reasonable reading of the complaint, the plaintiff may be entitled to relief." Phillips v. Cnty. of 

Allegheny, 515 F.3d 224, 233 (3d Cir. 2008). Plaintiffs must provide sufficient factual allegations 

"to state a claim to relief that is plausible on its face." Bell Atl. Corp. v. Twombly, 550 U.S. 544, 

570 (2007). This requirement of plausibility is satisfied 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 (citing Twombly, 550 U.S. at 556). "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." Ashcroft v. Iqbal, 556 U.S. 

662, 679 (2009). A complaint must contain "a short and plain statement of the claim showing that 

the pleader is entitled to relief, in order to give the defendant fair notice of what the ... claim is 

and the grounds upon which it rests." Bell Atl. Corp., 550 U.S. at 545. 

A district court's decision to grant leave to amend a dismissed complaint is reviewed under 

an abuse of discretion standard. Farnan v. Davis, 371 U.S. 178, 182 (1962). "In the absence of . 

. . undue delay, bad faith or dilatory motive on the part of the movant, repeated failure to cure 

5 

Case 4:18-cv-01886-HSG Document 59 Filed 10/25/16 Page 5 of 10
deficiencies by amendments previously allowed, undue prejudice to the opposing party ... , futility 

of amendment, etc.-the leave ... should be freely given." Id. Moreover, "[t]he mere passage of 

time does not require that a motion to amend a complaint be denied on grounds of delay . . . . In 

· fact, delay alone is an insufficient ground to deny leave to amend." Cureton v. Nat'! Collegiate 

Athletic Ass 'n, 252 F.3d_ 267, 273 (3d Cir. 2001). Undue prejudice to the non-moving party may 

exist when granting leave to amend "would result in additional discovery, cost, and preparation to 

defend against new facts or new theories." Id. 

IV. DISCUSSION 

HTC contends the F AC fails to satisfy the Twombly/Iqbal pleading standard for direct 

infringement because it alleges only a subset of exemplary claims and accused products and thus 

le;:tves open the possibility that many more claims may be added to the case later. (D.I. 20 at 5.) 

HTC also contends the PAC fails to plead all necessary elements of a claim for contributory 

infringement. (D .I. 20 at 10-11.) The court will address each in tum. 

A. Direct Infringement 

As an initial matter, Form 18 no longer provides the proper measure for the sufficiency of 

a complaint that alleges direct infringement. Because the Advisory Committee for the Federal 

Rules of Civil Procedure abrogated Rule 84 and the Appendix of Forms effective December 1, 

2015, the court must apply the Twombly/Iqbal pleading standard to the plaintiffs' complaint which 

was filed on December 7, 2015.4 The court finds that Philips has met its burden under 

4 VnlikeRaindance Tech. v. lOXGenomics, Inc., C.A. No. 11-1092, 2016 WL 927143 (D. Del. Mar. 4, 2016) where 

Judge Andrews applied the post-December 1, 2015 direct infringement pleading standard to the amended complaint 

"in the interest of justice," here, this court finds such an exercise of discretion unnecessary because the F AC was 

filed after the effective date. See Avago Techs. Gen. IP (Singapore) PTE Ltd. v. Asustek Computer, Inc., No. 15-

CV-04525-EMC, 2016 WL 1623920, at *4 (N.D. Cal. Apr. 25, 2016) (citing Maybe Pharma Int'! PTY Ltd. v. Merck 

& Co., No. 15-438-LPS-CJB, 2015 U.S. Dist. LEXIS 162912, at *4-5 n.1 (D. Del. Dec. 3, 2015) (noting that 

"[a]mendments to the Federal Rules of Civil Procedure taking effect on December 1, 2015 abrogate Rule 84 and the 

Appendix of Forms, including Form 18" and that, "[u]nder the new rules, allegations of direct infringement will be 

6 

Case 4:18-cv-01886-HSG Document 59 Filed 10/25/16 Page 6 of 10
Twombly/Iqbal. 

HTC contends that Philips' use of exemplary-rather than exhaustive-lists of products 

and claims renders the PAC deficient. (D.I. 20 at 6-7.) Defendant cites Wistron Corp. v. Phillip 

M Adams & Assocs. LLC, No. C-10-4458 EMC, 2011 WL 4079231 at *1 (N.D. Cal. Sept. 12, 

2011), Bender v. LG Elecs. U.S.A., Inc., No. C. 09-02114 JF (PVT), 2010 WL 889541, at *2 (N.D. 

Cal. Mar. 11, 2010), and Macronix Int'!. Co., Ltd., v. Spansion Inc., 4 F.Supp.3d 797, 798-99 

(E.D. Va. 2014) in support of its argument that the claims of infringement should be dismissed. In 

Wistron, the court dismissed the complaint because it only listed the categories of allegedly 

infringing products without identifying any specific examples of a particular infringing computer 

chip, motherboard, or computer. Wistron, 2011 WL 4079231, at *4. Similarly, in Bender, the 

court dismissed a complaint which accused only "c~tegories of products" the defendants produced 

"by way of example and without limitation." Bender, 2010 WL 889541, at *2. In Macronix, the 

court required that a complaint "recite[] the specific claim or claims which are alleged to be 

infringed" in order to conform with the pleading standards of Twombly and Iqbal. Macronix, 4 

F .Supp.3d 797 at 798-799. Here, there are 148 claims in the patents-in-suit. Philips asserts 18 of 

those claims. As a result, HTC argues that the complaint is deficient "under Macronix, not to 

mention Twombly and Iqbal." (D.I. 20 at 8.) 

The court is not persuaded. This District's local rules provide that "[w]ithin 30 days after 

the Rule 16 Conference and for each defendant, the plaintiff shall specifically identify the accused 

products and the asserted patent(s) they allegedly infringe, and produce the file history for each 

asserted patent." D. Del. Default Std. §4.a. These rules were promulgated post Twombly/Iqbal 

and are consistent with the Federal Rules of Civil Procedure's and courts' concern that a complaint 

subject to the pleading standards established by Twombly and Iqbal, requiring plaintiffs to demonstrate a 'plausible 

claim for relief"). 

7 

Case 4:18-cv-01886-HSG Document 59 Filed 10/25/16 Page 7 of 10
"give[s] the defendant fair notice of what the ... claim is and the grounds upon which it rests."5 

Twombly, 550 U.S. 544, 555 (2007); Iqbal, 556 U.S. 662, 698 (2009). 

Here, Philips provides specific details of at least one of the method and device claims 

allegedly infringed under each patent-in-suit, specific examples of at least one product HTC 

manufactures or sells that contains mechanisms or processes performing the identified functions, 

and specific examples of the class of products which also contain these Accused Functionalities. 

(D.I. 16, ilil 39, 40, 44, 45.) These allegations are far more detailed than those dismissed in the 

cases HTC cites. Those cases featured general categories of products such as "computer chips, 

motherboards, and computers." Wistron, 2011WL4079231 at *l. Thus, the court concludes that 

Philips' complaint contains averments sufficient to withstand HTC's Motion to Dismiss. 

B. Contributqry Infringement 

The sale or offer to sell or import into the United States a component of an infringing 

product "knowing the same to be especially made or especially adapted for use in an infringement 

of such patent, and not a staple article or commodity of commerce suitable for substantial noninfringing use" is knoWil as contributory infringement and runs afoul of 35 U.S.C. § 271(c). In 

order to establish contributory infringement, a plaintiff must "plead facts that allow an inference 

that the components sold or offered for sale have no substantial non-infringing uses." In Re Bill 

of Lading, 681F.3d1325, 1337 (Fed. Cir. 2012). The plaintiff must also establish knowledge and 

intent. See, e.g.,Aro Mfg. Co. v. Convertible Red Top Replacement Co., 377 U.S. 476, 488 (1964). 

HTC argues that Philips' claim must be dismissed because it fails to plead any facts supporting the 

5 See In re Ins. Brokerage Antitrust Litig., 618 F.3d 300, 319 (3d Cir. 2010) (recognizing that a claim to relief is 

plausible when the complaint alleges enough facts to create a reasonable expectation that discovery will yield 

evidence of illegality); Cf Windy City Innovations, LLC, v. Microsoft Corp., No. 16-cv-01729-YGR, 2016 WL 

3361858, at *5 (N.D. Cal. June 17, 2016) (denying a motion to dismiss in which the defendant alleged plaintiffs 

were obligated to explain which specific products infringed each specific claim asserted because the district's local 

rules delegated such disclosure to discovery). 

8 

Case 4:18-cv-01886-HSG Document 59 Filed 10/25/16 Page 8 of 10
conclusory statement that the Accused Devices "are not staple articles or commodities of 

commerce suitable for substantial, non-infringing use." (D.I. 20 at 12.) The court agrees. 

The court has previously dismissed allegations of contributory infringement which fail to 

allege facts demonstrating that the products bore no substantial non-infringing uses. See Bonutti 

Skeletal Innovations LLC v. Smith & Nephew, Inc., C.A. No. 12-1111-GMS, 2013 WL 6058472 

at *l n.5 (D. Del. Nov. 18, 2013) (Dismissing plaintiff's contributory infringement claim because 

plaintiff "fails to allege that [defendant's] products have no other substantial noninfringing uses."); 

Bonutti Skeletal Innovations LLC v. ConforMIS, C.A. No. 12-1109-GMS, 2013 WL 6040377, at 

*2 n.4 (D. Del. Nov. 14, 2013) (Dismissing plaintiffs contributory infringement claim that failed 

to allege "that the 'knee implants and products_ ... and/or associated instruments ... products and 

surgical technique guides' have no other substantial noninfringing uses.") 

Here, Philips has specified the categories of products alleged to contributorily infringe as 

well as the Accused Functionalities they possess. Philips, however, provides no facts supporting 

the inference that the Accused Functionalities have no substantial non-infringing use beyond the 

assertion that "upon information and belief ... the only use for the [ ] Accused Functionality is 

infringing the patent" and that the "Defendants know" this. (D.I. 16, ifil 48, 50.) This is 

insufficient, and the court will grant HTC's Motion to Dismiss. 

HTC also urges the court to dismiss without leave to amend because "any additional 

information they might add has been available to them since before they filed the original 

complaint." (D.I. 20 at 14.) HTC cites the Third Circuit's decision in Gasoline Sales, Inc. v. Aero 

Oil Co., 39 F.3d 70 (3d Cir. 1994) denying leave to amend where the plaintiff "[was] not seeking 

to add claims it inadvertently omitted from its prior complaints or which it did not know about 

earlier. Rather, [plaintiff was] modifying its allegations in hopes ofremedying factual deficiencies 

9 

Case 4:18-cv-01886-HSG Document 59 Filed 10/25/16 Page 9 of 10
in its prior pleading." Gasoline Sales, Inc., 39 F.3d at 74. Gasoline Sales, Inc. is distinguishable. 

Here, Philips has filed one amended complaint thus far; in Gasoline Sales, Inc. the plaintiffs had 

filed three amended complaints, leading the district court to declare "three attempts at a proper 

pleading is enough." Id. In addition, Philips' FAC already alleges HTC engaged in contributory 

infringement. (D.I. 16, if 50.) Granting Philips leave to. amend would not "result in additional 

discovery, cost, and preparation to defend against new ... theories." Cureton v. Nat'l Collegiate 

Athletic Ass 'n, 252 F.3d 267, 273 (3d Cir. 2001). Thus, the court will grant the plaintiffs leave to 

amend their complaint to attempt to properly allege a claim for contributory infringement. 

IV. CONCLUSION 

For the foregoing reasons, the court will grant the defendant HTC' s Motion as to plaintiffs' 

allegations of contributory infringement but deny the Motion as to direct infringement. The court 

will also grant Philips' leave to amend the complaint in order to attempt to correct the pleading 

deficiencies previously noted regarding the contributory infringement claims dismissed by this 

order. 

Dated: October 'lS, 2016 

10 

Case 4:18-cv-01886-HSG Document 59 Filed 10/25/16 Page 10 of 10