Document ID: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-cand-3_19-cv-06352/USCOURTS-cand-3_19-cv-06352-0/pdf.json

Parties Involved:
Apple Inc.
Counter-defendant
Princeps Interface Technologies LLC
Counter-claimant
Princeps Secundus LLC
Counter-claimant

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United States District Court

Northern District of California

UNITED STATES DISTRICT COURT

NORTHERN DISTRICT OF CALIFORNIA

APPLE INC.,

Plaintiff,

v.

PRINCEPS INTERFACE 

TECHNOLOGIES LLC, et al.,

Defendants.

Case No. 19-cv-06352-EMC 

ORDER GRANTING PLAINTIFF’S 

MOTION TO DISMISS 

COUNTERCLAIMS FOR INDIRECT 

AND WILLFUL INFRINGEMENT 

WITH LEAVE TO AMEND

Docket No. 39

This action is related to a patent for a portable version of the traditional two-handed 

QWERTY keyboard (U.S. Patent No. 6,703,963, “the ’963 patent”). On June 14, 2019, Princeps 

Interface Technologies (“Princeps I”) filed a complaint alleging infringement of its ’963 patent in 

the District of Delaware against Apple, Inc. (“Apple”). Princeps I voluntarily dismissed the action

without prejudice on October 4, 2019. Apple now brings suit against Princeps I and Princeps 

Secundus LLC (“Princeps II,” the new assignee of the ’963 patent) in this Court, seeking a 

declaratory judgment of noninfringement of the ’963 patent. Princeps II has filed counterclaims 

for infringement of the ’963 patent. Currently pending before the Court is Apple’s motion to 

dismiss Princeps II’s willful and indirect infringement counterclaims under Federal Rule of Civil 

Procedure 12(b)(6). Given Princeps II’s conclusory counterclaims, the Court hereby GRANTS

Apple’s motion to dismiss Princeps II’s willful, induced, and contributory infringement claims 

with leave to amend. 

I. BACKGROUND

Princeps I was formed on May 9, 2019, and shortly thereafter it purported to be the owner 

by assignment of the ’963 patent. Docket No. 1 (“Apple Compl.”) at 5; No. 3:19-cv-06566-EMC 

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(“Google Action”) Docket No. 50 (“Google Mot.”) at 2. The ’963 patent invention “provide[d] a 

multifunctional input device:” it allowed for multiple “functional mode[s],” each with one or more 

of its own “domain levels,” so that users could use the same key to enter multiple different inputs. 

Docket No. 33 (“Princeps Apple Ans.”) at 9.

On June 14, 2019, Princeps I filed an action for ’963 patent infringement against Apple in 

the District of Delaware. Docket No. 39 (“Apple Mot.”) at 2. The parties eventually filed a 

stipulation of dismissal without prejudice on October 4, 2019, under Rule 41(a)(1). Apple Mot. at 

2. Apple filed the present action in this Court on the same day. Apple Mot. at 2. In late 

November 2019, the ’963 patent was reassigned to Princeps II (which had just been incorporated 

on September 30, 2019). Google Mot. at 3. On January 8, 2020, Princeps II answered Apple’s 

complaint and filed a countercomplaint against Apple for infringement of the ’963 patent. See 

generally Princeps Apple Ans. In the countercomplaint, Princeps II alleges the following claims: 

(1) direct infringement; (2) willful infringement; and (3) indirect infringement under theories of 

induced infringement and contributory infringement. Id. at 11-13. It accuses Apple’s 

“information input devices”—including “iPhones, iPads and iPods, with proprietary and thirdparty software and with an operating system such as the Apple iOS operating system” —of 

infringement. Id. at 11. Apple now moves to dismiss Princeps II’s willful and indirect 

infringement counterclaims under Federal Rule of Civil Procedure 12(b)(6). See generally Apple 

Mot. 

II. LEGAL STANDARD

Federal Rule of Civil Procedure 8(a)(2) requires a complaint to include “a short and plain 

statement of the claim showing that the pleader is entitled to relief.” Fed. R. Civ. P. 8(a)(2). A 

complaint that fails to meet this standard may be dismissed pursuant to Federal Rule of Civil 

Procedure 12(b)(6). See Fed. R. Civ. P. 12(b)(6). To overcome a Rule 12(b)(6) motion to dismiss 

after the Supreme Court’s decisions in Ashcroft v. Iqbal, 556 U.S. 662 (2009), and Bell Atlantic 

Corp. v. Twombly, 550 U.S. 544 (2007), a plaintiff’s “factual allegations [in the complaint] ‘must 

. . . suggest that the claim has at least a plausible chance of success.’” Levitt v. Yelp! Inc., 765 

F.3d 1123, 1135 (9th Cir. 2014). The court “accept[s] factual allegations in the complaint as true 

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and construe[s] the pleadings in the light most favorable to the nonmoving party.” Manzarek v. St. 

Paul Fire & Marine Ins. Co., 519 F.3d 1025, 1031 (9th Cir. 2008). But “allegations in a 

complaint . . . may not simply recite the elements of a cause of action [and] must contain sufficient 

allegations of underlying facts to give fair notice and to enable the opposing party to defend itself 

effectively.” Levitt, 765 F.3d at 1135 (internal quotation marks omitted).1 “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.” Iqbal, 556 U.S. at 678. “The 

plausibility standard is not akin to a probability requirement, but it asks for more than a sheer 

possibility that a defendant has acted unlawfully.” Id. (internal quotation marks omitted). 

III. MOTION TO DISMISS

A. Willful Infringement

Apple seeks to dismiss Princeps II’s counterclaim of willful infringement. Apple Mot. at 

7. Princeps II counters by alleging that, since the Delaware action’s filing in June 2019, Apple has

implemented software updates “in an attempt to construct a defense of non-infringement.” 

Princeps Apple Ans. Ex. A-2 at 1. 

In the patent infringement context, willfulness is relevant to damages calculations. See 

Halo Elecs., Inc. v. Pulse Elecs., Inc., 136 S. Ct. 1923, 1932-33 (2016). Per the Supreme Court in 

Halo, courts should generally only award enhanced damages under §284 of the Patent Act in 

“egregious cases typified by willful misconduct.” See id. at 1934. These increased damages “are 

not to be meted out in a typical infringement case, but are instead designed as a ‘punitive’ or 

‘vindictive’ sanction for egregious infringement behavior,” i.e. behavior that is “willful, wanton, 

malicious, bad-faith, deliberate, consciously wrongful, flagrant, or—indeed—characteristic of a 

pirate.” Id. at 1932. Both the Federal Circuit and this District have held that “attempts to design 

around and avoid the patent or any other factors tending to show good faith[] should be taken into 

account [in the enhanced damages analysis] and given appropriate weight.” Telemac Corp. v. 

1 A court “need not . . . accept as true allegations that contradict matters properly subject to 

judicial notice or by exhibit.” Sprewell v. Golden State Warriors, 266 F.3d 979, 988 (9th Cir. 

2001). 

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US/Intelicom Inc., 185 F. Supp. 2d 1084, 1102 (N.D. Cal. 2001) (quoting SRI Int’l, Inc. v. 

Advanced Technology Laboratories, Inc., 127 F.3d 1462, 1465 (Fed. Cir. 1997)); see also Toro 

Co. v. Ariens Co., Nos. 99-1285, 99-1307, 2000 U.S. App. LEXIS 8253, 28 (Fed. Cir. Apr. 27, 

2000) (finding that “designing around” is “an activity that the patent system encourages”). Since 

Halo, courts in this District have required willful infringement claims to show both “knowledge of 

the . . . [p]atents” and “‘egregious’ conduct” in order to survive a motion to dismiss. See, e.g., 

Finjan, Inc. v. Cisco Sys., No. 17-cv-00072-BLF, 2017 U.S. Dist. LEXIS 87657, 14 (N.D. Cal. 

June 7, 2017) (“even if Finjan had adequately alleged that Cisco had pre-suit knowledge of the 

Asserted Patents, dismissal would also be warranted because the [First Amended Complaint] . . . 

does not contain sufficient factual allegations to make it plausible that Cisco engaged in 

‘egregious’ conduct”). 

Finjan is instructive. In Finjan, this District dismissed plaintiff Finjan’s willful 

infringement claims with leave to amend because Finjan had failed to show that defendant Cisco 

had engaged in “egregious conduct.” Id. at 16. Finjan alleged Cisco willfully infringed five of its 

patents. Id. at 2. Finjan also alleged that Cisco had “made multiple substantial financial 

investments in Finjan” for at least thirteen years and had “continued to gain knowledge about 

Finjan and its patents and patent technology” during this period. Id. at 6. Finjan argued that Cisco 

was “willfully, wantonly, and deliberately engag[ing] in acts of infringement . . . justifying an 

award to Finjan of increased damages” because, “despite knowledge of Finjan’s patent portfolio,” 

it “ha[d] sold and continue[d] to sell the accused products . . . in complete disregard of Finjan’s 

patent rights.” Id. at 7. The court found that Finjan had not plausibly shown either of willful 

infringement’s two elements (i.e., knowledge and egregiousness). Id. at 12-15. On the knowledge 

element, the court emphasized that Finjan’s evidence at most showed that Cisco had known of 

Finjan’s portfolio and did not illustrate that Finjan had known of the particular patents at issue. Id.

at 13-14. Additionally, even if Finjan had plausibly plead the first element, Finjan failed to show

the egregious conduct element. Id. at 15. Finjan had made “no specific factual allegations about 

Cisco’s subjective intent, or any other aspects of Cisco’s behavior that would suggest its behavior 

was ‘egregious.’” Id. “Instead,” the court observed, “Finjan has simply made conclusory 

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allegations of knowledge and infringement, which, considered in the totality of circumstances 

here, is not enough to plausibly allege ‘egregious[ness].’” Id. The court thus dismissed the willful 

infringement claim. Id. at 16.

In its willful-infringement counterclaim against Apple, Princeps II alleges that “[o]n 

information and belief, since at least the time it received notice by the earlier Complaint 

referenced above, Apple’s infringement has been and continues to be willful.” Princeps Apple 

Ans. at 13. As additional support in its opposition, Princeps II points to the fact that since 

Princeps I’s original Delaware complaint was filed in June 2019, Apple has “updated the software 

on its phones in an attempt to construct a defense of non-infringement regarding the ’963 patent.” 

Princeps Apple Ans. Ex. A-2 at 1. Specifically, it claims that “the Globe and Emoji symbols . . . 

no longer appear in the same precise locations;” now, “only the Globe appears consistently in the 

lower left corner and only the Globe button (no representations of an Emoji appears) is utilized as 

the domain control.” Id. at 8. In response, Apple emphasizes the conclusory nature of Princeps 

II’s counterclaim and argues that even if Princeps has shown knowledge, it has failed to plausibly 

plead the egregious conduct element of willful infringement. Docket No. 47 (“Apple Reply”) at 2. 

Given Princeps I’s June 2019 Delaware action, Princeps II has met the knowledge element. 

As Apple itself acknowledges, Princeps I’s Delaware complaint specifically names the same ’963 

patent at issue in the present suit. Apple does not explicitly contest this point in its briefing. 

However, Princeps II does not plausibly show with specificity that Apple’s conduct was 

egregious. First, Princeps II alleges no particular facts establishing egregious conduct. Indeed its 

brief focuses only on Apple’s knowledge of the ’963 patent. See generally Princeps Apple Ans. at 

13; Docket No. 45 (“Princeps Apple Opp.”) at 4-5. The only fact Princeps II alleges in support of 

its assertion of egregiousness is Apple’s post-June-2019 software update removing the Emoji icon 

from the keyboard. Princeps Apple Ans. Ex. A-2 at 8. But this update does not establish 

egregious conduct. If Apple implemented this change in response to Princeps II’s claims of 

infringement as a design around, this would tend to help rather than hurt Apple’s case because as 

Toro asserted, this “designing around” is “encourage[d]” by the patent system and would show 

Apple’s good faith attempt to avoid infringement. See Toro, 2000 U.S. App. LEXIS 8253 at 28; 

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see also Telemac, 185 F. Supp. 2d at 1102 (quoting SRI, 127 F.3d at 1465). 

The Court thus GRANTS Apple’s motion to dismiss Princeps II’s willful infringement 

claim with leave to amend (since, as in Finjan, Princeps II “has not yet sought leave to amend,” 

so “[it] is not clear, at this early stage in the case, that amendment would be futile”). See id. at 16. 

If Princeps II amends its pleading, it must plead specific factual allegations of egregious conduct,

that it can under Rule 11, to pursue a viable willful infringement claim. 

B. Indirect Infringement

Apple also moves to dismiss Princeps II’s counterclaim of indirect infringement. Princeps 

II alleges indirect infringement on two separate theories: (1) inducement, and (2) contributory 

infringement. Princeps Apple Ans. at 12. Apple contests both theories. See generally Apple Mot. 

at 4-7.

1. Inducement Infringement

35 U.S.C. § 271(b) states: “Whoever actively induces infringement of a patent shall be 

liable as an infringer.” 35 U.S.C. § 271(b). Per the Supreme Court, “induced infringement under 

§ 271(b) requires knowledge that the induced acts constitute patent infringement.” Glob.-Tech 

Appliances, Inc. v. SEB S.A., 563 U.S. 754, 766 (2011). Thus, a party claiming induced 

infringement must show “first that there has been direct infringement, and second, that the alleged 

infringer knowingly induced infringement and possessed specific intent to encourage another’s 

infringement.” Cap Co., Ltd. v. McAfee, Inc., No. 14-cv-05068-JD, 2015 U.S. Dist. LEXIS 

83522, 8 (N.D. Cal. June 26, 2015) (quoting MEMC Elec. Materials, Inc. v. Mitsubishi Materials 

Silicon Corp., 420 F.3d 1369, 1378 (Fed. Cir. 2005)). A defendant can meet the knowledge 

requirement if it has actual knowledge, i.e. both (1) “knew of the patent” and (2) “knew as well 

that ‘the induced acts constitute patent infringement.’” Commil USA, LLC v. Cisco Sys., 135 S. 

Ct. 1920, 1927 (2015). Courts have acknowledged, though, that “[a] reasonable, good-faith belief 

in noninfringement can negate the specific intent required for induced infringement.” In re Biogen 

’755 Patent Litig., 335 F. Supp. 3d 688, 714 (D.N.J. 2018) (citing Commil USA, LLC v. Cisco 

Sys., Inc., 720 F.3d 1361, 1367-68 (Fed. Cir. 2013), vacated and remanded on other grounds, 135 

S. Ct. 1920 (2015)).

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This court addressed analogous cases which are instructive here. First, in Cap, this court 

dismissed an inducement infringement claim in part because it failed to sufficiently plead specific 

intent. Cap, 2015 U.S. Dist. LEXIS 83522 at 15. There, patentee CAP alleged induced 

infringement on the grounds that the accused products were “sold directly to customers and used 

by them pursuant to [defendant’s] user manual guides, and support articles.” Id. at 8-9. The court 

noted that a patentee need only “cite examples where the accused infringer advertised benefits that 

can be achieved only through use of the asserted patent” to plausibly plead specific intent under 

12(b)(6). Id. at 16. CAP, however, had failed to meet even this bar: “CAP ma[d]e[] passing 

references to ‘user manual guides, and support articles,’ without ever saying what those materials 

contain, which [wa]s wholly inadequate for an inference of specific intent.” Id. at 16. The court 

thus dismissed the induced infringement claim. Id. at 16.

In Hypermedia Navigation v. Google LLC, No. 18-cv-06137-HSG, 2019 U.S. Dist. LEXIS 

56803, 3-8 (N.D. Cal. Apr. 2, 2019), the court dismissed an induced infringement claim because 

the patentee had failed to plausibly show specific intent. Hypermedia’s inducement claim against 

defendant Google “only state[d] bald conclusions that an end user following YouTube instructions 

results in infringement.” Hypermedia, 2019 U.S. Dist. LEXIS 56803 at 7. Hypermedia, the court 

noted, “in no way . . . detail[s] how an end user would infringe Hypermedia’s patents by following 

instructions in the links provided in the complaint.” See id. at 8. The court thus dismissed 

Hypermedia’s induced infringement claim because “this is exactly the situation addressed in CAP, 

as Hypermedia only ‘ma[d]e[] passing references . . . without ever saying what those materials 

contain.’” See id. at 8 (quoting Cap, 2015 U.S. Dist. LEXIS 83522 at 16).

Princeps II’s induced infringement counterclaim against Apple alleges the following:

26. Upon information and belief, since at least the time of receiving 

this Complaint, Apple has induced and continues to induce others to 

infringe at least claims 1, 2, 3, 9, 12 and 60 of the ’963 patent under 

35 U.S.C. § 271(b) by, among other things, and with specific intent 

or willful blindness, actively aiding and abetting others to infringe, 

including but not limited to Apple’s partners and customers, whose 

use of the Accused Instrumentalities constitutes direct infringement 

of at least claims 1, 2, 3, 9, 12 and 60 of the ’963 patent.

27. Apple’s actions that aid and abet others such as their partners 

and customers to infringe include distributing the Accused 

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Instrumentalities and providing instructional materials and/or 

services related to the Accused Instrumentalities. On information 

and belief, Apple has engaged in such actions with specific intent to 

cause infringement and with willful blindness to the resulting 

infringement because Apple has had actual knowledge of the ’963 

patent and that its acts were inducing infringement of the ’963 patent 

since at least June 18, 2019, as referenced in Paragraph 24 above.

2

Princeps Apple Ans. at 12. 

Like the Cap and Hypermedia patentees, Princeps II has made insufficient allegations of 

specific intent to survive a motion to dismiss. See Cap, 2015 U.S. Dist. LEXIS 83522 at 16; 

Hypermedia, 2019 U.S. Dist. LEXIS 56803 at 8. Princeps II’s general and imprecise references to 

“instructional materials and/or services related to the Accused Instrumentalities” echo CAP’s 

insufficiently specific “passing references to ‘user manual guides, and support articles.’” See Cap, 

2015 U.S. Dist. LEXIS 83522 at 16. Like CAP, Princeps II does not “ever say[] what those 

materials contain”—indeed, it does not even provide specific instructional materials or services as 

examples—which, as in Cap, should be considered “wholly inadequate for an inference of specific 

intent.” See id. Princeps II’s allegations are not even as specific as Hypermedia’s; Hypermedia at 

least pointed to specific instructions “in links provided in the complaint.” See Hypermedia, 2019 

U.S. Dist. LEXIS 56803 at 8. Further, Apple, in filing an action seeking a declaratory judgment of 

noninfringement, arguably asserts a “reasonable, good-faith belief in noninfringement,” which 

“can negate the specific intent required for induced infringement.” See Biogen, 335 F. Supp. 3d at 

714 (citing Commil, 720 F.3d at 1367-68). Princeps II has not made a convincing case to the 

contrary. 

The Court hereby GRANTS Apple’s motion to dismiss this counterclaim with leave to 

amend. In its amended pleading, Princeps II must allege facts that plausibly demonstrate Apple’s 

specific intent.

2. Contributory Infringement

To state a claim for contributory infringement under 35 U.S.C. § 271(c), a patentee must 

2

“Accused Instrumentalities” are “information input devices such as Apple’s iPhones, iPads and 

iPods, with proprietary and third-party software and with an operating system such as the Apple 

iOS operating system.” Princeps Apple Ans. at 11.

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show that a party:

sells, or offers to sell, “a component of a patented . . . combination,

. . . or a material . . . for use in practicing a patented process[] 

constituting a material part of the invention, 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.”

Nalco Co. v. Chem-Mod, LLC, 883 F.3d 1337, 1356 (Fed. Cir. 2018) (quoting 35 U.S.C. § 271(c)); 

see also Uniloc USA, Inc. v. Logitech, Inc., No. 18-CV-01304-LHK, 2018 U.S. Dist. LEXIS 

197194, 8 (N.D. Cal. Nov. 17, 2018). 

In Logitech, this court dismissed Uniloc’s contributory infringement claim because it 

“fail[ed] to provide factual underpinnings for its allegations that there are no substantial 

noninfringing uses of the accused devices.” Logitech, 2018 U.S. Dist. LEXIS 197194 at 9. 

Uniloc’s factual support for this claim stated only that defendant Logitech “kn[e]w[] that portions 

of the Accused Infringing Devices [we]re especially made or especially adapted for use in 

infringement of the . . . patent . . . and [we]re not a staple article or a commodity of commerce 

suitable for substantial noninfringing use when used as described above.” Id. at 8-9. The court 

found this “fleeting reference” unconvincing as it “merely paraphrase[d] the contributory 

infringement statute.” Id. at 9. As such, the court concluded that Uniloc had failed to meet Rule 

8’s pleading standards and thus dismissed the contributory infringement claim. Id. at 10; see also 

UNILOC USA, Inc. v. Apple Inc., No. C 18-00359 WHA, 2018 U.S. Dist. LEXIS 76226 (N.D. 

Cal. May 2, 2018) (dismissing a contributory infringement claim where the patentee also alleged a 

“merely formulaic recitation of Section 271(c) not entitled to the presumption of truth”).

Princeps II’s contributory infringement counterclaim against Apple alleges:

28. Upon information and belief, Apple is liable as a contributory 

infringer to at least claims 1, 2, 3, 9, 12 and 60 of the ’963 patent 

under 35 U.S.C. § 271(c) by offering to sell, selling and importing 

into the United States input device technology, such as the [sic] 

Apple’s iPhones, iPads and iPods, with proprietary and third-party 

software and with an operating system such as the Apple iOS 

operating system which are especially made or adapted for use in an 

infringement of the ’963 patent. The Accused Instrumentalities are 

material components for use in practicing the ’963 patent and are 

specifically made and are not a staple article of commerce suitable 

for substantial non-infringing use.

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Princeps Apple Ans. at 12. Apple contends this on the ground it “simply parrots the elements of 

[the contributory infringement] standard without any factual support.” Apple Mot. at 4. Princeps 

II does not explain “how or why Apple knows that the accused products ‘are specifically made and 

are not a staple article of commerce suitable for substantial non-infringing use.’” Id. Apple 

asserts that its products use a QWERTY keyboard which, Apple argues, is a substantial noninfringing use; Princeps II acknowledged the keyboard was art prior to the ’963 invention. Id.

Princeps II’s contributory infringement counterclaim mirrors Logitech’s conclusory claim. 

See Logitech, 2018 U.S. Dist. LEXIS 197194 at 10. As in Logitech, Princeps II’s counterclaim 

“merely paraphrases the contributory infringement statute” and presents no “factual 

underpinnings” to support its allegation that Apple knew its products were not a staple article of 

commerce capable of substantial non-infringing use. See id. at 9. In its opposition, the only 

additional argument that Princeps II provides is that the Court should consider “the totality of 

underlying relevant factual allegations.” Princeps Apple Opp. at 6. However, it does not point to 

any specific portions of its countercomplaint to give meaning to this vague and ill-defined 

reference. Id. Like Uniloc in Logitech, Princeps II has failed to meet Rule 8’s pleading standards. 

The Court GRANTS Apple’s motion to dismiss this counterclaim with leave to amend. In order 

to proceed, Princeps II’s amended counterclaim must plausibly allege with specificity, inter alia, 

that Apple knew its products were not staple articles of commerce capable of substantial noninfringing use.

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IV. CONCLUSION

Given Princeps II’s conclusory counterclaims against Apple, the Court GRANTS Apple’s 

motion to dismiss the willful, inducement infringement, and contributory infringement 

counterclaims with leave to amend. Any such amendment must comply with Fed. R. Civ. P. 11 

and be filed within thirty (30) days from the date of this order.

This order disposes of Docket No. 39. 

IT IS SO ORDERED.

Dated: March 26, 2020

______________________________________

EDWARD M. CHEN

United States District Judge

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