E.DIGITAL CORPORATION,
Plaintiff,
CASE NO. 13-cv-2905-H-BGS
ORDER DENYING
DEFENDANT'S MOTION TO
DISMISS PLAINTIFF'S
FIRST AMENDED
COMPLAINT
[Doc. No. 18]
vs.
INTEL CORPORATION,
Defendant.
On March 19, 2014, Plaintiff e.Digital Corporation filed its First Amended
Complaint (“FAC”) against Defendant Intel Corporation. (Doc. No. 13.) On March
28, 2014, Defendant filed a motion to dismiss Plaintiff’s FAC. (Doc. No. 18.) Plaintiff
filed its opposition on April 14, 2014. (Doc. No. 22.) Defendant filed its reply on
April 21, 2014. (Doc. No. 23.) On April 22, 2014, the Court vacated a hearing
scheduled for April 28, 2014, and submitted the motion. (Doc. No. 24.) The Court
denies Defendant’s motion to dismiss without prejudice.
Background
This is a patent infringement action brought by Plaintiff against Defendant for
infringing Claim 1 of U.S. Patent No. 5,839,108 (“the ’108 Patent”). (Doc. No. 13,
FAC, ¶ 1.) Claim 1 teaches a method of memory management for a non-volatile
memory storage medium, such as flash memory. (See Doc. No. 1, FAC, ¶ 10; see also
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id. Ex. A, ’108 Patent col.10 l.65 - col.11 l.36.) Plaintiff’s FAC lists one count of
infringement, alleging that Defendant committed both direct and indirect infringement
in violation of 35 U.S.C. § 271, et seq. (See Doc. No. 13, FAC, ¶ 11.) The FAC
further specifies two theories of indirect infringement: inducement of patent
infringement under 35 U.S.C. § 271(b), (id. ¶ 18), and contributory patent infringement
under 35 U.S.C. § 271(c), (id. ¶ 19). Defendant moves to dismiss Plaintiff’s induced
and contributory patent infringement claims, as well as any claim for pre-suit indirect
infringement, under Federal Rule of Civil Procedure 12(b)(6) for failure to state a claim
on which relief may be granted. (See Doc. No. 18)
Discussion
I. Legal Standards for a Rule 12(b)(6) Motion to Dismiss
A motion to dismiss under Rule 12(b)(6) tests the legal sufficiency of the
pleadings and allows a court to dismiss a complaint upon a finding that the plaintiff has
failed to state a claim upon which relief may be granted. See Navarro v. Block, 250
F.3d 729, 732 (9th Cir. 2001).
A complaint generally must satisfy the minimal notice pleading requirements of
Federal Rule of Civil Procedure 8(a)(2) to evade dismissal under a Rule 12(b)(6)
motion. Porter v. Jones, 319 F.3d 483, 494 (9th Cir. 2003). Rule 8(a)(2) requires that
a pleading stating a claim for relief contain “a short and plain statement of the claim
showing that the pleader is entitled to relief.” Fed R. Civ. P. 8(a)(2). “While a
complaint attacked by a Rule 12(b)(6) motion to dismiss does not need detailed factual
allegations, a plaintiff’s obligation to provide the ‘grounds’ of his ‘entitlement to relief’
requires more than labels and conclusions, and a formulaic recitation of the elements
of a cause of action will not do.” Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 555
(2007). A complaint does not “suffice if it tenders ‘naked assertion[s]’ devoid of
‘further factual enhancement,’” and the reviewing court need not accept “legal
conclusions” as true. Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (quoting Twombly,
550 U.S. at 557). “Factual allegations must be enough to raise a right to relief above
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the speculative level.” Twombly, 550 U.S. at 555 (citing 5 C. Wright & A. Miller,
Federal Practice and Procedure § 1216, pp. 235–36 (3d ed. 2004)).
“To survive a motion to dismiss, a complaint must contain sufficient factual
matter, accepted as true, to ‘state a claim to relief that is plausible on its face.’”
Hartmann v. Cal. Dept. of Corr. & Rehab., 707 F.3d 1114, 1122 (9th Cir. 2013)
(quoting Iqbal, 556 U.S. at 678). “Dismissal under Rule 12(b)(6) is appropriate only
where the complaint lacks a cognizable legal theory or sufficient facts to support a
cognizable legal theory.” Mendiondo v. Centinela Hosp. Med. Ctr., 521 F.3d 1097,
1104 (9th Cir. 2008). In deciding a motion to dismiss, the court reviews the contents
of the complaint, accepting all factual allegations as true, and drawing all reasonable
inferences in favor of the nonmoving party. al-Kidd v. Ashcroft, 580 F.3d 949, 956
(9th Cir. 2009). “[C]ourts must consider the complaint in its entirety, as well as other
sources courts ordinarily examine when ruling on Rule 12(b)(6) motions to dismiss, in
particular, documents incorporated into the complaint by reference, and matters of
which a court may take judicial notice.” Tellabs, Inc. v. Makor Issues & Rights, Ltd.,
551 U.S. 308, 323 (2007).
II. Legal Standards for Patent Infringement
Plaintiff’s complaint asserts infringement theories of direct infringement under
35 U.S.C. § 271(a), induced infringement under 35 U.S.C. § 271(b), and contributory
infringement under 35 U.S.C. § 271(c). For direct infringement, “whoever without
authority makes, uses, offers to sell, or sells any patented invention . . . during the term
of the patent therefor, infringes the patent.” 35 U.S.C. § 271(a).
Under a theory of induced infringement, “[w]hoever actively induces
infringement of a patent shall be liable as an infringer.” 35 U.S.C. § 271(b). To prove
induced infringement under § 271(b), “the patentee must show direct infringement, and
that the alleged infringer knowingly induced infringement and possessed specific intent
to encourage another’s infringement.” i4i Ltd. Partnership v. Microsoft Corp., 598
F.3d 831, 851 (Fed. Cir. 2010) (citation and quotation marks omitted). To establish a
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case for inducement, “[i]t is enough that the inducer ‘cause[s], urge[s], encourage[s],
or aid[s]’ the infringing conduct and that the induced conduct is carried out.” Akamai
Techs., Inc. v. Limelight Networks, Inc., 692 F.3d 1301, 1308 (Fed. Cir. 2012) (quoting
Arris Grp., Inc. v. British Telecomms. PLC, 639 F.3d 1368, 1379 n.13 (Fed. Cir.
2011)).
To prove contributory infringement, a patentee must show that the defendant
sold, or offered to sell, “a material or apparatus for use in practicing a patented
process.” 35 U.S.C. § 271(c). That “material or apparatus” must be a material part of
the invention, have no substantial noninfringing uses, and be known by the party “to
be especially made or especially adapted for use in an infringement of such patent.”
i4i Ltd. Partnership, 598 F.3d at 850-51 (internal quotation marks omitted). Thus, “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.” Cross Med. Prods. v. Medtronic Sofamor Danek, Inc., 424
F.3d 1293, 1312 (Fed. Cir. 2005).
II. Analysis
A. Induced Infringement
Defendant argues that Plaintiff has failed to allege sufficient facts to show
Defendant’s specific intent to induce infringement of the ’108 Patent. (Doc. No. 18.)
The FAC alleges that
Defendant] Intel, without authority, has induced and continues to induce
infringement of the ’108 patent in violation of 35 U.S.C. § 271(b)
inasmuch as:
a. The accused products infringe Claim 1 during the normal use
of the accused products by Intel’s customers and/or end-users;
b. Intel has known and has been continuously aware of the ’108
patent since at least the filing of the original complaint in this action, if
not sooner;
c. Intel has acted in a manner that encourages and continues to
encourage others to infringe Claim 1 of the ’108 patent by, among other
things, intentionally instructing and/or encouraging customers and
end-users to use the accused products in a manner that Intel knows or
should have known would cause them to infringe the ’108 patent;
d. Intel sells, distributes, and supplies the accused products to
customers and end-users with the intent that the products be used in an
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infringing manner;
e. Intel provides operating manuals, installation guides,
instructional videos, webcasts, or other instructional material designed
to instruct customers and end-users to use the products in an infringing
manner; and,
f. Intel advertises, markets, and promotes the use of the accused
products in an infringing manner.
(Doc. No. 13, FAC, ¶ 18.) In addition, Plaintiff alleges that Defendant “uses, makes,
sells, offers to sell and/or imports the accused products knowing that they will be used
by its customers and end-users for writing and storing electronic data to nonvolatile
memory utilizing the steps described in Claim 1 of the ’108 patent,” engaging in
behavior that includes making “product literature and instructional videos [that]
advertise and encourage customers to use the accused product(s)” in an infringing
manner. (Id. ¶ 15.) The FAC further alleges that Defendant “provides operating
manuals, installation guides, instructional and ‘how-to’ videos, webcasts, or other
instructional material that instruct customers and end-users” on how to use the accused
products in an infringing manner, including “step-by-step instructions on how to write
data into the memory of the accused products – a process that utilizes the method
disclosed in Claim 1 of the ’108 patent and which Intel knows (at the least as of the
filing of the original complaint if not sooner) infringes the method taught in Claim 1
of the ’108 patent.” (Id. ¶ 16.)
To survive a motion to dismiss, Plaintiff’s complaint must show “that the alleged
infringer knowingly induced infringement and possessed specific intent to encourage
another’s infringement.” i4i Ltd. Partnership, 598 F.3d at 851. Here, Plaintiff has
alleged with specificity the actions allegedly undertaken by Defendant that would
plausibly show that Defendant possessed specific intent to encourage others’
infringement of the ’108 Patent. The FAC identifies who committed the direct
infringement (Defendant’s “customers and end-users”) and how Defendant induced that
infringement (by providing them with “product literature,” “instructional videos,”
“operating manuals, installation guides, instructional and ‘how-to’ videos, webcasts,”
and other instructions on how to use the accused products in an infringing manner).
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Furthermore, the FAC alleged details about the accused products, describing them as
“USB, SSD, SD, microSD, and/or Compact Flash products” that “write to and store
data in electronic format in nonvolatile flash memory.” (Id. ¶ 10.) Taken together,
these factual allegations support an inference of Defendant’s specific intent to induce
infringement by its customers and end-users. Plaintiff’s FAC plausibly suggests that
Defendant may have provided certain customers and end-users with specific
instructions to use specific types of accused products in a particular manner. Accepting
these allegations as true, the Court concludes that Plaintiff’s FAC has alleged sufficient
factual detail to support a claim of induced infringement under 35 U.S.C. § 271(b).
B. Contributory Infringement
Defendant argues that Plaintiff has failed to allege sufficient facts to support two
elements of a contributory infringement claim: that Defendant knew the infringing
component was especially made or adapted for use in an infringement of the ’108
Patent, and that the component did not have substantial noninfringing use. (Doc. No.
18.) The FAC alleges
that [Defendant] Intel has contributed and continues to contribute to the
infringement of Claim 1 of the ’108 patent in violation of 35 U.S.C. §
271(c) inasmuch as:
a. The accused products infringe Claim 1 of the ’108 patent
during the normal use of the accused products by Intel’s customers
and/or end-users;
b. Intel has known and has been continuously aware of the ’108
patent since at least the filing of the original complaint in this action, if
not sooner;
c. Intel imports into the United States, sells and/or offers to sell
within the United States products that (a) practice the method of memory
management of Claim 1 of the ’108 patent; and, (b) Intel knows that the
same constitute material infringing component(s) of the accused
products, which were made and/or especially adapted for use in the
accused products;
d. The memory management component(s) and methods of the
accused products are not staple articles of commerce suitable for
substantial non-infringing use with respect to the ’108 patent; and,
e. Intel sells, has sold, and/or has supplied the accused products
knowing of Plaintiff’s ’108 patent and knowing that the accused
products incorporate Plaintiff’s patented method and/or were specially
adapted for use in a way which infringes the ’108 patent.
(Doc. No. 13, FAC, ¶ 19.) Plaintiff also alleges that Defendant “is aware that its
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customers and end-users are using the accused products in an infringing manner.” (Id.
¶ 17.) Plaintiff’s FAC states two independent grounds of support for Defendant’s
awareness: first, “the discussions, questions, answers, and/or comments posted on its
“Intel Support Community” website where [Defendant] Intel’s authorized agents,
customers and/or end-users discuss and disclose the use of the accused products for
non-volatile electronic data storage” in an infringing manner, and second, “the fact that
[Defendant] Intel encourages its customers and end-users to use the accused products
in an infringing manner.” (Id.) The FAC also alleges that “the primary and substantial
purpose of the accused products is to write to and store data in electronic format in
nonvolatile flash memory,” and that Claim 1 of the ’108 Patent “teaches a method of
memory management for a non-volatile storage medium” involving “writing electronic
data segments from volatile, temporary memory to a non-volatile, long-term storage
medium by linking data segments according to a number of specified steps.” (Id. ¶ 11.)
Finally, as noted above, the FAC identified specific details about the accused products,
including their technological components (“USB, SSD, SD, microSD, and/or Compact
Flash products”) and their function (“to write to and store data in electronic format in
nonvolatile flash memory.”). (Id. ¶ 10.)
“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.”
Cross Medical, 424 F.3d at 1312; see also 35 U.S.C. § 271(c). As noted above,
Plaintiff has sufficiently pleaded direct infringement by Defendant’s customers and
end-users. Plaintiff has also alleged with particularity Defendant’s knowledge that the
accused products infringed, offering sufficient factual detail to support an inference of
that knowledge. For example, the FAC alleges that there are postings on Defendant’s
“Intel Support Community” website discussing and disclosing the use of the accused
products in an infringing manner. (See Doc. No. 13, FAC, ¶ 17.) Furthermore, the
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FAC states specifically that “at least as of the date of the filing of the originally filed
complaint in this matter, if not sooner, Intel knew or should have known of the
existence of Claim 1 of the ’108 patent and the fact that the accused products infringe
said Claim 1.” (Id. ¶ 12.) Finally, Plaintiff has also
1 pleaded that the accused products’
“The primary and substantial purpose . . . is to write to and store data in electronic
format in nonvolatile flash memory,” fairly implying that they have no substantial
non-infringing uses. (Id. ¶ 10.) Plaintiff's FAC plausibly suggests that Defendant may
have contributed to customers’ and end-users’ direct infringement through its support
website by disclosing ways to use certain accused products primarily in an infringing
manner without discussing substantial non-infringing uses. Taking Plaintiff’s
allegations as true, the Court finds that Plaintiff has sufficiently pled a claim for
contributory infringement.
Conclusion
The Court denies Defendant’s motion to dismiss Plaintiff’s claims of induced
and contributory patent infringement.
IT IS SO ORDERED.
DATED: April 23, 2014
______________________________
MARILYN L. HUFF, District Judge
UNITED STATES DISTRICT COURT
1
Because Plaintiff’s FAC includes allegations regarding Defendant’s knowledge
of infringement based on factors other than the current lawsuit, the Court does not
reach the issue of whether a defendant’s post-filing knowledge of infringement based
solely on the complaint itself would be sufficient to state a claim for contributory
infringement. Cf. Pacing Techs., LLC v. Garmin Int'l., Inc., 2013 U.S. Dist. LEXIS
15728, 7-8 (S.D. Cal. Feb. 5, 2013) (Benitez, J.) (acknowledging the split of authority
among district courts in the Ninth Circuit and concluding that a complaint sufficiently
pleaded a claim for indirect infringement when it alleged defendant knew of
infringement as of the suit’s filing). For the same reason, the Court denies Defendant’s
request to dismiss any allegation of indirect infringement before Plaintiff filed its
original complaint in this matter.
