United States District Court, D. Delaware
REPORT AND RECOMMENDATION
CHRISTOPHER J. BURKE, Magistrate Judge.
Presently before the Court is Defendant Future Link Systems, LLC's ("Defendant" or "Future Link") Motion to Dismiss ("Motion to Dismiss"), which seeks dismissal of Plaintiff Intel Corporation's ("Plaintiff' or "Intel") Complaint on various grounds. (D.I. 8) For the reasons set forth below, the Court recommends that Defendant's Motion to Dismiss be GRANTED-IN-PART.
A. The Parties
Intel is a Delaware corporation with its principal place of business in Santa Clara, California. (D.I. 1 at ¶ 2) Future Link is a limited liability corporation organized under the laws of Delaware. (Id. at ¶ 3) Future Link is the owner of the nine asserted United States Patents, which include U.S. Patent Nos. 5, 608, 357 ("the '357 patent"), 5, 870, 570 ("the '570 patent"), 6, 008, 823 ("the '823 patent"), 6, 108, 738 ("the '738 patent"), 6, 606, 576 ("the '6576 patent"), 6, 622, 108 ("the '108 patent"), 6, 636, 166 ("the '166 patent"), 6, 920, 576 ("the '0576 patent"), and 7, 478, 302 ("the '302 patent") (collectively, "the Future Link patents"). (Id. at ¶ 8)
B. Procedural Background
On March 24, 2014, Intel commenced this action, seeking a declaratory judgment that it does not infringe each of the Future Link patents directly or indirectly, that the Future Link patents are invalid, that it has a license to practice at least five of the Future Link patents,  and that Future Link's claims with respect to the same five patents are barred by the doctrine of patent exhaustion. (Id. at ¶¶ 25-151) On June 13, 2014, Future Link filed the instant Motion to Dismiss. (D.I. 8) On July 15, 2014, Chief Judge Leonard P. Stark referred that motion to the Court for resolution. (D.I. 14) On November 20, 2014, the Court heard oral argument on the Motion to Dismiss. (D.I. 66, hereinafter "Tr.")
C. Relevant Allegations and Evidence Regarding the Motion to Dismiss
On April 15, 2013, Future Link's Managing Director Brian Marcucci sent a letter to Dell Inc.'s ("Dell") Legal Department (the "Dell Letter"). (D.I. 1 at ¶ 9; D.I. 16, ex. 1) This letter accused Dell of infringing each of the nine Future Link patents based on Dell's use and incorporation of features and functionalities covered by the patents. (D.I. 16, ex. 1 at 1) Enclosed along with the Dell Letter were two tables, which listed each of the assertedly infringed Future Link patents, as well as the Dell "Representative Products" that allegedly were used to infringe each of the patents. (Id. at 2-4) For example, with respect to the '570 patent, the table listed the following "Representative Products":
All Dell OptiPlex 580 series computers using and/or containing AMD SB7x0 Southbridge devices. All Dell products (including desktop, laptop and server products) using and/or containing AMD SB7x0, SB8x0 or AMD SB9x0 Southbridge devices. All other Dell products using and/or containing Southbridge devices that incorporate multi-function PCI device capability into a single integrated circuit. All other Dell products incorporating multi-function PCI device capability into a single integrated circuit. All other products incorporating multi-function PCI device capability into a single integrated circuit.
(Id. at 2) The accused Dell "Representative Products" for the eight other Future Link patents included: (1) "products using and/or supporting the PCI-Express (PCIe) standard"; (2) products containing "DDR3 SDRAM, DDR3 SDRAM memory modules, and/or GDDR5 SGRAM"; and (3) "products using and/or containing a processor that incorporate[s] multiple thermal sensors into a processor core, such as a central processing unit (CPU) or graphics processing unit (GPU)[.]" (D.I. 1 at ¶ 9; D.I. 16, ex. 1 at 2-4) In addition to these broad categories of products, the allegations also identified specific Dell products (e.g., "Dell Inspiron 15 laptop computers") that were alleged to be used to infringe each of the various Future Link patents. (D.I. 1 at ¶ 9; D.I. 16, ex. 1 at 2-4)
The tables' list of Dell "Representative Products" as to the '0576 patent was unique. This was the only instance wherein Future Link identified by name specific Intel components of the accused Dell products at issue. The accusations for the '0576 patent identify the following as "Representative Products":
All Dell PowerEdge R910 severs. All Dell PowerEdge series servers that support at least 2 Intel Xeon 5500, 5600, E5 or E7 series processors. All other Dell desktop, workstation, and server products using and/or supporting QuickPath Interconnect (QPI). All other Dell products using and/or supporting QuickPath Interconnect (QPI). All other products using and/or supporting QuickPath Interconnect (QPI).
( D.I. 16, ex. 1 at 4 (emphasis added)) "QuickPath Interconnect" is identified as "Intel's QuickPath Interconnect" in the Complaint, and is described therein as a "technolog[y] supplied by Intel." (D.I. 1 at ¶ 7) Although the remaining listing of "Representative Products" do not identify any Intel components, they do at times identify by name certain Advanced Micro Devices, Inc. ("AMD") and NVIDIA Corporation ("NVIDIA") components that are part of certain accused Dell products. (D.I. 16, ex. 1 at 2-4)
On April 15, 2013, Mr. Marcucci also sent a letter (the "HP Letter") to the Executive Vice President and General Counsel of Hewlett-Packard Company ("HP"). (D.I. 1 at ¶ 10; D.I. 16, ex. 2 at 1) The HP Letter accused certain HP products of infringing eight of the nine Future Link patents through the incorporation of features and functionalities allegedly covered by these eight patents. (D.I. 16, ex. 2 at 1) The HP Letter also included a table containing a list of "Representative Products" that were said to infringe the eight Future Link patents; that table identifies specific HP product models and, more broadly, general HP product categories. (Id. at 2-3) As with the Dell Letter, the table accompanying the HP Letter identifies "AMD" or "NVIDIA" products or components contained within the allegedly infringing HP products. (Id. ) But unlike the Dell Letter, that table never identifies by name any "Intel" products or components. (Id. )
During June 2013, Future Link also sent a letter (the "Promise Letter") to Promise Technology, Inc. ("Promise"), accusing Promise of infringing five of the nine Future Link patents (the '357 patent, the '6576 patent, the '108 patent, the '166 patent, and the '0576 patent). (D.I. 1 at ¶ 11; D.I. 16, ex. 3) As with the Dell Letter and the HP Letter, the Promise Letter included a table identifying specific Promise products, as well as general Promise product categories, that were said to be used to infringe the five Future Link patents. (D.I. 16, ex. 3) The table enclosed with the Promise Letter does not identify by corporate name any manufacturers of any of the components of Promise's accused products. (Id. )
In the Complaint, in addition to referencing the allegations in these letters listed above, Intel alleges that:
Intel manufactures and sells components that are the subject of Future Link's accusations against Dell, HP, and Promise... and  has engaged in meaningful preparations to continue manufacturing and selling such components. Intel customers including Dell, HP, and Promise have incorporated and continue to incorporate such components into their products, including the products [referenced in the Dell Letter, HP Letter and Promise Letter].
(D.I. 1 at ¶ 12) It further alleges that:
Intel has received indemnity demands from its customers based on Future Link's patent infringement accusations, and Intel's customers continue to seek indemnity from Intel in connection with Future Link's assertions. Intel is obligated to indemnify its customers for third-party patent infringement claims in accordance with the terms of the respective agreements governing sales to those customers.
(Id. at ¶ 14)
Future Link makes a number of different arguments in its Motion to Dismiss: (1) that the Complaint should be dismissed for lack of subject matter jurisdiction, pursuant to Federal Rule of Civil Procedure 12(b)(1), as Intel does not have standing to bring the declaratory judgment claims at issue; (2) that Intel's claims regarding direct and indirect non-infringement should be dismissed for failure to state a claim, pursuant to Federal Rule of Civil Procedure 12(b)(6); (3) that Intel's claims regarding a license defense and the doctrine of patent exhaustion also fail to state a claim pursuant to Rule 12(b)(6); and (4) that the Court should exercise its inherent authority under the Declaratory Judgment Act to dismiss the suit. The Court will address each of these arguments below.
A. Motion to Dismiss for Lack of Subject Matter Jurisdiction
1. Legal Standard
Rule 12(b)(1) authorizes dismissal of a complaint for lack of subject matter jurisdiction. "Under Rule 12(b)(1), the court's jurisdiction may be challenged either facially (based on the legal sufficiency of the claim) or factually (based on the sufficiency of jurisdictional fact)." Kuhn Constr. Co. v. Diamond State Port Corp., Civ. No. 10-637-SLR, 2011 WL 1576691, at *2 (D. Del. Apr. 26, 2011). "In reviewing a facial attack, the court must only consider the allegations of the complaint and documents referenced therein and attached thereto, in the light most favorable to the plaintiff." Gould Elecs. Inc. v. United States, 220 F.3d 169, 176 (3d Cir. 2000). "In reviewing a factual attack, the court may consider evidence outside the pleadings." Id. There is no dispute here that Future Link's attack is a facial one, as it focuses on the allegations in Intel's Complaint and why those allegations assertedly do not give rise to subject matter jurisdiction. (D.I. 9; D.I. 15 at 6 n.4; id. at 15 n.8; Tr. at 12, 60-61)
The Declaratory Judgment Act requires that a "case of actual controversy" exist between the parties before a federal court may exercise jurisdiction. 28 U.S.C. § 2201(a). In determining whether there is subject matter jurisdiction over declaratory judgment claims, a court should ask "whether the facts alleged, under all the circumstances, show that there is a substantial controversy, between parties having adverse legal interests, of sufficient immediacy and reality to warrant the issuance of a declaratory judgment." MedImmune, Inc. v. Genentech, Inc., 549 U.S. 118, 127 (2007) (internal quotation marks and citation omitted) (noting that the Declaratory Judgment Act's requirement that a case of actual controversy' exist is a reference to the types of cases and controversies that are justiciable under Article III); see also Prasco, LLC v. Medicis Pharm. Corp., 537 F.3d 1329, 1335-36 (Fed. Cir. 2008). A case or controversy must be "based on a real and immediate injury or threat of future injury that is caused by the defendants - an objective standard that cannot be met by a purely subjective or speculative fear of future harm." Prasco, LLC, 537 F.3d at 1339 (emphasis in original). Thus, in the patent context, "jurisdiction generally will not arise merely on the basis that a party learns of the existence of a patent owned by another or even perceives such a patent to pose a risk of infringement, without some affirmative act by the patentee." ...