United States District Court, D. Delaware
DR. LAKSHMI ARUNACHALAM, Plaintiff,
INTERNATIONAL BUSINESS MACHINES CORPORATION, et al., Defendants.
filed a complaint against IBM for patent infringement and
racketeering on April 20, 2016. (D.I. 1). Shortly thereafter,
Plaintiff filed a first amended complaint (D.I. 6), naming as
defendants, IBM, SAP, J.P. MorganChase, myself, and 100 Does.
I was dismissed as a defendant on September 26, 2016. (D.I.
72). The other three named defendants have filed motions to
dismiss (D.I. 17 (SAP); 21 (J.P. MorganChase); 28 (IBM)). The
motions have been fully briefed. I now address those motions.
first amended complaint alleges four counts: Count 1,
infringement by IBM of U.S. Patent No. 7, 340, 506 ("the
'506 patent"); Count 2, civil racketeering by IBM,
SAP, and J.P. MorganChase in violation of 18 U.S.C. §
1962(b); Count 3, civil racketeering by IBM, SAP, and J.P.
MorganChase in violation of 18 U.S.C. § 1962(c); and
Count 4, conspiracy to engage in racketeering by IBM, SAP,
and J.P. MorganChase, in violation of 18 U.S.C. §
three motions move to dismiss the racketeering-related
charges of Counts 2 through 4.[]
proceeds pro se and, therefore, her pleadings are
liberally construed and her complaint, "however
inartfully pleaded, must be held to less stringent standards
than formal pleadings drafted by lawyers." Erickson
v. Pardus, 551 U.S. 89, 94 (2007). Under Rule 12(b)(6),
a motion to dismiss may be granted only if, accepting the
well-pleaded allegations in the complaint as true and viewing
them in the light most favorable to the plaintiff, a court
concludes that those allegations "could not raise a
claim of entitlement to relief." Bell Atl. Corp. v.
Twombly, 550 U.S. 544, 558 (2007). "Though
'detailed factual allegations' are not required, a
complaint must do more than simply provide 'labels and
conclusions' or 'a formulaic recitation of the
elements of a cause of action.'" Davis v.
Abington Mem' l Hosp., 765 F.3d 236, 241
(3d Cir. 2014) (quoting Twombly, 550 U.S. at 555).
In addition, a plaintiff must plead facts sufficient to show
that a claim has substantive plausibility. See Johnson v.
City of Shelby, U.S., 135 S.Ct. 346, 347 (2014). A
complaint may not dismissed, however, for imperfect
statements of the legal theory supporting the claim asserted.
See Id. at 346.
reviewing the sufficiency of a complaint, a court should
follow a three-step process: (1) consider the elements
necessary to state a claim; (2) identify allegations that are
merely conclusions and therefore are not well-pleaded factual
allegations; and (3) accept any well-pleaded factual
allegations as true and determine whether they plausibly
state a claim. See Connelly v. Lane Constr. Corp.,
809 F.3d 780, 787 (3d Cir. 2016); Williams v. BASF
Catalysts LLC, 765 F.3d 306, 315 (3d Cir. 2014).
Deciding whether a claim is plausible 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).
alleging fraud, Federal Rule of Civil Procedure 9(b) requires
that the "party must state with particularity the
circumstances constituting fraud or mistake. Malice, intent,
knowledge, and other conditions of a person's mind maybe
alleged generally." Fed.R.Civ.P. 9(b). On a motion to
dismiss under Rule 9(b) "focusing exclusively on [the
rule's] particularity language is too narrow an approach
and fails to take account of the general simplicity and
flexibility contemplated by the rules." Seville
Indus. Mach. Corp. v. Southmost Mach. Corp., 742 F.2d
786, 791 (3d Cir. 1984) (internal quotation marks omitted).
The Third Circuit has held that:
Rule 9(b) requires plaintiffs to plead with particularity the
"circumstances" of the alleged fraud in order to
place the defendants on notice of the precise misconduct with
which they are charged, and to safeguard defendants against
spurious charges of immoral and fraudulent behavior. It is
certainly true that allegations of "date, place or
time" fulfill these functions, but nothing in the rule
requires them. Plaintiffs are free to use alternative means
of injecting precision and some measure of substantiation
into their allegations of fraud.
overview of the well-pled factual allegations in the amended
complaint shows that it alleges that: (1) Plaintiff invented
the '506 patent, and Defendant IBM infringes it; and (2)
the '506 patent underwent inter-partes
reexamination, and emerged unscathed in 2014. That is it. The
amended complaint does state that it attached various
exhibits (described as Exhibits A2, CI, Dl, D2 and L) which
constitute predicate acts for the racketeering claims.
Exhibit A2 (D.I. 6 at 30-40) reads like a brief arguing for
the validity of the '506 patent. It does not allege
anything resembling a factual statement of a racketeering
predicate act. Exhibit CI (id. at 41-58) mostly
reads like a brief on a number of topics. There are some
factual statements contained within it. E.g., SAP
and J.P. MorganChase are members of the IBM Eclipse
Foundation, which distributes Eclipse code. Plaintiff and
others provided the underlying code. IBM signed nondisclosure
agreements with IBM in 1995, 2001, and 2003; negotiated with
Plaintiff on a joint venture in 1994, 2001, and 2011;
provided Plaintiff office space in 1994 and 2003; offered to
buy her patent portfolio in 2006; and copied her source code.
Other allegations tend to recast her court defeats as a
massive conspiracy among district judges, courts of appeals
judges, Supreme Court Justices, lawyers and law firms, and
PTAB judges. Exhibit Dl (id. at 59) incorporates
Exhibits A2, CI, D2 and D3. Exhibit D2 (id. at 60)
refers to three documents that can be found on the
eclipse.org website, which are from 2002 and
2004. Exhibit D3 (id. at 61-80)
describes various of my rulings and occasionally intersperses
snippets of information about the rulings of other judges and
about the Eclipse Foundation. There does not appear to be an
preliminary note, and even recognizing that Plaintiff
proceeds pro se, the only factual allegations in the
twenty-seven pages of the amended complaint against SAP and
J.P. MorganChase concern why the Court has personal
jurisdiction over them (D.I. 6 at ¶¶ 5, 6, 14, 16),
that they "are using Plaintiffs patented Web
applications on a Web browser[, which] is mission critical to
how [they] conduct their business and operations today on the
Web, " (id. at ¶ 8), and that they have
not licensed the '506 patent. (Id. at ¶
21). This would be insufficient if they were accused of
patent infringement. It surely makes out no other cognizable
violation of the law. I do not think Plaintiff can make out
racketeering claims simply by appending about 60 pages of
exhibits containing mostly irrelevant information and
providing a citation to where other materials can be found
and purporting to incorporate them all by reference. (See
Id. at ¶ 91). The complaint is supposed to contain
"a short and plain statement of the claim showing that
the pleader is entitled to relief." Fed.R.Civ.P.
8(a)(2). Plaintiffs complaint is not short, it is not plain,
and it provides no basis for seeking relief against SAP and
J.P. MorganChase. Thus, for that reason alone, Defendants SAP
and J.P. MorganChase will be dismissed. Needless to say, the
reasons that follow relating to IBM do also apply to SAP and
review the relevant elements of the claims for Counts 2, 3,
elements of a § 1962(b) violation are: (1) Defendant is
a person who through a pattern of racketeering activity
acquired or maintained any interest or control of an
enterprise; (2) Defendant's interest or control in the
enterprise was associated with or connected to the pattern of
racketeering activity; (3) the enterprise was engaged in, or
the activities of the enterprise affected, interstate or
foreign commerce; and (4) Plaintiffs business or property was
injured by reason of defendant's acquisition or
maintenance of the interest in, or control over, the
enterprise. O'Malley, Federal Jury Practice and
Instructions, § 161.21 (6th ed. 2013). The
elements of a § 1962(c) violation are: (1) The existence
of an enterprise affecting interstate commerce; (2) Defendant
was employed by or associated with the enterprise; (3)
Defendant conducted or participated in the conduct of the
enterprise's affairs; (4) Defendant's participation
was through a pattern of racketeering activity; and (5)
Plaintiffs business or property was injured by reason of
defendant's conducting or participating in the conduct of
the enterprise's affairs. Id., § 161.22.
The elements of a § 1962(d) violation are: (1) Defendant
is a person who conspired to violate §§ 1962(b) or
(c); (2) Defendant understood the nature or unlawful
character of the conspiratorial plan; (3) Defendant agreed to
join with others to achieve the objective of the conspiracy
during the relevant period; (4) Defendant agreed that the
enterprise would be conducted through a pattern of
racketeering activity. This means that the commission of at
least two predicate crimes by the conspiracy was
contemplated. Id., § 161.23.
infringement is not a crime. Patent infringement thus is not
on the extensive list of crimes that can be a racketeering
act. See 18U.S.C. § 1961(1). Plaintiff s brief
(D.I. 50, p. 10) has a laundry list of federal crimes in
which "Defendants engaged egregiously, " but
Plaintiffs amended complaint makes no plausible factual
allegations to support any of them. The closest Plaintiff
comes, so far as I can see, is the brief reference that
"[t]he IBM Eclipse Foundation installed the Eclipse code
at JPMorgan . .. using Eclipse code that includes
[Plaintiffs] patented inventions and technology." (D.I.
6 at 48). Elsewhere, Plaintiff alleges that "IBM copied
[Plaintiffs] inventions." Copying patented inventions is
not a federal crime. It is also not the same thing as theft
of trade secrets, which is one of the federal crimes
Plaintiffs amended complaint mentions.
infringement suits are the proper remedy for patent
infringement. That is what Plaintiff has filed in Count 1.
She describes the pattern of racketeering activity as
"cluster[ing] around patent infringement, trafficking in
certain goods bearing counterfeit marks, tampering with a
Federal Witness, interstate transportation of stolen property
and obstruction of justice." (Id. at 2).
Plaintiff alleges no facts about goods bearing counterfeit
marks. There is a reference to a witness in a federal case,
but no factual allegation that suggests tampering. A product
that infringes a patent is not "stolen property"
within the meaning of any federal criminal statute.
Plaintiffs allegations of obstruction of justice are not
plausible. The facts alleged in support of the obstruction of