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Modern Telecom Systems, LLC v. TCL Corp.

United States District Court, D. Delaware

December 21, 2017




         1. In this patent infringement action filed by Plaintiff Modern Telecom Systems, LLC ("Plaintiff or "Modern Telecom")), Defendants TCL Communication Inc., TCT Mobile, Inc., TCT Mobile (US) Inc., and TCT Mobile (US) Holdings, Inc. (collectively, "Defendants") have filed a motion to dismiss the Complaint ("Motion"), pursuant to Federal Rule of Civil Procedure 12(b)(6). (D.I. 13)[1] More specifically, Defendants move to dismiss Plaintiffs allegations of direct infringement, induced infringement, contributory infringement and willful infringement of the one patent-in-suit, United States Patent No. 6, 504, 886[2] ("the '886 patent" or the "patent-in-suit"). (Id. at 1) The instant Motion has been referred to the Court for resolution by Chief Judge Leonard P. Stark. (D.I. 5)

         2. The standard of review here is the familiar two-part analysis applicable to motions made pursuant to Rule 12(b)(6). See Raindance Techs., Inc. v. 10x Genomics, Inc., Civil Action No. 15-152-RGA, 2016 WL 927143, at *2 (D. Del. Mar. 4, 2016) (applying the Twombly/lqbal standard to claims of direct patent infringement filed subsequent to the December 2015 abrogation of Federal Rule of Civil Procedure 84 and patent pleading Form 18); see also North Star Innovations, Inc. v. Micron Tech., Inc., Civil Action No. 17-506-LPS-CJB, 2017 WL 5501489, at *1 (D. Del. Nov. 16, 2017). First, the court separates the factual and legal elements of a claim, accepting "all of the complaint's well-pleaded facts as true, but [disregarding] any legal conclusions." Fowler v. UPMC Shadyside, 578 F.3d 203, 210-11 (3d Cir. 2009). Second, the court determines "whether the facts alleged in the complaint are sufficient to show that the plaintiff has a 'plausible claim for relief" Id. at 211 (quoting Ashcroft v. Iqbal, 556 U.S. 662, 679 (2009)). A plausible claim does more than merely allege entitlement to relief; it must also demonstrate the basis for that "entitlement with its facts." Id. Thus, a claimant's "obligation to provide the 'grounds' of his 'entitle[ment] to relief requires more than labels and conclusions, and a formulaic recitation of the elements of a cause of action will not do." Bell Ail. Corp. v. Twombly, 550 U.S. 544, 555 (2007). In assessing the plausibility of a claim, the court must '"construe the complaint in the light most favorable to the plaintiff, and determine whether, under any reasonable reading of the complaint, the plaintiff may be entitled to relief" Fowler, 578 F.3d at 210 (quoting Phillips v. Cnty. of Allegheny, 515 F.3d 224, 233 (3d Cir. 2008)).[3]

         3. With regard to the claims of direct infringement, Plaintiff makes "exemplary" allegations that one of Defendants' products (the "Blackberry PRIV") infringes one claim of the patent-in-suit (claim 18, which is an apparatus claim). (D.I. 1 at ¶ 24)[4] Thus, Plaintiff needs to have pleaded facts that plausibly indicate that the Blackberry PRIV practices each of the limitations found in claim 18. e.Digital Corp. v. iBaby Labs, Inc., Case No. 15-cv-05790-JST, 2016 WL 4427209, at *3-4 (N.D. Cal. Aug. 22, 2016); Raindance Techs., Inc., 2016 WL 927143, at *2-3; see also North Star, 2017 WL 5501489, at *1. After all, if it is not plausible, after reading a complaint, that the accused infringer's product reads on a limitation in the one asserted claim from a patent-in-suit, then it is not plausible that the accused infringer actually infringes the patent claim (or the patent). See e.Digital Corp., 2016 WL 4427209, at *3; Atlas IP, LLC v. Exelon Corp., 189 F.Supp.3d 768, 775 (N.D. Ill. 2016); see also North Star, 2017 WL 5501489, at*1.[5]

         4. Plaintiff has not pleaded sufficient facts to render it plausible that the Blackberry PRIV infringes claim 18. Claim 18 recites:

18. A communication device capable of communicating a learning sequence descriptor for use in constructing a learning sequence, said device comprising:
a transmitter; and
a processor in communication with said transmitter; wherein said processor is capable of providing a first parameter, a second parameter and a third parameter to said transmitter capable of transmitting said parameters, wherein said first parameter specifies a number of segments in said learning sequence, said second parameter specifies a sign pattern of each of said segments, and said third parameter specifies a training pattern of each of said segments, wherein said training pattern is indicative of an ordering of a reference symbol and a training symbol in each of said segments.

('886 patent, cols. 20:58-21:6) In the key paragraph in the Complaint (where Plaintiff attempts to articulate how it is that claim 18 is infringed), Plaintiff makes two basic assertions: (1) it repeats the words of claim 18, and states that "the Blackberry PRIV ... satisfies, literally or under the doctrine of equivalents, each and every claim limitation" of claim 18; and (2) it also states that "[o]n information and belief, the Blackberry PRIV includes a 8992 Snapdragon component [], and operates pursuant to Part 11: Wireless LAN Medium Access Control (MAC) and Physical Layer (PHY) Specifications of IEEE Std 802.11™-2012 and IEEE Std 802.11™-2009 (collectively, the relevant 'Wi-Fi Standard')." (D.I. 1 at ¶ 24)

         5. As to the first assertion, simply parroting back the words of the claim and stating (without more) that the Blackberry PRIV infringes that claim is not helpful. That amounts to little more than a conclusory statement that "Your product infringes my patent claim." There needs to be some facts alleged that articulate why it is plausible that the other party's product infringes that patent claim-not just the patentee asserting, in a take-my-word-for-it fashion, that it is so.[6]

         6. With regard to Plaintiffs second assertion-the bald allegation that the Blackberry PRIV operates pursuant to what the Complaint refers to as the "relevant Wi-Fi Standard"-that too is not enough. As Defendants note, "lacking in the Complaint are any facts purporting to show how 'operating] pursuant to' the Wi-Fi Standard relates to infringement of any limitations of claim 18, nor does the Complaint include any allegations relating to why it is plausible that "the accused Infringing Instrumentalities implement the Wi-Fi Standard[.]" (D.I. 14 at 4) Plaintiff must have some basis to believe that compliance with certain portions of the Wi-Fi Standard require the practice of each of the limitations of claim 18 of the patent-in-suit, [7]and must have some basis to believe that the Blackberry PRIV operates pursuant to the Wi-Fi Standard. It just needs to plead some facts that show the Court how it is plausible that these things are so.[8]

         7. As to this second assertion, the result in Network Managing Solutions, LLC v. AT&T Inc., No. 16-cv-295 (RGA), 2017 WL 472080 (D. Del. Feb. 3, 2017), is instructive. In Network Managing Solutions, the defendant successfully moved to dismiss the plaintiffs direct infringement claims, wherein the plaintiff, in its complaint, had: (1) identified at least one claim from each asserted patent that it alleged the defendant had infringed; (2) alleged that the "3rd Generation Partnership Project Standards incorporate the technologies covered by the patents" and (3) alleged "on information and belief that Defendants adopted the 3GPP standards." 2017 WL 472080, at * 1. The Network Managing Solutions Court found that the second of these allegations was insufficient to state a plausible claim, because "[p]laintiff knows its own patents [and] [t]he standards are public[, ]" so "[s]aying 'on information and belief that the standards 'incorporate the fundamental technologies' covered by the patents, without more, is insufficient to plausibly allege that to practice the standard necessarily means that a defendant also practices the patent." Id; see also Stragent, LLC v. BMW of N. Am., LLC, CIVIL ACTION NO. 6:16-cv-446-RWS-KNM, 2017 WL 2821697, at *4-7 (E.D. Tex. Mar. 3, 2017) (citing Audio MPEG, Inc. v. HP Inc., No. 2:15-cv-00073-HCM-RJK, No. 2:16-cv-00082-HCM-RJK, 2016 WL 7010947, at *8 (E.D. Va. July 1, 2016)).

         8. Because Plaintiffs allegations of induced, contributory and willful infringement all require that there be plausible allegations of direct infringement (and there are not), the allegations as to those claims are necessarily insufficient as well. Thus, the Court need not further address Defendants' remaining arguments herein as to those claims.

         9. In its briefing, Plaintiff requests leave to amend should the Court grant this Motion. (D.I. 20 at 2, 14) In light of the fact that leave to amend should be given freely "when justice so requires[, ]" Fed.R.Civ.P. 15(a)(2), and because dismissal with prejudice is "rarely" a proper sanction, see Univ. of Pittsburgh v. Varian Med. Sys., Inc.,569 F.3d 1328, 1334 (Fed. Cir. 2009) (citing Third Circuit case law), the Court recommends that ...

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