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KOM Software Inc. v. Netapp, Inc.

United States District Court, D. Delaware

November 26, 2018

KOM SOFTWARE INC., Plaintiff,
v.
NETAPP, INC., APACHE CORPORATION, and ON SEMICONDUCTOR, LLC, Defendants.

          MEMORANDUM ORDER

         Presently before me is Defendants' Motion to Dismiss. (D.I. 13). The Parties have fully briefed the issues. (D.I. 14, 21, 22). For the reasons set out below, I will DENY Defendants' motion.

         I. Background

         Plaintiff is a Canadian corporation in the business of providing "secure data archiving and storage management software and solutions." (D.I. 11 at ¶¶ 4, 12). It is the owner of the seven patents-in-suit. (Id. at ¶¶ 16-22). The asserted patents belong to two patent families. (Id. at ¶¶ 23-24). Family 1 is directed at Virtual Memory Systems and file lifecycle management. (D.I. 21 at 2 n.l). Members of Family 1 include U.S. Pat. Nos. 6, 348, 642 and 7, 392, 234. Family 2 is directed at Write-Once-Read-Many ("WORM") storage. (Id.). Members of Family 2 include U.S. Pat. Nos. 6, 654, 864 ("'864 Patent"), 7, 076, 624 ('"624 Patent"), 7, 536, 524, 8, 234, 477, and 9, 361, 243.

         On January 29, 2018, Plaintiff sued NetApp, Inc. and two of NetApp's customers, Apache Corporation and ON Semiconductor, LLC, alleging direct and indirect infringement of the patents-in-suit and that NetApp has willfully infringed the '864 Patent and the '624 Patent. (D.I. 11 at ¶¶ 44-81). On April 6, 2018, Defendants filed the present motion in response to Plaintiffs First Amended Complaint.

         II. Legal Standard

         When reviewing a motion to dismiss pursuant to Federal Rule of Civil Procedure 12(b)(6), the Court must accept the complaint's factual allegations as true. See Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555-56 (2007). Rule 8(a) requires "a short and plain statement of the claim showing that the pleader is entitled to relief." Id. at 555. The factual allegations do not have to be detailed, but they must provide more than labels, conclusions, or a "formulaic recitation" of the claim elements. Id. ("Factual allegations must be enough to raise a right to relief above the speculative level... on the assumption that all the allegations in the complaint are true (even if doubtful in fact)."). Moreover, there must be sufficient factual matter to state a facially plausible claim to relief. Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009). The facial plausibility standard is satisfied when the complaint's factual content "allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged." Id. ("Where a complaint pleads facts that are merely consistent with a defendant's liability, it stops short of the line between possibility and plausibility of entitlement to relief." (internal quotation marks omitted)).

         III. Discussion

         1. Direct Infringement Claims

         Plaintiff alleges each of the Defendants directly infringes each of the patents-in-suit. The Court of Appeals for the Federal Circuit has addressed the issue of the sufficiency of a patent infringement complaint on multiple occasions. It seems apparent to me that the Court's view generally is that very little is required to plead a claim of patent infringement. For example, in Disc Disease Solutions Inc. v. VGH Solutions, Inc., 888 F.3d 1256 (Fed. Cir. 2018), the Court reversed a district court dismissal of a patent infringement complaint. In relevant part, the Court of Appeals stated:

The district court determined that Disc Disease failed to "explain how Defendants' products infringe on any of Plaintiff s claims" because it "merely alleges that certain of Defendants' products 'meet each and every element of at least one claim' of Plaintiff s patents." We disagree. Disc Disease's allegations are sufficient under the plausibility standard of Iqbal/Twombly. This case involves a simple technology. The asserted patents, which were attached to the complaint, consist of only four independent claims. The complaint specifically identified the three accused products-by name and by attaching photos of the product packaging as exhibits-and alleged that the accused products meet "each and every element of at least one claim of the' 113 [or '509] Patent, either literally or equivalently." These disclosures and allegations are enough to provide VGH Solutions fair notice of infringement of the asserted patents. The district court, therefore, erred in dismissing Disc Disease's complaint for failure to state a claim.

Disc Disease, 888 F.3d at 1260 (alteration in original) (citations omitted).

         In this case, the First Amended Complaint alleges that specifically-named products infringe claims of each of the seven patents, copies of which Plaintiff attached to the First Amended Complaint. The allegations are substantially identical, mirroring this format:

On information and belief, [Defendants], without authorization or license from KOM, have been and are presently directly infringing at least [a claim] of [the Patent], as infringement is defined by 35 U.S.C. ยง 271(a), including through making, using (including for testing purposes), selling and offering for sale methods and articles infringing one or more claims of [the Patent]. [Defendants] are thus liable for direct infringement of [the Patent] ...

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