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Deere & Co. v. AGCO Corp.

United States District Court, D. Delaware

February 19, 2019

DEERE & COMPANY, Plaintiff,
v.
AGCO CORPORATION and PRECISION PLANTING LLC, Defendants.

          Adam W. Poff, Pilar G. Kraman, YOUNG, CONAWAY, STARGATT & TAYLOR LLP, Wilmington, Delaware; Richard L. Rainey, Kevin B. Collins, R. Jason Fowler, Jay I. Alexander, Daniel E. Valencia, Nicholas L. Envoy, COVINGTON & BURLING LLP, Washington, District of Columbia Counsel for Plaintiff

          Jack B. Blumenfeld, Jeremy A. Tigan, Anthony D. Raucci, MORRIS, NICHOLS, ARSHT & TUNNELL LLP, Wilmington, Delaware; Michael J. Summersgill, Jordan L. Hirsch, WILMER, CUTLER, PICKERING, HALE AND DOOR LLP, Boston, Massachusetts; Mary V. Sooter, WILMER, CUTLER, PICKERING, HALE AND DOOR LLP, Denver, Colorado; Heath A. Brooks, Michael E. Wolin, WILMER, CUTLER, PICKERING, HALE AND DOOR LLP, Washington, District of Columbia Counsel for Defendants

          MEMORANDUM OPINION

         Plaintiff Deere & Company has sued Defendants AGCO Corporation and Precision Planting LLC, alleging direct, induced, contributory, and willful infringement of the same 13 patents in 13 respective counts of separate but similar amended complaints. See generally D.I. 9 in Civil Action No. 18-827 ("AFAC"); D.I. 9 in Civil Action No. 18-828 ("PFAC"). AGCO and Precision Planting filed in their respective actions identical motions to dismiss Deere's "claims of indirect and willful infringement and enhanced damages" pursuant to Federal Rule of Civil Procedure 12(b)(6) for failure to state a claim upon which relief can be granted. See D.I. II.[1] For the reasons discussed below, I will grant in part and deny in part the motions.

         I. BACKGROUND[2]

         AGCO manufactures and sells planters-mechanical implements towed behind a tractor that sow seeds in rows in a field. Precision Planting manufactures and sells components of planters, including certain seed meters (the vSet Products) and a seed delivery system (the SpeedTube Product). Deere alleges in both amended complaints that the combination of a vSet Product with the SpeedTube Product infringes its patents-in-suit. See AFAC ¶ 89; PFAC ¶ 87. Deere also alleges-in the AGCO amended complaint only-that the installation of the vSet Products and/or the SpeedTube Product in certain planters manufactured and sold by AGCO results in a combination that infringes the patents-in-suit. See AFAC ¶ 97.

         Deere alleges in both amended complaints that Defendants marketed and sold the combination of the vSet Products with the SpeedTube Product, and also that they "instruct[ed]" certain "Downstream Parties," i.e., "end users, customers, dealers, distributors, and/or resellers," AFAC ¶ 107; PFAC ¶ 93, "to combine the vSet Products with the SpeedTube product and make, use, sell, offer to sell, and/or import those products together." AFAC ¶¶ 125, 145, 168, 190, 211, 232, 251, 270, 290, 309, 332, 354, 376; PFAC ¶¶ 111, 131, 154, 176, 197, 218, 237, 256, 276, 295, 318, 340, 362. Deere also alleges in the AGCO amended complaint that AGCO marketed and sold planters that had a vSet Product and/or the SpeedTube Product. See AFAC ¶¶ 99, 101, 104.

         In a letter sent to Precision Planting on August 11, 2017, Deere identified the four patents it asserts in Counts 1, 2, 5, and 6 of the amended complaints and "explain[ed] that Precision Planting's products infringe multiple claims" of those patents. AFAC ¶¶ 129, 149, 215, 236; PFAC ¶¶ 115, 135, 201, 222. Although Deere attached 24 and 22 exhibits, respectively, to the AGCO and Precision Planting amended complaints, it did not attach (or quote from) the August 2017 letter; nor did it make "Precision Planting's products" a defined term in the amended complaints or allege any additional facts about the contents of the August 2017 letter in either amended complaint. Thus, there is no allegation in the amended complaints that Deere identified in the August 2017 letter the vSet Products or SpeedTube Product; and there is no allegation that Deere stated in the letter that the combination of those products or the combination of AGCO's planters with either a vSet Product or the SpeedTube Product infringes any of the four patents asserted in Counts 1, 2, 5, and 6 of the amended complaints.

         On or about September 1, 2017, AGCO acquired Precision Planting as a subsidiary. AFAC ¶ 17; PFAC ¶ 17.

         In an instruction manual dated October 2016 and published as recently as May 24, 2018 on Precision Planting's website, Precision Planting instructed customers to combine a vSet Product with the SpeedTube Product. See AFAC ¶¶ 92, 93 and Ex. 22; PFAC ¶¶ 90, 91 and Ex. 21. As recently as May 24, 2018, AGCO published on its website marketing materials that featured an AGCO planter with the SpeedTube Product and an AGCO planter with a vSet Product. See AFAC ¶¶ 66, 99, 101, 103, 104.

         On June 1, 2018, Deere filed its original complaints in these actions. According to the Precision Planting amended complaint, the original complaint against Precision Planting alleged that the combination of the vSet and SpeedTube Products infringe claims of the eight patents asserted in Counts 3-4 and 7-12 of the amended complaints. See PFAC ¶¶ 158, 180, 241, 260, 280, 299, 322, 344.[3]According to the AGCO amended complaint, the original complaint filed against AGCO alleged that both the combination of a vSet Product with the SpeedTube Product and the combination of an AGCO planter with a vSet Product and/or the SpeedTube Product infringe claims of those eight patents. See AFAC ¶¶ 172, 194, 255, 274, 294, 313, 336, 358.[4]

         The patent asserted in Count 13 of the amended complaints (U.S. Patent No. 10, 004, 173 (the "#173 Patent")) was issued on June 26, 2018. AFAC ¶ 363; PFAC ¶ 349. Deere alleges that it informed Defendants' counsel on June 27, 2018 of the issuance of the #173 Patent. AFAC ¶ 380; PFAC ¶ 366. According to the Precision Planting amended complaint, Deere also informed Defendants' counsel on that date "that claims of the [#] 173 Patent are infringed by" the combination of the vSet and SpeedTube Products. PFAC ¶ 366. According to the AGCO amended complaint, Deere also informed Defendants' counsel on June 27, 2018 that both the combination of a vSet Product and the SpeedTube Product and the combination of AGCO's planters with a vSet Product and/or the SpeedTube Product infringe claims of the #173 Patent. AFAC ¶ 380.[5]

         Deere filed its amended complaints against AGCO and Precision Planting on July 11, 2018.

         II. LEGAL STANDARDS

         To state a claim upon which relief can be granted, a complaint must contain "a short and plain statement of the claim showing that the pleader is entitled to relief." FED. R. Civ. P. 8(A)(2). Detailed factual allegations are not required, but the complaint must set forth sufficient factual matter, accepted as true, to "state a claim to relief that is plausible on its face." Bell Ail. Corp. v. Twombly, 550 U.S. 544, 570 (2007). A claim is facially plausible when the factual content allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged. Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009). When considering a Rule 12(b)(6) motion to dismiss, the court must accept as true all factual allegations in the complaint and view them in the light most favorable to the plaintiff. Umland, 542 F.3d at 64.

         III. DISCUSSION

         Defendants have moved to dismiss Deere's claims for enhanced damages, induced infringement, and contributory infringement.

         A. ENHANCED DAMAGES

         1. Legal Standards

         Section 284 of the Patent Act "gives district courts the discretion to award enhanced damages against those guilty of patent infringement." Halo Elecs., Inc. v. Pulse Elecs., Inc., 136 S.Ct. 1923, 1935 (2016). The statute provides that "the court may increase the damages up to three times the amount found or assessed." 35 U.S.C. § 284. Although the Court in Halo intentionally "eschew[ed] any rigid formula for awarding enhanced damages under § 284," 136 S.Ct. at 1934, the Court held that the legal principles "developed over nearly two centuries of application and interpretation of the Patent Act... channel the exercise of [the district court's] discretion" and "limit[ ] the award of enhanced damages to egregious cases of misconduct beyond typical infringement," id. at 1935. Thus, enhanced damages awards under § 284 are available only in "egregious cases" of misconduct that involve more than "typical" infringement. Id. As the Court explained, the enhanced damages award provided by § 284 was "designed as a 'punitive' or 'vindictive' sanction for egregious infringement behavior ... [that] has been variously described in [the Court's] cases as willful, wanton, malicious, bad-faith, deliberate, consciously wrongful, flagrant, or-indeed-characteristic of a pirate." Id. at 1932.

         Although "§ 284 allows district courts to punish th[is] full range of culpable behavior[J" id. at 1933, in the vast majority of patent cases filed today, claims for enhanced damages are sought based on allegations of willful misconduct-so much so that, even though the words "willful" and "willfulness" do not appear in § 284, plaintiffs and courts more often than not describe claims for enhanced damages brought under § 284 as "willful infringement claims" (just as Deere has done in this case). Indeed, some parties and courts refer to such claims as willful infringement "causes of action" even though § 271 of the Patent Act, which creates causes of action for direct, induced, and contributory infringement, does not mention or suggest such a thing as "willful infringement."[6] The fact that willfulness is the most common type of misconduct alleged by plaintiffs who invoke § 284 makes sense, as willful conduct "serve[s] as [the] floor for culpable behavior that may incur enhanced damages." Robert L. Harmon, Cynthia A. Homan & Laura A. Lydigsen, Patents and the Federal Circuit, § 17.3(a), at 1378 ...


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