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NexStep, Inc. v. Comcast Cable Communications, LLC

United States District Court, D. Delaware

October 31, 2019

NEXSTEP, INC., Plaintiff,
v.
COMCAST CABLE COMMUNICATIONS, LLC, Defendant.

          REPORT AND RECOMMENDATION

          SHERRY R. FALLON UNITED STATES MAGISTRATE JUDGE.

         I. INTRODUCTION

         Presently before the court in this patent infringement action is defendant Comcast Cable Communications, LLC's ("Comcast") partial motion to dismiss for failure to state a claim upon which relief can be granted pursuant to Federal Rule of Civil Procedure 12(b)(6).[1] (D.I. 10) For the reasons that follow, the court recommends GRANTING-IN-PART and DENYING-IN-PART Comcast's motion to dismiss.

         II. BACKGROUND

         On June 3, 2019, plaintiff NexStep, Inc. ("NexStep") originally filed this patent infringement action against Comcast, alleging infringement of nine patents, United States Patent Numbers 7, 444, 130 ("the '130 patent"), 7, 542, 753 ("the '753 patent"), 7, 697, 669 ("the '669 patent"), 7, 907, 710 ("the '710 patent"), 8, 280, 009 ("the '009 patent"), 8, 494, 132 ("the '132 patent"), 8, 885, 802 ("the '802 patent"), 9, 614, 964 ("the '964 patent"), and 9, 866, 697 ("the '697 patent") (collectively, the "patents-in-suit"). (D.I. 1 at ¶¶ 10-18) The United States Patent and Trademark Office ("USPTO") issued the patents-in-suit to Dr. Robert Stepanian ("Dr. Stepanian"), the founder of NexStep, between 2008 and 2018. (Id. at ¶¶ 8, 10-18) The patents-in-suit relate to systems and methods for controlling and integrating a variety of devices, "such as TVs, set-top boxes, DVRs, VoIP (telephone) systems, and home devices (e.g., security cameras, electrical outlets, and thermostats)," using a hand-held device. (Id. at ¶ 19) Comcast provides Internet, video, voice, and security services. (Id. at ¶ 24) NexStep alleges that Comcast's modems, gateways, routers, set-top boxes, remote controls, home security sensors and video surveillance cameras, smartphone and tablet devices, and smartphone applications for controlling and integrating these devices are infringing products. (Id.) Comcast "markets and sells these services, equipment and apps under the Xfinity brand name ('Xfinity Services')." (Id.)

         NexStep alleges that on June 29, 2007, Dr. Stepanian met with Comcast's Chief Technology Officer ("CTO") and Director of Digital Technology and Standards to provide an overview of NexStep's technology and explain how Comcast could implement that technology in Internet, voice, video, and Home services. (Id. at ¶ 20) Dr. Stepanian provided examples of handheld devices for controlling and integrating various services. (Id.) On August 23, 2007, Dr. Stepanian met with Comcast's Vice President of Product Management and provided a written summary of NexStep's remote control product and technology. (Id. at ¶ 21) Dr. Stepanian noted that his technology was covered by issued and pending patent applications and provided further written materials to Comcast after his meetings. (Id. at ¶¶ 22-23) Ultimately, Comcast indicated that it would not work with NexStep because it was developing its own similar technology. (Id. at ¶ 23)

         On July 25, 2019, Comcast filed the present motion to dismiss. (D.I. 10)

         III. LEGAL STANDARD

         Rule 12(b)(6) permits a party to move to dismiss a complaint for failure to state a claim upon which relief can be granted. See Fed. R. Civ. P. 12(b)(6). 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. See Umland v. Planco Fin. Servs. Inc., 542 F.3d 59, 64 (3d Cir. 2008).

         To state a claim upon which relief can be granted pursuant to Rule 12(b)(6), 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). Although detailed factual allegations are not required, the complaint must set forth sufficient factual matter, accepted as true, to "state a claim to relief that is plausible on its face." Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007); see also Ashcroft v. Iqbal, 556 U.S. 662, 663 (2009). A claim is facially plausible when the factual allegations allow the court to draw the reasonable inference that the defendant is liable for the misconduct alleged. See Iqbal, 556 U.S. at 663; Twombly, 550 U.S. at 555-56.

         The court's determination is not whether the non-moving party "will ultimately prevail," but whether that party is "entitled to offer evidence to support the claims." United States ex rel. Wilkins v. UnitedHealth Grp., Inc., 659 F.3d 295, 302 (3d Cir. 2011). This "does not impose a probability requirement at the pleading stage," but instead "simply calls for enough facts to raise a reasonable expectation that discovery will reveal evidence of [the necessary element]." Phillips v. Cty. of Allegheny, 515 F.3d 224, 234 (3d Cir. 2008) (quoting Twombly, 550 U.S. at 556). The court's analysis is a context-specific task requiring the court "to draw on its judicial experience and common sense." Iqbal, 556 U.S. at 679.

         IV. DISCUSSION

         a. Willful Infringement

         To plead willful infringement, a plaintiff must allege facts plausibly showing that "as of the time of the claim's filing, the accused infringer: (1) knew of the patent-in-suit; (2) after acquiring that knowledge, it infringed the patent; and (3) in doing so, it knew, or should have known, that its conduct amounted to infringement of the patent." Valinge Innovation AB v. Halstead New England Corp., C.A No. 16-1082-LPS-CJB, 2018 WL 2411218, at *13 (D. Del. May 29, 2018).

         Comcast argues that NexStep fails to allege Comcast's pre-suit knowledge of any of the asserted patents, which issued after Dr. Stepanian's meetings with Comcast in 2007. (D.I. 11 at 5-8) NexStep argues that it has sufficiently pleaded factual allegations of Comcast's knowledge of the patents-in-suit. (D.I. 13 at 6-8 & n.l) The complaint avers that Dr. Stepanian disclosed that his "technology was covered by issued and pending patent applications." (D.I. 1 at ¶ 22) Furthermore, the complaint claims that Comcast's knowledge of NexStep's technology stems from its negotiations with Dr. Stepanian. (Id. at ¶¶ 62, 85, 111, 134, 159, 179, 201, 236, 262) The oldest patent-in-suit, the '130 patent, was issued on October 28, 2008. (Id. at ¶ 10) The other patents-in-suit were issued over the next several years, with the most recent, the '697 patent, being issued on January 9, 2018. (Id. at ...


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