Magistrate Judge Burke recently issued a Report, recommending that defendant Yahoo!’s motion to dismiss plaintiff’s claims of direct infringement of five patents be denied but Yahoo!’s motion to dismiss plaintiff’s claims of induced and contributory infringement of those same five patents be granted. Pragmatus AV, LLC v. Yahoo! Inc., C.A. No. 11-902-LPS-CJB (D. Del. Nov. 13, 2012).
Addressing the sufficiency of plaintiff’s claims of direct infringement, Judge Burke first distinguished the different levels of factual detail necessary for a plaintiff to overcome a motion to dismiss for undivided and joint infringement. Judge Burke explained that for an undivided infringement claim, the plaintiff must plead the level of detail required by Form 18 of the Appendix of Forms to the Federal Rules of Civil Procedure. Id. at 5-7. However, if plaintiff’s claim relies on a theory of joint infringement, the plaintiff must fulfill the requirements of Rule 18 and must further plead “facts sufficient to allow a reasonable inference that one party exercises the requisite ‘direction or control,’ such that performance of every step [of the claim] is attributable to the controlling party.” Id. at 7 (quoting Eon Corp. IP Holdings LLC v. FLO TV Inc., 802 F. Supp. 2d 527, 534-35 (D. Del. 2011)).
Defendant first argued that all of plaintiff’s asserted claims, which involved methods, could not possibly be performed by defendant alone, and required a second, joint infringer. Thus, according to defendant, plaintiff must have been relying on a theory of joint infringement. Defendant argued that because plaintiff did not plead factual allegations with regard to its exercise of control over a joint infringer, the direct infringement claims should be dismissed. Id. at 9.
In response, Plaintiff argued that it was not relying on a theory of joint infringement. Id. Thus, the parties’ disagreement essentially boiled down to “whether the claims at issue [could] plausibly be read to allow for one person or entity [to perform] all of the steps of [the] claimed method.” Id. at 10. Judge Burke noted that this type of disagreement “tend[s] to devolve into a dispute about what certain claim terms can and cannot mean.” Id. Judge Burke found, however, that conducting claim construction on a motion to dismiss would be going beyond the court’s “traditional gatekeeping role in reviewing such a motion.” Id. at 13. Judge Burke therefore found that “[t]o the extent that a defendant asserts that a direct infringement claim should be dismissed because the claim terms-at-issue require joint infringement—and the resolution of that question depends in any meaningful way on the construction of those claim terms—the motion should typically be denied as premature.” Id. Judge Burke did find, however, that there may be “certain (perhaps rare) cases where the facts of record at the pleading stage will so clearly and explicitly indicate that an ‘undivided’ claim of direct infringement cannot stand” that granting a motion to dismiss will be appropriate. Id. at 14. Because none of the claims at issue “clearly and explicitly” required a second, joint infringer, and because all of those claims met the requirements of Form 18, Judge Burke recommended that defendant’s motion to dismiss with regard to the claims of direct infringement be denied.
Turning to the sufficiency of plaintiff’s claims of indirect infringement, Judge Burke noted that “in order for an inducement claim to survive a motion to dismiss, the complaint must contain facts ‘plausibly showing that [the alleged indirect infringer] specifically intended [the direct infringers] to infringe [the patent-at-issue] and knew that the [direct infringer’s] acts constituted infringement.’” Id. at 24-25 (quoting In re Bill of Lading Transmission and Processing Sys. Patent Litig., 681 F.3d 1323, 1339 (Fed. Cir. 2012)). Despite plaintiff’s allegations that it provided “written notice of infringement” to Yahoo!, Judge Burke recommended a finding that plaintiff’s inducement claims were insufficient because they provided “no indication of when that notice was provided” and set forth no factual detail “regarding the substance of that notice.” Id. at 27.
Moving on to the contributory infringement claim, Judge Burke noted that to overcome a motion to dismiss, a plaintiff must “provide facts that allow a reasonable inference that all elements of a contributory infringement cause of action are plausible.” Id. at 29 (citing Bill of Lading, 681 F.3d at 1337). Such elements include the infringer’s knowledge that “the combination for which its components were especially made was both patented and infringing and that [the] components have no substantial non-infringing uses.” Id. (quoting Lucent Techs., Inc. v. Gateway, Inc., 580 F.3d 1301, 1320 (Fed. Cir. 2009)). Judge Burke found that plaintiff failed to “reference these legal elements” and provided “no detail that would flesh out the factual underpinnings supporting such elements.” Id. at 30. Although plaintiff alleged that Yahoo! Messenger “may be used to infringe,” Judge Burke found such an allegation insufficient to support a reasonable inference that Yahoo! Messenger has “no substantial nonfringing uses.” Id. at 30-31. Judge Burke therefore recommended that the claims for contributory infringement be dismissed. Id. at 31.
UPDATED: On May 24, 2013, after de novo review of the issues presented, Judge Andrews overruled objections to Judge Burke’s report and adopted the report and recommendation.