In a recent memorandum opinion, Judge Sue L. Robinson granted a parent company’s motion to dismiss infringement claims made against it based on the alleged conduct of its subsidiaries. Gevo, Inc. v. Butamax(TM) Advanced Biofuels LLC, et al., Civ. No. 12-1724-SLR (D. Del. July 8, 2013). As the Court explained in granting the motion, the plaintiff’s only factually supported allegations were that (1) the parent had two subsidiaries; (2) one of those subsidiaries was involved in a joint venture with another defendant; and (3) one of the defendants disclosed an infringing recombinant yeast strain. Id. at 5. “The remainder of [the plaintiff’s] allegations are conclusory statements.” Id.
More specifically, the Court explained that the complaint provided no underlying facts supporting the conclusory allegation that the parent controlled its subsidiaries’ infringing conduct, therefore “the court is not obligated to accept as true the proposition that [the parent] controls the activities of the subsidiary defendants or the activities of any business ventures owned by the subsidiaries.” Id. at 6. The Court noted that although “[i]t could be argued . . . that [the plaintiff] is not privy to such facts without discovery . . . indicia of control [such] as overlapping boards or officers or consolidated financial statements generally are within the public domain and should have been related if available.” Id. at 6 n.1. The Court also found insufficient the plaintiff’s allegation, made on information and belief, that the parent had actual notice of the defendant’s patent applications so as to support allegations of infringement of plaintiff’s provisional patent rights. The Court explained that this “actual notice” allegation was “not buttressed by any specific facts and is even further diluted by the use of “and/or” in the paragraph.” Id. at 7. For the same reasons, the Court found that the plaintiff did not adequately allege joint infringement or indirect infringement against the parent. Id. at 9-10.
The Court also granted the parent’s motion to dismiss the plaintiff’s contributory infringement claim, explaining that the plaintiff did not plead that the parent “sold, offered to sell, or imported a component of the infringing product into the United States. Nor has [the plaintiff] offered facts that would support such a claim.” Id. at 10-11 (footnotes omitted). Finally, the Court granted the parent’s motion to dismiss the plaintiff’s willful infringement claim, explaining that “the only circumstance identified by plaintiff to substantiate its willfulness claims . . . is the litigation itself[.]” Id. at 12.