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Judge Burke recommends denying Philips’ motion to dismiss plaintiff’s induced infringement claims

Judge Christopher J. Burke recently issued a report and recommendation on defendant Philips’ motion to dismiss plaintiff Advanced Optical Tracking’s (“AOT”) induced infringement claims. Advanced Optical Tracking, LLC v. Koninklijke Philips N.V., et al, C.A. No. 12-1292-LPS-CJB (D. Del. Sept. 9, 2013). In deciding the motion, Judge Burke noted that in order to survive a motion to dismiss an induced infringement claim, “a patentee must plead facts ‘plausibly showing that [the alleged infringer] specifically intended [a third party] to infringe the patents-in-suit and knew that the [third party’s] acts constituted infringement.'” Id. at 4 (quoting In re Bill of Lading Transmission & Processing Sys. Patent Litig., 681 F.3d 1323, 1339 (Fed. Cir. 2012)) (alteration in original). Philips argued that AOT’s allegations failed to adequately plead pre-filing knowledge of the patent-in-suit, knowledge of the alleged inducement, or facts to satisify the intent requirement for an induced infringement claim. Id. Judge Burke disagreed.

Contrary to Philips’ contentions, AOT’ s allegations of pre-suit knowledge are accompanied by basic factual content meant to bolster the claim. Here, the [Complaint] identifies September 19, 2012 notice letters that are asserted to have provided Defendants with knowledge of the inducement claims, and explains how that notification was allegedly sent to Defendants. Additionally, AOT’s allegations indicate that these letters not only identified the patent-in-suit and the induced infringement claim, but that they also identified the accused products at issue, the alleged direct infringers (Defendants’ suppliers, distributors, and resellers)/ how the alleged direct infringers were alleged to have infringed the patent (i.e., through the manufacture, use, sale and offer for sale of the accused products) and certain exemplary actions by which Defendants were asserted to have acted to induce infringement (i.e., by “entering into, performing, and requiring performance under manufacturing, supply, and distribution agreements” with those suppliers, distributors, and resellers).

Id. at 6.

Regarding intent, Judge Burke found that AOT’s allegations, “while not robust,” were sufficiently pled. Id. at 8. The Complaint contended that “Defendants, with knowledge that the accused products infringed the patent-in-suit, continued to require performance of contractual agreements entered into with their suppliers, distributors and resellers-agreements mandating that those entities manufacture, supply and distribute the accused products.” Id. at 9. Philips argued that the Complaint did not set forth additional facts, such as the content of the agreements or the nature of the relationship between Defendants and the third parties. Id. Judge Burke found, however, that the AOT was not required to “rule out all possible non-infringing eventualities; it need simply assert enough facts to provide Defendants with fair notice of facially plausible claims.” Id.

Advanced Optical Tracking, LLC v. Koninklijke Philips N.V., et al, C.A. No. 12-1292-LPS-CJB (D. Del. Sept….

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