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Judge Andrews addresses motion for judgment on the pleadings regarding indirect infringement

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Judge Richard G. Andrews recently addressed defendants’ motion for judgment on the pleadings, which provided several reasons that plaintiffs’ Third Amended Complaint failed to sufficiently plead indirect infringement. HSM Portfolio LLC v. Fujitsu Ltd., C.A. No. 11-770-RGA (D. Del. Sept. 9, 2014).

Defendants argued that plaintiffs cannot establish contributory infringement mainly because the “accused semiconductor chips are not components especially designed for an infringing product because they are accused of direct infringement in and of themselves.” Id. at 2. Judge Andrews agreed, explaining that “[t]he reason that it is necessary to plead that the component has no substantial noninfringing uses is that the component alone does not directly infringe” and therefore plaintiffs’ argument did “not make legal sense.” Id. at 3. Judge Andrews did, however, grant plaintiffs leave to file an amended complaint within ten days to amend their contributory infringement claim. Id. at 3.

Judge Andrews denied the remainder of defendants’ arguments. First, with respect to induced infringement based on domestic sales, defendants essentially argued that “because it might be found liable for direct infringement, based on the same actions of which it is accused of induced infringement, [the Court] should dismiss the claim for induced infringement.” Id. While Judge Andrews agreed that “there would be no additional liability for induced infringement based upon the same acts” of direct infringement, defendants’ “judicial economy” argument was not a sufficient “failure to state claim” argument. Id. Second, with respect to induced infringement based on foreign sales, Judge Andrews found that defendants “conflate[d] the standard for pleadings with that for summary judgment,” finding that plaintiff was only required to “set forth a basis for the court to make a ‘reasonable inference’” that defendants “encouraged the importation of the accused products in the United States by third parties.” Id. at 3-4. Third, Judge Andrews disagreed with defendants’ argument that all the inducement claims fail because plaintiffs failed to plead specific intent. Judge Andrews explained that plaintiffs alleged acts such as “creating advertisements, creating established distribution channels, manufacturing the products in accordance with U.S. law, distributing manuals, and providing technical support,” which “all evidence specific intent.” Id. at 4.

 

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