United States District Court, D. Oregon
John Mansfield, MansfieldLaw, Portland, OR; Bryan Atkinson, Farney Daniels PC, Georgetown, TX; Jonathan Baker, Michael Saunders, and Gurtej Singh, Farney Daniels PC, San Mateo, CA, Of Attorneys for Plaintiff.
Renee E. Rothauge, Markowitz Herbold PC, Portland, OR; Michael J. Summersgill, Jordan L. Hirsch, and Sean K. Thompson, Wilmer Hale LLP, Boston, MA; Grant K. Rowan, Wilmer Hale LLP, Washington, DC; Arthur W. Coviello, Wilmer Hale LLP, Palo Alto, CA, Of Attorneys for Defendant.
OPINION AND ORDER
MICHAEL H. SIMON, District Judge.
Plaintiff Memory Integrity, LLC ("Memory Integrity" or "MI") brings this action for the infringement of five of its patents: U.S. Patent Nos. 7, 296, 121 (the "'121 patent"); 7, 107, 409 (the "'409 patent"); 7, 103, 636 (the "'636 patent"); 8, 572, 206 (the "'206 patent"); and 8, 898, 254 (the "'254 patent"). Broadly, the patents in suit cover algorithms to efficiently maintain cache coherence in certain types of multiprocessor systems, as well as systems that implement those algorithms.
MI alleges that Defendant Intel Corporation ("Intel") infringes each patent directly, contributorily, and by inducement. Intel moves for partial judgment on the pleadings against Memory Integrity's claims for induced and contributory infringement, arguing that Memory Integrity has not alleged sufficient facts to support its claims. For the reasons below, Intel's motion is granted in part and denied in part.
A motion for judgment on the pleadings may be granted only when the pleading states no cognizable legal theory or does not contain factual allegations sufficient to support a claim for relief. Shroyer v. New Cingular Wireless Servs., Inc., 622 F.3d 1035, 1041 (9th Cir. 2010). In evaluating the sufficiency of a pleading's factual allegations, the court must draw all reasonable inferences in favor of the non-moving party and accept all well-pleaded material facts as true. Wilson v. Hewlett-Packard Co., 668 F.3d 1136, 1140 (9th Cir. 2012); Daniels-Hall v. Nat'l Educ. Ass'n, 629 F.3d 992, 998 (9th Cir. 2010). That presumption of truth, however, does not extend to legal conclusions couched as factual allegations. Ashcroft v. Iqbal, 556 U.S. 662, 678-79 (2009). The plaintiff "may not simply recite the elements of a cause of action, but must [provide] sufficient allegations of underlying facts to give fair notice and to enable the opposing party to defend itself effectively." Starr v. Baca, 652 F.3d 1202, 1216 (9th Cir. 2011). Furthermore, the underlying factual allegations must " plausibly suggest an entitlement to relief." Baca, 652 F.3d at 1216 (emphasis added). "A claim has facial plausibility when the pleaded factual content allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged." Iqbal, 556 U.S. at 663 (citing Bell Atl. Corp. v. Twombly, 550 U.S. 544, 556 (2007)).
Both contributory infringement and induced infringement require scienter on the part of the defendant. This scienter standard is demanding because the law is "reluctan[t] to find liability when a defendant merely sells a commercial product suitable for some lawful use." DSU Med. Corp. v. JMS Co., 471 F.3d 1293, 1305 (Fed. Cir. 2006) (en banc) (quoting Metro-Goldwyn-Mayer Studios Inc. v. Grokster, Ltd., 545 U.S. 913, 936 (2005)). At the pleading stage, the patentee must provide factual allegations that "allow the court to draw the reasonable inference that the defendant" had the requisite scienter. See Iqbal, 556 U.S. at 663.
Accordingly, Intel argues that MI's allegations of scienter are conclusory and without factual support. With respect to contributory infringement, Intel also argues that MI's allegation that the accused products have no substantial non-infringing uses is conclusory. The Court addresses each theory of secondary liability in turn.
A. Induced Infringement
The patent laws provide that "whoever actively induces infringement of a patent shall be liable as an infringer." 35 U.S.C. § 271(b). "[A]ctive" inducement has three elements: knowledge of the patent; knowledge that the induced acts will infringe; and " intent to bring about the desired result, ' which is infringement." Commil USA, LLC v. Cisco Sys., Inc., 135 S.Ct. 1920, 1925, 1928 (2015) (quoting Global-Tech Appliances, Inc. v. SEB S.A., 131 S.Ct. 2060, 2065 (2011)) (emphasis added).
Each requirement is separate and distinct. Knowledge of the patent is straightforward: Service of the complaint provides the defendant with notice of the patent's existence, and knowledge of the patent as of the date of service is sufficient. Black Hills Media, LLC v. Pioneer Corp., 2013 WL 8540141, at *2 (C.D. Cal. Sept. 24, 2013) (citing In re Bill of Lading Transmission & Processing Sys. Patent Litig., 681 F.3d 1323, 1345 (Fed. Cir. 2012)). The patentee need not, therefore, allege pre-suit knowledge of the patent. See id. Intel does not contest that this requirement is satisfied here.
In addition to knowledge of the patent, the patentee must allege that the defendant knew that the acts it was inducing would infringe the patent. See Commil, 135 S.Ct. at 1928. The latter may not merely be inferred from the former: The defendant may be aware of the patent, but "if [he] reads the patent's claims differently from the plaintiff, and that reading is reasonable, " then he lacks the scienter required for inducement liability. ...