Case 8:17-cv-00981-JVS-JCG Document 48 Filed 01/12/18 Page 1 of 19 Page ID #:894
`
`
`
`RUSS AUGUST & KABAT
`Brian Ledahl (CA SB No. 186579)
`Neil A. Rubin (CA SB No. 250761)
`Jacob Buczko (CA SB No. 269408)
`Paul A. Kroeger (CA SB No. 229074)
`Timothy T. Hsieh (CA SB No. 255953)
`12424 Wilshire Boulevard 12th Floor
`Los Angeles, California 90025
`Telephone: 310-826-7474
`Facsimile: 310-826-6991
`bledahl@raklaw.com
`nrubin@raklaw.com
`jbuczko@raklaw.com
`pkroeger@raklaw.com
`thsieh@raklaw.com
`
`Attorneys for Plaintiff
`Document Security Systems, Inc.
`
`
`
`UNITED STATES DISTRICT COURT
`
`CENTRAL DISTRICT OF CALIFORNIA
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`RUSS, AUGUST & KABAT
`
`DOCUMENT SECURITY SYSTEMS,
`INC., a New York corporation,
`
`
`vs.
`
`SEOUL SEMICONDUCTOR CO.,
`LTD, a Korean corporation, and SEOUL
`SEMICONDUCTOR, INC., a California
`corporation.
`
`
`
`
`
`
`Case No. 8:17-cv-00981-JVS-JCG
`
`PLAINTIFF DOCUMENT
`SECURITY SYSTEMS, INC.’S
`OPPOSITION TO DEFENDANTS’
`MOTION TO DISMISS RESTATED
`WILLFUL INFRINGEMENT
`CLAIM
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`Plaintiff,
`
`Defendants.
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`PLAINTIFF DOCUMENT SECURITY SYSTEMS, INC.’S OPPOSITION
`TO DEFENDANTS’ MOTION TO DISMISS RESTATED WILLFUL INFRINGEMENT CLAIM
`
`

`

`Case 8:17-cv-00981-JVS-JCG Document 48 Filed 01/12/18 Page 2 of 19 Page ID #:895
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`TABLE OF CONTENTS
`
`PAGE
`
`I.
`
`INTRODUCTION ............................................................................................ 1
`
`II. BACKGROUND .............................................................................................. 1
`
`III. LEGAL STANDARDS..................................................................................... 2
`
`IV. ARGUMENT .................................................................................................... 4
`
`A. DSS Pleads Willful Infringement Beyond the Required Standard ................... 5
`1. Seoul Confuses Pleading with Proving Willfulness ..................................... 5
`2. DSS Sufficiently Pleads Willfulness Under Halo......................................... 8
`3. Though Not Necessary at this Stage, DSS Pleads Specific Egregious
`Infringement by Defendants .................................................................................. 9
`
`B. DSS Properly Addressed the Court’s Order (Dkt. No. 44) and Removed the
`Language the Court Deemed a Concession Regarding Willful Infringement ........ 10
`
`C. DSS’s SAC Introduces New Allegations to Support Its Pleading of Willful
`Infringement ............................................................................................................ 11
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`V. CONCLUSION ............................................................................................... 12
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`TABLE OF CONTENTS
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`

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`Case 8:17-cv-00981-JVS-JCG Document 48 Filed 01/12/18 Page 3 of 19 Page ID #:896
`
`TABLE OF AUTHORITIES
`
`PAGE
`
`Cases
`
`Advanced Analogic Technologies, Inc. v. Kinetic Technologies, Inc.,
`No. C-09-1360 MMC, 2009 WL 1974602 (N.D. Cal. July 8, 2009).............. 6
`
`Apple Inc. v. Samsung Electronics Co., Ltd.,
`258 F. Supp. 3d 1013 (N.D. Cal. 2017) .......................................................... 9
`
`Ashcroft v. Iqbal,
`556 U.S. 662 (2009) ........................................................................................ 2
`
`Bayer Healthcare, LLC v. Baxalta, Inc.,
`No. 16-1122, 2017 U.S. Dist. LEXIS 126904 (D. Del. Aug. 10, 2017) ......... 9
`
`Bell Atlantic Corp. v. Twombly,
`550 U.S. 544 (2007) ........................................................................................ 2
`
`Bio-Rad Labs. Inc. v. Thermo Fisher Sci. Inc.,
`No. CV 16-358-RGA, 2017 WL 438733 (D. Del. Feb. 1, 2017) ............... 5, 9
`
`Bobcar Media, LLC v. Aardvark Event Logistics, Inc.,
`No. 16-885, 2017 WL 74729 (S.D.N.Y. Jan. 4, 2017) ............................... 8, 9
`
`Boundaries Sols. Inc. v. CoreLogic, Inc.,
`No. 5:14-CV-00761-PSG, 2014 WL 4954017
`(N.D. Cal. Sept. 29, 2014) ...................................................................... 4, 6, 9
`
`CG Tech. Dev., LLC v. Big Fish Games, Inc.,
`No. 16-cv-857, 2016 WL 4521682 (D. Nev. Aug 29, 2016) .......................... 7
`
`Cont’l Circuits LLC v. Intel Corp.,
`No. 16-cv-2026 PHX DGC, 2017 WL 2651709 (D. Ariz. June 19, 2017) .... 7
`
`DermaFocus LLC v. Ulthera, Inc.,
`201 F. Supp. 3d 465 (D. Del. 2016) ............................................................ 5, 9
`
`DRG-International, Inc. v. Bachem Americas, Inc.,
`Case No. CV-15-7276-MWF (SSx), 2016 WL 3460791
`(C.D. Cal. Jan. 5, 2016) .......................................................................... 1, 3, 4
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`TABLE OF AUTHORITIES
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`Case 8:17-cv-00981-JVS-JCG Document 48 Filed 01/12/18 Page 4 of 19 Page ID #:897
`TABLE OF AUTHORITIES
`(continued)
`
`
`
`PAGE
`
`Emblaze Ltd. v. Apple Inc.,
`No. C11-01079 SBA, 2012 WL 5940782 (N.D. Cal. Nov. 27, 2012) .... 1, 4, 6
`
`Finjan Inc. v. Cisco Sys. Inc.,
`No. 17-cv-00072-BLF, 2017 WL 2462423 (N.D. Cal. June 7, 2017) ............ 7
`
`Global–Tech Appliances, Inc. v. SEB S.A.,
`563 U.S. 754 (2011) ...................................................................................... 12
`
`Halo Electronics, Inc. v. Pulse Electronics, Inc.,
`__ U.S. __, 136 S. Ct. 1923, 195 L. Ed. 2d 278 (2016) ......................... passim
`
`IpVenture, Inc. v. Cellco P’ship,
`No. C 10-04755 JSW, 2011 WL 207978 (N.D. Cal. Jan. 21, 2011) .............. 4
`
`Jardin v. Datallegro, Inc.,
`No. 08CV1462-IEG-RBB, 2009 WL 186194 (S.D. Cal. Jan. 20, 2009) .... 4, 6
`
`Manzarek v. St. Paul Fire & Marine Ins. Co.,
`519 F.3d 1025 (9th Cir. 2008) ........................................................................ 3
`
`McZeal v. Sprint Nextel Corp.,
`501 F.3d 1354 (Fed. Cir. 2007) ...................................................................... 7
`
`MobileMedia Ideas LLC v. HTC Corp.,
`No. 2:10-CV-112-TJW, 2011 WL 4347037 (E.D. Tex. Sept. 15, 2011)........ 3
`
`mophie, Inc. v. Shah,
`No. SA CV 13-01321-DMG (JEMx), 2014 WL 10988347
`(C.D. Cal. Nov. 12, 2014 .............................................................................. 12
`
`Nanosys, Inc. v. QD Vision, Inc.,
`No. 16-cv-01957, 2016 WL 49430006 (N.D. Cal. Sept. 16, 2016) ........ 3, 6, 8
`
`Novitaz, Inc. v. inMarket Media, LLC,
`No. 16-cv-06795-EJD, 2017 WL 2311407 (N.D. Cal. May 26, 2017) ........ 10
`
`Oakley, Inc. v. 5.11, Inc.,
`No. 11CV2173 WQH CAB, 2012 WL 5363245 (S.D. Cal. Oct. 29, 2012) ... 6
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`TABLE OF AUTHORITIES
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`

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`Case 8:17-cv-00981-JVS-JCG Document 48 Filed 01/12/18 Page 5 of 19 Page ID #:898
`TABLE OF AUTHORITIES
`(continued)
`
`
`
`PAGE
`
`Oracle Corp. v. DrugLogic, Inc.,
`807 F. Supp. 2d 885 (N.D. Cal. 2011) ........................................................ 1, 4
`
`Progme Corp. v. Comcast Cable Commc'n LLC,
`No. 17-1488, 2017 WL 5070723 (E.D. Pa. Nov. 3, 2017) ......................... 5, 9
`
`Rambus, Inc. v. Nvidia Corp.,
`No. C 08-3343 SI, 2008 WL 4911165 (N.D. Cal. Nov. 13, 2008) ............. 1, 6
`
`Robert Bosch Healthcare Sys., Inc. v. Express MD Sols., LLC,
`No. C 12-00068 JW, 2012 WL 2803617 (N.D. Cal. July 10, 2012) .............. 7
`
`Shire Viropharma Inc. v. CSL Behring LLC et al.,
`No. 17-414, 2018 WL 326406 (D. Del. Jan. 8, 2018) .................................... 5
`
`Shroyer v. New Cingular Wireless Servs., Inc.,
`622 F.3d 1035 (9th Cir. 2010) ......................................................................... 2
`
`Sony Corp. v. LG Electronics U.S.A., Inc.,
`768 F. Supp. 2d 1058 (C.D. Cal. 2011) .......................................................... 6
`
`Straight Path IP Grp., Inc. v. Apple Inc.,
`No. C 16-03582 WHA, 2017 WL 3967864 (N.D. Cal. Sept. 9, 2017) ....... 3, 8
`
`The Tawnsaura Group, LLC v. Maximum Human Performance, LLC,
`No. CV 12-07189-SJO-(AGRx), 2012 WL 12331032
`(C.D. Cal. Nov. 7, 2012) ............................................................................... 12
`
`Varion Med. Sys., Inc. v. Elekta AB,
`No. 15-cv-871-LPS, 2016 WL 3748772 (D. Del. July 12, 2016) ................... 7
`
`XpertUniverse, Inc. v. Cisco Systems, Inc.,
`No. 17-cv-03848-RS, 2017 WL 4551519 (N.D. Cal. Oct. 11, 2017) ............. 7
`
`Zimmer Surgical, Inc. v. Stryker Corp.,
`No. CV 16-679-RGA-MPT, 2017 WL 3736750 (D. Del. Aug. 30, 2017) ..... 9
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`Statutes
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`35 U.S.C. § 284 ..................................................................................................... 3, 8
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`RUSS, AUGUST & KABAT
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`TABLE OF AUTHORITIES
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`

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`Case 8:17-cv-00981-JVS-JCG Document 48 Filed 01/12/18 Page 6 of 19 Page ID #:899
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`I.
`
`INTRODUCTION
`
`Defendants Seoul Semiconductor Co., Ltd.
`
`(“SSC”) and Seoul
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`Semiconductor, Inc. (“SSI”) (collectively, “Seoul” or “Defendants”) moved to
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`dismiss the willful infringement allegations in plaintiff Document Security
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`Systems, Inc. (“DSS” or “Plaintiff”)’s Second Amended Complaint (“SAC”).
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`Seoul’s motion (Dkt. No. 45) mischaracterizes the SAC’s willful infringement
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`allegations and misapplies the law. Seoul confuses the standard for pleading willful
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`infringement – the issue here – with the standard for ultimately proving willful
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`infringement – which is not at issue in this motion. The standard for pleading
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`willful infringement is unquestionably not the same as the standard to prove
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`willfulness. DRG-International, Inc. v. Bachem Americas, Inc., Case No. CV-15-
`
`7276-MWF (SSx), 2016 WL 3460791, at *9 (C.D. Cal. Jan. 5, 2016); Emblaze Ltd.
`
`v. Apple Inc., No. C11-01079 SBA, 2012 WL 5940782, at *8 (N.D. Cal. Nov. 27,
`
`2012); Rambus, Inc. v. Nvidia Corp., No. C 08-3343 SI, 2008 WL 4911165, at *2
`
`(N.D. Cal. Nov. 13, 2008). To plead willful infringement, a party only need only
`
`plead “the barest factual assertion of knowledge of an issued patent.” DRG-
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`International, 2016 WL 3460791, at *9, quoting Oracle Corp. v. DrugLogic, Inc.,
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`807 F. Supp. 2d 885, 902 (N.D. Cal. 2011) (citation omitted). DSS has
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`undoubtedly surpassed and exceeded the pleading requirements, and Seoul’s
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`motion must be denied.
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`II. BACKGROUND
`
`On November 16, 2017, DSS filed its SAC alleging Seoul’s infringement of
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`the three patents making up the patents-in-suit: the ’771 Patent, the ’087 Patent,
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`and the ’486 Patent (Dkt. No. 40). The SAC accuses Defendants of willfully
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`infringing the ’771, ’087 and ’486 patents. The SAC also alleges Defendants’
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`knowledge of the ’771, ’087 and ’486 patents and Defendants’ knowledge that it
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`and its customers infringed and continued to infringe each patent.
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`
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`1
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`PLAINTIFF DOCUMENT SECURITY SYSTEMS, INC.’S OPPOSITION
`TO DEFENDANTS’ MOTION TO DISMISS RESTATED WILLFUL INFRINGEMENT CLAIM
`
`RUSS, AUGUST & KABAT
`
`

`

`Case 8:17-cv-00981-JVS-JCG Document 48 Filed 01/12/18 Page 7 of 19 Page ID #:900
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`
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`The language of the paragraphs in the SAC that allege willful infringement
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`and knowledge of the patents-in-suit recite, in pertinent part:
`
`“Defendants have been aware of the [asserted patent] and of its
`infringement as of a date no later than [earliest date and how
`Defendants were notified]. Since that date, Defendants have failed to
`investigate and remedy their infringement of the [asserted patent] and
`thus willfully and egregiously continue to infringe the [asserted
`patent]. On information and belief, Defendants continued to offer
`infringing products without having modified or altered those products
`in a manner that would not infringe the [asserted patent]. Defendants,
`at the very least, have been egregiously and willfully blind to
`infringement of the [asserted patent]. Further evidence of Defendants’
`egregious and willful infringement are the acts of active inducement
`described
`in
`this Complaint. Defendants actively
`induce and
`encourage customers to make, use, sell, offer to sell and/or import the
`[asserted patent] Accused Instrumentalities with knowledge that these
`acts constitute infringement of the [asserted patent], with the purpose
`of, inter alia, developing and serving the United States market for
`Defendants’ LED products and consumer devices that include
`Defendants’ products.”
`
`(Dkt. No. 40 at ¶¶ 22, 33 & 46).
`
`Regarding pre-suit notice, specifically, paragraphs 22, 33 and 46 of the SAC
`
`state that “Defendants have been aware of the [’771, ’087 and ’486 patents] and of
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`[their] infringement as of a date no later than the date they were served with the
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`complaint in the case 2:17-cv-308, filed [in the U.S. District Court for the Eastern
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`District of Texas] April 13, 2017.” (Dkt. No. 40 at ¶¶ 22, 33 & 46.)1
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`III. LEGAL STANDARDS
`
`A claim can be dismissed only if there is “no cognizable legal theory” for
`
`the claim or where there is “an absence of sufficient facts alleged to support a
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`cognizable legal theory.” Shroyer v. New Cingular Wireless Servs., Inc., 622 F.3d
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`1035, 1041 (9th Cir. 2010). A complaint must state a claim that is “plausible on its
`
`face,” but need not establish that the claim is “probable.” Ashcroft v. Iqbal, 556
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`U.S. 662, 678 (2009). The complaint “does not need detailed factual allegations”
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`to state a claim. Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 555 (2007).
`
`
`1 Paragraph 46 of the SAC refers to the May 9, 2017 amended complaint filed in
`the dismissed E.D. Texas suit, which added allegations concerning the ’486 patent.
`2
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`PLAINTIFF DOCUMENT SECURITY SYSTEMS, INC.’S OPPOSITION
`TO DEFENDANTS’ MOTION TO DISMISS RESTATED WILLFUL INFRINGEMENT CLAIM
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`RUSS, AUGUST & KABAT
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`Case 8:17-cv-00981-JVS-JCG Document 48 Filed 01/12/18 Page 8 of 19 Page ID #:901
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`On a motion to dismiss, courts accept as true a plaintiff’s well-pleaded
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`factual allegations and construe all factual inferences in the light most favorable to
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`the plaintiff. See Manzarek v. St. Paul Fire & Marine Ins. Co., 519 F.3d 1025,
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`1031 (9th Cir. 2008.) Therefore, as long as a Complaint “pleads factual content
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`that allows the court to draw the reasonable inference that the defendant is liable
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`for the misconduct alleged” it is sufficient under Rule 12(b)(6). Iqbal, 556 U.S. at
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`678 (quoting Twombly, 550 U.S. at 570.)
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`In Halo Electronics, Inc. v. Pulse Electronics, Inc., __ U.S. __, 136 S. Ct.
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`1923, 195 L. Ed. 2d 278 (2016), the Supreme Court emphasized that the district
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`court should exercise its discretion as provided in 35 U.S.C. § 284 to determine
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`whether to award enhanced damages. The Supreme Court further explained that
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`the patentee must show that the infringement was an “egregious case[] of
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`misconduct beyond typical infringement.” Id. at 1935.
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`The Halo case replaced the previous “unduly rigid” legal standard for
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`willful/egregious infringement under 35 U.S.C. § 284 with a “more flexible
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`standard.” Id. Moreover, “a patent infringement plaintiff does not have to prove
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`willfulness at the pleading stage.” Straight Path IP Grp., Inc. v. Apple Inc., No. C
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`16-03582 WHA, 2017 WL 3967864, at *4 (N.D. Cal. Sept. 9, 2017).
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`The standard for pleading willful infringement is lower than and different
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`from the standard for proving willful infringement, under, for example, the 2016
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`U.S. Supreme Court case of Halo. See Nanosys, Inc. v. QD Vision, Inc., No. 16-cv-
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`01957, 2016 WL 49430006, at *7 (N.D. Cal. Sept. 16, 2016) (“Despite defendants’
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`assertion [that plaintiffs need to allege more than ‘mere knowledge’ to sustain a
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`willfulness claim], the Court disagrees that Halo created a special test [for
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`pleading because it] did not address pleading standards at the motion to dismiss
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`stage”); DRG-International, 2016 WL 3460791, at *10; see also MobileMedia
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`Ideas LLC v. HTC Corp., No. 2:10-CV-112-TJW, 2011 WL 4347037, at *2 (E.D.
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`
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`Tex. Sept. 15, 2011) (“this Court has observed that, much like direct infringement
`3
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`PLAINTIFF DOCUMENT SECURITY SYSTEMS, INC.’S OPPOSITION
`TO DEFENDANTS’ MOTION TO DISMISS RESTATED WILLFUL INFRINGEMENT CLAIM
`
`RUSS, AUGUST & KABAT
`
`

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`Case 8:17-cv-00981-JVS-JCG Document 48 Filed 01/12/18 Page 9 of 19 Page ID #:902
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`and its pleading requirements in accordance with Form 18 and Federal Circuit law,
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`the bar for pleading willful infringement is not high”).
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`To state a claim for willful infringement, the plaintiff must provide “a
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`pleading equivalent” to the defendant having “knowledge of the patent and of his
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`infringement.” Oracle, 807 F. Supp. 2d at 902. “Therefore, to plead willful
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`infringement, a party must make out ‘the barest factual assertion of knowledge of
`
`an issued patent.’” Id.; IpVenture, Inc. v. Cellco P’ship, No. C 10-04755 JSW,
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`2011 WL 207978, at *2 (N.D. Cal. Jan. 21, 2011).
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`Moreover, “[w]here a complaint (1) specifically identifies the accused
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`products, (2) alleges pre-suit knowledge, (3) alleges the infringing acts are willful,
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`intentional and conscious and (4) alleges plaintiff has and will continue to be
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`irreparably harmed by the infringement, that complaint sufficiently states a claim
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`for willful infringement.” DRG-International, 2016 WL 3460791, at *11, quoting
`
`Boundaries Sols. Inc. v. CoreLogic, Inc., No. 5:14-CV-00761-PSG, 2014 WL
`
`4954017, at *5 (N.D. Cal. Sept. 29, 2014); Emblaze Ltd., 2012 WL 59409782, at
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`*8; Jardin v. Datallegro, Inc., No. 08CV1462-IEG-RBB, 2009 WL 186194, at *7
`
`(S.D. Cal. Jan. 20, 2009).
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`IV. ARGUMENT
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`The SAC more than sufficiently pleads willful infringement for the ’771,
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`’087 and ’486 Patents because it provides “a pleading equivalent” to Seoul having
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`knowledge of those patents and their infringement, makes out the factual basis of
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`Seoul’s knowledge of those patents, and finally because it: (1) specifically
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`identifies the accused products (See e.g., Dkt. No. 40 at ¶ 13-17, 24-29 & 36-42),
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`(2) alleges pre-suit knowledge (See Dkt. No. 40 at ¶ 22, 33 & 46), (3) alleges the
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`infringing acts are willful, intentional and conscious (See Dkt. No. 40 at ¶ 22, 33 &
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`46) and (4) alleges plaintiff has and will continue to be irreparably harmed by the
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`infringement (See Dkt. No. 40 at ¶ 22, 33 & 46).
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`
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`Seoul attempts to side-step the applicable law by arguing that the willful
`4
`
`PLAINTIFF DOCUMENT SECURITY SYSTEMS, INC.’S OPPOSITION
`TO DEFENDANTS’ MOTION TO DISMISS RESTATED WILLFUL INFRINGEMENT CLAIM
`
`RUSS, AUGUST & KABAT
`
`

`

`Case 8:17-cv-00981-JVS-JCG Document 48 Filed 01/12/18 Page 10 of 19 Page ID #:903
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`infringement claims in DSS’s SAC are “substantially unchanged from [the]
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`willfulness claims in its FAC” with “only minor differences in wording” (Dkt. No.
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`45 at 6). This mischaracterizes the allegations of the SAC. The SAC adds
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`substantial specific allegations of Defendants’ knowledge of the ’771, ’087 and
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`’486 patents, knowledge that Defendants and their customers infringed, and,
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`though not required, specific allegations of egregious behavior by the Defendants,
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`including actively inducing and instructing customers to infringe DSS’s patents
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`knowing such actions constitute infringement of DSS’s patents.
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`A. DSS Pleads Willful Infringement Beyond the Required
`Standard
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`Seoul argues that the allegations in DSS’s SAC fall short of alleging any
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`facts sufficient to state a plausible willful infringement claim under Halo, which
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`requires willful infringement claims for “egregious cases of misconduct beyond
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`typical infringement.” (Dkt. No. 45 at 9).
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`1.
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`Seoul Confuses Pleading with Proving Willfulness
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`Seoul confuses the standard for proving willful infringement with the
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`standard for pleading willful infringement. See Shire Viropharma Inc. v. CSL
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`Behring LLC et al., No. 17-414, 2018 WL 326406, at *1 (D. Del. Jan. 8, 2018)
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`(“Defendants’ argument seems to conflate the standards for pleading willful
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`infringement with the standards for proving willful infringement. Even after Halo,
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`broader allegations of willfulness, without a specific showing of egregiousness, are
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`sufficient to withstand a motion to dismiss.”); accord Progme Corp. v. Comcast
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`Cable Commc'n LLC, No. 17-1488, 2017 WL 5070723, at *12 (E.D. Pa. Nov. 3,
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`2017); Bio-Rad Labs. Inc. v. Thermo Fisher Sci. Inc., No. CV 16-358-RGA, 2017
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`WL 438733, at *1 (D. Del. Feb. 1, 2017); DermaFocus LLC v. Ulthera, Inc., 201
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`F. Supp. 3d 465, 473 (D. Del. 2016) (“Under the less rigid standard announced in
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`Halo, however, the court will allow plaintiff’s general allegations of willful
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`infringement to withstand the motion to dismiss”).
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`
`
`5
`
`PLAINTIFF DOCUMENT SECURITY SYSTEMS, INC.’S OPPOSITION
`TO DEFENDANTS’ MOTION TO DISMISS RESTATED WILLFUL INFRINGEMENT CLAIM
`
`RUSS, AUGUST & KABAT
`
`

`

`Case 8:17-cv-00981-JVS-JCG Document 48 Filed 01/12/18 Page 11 of 19 Page ID #:904
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`Many district courts agree that cases like Halo or Seagate do not alter the
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`pleading requirements for a willful infringement claim. See, e.g., Nanosys, 2016
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`WL 49430006, at *7 (“Despite defendants’ assertion [that plaintiffs need to allege
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`more than ‘mere knowledge’ to sustain a willfulness claim], the Court disagrees
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`that Halo created a special test [for pleading because it] did not address pleading
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`standards at the motion to dismiss stage”); see also Oakley, Inc. v. 5.11, Inc., No.
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`11CV2173 WQH CAB, 2012 WL 5363245, at *2 (S.D. Cal. Oct. 29, 2012)
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`(“‘[T]he issue at this stage in the proceedings is limited to the sufficiency of the
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`pleadings. The [SAC] complaint identifies the specific products alleged to infringe
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`and alleges that the Defendants' had written notice of the issued patents before the
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`action was filed. The Court concludes that [SAC] sufficiently alleges willful
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`infringement.”); Emblaze Ltd., 2012 WL 5940782, at *8; Sony Corp. v. LG
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`Electronics U.S.A., Inc., 768 F. Supp. 2d 1058, 1064 (C.D. Cal. 2011); Advanced
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`Analogic Technologies, Inc. v. Kinetic Technologies, Inc., No. C-09-1360 MMC,
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`2009 WL 1974602, at *2 (N.D. Cal. July 8, 2009); Jardin, 2009 WL 186194, at *7;
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`Rambus v. Nvidia Corp., No. C 08-3343 SI, 2008 WL 4911165, at *2 (N.D. Cal.
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`Nov. 13, 2008).
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`DSS has more than sufficiently pled willful infringement at least because its
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`SAC (1) specifically identifies the accused products (See e.g., Dkt. No. 40 at ¶ 13-
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`17, 24-29 & 36-42), (2) alleges pre-suit knowledge (See Dkt. No. 40 at ¶ 22, 33 &
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`46), (3) alleges the infringing acts are willful, intentional and conscious (See Dkt.
`
`No. 40 at ¶ 22, 33 & 46) and (4) alleges plaintiff has and will continue to be
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`irreparably harmed by the infringement (See Dkt. No. 40 at ¶ 22, 33 & 46).
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`Boundaries, 2014 WL 4954017, at *5.
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`Furthermore, the cases that Seoul cites are inapposite and distinguishable
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`because they involve bare conclusory statements far below the substance that
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`DSS’s SAC provides, or determinations involving the merits of proving, not
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`
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`pleading willful infringement, as described above. See XpertUniverse, Inc. v. Cisco
`6
`
`PLAINTIFF DOCUMENT SECURITY SYSTEMS, INC.’S OPPOSITION
`TO DEFENDANTS’ MOTION TO DISMISS RESTATED WILLFUL INFRINGEMENT CLAIM
`
`RUSS, AUGUST & KABAT
`
`

`

`Case 8:17-cv-00981-JVS-JCG Document 48 Filed 01/12/18 Page 12 of 19 Page ID #:905
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`Systems, Inc., No. 17-cv-03848-RS, 2017 WL 4551519, at *6 (N.D. Cal. Oct. 11,
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`2017)
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`(“Although XpertUniverse has alleged knowledge and continued
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`infringement, it needs to do more to show that Cisco has engaged in ‘egregious
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`cases of misconduct beyond typical infringement’ that could possibly warrant
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`enhanced damages…Cisco for its part maintains that it accepted the Delaware
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`court's infringement judgment against Remote Expert versions 1.5 and 1.8 and
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`proceeded with a design-around in subsequent versions. Disagreement about the
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`existence of continued infringement does not necessarily indicate willful or
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`deliberate misconduct.”); Finjan Inc. v. Cisco Sys. Inc., No. 17-cv-00072-BLF,
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`2017 WL 2462423, at *5 (N.D. Cal. June 7, 2017) (“the SAC does not contain
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`factual allegations that would enable the Court to plausibly conclude that Cisco
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`had pre-suit knowledge of any of the Asserted Patents”); CG Tech. Dev., LLC v.
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`Big Fish Games, Inc., No. 16-cv-857, 2016 WL 4521682, at *14 (D. Nev. Aug 29,
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`2016) (“Plaintiffs simply state conclusory allegations that Defendant ‘was made
`
`aware of the … patents [and] … [its] continued use of its infringing products
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`constitutes willful and blatant infringement”); Varion Med. Sys., Inc. v. Elekta AB,
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`No. 15-cv-871-LPS, 2016 WL 3748772, at *8 (D. Del. July 12, 2016) (“Plaintiff
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`does little more than provide a formulaic recitation of the pre-Halo elements of a
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`willful infringement claim”); Cont’l Circuits LLC v. Intel Corp2., No. 16-cv-2026
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`PHX DGC, 2017 WL 2651709, at *8 (D. Ariz. June 19, 2017) (“The second
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`amended complaint adds the word ‘egregious’ to its allegations that Defendants’
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`‘infringement of the Patents-in-Suit has been and continues to be egregious,
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`2 The cases that Seoul cites not within the Ninth Circuit are further distinguishable
`because “a motion to dismiss for failure to state a claim upon which relief can be
`granted is a purely procedural question not pertaining to patent law” and thus,
`courts should apply “the law of the regional circuit” in evaluating such a motion.
`Robert Bosch Healthcare Sys., Inc. v. Express MD Sols., LLC, No. C 12-00068
`JW, 2012 WL 2803617, at *2–4 (N.D. Cal. July 10, 2012), quoting McZeal v.
`Sprint Nextel Corp., 501 F.3d 1354, 1355–56 (Fed. Cir. 2007).
`7
`
`PLAINTIFF DOCUMENT SECURITY SYSTEMS, INC.’S OPPOSITION
`TO DEFENDANTS’ MOTION TO DISMISS RESTATED WILLFUL INFRINGEMENT CLAIM
`
`
`
`RUSS, AUGUST & KABAT
`
`

`

`Case 8:17-cv-00981-JVS-JCG Document 48 Filed 01/12/18 Page 13 of 19 Page ID #:906
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`willful, wanton, malicious, in bad faith, deliberate, consciously wrongful, and/or
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`flagrant’…but this is merely a conclusion, which is not sufficient.”). In sum, these
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`cases failed to allege facts of pre-suit knowledge (beyond a mere conclusory
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`recital). Here there is no dispute that DSS has alleged factually how Defendants
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`obtained knowledge of the patents-in-suit (and the allegations of infringement).
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`2.
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`DSS Sufficiently Pleads Willfulness Under Halo
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`Since the U.S. Supreme Court altered the legal standard for willful/egregious
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`infringement in in Halo in 2016, there have been few, if any, decisions altering the
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`pleading standard under the new law. See Bobcar Media, LLC v. Aardvark Event
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`Logistics, Inc., No. 16-885, 2017 WL 74729, at *5-6 (S.D.N.Y. Jan. 4, 2017)
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`(Halo’s “effect on the pleading standard for willful infringement remains
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`unclear.”); Nanosys, 2016 WL 4943006, at *8 (“Halo did not address pleading
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`standards at the motion to dismiss stage.”).
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`One recent decision, however, held that similar, if not less detailed,
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`allegations of willful infringement were sufficient to sustain a willful/egregious
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`infringement claim at the pleading stage. Straight Path IP Grp., Inc. 2017 WL
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`3967864, at *4. The Northern District of California court reasoned that Halo
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`rejected the previous “unduly rigid” test under 35 U.S.C. § 284 for a more
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`“flexible” inquiry and this affected the pleading requirements for willful/egregious
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`infringement post-Halo. Id. The court accordingly held allegations a defendant
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`“was aware of the [] asserted patents and their infringement since at least
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`September 24, 2014, and that [defendant] nonetheless continued to sell the accused
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`products and induce infringement by its customers after that date” were sufficient
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`to sustain a willful/egregious infringement claim at the pleading stage. Id. DSS’s
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`allegations in its SAC go much further than this and more than sufficiently plead
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`willful infringement because its SAC (1) specifically identifies the accused
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`products (See e.g., Dkt. No. 40 at ¶ 13-17, 24-29 & 36-42), (2) alleges pre-suit
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`
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`knowledge (See Dkt. No. 40 at ¶ 22, 33 & 46), (3) alleges the infringing acts are
`8
`
`PLAINTIFF DOCUMENT SECURITY SYSTEMS, INC.’S OPPOSITION
`TO DEFENDANTS’ MOTION TO DISMISS RESTATED WILLFUL INFRINGEMENT CLAIM
`
`RUSS, AUGUST & KABAT
`
`

`

`Case 8:17-cv-00981-JVS-JCG Document 48 Filed 01/12/18 Page 14 of 19 Page ID #:907
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`
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`willful, intentional and conscious (See Dkt. No. 40 at ¶ 22, 33 & 46)3 and (4)
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`alleges plaintiff has and will continue to be irreparably harmed by the infringement
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`(See Dkt. No. 40 at ¶ 22, 33 & 46). Boundaries, 2014 WL 4954017, at *5; see also
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`Bobcar Media, 2017 WL 74729, at *6 (finding that plaintiff “carried its burden”
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`when pleading willfulness when
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`letters were sent to defendant alleging
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`infringement and defendant continued to engage in allegedly infringing activities).
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`3.
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`Though Not Necessary at this Stage, DSS Pleads
`Specific Egregious Infringement by Defendants
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`“At the pleading stage, it is not necessary to show that the case is
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`egregious.” Bio-Rad Labs., 2017 WL 438733, at *1; see also Bayer Healthcare,
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`LLC v. Baxalta, Inc., No. 16-1122, 2017 U.S. Dist. LEXIS 126904, at *3 (D. Del.
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`Aug. 10, 2017) (“At this [pleading] stage of the litigation…Plaintiff need not
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`allege egregiousness.”). “At a minimum, the discretion that Halo confers on
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`district courts to award enhanced damages based on the nature of the specific
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`misconduct in a given case counsels hesitation before dismissing allegations of
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`willfulness at the pleading stage.” Bobcar Media, 2017 WL 74729, at *6. “A patent
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`infringer’s subjective willfulness, whether intentional or knowing, may warrant
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`enhanced damages, without regard to whether his infringement was objectively
`
`
`3 The SAC alleges specific pre-filing and post-filing willful and egregious conduct.
`Several district courts have held that after Halo, post-filing conduct can also serve
`as a basis for willful infringement. See Apple Inc. v. Samsung Electronics Co.,
`Ltd., 258 F. Supp. 3d 1013, 1027 (N.D. Cal. 2017) (“[Defendant]’s post-filing
`conduct alone can serve as the basis of a jury’s willfulness finding and an award
`of enhanced damages.”); Zimmer Surgical, Inc. v. Stryker Corp., No. CV 16-679-
`RGA-MPT, 2017 WL 3736750, at *2 (D. Del. Aug. 30, 2017) (“I am going to
`conclude, based on the analysis in Apple v. Samsung, that allegations of post-filing
`conduct can support a finding of willfulness.”); Progme Corp. v. Comcast Cable
`Commc'ns LLC, No. CV 17-1488, 2017 WL 5070723, at *12 (E.D. Pa. Nov. 3,
`2017); DermaFocus LLC v. Ulthera, Inc., 201 F. Supp. 3d 465 (D. Del. 2016)
`(“Under the less rigid standard announced in Halo, however, the court will allow
`plaintiff’s general allegations of willful infringement to withstand the motion to
`dismiss.”)
`
`
`
`9
`
`PLAINTIFF DOCUMENT SECURITY SYSTEMS, INC.’S OPPOSITION
`TO DEFENDANTS’ MOTION TO DISMISS RESTATED WILLFUL INFRINGEMENT CLAIM
`
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