Case 3:18-cv-02245-JD Document 71 Filed 03/08/19 Page 1 of 4
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`UNITED STATES DISTRICT COURT
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`NORTHERN DISTRICT OF CALIFORNIA
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`FIRSTFACE CO., LTD.,
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`Plaintiff,
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`v.
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`APPLE, INC.,
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`Defendant.
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`Case No. 18-cv-02245-JD
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`ORDER RE MOTION TO DISMISS
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`Re: Dkt. No. 36
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`In this patent dispute, Apple, Inc. moves to dismiss the complaint under Federal Rule of
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`Civil Procedure 12(b)(6). Dkt. No. 36. The motion is denied.
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`BACKGROUND
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`The technology at issue is the “home” button and related functionality on iPhones and
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`iPads. The patents-in-suit, which plaintiff Firstface Co., Ltd. holds as an assignee, are Patent Nos.
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`8,831,557; 9,633,373; and 9,779,419. The patents are attached to the complaint. Dkt. No. 1,
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`Exhs. A-C. Firstface alleges that Apple has infringed multiple claims in these patents by
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`equipping its mobile devices with a home button that functions as an activation switch and
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`initiates fingerprint authentication and the hands-free “Siri” functionality. Firstface alleges presuit
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`knowledge of the ’557 patent based on a 2015 offer to Apple to purchase or license Firstface’s
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`patent portfolio. Id. ¶ 14. Willful infringement for purposes of enhanced damages is alleged only
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`for the ’557 patent.
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`I.
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`DIRECT INFRINGEMENT
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`DISCUSSION
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`The complaint states plausible claims for direct infringement. The complaint attaches and
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`incorporates by reference each of the patents at issue, and calls out the specific claims that have
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`been infringed. It identifies the accused Apple products by name and pinpoints the infringing
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`Case 3:18-cv-02245-JD Document 71 Filed 03/08/19 Page 2 of 4
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`components and functions, including the activation, authentication, and hands-free functions
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`associated with the home button on those Apple devices. See, e.g., Dkt. No. 1 ¶¶ 10, 12, 24, 26,
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`37, 39. That gives Apple fair notice of the infringement claims and the grounds on which they are
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`brought, which is all that is required to meet the plausibility standards of Iqbal and Twombly. Disc
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`Disease Solutions Inc. v. VGH Solutions, Inc., 888 F.3d 1256, 1260 (Fed. Cir. 2018).
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`II.
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`INDIRECT INFRINGEMENT
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`The complaint adequately alleges knowledge for induced infringement. Induced
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`infringement requires that the defendant knew about the patent and that the induced acts would
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`amount to patent infringement. Commil USA, LLC v. Cisco Sys., Inc., 135 S. Ct. 1920, 1926
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`(2015); see also Global-Tech Appliances, Inc. v. SEB S.A., 563 U.S. 754, 766 (2011). Firstface
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`adequately alleges knowledge of all three patents for indirect-infringement purposes as of the
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`filing date of the complaint. See CAP Co. v. McAfee, Inc., Case No. 14-CV-05068-JD, 2015 WL
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`3945875, at *5 (N.D. Cal. June 26, 2015).
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`The complaint also alleges enough facts to state a specific intent to encourage conduct by
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`others known to be infringing. See, e.g., Dkt. No. 1 ¶¶ 15-20, 29-32. These allegations are
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`considerably more developed than the “passing references” found to be inadequate in CAP.
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`See 2015 WL 3945875, at *5. Specifically, Firstface says that Apple actively coached customers
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`to use the accused devices in an infringing manner through online tutorials and similar
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`instructional matters, among other channels. See, e.g., Dkt. No. 1 ¶ 16. That is enough to proceed
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`with the induced infringement claims. See Barry v. Medtronic, Inc., 914 F.3d 1310, 1334 (Fed.
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`Cir. 2019).
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`So too for the contributory infringement claims, which entail similar mental state
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`requirements. Commil, 135 S. Ct. at 1927; Global-Tech, 563 U.S. at 764-66. The complaint also
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`adequately alleges the absence of substantial noninfringing uses. This element “focuses on
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`whether the accused products can be used for purposes other than infringement.” Nalco Co. v.
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`Chem-Mod, LLC, 883 F.3d 1337, 1357 (Fed. Cir. 2018) (quotation omitted; emphasis in original).
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`It looks to “the use’s practicality, the invention’s intended purpose, and the intended market.” i4i
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`Ltd. P’ship v. Microsoft Corp., 598 F.3d 831, 851 (Fed. Cir. 2010), aff’d, 564 U.S. 91 (2011).
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`Case 3:18-cv-02245-JD Document 71 Filed 03/08/19 Page 3 of 4
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`The complaint alleges that the home button and fingerprint functionality are “not staple
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`articles of commerce suitable for substantial non-infringing uses,” but were instead “specifically
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`programmed and/or configured to implement” the patents-in-suit. Dkt. No. 1 ¶¶ 17-18, 31-32,
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`44-45. Firstface specifies how these features on iPhones and iPads are central to the devices’
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`operation. In addition, while it was not Apple’s burden to identify any substantial noninfringing
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`uses for the home button, it certainly did not point any out. The complaint plausibly alleges no
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`substantial noninfringing uses.
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`III. ENHANCED DAMAGES
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`The complaint adequately states a claim for enhanced damages under 35 U.S.C.
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`Section 284 for willful infringement of the ’557 patent. Enhanced damages may be appropriate as
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`a sanction for willful infringement that manifests the wanton, malicious, and bad-faith conduct of
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`a veritable pirate. Halo Elecs., Inc. v. Pulse Elecs., Inc., 136 S. Ct. 1923, 1932 (2016). The
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`driving inquiry is whether the defendant acted despite a known or obvious risk of infringement.
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`Arctic Cat Inc. v. Bombardier Recreational Prods., Inc., 876 F.3d 1350, 1371 (Fed. Cir. 2017).
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`The predicate determination of whether infringement was willful is a question of fact for
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`the jury to decide. Polara Engineering Inc. v. Campbell Co., 894 F.3d 1339, 1353-54 (Fed.
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`Cir. 2018); WBIP, LLC v. Kohler Co., 829 F.3d 1317, 1341 (Fed. Cir. 2016).1 It is “by definition a
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`question of the actor’s intent, the answer to which must be inferred from all the circumstances.”
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`Gustafson, Inc. v. Inters. Indus. Prods., Inc., 897 F.2d 508, 510-11 (Fed. Cir. 1990) (emphasis
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`omitted). Subjective willfulness alone can be enough to support an award of enhanced damages.
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`Halo, 136 S. Ct. at 1933.
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`The intensely factual issues inherent in a claim of willfulness counsel against early
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`dismissal at the pleading stage, all the more so because the salient facts and evidence are often in
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`the defendant’s sole possession. Here, Firstface alleges that Apple knew about the ’557 patent as
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`early as 2015, when it proposed a purchase or licensing deal to Apple for it, and proceeded with
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`infringing activity after that. Dkt. No. 1 ¶¶ 14-16. That is enough to allow the claim to go
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`1 The ultimate decision to award enhanced damages is, of course, entrusted to the sound discretion
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`Case 3:18-cv-02245-JD Document 71 Filed 03/08/19 Page 4 of 4
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`forward for resolution on the basis of a fully developed record. Apple is perfectly free to attack
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`the sufficiency of the evidence on summary judgment, if the record warrants it, or at trial.
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`CONCLUSION
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`The motion to dismiss is denied.
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`IT IS SO ORDERED.
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`Dated: March 8, 2019
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`JAMES DONATO
`United States District Judge
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