`
`IN THE UNITED STATES DISTRICT COURT
`FOR THE DISTRICT OF DELA WARE
`
`ELM 3DS INNOVATIONS, LLC, a Delaware
`limited liability company,
`
`Plaintiff,
`
`v.
`
`SAMSUNG ELECTRONICS CO., LTD., a
`Korean business entity,
`SAMSUNG SEMICONDUCTOR, INC., a
`California corporation,
`SAMSUNG ELECTRONICS AMERICA, INC., a
`New York corporation, and
`SAMSUNG AUSTIN SEMICONDUCTOR, LLC,
`a Delaware limited liability company,
`
`Defendants.
`
`Civil Action No. 14-1430-LPS-CJB
`
`MEMORANDUM ORDER
`
`WHEREAS, Magistrate Judge Burke issued a 10-page Report and Recommendation
`
`("Report") (D.I. 40), dated September 29, 2015, recommending that Defendants' Motion to
`
`Dismiss ("Motion") (D.I. 25) be denied;
`
`WHEREAS, on October 16, 2015, Defendants objected to the Report ("Objections") (D.I.
`
`43), arguing that the Report erred in finding that Plaintiffs factual allegations provided a
`
`plausible basis for inferring induced infringement because it incorrectly concluded that
`
`Defendants (1) had actual knowledge of the '239 patent before this lawsuit was filed; and
`
`(2) specifically intended to encourage infringement of the '239 patent;
`
`WHEREAS, on November 2, 2015, Plaintiff responded to the Objections (D.I. 48),
`
`arguing that (1) the Report made neither factual nor legal errors and (2) that Plaintiff's complaint
`
`1
`
`
`
`Case 1:14-cv-01430-LPS-CJB Document 97 Filed 03/31/16 Page 2 of 3 PageID #: 1821
`
`alleged facts sufficient to support a plausible allegation of induced infringement;
`
`WHEREAS, the Court has considered Defendant's Motion de novo, as it presents case(cid:173)
`
`dispositive issues, see 28 U.S.C. § 636(b)(l ); Fed. R. Civ. P. 72(b)(3), and has further reviewed
`
`all of the pertinent filings;
`
`NOW THEREFORE, IT IS HEREBY ORDERED that:
`
`1.
`
`Defendant's Objections are OVERRULED, Judge Burke' s Report is ADOPTED,
`
`and Defendants' Motion (D.I. 25) is DENIED.
`
`2.
`
`Defendants argue that the Report's actual knowledge analysis improperly gave
`
`weight to Defendants' competitors' knowledge of the patents-in-suit. The Court disagrees.
`
`Defendants are correct that numerous cases have found that factual allegations based on general
`
`participation in a relevant market may not form a basis for inferring actual knowledge of a
`
`particular patent. See, e.g., EON Corp. IP Holdings, 802 F. Supp. 2d 527, 533-534 (declining to
`
`infer actual knowledge from fact that sophisticated market participant would likely have learned
`
`of patent through reasonable due diligence); MO NEC Holding, 897 F. Supp. 2d 225, 233
`
`(participation as "reasonable economic actor[s] and competitor[s]" in same technologically-based
`
`industry is insufficient to establish actual knowledge); Soft View LLC v. Apple Inc., 2012 WL
`
`3061027, at *6 (D. Del. July 26, 2012) (widespread knowledge of third-party litigation involving
`
`patent does not make actual knowledge plausible). Yet every case must be evaluated on its own
`
`merits. Here, Plaintiff argues not that participation in the relevant market would have given
`
`Defendants merely incentives or opportunities to know about the patent, but, rather, that
`
`Defendants' knowledge may be inferred from their participation in the semiconductor market
`
`where, allegedly, the existence of the patent-in-suit was common knowledge. Defendants'
`
`2
`
`
`
`Case 1:14-cv-01430-LPS-CJB Document 97 Filed 03/31/16 Page 3 of 3 PageID #: 1822
`
`participation in an industry group that was working to standardize technologies related to the
`
`patents-in-suit is a specific factual allegation further supporting Defendants' knowledge of the
`
`patent - as is the allegation discussed in the paragraph below. The Court cannot say at this stage
`
`that these well-pleaded factual allegations do not plausibly allege Defendants' knowledge.
`
`Hence, the Court finds no error in Judge Burke' s conclusion. Investpic, LLC v. FactSet Research
`
`Sys. , Inc., 2011WL4591078, at *2 (D. Del. Sept. 30, 2011).
`
`3.
`
`Defendants argue that the Report mischaracterizes some of Plaintiffs factual
`
`allegations about the patentee' s citations to the '239 patent, and further argue that, as a
`
`consequence, the Report improperly concludes that these allegations support a finding of
`
`plausibility. While the Court agrees with Defendants that the Report misstated the number of
`
`times Defendants cited to siblings of the '239 patent in their own applications, this error is
`
`immaterial in light of all that is alleged, including the allegations discussed in the paragraph
`
`above.
`
`4.
`
`Defendants argue that the Report erred in finding that the complaint sufficiently
`
`alleged Defendants' knowledge of and specific intent to induce infringement. The Court
`
`disagrees, for the reasons outlined in the Report.
`
`(D.14~:: ?,/L
`
`March 31 , 2016
`Wilmington, Delaware
`
`HONORABLE LEONARD P. STARK
`UNITED STATES DISTRICT JUDGE
`
`3
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