Case 1:16-cv-00830-RGA Document 35 Filed 02/07/18 Page 1 of 4 PageID #: 2289
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`IN THE UNITED STATES DISTRICT COURT
`FOR THE DISTRICT OF DELA WARE
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`SIPCO, LLC and IP CO., LLC,
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`Plaintiffs,
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`v.
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`STREETLINE, INC., KAPSCH
`TRAFFICCOM HOLDING CORP., and
`KAPSCH TRAFFICCOM U.S. CORP.
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`Defendants.
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`Civil Action No. 16-830-RGA
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`MEMORANDUM ORDER
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`Plaintiffs SIPCO and IP Co. filed a complaint against Defendants Streetline, Inc. and
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`Kapsch Trafficcom Holding Corp. alleging infringement often patents. (D.I. 1). Defendants
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`filed a motion to dismiss for failure to state a claim (D.I. 7), which I granted. (D.I. 15). I gave
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`Plaintiffs leave to amend, and Plaintiffs filed the First Amended Complaint ("F AC"). (D.I. 16).
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`The FAC added Kapsch Trafficcom U.S. Corp. as a third defendant, assertions of indirect
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`infringement, and a detailed description of the accused product. (See id.). Defendants again
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`moved to dismiss. (D.I. 18). I granted that motion. (D.I. 24). I again gave Plaintiffs leave to
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`amend, and Plaintiffs filed the Second Amended Complaint ("SAC"). (D.I. 25). Defendants
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`moved to dismiss in part the SAC. (D.I. 30). I now consider that motion.
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`The SAC adds ten new claim charts, which appear to show how the accused products
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`meet each limitation of the asserted claims of the ten patents-in-suit. (D.I. 26, Exhs. 11, 12, 13,
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`14, 15, 16, 17, 18, 19, 20).
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`Case 1:16-cv-00830-RGA Document 35 Filed 02/07/18 Page 2 of 4 PageID #: 2290
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`Defendants Kapsch Trafficcom Holding Corp. and Kapsch Trafficcom U.S. Corp.
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`("Kapsch") argue the SAC fails to state claims against them for direct or induced infringement.
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`(D.I. 31 at 7). Defendant Streetline argues the SAC fails to state a claim against it for induced
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`infringement. (Id.).
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`The SAC names some of the component parts of the parking system with some
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`specificity. (DJ. 25 iii! 18, 19, 20). The SAC makes clear that the products at issue are Streetline
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`products, and that Kaps ch' s involvement as defendants grows out of their 2015 acquisition of
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`Streetline. (Id. if 5). Streetline is now a wholly-owned subsidiary of one of the Kapsch
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`Defendants. (Id.).
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`As to claims of direct infringement against Kapsch, I do not think the SAC meets the
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`Twombly/ Iqbal pleading standard. In the SAC, Plaintiffs allege Kapsch "ha[ s] directly infringed
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`[the patents-at-issue] by either offering to sell and selling the Streetline system cited above in
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`reference to infringement by Defendant Streetline." (D.I. 25 iii! 31, 40, 47, 53, 65, 71, 77, 83, 89;
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`see also id. if 59). In some circumstances, this might be enough, but here the SAC makes clear
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`that it is Streetline's product. Thus, the allegation that Streetline's corporate relatives also sell
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`the product is sufficiently inconsistent with the other allegations as to require some factual
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`assertions to make the allegation "plausible." The only factual support for the allegation that
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`Kapsch "offers to sell, or sells" the patented inventions is the Kapsch website, which states, "Our
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`offerings include .... " (Id. iii! 23, 24). The website goes on to list parking solutions, including
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`sensors and parking space management. (Id.). Above the heading, "Our offerings include," is a
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`short paragraph related to Kapsch' s acquisition of Streetline. (Id. if 23).
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`In my opinion, these facts are insufficient to allow the Court to draw a "reasonable
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`inference" that Kapsch is liable for offering to sell or selling the patented inventions. See
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`Case 1:16-cv-00830-RGA Document 35 Filed 02/07/18 Page 3 of 4 PageID #: 2291
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`Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009). In other words, I do not think the fact that Kapsch's
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`website states "[ o ]ur offerings include," without more, supports an inference that Kapsch is
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`manifesting a willingness to enter into a bargain with a prospective customer. See Rotec Indus.
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`v. Mitsubishi Corp., 215 F.3d 1246, 1254-55 (Fed. Cir. 2000) (defining "offer to sell" in 35
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`U.S.C. § 27l(a) "according to the norms of traditional contractual analysis"). Nothing on the
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`website provided in the SAC suggests one could purchase any of the listed parking solutions
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`from Kapsch. Similarly, there are no facts alleged in the SAC supporting the inference that
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`Kapsch "sells" or has sold the patented inventions. Thus, I am dismissing the SAC as to claims
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`of direct infringement against Kapsch.
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`As to the claim of induced infringement against Streetline, I similarly do not think the
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`SAC meets the Twombly/Iqbal pleading standard. In applying that standard, the Federal Circuit
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`has held that in order for a claim of induced infringement to survive a motion to dismiss, the
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`"complaint[] must contain facts plausibly showing that [Defendants] specifically intended their
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`customers to infringe the [asserted patents] and knew that the customer's acts constituted
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`infringement." In re Bill of Lading Transmission & Processing Sys. Patent Litig., 681 F .3d
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`1323, 1339 (Fed. Cir. 2012); see also id. ("Liability under§ 271(b) requires knowledge that the
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`induced acts constitute patent infringement." (quoting Global-Tech Appliances, Inc. v. SEE SA.,
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`131 S. Ct. 2060, 2068 (2011 ))). It is not sufficient for the complaint to contain only a "formulaic
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`recitation" of the elements of an inducement claim. See id. at 1346 (quoting Bell At!. Corp. v.
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`Twombly, 550 U.S. 544, 545 (2007)).
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`In this case, the sole allegation of induced infringement against Streetline appears in
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`Count II of the SAC. That Count alleges that Streetline "has infringed and continues to infringe .
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`. . by intentionally inducing persons to practice the patented method of claim 11 [of the '496
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`Case 1:16-cv-00830-RGA Document 35 Filed 02/07/18 Page 4 of 4 PageID #: 2292
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`patent] through implementation and use of Streetline Equipment in combination with one or
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`more of the Streetline Programs. Defendant Streetline is thus liable for indirect infringement
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`pursuant to 35 U.S.C. § 271(b)." (D.I. 25 if 39). It consists of nothing more than a bare
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`recitation of the legal elements of an inducement claim. The SAC contains no facts to support
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`the allegation that Streetline had specific intent to induce infringement. I am therefore
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`dismissing the SAC as to the claim of induced infringement against Streetline. 1
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`All ten counts also allege induced infringement against Kapsch. But the allegations
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`against Kapsch are just as formulaic as they are in the one allegation of induced infringement
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`against Streetline. Other than providing a portion of the Kapsch website, which lists certain
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`parking solutions, the SAC contains no facts to support the allegation that Kapsch specifically
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`intended others to infringe Plaintiffs patents. Therefore, for the same reasons, I am dismissing
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`the SAC as to claims of induced infringement against Kapsch.
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`For the reasons stated above, Defendants' motion to dismiss in part the SAC (D.I. 30) is
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`GRANTED. Defendants' motion for additional time to respond (D.I. 27) is therefore
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`DISMISSED as moot.
`It is SO ORDERED this 1_ day of February 2018.
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`1 Because I find the SAC fails to adequately plead the mental state required for a claim of induced
`infringement, I need not reach or consider Defendants' additional argument that Plaintiffs' inducement
`allegations are deficient because they fail to generally identify the alleged direct infringers. (D.I. 31 at
`16).
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