Case 1:16-cv-00830-RGA Document 32 Filed 07/28/17 Page 1 of 25 PageID #: 2245
`
`IN THE UNITED STATES DISTRICT COURT
`FOR THE DISTRICT OF DELAWARE
`
`
`SIPCO, LLC, and IP CO., LLC (d/b/a
`INTUS IQ),
`
`
`Plaintiffs,
` v.
`
`STREETLINE, INC.; KAPSCH
`TRAFFICCOM HOLDING CORP.; and
`KAPSCH TRAFFICCOM U.S. CORP.
`
`Defendants.
`
`
`
`Civ. No. 1: 16-cv-00830-RGA
`
`
`
`
`
`PLAINTIFFS’ RESPONSE TO DEFENDANTS’
`
`MOTION TO DISMISS UNDER RULE 12(b)(6) (D.I. 31)
`
`Dated: July 28, 2017
`
`
`
`
`
`George Pazuniak DE (No. 478)
`Sean T. O’Kelly (DE No. 4349)
`Daniel P. Murray (DE No. 5785)
`O’Kelly & Ernst, LLC
`901 N. Market Street, Suite 1000
`Wilmington, Delaware 19801
`(302) 478-4230 / 778-4000
`(302) 295-2873 (facsimile)
`gp@del-iplaw.com
`sokelly@oeblegal.com
`dmurray@oeblegal.com
`
`
`
`
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`

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`Case 1:16-cv-00830-RGA Document 32 Filed 07/28/17 Page 2 of 25 PageID #: 2246
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`
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`TABLE OF CONTENTS
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`I. 
`
`NATURE AND STAGE OF THE PROCEEDINGS ..................................................... - 1 - 
`
`II. 
`
`SUMMARY OF THE ARGUMENT ............................................................................. - 1 - 
`
`III. 
`
`STATEMENT OF FACTS ............................................................................................. - 2 - 
`
`A.  Defendants’ Misleading Description Of The Prior Pleadings .............................. - 2 - 
`
`B.  Kapsch Defendants’ Infringement ........................................................................ - 3 - 
`
`C.  Defendants’ Inducement To Infringe .................................................................... - 4 - 
`
`IV. 
`
`ARGUMENT .................................................................................................................. - 5 - 
`
`A. 
`
`Legal Standard ...................................................................................................... - 5 - 
`
`1. Direct Infringement By the Kapsch Defendants....................................................... - 5 - 
`
`2. Inducement to Infringe ............................................................................................. - 6 - 
`
`B. 
`
`Plaintiffs State A Claim for Direct Infringement By The Kapsch Defendants ..... - 7 - 
`
`C. 
`
`Plaintiffs State A Claim for Inducing Infringement ........................................... - 10 - 
`
`1. Plaintiffs Pled Direct Infringement......................................................................... - 10 - 
`
`2. Plaintiffs Have Identified the Induced Direct Infringers ........................................ - 10 - 
`
`3. Plaintiffs Have Pled The Required Mental State .................................................... - 12 - 
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`i
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`4. Induced Infringement Against Kapsch Holding Is Adequately Pled ..................... - 15 - 
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`D.  Dismissal With Prejudice Would Be Improper .................................................. - 17 - 
`
`V. 
`
`CONCLUSION ............................................................................................................. - 18 - 
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`ii
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`Case 1:16-cv-00830-RGA Document 32 Filed 07/28/17 Page 4 of 25 PageID #: 2248
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`
`TABLE OF AUTHORITIES
`
`CASES
`
`Addiction & Detoxification Inst. L.L.C. v. Carpenter,
`
`620 F. App’x 934 (Fed. Cir. 2015) ....................................................................................... - 15 -
`
`Applera Corp. v. MJ Research, Inc.,
`
`297 F. Supp. 2d 459 (D. Conn. 2004) ................................................................................... - 16 -
`
`Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) ...................................................................... - 5 -, - 8 -
`
`Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 555 (2007) ...................................... - 5 -, - 6 -, - 8 -
`
`Broadcom Corp. v. Qualcomm Inc.,
`
`543 F.3d 683 (Fed. Cir. 2008)............................................................................................... - 14 -
`
`Carson Optical Inc. v. eBay, Inc.,
`
`2016 WL 4385998 (E.D.N.Y. 2016) ..................................................................................... - 13 -
`
`Collabo Innovations, Inc. v. Omnivision Techs., Inc.,
`
`2017 WL 374484 (D. Del. 2017), report and recommendation adopted, 2017 WL 603471 (D.
`
`Del. 2017) ............................................................................................................................. - 13 -
`
`DSU Med. Corp. v. JMS Co.,
`
`471 F.3d 1293 (Fed. Cir. 2006)............................................................................................... - 6 -
`
`Eli Lilly & Co. v. Teva Parenteral Medicines, Inc.,
`
`845 F.3d 1357 (Fed. Cir. 2017).................................................................................... - 6 -, - 12 -
`
`e-LYNXX Corp. v. InnerWorkings, Inc.,
`
`2011 WL 3608642 (M.D. Pa. 2011) ..................................................................................... - 12 -
`
`Fowler v. UPMC Shadyside, 578 F.3d 203, 210 (3d Cir. 2009) ................................................. - 5 -
`
`
`
`iii
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`

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`Case 1:16-cv-00830-RGA Document 32 Filed 07/28/17 Page 5 of 25 PageID #: 2249
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`
`Fuji Photo Film Co., Ltd. v. Jazz Photo Corp.,
`
`394 F.3d 1368 (Fed. Cir. 2005)............................................................................................. - 14 -
`
`Global-Tech Appliances, Inc. v. SEB S.A.,
`
`563 U.S. 754 (2011) ................................................................................................... - 11 -, - 14 -
`
`Kaneka Corp. v. SKC Kolon PI, Inc.,
`
`198 F. Supp. 3d 1089 (C.D. Cal. 2016) ................................................................................ - 11 -
`
`Kost v. Kozakiewicz,
`
`1 F.3d 176 (3d Cir. 1993) ............................................................................................ - 8 -, - 10 -
`
`Largan Precision Co. v. Genius Elec. Optical Co.,
`
`646 F. App’x 946 (Fed. Cir. 2016) ......................................................................................... - 6 -
`
`Limelight Networks, Inc. v. Akamai Techs., Inc. (Akamai III),
`
` ––– U.S. ––––, 134 S.Ct. 2111 (2014) ................................................................................... - 6 -
`
`MEMC Elec. Materials, Inc. v. Mitsubishi Materials Silicon Corp.,
`
`420 F.3d 1369 (Fed. Cir. 2005)............................................................................................... - 8 -
`
`MGM Studios Inc. v. Grokster, Ltd.,
`
`545 U.S. 913 (2005) .............................................................................................................. - 14 -
`
`Nexeon Ltd. v. Eaglepicher Techs., LLC,
`
`2016 WL 4045474 (D. Del. 2016), report and recommendation adopted, 2016 WL 6093471
`
`(D. Del. 2016) ....................................................................................................................... - 16 -
`
`NTP, Inc. v. Research In Motion, Ltd.,
`
`418 F.3d 1282 (Fed. Cir. 2005)............................................................................................... - 9 -
`
`Philips v. ASUSTeK Computer Inc., 2016 WL 6246763, slip op. at *2 (D. Del. Oct. 25, 2016)- 5 -
`
`Phillips v. County of Allegheny, 515 F.3d 224, 231 (3d Cir. 2008) ............................................ - 5 -
`iv
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`

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`Case 1:16-cv-00830-RGA Document 32 Filed 07/28/17 Page 6 of 25 PageID #: 2250
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`
`Power Integrations, Inc. v. Fairchild Semiconductor Int’l, Inc.,
`
`843 F.3d 1315 (Fed. Cir. 2016).................................................................................. - 12 -, - 15 -
`
`Scientific Telecommc’ns LLC v. ADTRAN Inc., 2016 WL 4037004, slip op. at *1 (D. Del. Jul. 25,
`
`2016) ....................................................................................................................................... - 5 -
`
`Smith v. Garlock Equip. Co.,
`
`658 F. App’x 1017 (Fed. Cir. 2016) ..................................................................................... - 10 -
`
`Sunrise Techs., Inc. v. Cimcon Lighting, Inc.,
`
`2016 WL 6902395 (D. Mass. 2016) ..................................................................................... - 13 -
`
`Suprema, Inc. v. Int'l Trade Comm'n,
`
`626 F. App'x 273 (Fed. Cir. 2015) ........................................................................................ - 14 -
`
`Tinnus Enterprises, LLC v. Telebrands Corp.,
`
`846 F.3d 1190 (Fed. Cir. 2017).................................................................................... - 6 -, - 14 -
`
`United States ex rel. Wilkins v. United Health Grp., Inc., 659 F.3d 295, 302 (3d Cir. 2011) .... - 5 -
`
`Warsaw Orthopedic, Inc. v. NuVasive, Inc.,
`
`824 F.3d 1344 (Fed. Cir. 2016).................................................................................... - 6 -, - 14 -
`
`Water Techs. Corp. v. Calco, Ltd.,
`
`850 F.2d 660 (Fed. Cir. 1988)). Lucent Techs., Inc., v. Gateway, Inc., 580 F.3d 1301, 1322
`
`(Fed. Cir. 2009) ..................................................................................................................... - 14 -
`
`Wing Shing Prod. (BVI), Ltd. v. Simatelex Manufactory Co.,
`
`479 F. Supp. 2d 388 (S.D.N.Y. 2007) ................................................................................... - 11 -
`
`STATUTES
`
`35 U.S.C. § 271(b) ...................................................................................................................... - 6 -
`
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`v
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`Case 1:16-cv-00830-RGA Document 32 Filed 07/28/17 Page 7 of 25 PageID #: 2251
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`35 U.S.C. §271(a) ..................................................................................................................... - 10 -
`
`RULES
`
`FED. R. CIV. P. 8 ................................................................................................................. - 5 -, - 7 -
`
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`vi
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`Case 1:16-cv-00830-RGA Document 32 Filed 07/28/17 Page 8 of 25 PageID #: 2252
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`Plaintiffs SIPCO, LLC and IP CO, LLC (collectively, “Plaintiffs”) hereby submit this
`
`memorandum in opposition to the Motion to Dismiss under FED. R. CIV. P. 12(b)(6) filed by
`
`Defendants Streetline, Inc. (“Streetline”), Kapsch TrafficCom Holding Corp. (“Kapsch
`
`Holding”) and Kapsch TrafficCom U.S. Corp. (“Kapsch U.S.”) (collectively “Defendants”) (DI
`
`31).
`
`I. NATURE AND STAGE OF THE PROCEEDINGS
`
`Plaintiffs SIPCO, LLC and IP CO, LLC filed this patent infringement action against
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`Defendants on September 19, 2016, alleging infringement of U.S. Patent Nos. 8,908,842 (“the
`
`‘842 patent”), 8,625,496 (“the ‘496 patent”), 8,233,471 (“the ‘47l patent”), 8,223,010 (“the ‘010
`
`patent”), 7,697,492 (“the ‘492 patent”), 7,468,661 (“the ‘66l patent”), 7,103,511 (“the ‘51l
`
`patent”), 6,914,893 (“the ‘893 patent”), 6,437,692 (“the ‘692 patent”) and 6,249,516 (“the ‘516
`
`patent”) (collectively, “the Patents-in-Suit”). (D.I. 1).
`
`This is the second time that Defendants have raised the issues in their present motion.
`
`Indeed, Defendants’ motion and brief is basically a copy of its prior motion to dismiss. (D.I. 18,
`
`19). Plaintiffs previously answered those contentions and explained why Defendants’ motion to
`
`dismiss was without merit. (D.I. 20). The Court entered an Order that addressed other issues
`
`raised by Defendants, but did not indicate that Plaintiffs’ First Amended Complaint was deficient
`
`for reasons raised in this motion. (D.I. 24). Defendants’ renewed motion to dismiss is deficient
`
`for the same reasons as stated before.
`
`II. SUMMARY OF THE ARGUMENT
`
`1.
`
`Defendants erroneously assert that Plaintiffs fail to plausibly allege the Kapsch
`
`Defendants’ acts of direct infringement. The Second Amended Complaint at ¶¶ 22-25 plausibly
`
`alleges that the Kapsch Defendants committed acts of direct infringement by directly offering for
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`Case 1:16-cv-00830-RGA Document 32 Filed 07/28/17 Page 9 of 25 PageID #: 2253
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`sale the accused instrumentality, based on Kapsch’s admitted advertisement and promotion of
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`the accused system. Plaintiffs are not required to plead “invoices or receipts of sales,” and the
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`Kapsch’s website marketing material supports the inference of actual sales or offers for sale.
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`2.
`
`In light of Defendants’ direct infringement and inducement to infringe, Plaintiffs
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`do not currently argue liability based on piercing the corporate veil. Thus, Defendants’
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`comments that Plaintiffs failed to allege piercing the corporate veil are irrelevant.
`
`3.
`
`Plaintiffs adequately pled inducement to infringe. Plaintiffs pled that Defendants
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`have induced their customers, the governmental parking entities, to infringe. Plaintiffs are not
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`required to name in the complaint the individual customers or parking authorities who were
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`induced, although the Second Amended Complaint actually identifies two governmental entities.
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`4.
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`Plaintiffs have pled the requisite intent in the usual manner by pleading that the
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`original complaint constituted notice of infringement, and that Defendants continued their
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`activities after such notice.
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`5.
`
`Plaintiffs have adequately pled sales of the accused parking systems with
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`instructions to use, which is adequate pleading of inducement.
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`6.
`
`Even if the Amended Complaint were in some fashion incomplete, there is no
`
`basis for dismissing the case with prejudice. Although Defendants had previously raised the
`
`issue, the Court had never found Plaintiffs’ claims against the Kapsch Defendants or for
`
`inducement to be inadequate.
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`III. STATEMENT OF FACTS
`
`A. Defendants’ Misleading Description Of The Prior Pleadings
`
`Defendants’ discussion of the prior motions and the Court’s decisions erroneously
`
`suggest that the Court had previously ruled on the issues addressed by this motion. In fact, this is
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`Case 1:16-cv-00830-RGA Document 32 Filed 07/28/17 Page 10 of 25 PageID #: 2254
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`the second time that Defendants have raised the same issues, and in neither case had the Court
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`found Plaintiffs’ pleadings here in issue to be deficient. Defendants’ motion and brief is
`
`basically a copy of its prior motion to dismiss. (D.I. 18, 19). Plaintiffs previously answered
`
`those contentions and explained why Defendants’ motion to dismiss was without merit. (D.I.
`
`20). The Court entered an Order that addressed other issue raised by Defendants, but did not
`
`indicate that Plaintiffs’ complaint was deficient for reasons raised in Defendants’ current renewal
`
`of their prior motion. (D.I. 24).
`
`Thus, it is correct that “Plaintiffs have not made any changes to Paragraphs 1-26” of the
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`First Amended Complaint. (D.I. 31 at 5). But, there was no reason for Plaintiffs to have
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`changed those pleadings, because the pleadings were sufficient and were not questioned by the
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`Court in response to Defendants’ prior motion, and Defendants’ arguments, as demonstrated
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`previously, were legally deficient.
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`B. Kapsch Defendants’ Infringement
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`The Second Amended Complaint, as did the First Amended Complaint, properly alleged
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`infringement by the Kapsch Defendants. The Second Amended Complaint, as did the First
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`Amended Complaint, alleges that the Kapsch Defendants created and maintained a website that
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`advertised and promoted, and apparently sold or resold, the Streetline Accused Instrumentalities.
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`(D.I. 25 at ¶¶ 22-25). The Second Amended Complaint attached as Exhibits claims charts for at
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`least one claim of each of the patents in suit, which more than sufficiently pled direct
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`infringement by both Streetline and by the Kapsch Defendants who had offered to sell the
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`infringing Streetline systems.
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`Plaintiffs are not relying on the Kapsch Defendants control of Streetline, and, thus, there
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`was no reason to plead such issues.
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`Case 1:16-cv-00830-RGA Document 32 Filed 07/28/17 Page 11 of 25 PageID #: 2255
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`C. Defendants’ Inducement To Infringe
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`The Second Amended Complaint, as did the First Amended Complaint, properly alleged
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`inducement to infringe by both Streetline and the Kapsch Defendants. The particular
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`inducements are identified. For example, as noted above, the Second Amended Complaint
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`alleges that Streetline “provides a parking management solution to governmental entities” where
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`the “solution includes” the “Streetline Equipment.” (D.I. 25 at ¶¶ 17-18). The Second Amended
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`Complaint further alleges that the normal use by governmental entities or other users of the
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`Streetline Equipment and Programs constitutes direct infringement of the method claims. See,
`
`for example, D.I. 25 at ¶¶ 30, 36, 38, 43, 48. Thus, the Amended Complaint alleges that
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`Defendants have infringed and continue to infringe by intentionally inducing persons to practice
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`the patented methods through the implementation and use of Streetline Equipment in
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`combination with one or more of the Streetline Programs. (D.I. 25 at ¶¶ 36, 69). In short, the
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`Second Amended Complaint includes an unremarkable and straightforward assertion that by
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`marketing and providing to governmental entities a system, the normal practice of which requires
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`infringement of a method claim, Streetline, as well as the Kapsch Defendants who are selling the
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`Streetline systems, have induced the governmental entities to practice the method claims and
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`thus to directly infringe.
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`As to the Kapsch Defendants specifically, the Second Amended Complaint incorporates
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`Kapsch’s website which encourages users to practice the Streetline Equipment and Programs.
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`(D.I. 25 at ¶¶ 22-25). The Amended Complaint further states that the above-described
`
`inducement by Kapsch for the users to acquire and use the Streetline Equipment and Programs
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`constitutes inducement to infringe of the method claims. (See, for example, D.I. 25 at ¶¶ 38, 53,
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`71).
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`- 4 -
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`Case 1:16-cv-00830-RGA Document 32 Filed 07/28/17 Page 12 of 25 PageID #: 2256
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`IV. ARGUMENT
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`A. Legal Standard
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`1. Direct Infringement By the Kapsch Defendants
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`FED. R. CIV. P. Rule 8(a)(2) requires that a complaint must contain a “short and plain
`
`statement of the claim showing that the pleader is entitled to relief.” Bell Atlantic Corp. v.
`
`Twombly, 550 U.S. 544, 555 (2007); Philips v. ASUSTeK Computer Inc., 2016 WL 6246763 at
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`*2 (D. Del. 2016). On a Rule 12(b)(6) motion, the “court’s determination is not whether the
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`non-moving party ‘will ultimately prevail’ but whether that party is ‘entitled to offer evidence to
`
`support the claims.’” Scientific Telecommc’ns LLC v. ADTRAN Inc., 2016 WL 4037004 at *1
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`(D. Del. 2016) (quoting United States ex rel. Wilkins v. United Health Grp., Inc., 659 F.3d 295,
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`302 (3d Cir. 2011)). When considering a motion to dismiss for failure to state a claim under
`
`Rule 12(b)(6), a court must take the facts alleged as true and view those facts in the light most
`
`favorable to the plaintiff. Phillips v. County of Allegheny, 515 F.3d 224, 231 (3d Cir. 2008);
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`Philips, 2016 WL 6246763, at *2. The court may consider “the pleadings, public record, orders,
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`exhibits attached to the complaint, and documents incorporated into the complaint by reference.”
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`Scientific Telecommc’ns, at *1.
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`Detailed factual allegations are not required, but facts must be pled that, when accepted
`
`as true, state a claim for relief that is “plausible on its face.” Twombly, at 570; see also Ashcroft
`
`v. Iqbal, 556 U.S. 662, 678 (2009). The court must decide whether facts pled in a Complaint
`
`state a claim for relief that is plausible on its face. Fowler v. UPMC Shadyside, 578 F.3d 203,
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`210 (3d Cir. 2009); Philips, 2016 WL 6246763, at *2. “A claim has facial plausibility when the
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`pleaded factual content allows the court to draw the reasonable inference that the defendant is
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`liable for the misconduct alleged.” Iqbal, at 678. As the Supreme Court noted, the plausibility
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`Case 1:16-cv-00830-RGA Document 32 Filed 07/28/17 Page 13 of 25 PageID #: 2257
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`requirement is not akin to a “probability requirement at the pleading stage; it simply calls for
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`enough fact[s] to raise a reasonable expectation that discovery will reveal” that the defendant is
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`liable for the alleged misconduct. Twombly, at 556.
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`2. Inducement to Infringe
`
`Pursuant to 35 U.S.C. § 271(b), “[w]hoever actively induces infringement of a patent
`
`shall be liable as an infringer.” Eli Lilly & Co. v. Teva Parenteral Medicines, Inc., 845 F.3d
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`1357, 1363 (Fed. Cir. 2017); 35 U.S.C. § 271(b). Liability for induced infringement under §
`
`271(b) “must be predicated on direct infringement.” Eli Lilly, supra, 845 F.3d at 1363-64
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`(quoting Limelight Networks, Inc. v. Akamai Techs., Inc. (Akamai III), ––– U.S. ––––, 134 S.Ct.
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`2111, 2117 (2014)). The patentee must also show that the alleged infringer possessed the
`
`requisite intent to induce infringement, which requires that the alleged infringer knew his actions
`
`would induce actual infringements. Eli Lilly, supra, 845 F.3d at 1364(quoting DSU Med. Corp.
`
`v. JMS Co., 471 F.3d 1293, 1304 (Fed. Cir. 2006) (en banc in relevant part) (internal quotation
`
`marks omitted)).
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`“To prove induced infringement, a patentee must show ‘the accused inducer took an
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`affirmative act to encourage infringement with the knowledge that the induced acts constitute
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`patent infringement.’” Largan Precision Co. v. Genius Elec. Optical Co., 646 F. App’x 946, 948
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`(Fed. Cir. 2016). “A patentee is entitled to rely on circumstantial evidence to establish” inducing
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`infringement. Tinnus Enterprises, LLC v. Telebrands Corp., 846 F.3d 1190, 1204 (Fed. Cir.
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`2017). The “requisite intent to induce infringement may be inferred from all of the
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`circumstances.” Warsaw Orthopedic, Inc. v. NuVasive, Inc., 824 F.3d 1344, 1347 (Fed. Cir.
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`2016).
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`Case 1:16-cv-00830-RGA Document 32 Filed 07/28/17 Page 14 of 25 PageID #: 2258
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`B. Plaintiffs State A Claim for Direct Infringement By The Kapsch Defendants
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`Defendants misstate the law by effectively arguing that Plaintiffs must prove their case in
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`the pleadings. Plaintiffs have adequately pled direct infringement by the Kapsch Defendants,
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`and, particularly, have pled that the Kapsch Defendants have been offering to sell or re-sell a
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`parking system which was the infringing Streetline system.
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`Offering to Sell
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`First, the Second Amended Complaint pleads that the Kapsch Defendants infringed by
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`“offering to sell” the claimed Streetline systems. (D.I. 25 at ¶¶ 26, 31, 40, 47, 53, 65, 71, 77, 83,
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`89). Indeed, as quoted in the Complaint, the website of the Kapsch Defendants introduces the
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`Streetline systems with the phrase “Our offerings include ….” (D.I. 25 at ¶ 24). The “offering
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`for sale” within the United States is an independent basis for patent infringement. 35 U.S.C. §
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`271(a).
`
`The Second Amended Complaint also pleads that the Streetline systems infringe the
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`patents in suit. Defendants’ motion does not suggest that the Plaintiffs pleadings are insufficient
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`to plead that the Streetline systems are infringing, and, thus, concede the adequacy of that
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`pleading.
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`Plaintiffs have also properly pled that the Kapsch Defendants are offering to sell the
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`infringing Streetline systems. Thus, Plaintiffs’ Second Amended Complaint includes an image
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`and text from the website of the Defendants where the Kapsch Defendants are offering to sell the
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`infringing Streetline systems, and, in fact, use the words “Our offerings include ….” (D.I. 25 at
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`¶¶ 22-25). The pleading that the Streetline systems infringe and that the Kapsch Defendants are
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`offering to sell the system by way of the website meets the “short and plain statement of the
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`claim showing that the pleader is entitled to relief” as required by Fed. R. Civ. P. Rule 8.
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`Case 1:16-cv-00830-RGA Document 32 Filed 07/28/17 Page 15 of 25 PageID #: 2259
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`Twombly does not require more. Plaintiffs are not required on a Rule 12(b)(6) motion to prove
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`their case, and detailed factual allegations are not required. Plaintiffs need only present facts,
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`when accepted as true, state a claim for relief that is “plausible on its face.” Twombly, at 570;
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`Iqbal, 556 U.S. at 678. The incorporation of the Kapsch website in the pleadings, showing an
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`“offering” of the infringing Streetline systems, is adequate to show a plausible case of an “offer
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`to sell” the Accused Instrumentalities which are then detailed in the Second Amended
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`Complaint’s claim charts. Plaintiffs are entitled at this stage to “the benefit of all reasonable
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`inferences that can be fairly drawn” from the allegations. Kost v. Kozakiewicz, 1 F.3d 176, 183
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`(3d Cir. 1993). The pleading of the Kapsch Defendants’ “offering” website is sufficient to infer
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`that the Kapsch Defendants had made offers of sale. Again, Plaintiffs do not have to prove
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`infringement at this stage, but need only “raise a reasonable expectation that discovery will
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`reveal that the defendant is liable for the alleged misconduct.” Twombly, at 556.
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`Defendants complain that their website does not contain enough information to support a
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`Uniform Commercial Code “offer,” which could be “accepted” to form a contract, citing MEMC
`
`Elec. Materials, Inc. v. Mitsubishi Materials Silicon Corp., 420 F.3d 1369, 1376 (Fed. Cir.
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`2005). (D.I. 31 at 10). But the case was on appeal to the Federal Circuit from a grant of
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`summary judgment – after discovery. MEMC Elec. Materials reflects the proofs necessary to
`
`establish infringement at trial, after a plaintiff had full discovery of the defendant’s internal
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`documents. MEMC does not say anything about what must be pled to support a plausible claim
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`for offering for sale of an accused instrumentality.
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`Further, Defendants misrepresent their website. The information, as presented in the
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`Second Amended Complaint, is far more than mere “general information.” Most importantly,
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`contrary to Defendants’ misrepresentation, the website does not say anything that suggests that
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`Case 1:16-cv-00830-RGA Document 32 Filed 07/28/17 Page 16 of 25 PageID #: 2260
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`Kapsch was sending customers to Streetline. In fact, Streetline is not mentioned in the website.
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`The parking systems are identified as Kapsch’ own systems. For example, the website refers to
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`“Our sensors” – i.e., Kapsch’ purported sensors. (D.I. 25 at ¶ 24). Certainly, there is nothing on
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`the website that suggests that it was “directing interested customers to contact Streetline for
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`further information,” as Defendants inaccurately misrepresent.
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`Thus, the website, as it appears to the public, states only that Kapsch is offering to sell
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`parking systems. Those parking systems may, in fact, be Streetline’s parking systems, but the
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`website is a clear “offering” to sell the Streetline system, not to merely direct the customers to
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`Streetline. The Kapsch Defendants claimed the parking system as their own, and did not give
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`any “shout out” to Streetline in the website. .
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`Selling
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`Second, Defendants cite NTP, Inc. v. Research In Motion, Ltd., 418 F.3d 1282, 1319
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`(Fed. Cir. 2005) for the Federal Circuit’s description of what constitutes a “sale” in 35 U.S.C. §
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`271(a). But, again, the case stated what would have to be proved at trial to establish a “sale.”
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`The case did not suggest that a plaintiff must specifically plead in the complaint facts proving
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`each of those elements. Indeed, one cannot expect any plaintiff to ever be able to plead the terms
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`of the sales contracts, including “a price in money paid or promised,” before discovery. The
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`information is confidential to the defendants and their customers, and no authority suggests that a
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`plaintiff must plead facts which defendants maintain in secrecy. Notably, Defendants at no point
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`identify any sources of information available to Plaintiffs where Plaintiffs could obtain copies of
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`all the contracts related to the Accused Instrumentalities so as to plead the facts proposed by the
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`Defendants.
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`Case 1:16-cv-00830-RGA Document 32 Filed 07/28/17 Page 17 of 25 PageID #: 2261
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`Defendants argue that the “present case is highly analogous to Smith v. Garlock Equip.
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`Co., 658 F. App’x 1017, 1027 (Fed. Cir. 2016) (nonprecedential). (D.I. 31 at 9). That is
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`incorrect. As Defendants’ own summary admits, the case was on appeal to the Federal Circuit
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`after a jury trial and JMOL rulings. The case stands for what must be proved at trial, not what
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`must be pled in a complaint before any discovery.
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`The public information is that Kapsch was offering to sell parking systems, which
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`admittedly are the Streetline systems. It is reasonable to infer that having made offers that the
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`Kapsch Defendants had sold such parking systems. A reasonable inference is all that is required
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`at the pleading stage. Kost, supra.
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`C. Plaintiffs State A Claim for Inducing Infringement
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`1. Plaintiffs Pled Direct Infringement
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`Plaintiffs have adequately pled literal direct infringement by both Streetline and by the
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`Kapsch Defendants. In addition, anyone who uses the accused parking systems is a direct
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`infringer. The “use” of a patented product is an infringement. 35 U.S.C. §271(a). Further, the
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`practicing of any patented method is direct infringement. (Id).
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`The Defendants, including Streetline and the Kapsch Defendants, induce infringement,
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`because they induce the direct infringement by the governmental parking entities and any other
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`users of the Streetline parking systems.
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`2. Plaintiffs Have Identified the Induced Direct Infringers
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`Defendants err on the law and on the facts in arguing that Plaintiffs “fail to identify who
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`the Defendants have allegedly induced to commit infringement.” (D.I. 31 at p. 12).
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`Defendants err on the law, because, a plaintiff need only plead sale of infringing products
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`to support inducement to infringe. In Global-Tech Appliances, Inc. v. SEB S.A., 563 U.S. 754
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`Case 1:16-cv-00830-RGA Document 32 Filed 07/28/17 Page 18 of 25 PageID #: 2262
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`(2011), the Supreme Court remarked that “lead[ing] another to engage in conduct that happens to
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`amount to infringement, i.e., the making, using, offering to sell, selling, or importing of a
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`patented invention” can constitute inducement to infringe if the knowledge requirement of 35
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`U.S.C. §271(b) is met. (Id. at 563 U.S. at 760). See also Kaneka Corp. v. SKC Kolon PI, Inc.,
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`198 F. Supp. 3d 1089, 1109 (C.D. Cal. 2016) (“evidence that SKPI knew its film infringed
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`Kaneka’s patents and that it actively and intentionally sold this film knowing that it would be
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`incorporated into Samsung and LG phones which would arrive in the United States is sufficient
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`to establish that SKPI actively and knowingly aided another’s direct infringement”); Wing Shing
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`Prod. (BVI), Ltd. v. Simatelex Manufactory Co., 479 F. Supp. 2d 388, 411 (S.D.N.Y. 2007) (“the
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`manufacture and sale of a patented product are by themselves sufficient to constitute active
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`inducement under § 271(b)”).
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`On the facts, Defendants ignore that the Seconded Amended Complaint states that
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`“Streetline provides a parking management solution to governmental entities,” and then
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`identifies the “parking solutions” as being the Streetline Equipment. (D.I. 25 at ¶¶ 17, 18-19).
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`Moreover, the Second Amended Complaint identifies the specific governmental parking
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`entities and contracts who were induced to use the accused instrumentalities. The Second
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`Amended Complaint incorporates the claims charts attached as exhibits to the complaint, and the
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`claim charts identify at least two such governmental parking authorities. For example, each of
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`the claim charts cites the “Agreement dated December 18, 2014 between the City Of Ocala and
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`Streetline, Inc.” and the “Order Form for Redwood City, dated August 27, 2014” (See, for
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`example, D.I. 26, Exhibit 11 at 11-12; Exhibit 12 at 16-17; Exhibit 17 at 11-12).
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`The above pleadings clearly identify governmental parking authorities as the persons
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`whom Defendants had induced to use the Accused Instrumentalities, and even identify two
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`Case 1:16-cv-00830-RGA Document 32 Filed 07/28/17 Page 19 of 25 PageID #: 2263
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`specific governmental authorities with whom Streetline has made agreements to supply the
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`infringing parking systems. This I more than sufficient to plead inducement by reference to a
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`class of persons, such as the Defendants’ customers, such as the parking authorities, or other end-
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`users. Power Integrations, Inc. v. Fairchild Semiconductor Int’l, Inc., 843