Case 1:16-cv-00830-RGA Document 33 Filed 08/04/17 Page 1 of 16 PageID #: 2270
`
`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.
`
`
`
`
`
`
`
` C.A. No. 16-830-RGA
`
`))))))))))))))
`
`
`REPLY BRIEF IN SUPPORT OF DEFENDANTS’
`MOTION TO DISMISS IN PART PLAINTIFFS’ SECOND AMENDED COMPLAINT
`PURSUANT TO FEDERAL RULE OF CIVIL PROCEDURE 12(b)(6)
`
`
`
`ROSS ARONSTAM & MORITZ LLP
`Benjamin J. Schladweiler (#4601)
`100 S. West Street, Suite 400
`Wilmington, DE 19801
`(302) 576-1600
`bschladweiler@ramllp.com
`
`Counsel for Defendants Streetline, Inc. and
`Kapsch TrafficCom Holding Corp.
`
`
`
`Of Counsel:
`
`Pierre R. Yanney
`Stephen E. Underwood
`STROOCK & STROOCK & LAVAN LLP
`180 Maiden Lane
`New York, NY 10038
`(212) 806-5400
`pyanney@stroock.com
`sunderwood@stroock.com
`
`
`Dated: August 4, 2017
`
`
`
`
`
`
`
`
`
`

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`Case 1:16-cv-00830-RGA Document 33 Filed 08/04/17 Page 2 of 16 PageID #: 2271
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`TABLE OF CONTENTS
`
`I.
`
`INTRODUCTION .................................................................................................................. 1
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`II. ARGUMENT .......................................................................................................................... 1
`
`A.
`
` The SAC Fails to State a Claim for Direct Infringement by Kapsch .................................. 1
`
`1. The SAC Fails to State A Claim Against Kapsch for Infringement by
`
`Offering to Sell ............................................................................................................... 1
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`2. The SAC Fails to State a Claim Against Kapsch for Infringement by Sale ................... 4
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` The SAC Fails to State a Claim for Induced Infringement ................................................. 5
`B.
`
`1. The SAC Does Not Adequately Allege Infringement by “Governmental Entities” ....... 5
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`2. The SAC Fails to Allege the Required Mental State for Induced Infringement ............. 8
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`3. The SAC Fails to State a Claim for Inducement Against the Kapsch Defendants ......... 9
`
`C.
` Dismissal With Prejudice Is Proper .................................................................................. 10
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`
`
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`-i-
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`

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`Case 1:16-cv-00830-RGA Document 33 Filed 08/04/17 Page 3 of 16 PageID #: 2272
`
`TABLE OF AUTHORITIES
`
`Cases
`
`
`
`Page(s)
`
`Apeldyn Corp. v. Sony Corp.,
`852 F. Supp. 2d 568 (D. Del. 2012) .......................................................................................8, 9
`
`Collabo Innovations, Inc. v. Omnivision Techs., Inc.,
`No. 16-197-SLR-SRF, 2017 WL 374484 (D. Del. Jan. 25, 2017) ............................................8
`
`e-LYNXX Corp. v. InnerWorkings, Inc.,
`No. 1-10-cv-02535, 2011 WL 3608642 (M.D. Pa. July 26, 2011) ............................................6
`
`Indag GmbH & Co. v. IMA S.P.A,
`150 F. Supp. 3d 946 (N.D. Ill. 2015) .........................................................................................4
`
`Kaneka Corp. v. SKC Kolon PI, Inc.,
`198 F. Supp. 3d 1089 (C.D. Cal. 2016) .................................................................................6, 7
`
`M2M Sols. LLC v. Telit Commc'ns PLC,
`No. CV 14-1103- RGA, 2015 WL 4640400 (D. Del. Aug. 5, 2015).........................................6
`
`MEMC Elec. Materials, Inc. v. Mitsubishi Materials Silicon Corp.,
`420 F.3d 1369 (Fed. Cir. 2005)..................................................................................................3
`
`Nexeon Ltd. v. Eaglepicher Techs., LLC,
`No. 15-955-RGA-MPT, 2016 WL 4045474 (D. Del. July 26, 2016) ......................................10
`
`NTP, Inc. v. Research In Motion, Ltd.,
`418 F.3d 1282 (Fed. Cir. 2005)..............................................................................................4, 5
`
`Power Integrations, Inc. v. Fairchild Semiconductor Int’l, Inc.,
`843 F.3d 1315 (Fed. Cir. 2016)........................................................................................5, 9, 10
`
`Rotec Indus., Inc. v. Mitsubishi Corp.,
`215 F.3d 1246 (Fed. Cir. 2000)..............................................................................................2, 3
`
`Smith v. Garlock Equip. Co.,
`658 F. App'x 1017 (Fed. Cir. 2016) ...........................................................................................4
`
`Walker Digital, LLC v. Facebook, Inc.,
`852 F. Supp. 2d 559 (D. Del. 2012) ...........................................................................................8
`
`Wing Shing Prod. (BVI), Ltd. v. Simatelex Manufactory Co.,
`479 F. Supp. 2d 388 (S.D.N.Y. 2007) ....................................................................................6, 7
`
`
`
`-ii-
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`

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`Case 1:16-cv-00830-RGA Document 33 Filed 08/04/17 Page 4 of 16 PageID #: 2273
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`Statutes
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`35 U.S.C. § 271(a) ...................................................................................................................2, 3, 4
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`Other Authorities
`
`Fed. R. Civ. P. 8 ...........................................................................................................................8, 9
`
`Fed. R. Civ. P. 12(b)(6)....................................................................................................................3
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`
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`-iii-
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`

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`Case 1:16-cv-00830-RGA Document 33 Filed 08/04/17 Page 5 of 16 PageID #: 2274
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`I.
`
`INTRODUCTION
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`SIPCO and IPCO (herein, “SIPCO”) allege that their SAC states a claim for direct
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`infringement against the Kapsch Defendants, because it shows they have “sold” and “offered for
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`sale” the accused systems. See D.I. 32 at 7-10. However, the only evidence of these alleged
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`“sales” and “offers” is a one-page printout from a purported Kapsch website. Id.; see also D.I.
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`25, ¶ 23. As shown in Section II.A infra, SIPCO’s citation to this website falls far short of stating
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`a “plausible claim” that the Kapsch Defendants have directly infringed the Patents-in-Suit.
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`Furthermore, as shown in Section II.B infra, the indirect infringement allegations against
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`all Defendants should be dismissed, because: (i) the SAC fails to adequately identify anyone who
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`allegedly committed direct infringement; and (ii) the SAC fails to state a plausible claim that any
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`Defendant had the required state of mind when it committed any act of inducement.
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`Finally, as shown in Section II.C infra, these allegations should be dismissed with
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`prejudice, because SIPCO had ample opportunity to cure its complaint, but failed to do so.
`
`II.
`
`ARGUMENT
` The SAC Fails to State a Claim for Direct Infringement by Kapsch
`
`A.
`
`In its Brief, SIPCO disavows any argument that the Kapsch Defendants are liable under a
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`“piercing the corporate veil” theory. See D.I. 32 at 3. Thus, the only way the SAC could state a
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`claim for direct infringement against the Kapsch Defendants is by alleging sufficient facts to
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`show that the Kapsch Defendants themselves have sold/offered the accused systems. It does not.
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`1. The SAC Fails to State A Claim Against Kapsch for Infringement by Offering to Sell
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`The only evidence that SIPCO cites to show that the Kapsch Defendants have “offered”
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`the accused systems for sale is the three-word phrase “our offerings include,” which appears in
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`the website screenshot at ¶ 23 of the SAC. Because the website has the word “Kapsch” in its
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`header, SIPCO interprets “our offerings” to mean “Kapsch’s offerings” and treats this three-word
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`
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`1
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`

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`Case 1:16-cv-00830-RGA Document 33 Filed 08/04/17 Page 6 of 16 PageID #: 2275
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`phrase as evidence that Kapsch itself is selling the accused systems. D.I. 32 at 7-9. SIPCO further
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`argues that a reasonable reader of the website could conclude that Kapsch Holding or Kapsch US
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`is the entity making “offers to sell,” as opposed to Streetline, because (according to SIPCO) “the
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`website does not say anything that suggests that Kapsch was sending customers to Streetline.”
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`See D.I. 32 at 8-9. This totally misrepresents the contents of the website.
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`The cited website, which is still active,1 contains only one hyperlink--the orange-
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`highlighted word “Streetline”2, which directs users
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`to Streetline’s home page,
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`www.streetline.com. Thus, contrary to what SIPCO asserts, the cited web page does redirect
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`users to Streetline. In fact, the link to Streetline’s homepage is the only interactive portion of the
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`quoted web page. If a user is interested in buying the “Smart Parking” products described on the
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`web page, the only option is to go to Streetline’s webpage.
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`SIPCO focuses on the word “offering,” and equates it with “offer to sell” as used in the
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`direct infringement statute, 35 U.S.C. § 271(a). D.I. 32 at 7-9. However, in context, it is clear
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`that “offering” is used in its colloquial sense of “something presented for inspection or sale.”3
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`The term “offer for sale” in § 271(a), by contrast, has a particular meaning. Specifically,
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`the Federal Circuit has held that “‘offer to sell’ [in Section 271(a)] is to be interpreted according
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`to its ordinary meaning in contract law.” Rotec Indus., Inc. v. Mitsubishi Corp., 215 F.3d 1246,
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`1255 (Fed. Cir. 2000) (emphasis added). Thus, “offers for sale” under § 271(a) are merely those
`
`
`1 The URL is https://www.kapsch.net/us/ktc/Portfolio/Intelligent-Mobility-Solutions/Smart-
`Urban-Mobility/Smart-Parking. See D.I. 25, ¶ 23. To the best of Defendants’ knowledge, this
`website has not been modified since it was cited by SIPCO in the FAC or the SAC.
`
` 2
`
` This discussion of “Streetline,” of course, directly disproves SIPCO’s repeated assertion that
`“Streetline is not mentioned in the website.” See, e.g., D.I. 32 at 9, 16-17.
`
` 3
`
` offering. (n.d.) Random House Kernerman Webster’s College Dictionary. (2010). Retrieved
`August 2 2017 from http://www.thefreedictionary.com/offering.
`
`
`
`
`2
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`

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`Case 1:16-cv-00830-RGA Document 33 Filed 08/04/17 Page 7 of 16 PageID #: 2276
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`words and conduct that qualify as “offers for sale” under traditional contract principles. Id.
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`Under those principles, a party makes an “offer for sale” only if he “communicate[s] a
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`‘manifestation of willingness to enter into a bargain, so made as to justify another person in
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`understanding that his assent to that bargain is invited and will conclude it.” Rotec, 215 F.3d at
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`1257 (Fed. Cir. 2000) (quoting Rest. (2nd) of Contracts, § 24).
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`The quoted Kapsch website does not include any “manifestation of willingness” on the
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`part of Kapsch to “enter a bargain.” It does not include any of the terms of such a bargain, such
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`as the name of the products to be sold, the quantities to be sold, or the price. No reasonable
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`reader of the website would be justified in thinking he could contact the Kapsch Defendants, say
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`“I accept,” and thus create a binding contract for sale. In short - the fact that the website uses the
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`word “offering” is irrelevant, because there is no evidence of a legal offer to sell under § 271(a).
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`SIPCO objects to Defendants’ citation of MEMC Elec. Materials, Inc. v. Mitsubishi
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`Materials Silicon Corp., 420 F.3d 1369, 1376 (Fed. Cir. 2005).4 According to SIPCO, that case
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`is inapposite because it was a decision on summary judgment, whereas this case is at the
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`pleading stage. See D.I. 32 at 8. However, Defendants merely cited MEMC for the general legal
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`principle that an “offer for sale” under § 271(a) is an “offer” under traditional contract principles.
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`See D.I. 31 at 10. On a Rule 12(b)(6) motion, the sufficiency of the complaint is viewed in terms
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`of the substantive legal standard that governs the underlying cause of action. Thus, Defendants’
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`citation of MEMC to supply the substantive legal standard for § 271(a) “offers” was appropriate.
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`
`4 In MEMC, the Federal Circuit affirmed a summary judgment of no infringement by “offering to
`sell” under § 271(a), because the only alleged evidence of such “offers for sale” was the
`“transmittal of e-mails containing technical data” between the alleged offeror and offeree, but
`those e-mails “d[id] not contain any price terms.” MEMC, 420 F.3d at 1376. The Federal Circuit
`held that, because the e-mails lacked price terms, they “cannot be construed as an ‘offer’ which
`[offeree] could make into a binding contract by simple acceptance.” Id. Here, the cited Kapsch
`website also lacks any price terms; thus, per MEMC, it cannot be an infringing offer for sale.
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`
`
`3
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`Case 1:16-cv-00830-RGA Document 33 Filed 08/04/17 Page 8 of 16 PageID #: 2277
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`Meanwhile, the few cases that have addressed the adequacy of “offer for sale” allegations
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`since the abrogation of Form 18 confirm that SIPCO’s complaint is inadequate. In Indag GmbH
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`& Co. v. IMA S.P.A, 150 F. Supp. 3d 946 (N.D. Ill. 2015), the complaint alleged that: (i)
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`Defendant sent a representative to a trade show; (ii) the representative had discussions with a
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`customer about buying the machine; and (iii) the general price of the machine (“1 million euro”
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`to “4 million euro”) was discussed. See id. at 966-970. Nonetheless, the court found that the
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`complaint failed to state a claim, because it showed only “a proposed loose agreement between
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`the parties that did not contain specific disclosure of a product or a [specific] price.” Id. at 967.
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`Here, the only evidence of an “offer for sale” is the non-interactive Kapsch website,
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`which includes no product details and no price. This falls far short of the in-person, direct
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`discussions with a specific customer which the court found to be inadequate in Indag. Thus,
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`clearly, SIPCO’s complaint fails to state a claim for infringement by “offering to sell.”
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`2. The SAC Fails to State a Claim Against Kapsch for Infringement by Sale
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`The SAC also alleges that the Kapsch Defendants have committed infringement by
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`“selling” the accused systems. However, as discussed above, the SAC fails even to state a claim
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`that the Kapsch Defendants have offered the accused systems for sale. As a matter of logic, since
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`the SAC fails to state a claim that the Kapsch Defendants have even offered the accused systems
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`for sale, it cannot state a claim that the Kapsch Defendants have actually made such sales.
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`SIPCO objects to Defendants’ citation of NTP and Smith v. Garlock, because those cases
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`were decided after the pleading stage. See D.I. 32 at 9-10. That objection lacks merit. NTP and
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`Smith v. Garlock are good law to describe the substantive standard governing whether an
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`infringing “sale” has occurred under § 271(a). At the pleading stage, that substantive standard
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`governs whether the complaint states a “plausible” claim for relief.
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`Under the substantive standards set forth in NTP and Smith v. Garlock, SIPCO’s
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`4
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`Case 1:16-cv-00830-RGA Document 33 Filed 08/04/17 Page 9 of 16 PageID #: 2278
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`complaint must – to state a claim for infringement by sale – plausibly allege that the Kapsch
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`Defendants have either actually delivered a unit of an accused system to a customer, or at least
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`have actually entered a contract to do so. See NTP, Inc. v. Research In Motion, Ltd., 418 F.3d
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`1282, 1319 (Fed. Cir. 2005). The SAC cites absolutely no facts to support either theory. Thus,
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`the SAC fails to state a claim for infringement by sale against the Kapsch Defendants.
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`B.
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` The SAC Fails to State a Claim for Induced Infringement
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`1. The SAC Does Not Adequately Allege Infringement by “Governmental Entities”
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`SIPCO cites Power Integrations, Inc. v. Fairchild Semiconductor Int’l, Inc., 843 F.3d
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`1315, 1335 (Fed. Cir. 2016), and other cases, for the proposition that only a “class of direct
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`infringers” – rather than any specific, named direct infringer – must be identified. See D.I. 32 at
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`10-12. SIPCO further alleges that the SAC adequately identifies such a “class of direct
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`infringers” – namely, “governmental entities,” who allegedly purchase the Streetline systems. Id.
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`SIPCO is mistaken. The phrase “governmental entities” only appears once in the SAC. It
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`appears in Paragraph 17, which states in full: “17. Streetline provides a parking management
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`solution to governmental entities.” D.I. 25, ¶ 17. This Paragraph never alleges that the Kapsch
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`Defendants provide anything to “governmental entities.” Thus, it cannot provide any support for
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`SIPCO’s claim that the Kapsch Defendants have induced infringement by “government entities.”
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`Moreover, as to Streetline itself – although the introductory portion of the SAC alleges
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`that Streetline supplies a “parking management solution” to “governmental entities,” the actual
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`infringement counts of the complaint do not make this allegation. Rather, the actual counts of the
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`complaint merely allege that the Defendants have “induc[ed] [unnamed] persons to use the
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`patented inventions[/methods/system].” See, e.g., D.I. 25 at ¶¶ 31, 39, 40, 47, 53, etc. (emphasis
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`added). The counts of the complaint never identify who these “persons” might be.
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`More crucially, the SAC never suggests that the “persons” in the counts are the same
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`5
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`“governmental entities” identified in Paragraph 17. Indeed – because SIPCO chose to use the
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`broader language “persons” in the counts of the Complaint, it must be assumed that they
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`intended the counts to cover something other than just “governmental entities.” However, the
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`SAC gives no indication of who the cited “persons” might be. If a “complaint fails to make even
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`a general identification of the alleged direct infringers,” it should be dismissed. e-LYNXX Corp.
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`v. InnerWorkings, Inc.5, 2011 WL 3608642, at *6 (M.D. Pa. July 26, 2011). SIPCO’s complaint
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`fails to make such a general identification. Thus, per e-LYNXX, it must be dismissed.
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`SIPCO alleges that the “persons” identified in the counts of the complaint “had been
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`specifically identified as being [the] governmental entities” described in Paragraph 17. See D.I.
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`32 at 12. That is incorrect. Nothing in the SAC itself connects the “persons” in the counts to the
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`“governmental entities” in Paragraph 17. It is only SIPCO’s Brief that makes this connection.
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`However, "[i]t is axiomatic that the complaint may not be amended by the briefs in opposition to
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`a motion to dismiss." M2M Sols. LLC v. Telit Commc'ns PLC, No. CV 14-1103- RGA, 2015 WL
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`4640400 at *3 (D. Del. 2015). Thus, the statements in SIPCO’s Brief are of no moment.
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`In support of its position that the SAC adequately identifies the direct infringers, SIPCO
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`cites Kaneka Corp. v. SKC Kolon PI, Inc., 198 F. Supp. 3d 1089, 1109 (C.D. Cal. 2016).
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`However, that case had nothing to do with the adequacy of proof or pleading as to the identity of
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`the direct infringers. Id. at 1103. Rather, it was about the adequacy of defendant’s knowledge of
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`infringement. Thus, Kaneka in irrelevant to the issue for which it is cited.
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`SIPCO also cites Wing Shing Prod. (BVI), Ltd. v. Simatelex Manufactory Co., 479 F.
`
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`5 SIPCO alleges that Defendants – citing e-LYNXX – conceded that “it is sufficient to identify
`‘customers’ as the parties who were induced.” See D.I. 32 at 12. Defendants made no such
`concession. Rather, Defendants noted that certain cases hold that, typically, it is sufficient to
`identify Defendants’ “customers” as the alleged direct infringers. See D.I. 31 at 12. However, as
`Defendants pointed out in the same paragraph, the complaint must give some “general
`identification” of who the direct infringers are. Id. The SAC fails even that lenient standard.
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`6
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`Case 1:16-cv-00830-RGA Document 33 Filed 08/04/17 Page 11 of 16 PageID #: 2280
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`Supp. 2d 388, 411 (S.D.N.Y. 2007). See D.I. 32 at 11. However, that case also had nothing to do
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`with the adequacy of proof as to the identity of the direct infringers. Rather, it was about whether
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`the defendant had knowledge that its products would be sold in the United States. See id. Thus,
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`like Kaneka, Wing Shing is irrelevant to the issue for which it is cited.
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`Finally, SIPCO asserts that it has identified two specific direct infringers, i.e., the “City
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`of Ocala” and “Redwood City.” See D.I. 32 at 11. The only evidence of this, however, are certain
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`oblique references in the claim charts to an alleged “Agreement dated December 18, 2014
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`between the City of Ocala and Streetline,” and an alleged “Order Form for Redwood City, dated
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`August 27 2014.” See D.I. 26, Exh. 12 at 13-14. Since the agreements themselves are not
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`attached to the Complaint, it is impossible to know whether these alleged “Agreements” and
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`“Order Forms” were ever actually consummated, and if so, whether the “Ocala” and “Redwood
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`City” entities actually performed any acts according to them.
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`However, even assuming that these were consummated sales contracts between Streetline
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`(not the Kapsch Defendants) and the cities, these alleged agreements still cannot give rise to
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`liability for induced infringement. That is so because SIPCO is limiting its demand for damages
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`to activities occurring after the filing of the original complaint. See D.I. 32 at 14 (“Plaintiffs have
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`not demanded damages for infringement based on inducement prior to the filing of the original
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`complaint.”) Here, the original complaint was filed on September 19, 2016. However, the two
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`alleged “sales” – to the Cities of Ocala and Redwood – are alleged to have occurred in 2014 –
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`two years before the filing of the original complaint. Thus, the acts of entering into those
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`contracts cannot support liability for indirect infringement, alleged to have occurred years later.
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`Moreover, the SAC does not allege any facts to suggest that Defendants committed any further
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`acts, after the filing of the original complaint, to induce Ocala, Redwood or anyone else to
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`7
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`

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`Case 1:16-cv-00830-RGA Document 33 Filed 08/04/17 Page 12 of 16 PageID #: 2281
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`commit direct infringement. Thus, the SAC fails to state a claim for induced infringement.
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`2. The SAC Fails to Allege the Required Mental State for Induced Infringement
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`SIPCO argues that, to adequately plead the required mental state for induced
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`infringement, all it needs to do is limit its inducement claim to post-filing conduct. See D.I. 32 at
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`13-15. The only case that SIPCO cites for this proposition is Collabo Innovations, Inc. v.
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`Omnivision Techs., Inc., 2017 WL 374484 at *9 (D. Del. 2017). In Collabo, the court noted that
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`recent Delaware cases have permitted plaintiffs to assert indirect infringement, even if the
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`Defendants’ only alleged knowledge of the Patents-in-Suit came from the filing of the complaint.
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`Id., 2017 WL 374484 at * 9. However, the court noted, such claims may only be allowed to the
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`extent that they solely seek relief for acts that occurred after the filing of the Complaint. Id. Here,
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`the SAC fails to limit the relief sought to acts occurring only after the date of the SAC, since it
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`alleges that Defendants “have induced and are inducing” infringement. See D.I. 25, ¶ 26.
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`The court’s ruling in Collabo relied primarily on two earlier Delaware cases: (i) Apeldyn
`
`Corp. v. Sony Corp., 852 F. Supp. 2d 568, 573–74 (D. Del. 2012); and (ii) Walker Digital, LLC
`
`v. Facebook, Inc., 852 F. Supp. 2d 559, 565 (D. Del. 2012). The rationale of both cases was that
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`“if a complaint sufficiently identifies, for purposes of Rule 8, the patent at issue and the allegedly
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`infringing conduct, a defendant's receipt of the complaint and decision to continue its conduct
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`despite the knowledge gleaned from the complaint satisfies the requirements of Global–Tech.”
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`Apeldyn, 852 F. Supp. 2d at 573; Walker Digital, 852 F. Supp. 2d at 565 (same). In other words,
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`this Court found that if the original complaint adequately alleges direct infringement under the
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`requirements of Rule 8, then the complaint puts Defendants on notice both of the Patents-in-Suit
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`and of the fact that the induced acts might constitute direct infringement. Id.
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`Here, the Court has already found that the original Complaint did not adequately allege
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`direct infringement under Rule 8. See D.I. 15. The Court has also found that the FAC failed to
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`8
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`Case 1:16-cv-00830-RGA Document 33 Filed 08/04/17 Page 13 of 16 PageID #: 2282
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`state a claim for direct infringement under Rule 8. See D.I. 24. Accordingly, SIPCO did not
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`adequately state a claim for direct infringement under Rule 8 – if at all – until it filed the SAC
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`(and its attendant claim charts) on June 30, 2017. As such, under Apeldyn, the SAC fails to state
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`a claim that any Defendant had the required mental state until – if at all - June 30, 2017.
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`However, as discussed in Section II.B.1 supra, the only colorable acts of “inducement”
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`that are identified in the SAC are the alleged sales to Ocala and Redwood – which took place in
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`2014, three years before the filing of the SAC. Thus, the SAC plainly fails to allege facts
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`showing that any Defendant had the required state of mind when it committed an inducing act.
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`As such, the SAC fails to state a claim for induced infringement against any Defendant. 6
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`3. The SAC Fails to State a Claim for Inducement Against the Kapsch Defendants
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`The only alleged “inducing act” by the Kapsch Defendants is the publication of the web
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`page quoted at Paragraph 23 of the SAC. See D.I. 32 at 15-16. SIPCO alleges that the publication
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`of this web page constitutes a legally-cognizable “inducing act,” because – allegedly – “[a]ny
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`advertisement of an accused product or method may be sufficient to support an induced
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`infringement pleading.” Id. (citing Power Integrations, 843 F.3d at 1335).
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`SIPCO misstates the law. In Power Integrations, the Federal Circuit affirmed a jury’s
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`verdict of infringement by inducement, because there was “significant . . . evidence that would
`
`allow a jury to find that Fairchild [the Defendant] took affirmative acts to induce third parties to
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`import its products into the United States.” Id. at 1333. This included evidence that Fairchild
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`“competed for business it knew was directed to the United States,” and “provided demonstration
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`6 Moreover, to be liable for induced infringement, there must be actual “successful
`communication between the alleged inducer and the third-party direct infringer.” Power
`Integration, 843 F.3d at 1331. Here, the SAC does not allege any facts to suggest that there has
`been actual, “successful communication” between the Defendants and any direct infringer (other
`than the 2014 “Agreements” with Ocala and Redwood, which pre-dated the required mental
`state). Thus, for this additional reason, the SAC fails to state a claim for induced infringement.
`
`
`
`9
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`

`

`Case 1:16-cv-00830-RGA Document 33 Filed 08/04/17 Page 14 of 16 PageID #: 2283
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`boards containing the infringing controller chips to customers and potential customers in the
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`United States.” Id. That is a far cry from the present case, where the only alleged evidence of an
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`“inducing act” by Kapsch is the vague, non-interactive website which does nothing but refer
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`interested customers to the Streetline website. Thus, Power Integrations is inapposite.
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`SIPCO also cites Nexeon Ltd. v. Eaglepicher Techs., LLC, 2016 WL 4045474 at *6 (D.
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`Del. 2016), for the proposition that “active steps ... taken to encourage direct infringement, such
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`as advertising an infringing use” can be a legally-cognizable “inducing act.” However, in
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`Nexeon, the Defendant did far more than just “advertise.” Rather, it also “instructed [the direct
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`infringer] of how to manufacture and use [the accused product].” Id. (emphasis added). That is a
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`far cry from the mere publication, on a website, of the phrase “our offerings include.” Thus,
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`Nexeon is inapposite, and Kapsch’s purported publication of the website at Paragraph 23 of the
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`SAC does not constitute a legally-cognizable act of “active inducement.”
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`C.
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` Dismissal With Prejudice Is Proper
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`Finally, SIPCO asserts that dismissal with prejudice would be improper, because the
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`Court has not previously ruled on the specific arguments set forth in this motion. See D.I. 17.
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`However, SIPCO admits that they were on notice of these arguments, because they were set forth
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`in Defendants’ prior motions to dismiss. See D.I. 32 at 3 (“Defendants’ motion and brief is
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`basically a copy of its prior motion to dismiss.”) Since SIPCO was already on notice of these
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`deficiencies, but deliberately chose not to correct them, dismissal with prejudice is proper.
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`In its latest order granting Defendants’ motion to dismiss, the Court stated that SIPCO
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`would only have one “last chance” to cure the deficiencies in their Complaint. D.I. 24 at 4. Yet,
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`for the third time in this case, SIPCO once again chose not to correct these deficiencies. Thus,
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`Defendants respectfully request that the indirect infringement claims against all Defendants, and
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`the direct infringement claims against Kapsch, be dismissed with prejudice.
`
`
`
`10
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`

`

`Case 1:16-cv-00830-RGA Document 33 Filed 08/04/17 Page 15 of 16 PageID #: 2284
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`
`
`
`
`
`Of Counsel:
`
`Pierre R. Yanney
`Stephen E. Underwood
`STROOCK & STROOCK & LAVAN LLP
`180 Maiden Lane
`New York, NY 10038
`(212) 806-5400
`pyanney@stroock.com
`sunderwood@stroock.com
`
`
`Dated: August 4, 2017
`
`Respectfully submitted,
`
`
`
`ROSS ARONSTAM & MORITZ LLP
`
` /s/ Benjamin J. Schladweiler
`Benjamin J. Schladweiler (#4601)
`100 S. West Street, Suite 400
`Wilmington, DE 19801
`(302) 576-1600
`bschladweiler@ramllp.com
`
`Counsel for Defendants Streetline, Inc. and
`Kapsch TrafficCom Holding Corp.
`
`
`
`11
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`

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`Case 1:16-cv-00830-RGA Document 33 Filed 08/04/17 Page 16 of 16 PageID #: 2285
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`CERTIFICATE OF SERVICE
`
`I, Benjamin J. Schladweiler, hereby certify that on August 4, 2017, I caused the
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`foregoing Reply Brief in Support of Defendants’ Motion to Dismiss in Part Plaintiffs’ Second
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`Amended Complaint Pursuant to Federal Rule of Civil Procedure 12(b)(6) to be served via
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`electronic mail upon the following counsel of record:
`
`George Pazuniak
`Sean T. O'Kelly
`Daniel Patrick Murray
`901 N. Market Street, Suite 1000
`Wilmington, DE 19801
`gp@del-iplaw.com
`sokelly@oeblegal.com
`dmurray@oeblegal.com
`
`Counsel for Plaintiff SIPCO, LLC and
`IP CO., LLC d/b/a INTUS IQ
`
`
`
`
`
`
`
`
`
`
`
`
`
`
` /s/ Benjamin J. Schladweiler
`Benjamin J. Schladweiler (#4601)
`
`
`
`
`
`
`
`