`
`IN THE UNITED STATES DISTRICT COURT
`FOR THE DISTRICT OF DELAWARE
`
`
`UNIVERSITY OF MASSACHUSETTS
`MEDICAL SCHOOL and CARMEL
`LABORATORIES, LLC,
`
` Plaintiffs,
`
`v.
`
`L’ORÉAL S.A. and L’ORÉAL USA, INC.,
`
`
`Defendants
`
`
`
`C.A. No. 17-868-JFB-SRF
`
`
`
`
`
`OPENING BRIEF OF DEFENDANT L’ORÉAL S.A. IN SUPPORT OF
`MOTION TO DISMISS FIRST AMENDED COMPLAINT
`
`Frederick L. Cottrell, III (#2555)
`Jeffrey L. Moyer (#3309)
`Katharine L. Mowery (#5629)
`Richards, Layton & Finger, P.A.
`One Rodney Square
`920 N. King Street
`Wilmington, Delaware 19801
`(302) 651-7700
`cottrell@rlf.com
`moyer@rlf.com
`mowery@rlf.com
`
`Attorneys for Defendants
`L’Oréal S.A. and L’Oréal USA, Inc.
`
`
`Of Counsel:
`
`Dennis S. Ellis
`Katherine F. Murray
`Adam M. Reich
`Paul Hastings LLP
`515 South Flower Street, 25th Floor
`Los Angeles, CA, 90071
`(213) 683-6000
`Naveen Modi
`Joseph E. Palys
`Paul Hastings LLP
`875 15th Street, N.W.
`Washington, D.C., 20005
`(202) 551-1990
`Blaine M. Hackman
`Paul Hastings LLP
`200 Park Avenue
`New York, NY 10166
`212-318-6000
`
`Dated: October 16, 2017
`
`
`
`Case 1:17-cv-00868-JFB-SRF Document 24 Filed 10/16/17 Page 2 of 25 PageID #: 494
`
`TABLE OF CONTENTS
`
`Page
`TABLE OF AUTHORITIES ......................................................................................................... ii
`I.
`STATEMENT OF NATURE AND STAGE OF THE PROCEEDINGS ......................... 1
`II.
`SUMMARY OF ARGUMENT ......................................................................................... 1
`III.
`STATEMENT OF FACTS ................................................................................................ 2
`A.
`The Parties and the Accused Products ................................................................... 2
`B.
`Allegations and Notable Omissions of the FAC .................................................... 4
`LEGAL STANDARD ........................................................................................................ 6
`A.
`Rule 12(b)(2) Standard .......................................................................................... 6
`B.
`Rule 12(b)(6) Standard .......................................................................................... 6
`THE COURT LACKS PERSONAL JURISDICTION OVER L’ORÉAL S.A. ............... 7
`A.
`L’Oréal S.A. Is Not Subject to General Jurisdiction. ............................................ 9
`B.
`L’Oréal S.A. Is Not Subject to Specific Jurisdiction. .......................................... 11
`PLAINTIFFS’ INFRINGEMENT CLAIMS ARE NOT ADEQUATELY PLED .......... 12
`A.
`The FAC Does Not Adequately Plead Direct Infringement ................................ 13
`1.
`The FAC Does Not Adequately Plead that L’Oréal S.A. Directly
`Infringes the Asserted Patent Claims ....................................................... 13
`The FAC Does Not Adequately Plead any Directly Infringing Use
`of the Accused Adenosine ....................................................................... 14
`The FAC Does Not Adequately Plead Induced or Contributory
`Infringement ......................................................................................................... 16
`The FAC Does Not Adequately Plead Willful Infringement ............................... 17
`Plaintiffs’ Repeated Failure to Plausibly Allege Infringement Against any
`Party Warrants Dismissing the FAC with Prejudice............................................ 18
`VII. CONCLUSION ................................................................................................................ 18
`
`IV.
`
`V.
`
`VI.
`
`2.
`
`B.
`
`C.
`D.
`
`
`
`
`
`i
`
`
`
`
`
`Case 1:17-cv-00868-JFB-SRF Document 24 Filed 10/16/17 Page 3 of 25 PageID #: 495
`TABLE OF AUTHORITIES
`
`
`
`Page(s)
`
`Cases
`
`Acorda Therapeutics, Inc. v. Mylan Pharms. Inc.,
`78 F. Supp. 3d 572 (D. Del. 2015), aff’d, 817 F.3d 755 (Fed. Cir. 2016) ...............................10
`
`Applied Biosystems, Inc. v. Cruachem, Ltd.,
`772 F. Supp. 1458 (D. Del. 1991) ........................................................................................8, 10
`
`Ashcroft v. Iqbal,
`556 U.S. 662, 678 (2009) .................................................................................................2, 6, 12
`
`Azubuko v. Comm’r of Police of Boston,
`No. 05-094-SLR, 2005 WL 914779 (D. Del. Apr. 13, 2005) ....................................................7
`
`Bell Atl. Corp. v. Twombly,
`550 U.S. 544 (2007) ...............................................................................................................2, 6
`
`Budget Blinds, Inc. v. White,
`536 F.3d 244 (3d Cir. 2008).....................................................................................................12
`
`Burger King Corp. v. Rudzewicz,
`471 U.S. 462 (1985) ...................................................................................................................8
`
`Bush v. City of Wilmington,
`No. 89-628-JRR, 1990 WL 10824350 (D. Del. Aug. 23, 1990) ................................................1
`
`Componentone, L.L.C. v. Componentart, Inc.,
`No. 02:05cv1122, 2007 WL 2359827 (W.D. Pa. Aug. 16, 2007) .............................................1
`
`In re Conex Holdings, LLC,
`514 B.R. 405 (Bankr. D. Del. 2014) ..........................................................................................7
`
`Cupp v. Alberto-Culver USA, Inc.,
`308 F. Supp. 2d 873 (W.D. Tenn. 2004) ............................................................................10, 11
`
`Daimler AG v. Bauman,
`134 S. Ct. 746 (2014) ...........................................................................................................9, 11
`
`Evolved Wireless, LLC v. Samsung Elecs. Co.,
`No. 15-545-SLR-SRF, 2016 WL 1019667 (D. Del. Mar. 15, 2016) .......................................16
`
`Fowler v. UPMC Shadyside,
`578 F.3d 203 (3d Cir. 2009).......................................................................................................6
`
`Gibbs v. Coupe,
`192 F. Supp. 3d 503 (D. Del. 2016) ...........................................................................................7
`
`
`
`
`ii
`
`
`
`Case 1:17-cv-00868-JFB-SRF Document 24 Filed 10/16/17 Page 4 of 25 PageID #: 496
`TABLE OF AUTHORITIES
`(continued)
`
`
`
`Page(s)
`
`Global–Tech Appliances, Inc. v. SEB S.A.,
`563 U.S. 754 (2011) .................................................................................................................16
`
`Halo Elecs., Inc. v. Pulse Elecs., Inc.,
`136 S. Ct. 1923 (2016) .........................................................................................................2, 17
`
`Helicopteros Nacionales de Colombia, S.A. v. Hall,
`466 U.S. 408 (1984) ...................................................................................................................9
`
`IMO Indus., Inc. v. Kiekert AG,
`155 F.3d 254 (3d Cir. 1998).......................................................................................................7
`
`Int’l Shoe Co. v. Washington,
`326 U.S. 310 (1945) ...................................................................................................................8
`
`Krantz v. Prudential Investments Fund Mgmt. LLC,
`305 F.3d 140, 144 (3d Cir. 2002) ............................................................................................18
`
`LaSala v. Marfin Popular Bank Pub. Co.,
`410 F. App’x 474 (3d Cir. 2011) .............................................................................................11
`
`M2M Solutions, LLC v. Telit Commc’ns PLC,
`No. 14–1103–RGA, 2015 WL 4640400 (D. Del. Aug. 5, 2015) .............................................13
`
`MacQueen v. Huntington Ingalls, Inc.,
`134 F. Supp. 3d 803 (D. Del. 2015) ...........................................................................................9
`
`Macronix Int’l Co. v. Spansion Inc.,
`4 F. Supp. 3d 797 (E.D. Va. 2014) ..........................................................................................15
`
`Mayne Pharma Int’l PTY Ltd. v. Merck & Co.,
`No. 15-438-LPS-CJB, 2015 WL 7833206 (D. Del. Dec. 3, 2015) ..........................................17
`
`Mellon Bank (East) PSFS, Nat’l Ass’n v. Farino,
`960 F.2d 1217 (3d Cir. 1992).....................................................................................................6
`
`Meritcare, Inc. v. St. Paul Mercury Ins. Co.,
`166 F.3d 214 (3d Cir. 1999).......................................................................................................7
`
`North Star Innovations, Inc. v. Toshiba Corp.,
`No. CV 16-115-LPS-CJB, 2016 WL 7107230 (D. Del. Dec. 6, 2016) ...................................13
`
`O’Connor v. Sandy Lane Hotel Co.,
`496 F.3d 312 (3d Cir. 2007)...............................................................................................11, 12
`
`
`
`iii
`
`
`
`Case 1:17-cv-00868-JFB-SRF Document 24 Filed 10/16/17 Page 5 of 25 PageID #: 497
`TABLE OF AUTHORITIES
`(continued)
`
`
`
`Page(s)
`
`Provident Nat’l Bank v. Cal. Fed. Sav. & Loan Ass’n,
`819 F.2d 434 (3d Cir. 1987)...................................................................................................6, 9
`
`Raindance Techs., Inc. v. 10x Genomics, Inc.,
`No. 15-152-RGA, 2016 WL 927143 (D. Del. Mar. 4, 2016) ..................................................14
`
`Rano v. Sipa Press, Inc.,
`987 F.2d 580 (9th Cir. 1993) ...................................................................................................12
`
`ReefEdge Networks, LLC v. Juniper Networks, Inc.,
`29 F. Supp. 3d 455 (D. Del. 2014) .....................................................................................16, 17
`
`Rush v. Savchuk,
`444 U.S. 320 (1980) .............................................................................................................8, 12
`
`Shoemaker v. McConnell,
`556 F. Supp. 2d 351 (D. Del. 2008) ...........................................................................................8
`
`SIPCO, LLC v. Streetline, Inc.,
`230 F. Supp. 3d 351 (D. Del. 2017) .........................................................................................14
`
`T-Jat Sys. 2006 Ltd. v. Expedia, Inc. (DE),
`No. 16-581-RGA-MPT, 2017 WL 896988 (D. Del. Mar. 7, 2017) ...........................................2
`
`Telcordia Techs., Inc. v. Alcatel, S.A.,
`No. 04-874 GMS, 2005 WL 1268061 (D. Del. May 27, 2005) .................................................1
`
`Tellabs, Inc. v. Makor Issues & Rights, Ltd.,
`551 U.S. 308 (2007) ...................................................................................................................5
`
`Time Share Vacation Club v. Atl. Resorts, Ltd.,
`735 F.2d 61 (3d Cir. 1984).........................................................................................................6
`
`Varian Med. Sys., Inc. v. Elekta AB,
`No. 15-871-LPS, 2016 WL 3748772 (D. Del. July 12, 2016) .................................................16
`
`World-Wide Volkswagen Corp. v. Woodson,
`444 U.S. 286 (1980) ...................................................................................................................8
`
`Statutes
`
`10 Del. C. § 3104(c)(1)-(4) ..............................................................................................................8
`
`
`
`iv
`
`
`
`Case 1:17-cv-00868-JFB-SRF Document 24 Filed 10/16/17 Page 6 of 25 PageID #: 498
`TABLE OF AUTHORITIES
`(continued)
`
`
`
`Page(s)
`
`Rules
`
`Fed. R. Civ. P.
`8........................................................................................................................................ passim
`12...................................................................................................................................... passim
`
`Fed. R. Evid.
`
`201..............................................................................................................................................5
`
`
`
`
`
`v
`
`
`
`Case 1:17-cv-00868-JFB-SRF Document 24 Filed 10/16/17 Page 7 of 25 PageID #: 499
`
`
`I.
`
`STATEMENT OF NATURE AND STAGE OF THE PROCEEDINGS
`
`Defendant L’Oréal S.A. (“L’Oréal S.A.”) hereby moves under Federal Rules of Civil
`
`Procedure (“Rules”) 12(b)(2) and 12(b)(6) to dismiss the First Amended Complaint (“FAC”)
`
`filed by plaintiffs University of Massachusetts Medical School (“UMass”) and Carmel
`
`Laboratories, LLC (“Carmel Labs”) (collectively “Plaintiffs”). On July 17, 2017, L’Oréal S.A.
`
`accepted service of Plaintiffs’ initial Complaint.1 After Plaintiffs filed their FAC on August 18,
`
`2017, the parties stipulated that L’Oréal S.A. would have until October 16, 2017 to respond to
`
`the FAC. (See D.I. 14.) On August 23, 2017 the Court approved the parties’ stipulation.
`
`II.
`
`SUMMARY OF ARGUMENT
`
`Plaintiffs’ case against L’Oréal S.A. fails for two reasons. First, this Court lacks
`
`jurisdiction over L’Oréal S.A., as it is a French entity based in France, with no Delaware
`
`contacts. L’Oréal S.A. does not regularly transact business or direct its activities to Delaware,
`
`and none of the allegations in the FAC tie L’Oréal S.A. to Delaware. Plaintiffs’ vague
`
`allegations that L’Oréal S.A. owns unspecified U.S. patents and that it filed U.S. patent
`
`applications do not support personal jurisdiction here. See Telcordia Techs., Inc. v. Alcatel, S.A.,
`
`No. 04-874 GMS, 2005 WL 1268061, at *7 (D. Del. May 27, 2005); see also Componentone,
`
`L.L.C. v. Componentart, Inc., No. 02:05cv1122, 2007 WL 2359827, at *4 (W.D. Pa. Aug. 16,
`
`2007) (“Mere ownership of intellectual property rights is not sufficient to establish personal
`
`jurisdiction.”). Plaintiffs’ similarly vague allegations that “Defendants” make, use or sell
`
`unidentified products also fail to establish a presence by L’Oréal S.A. in this District. See Bush
`
`v. City of Wilmington, No. 89-628-JRR, 1990 WL 10824350, at *3 (D. Del. Aug. 23, 1990) (an
`
`amended complaint that includes “no effort to differentiate the allegations” between defendants
`
`
`1 At the same time, the parties agreed that the deadline for L’Oréal S.A. to move, answer or
`otherwise respond to the initial Complaint would be October 16, 2017.
`
`
`
`1
`
`
`
`Case 1:17-cv-00868-JFB-SRF Document 24 Filed 10/16/17 Page 8 of 25 PageID #: 500
`
`
`“lacks the specificity required to survive [a] motion to dismiss”); T-Jat Sys. 2006 Ltd. v. Expedia,
`
`Inc. (DE), No. 16-581-RGA-MPT, 2017 WL 896988, at *7 (D. Del. Mar. 7, 2017) (“[P]laintiffs
`
`cannot combine allegations against multiple defendants[,]” as this “fails to meet the minimum
`
`pleading standard.”).
`
`Second, even if the Court had personal jurisdiction over L’Oréal S.A., Plaintiffs’ lawsuit
`
`is still inadequately pled. Rule 8 “demands more than an unadorned, the-defendant-unlawfully-
`
`harmed-me accusation.” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009); see also Fed. R. Civ. P.
`
`8(a). Hence, a pleading must “raise a right to relief above the speculative level . . . .” Bell Atl.
`
`Corp. v. Twombly, 550 U.S. 544, 555 (2007). The FAC does not do this, and is instead rife with
`
`conclusory allegations. For example, Plaintiffs allege that “Defendants” directly infringe the
`
`asserted patent claims by “making, using, selling, and/or offering to sell” a litany of unspecified
`
`products (collectively, the “Accused Adenosine Products”). (See, e.g., D.I. 13, ¶¶ 37, 47.) But
`
`the FAC neither identifies plausibly infringing acts by L’Oréal S.A. in particular, nor how any
`
`party could use any Accused Adenosine Product in a manner that could plausibly directly
`
`infringe the asserted patent claims. Plaintiffs’ induced and contributory infringement allegations
`
`are likewise deficient, and Plaintiffs do not allege that L’Oréal S.A. knew of any infringing use
`
`of an Accused Adenosine Product. (See id., ¶¶ 42-43, 52-53.) Plaintiffs’ willful infringement
`
`allegations are also deficient, as the FAC contains no factual allegations that might establish
`
`intentional or knowledgeable infringement by L’Oréal S.A. See Halo Elecs., Inc. v. Pulse Elecs.,
`
`Inc., 136 S. Ct. 1923, 1926, 1932-33 (2016).
`
`The Court should thus dismiss L’Oréal S.A. from this lawsuit, with prejudice.
`
`III.
`
`STATEMENT OF FACTS
`A.
`
`The Parties and the Accused Products
`
`While Plaintiffs are American entities principally based in Massachusetts, L’Oréal S.A. is
`
`
`
`2
`
`
`
`Case 1:17-cv-00868-JFB-SRF Document 24 Filed 10/16/17 Page 9 of 25 PageID #: 501
`
`
`a French corporation headquartered at Clichy, Hauts-de-Seine, France. (D.I. 13, ¶¶ 1-3, 5.) It is
`
`the parent company of co-defendant L’Oréal USA. (Id. ¶ 7.) The FAC does not allege that
`
`L’Oréal S.A. manufactures or distributes any products in this forum. Rather, Plaintiffs allege
`
`only that “L’Oréal USA manufactures, markets, and sells the Accused Adenosine Products
`
`across the United States, including in Delaware.” (See id., ¶ 33.) Specifically, L’Oréal USA
`
`develops and manufactures hair care, skincare, cosmetics and fragrances for consumer, luxury,
`
`and professional markets in the United States, and distributes them through over 30 brands. The
`
`FAC names several of these brands—e.g., Garnier, Giorgio Arman, Kiehl’s, L’Oréal Paris, La
`
`Roche-Posay, Lancôme, Maybelline, Shu Uemura, Vichy, and Yves Saint Laurent—and alleges
`
`on information and belief that these brands sell allegedly infringing, unidentified products. (Id.,
`
`¶ 31.) The only product specifically alleged in the FAC is L’Oréal Paris RevitaLift Triple Power
`
`Deep-Acting Moisturizer, which is a L’Oréal USA brand, sold by L’Oréal USA. (See id., ¶ 34
`
`and Exs. 6, 12, thereto.)
`
`L’Oréal S.A. has no physical presence in Delaware. It does not conduct business in
`
`Delaware; does not own, rent, or lease real estate, or maintain offices, manufacturing plants, or
`
`facilities in Delaware; and it is not registered to do business in Delaware. (See Declaration of
`
`Roy Rabinowitz (“Rabinowitz Decl.), ¶ 6, filed concurrently herewith.) L’Oréal S.A. also does
`
`not have a designated agent for service of process in Delaware and does not maintain any bank
`
`accounts in Delaware. (Id., ¶¶ 6-7.) Shares of L’Oréal S.A. are traded only on the Paris Stock
`
`Exchange; they are not publicly traded in the U.S. or on any United States exchange. (Id., ¶ 7.)
`
`While L’Oréal USA is a wholly-owned subsidiary of L’Oréal S.A., L’Oréal USA
`
`operates as a separate and independent legal entity from L’Oréal S.A., and does not act as
`
`L’Oréal S.A.’s agent in any capacity. (Id., ¶¶ 2-4.) Unlike L’Oréal S.A., L’Oréal USA is active
`
`
`
`3
`
`
`
`Case 1:17-cv-00868-JFB-SRF Document 24 Filed 10/16/17 Page 10 of 25 PageID #: 502
`
`
`in the United States, employing more than 10,000 people here, and operating manufacturing
`
`facilities in Arkansas, Kentucky, and New Jersey. (Id., ¶ 5.)
`
`B.
`
`Allegations and Notable Omissions of the FAC
`
`Throughout the FAC, Plaintiffs indiscriminately lump together L’Oréal S.A. and L’Oréal
`
`USA as “Defendants.” (See id., ¶¶ 18-19, 23-28, 30-32, 34, 37, 40-44, 47, 50-54, 56-58.)
`
`Indeed, the only allegations in the FAC directed to L’Oréal S.A. that are not pled on information
`
`and belief are allegations that L’Oréal S.A. filed a patent application and was issued four patents
`
`that cite the patents-in-suit. (See id., ¶¶ 20-22.)
`
`While Plaintiffs speculate, “[o]n information and belief,” that “L’Oréal USA’s activities
`
`are controlled by its parent, L’Oréal,” this conclusion is not supported by any facts, and the facts
`
`actually show otherwise. (See Rabinowitz Decl., ¶¶ 2-4.) Plaintiffs also do not provide any
`
`factual allegations to support their contention, based on “information and belief, [that]
`
`Defendants both create and design the Accused Products.” (See id., ¶¶ 31-32.)
`
`With respect to their patent infringement claims, Plaintiffs allege that “Defendants”
`
`directly and/or indirectly infringe, by induced and/or contributory infringement, claims 1 and 9
`
`of U.S. Patent No. 6,423,327 (the “’327 patent”) and claims 1 and 9 of U.S. Patent No. 6,645,513
`
`(the “’513 patent”). (Id., ¶¶ 11, 35-54.) Prosecution records for the ’327 and ’513 patents
`
`demonstrate that these patents were not the first publications to describe methods of applying
`
`adenosine-containing compositions to the skin. For example, during prosecution of U.S. Patent
`
`Application No. 09/672,348 (“the ’348 application”), which issued as the ’327 patent and to
`
`which the ’513 patent also claims priority, the patent applicants distinguished over a prior art
`
`topical composition containing an adenosine concentration of 0.033% (i.e., one third of 0.1% or
`
`
`
`4
`
`
`
`Case 1:17-cv-00868-JFB-SRF Document 24 Filed 10/16/17 Page 11 of 25 PageID #: 503
`
`
`1.27 x 10-3 M).2 (See D.I. 18 at Exs. A at p. 6, and B, ¶ 4.)
`
`Despite asserting claims for patent infringement, the FAC does not provide an element-
`
`by-element infringement analysis. (See id., ¶¶ 38-39, 48-49.) And despite acknowledging the
`
`public availability of the Accused Adenosine Products (see, e.g., D.I. 13, ¶¶ 25, 31, 34), the FAC
`
`does not reference testing or any type of analysis conducted on the Accused Adenosine Products.
`
`Additionally, the FAC provides no information regarding, for example, the adenosine
`
`concentration in any Accused Adenosine Product in relation to the infringement allegations for
`
`either the ’327 patent or the ’513 patent. (See, e.g., id., ¶¶ 25, 31, 34 37-39, 47-49.) Instead, the
`
`FAC merely references four L’Oréal S.A. patents and a 2006 publication authored by a L’Oréal
`
`S.A. scientist, none of which supports Plaintiffs’ infringement claims. (Id., ¶¶ 21-22, 26-27.)
`
`Indeed, examples from the referenced L’Oréal S.A. patents describe the applications of topical
`
`compositions to the skin that have adenosine concentrations exceeding the upper limit of both the
`
`’327 and ’513 patents. (See, e.g., D.I. 13-3 ¶ 0068 (Example 2); D.I. 13-8 at 6:55-7:27 (Example
`
`2).) Likewise, the 2006 publication describes studies on a cream with an adenosine
`
`concentration that exceeds the upper limit of both the ’327 and ’513 patents. (See D.I. 13-6 at 5;
`
`D.I. 18 at p.2 (citing D.I. 17 at Ex. C), Ex. A at p. 6, and Ex. B, ¶ 4; D.I. 13, ¶¶ 12, 38, 48; D.I.
`
`13-1 at 10:18-26; D.I. 13-2 at 10:18-26.)
`
`Plaintiffs additionally allege “[o]n information and belief,” that “Defendants” induce
`
`infringement of the ’327 and ’513 patents, but the FAC does not include a single factual
`
`allegation connecting L’Oréal S.A. with any third-party user of the Accused Adenosine Products.
`
`(D.I. 13, ¶¶ 42-43, 52-53.) Similarly, Plaintiffs accuse “Defendants” of willful infringement, but
`
`
`2 “[C]ourts must consider the complaint in its entirety, as well as other sources courts ordinarily
`examine when ruling on Rule 12(b)(6) motions to dismiss, in particular, documents incorporated
`into the complaint by reference, and matters of which a court may take judicial notice.” Tellabs,
`Inc. v. Makor Issues & Rights, Ltd., 551 U.S. 308, 322 (2007); accord Fed. R. Evid. 201.
`5
`
`
`
`
`
`Case 1:17-cv-00868-JFB-SRF Document 24 Filed 10/16/17 Page 12 of 25 PageID #: 504
`
`
`premise their claim on the conclusory allegation that “Defendants’ infringement of any or all of
`
`the above-named patents is willful and deliberate . . . .” (See id., ¶ 56.)
`
`IV.
`
`LEGAL STANDARD
`A.
`
`Rule 12(b)(2) Standard
`
`When a defendant challenges personal jurisdiction under Rule 12(b)(2), the plaintiff has
`
`the burden of establishing that the court has personal jurisdiction. Provident Nat’l Bank v. Cal.
`
`Fed. Sav. & Loan Ass’n, 819 F.2d 434, 437 (3d Cir. 1987). This requires the plaintiff to “come
`
`forward with sufficient facts to establish that jurisdiction is proper” and to “‘establish[] with
`
`reasonable particularity sufficient contacts between the defendant and the forum state.’” Mellon
`
`Bank (East) PSFS, Nat’l Ass’n v. Farino, 960 F.2d 1217, 1223 (3d Cir. 1992). “[A]t no point
`
`may a plaintiff rely on the bare pleadings alone in order to withstand a defendant’s Rule 12(b)(2)
`
`motion to dismiss for lack of in personam jurisdiction.” Time Share Vacation Club v. Atl.
`
`Resorts, Ltd., 735 F.2d 61, 66 n.9 (3d Cir. 1984).
`
`B.
`
`Rule 12(b)(6) Standard
`
`A Rule 12(b)(6) motion tests the sufficiency of a complaint’s factual allegations.
`
`Twombly, 550 U.S. at 555. “[A] complaint must contain sufficient factual matter, accepted as
`
`true, to ‘state a claim to relief that is plausible on its face.’” Iqbal, 556 U.S. at 678 (citation
`
`omitted). It must show “more than a sheer possibility that a defendant has acted unlawfully.” Id.
`
`Rule 8(a) “‘contemplate[s] the statement of circumstances, occurrences, and events in support of
`
`the claim presented’ and does not authorize a pleader’s ‘bare averment that he wants relief and is
`
`entitled to it.”’ Twombly, 550 U.S. at 555 n.3 (alteration in original). Legal conclusions must be
`
`disregarded. Fowler v. UPMC Shadyside, 578 F.3d 203, 210-11 (3d Cir. 2009). “Under the
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`pleading regime established by Twombly and Iqbal, a court reviewing the sufficiency of a
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`complaint must take three steps: (1) take note of the elements the plaintiff must plead to state a
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`Case 1:17-cv-00868-JFB-SRF Document 24 Filed 10/16/17 Page 13 of 25 PageID #: 505
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`claim; (2) identify allegations that, because they are no more than conclusions, are not entitled to
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`the assumption of truth; and (3) when there are well-pleaded factual allegations, the court should
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`assume their veracity and then determine whether they plausibly give rise to an entitlement to
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`relief.” Gibbs v. Coupe, 192 F. Supp. 3d 503, 506 (D. Del. 2016). Moreover, where a plaintiff
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`sues more than one defendant, Rule 8 requires that the plaintiff “supply[] specific facts as to each
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`defendant’s wrongdoing.” See In re Conex Holdings, LLC, 514 B.R. 405, 414-15 (Bankr. D.
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`Del. 2014) (it is not a close question where a plaintiff “lumps” defendants together “without
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`supplying specific facts as to each defendant’s wrongdoing[;]” “[m]uch more specificity is
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`needed [] to satisfy the legal standard.”).
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`V.
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`THE COURT LACKS PERSONAL JURISDICTION OVER L’ORÉAL S.A.
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`As a threshold matter, this Court lacks personal jurisdiction over L’Oréal S.A., and
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`dismissal is therefore mandatory. See Fed. R. Civ. P. 12(b)(2). “[To] exercise personal
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`jurisdiction over a defendant, a federal court sitting in diversity must undertake a two-step
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`inquiry. First, the court must apply the relevant state long-arm statute to see if it permits the
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`exercise of personal jurisdiction; then, the court must apply the precepts of the Due Process
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`Clause of the Constitution.” IMO Indus., Inc. v. Kiekert AG, 155 F.3d 254, 258-59 (3d Cir.
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`1998). The same inquiry applies in a federal question case. See Azubuko v. Comm’r of Police of
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`Boston, No. 05-094-SLR, 2005 WL 914779, at *3 (D. Del. Apr. 13, 2005) (citing Meritcare, Inc.
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`v. St. Paul Mercury Ins. Co., 166 F.3d 214, 217 (3d Cir. 1999)).
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`A defendant falls within the bounds of Delaware’s long-arm statute if it:
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`(1) Transacts any business or performs any character of work or
`service in the State;
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`(2) Contracts to supply services or things in this State;
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`(3) Causes tortious injury in the State by an act or omission in this
`State;
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`Case 1:17-cv-00868-JFB-SRF Document 24 Filed 10/16/17 Page 14 of 25 PageID #: 506
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`(4) Causes tortious injury in the State or outside of the State by an
`act or omission outside the State if the person regularly does or
`solicits business, engages in any other persistent course of conduct
`in the State or derives substantial revenue from services, or things
`used or consumed in the State . . . .
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`10 Del. C. § 3104(c)(1)-(4). Subsections (c)(1) through (c)(3) require a showing of specific
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`jurisdiction. Shoemaker v. McConnell, 556 F. Supp. 2d 351, 354-55 (D. Del. 2008). Meanwhile,
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`Subsection (c)(4) grants personal jurisdiction even when the claim is unrelated to the forum
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`contacts, but this requires a greater number of contacts with the forum. See Applied Biosystems,
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`Inc. v. Cruachem, Ltd., 772 F. Supp. 1458, 1466 (D. Del. 1991).
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`To satisfy the due process step of the personal jurisdiction analysis, the plaintiff must
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`establish sufficient “minimum contacts” between the non-resident defendant and the forum state,
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`“such that the maintenance of the suit does not offend traditional notions of fair play and
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`substantial justice.” Int’l Shoe Co. v. Washington, 326 U.S. 310, 316 (1945). The plaintiff must
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`therefore show that the defendant “purposefully avail[ed] itself of the privilege of conducting
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`activities within the forum State,” so that it should “reasonably anticipate being haled into court
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`there.” World-Wide Volkswagen Corp. v. Woodson, 444 U.S. 286, 297 (1980). In order for a
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`Court to exercise specific personal jurisdiction consistent with due process, the plaintiff’s causes
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`of action must have arisen from activities by the defendant in the forum State. See Burger King
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`Corp. v. Rudzewicz, 471 U.S. 462, 472 (1985). A court’s exercise of general personal
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`jurisdiction is consistent with due process so long as the defendant has “‘continuous and
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`systematic’ contacts with the forum state.” Applied Biosystems, 772 F. Supp. at 1470. It is
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`“plainly unconstitutional” and inconsistent with International Shoe, to attribute one defendant’s
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`in-state contacts to another “by considering the ‘defending parties’ together and aggregating their
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`forum contacts . . . .” Rush v. Savchuk, 444 U.S. 320, 331-32 (1980).
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`8
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`Case 1:17-cv-00868-JFB-SRF Document 24 Filed 10/16/17 Page 15 of 25 PageID #: 507
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`This Court does not have personal jurisdiction over L’Oréal S.A. because L’Oréal S.A.
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`does not have a systematic, substantial, and continuous presence in Delaware, and Plaintiffs’
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`conclusory claims of patent infringement are not based on any alleged conduct in Delaware.
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`A.
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`L’Oréal S.A. Is Not Subject to General Jurisdiction.
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`The Court cannot exercise general jurisdiction over L’Oréal S.A. because L’Oréal S.A.
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`does not have “continuous and substantial contacts” with Delaware that are “akin to those of a
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`local enterprise that actually is ‘at home’ in the State.” Daimler AG v. Bauman, 134 S. Ct. 746,
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`769 (2014); see also Provident, 819 F.2d at 437 (general jurisdiction requires “‘continuous and
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`systematic’ contacts with the forum state,” and “mere minimum contacts” will not suffice). For
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`foreign entities like L’Oréal S.A., general jurisdiction will only be found in an “exceptional
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`case.” MacQueen v. Huntington Ingalls, Inc., 134 F. Supp. 3d 803, 805-06 (D. Del. 2015).
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`Courts consider a variety of factors in this analysis, including whether the defendant conducts
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`business in the forum state, maintains a place of business or is licensed or registered to do
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`business in the forum state, and whether it maintains a bank account there. See Helicopteros
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`Nacionales de Colombia, S.A. v. Hall, 466 U.S. 408, 415-16 (1984).
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`The FAC does not show—because it cannot—that L’Oréal S.A. has systematic and
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`continuous contacts by which it is “at home” in Delaware. Plaintiffs do not allege that L’Oréal
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`S.A. has any physical presence in Delaware, or that L’Oréal S.A. is incorporated in or registered
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`to do business in Delaware. To the contrary, Plaintiffs allege that L’Oréal S.A. is a French entity
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`with its principal place of business in France. (D.I. 13, ¶ 5.) L’Oréal S.A., whose shares are
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`publicly traded only on the Paris Stock Exchange, does not conduct and is not registered to
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`conduct business in Delaware. (Rabinowitz Decl., ¶¶ 6-7.) L’Oréal S.A. does not maintain
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`offices or bank accounts in Delaware, and does not own, rent, or lease any real estate in this
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`forum. (Id.) L’Oréal S.A. also does not have a designated agent for service of process in
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`Case 1:17-cv-00868-JFB-SRF Document 24 Filed 10/16/17 Page 16 of 25 PageID #: 508
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`Delaware. (Id., ¶ 6.) In short, Plaintiffs have not met the “high” standard for establishing
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`general jurisdiction. See Cupp v. Alberto-Culver USA, Inc., 308 F. Supp. 2d 873, 878 (W.D.
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`Tenn. 2004) (dismissing L’Oréal S.A. under 12(b)(2) for failure to make prima facie showing of
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`personal jurisdiction).
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`The allegations concerning L’