Case 1:17-cv-00868-CFC-SRF Document 31 Filed 11/13/18 Page 1 of 26 PageID #: 1217
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`IN THE UNITED STATES DISTRICT COURT
`FOR THE DISTRICT OF DELAWARE
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`UNIVERSITY OF MASSACHUSETTS
`MEDICAL SCHOOL and CARMEL
`LABO RA TORIES, LLC,
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`Plaintiffs,
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`V.
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`L'OREAL S.A. and L'OREAL USA, INC., )
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`Civil Action No. 17-868-CFC-SRF
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`Defendants.
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`REPORT AND RECOMMENDATION
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`I.
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`INTRODUCTION
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`Presently before the court in this patent infringement action are the following motions:
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`(1) the motion to dismiss the complaint pursuant to Rule 12(b)(6) of the Federal Rules of Civil
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`Procedure, filed by defendant L'Oreal USA, Inc. ("L'Oreal USA") (D.I. 15); and (2) the motion
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`to dismiss the complaint pursuant to Rules 12(b)(2) and 12(b)(6), filed by defendant L'Oreal
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`S.A. (together with L'Oreal USA, "L'Oreal" or "defendants") (D.I. 23). For the following
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`reasons, I recommend that the court deny the Rule 12(b)(6) motions to dismiss of L'Oreal USA
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`and L'Oreal S.A., and grant L'Oreal S.A.'s Rule 12(b)(2) motion to dismiss.
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`II.
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`BACKGROUND
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`A. Patents-In-Suit
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`On July 23, 2002, the United States Patent and Trademark Office issued United States
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`Patent No. 6,423,327 ("the '327 patent"), entitled "Treatment of Skin with Adenosine or
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`Adenosine Analog." The '327 patent was filed on September 28, 2000 and is a continuation of
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`Application No. 09/179,006, which was filed on October 26, 1998 and is now abandoned. The
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`patent lists as inventors James G. Dobson, Jr. and Michael F. Ethier ("inventors"), and identifies
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`University of Massachusetts as the assignee. Carmel Laboratories, LLC ("Carmel Labs") is the
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`exclusive licensee of the '327 patent. (D.I. 13 at~ 36) The '327 patent describes methods for
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`improving the condition of unbroken, mammalian skin by applying adenosine "in an amount
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`effective to enhance the condition of the skin without increasing dermal cell proliferation,
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`wherein the adenosine concentration applied to the dermal cells is 10-4 M to 10-7 M." ('327
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`patent, col. 10: 18-26)
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`United States Patent No. 6,645,513 ("the '513 patent") (together with the '327 patent, the
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`"patents-in-suit") was filed on June 28, 2002 and issued on November 11, 2003. The '513 patent
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`is a continuation of the '327 patent. The '513 and '327 patents share the same title, abstract,
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`inventors, specification, assignee, and exclusive licensee.
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`Claims 1 and 9 of the '513 and '327 patents ("the asserted claims") are also identical
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`except for the claimed concentrations of adenosine applied to the dermal cells. Specifically, the
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`'327 patent claims an adenosine concentration of 10-4 M to 10-7 M, ('327 patent, col. 10:25-26),
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`and the '513 patent claims a concentration of 10-3 M to 10-7 M, ('513 patent, col. 10:25-26).
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`B. Parties
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`University of Massachusetts Medical School is a public institution of higher education in
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`Massachusetts. (D.I. 13 at~ 1). University of Massachusetts is identified as the assignee of the
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`patents-in-suit. ('327 patent, Assignee; '513 patent, Assignee)
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`Carmel Labs (together with University of Massachusetts Medical School, "plaintiffs") is
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`a for-profit Massachusetts limited liability company founded and wholly-owned by Teresian
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`Carmelites, Inc. ("Teresian Carmelites"). (D.1. 13 at~ 3) Teresian Carmelites is a Massachusetts
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`non-profit religious organization dedicated to prayer and service to the poor and marginalized.
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`(Id. at~~ 2, 14) Carmel Labs' profits financially sustain Teresian Carmelites and fund its
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`2
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`charitable endeavors. (Id. at ,-i 15) Carmel Labs is purportedly the exclusive licensee of the
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`patents-in-suit for all cosmetic applications, and has been since 2008. (Id. at ,-i 15) Using the
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`patented adenosine technology, Carmel Labs developed "Easeamine," an anti-aging face cream
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`that it released for sale in 2009. (Id. at ,-i 16)
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`L'Oreal USA is a wholly-owned subsidiary of L'Oreal S.A., a French corporation
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`headquartered in France. (Id. at ,-i,-r 5, 7) L'Oreal USA is Delaware corporation with its principal
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`place of business in New York, New York. (Id. at ,-r 6) L'Oreal USA develops and manufactures
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`hair care, skin care, cosmetics, and fragrances distributed globally. (Id. at ,-i 18) Plaintiffs accuse
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`eighteen L'Oreal brands of selling infringing products, including but not limited to the following
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`brands with products containing adenosine: Biotherm; The Body Shop; Carita; Decleor; Gamier;
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`Giorgio Armani; Helena Rubinstein; IT Cosmetics; Kiehl's; L'Oreal Paris; La Roche-Posay;
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`Lancome; Maybelline; Roger&Gallet; Sanoflore; Shu Uemura; Vichy; and Yves Saint Laurent
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`(the "Unnamed Accused Products"). (Id. at ,-i 31) However, the only product identified by name
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`in the First Amended Complaint is L'Oreal Paris' RevitaLift Triple Power Deep-Acting
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`Moisturizer (together with the Unnamed Accused Products, the "Accused Products"). (Id. at ,-r
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`34)
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`C.
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`Facts
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`Dr. James G. Dobson, Jr., the former Chairman of the Department of Physiology at
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`University of Massachusetts Medical School, and his colleague, Dr. Michael Ethier, discovered
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`that topical application of adenosine to dermal cells in specified concentrations can enhance the
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`condition of the skin without increasing dermal cell proliferation. (Id. at ,-i 10) Their discoveries
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`are embodied in the '327 and '513 patents. (Id. at ,-r 11) Drs. Dobson and Ethier assigned their
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`intellectual property rights to University of Massachusetts. (Id. at ,-i 4)
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`3
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`Teresian Carmelites learned of the adenosine technology Drs. Dobson and Ethier
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`developed through its relationship with Dr. Dobson, and negotiated a license for the technology.
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`(Id. at ,r 15) Since 2008, Carmel Labs has been the exclusive licensee of the patents-in-suit for
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`all cosmetic applications. (Id.) After securing a license to the patents-in-suit, Carmel Labs used
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`the patented adenosine technology to develop an anti-aging face cream called "Easeamine,"
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`which was released for sale in 2009. (Id. at ,r,r 15-16)
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`L'Oreal has cited to the '327 and '513 patents in several of its own issued patents and at
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`least one now-abandoned application. (Id. at ,r,r 20-22, Exs. 7-10) In fall of 2003, an agent of
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`L'Oreal contacted Dr. Dobson to discuss the patents-in-suit, but failed to obtain a license. (Id. at
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`,r 23) Following this conversation, L'Oreal began creating, marketing, and selling the Accused
`Products. (Id. at ,r 24) On October 15, 2010, L'Oreal publicly announced the upcoming launch
`of its new Youth Code line of skin care containing adenosine. (Id. at ,r 25; Ex. 5) In March
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`2015, the president of Teresian Carmelites and Carmel Labs sent a letter to L'Oreal's CEO
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`stating his belief that L'Oreal's products infringe the patents-in-suit, and affirming that Carmel
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`Labs is the exclusive licensee of the patents-in-suit. (Id. at ,r 30)
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`D. Procedural History
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`On June 30, 2017, University of Massachusetts Medical School and Carmel Labs filed
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`the present action against L'Oreal U.S.A and L'Oreal S.A., asserting causes of action for the
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`alleged infringement of the '327 and '513 patents. (D.I. 1) On August 4, 2017, L'Oreal U.S.A
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`filed its motion to dismiss plaintiffs' complaint, pursuant to Rules 8(a)(2) and 12(b)(6). (D.I. 7)
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`Plaintiffs subsequently filed their First Amended Complaint ("F AC") on August 18, 2017. (D.I.
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`13) In response, L'Oreal USA filed its motion to dismiss the FAC on August 23, 2017, alleging
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`that the causes of action failed to state a claim under Rule 12(b)(6). (D.I. 15) L'Oreal S.A.
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`4
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`followed suit on October 16, 2017, filing a motion to dismiss for lack of personal jurisdiction and
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`failure to state a claim upon which relief can be granted. (DJ. 23)
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`III.
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`LEGAL STANDARDS
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`A. Failure to State a Claim
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`Rule 12(b)(6) permits a party to move to dismiss a complaint for failure to state a claim
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`upon which relief can be granted. Fed. R. Civ. P. 12(b)(6). When considering a Rule 12(b)(6)
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`motion to dismiss, the court must accept as true all factual allegations in the complaint and view
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`them in the light most favorable to the plaintiff. Umland v. Planco Fin. Servs., 542 F.3d 59, 64
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`(3d Cir. 2008).
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`To state a claim upon which relief can be granted pursuant to Rule 12(b )( 6), a complaint
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`must contain a "short and plain statement of the claim showing that the pleader is entitled to
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`relief." Fed. R. Civ. P. 8(a)(2). Although detailed factual allegations are not required, the
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`complaint must set forth sufficient factual matter, accepted as true, to "state a claim to relief that
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`is plausible on its face." Bell At!. Corp. v. Twombly, 550 U.S. 544, 570 (2007); see also Ashcroft
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`v. Iqbal, 556 U.S. 662, 663 (2009). A claim is facially plausible when the factual allegations
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`allow the court to draw the reasonable inference that the defendant is liable for the misconduct
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`alleged. Iqbal, 556 U.S. at 663; Twombly, 550 U.S. at 555-56.
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`When determining whether dismissal is appropriate, the court must take three steps. 1 See
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`Santiago v. Warminster Twp., 629 F.3d 121, 130 (3d Cir. 2010). First, the court must identify
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`the elements of the claim. Iqbal, 556 U.S. at 675. Second, the court must identify and reject
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`1 Although Iqbal describes the analysis as a "two-pronged approach," the Supreme Court
`observed that it is often necessary to "begin by taking note of the elements a plaintiff must plead
`to state a claim." 556 U.S. at 675, 679. For this reason, the Third Circuit has adopted a three(cid:173)
`pronged approach. See Santiago v. Warminster Twp., 629 F.3d 121, 130 n.7 (3d Cir. 2010);
`Malleus v. George, 641 F.3d 560, 563 (3d Cir. 2011).
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`conclusory allegations. Id at 678. Third, the court should assume the veracity of the well(cid:173)
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`pleaded factual allegations identified under the first prong of the analysis, and determine whether
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`they are sufficiently alleged to state a claim for relief. Id; see also Malle us v. George, 641 F .3d
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`560, 563 (3d Cir. 2011). The third prong presents a context-specific inquiry that "draw(s] on
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`(the court's] experience and common sense." Id at 663-64; see also Fowler v. UPMC
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`Shadyside, 578 F.3d 203,210 (3d Cir. 2009). As the Supreme Court instructed in Iqbal, "where
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`the well-pleaded facts do not permit the court to infer more than the mere possibility of
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`misconduct, the complaint has alleged - but it has not 'show( n]' - 'that the pleader is entitled to
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`relief."' Iqbal, 556 U.S. at 679 (quoting Fed. R. Civ. P. 8(a)(2)).
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`The court's determination is not whether the non-moving party "will ultimately prevail,"
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`but whether that party is "entitled to offer evidence to support the claims." United States ex rel.
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`Wilkins v. United Health Grp., Inc., 659 F.3d 295, 302 (3d Cir. 2011). This "does not impose a
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`probability requirement at the pleading stage," but instead "simply calls for enough facts to raise
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`a reasonable expectation that discovery will reveal evidence of [the necessary element]."
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`Phillips, 515 F.3d at 234 (quoting Twombly, 550 U.S. at 556). The court's analysis is a context(cid:173)
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`specific task requiring the court "to draw on its judicial experience and common sense." Iqbal,
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`556 U.S. at 663-64.
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`B. Personal Jurisdiction
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`Rule 12(b )(2) directs the court to dismiss a case when the court lacks personal
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`jurisdiction over the defendant. Fed. R. Civ. P. 12(b)(2). When reviewing a motion to dismiss
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`pursuant to Rule 12(b)(2), a court must accept as true all allegations of jurisdictional fact made
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`by the plaintiff and resolve all factual disputes in the plaintiffs favor. Traynor v. Liu, 495 F.
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`Supp. 2d 444,448 (D. Del. 2007). Once a jurisdictional defense has been raised, the plaintiff
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`bears the burden of establishing, with reasonable particularity, that sufficient minimum contacts
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`have occurred between the defendant and the forum to support jurisdiction. See Provident Nat 'l
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`Bankv. Cal. Fed. Sav. & LoanAss'n, 819 F.2d 434,437 (3d Cir. 1987). To meet this burden, the
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`plaintiff must produce "sworn affidavits or other competent evidence," since a Rule 12(b)(2)
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`motion "requires resolution of factual issues outside the pleadings." Time Share Vacation Club
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`v. Atlantic Resorts, Ltd., 735 F.2d 61, 67 n.9 (3d Cir. 1984).
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`To establish personal jurisdiction, a plaintiff must demonstrate facts sufficient to satisfy
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`both a statutory and a constitutional requirement. With respect to the statutory analysis, the court
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`analyzes the long-arm statute of the state in which the court is located. See IMO Indus., Inc. v.
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`Kiekert AG, 155 F.3d 254,259 (3d Cir. 1998). Next, the court must determine whether
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`exercising jurisdiction over the moving defendant in this state comports with the due process
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`clause of the United States Constitution. See id.; Autogenomics, Inc. v. Oxford Gene Tech. Ltd.,
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`566 F.3d 1012, 1016 (Fed. Cir. 2009) (noting that the court must apply the law of the Federal
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`Circuit to the constitutional inquiry in patent cases).
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`Pursuant to the relevant portions of Delaware's long-arm statute, 10 Del. C. § 3104(c)(l)(cid:173)
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`(4), a court may exercise personal jurisdiction over a defendant when the defendant or its agent:
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`(1) Transacts any business or performs any character of work or service in the
`State;
`(2) Contracts to supply services or things in this State;
`(3) Causes tortious injury in the State by an act or omission in this State;
`(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)(l)-(4). With the exception of subsection (c)(4), the long-arm statute
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`requires a showing of specific jurisdiction. See Shoemaker v. McConnell, 556 F. Supp. 2d 351,
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`354-55 (D. Del. 2008). Subsection ( c )( 4) confers general jurisdiction, which requires a great
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`number of contacts, but allows the exercise of personal jurisdiction even when the claim is
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`unrelated to the forum contacts. See Applied Biosystems, Inc. v. Cruachem, Ltd, 772 F. Supp.
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`1458, 1466 (D. Del. 1991).
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`If a defendant is found to be within the reach of the long-arm statute, the court then must
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`analyze whether the exercise of personal jurisdiction comports with due process by determining
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`whether the plaintiff has demonstrated that the defendant "purposefully avail[ ed] itself of the
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`privilege of conducting activities within the forum State," so that it should "reasonably anticipate
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`being haled into court there." World-Wide Volkswagen Corp. v. Woodson, 444 U.S. 286,297
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`( 1980) ( citations omitted). For the court to exercise specific personal jurisdiction consistent with
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`due process, a plaintiffs cause of action must have arisen from the defendant's activities in the
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`forum state. See Burger King Corp. v. Rudzewicz, 471 U.S. 462,472 (1985). The court may
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`exercise general personal jurisdiction consistent with due process if the plaintiffs cause of action
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`is unrelated to the defendant's activities in the forum state, so long as the defendant has
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`"continuous and systematic contacts with the forum state." Applied Biosystems, Inc., 772 F.
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`Supp. at 1458.
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`IV. DISCUSSION
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`A. Failure to State a Claim
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`1. Direct infringement
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`Pursuant to 35 U.S.C. § 271(a), a patent is directly infringed when a person "without
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`authority makes, uses, offers to sell, or sells any patented invention, within the United States ...
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`during the term of the patent." Amendments to the Federal Rules of Civil Procedure, which took
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`effect on December 1, 2015, abrogated Rule 84 and the Appendix of Forms, including Form 18.
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`Under the new rules, allegations of direct infringement are subject to the pleading standards
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`established by Twombly and Iqbal, requiring plaintiffs to demonstrate a plausible claim for relief.
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`See Mayne Pharma Int'! PTY Ltd. v. Merck & Co., Inc., C.A. No. 15-438-LPS-CJB, 2015 WL
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`7833206, at *2 n.1 (D. Del. Dec. 3, 2015). "Direct infringement requires a party to perform each
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`and every step or element of a claimed method or product." Exergen Corp. v. Wal-Mart Stores,
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`Inc., 575 F.3d 1312, 1320 (Fed. Cir. 2009) (internal quotation marks omitted).
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`Plaintiffs accuse eighteen L' Ore al brands of selling infringing products because they sell
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`"products containing adenosine." (D.I. 13 at ,r 31) The F AC alleges:
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`On information and belief, Defendants' Accused Adenosine
`Products include, but are not limited to, the following brands with
`products containing adenosine: Biotherm; The Body Shop; Carita;
`Decleor; Gamier; Giorgio Armani; Helena Rubinstein; IT
`Cosmetics; Kiehl's; L'Oreal Paris; La Roche-Posay; Lancome;
`Maybelline; Roger&Gallet; Sanoflore; Shu Uemura; Vichy; and
`Yves Saint Laurent.
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`(Id.) The only product the FAC identifies by name is L'Oreal Paris' RevitaLift Triple Power
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`Deep-Acting Moisturizer. (Id. at ,r 34) L'Oreal contends that the FAC fails to properly plead
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`direct infringement because plaintiffs "indiscriminately target eighteen brands without providing
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`plausible patent infringement allegations for any products made by those brands[.]" (D.I. 16 at
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`9)
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`With respect to the Unnamed Accused Products, plaintiffs have properly pled direct
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`infringement. To properly allege direct infringement under Twombly and Iqbal, plaintiffs must
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`"plead facts sufficient to place [L'Oreal] on notice as to what [it] must defend." Mczeal v.
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`Sprint Nextel Corp., 501 F.3d 1354, 1357 (Fed. Cir. 2007). L'Oreal is on notice that products
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`containing adenosine made by the eighteen brands specified in the F AC are accused of
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`infringement. From the FAC, L'Oreal should easily be able to ascertain the identity of the
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`Accused Products. More specific product identification will occur at the appropriate time under
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`the relevant provisions of the scheduling order once such an order is entered after resolution of
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`the pending motions, but such specifics are not required at this stage. The F AC contains
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`sufficient detail to withstand a motion to dismiss. See, e.g., E.digital Corp. v. Micron Tech., Inc.,
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`2014 WL 12488496, at *4 (S.D. Cal. May 29, 2014) (denying motion to dismiss where the
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`complaint identified accused products by specific characteristics and brand names); see also
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`Connective Licensing, LLC v. Iceland Health, Inc., 2014 WL 11706456, at *3 (S.D. Fla. Feb. 10,
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`2014) (specific identification of accused products not necessary); see also Anza Tech., Inc. v.
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`ARRIS Group, Inc., 2017 WL 1843280, at *3 (S.D. Cal. May 5, 2017) (same; post-Form 18
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`abrogation).
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`The FAC also sufficiently pleads direct infringement with respect to L'Oreal Paris'
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`RevitaLift Triple Power Deep-Acting Moisturizer. The F AC alleges:
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`On information and belief, use of one or more of the Accused
`Adenosine Products constitutes direct infringement of claim 1 of
`the '327 patent, as such use involves "a method for enhancing the
`condition of unbroken skin of a mammal by reducing one or more
`of wrinkling, roughness, dryness, or laxity of the skin, without
`increasing dermal cell proliferation, the method comprising
`topically applying to the skin a composition comprising a
`concentration of adenosine in an amount effective to enhance the
`condition of the skin without increasing dermal cell proliferation,
`wherein the adenosine concentration applied to the dermal cells is
`10-4 M to 10-7."
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`(D.I. 13 at ,r 38 (quoting '327 patent, col. 10:18-26)) The FAC further alleges, and L'Oreal does
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`not dispute, that RevitaLift Triple Power Deep-Acting Moisturizer is an adenosine-containing,
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`topical composition used to reduce wrinkles. (D.1. 13, Exs. 11-12) Taking the allegations in the
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`FAC as true, the court can reasonably infer that the use ofRevitaLift Triple Power Deep-Acting
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`Moisturizer meets each of the limitations of the asserted claims.
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`L'Oreal contends that plaintiffs have failed to state a claim for direct infringement of the
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`patents-in-suit because the F AC "does not provide an element-by-element infringement
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`analysis." (D.I. 16 at 4) However, an element-by-element infringement analysis is required to
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`prove direct infringement-not plead it. See Crypto Research, LLC v. Assa Abloy, Inc., 236 F.
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`Supp. 3d 671, 686 (E.D.N.Y. 2017) (declining to require that plaintiff plead every element of the
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`allegedly infringed claims to withstand a motion to dismiss); Niazi v. Pressure Prods. Med.
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`Supplies, Inc., No. 16-cv-670-jdp, 2017 WL 108114, at* 1 (W.D. Wis. Jan 11, 2017) ("This
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`court will not require plaintiffs to plead direct infringement element-by-element[.]"). Though
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`L'Oreal repeatedly references the requirements for proving direct infringement in its briefs, there
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`is no requirement that plaintiffs "prove [their] case at the pleading stage." In re Bill of Lading
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`Transmission & Processing Sys. Patent Litig., 681 F.3d 1323, 1339 (Fed. Cir. 2012). To
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`withstand a motion to dismiss, plaintiffs need only present '"enough facts to raise a reasonable
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`expectation that discovery will reveal' that [L'Oreal] is liable for the misconduct alleged." Id. at
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`1341 (quoting Twombly, 550 U.S. at 556).
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`L'Oreal also argues that the F AC is deficient because plaintiffs fail to plausibly assert
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`that the adenosine concentration applied to the dermal cells is 10-4 M to 10-7 Min the case of the
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`'327 patent and 10-3 M to 10-7 Min the case of the '513 patent. (D.I. 22 at 4) L'Oreal asserts
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`that "the only documents included or cited in Plaintiffs' F AC contain examples of adenosine
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`concentrations that fall outside the claimed range" and within the range plaintiffs surrendered
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`during prosecution of the '327 patent. (D.I. 16 at 10) Plaintiffs contend that L'Oreal's argument
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`is inapposite because L' Oreal has misconstrued the meaning of "applied to the dermal cells" to
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`mean the concentration of adenosine in a product, not "the concentration that is ultimately
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`applied to the dermal cells" as plaintiffs argue is the correct construction of the phrase. (Id. at 6-
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`7 (emphasis original)) Because plaintiffs' argument is not contradicted by the pleadings or
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`documents incorporated by reference when viewed in the light most favorable to plaintiffs, the
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`FAC plausibly establishes that L'Oreal Paris' RevitaLift Triple Power Deep-Acting Moisturizer
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`practices the claimed concentration.2 (D.I. 9, Ex. Cat 448; D.I. 13, Ex. 3 at ,r 0068; D.I. 13, Ex.
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`6 at 5; D.I. 13, Ex. 8 at 6:55-7:27)
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`L'Oreal also faults the F AC for not referencing testing or any ingredient analysis
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`conducted on the Accused Products. (D.1. 16 at 5; D.I. 9, Ex. A at 2) Contrary to L'Oreal's
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`position, plaintiffs are not required to reveal privileged work product to support their factual
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`allegations at this stage. See DermaFocus LLC v. Ulthera, Inc., 201 F. Supp. 3d 465,469 (D.
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`Del. 2016) ("Absent specific guidance from the Federal Circuit directing the court to front-load
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`the litigation process by requiring a detailed complaint in every instance, the court declines to do
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`so.") Accordingly, I recommend that the court deny L'Oreal USA and L'Oreal S.A.'s Rule
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`12(b)(6) motions to dismiss plaintiffs' causes of action for direct infringement of the '327 and
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`'513 patents.
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`2. Induced infringement
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`To state a claim for induced infringement, a plaintiff must allege facts showing that: (1)
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`the plaintiff's patent is directly infringed, (2) the defendant induced that infringement by
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`"aid[ing] and abett[ing] another's direct infringement of the patent," Rodime PLC v. Seagate
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`2 To the extent the parties dispute the meaning of "applied to the dermal cells," this dispute is
`appropriately reserved for claim construction. See Novartis Pharma. Corp. v. Actavis, Inc., 2012
`WL 6212619, at *7 (D. Del. Dec. 5, 2012) ("[I]f a court is required to construe the meaning of
`claim terms and perform an infringement analysis in order to resolve a motion to dismiss ... ,
`the motion should be denied, because this type of analysis is inappropriate at the pleading
`stage."). When affording the broadest possible meaning to the disputed term and drawing all
`reasonable factual inferences in plaintiffs' favor at this stage, the court finds that plaintiffs have
`presented a plausible argument as to why dismissal on this ground is inappropriate.
`
`12
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`Case 1:17-cv-00868-CFC-SRF Document 31 Filed 11/13/18 Page 13 of 26 PageID #: 1229
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`Tech., Inc., 174 F.3d 1294, 1306 (Fed. Cir. 1999), and (3) the defendant possessed the specific
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`intent to encourage the third party to infringe, see Warner-Lambert Co. v. Apotex Corp., 316
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`F.3d 1348, 1363 (Fed. Cir. 2003).
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`I recommend that the court deny defendants' motions to dismiss with respect to the
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`causes of action for induced infringement because the F AC adequately pleads direct
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`infringement, knowledge, and intent. First, the FAC states that the acts ofL'Oreal's customers,
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`who are end-users of the Accused Products, constitute direct infringement. (D.I. 13 at ,r 40) The
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`F AC also pleads the requisite knowledge element. "This court has held that a complaint
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`sufficiently pleads a defendant's actual knowledge ... when a plaintiff alleges that a defendant
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`previously filed papers with the PTO identifying the patents as prior art." MONEC Holding AG
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`v. Motorola Mobility, Inc., 897 F. Supp. 2d 225, 229-30 (D. Del. 2012). Taking plaintiffs'
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`allegations in the FAC as true, it is plausible to infer that L'Oreal knew of the patents-in-suit
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`because L'Oreal referenced the '327 patent and the application that issued as the '513 patent in a
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`provisional patent application in 2002. (D.I. 13 at ,r,r 20-21) It is also plausible to infer that
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`L'Oreal knew that selling the Accused Products constituted patent infringement because a
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`L'Oreal agent contacted co-inventor Dr. Dobson in fall of 2003 to discuss the patents-in-suit and
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`obtain a license to the patented technology. 3 (D.I. 13 at ,r 23)
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`3 Plaintiffs also contend that a notice letter sent in March 2015 to L' Oreal' s CEO is sufficient to
`show that L'Oreal knew its acts induced infringement. (D.I. 19 at 9) The court declines to
`consider this letter, however, because its contents are not quoted or specifically referenced in the
`FAC or attached thereto. See Trans Video Elecs., Ltd V Netflix, Inc., No. 12-1743-LPS-CJB,
`2014 WL 900929, at *3 (D. Del. Mar. 4, 2014), adopted by 2014 WL 1268680 (D. Del. Mar. 26,
`2014) (declining to consider on a motion to dismiss a notice letter plaintiff purportedly sent to
`defendant where the letter and its contents were not quoted or clearly referenced in the complaint
`or attached thereto).
`
`13
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`Case 1:17-cv-00868-CFC-SRF Document 31 Filed 11/13/18 Page 14 of 26 PageID #: 1230
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`The F AC also plausibly pleads that L'Oreal intended to induce its customers to infringe
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`the patents-in-suit by identifying the advertising and instructional materials provided with
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`L'Oreal Paris' RevitaLift Triple Power Deep-Acting Moisturizer that teach customers to practice
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`the methods claimed in the patents-in-suit. (D.I. 13 at ,r,r 30, 34) Federal Circuit precedent
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`establishes that, at the pleading stage, facts comparable to those alleged in the F AC are sufficient
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`to give rise to a reasonable inference of an intention to induce customers to use a patented
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`method. See In re Bill of Lading, 681 F.3d at 1341-42 (concluding that advertisements
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`encouraging infringing uses of an accused product give rise to a reasonable inference of an
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`intention to induce customers to use the patented method); see also DermaFocus LLC, 201 F.
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`Supp. 3d at 4 71 (holding that the plaintiff sufficiently pleaded knowledge of alleged infringing
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`use by the defendant, which provided instructions, promotional and educational materials to its
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`customers). Consequently, I recommend that the court deny L'Oreal USA and L'Oreal S.A.'s
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`Rule 12(b)(6) motions to dismiss plaintiffs' causes of action for induced infringement of the '327
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`and '513 patents.
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`3. Contributory infringement
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`"Contributory infringement imposes liability on one who embodies in a non-staple device
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`the heart of a patented process and supplies the device to others to complete the process and
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`appropriate the benefit of the patented invention." Vita-Mix Corp. v. Basic Holding, Inc., 581
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`F.3d 1317, 1327 (Fed. Cir. 2009). "To state a claim for contributory infringement, an infringer
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`must sell, offer to sell or import into the United States a component of an infringing product
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`'knowing [the component] to be especially made or especially adapted for use in an infringement
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`of such patent, and not a staple article or commodity of commerce suitable for substantial non
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`infringing use." 35 U.S.C. § 271(c); see Lucent Techs. v. Gateway, Inc., 580 F.3d 1301, 1320
`
`14
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`Case 1:17-cv-00868-CFC-SRF Document 31 Filed 11/13/18 Page 15 of 26 PageID #: 1231
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`(Fed. Cir. 2009). As with induced infringement, a claim for contributory infringement must
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`contain allegations of the requisite knowledge of the patent-in-suit at the time of infringement.
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`Mallinckrodt, Inc. v. E-Z-Em Inc., 670 F. Supp. 2d 349, 355 (D. Del. 2009); see also Global(cid:173)
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`Tech Appliances, Inc. v. SEB S.A., 131 S. Ct. 2060, 2068 (2011 ). The requisite knowledge for
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`contributory infringement is the same as the knowledge for induced infringement. Nexeon Ltd.
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`v. Eaglepicher Techs., LLC, No. 15-955-RGA-MPT, 2016 WL 4045474, at *4 (D. Del. July 26,
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`2016), adopted by 2016 WL 6093471 (D. Del. Oct. 18, 2016). In addition, the patentee bears
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`the burden of proving that the accused products are a material part of the patented invention, and
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`that they have no substantial non-infringing uses. See Golden Blount, Inc. v. Robert H Peterson
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`Co., 438 F.3d 1354, 1363 (Fed. Cir. 2006); Nexeon Ltd., 2016 WL 4045474, at *4.
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`I recommend that the court deny defendants' motions to dismiss with respect to the
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`causes of action for contributory infringement. As explained in § IV.A.2, supra, plaintiffs have
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`shown direct infringement and that L'Oreal had the requisite knowledge of the patents-in-suit.
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`See Nexeon Ltd., 2016 WL 4045474, at *4 ("the knowledge for inducement is the same for
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`contributory infringement"). The F AC also adequately pleads that the Accused Products are a
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`material part of the patented inventions: the "use of the Accused Adenosine Products is a
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`material and substantial part of the invention claimed by the '327 patent." (D.I. 13 at 143); see
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`Courtesy Prods., L.L.C. v. Hamilton Beach Brands, Inc., 73 F. Supp. 3d 435, 440-41 (D. Del.
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`2014) (finding that the complaint sufficiently pied that the accused products were a material part
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`of the patented invention where the complaint alleged that the defendant made, sold, or offered
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`to sell components "which [defendant] [knew] constitute[d] a material part of the invention[.]").
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`Plaintiffs also adequately plead that the Accused Products have no known substantial
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`non-infringing use. (D.I. 13 at~ 43) "The Federal Circuit has ruled that affirmatively pleading
`
`15
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`Case 1:17-cv-00868-CFC-SRF Document 31 Filed 11/13/18 Page 16 of 26 PageID #: 1232
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`the absence of substantial non-infringing uses renders the claim plausible if the pleadings do not
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`undermine that allegation." Merck Sharp & Dahme Corp. v. Teva Pharma. USA, Inc., No. 14-
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`874-SLR-SRF, 2015 WL 4036951, at *7 (D. Del. Jul. 1, 2015) (citing In re Bill of Lading, 681
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`F.3d at 1339). Because the pleadings do not u