Case 1:18-cv-00943-RGA Document 12 Filed 08/31/18 Page 1 of 18 PageID #: 115
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`Plaintiff,
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`
`
`v.
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`ALMONDNET, INC.,
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`
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`OATH HOLDINGS INC.,
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`
`
`IN THE UNITED STATES DISTRICT COURT
`FOR THE DISTRICT OF DELAWARE
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`)
`)
`)
`)
`)
`)
`)
`)
`)
`
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`DEFENDANT OATH HOLDINGS INC.’S OPENING BRIEF IN SUPPORT OF ITS
`MOTION TO DISMISS FOR FAILURE TO STATE A CLAIM
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`
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`
`
`Defendant.
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`
`
`
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`
`
`OF COUNSEL:
`
`Patrick D. Curran
`John T. McKee
`QUINN EMANUEL URQUHART
`& SULLIVAN, LLP
`51 Madison Avenue, 22nd Floor
`New York, NY 10010
`(212-849-7000
`
`Charles K. Verhoeven
`QUINN EMANUEL URQUHART
`& SULLIVAN, LLP
`50 California Street, 22nd Floor
`San Francisco, CA 94111
`(415-875-6600
`
`August 31, 2018
`
`
`
`
`
`
`
`C.A. No. 18-943 (CFC) (SRF)
`
`
`MORRIS, NICHOLS, ARSHT & TUNNELL LLP
`Jack B. Blumenfeld (#1014)
`Brian P. Egan (#6227)
`1201 North Market Street
`P.O. Box 1347
`Wilmington, DE 19899-1347
`(302) 658-9200
`jblumenfeld@mnat.com
`began@mnat.com
`
`Attorneys for Defendant 
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`

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`Case 1:18-cv-00943-RGA Document 12 Filed 08/31/18 Page 2 of 18 PageID #: 116
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`TABLE OF CONTENTS
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`Page
`
` INTRODUCTION ..........................................................................................................................1 
`
`I. 
`
`STATEMENT OF FACT ....................................................................................................3 
`
`A. 
`
`B. 
`
`The Eastern District of New York Case ..................................................................3 
`
`The District of Delaware Case .................................................................................4 
`
`II. 
`
`III. 
`
`LEGAL STANDARD ..........................................................................................................6 
`
`ARGUMENT .......................................................................................................................7 
`
`A. 
`
`B. 
`
`C. 
`
`AlmondNet’s Direct Infringement Allegations Fail to Adequately Identify
`the Accused Products ...............................................................................................7 
`
`AlmondNet’s Allegation that Oat Knew of the ’615 Patent Are Inadequate
`to Support a Claim for Willful Infringement ...........................................................8 
`
`AlmondNet’s Complaint Does Not Adequately Plead the Intent Element
`for Induced Infringement .......................................................................................10 
`
`CONCLUSION ..............................................................................................................................13 
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`
`
`i
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`

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`Case 1:18-cv-00943-RGA Document 12 Filed 08/31/18 Page 3 of 18 PageID #: 117
`
`Cases
`
`TABLE OF AUTHORITIES
`
`Page(s)
`
`Addiction & Detoxification Institute L.L.C. v. Carpenter,
`620 F. App’x 934 (Fed. Cir. 2015) ............................................................................................7
`
`AlmondNet, Inc. et al. v. Yahoo! Inc.,
`Case No. 1:16-cv-01557-ILG-SMG (E.D.N.Y.) ........................................................................1
`
`Ashcroft v. Iqbal,
`556 U.S. 662 (2009) ...................................................................................................................6
`
`Avocet Sports Tech., Inc. v. Garmin Int’l., Inc.,
`No. 11-cv-4049, 2012 WL 2343163 (N.D. Cal. 2012) ............................................................12
`
`Bell Atl. Corp. v. Twombly,
`550 U.S. 544 (2007) ...............................................................................................................6, 7
`
`Clouding IP, LLC v. Amazon.com,
`No. 12-641, -642, & -675, 2013 WL 2293452 (D. Del. May 24, 2013) ..................................11
`
`Continental Circuits LLC v. Intel Corp.,
`No. 16-2026 PHX DGC, 2017 WL 679116 (D. Ariz. Feb. 21, 2017) .......................................8
`
`DSU Med. Corp. v. JMS Co. Ltd.,
`471 F.3d 1293 (Fed. Cir. 2006)......................................................................................3, 10, 13
`
`Finjan, Inc. v. Cisco Sys. Inc.,
`2017 WL 2462423 (N.D. Cal. June 7, 2017) .............................................................................8
`
`Halo Elecs., Inc. v. Pulse Elecs., Inc.,
`136 S. Ct. 1923 (2016) .......................................................................................................2, 8, 9
`
`In re Bill of Lading,
`681 F.3d at 1339 ......................................................................................................................10
`
`Infineon Techs. AG v. Volterra Semiconductor Corp.,
`No. 11-6239, 2012 WL 5988461 (N.D. Cal. Nov. 29, 2012) ....................................................7
`
`Mallinckrodt, Inc. v. E-Z-Em Inc.,
`670 F. Supp. 2d 349 (D. Del. 2009) .........................................................................................11
`
`Pragmatus AV, LLC v. Yahoo! Inc.,
`No. 11-902-LPS-CJB, 2013 WL 2295344 (D. Del. May 24, 2013) ..................................10, 11
`
`Princeton Digital Image Corp. v. Ubisoft Entertainment SA,
`No. 13-335-LPS-CJB, 2016 WL 6594076 (D. Del. Nov. 4, 2016) ...........................................9
`
`
`
`ii
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`

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`Case 1:18-cv-00943-RGA Document 12 Filed 08/31/18 Page 4 of 18 PageID #: 118
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`Totes-Isotoner Corp. v. United States,
`594 F.3d 1346 (Fed. Cir. 2010)..................................................................................................6
`
`U.S. Ethernet Innovations, LLC v. Cirrus Logic, Inc.,
`6:12-cv-366-MHS-JDL, 2013 WL 8482270 (E.D. Tex. Mar. 6, 2013) ...................................12
`
`Valinge Innovation AB v. Halstead New England Corp.,
`2018 WL 2411218 (May 29, 2018) .................................................................................2, 9, 10
`
`Varian Med. Sys., Inc. v. Elekta AB,
`No. 15-871-LPS, 2016 WL 3748772 (D. Del. June 12, 2016) ..................................................8
`
`Vita-Mix Corp. v. Basic Holding, Inc.,
`581 F.3d 1317 (Fed. Cir. 2009)................................................................................................10
`
`Rules and Statutes
`
`35 U.S.C. § 271(a) ...........................................................................................................................2
`
`Fed. R. Civ. P. 12(b)(6)....................................................................................................................3
`
`
`
`
`
`iii
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`

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`Case 1:18-cv-00943-RGA Document 12 Filed 08/31/18 Page 5 of 18 PageID #: 119
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`I.
`
`NATURE AND STAGE OF THE PROCEEDINGS
`
`INTRODUCTION
`
`Plaintiff AlmondNet, Inc. (“AlmondNet”) sued Defendant Oath Holdings Inc. (“Oath”)
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`for alleged infringement of U.S. Patent No. 9,830,615 (“the ’615 patent”) on June 26, 2018
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`(D.I. 1). AlmondNet amended its complaint on July 17, 2018 to add U.S. Patent No. 10,026,100
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`(“the ’100 patent”), the day that patent issued (D.I. 9). Oath has moved to dismiss the Amended
`
`Complaint. This is Oath’s opening brief in support of that motion.
`
`II.
`
`SUMMARY OF ARGUMENT
`
`AlmondNet has already sued Oath’s predecessor-in-interest, Yahoo! Inc. (collectively,
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`“Oath”) in the Eastern District of New York, a suit that is still pending. AlmondNet, Inc. et al. v.
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`Yahoo! Inc., Case No. 1:16-cv-01557-ILG-SMG (E.D.N.Y.) (“the EDNY case”). Curiously,
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`when the ’615 patent and the ’100 patent (collectively, “the Asserted Delaware Patents”) issued,
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`AlmondNet did not seek leave to amend its complaint in the EDNY case, as it had done with
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`other newly-issued patents from the families at issue in the EDNY Action (see EDNY No. 1:16-
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`cv-01557-ILG-SMG, D.I. 68). Instead, AlmondNet decided to file a new complaint in this
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`Court. But the complaint AlmondNet filed in this Court is deficient for multiple reasons,
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`including a failure to provide basic information on how Oath allegedly infringes these two
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`patents. AlmondNet’s complaint in this matter is deficient and should be dismissed.
`
`First, AlmondNet alleges that Oath directly infringes the ’615 and ’100 patents “[b]y
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`marketing, selling, offering to sell, providing, instructing, supplying, operating, licensing, or
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`supporting the services, platforms, products, or activities described in this Complaint.” D.I. 9 at
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`¶¶ 29, 48.1 By referring to generally “the services, platforms, products, or activities described in
`
`
`1 AlmondNet’s list of verbs describing activities that allegedly infringe the Asserted Patents is
`another example of AlmondNet attempting to expand the scope of litigation. The patent statute
`
`1
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`

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`Case 1:18-cv-00943-RGA Document 12 Filed 08/31/18 Page 6 of 18 PageID #: 120
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`this Complaint,” AlmondNet has failed to identify what products or services it is accusing of
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`infringement, especially in light of the Complaint’s description of Oath as “a world-wide
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`provider of various Internet-based products and services, including online advertising services
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`. . . including search, content, and behavioral advertising on Oath-owned and -operated
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`properties, across the web and across devices including personal computers and mobile devices.”
`
`D.I. 9 at ¶ 8. This attempt at indiscriminately accusing what appears to be all of Oath’s actions
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`of infringement is improper. Indeed, AlmondNet previously attempted a similarly broad form of
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`pleading in the EDNY Action, but ultimately provided greater specificity to resolve a motion to
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`dismiss. Unless AlmondNet provides a similar level of additional detail here, the Delaware
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`Complaint should likewise be dismissed.
`
`Second, AlmondNet’s complaint fails to set forth a plausible and non-conclusory
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`allegation of supposedly egregious conduct necessary to support allegations of willful
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`infringement. At most, AlmondNet’s July 18, 2018 Complaint alleges that Oath knew of the
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`Asserted Patents. But knowledge alone does not state a claim for willfulness, or render plausible
`
`the assertion that Oath’s conduct was “willful, wanton, malicious, bad-faith, deliberate,
`
`consciously wrongful, flagrant, or—indeed—characteristic of a pirate,” as required. See Halo
`
`Elecs., Inc. v. Pulse Elecs., Inc., 136 S. Ct. 1923, 1932 (2016).2
`
`
`recognizes only “mak[ing], us[ing], offer[ing] to sell, or sell[ing]” as potential acts of direct
`infringement. 35 U.S.C. § 271(a). Oath cannot be liable for direct infringement due to any of
`the other actions in AlmondNet’s list.
`
`2 Magistrate Judge Burke recently articulated the requirements for pleading willful infringement
`as follows: “In sum, in order to sufficiently plead willful infringement, a plaintiff must allege
`facts plausibly showing that as of the time of the claim’s filing, the accused infringer: (1) knew
`of the patent-in-suit; (2) after acquiring that knowledge, it infringed the patent; and (3) in doing
`so, it knew, or should have known, that its conducts amounted to infringement of the patent.”
`Valinge Innovation AB v. Halstead New England Corp., 2018 WL 2411218, at *13 (May 29,
`2018).
`
`2
`
`

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`Third, to support a claim for induced infringement, AlmondNet was required to plead a
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`plausible claim that Oath “ha[d] an affirmative intent to cause direct infringement.” DSU Med.
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`Corp. v. JMS Co. Ltd., 471 F.3d 1293, 1306 (Fed. Cir. 2006). AlmondNet failed to do so.
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`Again, AlmondNet pleads only knowledge – there is no non-conclusory allegation of an intent to
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`infringe, as opposed to knowledge that a patent exists.
`
`Because AlmondNet’s direct, willful, and induced infringement allegations are all
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`deficient, AlmondNet’s Amended Complaint should be dismissed.
`
`III.
`
`STATEMENT OF FACTS
`
`A.
`
`The Eastern District of New York Case
`
`AlmondNet first sued Oath for allegedly infringing patents in the same family as the ’615
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`patent—the “Media Property Selection” (“MPS”) family—and patents in the same family as the
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`’100 patent—the “Off-site Targeted Advertising” (“OTA”) family—in March 2016. In the
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`EDNY case, AlmondNet alleged that Oath (then still called Yahoo! Inc.) infringed two patents in
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`the MPS family “through the Brightroll demand side platform (DSP).” EDNY case, D.I. 1 at
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`¶¶ 22-23. AlmondNet also alleged that “Yahoo (including Brightroll)” infringed two patents in
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`the OTA family. Id. ¶¶ 20-21. Thereafter, Oath moved to dismiss under Rule 12(b)(6)
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`AlmondNet’s direct infringement allegations for failing to address many limitations of the
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`asserted claims and its indirect infringement allegations for failing to plead any facts. EDNY
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`case, D.I. 23.
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`Subsequently, Oath withdrew its motion “in light of supplemental disclosures by
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`AlmondNet.” EDNY case, D.I. 23. These included an October 19, 2016 letter wherein
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`AlmondNet expressly confirmed that “Brightroll DSP . . . is the only currently accused product”
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`for the MPS patents and that the products accused of infringing the OTA patent via “the
`
`technique of reaching Yahoo audience on non-Yahoo websites, which technique Yahoo materials
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`3
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`appear to call ‘audience sharing’ or ‘audience extension’” and which AlmondNet believes
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`correspond to products named “Yahoo Audience Ads” or “Yahoo Audience Data.” Ex. A.
`
`B.
`
`The District of Delaware Case
`
`The ’615 patent issued on November 28, 2017 and claims priority to three patents in the
`
`same patent family asserted in the EDNY case. D.I. 1-1 at 1-2.
`
`In the “Oath’s Direct Infringement of the ’615 Patent” section of the Complaint,
`
`AlmondNet alleges that “[b]y marketing, selling, offering to sell, providing, instructing,
`
`supplying, operating, licensing, or supporting the services, platforms, products, or activities
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`described in this Complaint, Oath infringes the claims of the ‘615 Patent, especially through its
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`demand side platforms, whether labeled Oath, Yahoo, Brightroll, or other (‘Oath’s DSP’).”
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`D.I. 9 at ¶ 29. The Complaint then sets forth certain actions by “Oath’s DSP” that allegedly
`
`“perform techniques claimed in the ’615 patent.” D.I. 9 at ¶¶ 30-41.
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`The ’100 patent issued on July 17, 2018 and claims priority to two patents in the same
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`patent family asserted in the EDNY case. D.I. 9-2 at 1-2.
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`Similar to the ’615 patent, in the “Oath’s Direct Infringement of the ’100 Patent” section
`
`of the Complaint, AlmondNet alleges that “Oath infringes the ’100 Patent by marketing, selling,
`
`offering to sell, providing, instructing, supplying, operating, licensing, or supporting the services,
`
`platforms, products, or activities described in this Complaint, specifically by performing
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`techniques of facilitating targeting of Internet advertising to Oath (formerly Yahoo) audience on
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`non-Oath Internet websites, which technique Oath appears to call “audience data” or “audience
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`extension.” D.I. 9 at ¶ 48. The Complaint then sets forth how Oath computer systems allegedly
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`allow third-party advertisers to “access Oath products offering off-site targeted advertising
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`through any Oath, Yahoo, or Brightroll ‘platform,’ particularly DSP platforms, including via
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`‘Real Time Bidding.’” Id. at ¶¶ 49-55.
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`4
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`But even according to the Complaint, these products are not the full scope of Oath’s
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`products and services. D.I. 9 at ¶ 8 (Oath’s products include “a world-wide provider of various
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`Internet-based products and services, including online advertising services” and “advertising
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`services including search, content, and behavioral advertising on Oath-owned and -operated
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`properties, across the web and across devices including personal computers and mobile
`
`devices.”). The Complaint also acknowledges that “Oath facilitates advertising services using
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`different platforms including ad exchanges and online ad management platforms” and that Oath
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`further acquired Brightroll which was also “a world-wide provider of online-advertising
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`services” and had its own “video advertising platforms.” D.I. 9 at ¶¶ 10-11. Other than
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`AlmondNet’s blanket statement that “the services, platforms, products, or activities described in
`
`this Complaint” allegedly infringe, however, the Complaint does not include any allegations
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`mapping Oath’s products, services, or platforms to any limitations of the Asserted Patents.
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`In AlmondNet’s “Oath’s Knowledge of the MPS and OTA Families and of the ’615 and
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`’100 Patents and Willful Infringement” section of the Complaint, AlmondNet alleges that Oath
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`knew about the ’615 and ’100 patents. D.I. 9 at ¶¶ 56-69. The Complaint states that “[t]he ’615
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`Patent issued after presentation to the patent examiner of the prior art references that Yahoo
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`contended applied to invalidate the parent MPS patents;” that “[t]he ’100 Patent issued after
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`presentation to the patent examiner of the prior art references that Yahoo contended applied to
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`invalidate the parent OTA patents;” and that “Yahoo’s arguments in the New York lawsuit for
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`non-infringement of the parent MPS patents do not apply to the ’615 Patent, and its arguments in
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`the New York lawsuit for non-infringement of the parent OTA patents do not apply to the ’100
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`Patent..” D.I. 9 at ¶¶ 61-62. The Complaint then concludes that “[a]ccordingly, Oath’s
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`5
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`Case 1:18-cv-00943-RGA Document 12 Filed 08/31/18 Page 10 of 18 PageID #: 124
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`infringement of the ’615 patent was, and continues to be, willful and deliberate. Oath’s
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`infringement of the ‘100 Patent is willful and deliberate.” D.I. 9 at ¶ 68.
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`In the “Oath’s Indirect Infringement” section of the Complaint, AlmondNet alleges that
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`“Oath may be found to have induced infringement of the ’615 patent” because, “[a]s indicated
`
`above, Oath had knowledge of the ’615 patent and intended to induce infringement.” D.I. 9 at
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`¶ 70. Similarly, AlmondNet alleges that “Oath has knowledge of the '100 Patent by the filing
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`and service of this First Amended Complaint” and “intends to induce infringement of the '100
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`Patent.” Id. Apart from these legal conclusions, AlmondNet’s only factual allegations on how
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`Oath allegedly induces infringement are that “Oath instructs and supports the use of the
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`infringing DSP system by its customers through Oath’s DSP online website interface, customer
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`instruction manuals and instruction sheets, and statements made by customer service and training
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`representatives” and that “Oath affirmatively promotes customer use of audience data or
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`audience extension.” D.I. 9 at ¶ 71.
`
`IV.
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`LEGAL STANDARD
`
`The law on a motion to dismiss such as this one is well-settled. The complaint must
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`include sufficient allegations that “give the defendant fair notice of what the . . . claim is and the
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`ground upon which it rests.” Bell Atl. Corp. v. Twombly, 550 U.S. 544, 545 (2007) (citations
`
`omitted). This “requires more than labels and conclusions, and a formulaic recitation of the
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`elements of a cause of action will not do.” Id. Although the “[f]actual allegations must be
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`enough to raise a right to relief above the speculative level on the assumption that all of the
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`complaint’s allegations are true,” id., “[w]here there are well-pleaded factual allegations, a court
`
`should assume their veracity and then determine whether they plausibly give rise to an
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`entitlement to relief.” Ashcroft v. Iqbal, 556 U.S. 662, 664 (2009); see also Totes-Isotoner Corp.
`
`v. United States, 594 F.3d 1346, 1354 (Fed. Cir. 2010) (“Factual allegations must be enough to
`
`6
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`

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`Case 1:18-cv-00943-RGA Document 12 Filed 08/31/18 Page 11 of 18 PageID #: 125
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`raise a right to relief above the speculative level … [S]uch a claim requires a complaint with
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`enough factual matter (taken as true) to suggest that [a claim is plausible].”) (alterations in
`
`original).
`
`V.
`
`ARGUMENT
`A.
`
`AlmondNet’s Direct Infringement Allegations Fail to Adequately Identify the
`Accused Products
`
`Even under the broader, Form 18 pleading standard, “[i]t is not enough to say ‘you
`
`infringe my patent.’” See Addiction & Detoxification Institute L.L.C. v. Carpenter, 620 F. App’x
`
`934, 937 (Fed. Cir. 2015); see also Infineon Techs. AG v. Volterra Semiconductor Corp., No. 11-
`
`6239, 2012 WL 5988461, at *2 (N.D. Cal. Nov. 29, 2012) (discussing prior order dismissing
`
`infringement allegations that named specific products, but also accused other products “without
`
`limitation,” and contrasting those allegations with the second amended complaint where
`
`allegations where limited to defendant’s “master controller products”). Following the abrogation
`
`of Form 18, the pleading standard for patent infringement was tightened, and a plaintiff must
`
`now plead facts sufficient to “give the defendant fair notice of what the claim is.” Twombly,
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`550 U.S. at 555 (quotation marks omitted).
`
`By defining the accused products as “the services, platforms, products, or activities
`
`described in this Complaint,” and then giving an overview of Oath that describes “various
`
`Internet-based products and services, including online advertising services” that are facilitated
`
`“using different platforms,” AlmondNet has accused all of Oath’s actions of infringement. See
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`D.I. 9 at ¶¶ 8-11, 29, 48. Thereafter, AlmondNet only compared the “Oath’s DSP” product to
`
`the ’615 patent, and only compared “audience data” and “audience extension” to the ’100 patent.
`
`See D.I. 9 at ¶¶ 30-41, 49-55. In the EDNY case, Oath agreed to limit its allegations to products
`
`and services it actually contends infringe the patents-in-suit in order to avoid a motion to dismiss.
`
`7
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`

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`Case 1:18-cv-00943-RGA Document 12 Filed 08/31/18 Page 12 of 18 PageID #: 126
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`See Ex. B. Here, too, AlmondNet’s direct infringement allegations should be dismissed for
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`failing to give Oath notice of AlmondNet’s claim.
`
`B.
`
`AlmondNet’s Allegation that Oath Knew of the ’615 Patent Are Inadequate
`to Support a Claim for Willful Infringement
`
`For there to be willful infringement, a defendant’s conduct must be “willful, wanton,
`
`malicious, bad-faith, deliberate, consciously wrongful, flagrant, or—indeed—characteristic of a
`
`pirate.” Halo, 136 S. Ct. at 1932. Mere knowledge of a patent is not enough to plead a claim for
`
`willful infringement; a plaintiff must allege facts from which the court can infer that the
`
`defendant’s conduct was egregious. See Varian Med. Sys., Inc. v. Elekta AB, No. 15-871-LPS,
`
`2016 WL 3748772, at *7-8 (D. Del. June 12, 2016) (dismissing willful infringement allegations
`
`because “the Complaint does not sufficiently articulate how the U.S. Defendants’ making, using
`
`or offering for sale of the Gamma Knife Icon actually amounted to an egregious case of
`
`infringement of the patent”), report and recommendation adopted 2016 WL 9307500 (Dec. 22,
`
`2016); Finjan, Inc. v. Cisco Sys. Inc., 2017 WL 2462423, at *5 (N.D. Cal. June 7, 2017) (“[E]ven
`
`if Finjan had adequately alleged that Cisco had pre-suit knowledge of the Asserted Patents,
`
`dismissal would also be warranted because the FAC does not contain sufficient factual
`
`allegations to make it plausible that Cisco engaged in ‘egregious’ conduct that would warrant
`
`enhanced damages under Halo.”); Continental Circuits LLC v. Intel Corp., No. 16-2026 PHX
`
`DGC, 2017 WL 679116, at *11 (D. Ariz. Feb. 21, 2017) (“Plaintiff has alleged sufficient facts to
`
`show knowledge, but not to show the additional element of egregiousness. Ibiden’s motion to
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`dismiss as to willfulness will be granted.”).
`
`Even drawing every inference in AlmondNet’s favor, the Complaint merely alleges that
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`Oath knew about the ’615 patent since its issuance in November 2017 and about the ’100 patent
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`since its issuance on July 17, 2018—the same day the Amended Complaint was filed. See D.I. 9
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`8
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`Case 1:18-cv-00943-RGA Document 12 Filed 08/31/18 Page 13 of 18 PageID #: 127
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`at ¶¶ 56-69. Knowledge, alone, is not sufficient to show the type of egregious conduct required
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`for willful infringement. Rather, as explained in Valinge, the plaintiff must also allege facts
`
`plausibly showing that a defendant “knew, or should have known, that its conduct amounted to
`
`infringement of the patent.” Valinge, 2018 WL 2411218 at *13. But it cannot be the case that
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`that Oath “knew, or should have known, that its conduct amounted to infringement” when Oath
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`did not even know about the asserted patents. Plaintiffs merely allege that Oath allegedly knew
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`of the ’615 patent for only a seven month period (from the issuance of the ’615 patent in
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`November 2017 to the filing of the complaint in June 2018), years after Oath first began selling
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`the accused products and services (for example, AlmondNet accused the same products and
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`services of infringing different patents in March 20163), and did not know of the ’100 patent for
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`a single day before AlmondNet’s willful infringement allegations were levied. See Princeton
`
`Digital Image Corp. v. Ubisoft Entertainment SA, No. 13-335-LPS-CJB, 2016 WL 6594076
`
`(D. Del. Nov. 4, 2016)(“And even
`
`if one were
`
`to assume
`
`that
`
`the original
`
`Complaint did sufficiently put Ubisoft SA on notice of its indirect infringement, the TAC does
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`not sufficiently articulate how Ubisoft SA’s actions during a short, three-month period of time
`
`amount to an ‘egregious’ case of infringement of the patent.”). The fact that Oath did not
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`immediately stop selling its products and services upon issuance of the Asserted Patents cannot
`
`be “willful, wanton, malicious, bad-faith, deliberate, consciously wrongful, flagrant, or—
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`indeed—characteristic of a pirate.” Halo, 136 S. Ct. at 1932. The pled facts do not plausibly
`
`
`3 AlmondNet also alleges that Oath’s arguments on invalidity and non-infringement from the
`EDNY case do not apply to the Asserted Patent. See D.I. 9 at ¶¶ 61-62. Oath’s prior non-
`infringement and invalidity defenses have no bearing on whether Oath has reasonable defenses
`to the Asserted Patents. Even if these allegations have any relevance, they are mere legal
`conclusions that cannot save the complaint from dismissal.
`
`9
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`Case 1:18-cv-00943-RGA Document 12 Filed 08/31/18 Page 14 of 18 PageID #: 128
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`show that Oath “knew, or should have known, that its conduct amounted to infringement” of the
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`Asserted Patents. Valinge, 2018 WL 2411218 at *13.
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`Because knowledge of a patent alone does not state a willful infringement claim,
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`AlmondNet’s willful infringement allegations should be dismissed.
`
`C.
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`AlmondNet’s Complaint Does Not Adequately Plead the Intent Element for
`Induced Infringement
`
`“Inducement requires a showing that the alleged inducer knew of the patent, knowingly
`
`induced the infringing acts, and possessed a specific intent to encourage another’s infringement
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`of the patent.” Vita-Mix Corp. v. Basic Holding, Inc., 581 F.3d 1317, 1328 (Fed. Cir. 2009). To
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`meet the intent element, “the inducer must have an affirmative intent to cause direct
`
`infringement.” DSU Med. Corp. v. JMS Co. Ltd., 471 F.3d 1293, 1306 (Fed. Cir. 2006). Even at
`
`the pleading stage, a complaint alleging induced infringement “must contain facts ‘plausibly
`
`showing that [the alleged indirect infringer] specifically intended [the direct infringers] to
`
`infringe [the patent-at-issue].’” Pragmatus AV, LLC v. Yahoo! Inc., No. 11-902-LPS-CJB, 2013
`
`WL 2295344, at *1 (D. Del. May 24, 2013). At a minimum, the complaint must provide the
`
`Court with “some factual basis from which to draw an inference of intent.” Id. at *1.
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`AlmondNet alleges that “Oath . . . intended to induce infringement,” but other than this legal
`
`conclusion failed to alleged any facts that render this required intent plausible. See D.I. 9 at ¶ 54.
`
`First, knowledge of the patents alone is insufficient to plead the required intent for
`
`induced infringement, since knowledge of infringement and intent to induce infringement are
`
`two separate elements of induced infringement. See In re Bill of Lading, 681 F.3d at 1339 (“To
`
`survive Appellees’ motion to dismiss, therefore, R+L’s amended complaints must contain facts
`
`plausibly showing that Appellees specifically intended their customers to infringe the [asserted
`
`patent] and knew that the customer’s acts constituted infringement.”) (emphasis added);
`
`10
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`Case 1:18-cv-00943-RGA Document 12 Filed 08/31/18 Page 15 of 18 PageID #: 129
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`Mallinckrodt, Inc. v. E-Z-Em Inc., 670 F. Supp. 2d 349, 354 (D. Del. 2009) (“The Court finds
`
`that Plaintiffs’ Complaint fails to sufficiently allege the requisite intent and knowledge needed to
`
`state a claim for inducing infringement . . . Plaintiffs do not specifically allege any intent to
`
`induce infringement.”) (emphasis added); Pragmatus, 2013 WL 2295344, at *1 (distinguishing
`
`intent and knowledge elements). The fact that Oath continued to sell the accused products and
`
`services after allegedly learning of the patents is also insufficient to plead the requisite intent to
`
`induce infringement. See Clouding IP, LLC v. Amazon.com, No. 12-641, -642, & -675, 2013
`
`WL 2293452, at *3 (D. Del. May 24, 2013) (“Clouding cannot rely on Defendants' continued
`
`infringement to support an induced infringement claim.”). Accordingly, AlmondNet’ allegations
`
`regarding Oath’s purported knowledge of the Asserted Patents are insufficient to adequately
`
`plead intent to induce infringement.
`
`The Pragmatus case is instructive. There, the plaintiff alleged that Yahoo had been
`
`“advised . . . of [its] infringement of the [asserted] patent[s]” by a prior assignee or that the
`
`plaintiff “has provided Yahoo! written notice of its infringement.” Pragmatus, D.I. 43 ¶¶ 15, 20,
`
`25, 30, 33. The plaintiff further alleged that “Yahoo! did nothing to remedy its infringement and
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`continues to infringe to this day” and that “Yahoo! has continued to infringe despite an
`
`objectively high likelihood that its Yahoo! Messenger infringes the [asserted] patent[s].” Id. In
`
`opposing Yahoo!’s motion to dismiss, plaintiff argued that “intent can be inferred because
`
`Yahoo! has ‘continued the acts which induced infringement after gaining knowledge of
`
`infringement.’” Pragmatus, 2013 WL 2295344, at *1. The Court, however, rejected this
`
`argument, explaining that “the [complaint] does not even use the word 'intent,' let alone allege
`
`any facts to support an inference that Yahoo! specifically intended or encouraged its users to
`
`infringe.” Id. Just like the plaintiff in Pragmatus, AlmondNet alleges that Oath knew of the
`
`11
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`

`

`Case 1:18-cv-00943-RGA Document 12 Filed 08/31/18 Page 16 of 18 PageID #: 130
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`asserted patents, but no other facts from which the Court may infer intent. Indeed, AlmondNet's
`
`complaint never alleges that Oath “inten[ded]” anything, much less that it had the specific intent
`
`necessary to adequately plead induced infringement.
`
`Second, as a matter of law, bare allegations that customers following manuals use an
`
`accused product in an infringing manner are also insufficient to show specific intent. See U.S.
`
`Ethernet Innovations, LLC v. Cirrus Logic, Inc., 6:12-cv-366-MHS-JDL, 2013 WL 8482270, at
`
`*4 (E.D. Tex. Mar. 6, 2013) (“[Plaintiff]’s allegations that [Defendant] ‘supplies’ infringing
`
`systems and components and provides ‘instructions’ to its customers who allegedly infringe do
`
`not create a reasonable inference of inducement.”); Avocet Sports Tech., Inc. v. Garmin Int’l.,
`
`Inc., No. 11-cv-4049, 2012 WL 2343163, at *4 (N.D. Cal. 2012) (holding that allegations of
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`“instruction” and “training” were insufficient to plead specific intent). This is especially true
`
`here, since even according to AlmondNet’s allegations “Oath’s DSP performs techniques
`
`claimed in the ’615 patent automatically for advertiser clients or their representatives who wish
`
`to advertise on websites that are not Oath-owned or –operated properties” (D.I. 9 at ¶ 31), and
`
`“Oath’s DSP computer systems operate in conjunction with a third-party ad exchange or supply
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`side platform (SSP)” (D.I. 9 at ¶ 52), yet Oath also “offers advertising services . . . on Oath-
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`owned and –operated properties” (D.I. 9 at ¶ 8). Even Oath’s DSP, therefore, only allegedly
`
`infringes the Asserted Patents in some configurations. AlmondNet’s allegations that “Oath
`
`instructs and supports the use