Case 1:18-cv-00943-RGA Document 14 Filed 09/14/18 Page 1 of 24 PageID #: 146
`
`IN THE UNITED STATES DISTRICT COURT
`FOR THE DISTRICT OF DELAWARE
`
`ALMONDNET, INC.,
`
`
`
`
`
`v.
`
`OATH HOLDINGS INC.,
`
`
`
`
`
`
`
`
`
`Plaintiff,
`
`Defendant.
`
`
`
`)
`)
`)
`)
`)
`)
`)
`
` )
`
`
`
`
`Civil Action No. 18-cv-943-CFC-SRF
`
`
`
`
`
`
`PLAINTIFF ALMONDNET’S
`
`RESPONSE TO OATH HOLDINGS’S MOTION TO DISMISS
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`Brian E. Farnan (Bar No. 4089)
`FARNAN LLP
`919 North Market Street, 12th Floor
`Wilmington, DE 19801
`Telephone: (302) 777-0300
`Facsimile: (302) 777-0301
`Email: bfarnan@farnanlaw.com
`
`Louis J. Hoffman (admitted pro hac vice)
`LOUIS J. HOFFMAN, P.C.
`7689 East Paradise Lane, Suite 2
`Scottsdale, Arizona 85260
`Telephone: (480) 948-3295
`Facsimile: (480) 948-3387
`Email: louis@valuablepatents.com
`
`ATTORNEYS FOR PLAINTIFF
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`Date: September 14, 2018
`
`
`
`

`

`Case 1:18-cv-00943-RGA Document 14 Filed 09/14/18 Page 2 of 24 PageID #: 147
`
`Table of Contents
`
`I. Nature and Stage of the Proceedings. ...........................................................................1
`
`II. Summary of the Argument. ..........................................................................................1
`
`III. Statement of Material Facts. .........................................................................................1
`
`IV. Argument. .....................................................................................................................6
`
`A. The First Amended Complaint meets Twombly standards as to direct
`
`infringement......................................................................................................................6
`
`1. Legal standards for pleading direct infringement. ................................................6
`
`2. The First Amended Complaint informs Oath of what it is accused of
`infringing. ......................................................................................................................8
`
`B. The First Amended Complaint meets Twombly standards for induced
`
`infringement....................................................................................................................10
`
`1. Legal standards for pleading inducement to infringe. .........................................10
`
`2. Oath told its customers to infringe knowing of the applications before
`they became patents and of the patents when they issued. .........................................11
`
`C. The Complaint meets Twombly standards for alleging willfulness. .......................13
`
`1. Legal standards for pleading willful infringement. .............................................14
`
`2. The First Amended Complaint pleads facts sufficient to prove willful
`infringement under the flexible standard. ...................................................................16
`
`V. Conclusion. .................................................................................................................19
`
`i
`
`

`

`Case 1:18-cv-00943-RGA Document 14 Filed 09/14/18 Page 3 of 24 PageID #: 148
`
`Table of Authorities
`
`Cases
`
`Apple Inc. v. Samsung Electronics Co., 258 F.Supp.3d 1013 (N.D. Cal. 2017)........ passim
`
`Ashcroft v. Iqbal, 129 S. Ct. 1937 (2009) ........................................................................... 7
`
`Avocet Sports Tech., Inc. v. Garmin Int’l, Inc., C.A. No. 11-4049, 2012 WL 2343163
`(N.D. Cal. 2012).......................................................................................................... 12
`
`Bell Atl. Corp. v. Twombly, 550 U.S. 544 (2007) ...................................................... passim
`
`Clouding IP, LLC v. Amazon, C.A. No. 12-641, -642, and -675, 2013 WL 2293452 (D.
`Del. 2013) ................................................................................................................... 13
`
`Collabo Innovations, Inc. v. Omnivision Technologies, Inc., C.A. No. 16–197–SLR–SRF,
`2017 WL 374484 (D. Del. Jan. 25, 2017) ............................................................... 7, 11
`
`Continental Circuits LLC v. Intel Corp., C.A. No. 16-2026, 2017 WL 2651709 (D. Ariz.
`2017) ..................................................................................................................... 15, 18
`
`Courtesy Products, LLC v. Hamilton Beach Brands, Inc., C.A. No 13-2012, 2015 WL
`6159113 (D. Del. 2015) .............................................................................................. 15
`
`Ericsson Inc. v. TCL Communication Technology Holdings, Ltd., C.A. No. 2:15-00011,
`2017 WL 5137401 (E.D. Tex. 2017) .................................................................... 15, 18
`
`Fairchild Semiconductor Corp. v. Power Integrations, Inc., 935 F. Supp. 2d 772 (D. Del.
`2013) ........................................................................................................................... 11
`
`Genedics, LLC v. Meta Co., C.A. No. 17-1062, 2018 WL 3991474 (D. Del. 2017)........ 15
`
`Halo Electronics, Inc. v. Pulse Electronics, Inc., 136 S. Ct. 1923 (2016)............ 14, 16, 19
`
`i4i L.P. v. Microsoft Corp., 598 F.3d 831 (Fed. Cir. 2010) .............................................. 10
`
`Imperium IP Holdings v. Samsung Electronics Co., 203 F. Supp. 3d 755 (E.D. Tex. 2016)
`..................................................................................................................................... 14
`
`In re Bill of Lading Transmission and Processing System Patent Litigation, 681 F.3d
`1323 (Fed. Cir. 2012) .................................................................................................. 11
`
`In re Seagate Technology, LLC, 497 F.3d 1360 (Fed. Cir. 2007) .................................... 14
`
`Lifetime Industries, Inc. v. Trim-Lok, Inc., 869 F.3d 1372 (Fed. Cir. 2017) .............. 10, 12
`
`Liquid Dynamics Corp. v. Vaughan Co., 449 F.3d 1209 (Fed. Cir. 2006) ....................... 14
`
`Lyda v. CBS Corp., 838 F.3d 1331 (Fed. Cir. 2018) .......................................................... 7
`
`ii
`
`

`

`Case 1:18-cv-00943-RGA Document 14 Filed 09/14/18 Page 4 of 24 PageID #: 149
`
`McZeal v. Sprint Nextel Corp., 501 F.3d 1354 (Fed. Cir. 2007) ........................................ 6
`
`Mentor Graphics Corp. v. EVE-USA, Inc., 851 F.3d 1275 (Fed. Cir. 2017) .............. 15, 18
`
`Microchip Technology, Inc. v. Delphi Automotive Systems, LLC, C.A. No. 17-1194, 2018
`WL 605893 (D. Del. 2018) ........................................................................................... 7
`
`Nalco Co. v. Chem-Mod, LLC, 883 F.3d 1337 (Fed. Cir. 2018) ............................ 9, 10, 12
`
`North Star Innovations, Inc. v. Toshiba Corp., C.A. 16-115-LPS-CJB, 2016 WL 7107230
`(D. Del. Dec. 6, 2016) ................................................................................................. 20
`
`Phillips v. County of Allegheny, 515 F.3d 224 (3d Cir. 2008) ........................................ 6, 8
`
`Pragmatus AV, LLC v. Yahoo! Inc., C.A. No. 11-902, 2013 WL 2295344 (D. Del. 2013)
`..................................................................................................................................... 13
`
`Prowire LLC v. Apple, Inc., C.A. No. 17-223, 2017 WL 3444689 (D. Del. 2017) ............ 7
`
`SoftView v. Apple Inc., C.A. No. 10–389–LPS, 2012 WL 3061027 (D. Del. July 26, 2012)
`..................................................................................................................................... 11
`
`Toshiba Corp. v. Imation Corp., 681 F.3d 1358 (Fed. Cir. 2012) .................................... 10
`
`U.S. Ethernet Innovations, LLC v. Cirrus Logic, Inc., C.A. No. 6:12-366, 2013 WL
`8482270 (E.D. Tex. 2013) .......................................................................................... 12
`
`United States Gypsum Co. v. New NGC, Inc., C.A. No. 17-130, 2017 WL 5187845 (D.
`Del. 2017) ..................................................................................................................... 7
`
`Välinge Innovation AB v. Halstead New England Corp., C.A. No. 16-1082, 2018 WL
`2411218 (D. Del. 2018) ........................................................................................ 16, 18
`
`WCM Industries, Inc. v. IPS Corporation, 721 Fed. Appx. 959 (Fed. Cir. 2018) 16, 17, 18
`
`Zimmer Surgical, Inc. v. Stryker Corp., C.A. No. 16-679-RGA-MPT, 2017 WL 1296026
`(D. Del. Apr. 6, 2017) ..................................................................................... 11, 16, 18
`
`Statutes
`
`35 U.S.C. § 271(b) ............................................................................................................ 10
`
`35 U.S.C. § 284 ................................................................................................................. 14
`
`Rules
`
`Federal Rule of Civil Procedure 8(a)(2) ............................................................................. 6
`
`
`
`iii
`
`

`

`Case 1:18-cv-00943-RGA Document 14 Filed 09/14/18 Page 5 of 24 PageID #: 150
`
`I.
`
`Nature and Stage of the Proceedings.
`
`On June 26, 2018, AlmondNet, Inc. (“AlmondNet”) filed its Complaint (D.I. 1)
`
`against Oath Holdings Inc. (“Oath”) alleging infringement of U.S. Patent 9,830,615. On
`
`July 17, 2018, AlmondNet filed its First Amended Complaint to add newly issued U.S.
`
`Patent 10,026,100. D.I. 9. In lieu of an Answer, Oath filed a motion to dismiss. D.I. 11.
`
`II.
`
`Summary of the Argument.
`
`AlmondNet’s First Amended Complaint alleges infringement sufficiently to
`
`withstand dismissal. The Complaint identifies the infringing methods and computer
`
`systems by category and specific examples.
`
`The Complaint also plausibly alleges Oath’s intent to induce infringement by
`
`reference to its knowledge of the asserted patents in the course of prior litigation and
`
`proceedings in the Patent and Trademark Office (“PTO”) involving patents issued from
`
`common applications, coupled with its instruction and support of direct infringement by
`
`its customers and users.
`
`Finally, the Complaint alleges facts supporting willful infringement under the
`
`present flexible standard, including the facts that Oath continued infringement after
`
`knowing of the pending applications and allowance of the patents, even after all of its
`
`best defenses against related patents had failed.
`
`III.
`
`Statement of Material Facts.
`
`1.
`
`AlmondNet and Oath (via its predecessor company, Yahoo! Inc.) engaged
`
`in repeated discussions regarding AlmondNet’s patent portfolio since 2006. D.I. 9, ¶ 57.
`
`At least in 2015, AlmondNet’s counsel sent Oath (then Yahoo) copies of certain issued
`
`patents that are parents of both patents in suit, together with an identification of the
`
`1
`
`

`

`Case 1:18-cv-00943-RGA Document 14 Filed 09/14/18 Page 6 of 24 PageID #: 151
`
`allegedly infringing activities. D.I. 9, ¶58. As explained in more detail below, in
`
`connection with a related litigation, in 2016-17, Oath obtained copies of the specific
`
`applications that became the patents in this lawsuit and made arguments about them to
`
`the PTO. D.I. 9, ¶¶60, 65, 66.
`
`2.
`
`AlmondNet sued Yahoo for infringement of patents in the families of both
`
`the ‘615 and ‘100 Patents (called the MPS and OTA families, respectively) in the Eastern
`
`District of New York, Civil Action No. 1:16-cv-01557-ILG-SMG. References to filings
`
`in that suit are hereinafter referenced as “EDNY D.I.” followed by the docket number.
`
`3.
`
`Yahoo responded to AlmondNet’s complaint in the EDNY by filing a
`
`motion to dismiss for failure to state a claim under FRCP 12(b)(6). The Court heard oral
`
`argument on September 29, 2016. Based in part on the parties extensive negotiating
`
`history, Judge Glasser stated:
`
`What you are really saying in every case when a 12(b)(6) motion is made, what
`the defendant is saying, we do not know enough about why we are being sued.
`That is essentially it. We have no idea why we are here, but that is not -- that
`cannot be true.
`. . . .
`You know precisely why you are being sued, and I would suspect you have a
`pretty good idea of what the product is; or if there is no product, what the conduct
`was, what your activity was, how you used whatever the Internet facilities are,
`which may be also the essence of their claim. Why [don’t] you get on with it?
`
`EDNY D.I. 38 at 6, 9 (Hoffman Decl., Ex. 1). Indeed, the Court was highly critical of
`
`Yahoo for bringing the motion, going so far as to say:
`
`And one is tempted to infer that Twombly and Iqbal have become ATM machines
`for lawyers…. [T]he point of the matter is, gentlemen, why are you here? You
`know what it is the defendant claims it patented and what it is they are thinking or
`alleging that you have infringed. So what these 12(b)(6) motions are all about are
`designed to put an end to litigation based on a piece of paper, based upon a
`complaint. If you think that there is a real, legitimate dispute between you, why
`do you not get on with your discovery and go to trial. You know what it is all
`about. Why are you here?
`
`2
`
`

`

`Case 1:18-cv-00943-RGA Document 14 Filed 09/14/18 Page 7 of 24 PageID #: 152
`
`Id. at 7. However, instead of formal, immediate denial of the motion, the Court agreed to
`
`“adjourn the motion” and allowed Yahoo to ask AlmondNet for certain clarification. Id.
`
`at 11-12, 16-17, 19. The Court established that process to avoid having to “take about six
`
`months” to understand the patents enough to judge the few Yahoo allegations of gaps in
`
`the complaint. Id. at 8 (“if you really had some doubt as to what is the product, you pick
`
`up the phone and say, Mr. Hoffman [plaintiff’s counsel], what product are you accusing
`
`us of, what did we do, and get on with it. And if you think that there was no patent
`
`infringed, you think that there is a really good basis for succeeding in a lawsuit before a
`
`jury, get on with it. Now, it may be that you will not have as many billable hours, it may
`
`be that you will not be able to run up a large fee, but get on with it instead of occupying
`
`the time of the Court ….”).
`
`4.
`
`AlmondNet answered Yahoo’s (few) questions by letter in mid-October, a
`
`copy of which Oath attached as Exhibit A. On December 13, 2016, Yahoo formally
`
`withdrew its motion to dismiss, “in light of supplemental disclosures by AlmondNet.”
`
`EDNY D.I. 43 at 1.
`
`5.
`
`On October 28, 2016, AlmondNet provided Yahoo its “Disclosure of
`
`Asserted Claims and Infringement Contentions.” Oath Exhibit B. That Disclosure was
`
`pursuant to EDNY Local Patent Rule 6, which requires identification of “each product or
`
`process of each opposing party of which the party claiming infringement is aware that
`
`allegedly infringes each identified claim.” Id. at 1.
`
`6.
`
`In April 2017 in the New York suit, AlmondNet served on Yahoo its
`
`formal infringement contentions pursuant to an Eastern District of Texas Local Patent
`
`Rule that the parties had agreed to adopt. The April contentions consist of detailed charts
`
`3
`
`

`

`Case 1:18-cv-00943-RGA Document 14 Filed 09/14/18 Page 8 of 24 PageID #: 153
`
`based upon public data demonstrating infringement on a claim-element-by-claim-element
`
`basis; charts for the OTA patents related to the ‘100 Patent were 15 pages, the charts for
`
`the MSP patents related to the ‘615 Patent were 14 pages. See Hoffman Decl., Ex. 2.
`
`7.
`
`In June 2017, Yahoo moved to dismiss the New York suit for lack of
`
`venue. EDNY D.I. 70. The Court denied that motion, EDNY D.I. 90, and Yahoo sought
`
`mandamus from the Federal Circuit. The Federal Circuit remanded for reconsideration,
`
`which the district court denied on August 21, 2018. EDNY D.I. 118. The district court
`
`denied Yahoo’s subsequent motion for stay pending a planned second mandamus
`
`petition, EDNY D.I. 122, 123. Yahoo filed its mandamus petition on September 12, 2018.
`
`In re Oath Holdings Inc., No. 18-157, D.I. 2 (Fed. Cir.). The Federal Circuit has ordered
`
`AlmondNet to respond. Id., D.I. 8.
`
`8.
`
`In June 2018, AlmondNet filed the instant suit. AlmondNet filed a
`
`separate action, rather than seeking to add the new patents to the New York case, to avoid
`
`slowing down the New York case, in which claim construction was fully briefed.
`
`AlmondNet filed the new suit in Delaware rather than New York, in light of Yahoo’s
`
`venue attacks in the New York case (Fact #7 above), because venue in Delaware is
`
`incontrovertible given Oath’s incorporation in this State. See 28 U.S.C. § 1400(b).
`
`9.
`
`AlmondNet’s First Amended Complaint includes a list of infringed
`
`independent and dependent claims of the ‘615 Patent along with a detailed factual
`
`description of the accused Oath demand side platforms (DSP), with facts extending for 14
`
`paragraphs of the First Amended Complaint and explaining the infringement on a claim-
`
`element-by-claim-element basis. D.I. 9, ¶¶27-41.
`
`4
`
`

`

`Case 1:18-cv-00943-RGA Document 14 Filed 09/14/18 Page 9 of 24 PageID #: 154
`
`10.
`
`AlmondNet’s First Amended Complaint includes a list of infringed
`
`independent and dependent claims of the ‘100 Patent along with a detailed factual
`
`description of the accused “audience data” or “audience extension” techniques, with facts
`
`extending for 9 paragraphs of the First Amended Complaint and explaining the
`
`infringement on a claim-element-by-claim-element basis. D.I. 9, ¶¶ 47-55.
`
`11.
`
`The First Amended Complaint also cross-references infringement
`
`contentions provided for the related patents in the New York case. The reference is not to
`
`the simple listing of claims and services pursuant to the Eastern District of New York
`
`Local Patent Rule 6, which Oath attaches as Exhibit B; rather, it refers to the detailed
`
`April contentions, see Fact #6, above; Hoffman Decl., Ex. 2.
`
`12.
`
`The First Amended Complaint (¶¶71-72) accuses Oath of inducing
`
`infringement: “Oath instructs and supports the use by Oath’s customers of the infringing
`
`Oath’s DSP computer systems or other computer system describe herein through Oath’s
`
`DSP online web interface, customer instruction manuals and instruction sheets, and
`
`statements made by customer service and training representatives. Oath affirmatively
`
`promotes customer use of audience data or audience extension.”
`
`13.
`
`The First Amended Complaint addresses Oath’s knowledge of the ‘615
`
`and ‘100 Patents and the applications preceding their issuance, including discussions
`
`between the parties (D.I. 9, ¶¶ 57-58), the New York litigation (D.I. 9, ¶¶59), and
`
`Yahoo’s activities before the PTO in which Yahoo discussed the applications leading to
`
`issuance of the patents in suit (D.I. 9, ¶¶65-66).
`
`14.
`
`Both the ‘615 and ‘100 Patents issued after the PTO examiners considered
`
`Oath’s prior art and other defenses, including notably reviewing Oath’s closest prior art
`
`5
`
`

`

`Case 1:18-cv-00943-RGA Document 14 Filed 09/14/18 Page 10 of 24 PageID #: 155
`
`references and Yahoo’s “invalidity charts” served in the New York case, as well as
`
`Yahoo’s CBM petitions seeking to invalidate the parent patents under section 101 via
`
`related PTO proceedings. D.I. 9, ¶¶ 61-67.
`
`IV. Argument.
`
`A. The First Amended Complaint meets Twombly standards as to direct
`
`infringement.
`
`The First Amended Complaint easily clears the threshold for pleading plausible
`
`facts sufficient to allege that Oath’s platforms, services, and computer systems infringe
`
`two AlmondNet patents.
`
`1. Legal standards for pleading direct infringement.
`
`1.
`
`Federal Rule of Civil Procedure 8(a)(2) requires a “short and plain
`
`statement of the claim showing that the pleader is entitled to relief.” A plaintiff need not
`
`make “detailed factual allegations” in the complaint. Bell Atl. Corp. v. Twombly, 550 U.S.
`
`544, 555 (2007) (citation omitted). The primary function of a complaint is to put
`
`defendant on “notice as to what he must defend.” McZeal v. Sprint Nextel Corp., 501
`
`F.3d 1354, 1357 (Fed. Cir. 2007) (citing Twombly, 550 U.S. at 565 n.10).
`
`2.
`
`Heightened fact pleading is not required, and a complaint must allege only
`
`“enough facts to state a claim to relief that is plausible on its face.” Twombly, 550 U.S. at
`
`555, 570; accord Phillips v. County of Allegheny, 515 F.3d 224, 234 (3d Cir. 2008) (“the
`
`Supreme Court explained that the concept of a ‘showing’ requires only notice of a claim
`
`and its grounds, and distinguished such a showing from ‘a pleader’s bare averment that
`
`he wants relief and is entitled to it.’”) (quoting Twombly, 550 U.S. at 555 n.3). A claim
`
`has facial plausibility when a plaintiff pleads factual content sufficient to draw a
`
`6
`
`

`

`Case 1:18-cv-00943-RGA Document 14 Filed 09/14/18 Page 11 of 24 PageID #: 156
`
`reasonable inference that the defendant is liable, drawing on the court’s “judicial
`
`experience and common sense.” Ashcroft v. Iqbal, 129 S. Ct. 1937, 1949, 1950 (2009)
`
`(citing Twombly, 550 U.S. at 556).
`
`3.
`
`There is no requirement that direct infringement claims in a complaint be
`
`limited to only the specific systems or products identified; complaints may pass muster
`
`by identifying a category of accused products and an example or examples thereof. See,
`
`e.g., Microchip Technology, Inc. v. Delphi Automotive Systems, LLC, C.A. No. 17-1194,
`
`2018 WL 605893 *2 (D. Del. 2018) (complaint alleging infringement “at least” through
`
`single identified product found sufficient); United States Gypsum Co. v. New NGC, Inc.,
`
`C.A. No. 17-130, 2017 WL 5187845 *3 n.1 (D. Del. 2017) (allegation of infringement by
`
`“competing products includ[ing] but not limited to” specific wallboard found sufficient);
`
`Collabo Innovations, Inc. v. Omnivision Technologies, Inc., C.A. No. 16-197, 2017 WL
`
`374484 *1 (D. Del. 2017) (allegations of infringement by “sensors, including but not
`
`limited to” named product sufficient). Indeed, the existence of Default Standard 4.a,
`
`requiring plaintiff to “specifically identify the accused products” after the Rule 16
`
`conference makes clear that such specificity is not expected at the pleading stage. See
`
`Prowire LLC v. Apple, Inc., C.A. No. 17-223, 2017 WL 3444689 *5 n.33 (D. Del. 2017).
`
`4.
`
`Moreover, for patent-infringement claims involving patents directed to
`
`methods and systems for providing a service, as opposed to product claims, a complaint
`
`need not name a specific infringing product and satisfies the standard in Bell Atl. Corp. v.
`
`Twombly, 550 U.S. 544, 555 (2007). See, e.g., Lyda v. CBS Corp., 838 F.3d 1331, 1339
`
`(Fed. Cir. 2018) (method claim “requires pleading facts sufficient to allow a reasonable
`
`inference that all steps of the claimed method are performed”).
`
`7
`
`

`

`Case 1:18-cv-00943-RGA Document 14 Filed 09/14/18 Page 12 of 24 PageID #: 157
`
`5.
`
`On a motion to dismiss, facts alleged in a Complaint are assumed true and
`
`viewed in the light most favorable to plaintiff. See, e.g., Phillips, 515 F.3d at 234
`
`(reversing dismissal and holding that Twombly “reaffirmed that … the facts alleged must
`
`be taken as true” and did not “undermine” the “point about drawing reasonable inferences
`
`in favor of the plaintiff”).
`
`2. The First Amended Complaint informs Oath of what it is accused
`of infringing.
`
`Oath complains that AlmondNet “has accused all of Oath’s actions as
`
`infringement.” D.I. 12 at 7. This is a gross overstatement. Oath makes this allegation by
`
`referring to AlmondNet’s background description of Oath’s business and services,
`
`including its corporate history, D.I. 9 at 8-11, and virtually ignores the detailed
`
`description of what specifically Oath does that infringes, see D.I. 9 at ¶¶30-40 (‘615
`
`Patent) and ¶¶48-54 (‘100 Patent), as well as the discussion of the detailed April
`
`infringement contentions, Fact #6.
`
`Oath’s motion does not complain about the level of detail in the specific
`
`allegations, nor does it identify even one claim feature allegedly missing from the
`
`specific allegations. This is unlike its motion to dismiss in the New York action, where it
`
`argued that a few gaps existed. Facts #3, 4; EDNY D.I. 23 at 6-8; see also EDNY D.I. 26
`
`at 10-13 (refuting allegations of gaps).
`
`Oath’s motion tells the Court that AlmondNet’s New York Complaint survived
`
`Twombly only because of AlmondNet’s supplementation. D.I. 12 at 7 (“In the EDNY
`
`case, Oath [sic] 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.”). Nothing could be
`
`8
`
`

`

`Case 1:18-cv-00943-RGA Document 14 Filed 09/14/18 Page 13 of 24 PageID #: 158
`
`further from the truth: The Court told Yahoo that its motion was unnecessary and simply
`
`ran up needless attorney bills. Fact #3.
`
`Even if Oath’s motion had correctly reported that the supplementation was
`
`required, the allegations in the First Amended Complaint are more detailed than those set
`
`forth in Exhibit A that Yahoo found satisfactory in the New York suit, and contain the
`
`exact same citations to specific platforms and services as identified in Exhibit B. Indeed,
`
`AlmondNet wrote the Delaware First Amended Complaint to incorporate the information
`
`provided to Oath through the papers filed in New York, including both Exhibits A and B
`
`to Oath’s motion and the more detailed infringement contentions served later.
`
`The crux of the section of Oath’s motion related to direct infringement is that
`
`Oath has concerns that AlmondNet not only provided detailed explanations of certain
`
`specifically “named” services and platforms but also alluded to the possibility that
`
`discovery might reveal additional infringement in some of its other products. Those
`
`allegations do not make the complaint insufficient under Iqbal. See Part IV.A.1 at ¶3,
`
`above. Particularly under the circumstances her, where Oath has years of experience with
`
`these patent families, including significant discovery as to AlmondNet’s contentions in
`
`the New York suit, as well as Yahoo’s arguments to the PTO related to parent patents to
`
`the patents in suit here, it defies common sense to consider that Oath does not know what
`
`is at issue. See Nalco, 883 F.3d at 1350 (a complaint must put a defendant “on notice of
`
`what activity . . . is being accused of infringement’”) (citation omitted).1
`
`
`1 In addition, all of the claims asserted are for methods and systems performed in
`connection with providing services, not the sale of goods or products, which do not
`require the same identification in pleadings. See Part IV.A.1 at ¶4, above.
`
`9
`
`

`

`Case 1:18-cv-00943-RGA Document 14 Filed 09/14/18 Page 14 of 24 PageID #: 159
`
`B. The First Amended Complaint meets Twombly standards for induced
`
`infringement.
`
`The second part of Oath’s motion relates to indirect infringement, specifically
`
`inducement to infringe both patents. Oath argues that the First Amended Complaint fails
`
`to adequately plead the intent element for induced infringement. To the contrary, the
`
`allegations of the First Amended Complaint, considered in their entirety, in context and
`
`with a modicum of common sense, easily clear the threshold for pleading plausible facts
`
`sufficient to support allegations of induced infringement.
`
`1. Legal standards for pleading inducement to infringe.
`
`1.
`
`Under 35 U.S.C. § 271(b), “whoever actively induces infringement of a
`
`patent shall be liable as an infringer.” “To prove induced infringement, the patentee must
`
`show direct infringement, and that the alleged infringer knowingly induced infringement
`
`and possessed specific intent to encourage another’s infringement.” Toshiba Corp. v.
`
`Imation Corp., 681 F.3d 1358, 1363 (Fed. Cir. 2012) (quoting i4i L.P. v. Microsoft Corp.,
`
`598 F.3d 831, 851 (Fed. Cir. 2010) (internal quotation marks omitted)). In summary, to
`
`plead inducement, it is sufficient to allege knowledge of the asserted patents and facts
`
`permitting an inference that Oath encouraged others to infringe.
`
`2.
`
`In pleading inducement to infringe, the “intent to cause infringement”
`
`element is satisfied by knowledge of the patent and its scope, coupled with assisting or
`
`directing customers in activity that constitutes infringement. Lifetime Industries, Inc. v.
`
`Trim-Lok, Inc., 869 F.3d 1372, 1380 (Fed. Cir. 2017); see also Nalco Co. v. Chem-Mod,
`
`LLC, 883 F.3d 1337, 1355 (Fed. Cir. 2018) (allegations that defendant provided its
`
`customers “instructions, support, and technical assistance” in the use of the infringing
`
`method sufficient for pleading intent to induce). “[W]hat is necessary is that facts, when
`
`10
`
`

`

`Case 1:18-cv-00943-RGA Document 14 Filed 09/14/18 Page 15 of 24 PageID #: 160
`
`considered in their entirety and in context, lead to the common sense conclusion that a
`
`patented method is being practiced.” In re Bill of Lading Transmission and Processing
`
`System Patent Litigation, 681 F.3d 1323, 1343 (Fed. Cir. 2012).
`
`3.
`
`In pleading inducement to infringe, “knowledge gleaned from the
`
`complaint satisfies the requirement of proof of knowledge that the induced acts constitute
`
`patent infringement,” Zimmer Surgical, Inc. v. Stryker Corp., C.A. No. 16-679-RGA-
`
`MPT, 2017 WL 1296026 *6 (D. Del. Apr. 6, 2017) (citing Fairchild Semiconductor
`
`Corp. v. Power Integrations, Inc., 935 F. Supp. 2d 772, 777-78 (D. Del. 2013)); Collabo,
`
`2017 WL 374484 *9 (“a more recent line of cases from this district holds that ‘the filing
`
`of a complaint is sufficient to provide knowledge of the patents-in-suit for purposes of
`
`stating a claim for indirect infringement occurring after the filing date.’ SoftView [v.
`
`Apple Inc., C.A. No. 10–389–LPS], 2012 WL 3061027, at *7 [(D. Del. July 26, 2012)]”)
`
`(citations to five other D. Del. cases from 2011-13 omitted).
`
`2. Oath told its customers to infringe knowing of the applications
`before they became patents and of the patents when they issued.
`
`The First Amended Complaint alleges facts showing that AlmondNet’s counsel
`
`sent copies of the patent applications that led to the patents in suit to Oath. Indeed, Yahoo
`
`addressed those specific applications in proceedings before the PTO. AlmondNet
`
`identified the allegedly infringing platforms and services at least in the New York
`
`litigation in October 2016. See Facts #1, 2, 5, 6, 13. Oath does not deny that the First
`
`Amended Complaint alleges that Oath had knowledge of the patents-in-suit.
`
`Rather, Oath asserts that AlmondNet fails to present facts supporting a specific
`
`intent to cause infringement by its customers. A complaint may satisfy the “intent to
`
`infringe” element by alleging facts of encouragement such as advertising or promoting,
`
`11
`
`

`

`Case 1:18-cv-00943-RGA Document 14 Filed 09/14/18 Page 16 of 24 PageID #: 161
`
`or instructing how to engage in, an infringing use of a system. Part IV.B.1 at ¶2, supra.
`
`Oath’s arguments to the contrary, asserting that AlmondNet’s allegations concerning its
`
`interactions with customers (D.I. 9, ¶ 72 and Fact #12, above) are insufficient, wholly
`
`ignores the Federal Circuit’s recent teaching on pleading inducement in Lifetime
`
`Industries and Nalco. See IV.B.1 at ¶2, supra.2 The standard Oath endeavors to set is
`
`unreasonably high at this stage of the proceedings.
`
`AlmondNet’s First Amended Complaint alleges that, with knowledge of the
`
`patents and knowing the bases for AlmondNet’s infringement claims, “Oath instructs and
`
`supports the use by Oath’s customers of the infringing Oath’s DSP computer systems or
`
`other computer system described herein through Oath’s DSP online web interface,
`
`customer instruction manuals and instruction sheets, and statements made by customer
`
`service and training representatives.” D.I. 9, ¶ 71. AlmondNet further alleges that “Oath
`
`affirmatively promotes customer use of” the infringing methods and systems. Id. Those
`
`allegations must be accepted as true. See IV.A.1 at ¶5, supra.
`
`The First Amended Complaint proceeds to allege that Oath’s computer systems
`
`are specifically programmed to infringe the patented techniques directly, and the indirect
`
`infringement allegation is derivative: The complaint alleges that Oath induces
`
`infringement, if the customers (rather than Oath itself) are found to “control the Oath’s
`
`DSP computer systems or other computer systems described herein.” D.I. 9, ¶ 72. That
`
`paragraph avers that, in this scenario, Oath infringes by providing “encouragement,
`
`
`2 For example, the cases from Texas and California cited in Oath’s brief bot