Case 1:20-cv-01646-RGA-JLH Document 60 Filed 08/11/21 Page 1 of 9 PageID #: 5024
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`IN THE UNITED STATES DISTRICT COURT
`FOR THE DISTRICT OF DELAWARE
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`RAVGEN, INC.,
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`v.
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`Plaintiff,
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`C.A. No. 20-1646-RGA-JLH
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`)))))))))
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`ARIOSA DIAGNOSTICS, INC., ROCHE
`SEQUENCING SOLUTIONS, INC., ROCHE
`MOLECULAR SYSTEMS, INC., and
`FOUNDATION MEDICINE, INC.,
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`
`Defendants.
`______________________________________
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`)
`)
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`REPORT AND RECOMMENDATION
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`Pending before the Court are four motions to dismiss filed by Defendants Ariosa
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`Diagnostics, Inc., Roche Sequencing Solutions, Inc., and Roche Molecular Systems, Inc.
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`(collectively, “the Roche Defendants”) and Foundation Medicine, Inc. (“FMI”). (D.I. 12, 15, 23,
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`25.) As announced at the teleconference on July 26, 2021, I recommend that the Court DENY all
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`four pending motions to dismiss.
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`I. LEGAL STANDARD
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`A defendant may move to dismiss a complaint under Federal Rule of Civil Procedure
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`12(b)(6) for failure to state a claim. “To survive a motion to dismiss, a complaint must contain
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`sufficient factual matter, accepted as true, to ‘state a claim to relief that is plausible on its face.’”
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`Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544,
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`570 (2007)). A claim is plausible on its face when the complaint contains “factual content that
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`allows the court to draw the reasonable inference that the defendant is liable for the misconduct
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`alleged.” Id. (citing Twombly, 550 U.S. at 556). A possibility of relief is not enough. Id. “Where
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`a complaint pleads facts that are ‘merely consistent with’ a defendant’s liability, it ‘stops short of
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`Case 1:20-cv-01646-RGA-JLH Document 60 Filed 08/11/21 Page 2 of 9 PageID #: 5025
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`the line between possibility and plausibility of entitlement to relief.’” Id. (quoting Twombly, 550
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`U.S. at 557).
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`In determining the sufficiency of the complaint, I must assume all “well-pleaded facts” are
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`true but need not assume the truth of legal conclusions. Id. at 679. “[W]hen the allegations in a
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`complaint, however true, could not raise a claim of entitlement to relief, this basic deficiency
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`should be exposed at the point of minimum expenditure of time and money by the parties and the
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`court.” Twombly, 550 U.S. at 558 (internal quotation marks omitted).
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`II. DISCUSSION
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`My report and recommendation regarding the pending motions was announced from the
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`bench on July 26, 2021 as follows:
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`There are four pending motions set forth at docket numbers
`12, 15, 23, and 25. Two of those motions, docket [numbers] 12 and
`15, became moot when Ravgen filed its first amended complaint.
`Accordingly, I recommend that the Court deny those motions as
`moot. That leaves numbers 23 and 25.
`
` have reviewed the parties’ briefs. I have also carefully
`considered the arguments made at the July 1[, 2021] hearing. And I
`will summarize the reasons for my recommendations in a moment.
`But before I do, I want to be clear that my failure to address a
`particular argument or cited case does not mean that I did not
`consider it. I also note that while we will not be issuing a separate
`written recommendation, we will
`issue a written document
`incorporating the recommendation that I am about to make.
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`For the following reasons, I recommend that the Court deny
`the motions to dismiss.
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`This is one of four related cases filed by Ravgen against
`various defendants. On December 3, 2020, Ravgen filed its original
`complaint for patent infringement in this case against Ariosa
`Diagnostics, Roche Sequencing Solutions, Roche Medical Services,
`and Foundation Medicine. The defendants are all alleged to have the
`same foreign parent company.
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` I
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`2
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`The original complaint alleged infringement of two of
`Ravgen’s patents, the ’277 patent and the ’720 [patent].1 Those
`patents are both titled “Methods for Detection of Genetic
`Disorders,” and each claims methods related to cell-free DNA
`technology. The inventor of the patents, Dr. Ravinder S. Dhallan, is
`also the founder of Ravgen.2
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`On the same day that Ravgen filed its original complaint,
`before any defendant was formally served in this case, Ravgen sent
`letters to each defendant inquiring whether any of them were
`interested in acquiring a license to the asserted patents. Those letters
`[attached] the original complaint.
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`The Roche Defendants and FMI separately moved to dismiss
`the original complaint.3 Ravgen [then] filed a first amended
`complaint.4 The Roche Defendants and FMI again filed separate
`motions to dismiss for failure to state a claim.5 While those motions
`were being briefed, the parties stipulated, and the Court ordered, that
`Ravgen could file a second amended complaint solely to replace an
`exhibit with a corrected version.6 That stipulation provides that the
`pending motions
`to dismiss apply
`to the second amended
`complaint.7
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`The SAC alleges direct, induced, and willful infringement of
`the ’277 and ’720 patents by the Roche Defendants. The Roche
`Defendants seek to dismiss the SAC’s claims of inducement and
`willful infringement.
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`The SAC alleges direct, induced, and willful infringement of
`the ’720 patent by FMI. At oral argument, Ravgen confirmed that it
`was only asserting post-suit induced infringement and post-suit
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`1 U.S. Patent Nos. 7,332,277 (the “’277 Patent”) and 7,727,720 (the “’720 Patent”).
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`2 (D.I. 33 ¶¶ 15, 27, 29.)
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`3 (D.I. 12, 15.)
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`4 (D.I. 20.)
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`5 (D.I. 23, 25.)
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`6 (D.I. 32.)
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`7 (Id.)
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`3
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`willful infringement as to FMI.8 Subsequent to oral argument,
`Ravgen agreed to dismiss its induced infringement claim against
`FMI.9 With the pending motion, FMI seeks to dismiss the SAC’s
`claim of post-suit willful infringement.
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`I’m not going to read into the record the law that applies to
`motions to dismiss for failure to state a claim under Federal Rule of
`Civil Procedure 12(b)(6). I previously set forth the applicable legal
`standard
`in
`another
`report
`and
`recommendation,
`CoolTVNetwork.com v. Facebook, Inc., C.A. No. 19-292, 2019 WL
`4415283, at *3 (D. Del. Sept. 16, 2019), and I incorporate that legal
`standard by reference.
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`Under 35 U.S.C. § 271(b), “[w]hoever actively induces
`infringement of a patent shall be liable as an infringer.” To state a
`claim for induced infringement, a plaintiff must plead that the
`alleged infringer knowingly induced infringement and possessed
`specific intent to encourage another’s infringement.10
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`Under 35 U.S.C. § 284, district courts have discretion to
`award enhanced damages against
`those guilty of patent
`infringement.11 However, enhanced damages under § 284 “should
`generally be reserved for egregious cases typified by willful
`misconduct.”12 As with induced infringement, a finding of
`willfulness requires, among other things, knowledge by the accused
`infringer that his conduct infringes.13
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`[The Roche Defendants’ Motion]
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`I’ll begin with the motion filed by the Roche Defendants.
`The SAC alleges pre- and post-suit induced infringement and pre-
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`8 (July 1, 2021, Hearing Tr. at 35:8-23.)
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`9 (D.I. 53.)
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`10 See Toshiba Corp. v. Imation Corp., 681 F.3d 1358, 1363 (Fed. Cir. 2012); see also
`Groove Digital, Inc. v. Jam City, Inc., No. 18-1331-RGA, 2019 WL 351254, at *4 (D. Del. Jan.
`29, 2019).
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`11 Halo Elecs., Inc. v. Pulse Elecs., Inc., 136 S. Ct. 1923, 1935 (2016).
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`12 Id. at 1934.
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`13 IOENGINE, LLC v. PayPal Holdings, Inc., No. 18-452-WCB, 2019 WL 330515, at *7
`(D. Del. Jan. 25, 2019).
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`and post-suit willful infringement against the Roche Defendants.
`Roche argues that the induced infringement claims should be
`dismissed because the SAC fails to plausibly allege that the Roche
`Defendants had pre-suit knowledge that any induced acts constituted
`infringement. Roche argues that the willful infringement claim
`should be dismissed “for the same reasons,” namely, that the SAC
`fails to allege facts showing pre-suit knowledge that they were
`infringing.14
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`The Roche Defendants acknowledge that they had pre-suit
`knowledge of the asserted patents. What they challenge is the
`sufficiency of Ravgen’s pleading regarding their knowledge that
`their activities infringed. Ravgen responds that knowledge of
`infringement can be inferred from the facts alleged in the SAC.
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`While knowledge of infringement does not automatically
`follow from knowledge of the asserted patents, knowledge of
`infringement may be “inferred based on surrounding circumstances,
`‘taken collectively and in context.’”15 The SAC, taken collectively
`and in context, permits a plausible inference of pre-suit knowledge
`of infringement.
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`For example, the SAC contains a number of allegations
`suggesting that the Roche Defendants were sufficiently familiar
`with the patents that they would have had knowledge of
`infringement. The SAC alleges that the innovations claimed by the
`asserted patents were widely publicized in prominent medical
`journals and received worldwide press coverage from prominent
`news outlets.16 The patents claim methods related to cell-free DNA
`technology, which can be used for prenatal diagnostics, and the SAC
`alleges that the Roche Defendants regularly monitor patents and
`litigation in the field of prenatal diagnostics and liquid biopsy to
`determine whether any of their products infringe any patents.17 That
`is not an implausible allegation under the circumstances.
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`14 (D.I. 24 at 12.)
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`
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`15 3Shape A/S v. Align Tech., Inc., No. 18-886-LPS, 2019 WL 1416466, at *2 (D. Del. Mar.
`29, 2019) (quoting In re Bill of Lading Transmission & Processing Sys. Pat. Litig., 681 F.3d 1323,
`1340 (Fed. Cir. 2012)).
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`16 (D.I. 33 ¶¶ 21-24.)
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`17 (Id. ¶ 119.)
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`The SAC also alleges that the Roche Defendants themselves
`cited the asserted patents during the prosecution of some of their
`own patent applications.18 The Roche Defendants also cited
`Ravgen’s patents against others by asserting them as prior art to
`others’ patents and making substantive arguments about them before
`the PTO in both IPRs and reexamination proceedings.19
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`The SAC also refers to communications between Ariosa and
`Ravgen that suggest that Ariosa was interested in Ravgen’s
`technology. One such contact allegedly came from the former CEO
`of Ariosa, Dr. Ken Song, who first reached out to Dr. Dhallan
`requesting “a chance to discuss Ravgen and its technology” in July
`2009.20 Although he was not yet employed by Ariosa or its
`predecessor at the time of that initial contact, Dr. Song became the
`CEO of Aria Diagnostics, which later changed its name to Ariosa
`sometime prior to December 2011.21 The discussions between Dr.
`Song and Dr. Dhallan continued for several years and included in-
`person meetings at both Ariosa’s and Ravgen’s facilities.22
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`While I am not sure that any one of these facts on its own
`would be sufficient to permit an inference that the Roche Defendants
`knew that their acts infringed the asserted patents, I find that it is at
`least plausible to infer from these facts taken together that the Roche
`Defendants had such knowledge.
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`The Roche Defendants urge the Court to draw the opposite
`conclusion from the history of communications between certain
`Roche Defendants and Ravgen. According to the Roche Defendants,
`because they were in discussions with Ravgen over a period of years
`and Ravgen never accused them or alleged infringement during that
`time, the only plausible inference is that Roche thought they did not
`infringe.23 To be clear, the Roche Defendants do not contend that a
`patentee is required to convey a pre-suit allegation of infringement
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`18 (Id. ¶¶ 80-84.)
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`19 (Id. ¶¶ 85-93.)
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`20 (Id. ¶ 95.)
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`21 (Id. ¶¶ 95, 97. 99.)
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`22 (Id. ¶¶ 98-107.)
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`23 (July 1, 2021 Hearing Tr. at 65:7-66:2.)
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`in order to plausibly plead knowledge of infringement.24 Rather,
`they say that under the circumstances here, including the parties’
`history of communications, the lack of such a notice makes it
`implausible that Roche believed it was infringing.
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`Roche’s view that they lacked knowledge of infringement is
`certainly one reasonable inference that can be drawn from the facts
`alleged. Indeed, it might be the most reasonable inference. However,
`when deciding a motion to dismiss, I must draw all reasonable
`inferences in favor of the non-moving party. Here, that is Ravgen.
`And it is at least plausible, based on all of Ravgen’s allegations, to
`infer that the Roche Defendants had pre-suit knowledge that their
`activities infringed the ’277 and ’720 patents. Accordingly, I
`recommend that the Court deny the Roche Defendants’ motion to
`dismiss the induced infringement and willful infringement claims.
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`[FMI’s Motion]
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` now turn to FMI’s motion. Ravgen alleges post-suit willful
`infringement by FMI. FMI argues that it cannot be liable for post-
`suit willful infringement because it lacked pre-suit knowledge of the
`patent. Ravgen argues that its post-suit willful infringement claim is
`supported by FMI’s knowledge of infringement gained from
`Ravgen’s original complaint and a letter sent to FMI the day the
`complaint was filed.
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`As an initial matter, the parties debate whether Ravgen may
`maintain a claim for enhanced damages based on post-suit willful
`infringement if FMI first obtained knowledge of its infringement
`from the original complaint. I agree with Ravgen that it can.
`Accordingly, I do not address the relevance, if any, of the post-suit
`letter that Ravgen sent to FMI.
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`As many have acknowledged, courts, including courts
`within this district, disagree as to whether a pleading alleging post-
`suit willfulness must allege additional facts, beyond post-suit
`knowledge of the patent and continuing infringement despite that
`knowledge, from which a finder of fact could conclude that the
`accused infringer’s post-suit conduct was sufficiently egregious to
`support a willfulness finding.25 The parties in this case agree, and I
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` I
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`24 (Id. at 64:21-65:6.)
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`25 See ZapFraud, Inc. v. Barracuda Networks, Inc., No. 19-1687-CFC-CJB, 2021 WL
`1134687, at *2-3 & n.1, n.2 (D. Del. Mar. 24, 2021) (collecting cases and discussing the
`7
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`concur, that there is currently no binding authority from the Federal
`Circuit or the Supreme Court on this point.26 I have read and
`considered both lines of cases and I don’t have anything to add to
`the discourse that has not already been said.
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`Ultimately, I’m persuaded by the reasoning of Judge Bryson,
`sitting by designation in this district, in IOENGINE v. PayPal
`Holdings. Judge Bryson concluded that there was no requirement
`that a plaintiff plead pre-suit knowledge in order for a claim of
`willful infringement to survive a motion to dismiss.27 I agree with
`Judge Bryson that if a defendant is on notice of a patent and the
`allegations of the infringement as a result of [the] filing of a
`pleading, there is no reason it should not be answerable for willful
`infringement after that date if the patentee can prove the requisite
`level of culpable behavior during the post-suit period.28
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`Here the SAC pleads that the original complaint gave FMI
`knowledge of the patents and notice of its infringement.29 And FMI
`has not seriously contested that the original complaint contains
`sufficient factual allegations to put FMI on notice of what activity is
`alleged to constitute infringement. The SAC further pleads that FMI
`has continued to willfully infringe since the original complaint was
`filed. 30 I think that is enough to support its claim for post-suit willful
`infringement at this stage.31
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`
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`disagreements between district courts across the country and between “current and recent judges
`of this District”).
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`26 (July 1, 2021 Hearing Tr. at 18:11-17, 26:23-27:1.)
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`27 IOENGINE, 2019 WL 330515, at *7-8.
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`28 Id. at *7 n.4; cf. BlackBerry Ltd. v. Nokia Corp., No. 17-155-RGA, 2018 WL 1401330,
`at *3 (D. Del. Mar. 20, 2018) (“Since Plaintiff’s amended complaint adequately pleads direct
`infringement of the asserted patents by [Defendant], I find the amended complaint sufficient to
`place [Defendant] on notice of the asserted patents and its allegedly infringing activity. . . . This is
`sufficient to support a willful infringement claim at the motion to dismiss stage.”).
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`29 (D.I. 33 ¶¶ 116, 120, 146-47.)
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`30 (Id. ¶¶ 120, 147.)
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`31 I do not need to decide here whether the filing of an original complaint alleging post-suit
`willfulness is sufficient on its own to permit enhanced damages for post-suit willfulness.
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`That said, I note that I have been referred this case for all
`purposes through the case dispositive motion deadline, and I can and
`will recommend to Judge Andrews that he dismiss the post-suit
`willfulness claim at summary judgment if Ravgen’s evidence of
`post-suit conduct does not meet the standard for culpable behavior
`set down by the Supreme Court in Halo. I also can and will
`recommend to Judge Andrews that he grant summary judgment to
`FMI on the post-suit willfulness claim
`if I conclude that
`notwithstanding some evidence of willfulness, the Court should
`decline to exercise its discretion to enhance damages.
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` I
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` therefore recommend that the Court deny FMI’s motion to
`dismiss the post-suit willfulness claim.
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`III. CONCLUSION
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`For the reasons explained, I recommend that the Court DENY the pending motions to
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`dismiss the Second Amended Complaint. (D.I. 23, 25; see D.I. 32.) The Court should DENY the
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`motions to dismiss the original Complaint (D.I. 12, 15) as moot.
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`Dated: August 11, 2021
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`___________________________________
`THE HONORABLE JENNIFER L. HALL
`UNITED STATES MAGISTRATE JUDGE
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`9
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