Case 1:22-cv-00305-RGA Document 20 Filed 11/14/22 Page 1 of 10 PageID #: 204
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`IN THE UNITED STATES DISTRICT COURT
`FOR THE DISTRICT OF DELAWARE
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`(
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`ROBOCAST, INC.,
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`Plaintiff,
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`V.
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`NETFLIX, INC.
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`Defendant.
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`Civil Action No. 22-305-RGA
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`MEMORANDUM
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`· :eefore me is Defendant's motion to dismiss for failure to state a claim. (D.I. 11). The
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`motion has been fully briefed and I have considered the parties' briefing. (D.I. 12, 18, 19). For the
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`reasons set forth below, Defendant's motion is GRANTED in part and DENIED in part.
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`I.
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`BACKGROUND
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`This is a patent infringement action. On March 7, 2022, Plaintiff Robocast filed its
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`Complaint against Defendant Netflix, alleging direct, indirect, and willful infringement of U.S.
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`Patent Nos. 7,155,451 ("the ',A51 patent"), 8,606,819 ("the '819 patent"), and 8,965,932 ("the '932
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`patent'~) (collectively, "the asserted patents"). (D.I. 1). The asserted patents relate to methods of
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`automating the presentation of computer content. (Id. at 5).
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`II.
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`LEGAL STANDARD
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`When reviewing a motion to dismiss pursuant to Federal Rule of Civil Procedure 12(b)(6),
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`the Court must accept the complaint's factual allegations as true. See Bell At!. Corp. v. Twombly,
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`550 U.S. 544, 555-56 (2007). Rule 8(a) requires "a short and plain statement of the claim showing
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`that the pleader is entitled to relief." Id. at 555. The factual allegations do not have to be detailed,
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`but they must provide more than labels, conclusions, or a "formulaic recitation" of the claim
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`elements. Id. ("Factual allegations must be enough to raise a right to relief above the speculative
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`level . . . on the assumption that all the allegations in the complaint are true ( even if doubtful in
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`fact)."). Moreover, there must be sufficient factual matter to state a facially plausible claim to
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`relief. Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009). The facial plausibility standard is satisfied when
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`the complaint's factual content "allows the court to draw the reasonable inference that the
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`defendant is liable for the misconduct alleged." Id. ("Where a ,complaint pleads facts that are
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`merely consistent with a defendant's liability, it stops short of the line between possibility and
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`plausibility of entitlement to relief." ( cleaned up)).
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`III. DISCUSSION
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`A.
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`Direct Infringement
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`To satisfy the Iqbal/Twombly pleading standard in a patent case, "[s]pecific facts are not
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`necessary." Disc Disease Solutions Inc. v. VGH Solutions, Inc., 888 F.3d 1256, 1260 (Fed. Cir.
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`2018) (quoting Erickson v. Pardus, 551 U.S. 89, 93 (2007)). A complaint need only give the
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`defendant "fair notice of what the [infringement] claim is and the ground upon which it rests." Id.
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`Netflix contends that the Complaint has failed to provide fair notice because Robocast did
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`not show how the accused products and features infringed. (D.I. 12 at 4-5). I agree with Robocast
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`that no such showing is required. Disc Disease, the case Robocast relies upon for this point, is
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`instructive, There, the Federal Circuit reversed a district court's dismissal of the complaint on the
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`basis that the plaintiff had failed to "explain how Defendants' products infringe on any of Plaintiffs
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`claims" as the complaint "merely alleges that certain of Defendants' products 'meet each and every
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`element of at least one claim' of Plaintiffs patents." Disc Disease, 888 F.3d at 1260. The Federal
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`Circuit found that the plaintiffs allegations were sufficient under Iqbal/Twombly, explaining that
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`the complaint specifically identified the accused products and alleged that those products met each
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`and every element of at least one claim of the patents-in-suit. Id These disclosures and allegations
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`were enough to provide the defendants with "fair notice" of infringement of the asserted patents.
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`Id Just so here. In its Complaint, Robocast identifies the accused products and features-the
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`"Netflix Internet platform" and its "automated video playlists," such as its "Autoplay playlists,"
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`"Flixtape playlists," and "all other static or dynamic video playlists provided by Netflix" (D.I. 1 at
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`I
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`14 )-and alleges that the platform and its play lists satisfy each limitation of "at least claim 1" of
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`each of the asserted patents. (Id at 17, 19, 21).
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`Netflix argues that there are important facts in this case which distinguish it from Disc
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`Disease. (D.I. 19 at 2-4). It posits that, unlike the plaintiff in Disc Disease-which specifically
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`identified the accused products "by name and by attaching photos of the product packaging as
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`exhibits," 888 F.3d at i260-Robocast offers only "ambiguous" allegations (D.I. 19 at 2). Thus,
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`says Netflix, this case is less like Disc Disease and more like Promos Technologies, Inc. v. Samsung
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`Electronics Co., 2018 WL 5630585 (D. Del. Oct 31, 2018). (D.I. 12 at 10). There, I held that
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`allegations directed to unidentified products failed to meet the pleading standard because the
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`plaintiff alleged no facts articulating how those products infringed the patents-in-suit. Promos,
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`2018 WL 5630585 at *4 ("Where an accused infringing product is not identified by name, the
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`plaintiff must allege how the accused infringing class of products infringe the asserted patents.").
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`· Netflix urges a similar result here.
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`Netflix's reliance on Promos is inapposite. I held that the plaintiff's allegations failed to
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`provide fair notice because they were directed to a "broad class" of unnamed products. Id By
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`contrast, as explained above, Robocast specifically directed its allegations to the products and
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`features it alleges have infringed (the ''Netflix Internet platform" and its associated "automated
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`playlists"). This is enough for identification purposes; Robocast need not provide, as Net:flix
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`incorrectly insists that it must, "websites, images, or other support." (D.I. 19 at 2). Because
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`Robocast sufficiently identifies the accused products and features, it is not required to demonstrate
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`how those products and features infringe. Even if it were so required, however, Robocast's
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`Complaint would pass muster, as Robocast alleges facts articulating the ways in which Netflix's
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`technology infringes the asserted patents. 1 (See, e.g., D.I. 1 at 14-15).
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`Netflix also argues that in contrast to the "simple" mechanical device technology involved
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`in the asserted patents in Disc Disease, 888 F.3d at 1260, the complex software-based technology
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`at issue here suggests a higher threshold for providing fair notice. (D.I. 19 at 2). Netflix points to
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`Bot MB LLC v. Sony Corp. of Am., 4 F.4th 1342 (Fed. Cir. 2021), in which the Federal Circuit
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`recognized that "the compl~xity of the technology" is a factor in assessing the sufficiency of
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`allegations. Id at 1352-53. Whether the technology in this case can be classified as simple or
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`complex is immaterial here, as I find that other aspects of Robocast's Complaint-such as the
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`identifications and factual allegations described above-' provide the "fair notice" that lies at the
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`heart of the Rule 12(b)(6) inquiry.
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`1 Robocast has not specified in its Complaint that Net:flix's allegedly infringing activity occurred
`during the enforceable term of each of the asserted patents. Contrary to Netflix's assertions (e.g.,
`D.I. 12 at 11), this omission is not fatal to Robocast. Viewing the factual allegations in the
`Complaint in the "light most favorable to the plaintiff," Connelly v. Lane Constr. Corp., 809 F.3d
`780, 791 (3d Cir. 2016), I can reasonably infer that the allegedly infringing acts occurred during
`the relevant damages Reriod of each of the asserted patents (between March 7, 2016 and August
`9, 2020 for the '451 patent, and between March 7, 2016 and September 2, 2017 for the '819 and
`, '932 patents). (See D.I. 18 at 10).
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`For these reasons, I conclude that Robocast has sufficiently stated a claim for direct
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`infringement. I therefore DENY Netflix's motion to dismiss with respect to Robocast's claims of
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`direct infringement, with the exception of Robocast's vicarious liability claims, which I discuss
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`below.
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`B.
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`Vicarious Liability for Direct Infringement
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`All that Robocast alleges with respect to these claims is that Netflix is "vicariously liable
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`for ... direct infringement by exercising control or direction over the practicing ... of at least claim
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`1 of the '451 patent ... conducted by an as yet unknown third party pursuant to a principal-agent
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`relationship, a contractual relationship, a joint enterprise, or other like arrangement." (D.I. 1 at 17).
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`As a threshold matter, contrary to Robocast's assertions (D.I. 18 at 11 ), it is not "premature"
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`to decide issues of vicarious liability for infringement under Rule 12(b )( 6). Courts routinely decide
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`the sufficiency of these sorts of claims at the motion to disi;niss stage. See, e.g., Lyda v. CBS Corp.,
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`838 F.3d 1331, 1339 (Fed. Cir. 2016) Goint infringement). Robocast's argument-that such
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`decisions are generally premature "because they raise questions regarding claim con~truction and
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`the infringement analysis necessarily based thereon" (D.I. 18 at 11 )-is based on a misreading of
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`Nalco v. Chem-Mod, LLC, 883 F.3d 1337 (Fed. Cir. 2018). The Nalco court declined to resolve
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`the plaintiff's claims at the R~le 12(b )(6) stage in part because the defendanp s objections to those
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`claims "boil[ed] down to objections to [Plaintiff's] proposed claim construction." Id at 1349. Here,
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`the parties have neither identified any claim construction issues nor advanced arguments dependent
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`on such issues. I will therefore proceed to consider the sufficiency ofRobocast's vicarious liability
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`claims.
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`A claim of direct infringement based on vicarious liability requires "pleading facts
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`sufficient to allow a reasonable inference that all steps of the claimed method are performed and
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`either· (1) one party exercises the requisite 'direction or control' over the others' performance or
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`(2) the actors form a joint enterprise such that performance of every step is attributable to the
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`controlling party." Lyda, 83 8 F.3d at 1339 (internal citations omitted). Robocast, however, offers
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`no factual basis for its claim. Indeed, the Complaint fails to identify any third parties at all, 2 let
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`alone allege facts supporting a relationship between those parties and Netflix.
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`For these reasons, I conclude that Robocast fails to allege sufficient facts to state a claim
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`for vicarious liability. I therefore GRANT Netflix's motion to dismiss Robocast's vicarious
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`liability claims.
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`C.
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`Indirect and Willful Infringement
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`Indirect infringement "requires knowledge of the patent in suit and knowledge of patent
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`infringement." Cammi/ USA, LLC v. Cisco Systems, Inc., 575 U.S. 632, 639 (2015) (inducement
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`and contributory infringement). A determination of willful infringement requires a finding of
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`"deliberate or intentional" infringement. SRI Int'!, Inc. v. Cisco Sys., Inc., 14 F.4th 1323, 1330
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`(Fed. Cir. 2021). The complaint must allege that the accused infringer knew of the asserted patent,
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`and knowingly or intentionally infringed the patent after acquiring that knowledge. Eko Brands,
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`LLC v. Adrian Rivera Maynez Enters., Inc., 946 F.3d 1367, 1378-79 (Fed. Cir. 2020). With respect
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`to both indirect and willful infringement claims, a plaintiff can meet the knowledge requirement
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`2 In its Opposition Brief, Robocast argues that it has identified "registered account holders" as the
`relevant third parties. (D.I. 18 at 12). Although Robocast identifies "registered account holders" in
`its Complaint, it appears to do so with respect to its indirect infringement claims alone. (D.I. 1 at
`15-16, 18).
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`by showing "willful blindness," which "requires the patentee to show not only that the accused
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`subjectively believed that there was a high risk of infringement, but also that the accused took
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`deliberate actions to avoid confirming infringement." Unwired Planet, LLC v. Apple Inc., 829 F.3d
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`1353, 1364 (Fed. Cir. 2016)(inducement).
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`Netflix contends that Robocast has failed to state claims of indirect and willful
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`infringement. because (1) Robocast fails to plausibly allege pre-suit knowledge of the asserted
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`patents; and (2) Robocast fails to plausibly allege that Netflix had knowledge of or intent to cause
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`infringement. (D.I. 12 at 13). Because I conclude that Netflix's first argument prevails, I need not
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`consider its second argument.
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`Robocast did not provide Netflix with actual notice of the asserted patents. (D.I. 12 at 4).
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`Nevertheless, Robocast alleges several distinct ways in which Netflix obtained pre-suit knowledge.
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`All are insufficient.
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`First, Robocast alleges that Netflix had notice of the '451 patent based on prior litigation
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`between Microsoft and Robocast regarding that patent. (D.I. 1 at 12-14). That litigation concluded
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`in 2014 and resulted in Microsoft licensing each of the patents-in-suit. (Id at 13); see Robocast,
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`Inc. v. Microsoft Corp., Case No. 10-1055 (D. Del. Dec. 06, 2010). Robocast's theory centers upon
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`two individuals, both affiliated with N etflix, who were affiliated with Microsoft while the
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`Microsoft case was pending: Mr. Reed Hastings, Netflix founder, chairman, and CEO, who served
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`on the Microsoft board from 2007 until 2012, and Mr. Brad Smith, Netflix board member since
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`2015, who served as Microsoft's general counsel starting in 2002 and held that positiol'1: during the
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`Microsoft litigation. (!d ). Robocast alleges that by holding these roles at Microsoft, Mr. Smith and
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`Mr. Hastings obtained knowledge of the '4 51 patent. (Id) It further alleges that N etflix, by virtue
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`of its relationship with these individuals, knew, should have known, or was willfully blind as to
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`the existence of the '451 patent as well. (Id.).
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`This theory is speculative. Nowhere in the Complaint does Robocast allege that Mr. Smith
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`or Mr. Hastings were involved in the Microsoft litigation such that it is plausible that they might
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`have learned of the '451 patent; Robocast simply assumes that the role of general counsel and
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`I
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`board member granted them that knowledge. Even if this assumption were correct, Robocast
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`.alleges no specific facts suggesting that the knowledge of Mr. Smith and Mr. Hastings can
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`plausibly be imputed to N etflix. 3 As N etflix notes (D .I. 19 at 9 ), courts in this district have rejected
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`similar imputation theories. See ReefEdge Networks, LLC v. Juniper Networks, Inc., 29 F. Supp.
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`3d 455, 458-59 (D. Del. 2014) (insufficient pleading of pre-suit knowledge where plaintiff failed
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`to allege specific facts "linking knowledge [defendant's counsel] may have acquired from her work
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`at [third-party company and former patent owner] to her work at [defendant corporation]"). I do
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`so again here.
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`Second, Robocast alleges that Netflix obtained knowledge of the '451 patent in 2016, when
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`Netflix became a licensee of two patent portfolios that include patents or patent applications with
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`citations to the '451 patent. (D.I. 1 at 13). Robocast, however, fails to sufficiently distinguish cases
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`in which this court has dismissed a plaintiff's allegations of pre-suit knowledge based on similar
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`licensing agreements with a third party. See, e.g., EON Corp. IP Holdings LLC v. FLO TV Inc.,
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`3 Robocast contends that Netflix's argument to this effect, as well as its argument regarding the
`sufficiency of Robocast's allegations with respect to Mr. Smith's and Mr. Hastings's roles at
`Microsoft, constitute a disputation of the facts and are therefore improper to consider under Rule
`12(b)(6). (D.I. 18 at 14-15). I disagree. As Netflix rightly notes (D.I. 18 at 7-8), its arguments go ,
`to the plausibility ofRobocast's factual allegations and are therefore relevant to the Rule 12(b)(6)
`mqmry.
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`802 F. Supp. 2d 527 (D. Del. 2011). In EON, the court held that one such licensing agreement(cid:173)
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`in which the asserted pa~ent was "one of fourteen" and "one of ninety-eight" patents ·cited as prior
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`art on the face of the patents in the license agreements---established "too tenuous a link" between
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`the asserted patent and defendants to sustain an allegation of knowledge. Id. at 533. Here, the
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`alleged link is similarly attenuated, and without further information about the number of patents
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`or patent applications included in the patent portfolios at issue-which Robocast does not
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`provide-I am unable to conclude that Robocast has plausibly alleged pre-suit knowledge on this
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`basis.
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`Robocast does not allege specific facts regarding Netflix's pre-suit knowledge of the '819
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`and '932 patents. Neither patent was involved in the Microsoft case. The '819 patent was issued
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`in December of 2013, while the case was pending, but it was never asserted in that litigation; the
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`'932 patent was issued in February of 2015, after the case had concluded. (See D.I. 1 at 3).
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`Nevertheless, Robocast maintains that because these patents are continuations of the '451 parent,
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`its allegations regarding Netflix's knowledge of the parent patent are sufficient to allege
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`knowledge of the child patents as of the date of their issuance. (Id. at 3-4, 12-14; D.I. 18 at 17).
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`Because I find that Robocast' s allegations with respect to the '451 patent are. insufficient, I need
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`not address its arguments with respect to the other two patents.
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`I conclude that Robocast fails to allege sufficient facts to state a claim for indirect and
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`willful infringement. I therefore GRANT Netflix's motion to dismiss Robocast's indirect and
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`willful infringement claims.
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`IV.
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`CONCLUSION
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`For the reasons stated above, I will GRANT in part and DENY in part Netflix's motion to
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`dismiss. (D.I. 11). Robocast's claims for vicarious liability for direct infringement, indirect
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`infringement, and willful infringement are DISMISSED without prejudice. Per Robocast's request
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`(D.I. 18 at 20), I grant Robocast leave to amend its Complaint within three weeks.
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`An appropriate order will follow.
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