Case 1:23-cv-00121-RGA Document 28 Filed 11/16/23 Page 1 of 9 PageID #: 1654
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`IN THE UNITED STATES DISTRICT COURT
`FOR THE DISTRICT OF DELAWARE
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`Civil Action No. 23-121-RGA
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`LITL LLC,
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`Plaintiff,
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`V.
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`DELL TECHNOLOGIES INC. and DELL
`INC.,
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`Defendant.
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`MICROSOFT CORPORATION,
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`Intervenor-Plaintiff,
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`V.
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`LITL LLC,
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`Intervenor-Defendant.
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`MEMORANDUM ORDER
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`Before me is Defendants' Motion to Dismiss Plaintiff's Indirect and Willful Infringement
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`Claims in its First Amended Complaint. (D.I. 19). I have considered the parties' briefing. (D.I.
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`20, 21, 22).
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`I.
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`BACKGROUND
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`In the First Amended Complaint ("F AC"), Plaintiff LiTL alleges Defendants Dell
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`Technologies Inc. ("Dell Technologies") and Dell Inc. ("Dell") infringe one or more claims of
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`U.S. Patent Nos. 8,289,688 ("the ' 688 patent"); 8,624,844 ("the '844 patent"); 9,563,229 ("the
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`'229 patent "); 10,289,1 54 ("the '154 patent"); 9,003 ,315 ("the '315 patent"); 9,880,715 ("the
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`'715 patent"); 10,564,818 ("the ' 818 patent"); and 8,612,888 ("the ' 888 patent") (collectively,
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`Case 1:23-cv-00121-RGA Document 28 Filed 11/16/23 Page 2 of 9 PageID #: 1655
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`"the Asserted Patents."). (D.I. 1812). The Asserted Patents relate to computing devices that
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`can be used in multiple display modes. (Id. 1 18). Defendants move to dismiss the F AC for
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`failure to state a claim of (1) pre-suit induced infringement under the '688 and ' 844 patents and
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`(2) willful infringement under the '688 and ' 844 patents. (D.I. 19; D.I. 20 at 1).
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`II.
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`LEGAL STANDARD
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`Rule 8 requires a complainant to provide "a short and plain statement of the claim
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`showing that the pleader is entitled to relief." FED. R. Crv. P. 8(a)(2). Rule 12(b)(6) allows the
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`accused party to bring a motion to dismiss the claim for failing to meet this standard. A Rule
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`12(b)(6) motion may be granted only if, accepting the well-pleaded allegations in the complaint
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`as true and viewing them in the light most favorable to the complainant, a court concludes that
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`those allegations "could not raise a claim of entitlement to relief." Bell At!. Corp. v. Twombly,
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`550 U.S. 544, 558 (2007).
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`The factual allegations do not have to be detailed, but they must provide more than
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`labels, conclusions, or a "formulaic recitation" of the claim elements. Id. at 555 ("Factual
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`allegations must be enough to raise a right to relief above the speculative level ... on the
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`assumption that all the allegations in the complaint are true (even if doubtful in fact). ").
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`Moreover, there must be sufficient factual matter to state a facially plausible claim to relief.
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`Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009). The facial plausibility standard is satisfied when the
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`complaint's factual content "allows the court to draw the reasonable inference that the defendant
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`is liable for the misconduct alleged." Id. ("Where a complaint pleads facts that are merely
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`consistent with a defendant's liability, it stops short of the line between possibility and
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`plausibility of entitlement to relief." (internal quotation marks omitted)).
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`Case 1:23-cv-00121-RGA Document 28 Filed 11/16/23 Page 3 of 9 PageID #: 1656
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`III. DISCUSSION
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`This lawsuit is one in a series of patent infringement actions related to the Asserted
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`Patents, including LiTL's now dismissed lawsuit against Lenovo. See LiTL LLC v. Lenovo
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`(United States), Inc., C.A. No. 20-689-RGA, D.I. 119 (D. Del. Feb. 3, 2023). Lenovo involved
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`similar arguments to the ones now raised by Defendants.
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`A. Pre-Suit Induced Infringement
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`In Lenovo, I set forth the relevant law. 2022 WL 610739, at *6-10 (D. Del. Jan. 21,
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`2022). "(T]o prove induced infringement, a plaintiff must prove the following elements: ( 1)
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`direct infringement, (2) knowing inducement of infringement, and (3) specific intent to
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`encourage another's infringement." Id. at 7. "To prove the second element, ' knowing
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`inducement of infringement,' it logically follows that a plaintiff must prove the following sub(cid:173)
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`elements: (a) knowledge of the patent(s); (b) knowledge of the direct infringement of the
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`patent(s); (c) action(s) taken to induce infringement; (d) knowledge the action(s) would induce
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`the direct infringement; and ( e) some causal link between the inducing acts and the direct
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`infringement." Id. ( citations omitted). "At the pleading stage, a plaintiff must allege facts that
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`would allow a factfinder plausibly to conclude each of these elements and sub-elements is
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`satisfied." Id.
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`Defendants argue that the F AC fails to plausibly allege Defendants had pre-suit
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`knowledge of the ' 688 and ' 844 patents or pre-suit knowledge of infringement of those patents.
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`(D.I. 20 at 8-18). For its pre-suit induced infringement claims, LiTL must allege sufficient facts
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`to support an inference that Defendants had both knowledge of the asserted patents and
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`knowledge of infringement prior to the commencement of this suit. Defendants do not challenge
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`LiTL's pleading of the other elements.
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`Case 1:23-cv-00121-RGA Document 28 Filed 11/16/23 Page 4 of 9 PageID #: 1657
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`1. Pre-Suit Knowledge of the Patents
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`a. Prosecution of the Dell Products Patents
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`LiTL alleges that Dell Products, L.P. ("Dell Products") is a wholly-owned subsidiary of
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`Dell that holds the majority of Defendants' patents and patent applications. (D.I. 18 ,r,r 53-54).
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`The F AC alleges facts showing that Dell Products and Dell have overlapping officers and patent
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`attorneys and that Dell and its patent attorneys routinely prosecute Dell Products patent
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`applications, including the applications discussed in the FAC. (See id. ,r,r 55-69; 76-99, 133-
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`54).
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`Defendants submit that outside counsel, rather than the two in-house Dell attorneys listed
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`on the power of attorney, handled the substantive prosecution of the referenced patent
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`applications. (D.I. 20 at 6, 10). I reject Defendants' implication that they cannot be held
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`accountable for patent prosecution handled by outside counsel. See id. It is reasonable to infer
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`that Dell's in-house counsel is aware of actions taken on Dell's behalf by the external law firm
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`that Dell hired. Failure to be so aware would raise questions about willful blindness. See
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`Global-Tech Appliances, Inc. v. SEB SA., 563 U.S. 754, 769 (2011) ("The defendant must
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`subjectively believe that there is a high probability that a fact exists and ... the defendant must
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`take deliberate actions to avoid learning of that fact. "). I therefore find it proper to impute
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`knowledge gained during prosecution of the Dell Products patent applications to Defendants.
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`b. The '688 Patent
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`Li TL has alleged sufficient facts to support a plausible inference that Defendants had pre(cid:173)
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`suit knowledge of the '688 patent.
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`The '688 patent is cited on the face of four Dell Products patents. (D .I. 18 ,r,r 77, 82, 87,
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`91). The published version of the patent application that issued as the '688 patent ("the '832
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`publication") is cited on the face of one Dell Products patent. (Id. ,r 95). Dell Products identified
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`the ' 688 patent in three Information Disclosure Statements it submitted to the USPTO. (Id. ,r,r
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`75 , 86, 90). The USPTO examiner cited the ' 688 patent in a rejection of one Dell Products
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`patent application and the ' 832 publication in a rejection of another. (Id. ,r 81 ; id. ,r 94).
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`Dell Inc. has cited to the ' 688 patent four times and to the ' 832 publication two times,
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`and LiTL points to 140 citations to the '688 patent and 168 citations to the ' 832 publication in
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`patents and publications by "major players" in the personal computing industry to show the '688
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`patent is well-known in the industry. (Id. ,r,r 97- 98). These statistics adequately support the
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`conclusion. See Lenovo, 2022 WL 610739, at *6-10.
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`Taken together, these allegations plausibly support an inference that Defendants had pre(cid:173)
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`suit knowledge of the ' 688 patent.
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`c. The '844 Patent
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`Li TL has alleged sufficient facts to support a plausible inference that Defendants had pre(cid:173)
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`suit knowledge of the '844 patent.
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`The ' 844 patent is cited on the face of one Dell Products patent. (D.I. 18 ,r 138). The
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`published version of the patent application that issued as the '844 patent ("the '012 publication")
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`is cited on the face of two Dell Products patents. (Id. 18 ,r,r 144, 151 ). The USPTO examiner
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`cited the '012 publication in rejections of three different Dell Products patent applications. (Id.
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`,r,r 134, 135, 143, 149). The file wrapper of one Dell Products patent application indicates the
`examiner identified the ' 844 patent in a prior art search. (Id. ,r 137).
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`Dell Inc. has cited to the ' 844 patent two times and to the ' 012 publication two times, and
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`LiTL points to fifty-one citations to the ' 844 patent and sixty-nine citations to the ' 012
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`Case 1:23-cv-00121-RGA Document 28 Filed 11/16/23 Page 6 of 9 PageID #: 1659
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`publication by "major players" in the personal computing industry to show the ' 844 patent is
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`well-known in the industry. (Id. ,r,r 151- 52). These statistics adequately support the conclusion.
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`Taken together, these allegations plausibly support an inference that Defendants had pre(cid:173)
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`suit knowledge of the ' 844 patent.
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`2. Pre-Suit Knowledge of Infringement
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`LiTL has alleged sufficient facts to support a plausible inference that Defendants had pre(cid:173)
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`suit knowledge of infringement of the ' 688 and ' 844 patents.
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`The F AC alleges that, since at least 2017, Defendants knew that the accused products
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`would infringe at least claim 19 of the '688 patent and claims 10 and 17 of the ' 844 patent when
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`used by customers and explains how those claims would be infringed. (Id. ,r,r 100-05; id. ,r,r
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`155-60; see also id. ,r,r 33--44). The F AC states that Defendants provided customers with
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`literature instructing customers how to use the accused products in a manner that infringes the
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`' 688 and ' 844 patents. (Id. ,r,r 100-03, 108; id. ,r,r 155-58, 163). These allegations plausibly
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`support an inference that Defendants had pre-suit knowledge of infringement of the ' 688 and the
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`' 844 patents. See Novozymes N. Am. , Inc. v. Danisco US Inc., 2020 WL 12895027, at *3 (D.
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`Del. Feb. 12, 2020); Elm 3DS Innovations, LLC v. Samsung Elecs. Co., 2015 WL 5725768, at *4
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`(D. Del. Sept. 29, 2015), report and recommendation adopted, 2016 WL 1274812 (D. Del. Mar.
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`31 , 2016).
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`Defendants maintain that the F AC "must demonstrate a link between the various
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`allegations of knowledge of the patents-in-suit and the allegations that the risks of infringement
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`were either known or were so obvious that they should have been known." (D.I. 22 at 9 (citing
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`MONEC Holding AG v. Motorola Mobility, Inc. , 897 F. Supp. 2d 225 , 236 (D. Del. 2012)
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`(cleaned up)). Defendants insist LiTL fails this pleading requirement because "LiTL's complaint
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`is devoid of any allegations that [the patent attomeys]--or anyone at Dell-had both pre-suit
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`knowledge of the patents and the knowledge that the patents were being infringed by Dell' s
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`customers." (D .I.19 at 17-18; D .I. 22 at 10). Defendants' argument fails for several reasons.
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`First, Defendants rely on a line of willful infringement cases applying the Seagate
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`standard. (See D.I. 22 at 9-10 (citing Mayne Pharma Int'! PTY Ltd. v. Merck & Co., 2015 WL
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`7833206, at *5 (D. Del. Dec. 3, 2015); Courtesy Prod. L.L.C. v. Hamilton Beach Brands, Inc.,
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`2015 WL 6159113, at *4 (D. Del. Oct. 20, 2015); ReefEdge Networks, LLC v. Juniper Networks,
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`Inc. , 29 F. Supp. 3d 455,458 (D. Del. 2014); McRo, Inc. v. Rockstar Games, Inc., 2014 WL
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`1051527, at *7 (D. Del. Mar. 17, 2014); MO NEC, 897 F. Supp. 2d at 236)). Part of the "link"
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`pleading requirement relies on the second prong of the Seagate test. See In re Seagate Tech. ,
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`LLC, 497 F.3d 1360, 1371 (Fed. Cir. 2007) ("If this threshold objective standard is satisfied, the
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`patentee must also demonstrate that this objectively-defined risk [ of infringement] ... was either
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`known or so obvious that it should have been known to the accused infringer."). Seagate has
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`since been abrogated. See Halo Elecs., Inc. v. Pulse Elecs., Inc., 579 U.S. 93 , 104-10 (2016).
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`There is some reason to doubt whether the holdings of this line of cases, which relies on the now
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`defunct Seagate test, is still good law.
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`Second, none of the cases cited by Defendants stand for the proposition that Li TL must
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`identify an individual employee that possesses both pre-suit knowledge of the patents and pre(cid:173)
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`suit knowledge of infringement of those patents. St. Clair Intellectual Property Consultants, Inc.
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`v. Hewlett-Packard Co. , cited in all Defendants' referenced cases, instead supports the opposite
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`conclusion. 2012 WL 1134318, at *3 (D. Del. Mar. 28, 2012) ("Although HP asserts that the
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`Proposed Complaint fails to identify which specific individuals at HP had knowledge of the
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`Case 1:23-cv-00121-RGA Document 28 Filed 11/16/23 Page 8 of 9 PageID #: 1661
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`potential risk of infringement, this is not required at the pleading stage; rather, this may be
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`developed through discovery.").
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`Third, I would decline to follow a line of district court cases that did require complaints
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`to pinpoint one person at a company that had both types of knowledge. 1 It is unreasonable to
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`require plaintiffs to plead with such a level of specificity given the difficulty in obtaining
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`information, prior to discovery, regarding a defendant company' s internal workings.
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`Defendants' proposed rule would make it next to impossible to allege knowledge of infringement
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`based on information gained during patent prosecution.
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`For all these reasons, I decline to adopt a rule requiring LiTL to demonstrate in its
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`complaint a "link" between knowledge of the patents and knowledge of infringement.
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`B. Willful Infringement
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`"Under Halo , the concept of ' willfulness' requires .. . no more than deliberate or
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`intentional infringement." Eko Brands, LLC v. Adrian Rivera Maynez Enters., Inc., 946 F.3d
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`1367, 1378 (Fed. Cir. 2020) (citing Halo , 579 U.S. at 105).
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`Defendants' Motion to Dismiss the willful infringement claims under the ' 688 patent and
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`the ' 844 patent relies on their argument that they lacked pre-suit knowledge of the patents and
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`pre-suit knowledge of infringement. (D.I. 20 at 7-18 ; D.I. 22 at 2-10). LiTL has plausibly
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`alleged that Defendants had pre-suit knowledge of the '688 and ' 844 patents. LiTL has plausibly
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`1 I leave for another day the issue of whether a plaintiff raising an induced infringement claim
`would ever have to prove a single individual had both types of knowledge. If an individual was
`the defendant, clearly that person would have to have both types. But a corporate defendant
`might be understood, through agency law, to have the knowledge of all its employees operating
`in the regular performance of their duties. See RESTATEMENT (SECOND) OF AGENCY§ 272
`(1958) ("[T]he liability of a principal is affected by the knowledge of an agent concerning a
`matter as to which he acts within his power to bind the principal or upon which it is his duty to
`give the principal information.").
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`Case 1:23-cv-00121-RGA Document 28 Filed 11/16/23 Page 9 of 9 PageID #: 1662
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`alleged that Defendants had pre-suit knowledge of infringement of the ' 688 and' 844 patents. At
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`the motion to dismiss stage, that is sufficient to support a claim of willful infringement. See
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`Lenovo, 2022 WL 610739, at* 10.
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`IV. CONCLUSION
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`For the foregoing reasons, Defendants' Motion to Dismiss is DENIED.
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`IT IS SO ORDERED.
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`Entered this ~
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`~
`ay of November, 2023
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