Case 2:22-md-03034-TGB ECF No. 53, PageID.2119 Filed 08/10/22 Page 1 of 22
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`
`
`UNITED STATES DISTRICT COURT
`EASTERN DISTRICT OF MICHIGAN
`SOUTHERN DIVISION
`
`
`MDL Case No.: 2:22-md-3034
`
`
`
`E.D. Mich. Case No. 2:22-cv-11404
`
`Hon. Terrence G. Berg
`
`IN RE: NEO WIRELESS, LLC
`--------------------
`
`NEO WIRELESS LLC,
`
`
`Plaintiff,
`
`
`v.
`
`VOLKSWAGEN GROUP OF
`AMERICA, INC. & VOLKSWAGEN
`GROUP OF AMERICA
`CHATTANOOGA OPERATIONS,
`LLC,
`
` Defendants.
`
`
`DEFENDANTS VOLKSWAGEN GROUP OF AMERICA, INC. AND
`VOLKSWAGEN GROUP OF AMERICA CHATTANOOGA OPERATIONS,
`LLC’S MOTION TO DISMISS PURSUANT TO FEDERAL RULE
`OF CIVIL PROCEDURE 12(B)(6)
`
`
`Defendants Volkswagen Group of America, Inc. and Volkswagen Group of
`
`America Chattanooga Operations, LLC (collectively “Volkswagen”), by their
`
`attorneys, move the Court pursuant to Federal Rule of Civil Procedure 12(b)(6) to
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`dismiss Plaintiff’s allegations of willful infringement from Plaintiff’s Amended
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`Complaint on the ground that NEO has failed to state a claim for willful
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`infringement. In support, Volkswagen relies on the accompanying brief.
`
`
`
`

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`Case 2:22-md-03034-TGB ECF No. 53, PageID.2120 Filed 08/10/22 Page 2 of 22
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`Pursuant to E.D. Mich. LR 7.1(a), counsel for Defendants conferred with
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`opposing counsel regarding the relief sought in this motion and the motion to dismiss
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`concurrently filed by the Honda and Nissan Defendants (ECF No. 50). No agreement
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`was reached.
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`WHEREFORE, Volkswagen respectfully requests that the Court grant its
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`motion and dismiss the Amended Complaint’s allegations of willful infringement
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`with prejudice pursuant to Rule 12(b).
`
`Dated: August 10, 2022
`
`
`
`
`
`Respectfully submitted,
`
`By: /s/Daniel E. Yonan
`Susan M. McKeever
`Justin B. Weiner
`BUSH SEYFERTH PLLC
`100 West Big Beaver Road
`Suite 400
`Troy, MI 48084
`(248) 822-7851
`mckeever@bsplaw.com
`weiner@bsplaw.com
`
`Daniel E. Yonan
`Deirdre M. Wells
`Ryan C. Richardson
`William H. Milliken
`Anna G. Phillips
`STERNE, KESSLER, GOLDSTEIN & FOX
`P.L.L.C
`1100 New York Avenue NW
`Suite 600
`Washington, DC 20005
`(202) 371-2600
`dyonan@sternekessler.com
`dwells@sternekessler.com
`
`
`
`

`

`Case 2:22-md-03034-TGB ECF No. 53, PageID.2121 Filed 08/10/22 Page 3 of 22
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`rrichardson@sternekessler.com
`wmilliken@sternekessler.com
`aphillips@sternekessler.com
`
`Counsel for Defendants Volkswagen
`Group of America, Inc. and
`Volkswagen Group of America
`Chattanooga Operations, Inc.
`
`
`
`
`
`

`

`Case 2:22-md-03034-TGB ECF No. 53, PageID.2122 Filed 08/10/22 Page 4 of 22
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`
`
`UNITED STATES DISTRICT COURT
`EASTERN DISTRICT OF MICHIGAN
`SOUTHERN DIVISION
`
`
`MDL Case No.: 2:22-md-3034
`
`
`
`E.D. Mich. Case No. 2:22-cv-11404
`
`Hon. Terrence G. Berg
`
`IN RE: NEO WIRELESS, LLC
`--------------------
`
`NEO WIRELESS LLC,
`
`
`Plaintiff,
`
`
`v.
`
`VOLKSWAGEN GROUP OF
`AMERICA, INC. & VOLKSWAGEN
`GROUP OF AMERICA
`CHATTANOOGA OPERATIONS,
`LLC,
`
` Defendants.
`
`
`VOLKSWAGEN’S BRIEF IN SUPPORT OF THEIR
`MOTION TO DISMISS PURSUANT TO RULE 12(b)(6)
`
`
`
`
`
`

`

`Case 2:22-md-03034-TGB ECF No. 53, PageID.2123 Filed 08/10/22 Page 5 of 22
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`TABLE OF CONTENTS
`
`TABLE OF AUTHORITIES .................................. Error! Bookmark not defined.
`STATEMENT OF QUESTION PRESENTED ....................................................... iv
`CONTROLLING OR MOST APPROPRIATE AUTHORITY ............................... v
`INTRODUCTION .................................................................................................... 1
`I.
`APPLICABLE LAW ...................................................................................... 1
`II.
`ARGUMENT .................................................................................................. 2
`A. NEO fails to plausibly allege that Volkswagen had
`knowledge of the asserted patents before the lawsuit was
`filed. ....................................................................................................... 2
`NEO fails to allege facts showing that Volkswagen had the
`specific intent required to willfully infringe. ........................................ 5
`NEO fails to allege facts plausibly suggesting that
`Volkswagen engaged in egregious behavior. ........................................ 8
`III. CONCLUSION ............................................................................................. 11
`
`B.
`
`C.
`
`
`
`
`
`
`
`
`i
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`

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`Case 2:22-md-03034-TGB ECF No. 53, PageID.2124 Filed 08/10/22 Page 6 of 22
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`
`
`TABLE OF AUTHORITIES
`
` Page(s)
`
`Cases
`Addiction & Detoxification Institute, L.L.C. v. Aharonov,
`2015 WL 631959 (E.D. Mich. Feb. 13, 2015) ...................................................... 5
`Ashcroft v. Iqbal,
`556 U.S. 662 (2009) .......................................................................................... v, 1
`Bushnell Hawthorne, LLC v. Cisco Sys., Inc.,
`2019 WL 8107921 (E.D. Va. Feb. 26, 2019) ....................................................... 8
`Cellcontrol, Inc. v. Mill Mountain Cap., LLC,
`2022 WL 598752 (W.D. Va. Feb. 28, 2022) .................................................. 9, 10
`Dynamic Data Techs., LLC v. Amlogic Holdings Ltd.,
`2020 WL 4365809 (D. Del. July 30, 2020) .......................................................... 5
`Dynamic Data Techs. v. Google LLC,
`2020 WL 1285852 (D. Del. Mar. 18, 2020) ......................................................... 3
`FluorDx LLC v. Quidel Corp.,
`2020 WL 4464475 (S.D. Cal. Aug. 4, 2020) .......................................... 6, 8, 9, 10
`Fortinet, Inc. v. Forescout Techs., Inc.,
`543 F. Supp. 3d 814 (N.D. Cal. 2021) ............................................................ 9, 10
`Fractus, S.A. v. TCL Corp.,
`2021 WL 2483155 (E.D. Tex. June 2, 2021) ..................................................... 10
`Google LLC v. Princeps Interface Techs. LLC,
`2020 WL 1478352 (N.D. Cal. Mar. 26, 2020) ..................................................... 9
`Halo Elecs., Inc. v. Pulse Elecs., Inc.,
`579 U.S. 93 (2016) ............................................................................................ v, 8
`Hypermedia Navigation LLC v. Google LLC,
`2019 WL 1455336 (N.D. Cal. Apr. 2, 2019) .................................................... v, 7
`iFIT Inc. v. Peloton Interactive, Inc.,
`2022 WL 609605 (D. Del. Jan. 28, 2022) ............................................................ 5
`Malvern Panalytical Ltd v. Ta Instruments-Waters LLC,
`2021 WL 3856145 (D. Del. Aug. 27, 2021) ......................................................... 6
`Mentor Graphics Corp. v. EVE-USA, Inc.,
`851 F.3d 1275 (Fed. Cir. 2017) ............................................................................ 4
`
`
`
`- ii -
`
`

`

`Case 2:22-md-03034-TGB ECF No. 53, PageID.2125 Filed 08/10/22 Page 7 of 22
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`
`
`Michigan Motor Techs. LLC v. Volkswagen Aktiengesellschaft,
`472 F. Supp. 3d 377 (E.D. Mich. 2020) ......................................................passim
`PLC Trenching Co. v. IM Servs. Grp.,
`2021 WL 3234590 (D. Idaho July 29, 2021) .................................................... 6, 9
`Smith v. Extreme Performance 1, LLC,
`2020 WL 5092913 (C.D. Cal. June 23, 2020) ...................................................... 9
`Sonos, Inc. v. Google LLC,
`2022 WL 799367 (N.D. Cal. Mar. 16, 2022) ....................................................... 7
`Varian Med. Sys., Inc. v. Elekta AB,
`2016 WL 3748772 (D. Del. July 12, 2016) .......................................................... 3
`VLSI Tech. LLC v. Intel Corp.,
`2019 WL 1349468 (D. Del. Mar. 26, 2019) ......................................................... 5
`Xiamen Baby Pretty Prod. Co. v. Talbot’s Pharms. Fam. Prod., LLC,
`2022 WL 509336 (W.D. La. Feb. 18, 2022) ........................................................ 9
`Other Authorities
`Fed. R. Civ. P. 8 ..................................................................................................... v, 1
`Fed. R. Civ. P. 12(b)(6) ...................................................................................... v, 1, 9
`
`
`
`
`
`
`
`
`- iii -
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`

`

`Case 2:22-md-03034-TGB ECF No. 53, PageID.2126 Filed 08/10/22 Page 8 of 22
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`
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`1.
`
`STATEMENT OF QUESTION PRESENTED
`To state a claim for willful patent infringement, a complaint must plead facts
`plausibly suggesting that (i) the defendant had knowledge of the asserted
`patent; (ii) the defendant specifically intended to infringe the patent or
`willfully blinded itself to such infringement; and (iii) the defendant engaged
`in egregious behavior. Should NEO’s claims of willful infringement be
`dismissed, where NEO has failed to allege facts plausibly suggesting any—
`much less all—of these elements?
`
`Answer: Yes.
`
`
`
`
`
`
`- iv -
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`

`

`Case 2:22-md-03034-TGB ECF No. 53, PageID.2127 Filed 08/10/22 Page 9 of 22
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`
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`CONTROLLING OR MOST APPROPRIATE AUTHORITY
`Ashcroft v. Iqbal, 556 U.S. 662 (2009)
`
`Halo Elecs., Inc. v. Pulse Elecs., Inc., 579 U.S. 93, 103 (2016)
`
`Hypermedia Navigation LLC v. Google LLC, 2019 WL 1455336 (N.D. Cal. Apr. 2,
`2019)
`
`Michigan Motor Techs. LLC v. Volkswagen Aktiengesellschaft, 472 F. Supp. 3d
`377 (E.D. Mich. 2020)
`
`Fed. R. Civ. P. 8
`Fed. R. Civ. P. 12(b)(6)
`
`
`
`- v -
`
`

`

`Case 2:22-md-03034-TGB ECF No. 53, PageID.2128 Filed 08/10/22 Page 10 of 22
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`INTRODUCTION
`NEO’s allegations of willful patent infringement are precisely the sort of
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`“unadorned, the-defendant-unlawfully-harmed-me accusation[s]” that the Supreme
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`Court has held are insufficient to state a claim under Rule 8. Ashcroft v. Iqbal, 556
`
`U.S. 662, 678 (2009). To adequately plead willful infringement, NEO must allege
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`facts plausibly suggesting that (i) Volkswagen knew of the asserted patents;
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`(ii) Volkswagen intended to infringe the patents or was willfully blind to such
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`infringement; and (iii) Volkswagen’s behavior was “egregious.” Michigan Motor
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`Techs. LLC v. Volkswagen Aktiengesellschaft, 472 F. Supp. 3d 377, 383–84 (E.D.
`
`Mich. 2020). NEO has not satisfied any of these elements, much less all three. The
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`Amended Complaint contains mere “formulaic recitation[s] of the elements” of a
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`willfulness claim, Iqbal, 556 U.S. at 678, without any actual facts backing those
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`legal conclusions. See Michigan Motor, 472 F. Supp. 3d at 384. NEO’s willfulness
`
`allegations should therefore be dismissed.
`
`I.
`APPLICABLE LAW
`In compliance with this Court’s order (ECF No. 27, PageID.50) to “coordinate
`
`to avoid duplicative briefing,” Volkswagen incorporates by reference the discussion
`
`of the applicable law on the Rule 12(b)(6) standard and willful infringement set forth
`
`in the Honda and Nissan Defendants’ motion to dismiss. See ECF No. 50,
`
`PageID.2097–2099.
`
`
`
`1
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`

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`Case 2:22-md-03034-TGB ECF No. 53, PageID.2129 Filed 08/10/22 Page 11 of 22
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`
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`II. ARGUMENT
`NEO’s Amended Complaint flunks all three prongs of the willfulness inquiry.
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`NEO has not plausibly alleged the requisite knowledge, the requisite intent, or the
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`requisite egregious behavior. Each failure provides an independent basis for
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`dismissal of NEO’s willfulness claims.
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`The allegations supporting NEO’s willfulness claims amount to the following:
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`• an allegation that “NEO sent a letter to Volkswagen’s parent company
`on November 23, 2021 . . . listing the patents-in-suit and how the
`patents-in-suit cover certain 3GPP wireless standards used in
`Volkswagen’s accused products,” Am. Compl. ¶ 69, ECF No. 30,
`PageID.733;
`• an assertion—unaccompanied by any supporting facts—that the two
`Volkswagen entities named in the complaint (VGA and VGACO)
`somehow received this letter “no later than January 20, 2022,” id.; and
`• conclusory, non-specific recitations of the elements of a willfulness
`claim, see, e.g., id. ¶¶ 62, ECF No. 30, PageID.730–731 (Volkswagen
`“performed [the allegedly] infringing acts with full knowledge of the
`Asserted Patents and their infringement thereof”); id. ¶¶ 67–70, ECF
`No. 30, PageID.732–734 (asserting, without any additional factual
`support, that Volkswagen committed infringing acts while knowing
`that it was infringing or willfully blinding itself to the infringement and
`that VW’s alleged infringement was “willful and egregious”).
`These allegations—considered individually or collectively—are insufficient to state
`
`a claim for willful infringement.
`
`A. NEO fails to plausibly allege that Volkswagen had knowledge of the
`asserted patents before the lawsuit was filed.
`NEO pleads no actual facts showing that either named Defendant had actual
`
`pre-suit knowledge of any of the asserted patents. Instead, NEO principally asserts
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`2
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`

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`Case 2:22-md-03034-TGB ECF No. 53, PageID.2130 Filed 08/10/22 Page 12 of 22
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`that it sent a notice letter to a different entity—the named Defendants’ foreign
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`parent—and therefore that the parent company had knowledge of the patents. But
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`that allegation is irrelevant. Even concrete allegations that a parent company had
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`pre-suit knowledge of a patent do not plausibly suggest that the parent company’s
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`subsidiaries had the requisite knowledge. Dynamic Data Techs. v. Google LLC,
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`2020 WL 1285852, at *3 (D. Del. Mar. 18, 2020), report and recommendation
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`adopted, 2020 WL 3103786 (D. Del. June 11, 2020); see also Varian Med. Sys., Inc.
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`v. Elekta AB, 2016 WL 3748772, at *5 (D. Del. July 12, 2016) (observing that
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`“knowledge of a patent by a parent corporation is not necessarily imputed to its
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`subsidiaries” and dismissing willfulness claim because notice letter had been sent to
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`named defendant’s parent company) (collecting cases), report and recommendation
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`adopted, 2016 WL 9307500 (D. Del. Dec. 22, 2016).
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`Perhaps recognizing this deficiency, NEO asserts that the notice letter in
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`question was received by the named Defendants “no later than January 20, 2022.”
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`Am. Compl. ¶ 69, ECF No. 30, PageID.733. But the assertion is just that—an
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`assertion. NEO provides no factual support for the proposition that Defendants
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`received the letter (indeed, NEO does not even attach the letter to its complaint). Nor
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`is it evident how NEO would have knowledge of communications between
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`Defendants and their parent company. This conclusory assertion of knowledge is
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`therefore insufficient to satisfy NEO’s pleading obligation.
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`3
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`

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`Case 2:22-md-03034-TGB ECF No. 53, PageID.2131 Filed 08/10/22 Page 13 of 22
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`Michigan Motor is instructive on this point. There, the complaint alleged that
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`“Defendants were made aware of the patents-in-suit at least as early as March 4,
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`2015, when they were provided notice of the patents via letter.” Michigan Motor,
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`472 F. Supp. 3d at 384. This allegation, the court observed, was “purely conclusory,
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`and conclusory allegations are ‘not entitled to be assumed true.’” Id. (quoting Iqbal,
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`556 U.S. at 681). The court therefore declined to credit “this naked assertion that
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`[was] devoid of further factual enhancement.” Id. (cleaned up).
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`The same result is appropriate here. NEO’s conclusory assertion of pre-suit
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`knowledge on the part of the named Defendants lacks any actual facts backing it up.
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`It is thus not entitled to a presumption of truth for purpose of this motion—and, in
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`fact, it should be “disregard[ed]” altogether. Id. at 381 (“[C]ourts ‘should disregard’
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`legal conclusions and focus on the factual matter pleaded.”).
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`In a last-ditch effort to allege knowledge, NEO asserts that, “[i]n any event,
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`VGA and VGACO were on actual notice of the Asserted Patents and their
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`infringement on the date of service of the Complaint.” Am. Compl. ¶ 69, ECF No.
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`30, PageID.733. But this allegation does not save NEO’s willful infringement
`
`claims. The knowledge required for willful infringement is knowledge at the time of
`
`the alleged infringing act (i.e., pre-suit). See Mentor Graphics Corp. v. EVE-USA,
`
`Inc., 851 F.3d 1275, 1295 (Fed. Cir. 2017) (willfulness allegations depend on pre-
`
`suit conduct); Michigan Motors, 472 F. Supp. 3d at 383–84 (prior knowledge of
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`4
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`

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`Case 2:22-md-03034-TGB ECF No. 53, PageID.2132 Filed 08/10/22 Page 14 of 22
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`patent is necessary for willful infringement); Addiction & Detoxification Institute,
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`L.L.C. v. Aharonov, 2015 WL 631959, at *2 (E.D. Mich. Feb. 13, 2015) (post-filing
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`knowledge is not sufficient to support willful infringement claims).
`
`Filing a complaint cannot cure this defect. “The purpose of a complaint is not
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`to create a claim but rather to obtain relief for an existing claim.” VLSI Tech. LLC v.
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`Intel Corp., 2019 WL 1349468, at *2 (D. Del. Mar. 26, 2019). Accordingly, “the
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`complaint itself cannot serve as the basis for a defendant’s actionable knowledge.”
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`Dynamic Data Techs., LLC v. Amlogic Holdings Ltd., 2020 WL 4365809, at *2 (D.
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`Del. July 30, 2020); accord Addiction & Detoxification, 2015 WL 631959, at *2.
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`Indeed, even “an amended complaint cannot rely upon the original complaint as a
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`basis to allege knowledge for a willful infringement claim.” iFIT Inc. v. Peloton
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`Interactive, Inc., 2022 WL 609605, at *2 (D. Del. Jan. 28, 2022). NEO’s reliance on
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`the filing of the complaint is therefore misplaced.
`
`In short, NEO’s failure to plausibly allege pre-suit knowledge is fatal to its
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`willful infringement claims.
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`B. NEO fails to allege facts showing that Volkswagen had the specific intent
`required to willfully infringe.
`NEO’s failure to sufficiently plead the required specific intent provides
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`another, standalone reason why its willful infringement claims should be dismissed.
`
`NEO’s allegations of intent consist solely of insufficient legal conclusions. Without
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`any factual support whatsoever, NEO claims:
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`5
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`

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`Case 2:22-md-03034-TGB ECF No. 53, PageID.2133 Filed 08/10/22 Page 15 of 22
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`• “Volkswagen took the above actions intending to cause infringing acts
`by others,” Am. Compl. ¶ 67, ECF No. 30, PageID.732;
`• Volkswagen acted “despite knowing of an objectively high likelihood”
`that its products infringed, id. ¶ 68, ECF No. 30, PageID.732–733;
`• Volkswagen “believed there was a high probability” that others would
`infringe, id.; and
`• Volkswagen “willfully blinded itself as to the existence of the Asserted
`Patents and the Accused Products’ infringement therefore and has
`deliberately and wantonly continued to infringe on NEO’s patent
`rights,” id. ¶ 69, ECF No. 30, PageID.733.
`These unsupported assertions are particularly hard to imagine given that (as
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`explained above) there are no plausible allegations that the Defendants even knew
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`about the asserted patents, let alone that they believed they infringed them.
`
`NEO’s recitations of legal conclusions, devoid of any supporting factual
`
`allegations, are insufficient to state a willfulness claim. See Malvern Panalytical Ltd
`
`v. Ta Instruments-Waters LLC, 2021 WL 3856145, at *3–4 & n.3 (D. Del. Aug. 27,
`
`2021) (complaint “must do more than plead the standard” for willfulness to state a
`
`claim); PLC Trenching Co. v. IM Servs. Grp., 2021 WL 3234590, at *11 (D. Idaho
`
`July 29, 2021) (“conclusory statements couched as factual allegations that
`
`[defendant] knew of the [p]atents and its infringement” did not state a claim for
`
`willfulness because the court was “not bound to accept” those conclusory statements
`
`as true); FluorDx LLC v. Quidel Corp., 2020 WL 4464475, *5 (S.D. Cal. Aug. 4,
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`2020) (dismissing willfulness claim where complaint provided no “specific factual
`
`allegations about Defendant’s subjective intent or details about the nature of
`
`6
`
`

`

`Case 2:22-md-03034-TGB ECF No. 53, PageID.2134 Filed 08/10/22 Page 16 of 22
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`Defendant’s conduct to render a claim of willfulness plausible, not merely
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`possible”); see also Sonos, Inc. v. Google LLC, 2022 WL 799367, at *6 (N.D. Cal.
`
`Mar. 16, 2022) (similar).
`
`The decision in Hypermedia Navigation LLC v. Google LLC, 2019 WL
`
`1455336 (N.D. Cal. Apr. 2, 2019), illustrates this point nicely. There—as here—the
`
`plaintiff’s complaint failed to “provide[] specific factual allegations about [the
`
`defendant’s] subjective intent or details about the nature of [the defendant’s] conduct
`
`to render a claim of willfulness plausible, and not merely possible.” Id. at *4. Instead,
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`the complaint merely alleged that the plaintiff had sent the defendant a letter
`
`asserting that the defendant “‘provide[d] . . . technology’” covered by some of the
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`plaintiff’s patents. Id. at *2. This letter, the court held, was insufficient to plausibly
`
`suggest that the defendant intended to infringe—or was willfully blind to
`
`infringement of—the asserted patents. Id. at *4.
`
`Just so here. Even assuming that the named Defendants actually did receive
`
`NEO’s notice letter and declined to take a license, those facts, standing alone, tell us
`
`nothing about whether Defendants possessed the requisite intent to commit willful
`
`infringement. See id. at *4 (rejecting the “proposition that a defendant who receives
`
`a letter asking if they are ‘interested in a non-litigation business discussion’ must
`
`cease operations immediately to avoid a willful infringement claim”). That is
`
`because those facts are “‘equally consistent with a defendant who subjectively
`
`7
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`

`

`Case 2:22-md-03034-TGB ECF No. 53, PageID.2135 Filed 08/10/22 Page 17 of 22
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`
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`believes the plaintiff’s patent infringement action has no merit.’” FluorDx, 2020 WL
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`4464475, at *5 (quoting Slot Speaker Techs., Inc. v. Apple, Inc., 2017 WL 4354999,
`
`at *2 (N.D. Cal. Sept. 29, 2017)).
`
`NEO’s failure to plausibly allege the requisite intent is independently fatal to
`
`its willful infringement claims.
`
`C. NEO fails to allege facts plausibly suggesting that Volkswagen engaged
`in egregious behavior.
`There is a third independent basis to dismiss NEO’s willfulness allegations:
`
`NEO has not come close to pleading egregiousness.
`
`Enhanced damages under § 284 are “reserved for egregious cases typified by
`
`willful misconduct.” Halo Elecs., Inc. v. Pulse Elecs., Inc., 579 U.S. 93, 106 (2016);
`
`accord Michigan Motor, 472 F. Supp. 3d at 382. “The sort of conduct warranting
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`enhanced damages has been variously described . . . as willful, wanton, malicious,
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`bad-faith, deliberate, consciously wrongful, flagrant, or—indeed—characteristic of
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`a pirate.” Halo, 579 U.S. at 103–04. In view of this legal standard, the majority of
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`courts—including courts in this district—“have sensibly concluded” that, in addition
`
`to pleading facts plausibly suggesting knowledge of the patent and intent to infringe,
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`a plaintiff requesting enhanced damages “must also allege facts to demonstrate the
`
`defendant’s behavior was egregious under the circumstances.” Bushnell Hawthorne,
`
`LLC v. Cisco Sys., Inc., 2019 WL 8107921, at *1 (E.D. Va. Feb. 26, 2019); see
`
`8
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`

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`Case 2:22-md-03034-TGB ECF No. 53, PageID.2136 Filed 08/10/22 Page 18 of 22
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`Michigan Motor, 472 F. Supp. 3d at 384.1 This rule makes good sense. If a plaintiff
`
`asserting willful infringement must ultimately prove egregiousness in order to show
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`entitlement to extra damages, it stands to reason that a plaintiff pleading willful
`
`infringement must allege facts plausibly suggesting egregiousness to survive a Rule
`
`12(b)(6) motion. See Michigan Motor, 472 F. Supp. 3d at 384 (rejecting the
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`“minority view” that complaints of willful infringement need not allege
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`egregiousness because that view is inconsistent with Halo’s “prescription that
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`enhanced damages can only be supported by conduct that is egregious”).
`
`NEO’s complaint barely even nods to the egregiousness requirement. The
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`complaint
`
`includes a conclusory,
`
`throwaway assertion
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`that Volkswagen’s
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`infringement “has been willful and egregious.” Am. Compl. ¶ 70, ECF No. 30,
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`PageID.734. But it does not contain a shred of factual support for that proposition.
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`At most, NEO has alleged that the foreign parent of the two named Defendants
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`received a notice letter that somehow made its way to the two named Defendants (as
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`explained above, NEO has not even plausibly alleged that much) and no license was
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`1 Accord, e.g., Cellcontrol, Inc. v. Mill Mountain Cap., LLC, 2022 WL
`598752, at *5 (W.D. Va. Feb. 28, 2022); Xiamen Baby Pretty Prod. Co. v. Talbot’s
`Pharms. Fam. Prod., LLC, 2022 WL 509336, at *3 (W.D. La. Feb. 18, 2022);
`Fortinet, Inc. v. Forescout Techs., Inc., 543 F. Supp. 3d 814, 840 (N.D. Cal. 2021);
`PLC Trenching, 2021 WL 3234590, at *11; Smith v. Extreme Performance 1, LLC,
`2020 WL 5092913, at *5 (C.D. Cal. June 23, 2020); FluorDx, 2020 WL 4464475,
`at *5; Google LLC v. Princeps Interface Techs. LLC, 2020 WL 1478352, at *2 (N.D.
`Cal. Mar. 26, 2020).
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`Case 2:22-md-03034-TGB ECF No. 53, PageID.2137 Filed 08/10/22 Page 19 of 22
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`taken. But, as legion cases have held, that fact pattern is categorically insufficient to
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`support a claim for enhanced damages. “Refusing a license alone . . . does not show
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`willfulness.” FluorDx, 2020 WL 4464475, at *5 (dismissing willfulness claim for
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`failure to plausibly allege egregiousness). Instead, it suggests—at most—“only
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`‘garden-variety’ infringement that does not rise to the level of an ‘egregious case of
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`misconduct beyond typical infringement.’” Id. (quoting Halo, 579 U.S. at 109); see
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`Cellcontrol, 2022 WL 598752, at *5 (allegations that defendant “failed to respond
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`to [a] cease and desist letter and . . . continue[d] to market the accused product” did
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`“not rise to the level of infringing conduct sufficiently egregious to state a claim for
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`willful infringement”); Fractus, S.A. v. TCL Corp., 2021 WL 2483155, at *4 (E.D.
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`Tex. June 2, 2021) (allegations that defendant received a notice letter specifically
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`identifying the asserted patents and the accused products and that defendant
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`thereafter continued the allegedly infringing conduct is insufficient to allege the
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`“culpable conduct” required for a willfulness claim); Fortinet, 543 F. Supp. 3d at
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`841–42 (defendant’s decision not to “engage in serious licensing negotiations,”
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`without more, is insufficient to support a willful infringement claim).
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`The timing set forth in NEO’s complaint also demonstrates there is no
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`reasonable inference that Volkswagen has engaged in egregious behavior. NEO
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`alleges that the named Defendants received notice of the patents in January 2022—
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`about two months before NEO filed this lawsuit. It takes years to design and produce
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`Case 2:22-md-03034-TGB ECF No. 53, PageID.2138 Filed 08/10/22 Page 20 of 22
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`a vehicle. The accused vehicles thus would have been designed and produced long
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`before Volkswagen allegedly received notice. Those facts do not give rise to a
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`plausible inference of egregiousness.
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`III. CONCLUSION
`In short, NEO’s complaint contains “no facts . . . from which a factfinder could
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`infer that the defendants deliberately copied the ideas or design of another, that the
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`defendants had a motivation for infringing the patents, or that they otherwise
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`behaved poorly or acted with bad faith.” Michigan Motor, 472 F. Supp. at 385.
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`NEO’s willful infringement claims against Volkswagen should be dismissed.
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`11
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`Case 2:22-md-03034-TGB ECF No. 53, PageID.2139 Filed 08/10/22 Page 21 of 22
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`Dated: August 10, 2022
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`Respectfully submitted,
`
`By: /s/Daniel E. Yonan
`Susan M. McKeever
`Justin B. Weiner
`BUSH SEYFERTH PLLC
`100 West Big Beaver Road
`Suite 400
`Troy, MI 48084
`(248) 822-7851
`mckeever@bsplaw.com
`weiner@bsplaw.com
`
`Daniel E. Yonan
`Deirdre M. Wells
`Ryan C. Richardson
`William H. Milliken
`Anna G. Phillips
`STERNE, KESSLER, GOLDSTEIN & FOX
`P.L.L.C
`1100 New York Avenue NW
`Suite 600
`Washington, DC 20005
`(202) 371-2600
`dyonan@sternekessler.com
`dwells@sternekessler.com
`rrichardson@sternekessler.com
`wmilliken@sternekessler.com
`aphillips@sternekessler.com
`
`Counsel for Defendants Volkswagen
`Group of America, Inc. and
`Volkswagen Group of America
`Chattanooga Operations, Inc.
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`Case 2:22-md-03034-TGB ECF No. 53, PageID.2140 Filed 08/10/22 Page 22 of 22
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`CERTIFICATE OF SERVICE
`I hereby certify that on August 10, 2022, I electronically filed the foregoing
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`document with the Clerk of the Court using the CM/ECF system, which will send
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`notification of such filing upon all ECF filing participants.
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` /s/ Daniel E. Yonan
`Daniel E. Yonan
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