throbber
Case 2:22-md-03034-TGB ECF No. 67, PageID.2345 Filed 08/31/22 Page 1 of 30
`
`IN THE UNITED STATES DISTRICT COURT
`FOR THE EASTERN DISTRICT OF MICHIGAN
`SOUTHERN DIVISION
`
`
`
`IN RE NEO WIRELESS, LLC
`PATENT LITIG.
`
`
`2:22-MD-03034-TGB
`
`
`HON. TERRENCE G. BERG
`
`2:22-CV-11404-TGB
`
`
`
`HON. TERRENCE G. BERG
`
`
`
`
`JURY TRIAL DEMANDED
`
`
`
`
`
`
`
`
`
`
`
`§
`§
`§
`§
`§
`
`
` §
`
`
`§
`§
`§
`§
`§
`§
`§
`§
`§
`§
`§
`§
`
`
`
`
`NEO WIRELESS, LLC,
`
`
`
`
`
`VOLKSWAGEN GROUP OF
`AMERICA, INC. &
`VOLKSWAGEN GROUP OF
`AMERICA CHATTANOOGA
`OPERATIONS, LLC,
`
`
`
`Plaintiff,
`
`
`
`v.
`
`Defendants.
`
`
`
`
`
`
`
`
`
`
`
`
`PLAINTIFF NEO WIRELESS, LLC’S RESPONSE TO VOLKSWAGEN
`DEFENDANTS’ MOTION TO DISMISS PURSUANT TO FEDERAL RULE
`OF CIVIL PROCEDURE 12(B)(6)
`
`
`
`
`
`

`

`Case 2:22-md-03034-TGB ECF No. 67, PageID.2346 Filed 08/31/22 Page 2 of 30
`
`TABLE OF CONTENTS
`
`
`
`I.
`
`INTRODUCTION ........................................................................................... 1
`
`II. ALLEGED WILLFULNESS FACTS ............................................................. 3
`
`III. APPLICABLE STANDARD .......................................................................... 5
`
`IV. ARGUMENT ................................................................................................... 6
`
`A. Federal Circuit Law Rejects Volkswagen’s “Three-Prong”
`Pleading Test, and Michigan Motor Is Not to the Contrary. ................... 6
`
`B. Under the Proper Standard, Neo Plausibly Alleged That
`Volkswagen Willfully Infringed. ...........................................................11
`
`1. Neo Plausibly Alleged That Defendants Received Pre-Suit
`Notice of the Asserted Patents. ......................................................11
`
`2. Volkswagen’s Pre-Suit Knowledge Coupled with its
`Subsequent Actions Further Allows the Court to Infer
`Volkswagen’s Culpability. .............................................................16
`
`3. At a Minimum, Neo Has Plausibly Alleged Intentional
`(and Thereby Egregious) Infringement Since the Filing
`of the Original Complaint. .............................................................19
`
`C.
`
`In the Alternative, Neo Requests Leave to Amend. ..............................21
`
`V.
`
`CONCLUSION ..............................................................................................22
`
`
`
`
`
`
`
`
`
`
`i
`
`

`

`Case 2:22-md-03034-TGB ECF No. 67, PageID.2347 Filed 08/31/22 Page 3 of 30
`
`TABLE OF AUTHORITIES
`
`
`Cases
`
`Acqis LLC v. Lenovo Group
` No. 6:20-cv-00967, 2022 WL 2705269 (W.D. Tex. July 12, 2022) ....................13
`
`Addiction & Detox. Inst., LLC v. Aharonov
` 2015 WL 631959 (E.D. Mich. Feb. 13, 2015) .....................................................15
`
`Ashcroft v. Iqbal
` 556 U.S. 662 (2009) ...................................................................................... 1, 2, 7
`
`Bayer Healthcare LLC v. Baxalta Inc.
` 989 F.3d 964 (Fed. Cir. 2021) ..............................................................................10
`
`Bell Atlantic Corp. v. Twombly
` 550 U.S. 544 (2007) .................................................................................... 5, 7, 18
`
`BillJCo, LLC v. Apple Inc.
` No. 6:21-CV-00528-ADA, 2022 WL 299733 (W.D. Tex. Feb. 1, 2022) ............20
`
`Brice Env. Servs. Corp. v. Arcadis U.S., Inc.
` 2022 WL 1032930 (D. Alaska Apr. 6, 2022) .......................................................17
`
`Crehan v. Countrywide Bank, FSB
` No. 1:11 CV 613, 2012 WL 4341049 (W.D. Mich. Feb. 15, 2012) ....................14
`
`Eko Brands, LLC v. Adrian Rivera Maynez Enter., Inc.
` 946 F.3d 1367 (Fed. Cir. 2020) .............................................................................. 9
`
`Ericsson Inc. v. TCL Comm. Tech. Holdings, ltd.
` 2017 WL 5137401 (E.D. Tex. Nov. 4, 2017) .......................................................20
`
`FluorDX LLC v. Quidel Corp.
` 2020 WL 4464475 (S.D. Cal. Aug. 4, 2020) ........................................................18
`
`Georgetown Rail Equip. Co. v. Holland L.P.
` 867 F.3d 1229 (Fed. Cir. 2017) ............................................................................10
`
`
`
`
`ii
`
`

`

`Case 2:22-md-03034-TGB ECF No. 67, PageID.2348 Filed 08/31/22 Page 4 of 30
`
`Halo Elecs., Inc. v. Pulse Elecs., Inc.
` 579 U.S. 93 (2016) ....................................................................................... passim
`
`Hilgraeve, Inc. v. Symantec Corp.
` 272 F. Supp. 2d 613 (E.D. Mich. 2003) ................................................................. 1
`
`Hill v. Snyder
` 878 F.3d 193 (6th Cir. 2017) .................................................................................. 5
`
`In re Bill of Lading Transmission & Proc. Sys. Patent Lit.
` 681 F.3d 1323 (Fed. Cir. 2012) ........................................................................5, 18
`
`IOENGINE, LLC v. PayPal Holdings, Inc.
` 2019 WL 330515 (D. Del. Jan. 25, 2019) .................................................... passim
`
`JDS Techs., Inc. v. Avigilon USA Corp.
` 2015 WL 3603525 (E.D. Mich. June 15, 2015) .................................. 7, 10, 11, 15
`
`John Keeler & Co., Inc. v. Heron Point Seafood, Inc.
` 2016 WL 6839615 (N.D. Ohio July 8, 2016) .......................................................16
`
`Malibu Boats, LLC v. MasterCraft Boat Co., LLC
` No. 3:16-cv-82-TAV-HBG, 2016 WL 8286158 (E.D. Tenn. Oct. 28, 2016) 15, 16
`
`Mentor Graphics Corp. v. EVE-USA, Inc.
` 851 F.3d 1275 (Fed. Cir. 2017) ............................................................... 18, 19, 20
`
`Michigan Motor Techs. LLC v. Volkswagen Aktiengesellschaft
` 472 F. Supp. 3d 377 (E.D. Mich. 2020) ....................................................... passim
`
`Mobile Telecomms. Techs., LLC v. BlackBerry Corp.
` No. 3:12-cv-1652, 2016 WL 1642927 (N.D. Tex. Apr. 26, 2016) ......................13
`
`National Institute for Strategic Tech. Acquisition &
` Commercialization v. Nissan of N. Am.
` No. 11-11039, 2012 WL 3600289 (E.D. Mich. Aug. 21, 2012) ..........................12
`
`Read Corp. v. Portec
` 970 F.2d 816 (Fed. Cir. 1992) ....................................................................... 7, 8, 9
`
`
`
`
`iii
`
`

`

`Case 2:22-md-03034-TGB ECF No. 67, PageID.2349 Filed 08/31/22 Page 5 of 30
`
`Seagate Tech., LLC
` 497 F.3d 1360 (Fed. Cir. 2007) ........................................................................1, 20
`
`Serv. Sols. U.S., LLC v. Autel U.S. Inc.
` No. 13-10534, 2013 WL 5701063 (E.D. Mich. Oct. 18, 2013) ...........................21
`
`Sony Corp. v. LG Elecs. U.S.A., Inc.
` 768 F. Supp. 2d 1058 (C.D. Cal. 2011) ................................................................15
`
`Water Techs. Corp. v. Calco Ltd.
` 850 F.2d 660 (Fed. Cir. 1988) ................................................................................ 1
`
`Watson Carpet & Floor Covering, Inc. v. Mohawk Indus., Inc.
` 648 F.3d 452 (6th Cir. 2011) ................................................................................18
`
`WCM Indus., Inc. v. IPS Corp.
` 721 Fed. Appx. 959 (Fed. Cir. 2018) ........................................................ 6, 10, 18
`
`
`Rules
`
`Fed. R. Civ. P, 12(b)(6) .................................................................................... passim
`
`
`
`
`iv
`
`

`

`Case 2:22-md-03034-TGB ECF No. 67, PageID.2350 Filed 08/31/22 Page 6 of 30
`
`STATEMENT OF ISSUES PRESENTED
`
`1.
`
`
`To adequately plead willful infringement, the complaint must allege nothing
`more than the defendant had pre- or post-suit “knowledge of the patent[s].”
`IOENGINE, LLC v. PayPal Holdings, Inc., 2019 WL 330515, at *7 (D. Del.
`Jan. 25, 2019) (Bryson, J.). Neo pleaded detailed allegations of Volkswagen’s
`pre-suit knowledge of the Asserted Patents and its infringement, and
`subsequent actions implying deliberate wrongdoing. Taking these facts as true
`and construing them in Neo’s favor, can this Court to infer Neo’s willfulness
`claim is plausible?
`
`Answer: Yes.
`
`
`
`
`
`
`
`v
`
`

`

`Case 2:22-md-03034-TGB ECF No. 67, PageID.2351 Filed 08/31/22 Page 7 of 30
`
`MOST APPROPRIATE AND CONTROLLING AUTHORITIES
`
`
`Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009)
`
`Bell Atlantic Corp. v. Twombly, 550 U.S. 544 (2007)
`
`Bayer Healthcare LLC v. Baxalta Inc., 989 F.3d 964 (Fed. Cir. 2021)
`
`Eko Brands, LLC v. Adrian Rivera Maynez Enter., Inc., 946 F.3d 1367 (Fed. Cir.
`2020)
`
`Georgetown Rail Equip. Co. v. Holland L.P., 867 F.3d 1229 (Fed. Cir. 2017)
`
`Halo Elecs., Inc. v. Pulse Elecs., Inc., 579 U.S. 93 (2016)
`
`In re Bill of Lading Transmission & Proc. Sys. Patent Lit., 681 F.3d 1323 (Fed.
`Cir. 2012)
`
`Mentor Graphics Corp. v. EVE-USA, Inc., 851 F.3d 1275 (Fed. Cir. 2017)
`
`Read Corp. v. Portec, 970 F.2d 816 (Fed. Cir. 1992)
`
`WCM Indus., Inc. v. IPS Corp., 721 Fed. Appx. 959 (Fed. Cir. 2018)
`
`IOENGINE, LLC v. PayPal Holdings, Inc., 2019 WL 330515 (D. Del. Jan. 25,
`2019)
`
`JDS Techs., Inc. v. Avigilon USA Corp., 2015 WL 3603525 (E.D. Mich. June 15,
`2015)
`
`National Institute for Strategic Tech. Acquisition & Commercialization v. Nissan
`of N. Am., No. 11-11039, 2012 WL 3600289 (E.D. Mich. Aug. 21, 2012)
`
`Fed. R. Civ. P. 12(b)(6)
`
`
`
`
`
`vi
`
`

`

`Case 2:22-md-03034-TGB ECF No. 67, PageID.2352 Filed 08/31/22 Page 8 of 30
`
`I.
`
`INTRODUCTION1
`
`Willfulness is a highly factual test that turns on the subjective culpability of
`
`the patent infringer. See, e.g., Halo Elecs., Inc. v. Pulse Elecs., Inc., 579 U.S. 93,
`
`108–10 (2016) (rejecting the rigid “objective recklessness” requirement from In re
`
`Seagate Tech., LLC, 497 F.3d 1360 (Fed. Cir. 2007), for willfulness findings).
`
`Because evidence of state of mind is largely within the sole possession, custody, or
`
`control of the patent infringer, “[a] party may establish intent . . . through
`
`circumstantial evidence.” Hilgraeve, Inc. v. Symantec Corp., 272 F. Supp. 2d 613,
`
`620 (E.D. Mich. 2003) (citing Water Techs. Corp. v. Calco Ltd., 850 F.2d 660, 668
`
`(Fed. Cir. 1988)). To adequately plead willful infringement, Neo did not need to
`
`marshal all its evidence or conclusively prove Defendants’ culpable state of mind.
`
`It did not even need to plead facts indicating a probability of willful infringement.
`
`It needed only plead sufficient circumstantial facts that “nudge” the claim “across
`
`the line from conceivable to plausible.” Ashcroft v. Iqbal, 556 U.S. 662, 678
`
`(2009). Neo unquestionably did so.
`
`
`
` 1
`
` Neo notes that while Honda and Nissan filed a separate motion from Volkswagen
`due to some non-overlapping arguments between the two motions, the arguments
`related to willful infringement overlap substantially in both motions. Thus, while
`Neo has set forth its counterarguments in full in both of its responses to avoid
`confusion, the Court will find considerable repetition between the responses. For the
`Court’s reference, the discussion of willfulness in this response is the more
`comprehensive of the two.
`
`
`
`1
`
`

`

`Case 2:22-md-03034-TGB ECF No. 67, PageID.2353 Filed 08/31/22 Page 9 of 30
`
`In moving to dismiss Neo’s willful infringement claim, the Volkswagen
`
`Defendants (“Volkswagen”) (1) rely on a “three-pronged” test for pleading willful
`
`infringement that does not exist; (2) impose a heightened pleading standard more
`
`akin to the “probability requirement” the Supreme Court explicitly rejected in
`
`Iqbal, id. at 678; and (3) selectively ignore important factual allegations in Neo’s
`
`Amended Complaint. Those allegations plausibly set forth Volkswagen’s pre-suit
`
`notice of the Asserted Patents and their relationship to cellular standards
`
`Volkswagen employs in its products; the fact that the standardized technology
`
`claimed in the Asserted Patents is a core part of communications on LTE networks;
`
`and Volkswagen’s decision to not respond to Neo’s initial attempt to engage in
`
`licensing discussions, and to instead continue infringing the Asserted Patents
`
`despite knowledge of its infringement. Nor were these “naked assertions” such as
`
`“defendant was willful,” or “defendant had prior knowledge of the Asserted
`
`Patents”; rather, Neo’s First Amended Complaint pleads the above facts with
`
`specificity.
`
`While discovery may uncover many additional facts about Volkswagen’s
`
`internal decisions, analysis, and response to receiving Neo’s letter, the pleaded
`
`factual allegations alone allow the court to draw the reasonable inference that
`
`Volkswagen willfully infringed the Asserted Patents. As Federal Circuit Judge
`
`Bryson has said, sitting by designation in Delaware, “[t]he facts bearing on
`
`
`
`2
`
`

`

`Case 2:22-md-03034-TGB ECF No. 67, PageID.2354 Filed 08/31/22 Page 10 of 30
`
`willfulness are likely to be, in large measure, in the possession of the defendant
`
`and available to the plaintiff only through discovery. If discovery fails to produce
`
`facts that would support a finding of willfulness, the defendant can seek to have the
`
`willfulness allegations dismissed on summary judgment.” IOENGINE, LLC v.
`
`PayPal Holdings, Inc., 2019 WL 330515, at *7 (D. Del. Jan. 25, 2019) (Bryson,
`
`J.). But at the pleading stage, the court reasoned, “there is no requirement that the
`
`plaintiff plead additional facts, beyond knowledge of the patent or patents, in order
`
`for a claim to survive a motion to dismiss.” Id. The same is true here.2
`
`II. ALLEGED WILLFULNESS FACTS
`
`Even leaving out allegations that arguably restate a legal standard, Neo’s
`
`First Amended Complaint alleges the following purely factual matters regarding
`
`Volkswagen’s willful infringement:
`
`• Neo sent a letter to Volkswagen’s parent company on November 23,
`2021. Am. Comp. at ¶ 69.
`
`• Volkswagen received Neo’s letter no later than January 20, 2022. Id.
`
`• Neo’s notice letter was an attempt to initiate commercial licensing
`discussions with Volkswagen. Id.
`
`• Neo’s notice letter informed Volkswagen of Neo Wireless’s relevant
`patent portfolio, including listing the patents-in-suit and observing that
`the patents-in-suit cover certain 3GPP wireless standards. Id.
`
`
`
` 2
`
` It is telling that four other defendants in this multi-district litigation did not move
`to dismiss these allegations, on nearly identical pleadings.
`
`
`
`3
`
`

`

`Case 2:22-md-03034-TGB ECF No. 67, PageID.2355 Filed 08/31/22 Page 11 of 30
`
`• Volkswagen’s products employ those 3GPP wireless standards. E.g., id.
`at ¶¶ 42–48.
`
`• Each of the Asserted Patents reads on portions of those 3GPP standards
`that are, for example, “a core part of communications on an LTE
`network,” “integral to the establishment of connections between
`Volkswagen’s Accused Products and the serving base stations,” “central
`to the operation of the mobile devices within LTE networks,” “important
`to maintain accurate signaling between the mobile device and the serving
`cells in the LTE network,” and/or “particularly important for highly
`mobile devices, such as those implemented in Volkswagen’s Accused
`Products.” Id. at ¶¶ 75, 82, 89, 96, 103, 110.
`
`• On information and belief, through their parent company, VGA and
`VGACO obtained actual knowledge of the Asserted Patents and their
`infringement thereof no later than January 20, 2022. Id. at ¶ 69.
`
`• Volkswagen did not respond to Neo’s notice letter and refused to engage
`in any good faith licensing negotiations. Id.
`
`• Volkswagen continued infringing on the Asserted Patents. Id.
`
`• VGA and VGACO’s advertising, sales, design, development and/or
`technical materials related to the 3GPP LTE/4G and/or 5G/NR standards
`associated with the Volkswagen Accused Products did and continue to
`encourage customers and other third parties to directly infringe the
`Asserted Patents. Id. at ¶ 63–66.
`
`In short, Neo has adequately alleged that Volkswagen received a detailed
`
`letter seeking licensing discussions about the Asserted Patents, that the letter
`
`specified the wireless standards at issue, and that despite the fact that Volkswagen
`
`practiced those very standards, and that the Asserted Patents cover particularly
`
`important aspects of those standards relevant to Volkswagen’s Accused Products,
`
`Volkswagen nevertheless declined to engage in licensing discussions and
`
`continued infringing and encouraging others to infringe. These alleged facts, when
`
`
`
`4
`
`

`

`Case 2:22-md-03034-TGB ECF No. 67, PageID.2356 Filed 08/31/22 Page 12 of 30
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`taken as true, readily lead to a reasonable inference that Volkswagen acted
`
`willfully—either by deliberately and consciously infringing, or at a minimum by
`
`remaining willfully blind to its infringement.
`
`III. APPLICABLE STANDARD
`
`The standard for surviving a motion to dismiss under FRCP 12(b)(6)
`
`imposes a low threshold upon pleadings requiring the plaintiff to plead “enough
`
`facts to state a claim for relief that is plausible on its face.” Bell Atlantic Corp. v.
`
`Twombly, 550 U.S. 544, 570 (2007). For a claim to be facially plausible “simply
`
`calls for enough fact to raise a reasonable expectation that discovery will reveal
`
`evidence of [liability].” Id. at 556. In evaluating a motion to dismiss, courts must
`
`construe the allegations “in the light most favorable to the plaintiff” with
`
`reasonable inferences made accordingly. Michigan Motor Techs. LLC v.
`
`Volkswagen Aktiengesellschaft, 472 F. Supp. 3d 377, 381 (E.D. Mich. 2020)
`
`(citing Hill v. Snyder, 878 F.3d 193, 203 (6th Cir. 2017)). Importantly, “[n]othing
`
`in Twombly or its progeny allows a court to choose among competing inferences as
`
`long as there are sufficient facts alleged to render the non-movant’s asserted
`
`inferences plausible.” In re Bill of Lading Transmission & Proc. Sys. Patent Lit.,
`
`681 F.3d 1323, 1340 (Fed. Cir. 2012).
`
`
`
`5
`
`

`

`Case 2:22-md-03034-TGB ECF No. 67, PageID.2357 Filed 08/31/22 Page 13 of 30
`
`IV. ARGUMENT
`
`A.
`
`Federal Circuit Law Rejects Volkswagen’s “Three-Prong”
`Pleading Test, and Michigan Motor Is Not to the Contrary.
`
`As an initial matter, the Court should disregard Volkswagen’s proposed
`
`“three-pronged” pleading standard for willful infringement. Volkswagen simply
`
`misconstrues the holding in Michigan Motor in arguing that, following the
`
`Supreme Court’s 2016 decision in Halo, Neo must plead “egregiousness” as a
`
`distinct and separate element from intentional, willful infringement. In fact,
`
`allegations of intentional infringement alone, with or without additional
`
`aggravating factors, state a claim for willful infringement, and are part of the
`
`subset of “egregious” behaviors that can, on further consideration in posttrial,
`
`justify enhanced damages.
`
`The Supreme Court’s ruling in Halo—which dealt primarily with expanding
`
`the availability of enhanced damages in patent cases by rejecting the Federal
`
`Circuit’s too-rigid Seagate framework—did not redefine the concept of willful
`
`infringement or its relationship to “egregious” behavior and enhanced damages.
`
`See WCM Indus., Inc. v. IPS Corp., 721 Fed. Appx. 959, 969 (Fed. Cir. 2018)
`
`(“Halo did not disturb the substantive standard for the second prong of Seagate,
`
`subjective willfulness.”). Long before Halo, parties who pleaded and proved the
`
`threshold issue of willful (that is, intentional or reckless) infringement at trial still
`
`had to resort to the “Read factors” in convincing the Court, in posttrial
`
`
`
`6
`
`

`

`Case 2:22-md-03034-TGB ECF No. 67, PageID.2358 Filed 08/31/22 Page 14 of 30
`
`proceedings, that the willful infringement found by the jury was “egregious”
`
`enough to warrant enhanced damages. See Read Corp. v. Portec, 970 F.2d 816,
`
`826 (Fed. Cir. 1992) (“The paramount determination in deciding to grant
`
`enhancement and the amount thereof is the egregiousness of the defendant’s
`
`conduct based on all the facts and circumstances.” (emphasis added)). Yet despite
`
`the fact that the court would ultimately have to evaluate the egregiousness of the
`
`defendant’s behavior in order to award enhanced damages in posttrial, Courts
`
`allowed allegations of willful infringement to proceed to trial merely on a plausible
`
`showing that the defendant’s infringement was intentional, and nothing more. See
`
`JDS Techs., Inc. v. Avigilon USA Corp., 2015 WL 3603525, at *3 (E.D. Mich. June
`
`15, 2015) (“To state a claim for willful infringement, the plaintiff must provide a
`
`pleading equivalent to “with knowledge of the patent and his infringement.”
`
`(cleaned up)). In fact, the JDS Technologies court acknowledged—well after
`
`Twombly/Iqbal—that adequately pleading intentional infringement only required
`
`“a bare factual assertion that [the defendant] had knowledge of the patents prior to
`
`suit.” Id.; see also IOENGINE, 2019 WL 330515, at *7 (“[T]here is no requirement
`
`that the plaintiff plead additional facts, beyond knowledge of the patent or
`
`patents.”).
`
`This low threshold for pleading willfulness makes particular sense in view of
`
`the fact that some of the Read factors (which might enhance or mitigate the
`
`
`
`7
`
`

`

`Case 2:22-md-03034-TGB ECF No. 67, PageID.2359 Filed 08/31/22 Page 15 of 30
`
`egregiousness of the infringing conduct), look at matters that might only be
`
`uncovered through discovery (such as “whether the infringer . . . investigated the
`
`scope of the patent,” or “attempted to conceal its misconduct”); or that occur only
`
`after filing of the case (such as “the infringer’s behavior as a party to the
`
`litigation,” and the “closeness of the case”), such that the full range of facts leading
`
`to an egregiousness finding could not possibly have been pleaded in a complaint.
`
`See Read, 970 F.2d at 827. This plainly refutes Volkswagen’s contention that its
`
`three-pronged rule “makes good sense” because a plaintiff must ultimately prove
`
`egregiousness, and therefore “must allege facts plausibly suggesting egregiousness
`
`to survive a Rule 12(b)(6) motion.” Mot. at 9. On the contrary, it would make no
`
`sense to hold a plaintiff to a pleading standard that cannot be fully met until
`
`posttrial.
`
`The Supreme Court’s decision in Halo changed none of the above. It did
`
`acknowledge that, as required by Read before it (and still), the ultimate decision to
`
`award enhanced damages should be reserved for “egregious infringement
`
`behavior.” 579 U.S. at 104. And Justice Breyer did, in a concurrence, emphasize
`
`the importance of “egregiousness,” and his belief that courts should not award
`
`enhanced damages where “the infringer knew about the patent and nothing more.”
`
`Id. at 110–11 (emphasis in original). But the Court was still focused on the court’s
`
`
`
`8
`
`

`

`Case 2:22-md-03034-TGB ECF No. 67, PageID.2360 Filed 08/31/22 Page 16 of 30
`
`ultimate finding of enhanced damages; not the pleading and proof of the
`
`underlying jury question of willful infringement.
`
`Further, and perhaps more importantly, the Halo Court also clarified that the
`
`concept of “egregious infringement behavior” encompasses “the full range of
`
`culpable behavior,” id. at 106, and listed among the examples of such egregious
`
`behavior: conduct that is merely “willful,” “deliberate,” or “consciously wrongful.”
`
`Id. at 103–04; see also id. at 98–99 (describing predecessor cases authorizing
`
`awarding enhancement “where infringer acted deliberately or willfully”). In other
`
`words, intentional/deliberate infringement is not just an initial ingredient that must
`
`be augmented to become egregious; intentional infringement is itself egregious
`
`(albeit potentially mitigated, as the Read factors contemplate).
`
`Consistent with the above framework, the Federal Circuit has made clear
`
`post-Halo that, while the level of egregiousness and worthiness of punishment of
`
`the defendant’s willfulness are taken into consideration by the court in determining
`
`whether to enhance damages, the core question of willfulness itself “requires a jury
`
`to find no more than deliberate or intentional infringement.” Eko Brands, LLC v.
`
`Adrian Rivera Maynez Enter., Inc., 946 F.3d 1367, 1378 (Fed. Cir. 2020). In 2017,
`
`a year after Halo, the Federal Circuit affirmed a jury verdict of willfulness without
`
`ever mentioning egregiousness, basing its affirmance solely on “evidence that
`
`[defendant] was aware of the [asserted patent] prior to the current litigation . . . and
`
`
`
`9
`
`

`

`Case 2:22-md-03034-TGB ECF No. 67, PageID.2361 Filed 08/31/22 Page 17 of 30
`
`believed that it was infringing the patent.” Georgetown Rail Equip. Co. v. Holland
`
`L.P., 867 F.3d 1229, 1245 (Fed. Cir. 2017); see also WCM Industries, 721 Fed.
`
`Appx. at 970 (reviewing jury verdict of willfulness only to determine whether
`
`evidence “was sufficient to prove by a preponderance of the evidence that
`
`[defendant] acted despite a risk of infringement that was either known or so
`
`obvious that it should have been known.”); Bayer Healthcare LLC v. Baxalta Inc.,
`
`989 F.3d 964, 988 (Fed. Cir. 2021) (same).
`
`Against this backdrop, it is clear that the court in Michigan Motor did not
`
`add a third, distinct “egregiousness” requirement into the pleading standard for
`
`willful infringement. See Michigan Motor, 472 F. Supp. 3d at 381. The Michigan
`
`Motor court did—albeit in dicta—appear to interpret Justice Breyer’s concurring
`
`opinion to require the plaintiff to plead more than mere pre-suit knowledge of the
`
`patent, implicitly disagreeing with this District’s earlier view in JDS Technologies.
`
`See id. at 384.3 But the court went no further than that, and required only that the
`
`plaintiff allege sufficient facts to support an inference that the “conduct infringing
`
`the patents [] was willful, wanton, malicious, bad-faith, deliberate, consciously
`
`
`
` 3
`
` As alluded to above, Neo disagrees with that conclusion, since the Halo opinion
`did not alter the pleading standard for willfulness, and prior courts, including in this
`district, had long held that mere pre-suit knowledge of the patent was sufficient to at
`least survive a motion to dismiss. JDS, 2015 WL 3603525, at *3; IOENGINE, 2019
`WL 330515, at *7.
`
`
`
`10
`
`

`

`Case 2:22-md-03034-TGB ECF No. 67, PageID.2362 Filed 08/31/22 Page 18 of 30
`
`wrongful, or flagrant.” Id. at 385. As discussed above, alleging intentional
`
`(“deliberate,” “consciously wrongful”) infringement meets those criteria, and Neo
`
`need not have separately alleged egregiousness beyond that showing of intent.4
`
`In summary, while this Court may ultimately have to consider additional
`
`factors beyond Volkswagen’s mere intent to infringe when deciding whether to
`
`enhance damages in posttrial, denial of Volkswagen’s motion to dismiss requires
`
`only that the Court find Neo has plausibly alleged that Volkswagen infringed “with
`
`knowledge of the patent and [its] infringement.” JDS Technologies, 2015 WL
`
`3603525, at *3.
`
`B. Under the Proper Standard, Neo Plausibly Alleged That
`Volkswagen Willfully Infringed.
`
`1.
`
`Neo Plausibly Alleged That Defendants Received Pre-Suit Notice
`of the Asserted Patents.
`
`In view of the above background, Volkswagen’s arguments in favor of
`
`dismissal fail at each turn, including regarding Neo’s pleading of pre-suit
`
`knowledge of the Asserted Patents. In fact, Neo has adequately alleged pre-suit
`
`notice of the patents-in-suit—in a pleading far more detailed than the one rejected
`
`
`
` 4
`
` Neo also notes that, because the court found that the plaintiff had failed to even
`adequately plead knowledge of the patents (much less something more), the court
`did not fully explore exactly what “more” might be required. Id. at 384.
`
`
`
`11
`
`

`

`Case 2:22-md-03034-TGB ECF No. 67, PageID.2363 Filed 08/31/22 Page 19 of 30
`
`in Michigan Motor—and that allegation alone supports a plausible inference of
`
`willful infringement.
`
`As a threshold matter, Volkswagen AG’s actual knowledge of the Asserted
`
`Patents and infringement may be imputed to the Volkswagen defendants in this
`
`case. Judge Steeh, in National Institute for Strategic Technology Acquisition and
`
`Commercialization v. Nissan of North America held: “It is also a reasonable
`
`inference that a Japanese parent company, Honda Motor Company, which received
`
`NISTAC’s letter concerning the patents-in-suit, would communicate with its
`
`United States subsidiary, American Honda, about these patents and potential
`
`infringement thereof.” 2012 WL 3600289, at *4–*5 (E.D. Mich. 2012) (denying
`
`defendant’s motion to dismiss plaintiff’s willfulness claims where the
`
`circumstantial evidence in context raised an inference of knowledge of
`
`infringement).
`
`The same rings true here. Neo alleged, “[o]n information and belief, through
`
`the parent company, [the Volkswagen defendants] obtained actual knowledge of
`
`the Asserted Patents and their infringement thereof no later than January 20,
`
`2022.” Am. Comp. at ¶ 69. As in National Institute, it is reasonable to believe that
`
`Volkswagen’s parent company receiving a notice letter regarding its infringement
`
`of Neo’s Patent portfolio, including the asserted United States patents, via
`
`compliance with 3GPP wireless standards, would communicate with its United
`
`
`
`12
`
`

`

`Case 2:22-md-03034-TGB ECF No. 67, PageID.2364 Filed 08/31/22 Page 20 of 30
`
`States subsidiaries about the same. Accord Acqis LLC v. Lenovo Group, No. 6:20-
`
`cv-00967, 2022 WL 2705269 (W.D. Tex. July 12, 2022) (finding patentee
`
`sufficiently pled actual knowledge “for all Lenovo entities” despite only sending
`
`the notice letter to one entity, stating that while the plaintiff “may not yet have
`
`proven its theory, it has adequately pleaded it”); Mobile Telecomms. Techs., LLC v.
`
`BlackBerry Corp., No. 3:12-cv-1652, 2016 WL 1642927 (N.D. Tex. Apr. 26,
`
`2016) (denying dismissal where the plaintiff alleged that the parent corporation’s
`
`knowledge of the asserted patents illustrated its subsidiaries’ same knowledge).
`
`
`
`Turning to the substance of Neo’s allegations, the allegations exceed those at
`
`issue in Michigan Motor, and more than adequately plead that Volkswagen
`
`received notice of the Asserted Patents. In Michigan Motor, the court granted the
`
`defendant’s motion to dismiss where the Plaintiff asserted only the following
`
`regarding a pre-suit notice letter:
`
`Defendants were made aware of the patents-in-suit at least as early as
`March 4, 2015, when [they were] provided notice of the patents via
`letter.
`
`Michigan Motor, 472 F. Supp. 3d at 380. The court declined to credit the
`
`allegation, because it did not “specif[y] what the letter stated, did not mention who
`
`sent the letter, and did not mention to whom the letter actually was sent.” Id.
`
`Consequently, the court concluded “there are too many dots to connect before the
`
`Court can arrive at finding that the letter indeed was sent to the defendants or their
`
`
`
`13
`
`

`

`Case 2:22-md-03034-TGB ECF No. 67, PageID.2365 Filed 08/31/22 Page 21 of 30
`
`agents and that it informed the defendants that they were potentially infringing on
`
`[the plaintiff’s] patents.” Id.5
`
`
`
`Here, unlike the plaintiff in Michigan Motor, Neo’s complaint specified (1)
`
`who sent the letter (“Neo sent a letter”); (2) to whom the letter was sent (“to
`
`Volkswagen’s parent company”); (3) the date the letter was sent (“on November
`
`23, 2021”); (4) the date Volkswagen received the letter (“that Volkswagen
`
`received no later than January 20, 2022”); (5) the letter’s reference to the Asserted
`
`Patents (“informing Volkswagen of Neo Wireless’s relevant patent portfolio,
`
`including listing the patents-in-suit”); and (6) the letter’s reference to 3GPP
`
`wireless standards (“and how the patents-in-suit cover certain 3GPP wireless
`
`standards”). Am. Comp. at ¶ 69.
`
`There is more than enough detail in these allegations for the Court to accept
`
`them as true, and reasonably infer that this letter was in fact sent and received.
`
`Courts have accepted allegations of pre-suit notice as true on far less specific
`
`
`
` 5
`
` While unnecessary for resolution of this motion, Neo respectfully observes that
`even this allegation—which alleged a specific fact (the sending of a letter on a
`certain date), and not just a bare legal conclusion—likely passed muster under
`Twombly/Iqbal and should have been treated as true. Cf., e.g., Crehan v.
`Countrywide Bank, FSB, No. 1:11 CV 613, 2012 WL 4341049, at *6 (W.D. Mich.
`Feb. 15, 2012) (denying 12(b)(6) motion because while allegation was “arguably
`vague[,] it is not a legal conclusion, but is instead a factual assertion.”), report and
`recommendation adopted, No. 1:11-CV-613, 2012 WL 4340848 (W.D. Mich. Sept.
`20, 2012.
`
`
`
`14
`
`

`

`Case 2:22-md-03034-TGB ECF No. 67, PageID.2366 Fil

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