Case 2:22-md-03034-TGB ECF No. 93, PageID.2733 Filed 10/17/22 Page 1 of 12
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`IN THE UNITED STATES DISTRICT COURT
`FOR THE EASTERN DISTRICT OF MICHIGAN
`SOUTHERN DIVISION
`
`
`
`Case No. 2:22-md-03034-TGB
`Hon. Terrence G. Berg
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`
`
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`Case No. 2:22-CV-11769-TGB
`Hon. Terrence G. Berg
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`
`
`
`IN RE NEO WIRELESS, LLC
`PATENT LITIG.
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`NEO WIRELESS, LLC,
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`
`Plaintiff,
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`v.
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`
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`MERCEDES-BENZ USA, LLC
`
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`Defendant.
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`
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`DEFENDANT MERCEDES-BENZ USA, LLC’S
`REPLY BRIEF IN SUPPORT OF ITS
`MOTION TO DISMISS UNDER RULE 12(b)(6) (DKT. NO. 74)
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`

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`Case 2:22-md-03034-TGB ECF No. 93, PageID.2734 Filed 10/17/22 Page 2 of 12
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`TABLE OF CONTENTS
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`Page
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`I. MBUSA’s Lack of Pre-Suit Knowledge of the Asserted Patents Is Fatal
`to Neo’s Willful- And Indirect-Infringement Claims ...................................... 1
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`II.
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`Even if Neo’s Alleged Notice Letter Were Shared with MBUSA, such
`Bare Pleading is Inadequate to Show Plausible Pre-Suit Knowledge of
`Infringement .................................................................................................... 4
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`III. Neo Cannot Rely on the Complaint to Save its Willful- and Indirect-
`Infringement Claims ........................................................................................ 5
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`IV. Neo’s Improper Request to Amend its Complaint Must Be Denied ............... 6
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`V.
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`Conclusion ....................................................................................................... 6
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`i
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`Case 2:22-md-03034-TGB ECF No. 93, PageID.2735 Filed 10/17/22 Page 3 of 12
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`
`
`Cases
`
`TABLE OF AUTHORITIES
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` Page(s)
`
`In re Auto. Parts Antitrust Litig.,
`No. 12-MD-02311, 2015 WL 13722910 (E.D. Mich. Aug. 25,
`2015) ..................................................................................................................... 3
`
`U.S. ex rel. Kreipke v. Wayne State Univ.,
`Case No. 12-14836, 2015 WL 400970 (E.D. Mich. Jan. 28, 2015) ..................... 6
`
`McRO, Inc. v. Namco Bandai Games Am., Inc.,
`23 F. Supp. 3d. 1113 (N.D. Cal. 2013) ................................................................. 2
`
`Midwest Energy Emissions Corp. v. Vistra Energy Corp.,
`No. 19-1334-RGA-CJB, 2020 WL 3316056 (D. Del. June 18,
`2020) ..................................................................................................................... 2
`
`Nat’l Inst. for Strategic Tech. Acquisition & Commercialization v.
`Nissan of N. Am.,
`No. 19-1334-RGA-CJB, 2020 WL 3316056 (D. Del. June 18,
`2020) ..................................................................................................................... 2
`
`Neo Wireless, LLC v. Mercedes-Benz USA, LLC,
`Case No. 2:22-CV-11769-TGB (E.D. Mich.), ECF No. 1 ................................... 1
`
`Schwendimann v. Stahls’, Inc.,
`510 F. Supp. 3d 503 (E.D. Mich. 2021) ............................................................... 4
`
`Se. Texas Inns, Inc. v. Prime Hosp. Corp.,
`462 F.3d 666 (6th Cir. 2006) ................................................................................ 3
`
`U.S. Philips Corp. v. ATI Techs., Inc.,
`No. 05CIV.8176(LAP), 2008 WL 2073928 (S.D.N.Y. May 8,
`2008) ..................................................................................................................... 3
`
`Xiros, Ltd. v. Depuy Synthes Sales, Inc.,
`No. W-21-CV-00681-ADA, 2022 WL 3592449 (W.D. Tex. Aug.
`22, 2022) (distinguishing ACQIS LLC v. Lenovo Grp. Ltd., No.
`6:20-CV-00967-ADA, 2022 WL 2705269 (W.D. Tex. July 12,
`2022) on this basis) ............................................................................................... 2
`
`ii
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`Case 2:22-md-03034-TGB ECF No. 93, PageID.2736 Filed 10/17/22 Page 4 of 12
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`
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`ZapFraud, Inc. v. Barracuda Networks, Inc.,
`528 F. Supp. 3d 247 (D. Del. 2021).................................................................. 5, 6
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`Other Authorities
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`Rule 12(b)(6) .............................................................................................................. 6
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`
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`iii
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`Case 2:22-md-03034-TGB ECF No. 93, PageID.2737 Filed 10/17/22 Page 5 of 12
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`Neo Wireless, LLC’s (“Neo’s”) claims should be dismissed because it failed
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`to plausibly allege that MBUSA willfully or indirectly infringed the Asserted
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`Patents.1 First, Neo cannot plausibly show that MBUSA had the requisite pre-suit
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`knowledge of the Asserted Patents. Second, Neo cannot plausibly show that
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`MBUSA had pre-suit knowledge of infringement of the Asserted Patents. Third,
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`Neo cannot rely on the Complaint to provide notice of the Asserted Patents.
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`Finally, Neo’s request to amend must be denied because amendment would be
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`futile and the request is procedurally improper.
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`I. MBUSA’s Lack of Pre-Suit Knowledge of the Asserted Patents Is
`Fatal to Neo’s Willful- And Indirect-Infringement Claims
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`The single sentence in the Complaint that Neo relies on to show pre-suit
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`knowledge by MBUSA cannot bear the weight Neo puts on it. It does no more than
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`allege MBUSA having “knowledge” through its parent/subsidiary relationship:
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`“[o]n information and belief, [MBUSA], through its parent company, obtained
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`actual knowledge of the Asserted Patents and its infringement thereof.” Complaint,
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`Neo Wireless, LLC v. Mercedes-Benz USA, LLC, Case No. 2:22-CV-11769-TGB
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`(E.D. Mich.), ECF No. 1 ¶ 65 (the “Complaint”). Yet courts generally agree that
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`1 In line with this Court’s order to “coordinate to avoid duplicative briefing,” (Dkt.
`No. 27 at 1), MBUSA incorporates by reference co-defendants Honda, Nissan, and
`VW’s arguments in opposition to Neo’s willful- and indirect-infringement claims
`reflected in their briefing in support of their respective Motions to Dismiss. (Dkt.
`Nos. 50, 53, 76 and 79.)
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`1
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`

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`Case 2:22-md-03034-TGB ECF No. 93, PageID.2738 Filed 10/17/22 Page 6 of 12
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`this bare assertion is not enough and that “knowledge of a patent by a parent
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`corporation is not necessarily imputed to the subsidiary.” McRO, Inc. v. Namco
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`Bandai Games Am., Inc., 23 F. Supp. 3d. 1113, 1125 (N.D. Cal. 2013).
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`Neo’s reliance on National Institute for Strategic Technology Acquisition and
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`Commercialization v. Nissan of North America to justify imputing knowledge to
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`MBUSA from a foreign parent is misplaced. No. 11-11039, 2012 WL 3600289
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`(E.D. Mich. Aug. 21, 2012). The National Institute court did not discuss the
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`plaintiff’s allegations in its complaint regarding the parent/subsidiary at issue (which
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`are sealed on the docket), so it is unclear how applicable its analysis is here. Id. at
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`*5. Nor did that court did have the benefit of the now-prevailing caselaw requiring
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`more than a bare allegation of a parent-subsidiary relationship to impute knowledge
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`to corporate affiliates. See, e.g., Midwest Energy Emissions Corp. v. Vistra Energy
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`Corp., No. 19-1334-RGA-CJB, 2020 WL 3316056, at *5 (D. Del. June 18, 2020)
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`(collecting cases).
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`In addition, Neo’s allegations fail even under its own cited cases. Neo’s
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`Complaint’s “offer[] of little more than the bare facts of the parent/subsidiary
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`relationship” is not enough to plead imputed knowledge to MBUSA from a foreign
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`parent. See Xiros, Ltd. v. Depuy Synthes Sales, Inc., No. W-21-CV-00681-ADA,
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`2022 WL 3592449, at *3 (W.D. Tex. Aug. 22, 2022) (distinguishing ACQIS LLC v.
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`2
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`Case 2:22-md-03034-TGB ECF No. 93, PageID.2739 Filed 10/17/22 Page 7 of 12
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`
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`Lenovo Grp. Ltd., No. 6:20-CV-00967-ADA, 2022 WL 2705269 (W.D. Tex. July
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`12, 2022) on this basis).
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`Holding that knowledge can be plausibly imputed to MBUSA based on the
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`mere fact of a parent/subsidiary relationship would also threaten principles of
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`corporate and agency law. “A subsidiary is a distinct legal entity and is not liable
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`for the actions of its parent or sister corporations by dint of the corporate
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`relationship.” In re Auto. Parts Antitrust Litig., No. 12-MD-02311, 2015 WL
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`13722910, at *3 (E.D. Mich. Aug. 25, 2015) (citation omitted). Piercing a corporate
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`veil requires an inquiry into the relatedness and control among the corporate entities.
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`See, e.g., Se. Texas Inns, Inc. v. Prime Hosp. Corp., 462 F.3d 666, 675 (6th Cir.
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`2006) (describing the requisite analysis and the caution with which courts pierce the
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`corporate veil). Such imputation also implicates agency principles, where courts
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`have explained that “[b]efore a parent’s knowledge will be imputed to its subsidiary,
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`it must be shown that the parent’s employees informed of the [trademark]
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`infringement were under a duty to report that information to the subsidiary.” See
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`U.S. Philips Corp. v. ATI Techs., Inc., No. 05CIV.8176(LAP), 2008 WL 2073928,
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`at *2 (S.D.N.Y. May 8, 2008) (citation omitted). There is no basis for a patent-law
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`exception to these principles, so Neo cannot plausibly show imputation of
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`knowledge to MBUSA here.
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`3
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`Case 2:22-md-03034-TGB ECF No. 93, PageID.2740 Filed 10/17/22 Page 8 of 12
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`II. Even if Neo’s Alleged Notice Letter Were Shared with MBUSA,
`Such Bare Pleading is Inadequate to Show Plausible Pre-Suit
`Knowledge of Infringement
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`The letter Neo relies on for alleged pre-suit notice to MBUSA appears to be
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`substantively identical to letters it sent to affiliates of other defendants. Compare
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`Ex. 1, with Dkt. 79 Exs. A-B. The only differences are the letters’ dates and
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`recipients. As such, Honda’s, Nissan’s, and VW’s arguments regarding the
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`inadequacy of the letter to plausibly plead providing notice of infringement are
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`directly applicable to MBUSA and are incorporated herein by reference. (See, e.g.,
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`Dkt. No. 50 at 11-14, 17-18; Dkt. No. 53 at 7-8; Dkt. No. 76 at 3-4; and Dkt. No. 79
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`at 1-3.)
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`When Neo is required to offer a plausible notice of alleged infringement, it
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`takes a markedly different approach. Neo’s Complaint includes far more detailed
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`allegations of infringement of the Asserted Patents than its alleged notice letter.
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`Compare Complaint ¶¶ 44-110 and Exs. 7-12, with Ex. 1. This contrast illustrates
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`that Neo’s letter fails to plausibly provide notice of infringement because it does not
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`identify accused products or the specific Asserted Patents and claims at issue—Neo
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`references only an overall portfolio and does not show how MBUSA (or any other
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`entity) allegedly infringes the claims. See Schwendimann v. Stahls’, Inc., 510 F.
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`Supp. 3d 503, 510, 514 (E.D. Mich. 2021) (holding that a plaintiff’s request “that
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`defendant take an unspecified license and indicated their belief that unspecified . . .
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`4
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`Case 2:22-md-03034-TGB ECF No. 93, PageID.2741 Filed 10/17/22 Page 9 of 12
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`patents cover the Accused [Products]” did “not support a reasonable inference of
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`intentional or knowing infringement”).
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`III. Neo Cannot Rely on the Complaint to Save its Willful- and
`Indirect-Infringement Claims
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`Neo’s alternative theory, that its Complaint can provide notice of the Asserted
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`Patents for willful- and indirect-infringement purposes, also fails. Apart from the
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`inherent implausibility of Neo’s allegations about future conduct,2 “the operative
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`complaint in a lawsuit fails to state a claim for indirect patent infringement where
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`the defendant’s alleged knowledge of the asserted patents is based solely on the
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`content of that complaint or a prior version of the complaint filed in the same
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`lawsuit.” ZapFraud, Inc. v. Barracuda Networks, Inc., 528 F. Supp. 3d 247, 251 (D.
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`Del. 2021). And the same is true for claims for “willfulness-based enhanced
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`damages.” Id. Although some courts have previously allowed a complaint to provide
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`notice of a patent to an accused infringer for willful- and indirect-infringement
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`purposes, this approach creates a patent-specific rule that perversely encourages
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`more patent disputes. Id. (observing that “no area of tort law other than patent
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`infringement where courts have allowed a plaintiff to prove an element of a legal
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`claim with evidence that the plaintiff filed the claim”). Every claim for patent
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`2 Neo’s operative Complaint was filed on July 15, 2022. Complaint at 37. As such,
`its statement in ¶ 66 that MBUSA “deliberately and wantonly continued to infringe
`on Neo’s patent rights [after being served with the Complaint]” is baseless
`speculation about MBUSA’s potential future conduct. Id. at 18.
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`5
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`Case 2:22-md-03034-TGB ECF No. 93, PageID.2742 Filed 10/17/22 Page 10 of 12
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`infringement would result in an additional willfulness claim. As such, courts are
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`increasingly dismissing such claims in the absence of actual pre-suit knowledge. Id.
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`at 249 n.1 (colleting cases). Neo’s claims here should likewise be rejected.
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`IV. Neo’s Improper Request to Amend its Complaint Must Be Denied
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`Any amendment by Neo regarding MBUSA’s alleged knowledge would
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`necessarily be futile because no facts exist that plausibly suggest that MBUSA had
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`pre-suit knowledge of the Asserted Patents. Simply put, Neo had no pre-suit
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`communications with MBUSA, and MBUSA had no pre-suit knowledge of the
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`Asserted Patents.
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`Additionally, Neo’s request to amend should also be denied because it is not
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`properly presented to the Court. “In the Sixth Circuit, courts have repeatedly held
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`that an informal request for leave to amend raised only in response to a motion to
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`dismiss is procedurally improper, and must be denied.” U.S. ex rel. Kreipke v. Wayne
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`State Univ., Case No. 12-14836, 2015 WL 400970, at *2 (E.D. Mich. Jan. 28, 2015)
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`(collecting cases). Neo disregarded the requirement that it must move and attach its
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`proposed amendment, so neither the Court nor MBUSA can evaluate Neo’s
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`proposal. Id. Thus, its request to amend must be rejected.
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`V. Conclusion
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`For the reasons discussed above, as well as in MBUSA’s Brief In Support of
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`its Motion to Dismiss Under Rule 12(b)(6) and Honda, Nissan, and VW’s briefs
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`6
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`Case 2:22-md-03034-TGB ECF No. 93, PageID.2743 Filed 10/17/22 Page 11 of 12
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`supporting their respective Motions to Dismiss, (see Dkt. Nos. 50, 53, 74, 76 and
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`79), the Court should dismiss the claims of willful infringement and enhanced
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`damages, as well as induced infringement, against MBUSA.
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`Dated: October 17, 2022
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`Respectfully submitted,
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`
`
` /s/ Celine J. Crowson
`
`Celine J. Crowson
`Joseph J. Raffetto
`Damon M. Lewis
`Nicholas W. Rotz
`Hogan Lovells US LLP
`555 Thirteenth St, NW
`Washington, DC 20004
`Telephone: (202) 637-5700
`Facsimile: (202) 637-5910
`celine.crowson@hoganlovells.com
`joseph.raffetto@hoganlovells.com
`damon.lewis@hoganlovells.com
`nicholas.rotz@hoganlovells.com
`
`
`Counsel for Defendant Mercedes-Benz
`USA, LLC
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`7
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`Case 2:22-md-03034-TGB ECF No. 93, PageID.2744 Filed 10/17/22 Page 12 of 12
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`CERTIFICATE OF SERVICE
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`I certify that on October 17, 2022, I electronically filed the foregoing with
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`the Clerk of the Court using the CM/ECF system which will send notification of
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`such filing to all counsel of record.
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`/s/ Celine J. Crowson
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`Celine J. Crowson
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