`
`
`NOT FOR PUBLICATION
`
`UNITED STATES DISTRICT COURT
`DISTRICT OF NEW JERSEY
`
`WAG ACQUISTION, LLC,
` Plaintiff,
` v.
`MULTI-MEDIA, LLC, et al.,
` Defendants.
`
`
`Civil Action No. 14-2340 (ES) (JAD)
` OPINION & ORDER
`
`WAG ACQUISTION, LLC,
` Plaintiff,
` v.
`SOBONITO INVESTMENTS, LTD., et al.,
` Defendants.
`
`
`Civil Action No. 14-1661 (ES) (JAD)
`OPINION & ORDER
`
`WAG ACQUISTION, LLC,
` Plaintiff,
` v.
`DATA CONVERSIONS, INC., et al.,
` Defendants.
`
`
`Civil Action No. 14-2345 (ES) (JAD)
`OPINION & ORDER
`
`1
`
`
`
`
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`
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`Case 2:14-cv-02340-ES-JAD Document 61 Filed 09/10/15 Page 2 of 25 PageID: 881
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`WAG ACQUISTION, LLC,
` Plaintiff,
` v.
`FLYING CROCODILE, INC., et al.,
` Defendants.
`
`WAG ACQUISTION, LLC,
` Plaintiff,
` v.
`GATTYÁN GROUP S.a r.l., et al.,
` Defendants.
`
`
`Civil Action No. 14-2674 (ES) (JAD)
`OPINION & ORDER
`
`
`Civil Action No. 14-2832 (ES) (JAD)
`OPINION & ORDER
`
`WAG ACQUISTION, LLC,
` Plaintiff,
` v.
`FRIENDFINDER NETWORKS, INC., et al.,
` Defendants.
`
`
`Civil Action No. 14-3456 (ES) (JAD)
`OPINION & ORDER
`
`WAG ACQUISTION, LLC,
` Plaintiff,
` v.
`VUBEOLOGY, INC., et al.,
` Defendants.
`
`
`Civil Action No. 14-4531 (ES) (JAD)
`OPINION & ORDER
`
`
`
`2
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`Case 2:14-cv-02340-ES-JAD Document 61 Filed 09/10/15 Page 3 of 25 PageID: 882
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`Civil Action No. 15-3581 (ES) (JAD)
`OPINION & ORDER
`
`WAG ACQUISTION, LLC,
` Plaintiff,
` v.
`WEBPOWER, INC., et al.,
` Defendants.
`
`
`
`SALAS, DISTRICT JUDGE
`
`Before the Court are motions to dismiss in eight patent infringement actions filed by
`
`Plaintiff WAG Acquisition, LLC (“WAG”). Seven of these cases were consolidated into Civil
`
`Action No. 14-2340 for purposes of discovery on October 6, 2014.1 (D.E. No. 45, Consolidation
`
`Order).2 In addition to the consolidated cases, WAG filed a Complaint involving the patents-in-
`
`suit against WebPower, Inc. (“WebPower”) on May 27, 2015. (Civil Action No. 15-3581, D.E.
`
`No. 1, WebPower Complaint).
`
`Defendants in the seven consolidated cases have jointly moved to dismiss Plaintiff’s
`
`Complaints. (D.E. No. 48). WebPower moved separately to dismiss in its action, (Civil Action
`
`No. 15-3581, D.E. No. 9), and the parties have requested that the Court consider WebPower’s
`
`
`1 WAG Acquisition, LLC v. Sobonito Investments, Ltd., et al., Civil Action No. 14-1661 (“Sobonito”); WAG
`Acquisition, LLC v. Multi Media LLC, et al., Civil Action No. 14-2340 (“Multi Media”); WAG Acquisition,
`LLC v. Data Conversions, Inc. et al., Civil Action No. 14-2345 (“Data Conversions”); WAG Acquisition,
`LLC v. Flying Crocodile, Inc., et al., Civil Action No. 14-2674 (“Flying Crocodile”); WAG Acquisition,
`LLC v. Gattyan Group S.a.r.l., et al., Civil Action No. 14-2832 (“Gattyan”); WAG Acquisition LLC v.
`FriendFinder Networks Inc., et al., Civil Action No. 14-3456 (“FriendFinder”); and WAG Acquisition, LLC
`v. Vubeology, Inc., et al., Civil Action No. 14-4531 (“Vubeology”). There was originally an eighth
`consolidated case, WAG Acquisition, LLC v. MFCXY, Inc., et al. (“MFCXY”), but it was voluntarily
`dismissed on May 8, 2015. (See Civil Action No. 14-3196, D.E. No. 48).
`2 Unless otherwise specified, docket entry numbers refer to the consolidated action, Civil Action No. 14-
`2340.
`
`
`
`3
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`motion to dismiss in conjunction with the consolidated motion. (Civil Action No. 15-3581, D.E.
`
`No. 13, June 29, 2015 Letter).
`
`Defendants argue that the Court should dismiss WAG’s Complaints because the claims of
`
`the patents-in-suit are invalid and/or unenforceable and because WAG has failed to sufficiently
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`allege direct infringement, induced infringement, contributory infringement, and willful
`
`infringement. Defendant Coolvision in the Sobonito matter also moves to dismiss for lack of
`
`personal jurisdiction. The Court has considered the parties submissions in connection with their
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`motions, as well as the oral arguments presented to the Court on July 29, 2015. For the reasons
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`below, the Court denies Defendants’ motions to dismiss and orders limited discovery regarding
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`the Court’s personal jurisdiction over Defendant Coolvision.
`
`I.
`
`FACTUAL BACKGROUND
`
`WAG is a “New Jersey business that provides Internet streaming services to proprietors of
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`traditional radio stations—retransmitting (“streaming”) the radio station’s live programming over
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`the Internet.” (D.E. No. 49, Plaintiff’s Brief in Opposition to Defendants’ Joint Motion to Dismiss
`
`(“Pl. Opp. Br.”) at 2). Defendants “primarily operate paid live ‘web cam’ sites on the Internet.”
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`(Id. at 3).
`
`WAG contends that, during the course of its business, it developed patents to improve the
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`experience of streaming over the Internet. (Id. at 2). WAG has asserted four of these patents in
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`this litigation: U.S. Patent No. 8,122,141 (“the ‘141 patent”), U.S. Patent No. 8,327,011 (“the ‘011
`
`patent”), U.S. Patent No. 8,185,611 (“the ‘611 patent”), and U.S. Patent No. 8,364,839 (“the ‘839
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`patent”).3 WAG currently practices the ‘611 and ‘839 patents. (Id. at 3).
`
`
`3 WAG has asserted the ‘141 and ‘011 patents against all Defendants. It has asserted the ‘611 patent and
`‘839 patent only in the Sonbonito, Flying Crocodile, Gattyan, FriendFinder, and WebPower cases.
`
`
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`4
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`According to WAG, its patents “provide two separate and distinct types of solutions to the
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`problem of reliable and timely Internet media transport.” (Id. at 5). The ‘839 and ‘611 patents are
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`directed to a “buffering” solution, which employs a user buffer and server buffer, and in which the
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`control of data flow for streaming is mediated by the server. (Id.). The ‘141 and ‘011 patents
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`provide a “pull implementation” solution “in which the server regulates the flow of data based on
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`receiving requests from the client.” (Id.). WAG argues that the technology that “Defendants use
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`to stream their video is WAG’s technology, covered by the patents-in-suit.” (Id. at 4).
`
`II.
`
`LEGAL STANDARD
`
`For a complaint to survive dismissal pursuant to Federal Rule of Civil Procedure 12(b)(6),
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`it “must contain sufficient factual matter, accepted as true, to ‘state a claim to relief that is plausible
`
`on its face.’” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (quoting Bell Atl. Corp. v. Twombly,
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`550 U.S. 544, 570 (2007)). “A claim has facial plausibility when the plaintiff pleads factual
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`content that allows the court to draw the reasonable inference that the defendant is liable for the
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`misconduct alleged.” Id. (citing Twombly, 550 U.S. at 556).
`
`In evaluating the sufficiency of a complaint, a court must “accept all well-pleaded
`
`allegations in the complaint as true and . . . draw all reasonable inferences in favor of the non-
`
`moving party.” See Phillips v. Cnty. of Allegheny, 515 F.3d 224, 234 (3d Cir. 2008). However,
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`“the tenet that a court must accept as true all of the allegations contained in a complaint is
`
`inapplicable to legal conclusions,” and “[a] pleading that offers ‘labels and conclusions’ or ‘a
`
`formulaic recitation of the elements of a cause of action will not do.’” Iqbal, 556 U.S. at 678
`
`(quoting Twombly, 550 U.S. at 555).
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`5
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`III. DISCUSSION
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`a. Unenforceability of ‘141 Patent Claims
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`Defendants argue that claims 1-18 and 23-28 of the ‘141 patent are unenforceable as a
`
`matter of law because they erroneously include the phrase “such as the Internet” even though that
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`phrase was deleted as part of an Examiner’s Amendment during the patent’s prosecution. (D.E.
`
`No. 48, Joint Motion to Dismiss Plaintiff’s Complaints (“Def. Mov. Br.”) at 6-8). Specifically,
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`Defendants argue that the “Federal Circuit’s Overstock decision explains that claims in an issued
`
`patent that are not the allowed claims—e.g., do not reflect the claim language allowed by the
`
`PTO—are not enforceable as a matter of law.” (Id. at 8 (citing H-W Tech. LC v. Overstock.com,
`
`Inc., 758 F.3d 1329, 1335 (Fed. Cir. 2014))). They argue that, to decide this issue, the Court must
`
`consider the following inquiries: (1) Did the ‘141 patent issue with erroneous claims? (2) Does
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`the Court have the authority to correct the errors in such claims? (3) Can WAG assert the claims
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`prior to correction? (D.E. No. 50, Joint Reply Brief in Support of Motion to Dismiss Plaintiff’s
`
`Complaints (“Def. Rep. Br.”) at 1). Defendants make clear that they are not asking the Court to
`
`analyze the validity of the claims as asserted—but rather to find that WAG cannot even assert the
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`claims to begin with. (Id.). The Court will consider each question in turn.
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`First, there is no dispute that the ‘141 patent issued with claim language that was deleted
`
`during an Examiner’s Amendment. On September 29, 2011, the Patent Examiner conducted a
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`telephone interview in which he “informed applicant’s representative of the potential 112 issues
`
`in the independent claims and suggested an examiner’s amendment to address the issues.
`
`Applicant’s attorney agreed to allow the examiner to amend claims 1, 10, and 24 by removing the
`
`phrase ‘such as the internet.’” (D.E. No. 48-9, 9/29/2011 Examiner-Initiated Interview Summary).
`
`Accordingly, an Examiner’s Amendment issued on the same date deleting the phrase “such as the
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`6
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`Case 2:14-cv-02340-ES-JAD Document 61 Filed 09/10/15 Page 7 of 25 PageID: 886
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`Internet” from the agreed-upon claims. (D.E. No. 48-9, 9/29/2011 Examiner’s Amendment).
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`Despite the Examiner’s Amendment, the ‘141 patent issued with the phrase “such as the Internet”
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`in claims 1, 10, and 24. (‘141 patent at 13:24, 13:64, 15:9). Though WAG stated at oral argument
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`that the inclusion of the phrase is not technically “erroneous” because it is accurate and appears in
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`other patents, it does not dispute that the ‘141 patent issued with language different from what was
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`agreed to during prosecution. (7/29/2015 Oral Argument Transcript (“Tr.”) at 48:21-49:7; 51:13-
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`15). Thus, the Court is satisfied that the inclusion of the phrase “such as the Internet” in claims 1,
`
`10, and 24 of the ‘141 patent constitutes an error.
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`Second, accepting that there is an error, there is also no dispute that the Court does not have
`
`authority to correct the claims. The Federal Circuit has held that “the district court can correct an
`
`error only if the error is evident from the face of the patent.” Grp. One, Ltd. v. Hallmark Cards,
`
`Inc., 407 F.3d 1297, 1303 (Fed. Cir. 2005) (citing Novo Indus., L.P. v. Micro Molds Corp., 350
`
`F.3d 1348, 1357 (Fed. Cir. 2003)). If, however, “a reader of the patent at issue . . . could not
`
`ascertain the error from the face of the patent,” then the district court is without authority to correct
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`it. Id. Here, the alleged error is not evident from the face of the patent. A reader of the ‘141 patent
`
`would not be able to discern that the phrase “such as the Internet” should not be included in certain
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`claims. The claim language reads coherently as printed. Accordingly, the Court is without
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`authority to make the correction.
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`The heart of the dispute, therefore, is whether WAG may assert the ‘141 patent claims prior
`
`to correction. Defendants argue that WAG may not assert the uncorrected claims because “claims
`
`in an issued patent that are not the allowed claims—e.g., do not reflect the claim language as
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`allowed by the PTO—are not enforceable as a matter of law.” (Def. Mov. Br. at 8). Defendants
`
`rely on H-W Tech., L.C. v. Overstock.com, Inc., 758 F.3d 1329, 1335 (Fed. Cir. 2014), which states
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`7
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`that when “a claim issues that omits a material limitation, and such omission is not evident on the
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`face of the patent, the patentee cannot assert that claim until it has been corrected by the PTO.”
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`758 F.3d at 1335. According to Defendants, WAG is therefore required to obtain a PTO correction
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`of the erroneous ‘141 claims pursuant to 35 U.S.C. § 254 before asserting them in litigation. (Tr.
`
`at 47:1-4). In response, WAG argues that H-W only applies when a claim is erroneous because it
`
`omits a material limitation. (Pl. Opp. Br. at 11). WAG argues that H-W does not bar the assertion
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`of claims like those in the ‘141 patent because (1) the error is not an omission; and (2) the error is
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`immaterial. (Id. at 10-14).
`
` The Court agrees with Plaintiff that H-W does not bar the assertion of the disputed
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`claims in the ‘141 patent. In H-W, the claim at issue was “[a] method for performing contextual
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`searches on an Internet Phone (IP) phone comprising the following steps . . . .” H-W, 758 F.3d at
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`3333. The claim approved by the PTO included the step “wherein said user completes a transaction
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`with at least one of said merchants listed without the need to generate a voice call,” but the patent
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`issued without that limitation. Id. The Federal Circuit agreed that the district court could not
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`correct the claim, and held that the claim could not be asserted uncorrected because it “omits a
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`material limitation, and such omission is not evident on the face of the patent.” The Federal Circuit
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`reasoned that permitting the patentee to assert the claim “would be inequitable and undermine the
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`notice function of patents.” Id. at 1335.
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`Here, by contrast, there was no omission of a material limitation. In describing his basis
`
`for deleting the phrase, the Patent Examiner states that he “[i]nformed applicant’s representative
`
`of the potential 112 issues in the independent claims and suggested an examiner’s amendment to
`
`address the issues. Applicant’s attorney agreed to allow the examiner to amend claims 1, 10 and
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`24 by removing the phrase ‘such as the internet.’” (D.E. No. 48-9, 9/29/2011 Examiner’s
`
`
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`8
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`Case 2:14-cv-02340-ES-JAD Document 61 Filed 09/10/15 Page 9 of 25 PageID: 888
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`Amendment). The Patent Examiner did not suggest—and neither party has asserted—that the
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`phrase “such as the Internet” alters the scope of the claims. As WAG points out, the phrase “such
`
`as the Internet” “only serves to qualify, i.e., limit the scope of, the phrase that it modifies (‘data
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`communications medium’).” (Pl. Opp. Br. at 14). This error is therefore distinguishable from the
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`error in H-W, where the error broadened the scope of the patent claim.
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`Defendants have cited no case suggesting that any claim with an uncorrected error is
`
`unenforceable as a matter of law. In fact, the cases that Defendants rely on are inapposite, and
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`they reveal that courts have not held patent claims unenforceable simply because they contain
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`uncorrected errors. For example, in Group One, as here, the plaintiff did not seek a certificate of
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`correction to address an error that was “correctable by the PTO” under § 254. 407 F.3d at 1302.
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`The Federal Circuit upheld the district court’s determination that (1) it was without authority to
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`make the correction, and (2) the patent was invalid because “the missing language [was] essential
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`to the validity of [the claim], and Group One has made no claim that the omitted language is not
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`essential to validity.” Id. at 1303. Notably, the Federal Circuit did not hold that the uncorrected
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`claim was unenforceable as a matter of law; it merely held that the asserted, uncorrected claim was
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`invalid on the merits. Id. Similarly, in Novo Industries, the Federal Circuit upheld the District
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`Court’s decision not to correct an error that added a full claim element, and determined that the
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`uncorrected claim was “invalid for indefiniteness in its present form.” 350 F.3d at 1356. Again,
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`the Federal Circuit’s holding was based on invalidity. Id. There is nothing to suggest that the
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`plaintiff was barred from asserting the claims, or that the error rendered the uncorrected claims
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`unenforceable as a matter of law. Id.
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`In this case, Defendants have explicitly stated that they are not arguing that the inclusion
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`of the phrase “such as the Internet” renders the ‘141 claims invalid as indefinite or otherwise. (Def.
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`9
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`Case 2:14-cv-02340-ES-JAD Document 61 Filed 09/10/15 Page 10 of 25 PageID: 889
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`Rep. Br. at 1). Instead, they argue that it is strictly unenforceable as a matter of law. (Def. Mov.
`
`Br. at 8). Because the Court does not agree that the inclusion of the phrase “such as the Internet”
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`renders the ‘141 claims unenforceable as a matter of law, Defendants’ motion to dismiss these
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`claims is denied.
`
`b. § 101 Subject Matter
`
`Next, Defendants argue that the patents should be dismissed because they are directed to
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`ineligible subject matter pursuant to 35 U.S.C. § 101. Section 101 of the Patent Act defines the
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`scope of eligible subject matter as “any new and useful process, machine, manufacture, or
`
`composition of matter, or any new and useful improvement thereof.” 35 U.S.C. § 101. However,
`
`the Supreme Court has “long held that this provision contains an important implicit exception:
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`Laws of nature, natural phenomena, and abstract ideas are not patentable.” Alice Corp. Pty. Ltd.
`
`v. CLS Bank Int’l, 134 S. Ct. 2347, 2354 (2014) (quoting Assoc. for Molecular Pathology v. Myriad
`
`Genetics, Inc., 133 S. Ct. 2107, 2116 (2013)). Defendants argue that the patents cover the “abstract
`
`idea” of “maintaining streaming media data over the Internet.” (WebPower Mov. Br. at 6). WAG
`
`argues that it is premature for the Court to determine § 101 eligibility at this stage of the litigation,
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`prior to claim construction. (Pl. Opp. Br. at 21). Alternatively, it argues that the patents are not
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`invalid under § 101. (Id. at 22-43).
`
`The Supreme Court has set forth a two-part framework for distinguishing patent-eligible
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`and patent-ineligible subject matter. Alice, 134 S. Ct. at 2355. First, the Court must “determine
`
`whether the claims at issue are directed to one of those patent-ineligible concepts.” Id. (citing
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`Mayo Collaborative Servs. v. Prometheus Labs., Inc., 132 S. Ct. 1289, 1296-97 (2012)). If yes,
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`the court must then “consider the elements of each claim both individually and as an ‘ordered
`
`combination’ to determine whether the additional steps ‘transform the nature of the claim’ into a
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`10
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`Case 2:14-cv-02340-ES-JAD Document 61 Filed 09/10/15 Page 11 of 25 PageID: 890
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`patent-eligible application.” Id. (citing Mayo, 132 S. Ct. at 1298, 1297). Step two of the analysis
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`is known as search for the “inventive concept,” which is “an element or combination of elements
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`that is sufficient ‘to ensure that the patent in practice amounts to significantly more than a patent
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`upon the [ineligible concept] itself.” Id. (citing Mayo, 132 S. Ct. at 1294).
`
`The Court recognizes that “claim construction is not an inviolable prerequisite to a validity
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`determination under 101.” Content Extraction and Transmission LLC v. Wells Fargo Bank, 776
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`F.3d 1343, 1349 (Fed. Cir. 2014). Nevertheless, the Federal Circuit has instructed that “it will
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`ordinarily be desirable—and often necessary—to resolve claim construction disputes prior to a
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`§ 101 analysis, for the determination of patent eligibility requires a full understanding of the basic
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`character of the claimed subject matter.” BanCorp Servs., LLC v. Sun Life Assurance Co. of
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`Canada, 687 F.3d 1266, 1273-74 (Fed. Cir. 2012). Indeed, “[i]f the Court is going to invalidate
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`[the patent-in-suit] on subject matter eligibility grounds before claim construction, then
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`Defendants must establish that the only plausible construction [i]s one that . . . renders the subject
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`matter ineligible (with no factual inquiries).” Data Distribution Technologies, LLC v. Brer
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`Affiliates, Inc., No. 12-4878, 2014 WL 4162765, at *6 (D.N.J. Aug. 19, 2014). Accordingly, “it
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`will be rare that a patent infringement suit can be dismissed at the pleading stage for lack of
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`patentable subject matter.” Ultramercial, Inc. v. Hulu, LLC, 722 F.3d 1335, 1338 (Fed. Cir. 2013)
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`(cert. granted, judgment vacated sub nom. WildTangent, Inc. v. Ultramerical, LLC, 134 S. Ct.
`
`2870 (2014)).
`
`Defendants argue that the Court can—and should—address § 101 eligibility at this stage,
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`and they direct the Court to several cases taking that approach. (Def. Mov. Br. at 11-12 (citing,
`
`inter alia, Content Extraction & Transmission LLC v. Wells Fargo Bank, 2013 WL 3964909
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`(D.N.J. Jul. 31, 2013); Glory Licensing LLC v. Toys R US, Inc., 2011 U.S. Dist. LEXIS 51888
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`11
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`Case 2:14-cv-02340-ES-JAD Document 61 Filed 09/10/15 Page 12 of 25 PageID: 891
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`(D.N.J. May 16, 2011)).4 WAG contends that the Court should defer ruling on § 101 eligibility
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`until after claim construction, and directs the Court to cases that in which a § 101 ruling was
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`“deferred in order to further develop the record.” (D.E. No. 16, Plaintiff’s Brief in Opposition to
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`Defendant WebPower Inc.’s Motion to Dismiss (“WebPower Opp. Br.”) at 34-35 n.8 (collecting
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`cases)). There is no dispute that courts have taken both approaches.
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`The Court agrees with WAG that claim construction is necessary in this case before it can
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`determine whether WAG’s patents are invalid under § 101. It is clear to the Court from the parties’
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`submissions and oral argument that the parties vigorously dispute the basic character and meaning
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`of the claims. Indeed, WAG has stated that “the parties disagree on key areas of interpretation,
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`including the fundamental question of what WAG’s patents are about.” (Pl. Opp. Br. at 22).
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`Despite this, the parties have not set forth stipulated representative claims or proposed
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`constructions for the Court to review. As such, the Court cannot “fairly apply Alice, particularly
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`at step two, by attempting to conjure up all plausible claim constructions at this pleadings stage in
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`the absence of stipulated constructions or at least Plaintiff’s proposed constructions of its own
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`patent.” See Data Distribution, 2014 WL 4162765, at *11. Because resolving the parties’ disputes
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`about the basic character and meaning of the claims requires claim construction, Defendants’
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`motion to dismiss under § 101 is denied. See Nomadix, Inc. v. Hospitality Core Servs. LLC, No.
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`14-08256, 2015 WL 1525537, at *2 (C.D. Cal. Apr. 3, 2015) (denying § 101 argument on motion
`
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`4 Though not raised in their moving brief, Defendants also relied heavily on Wireless Media Innovations,
`LLC v. Maher Terminals, LLC, No. 14-7004, 2015 WL 1810378 (D.N.J. Apr. 20, 2015), in the WebPower
`brief and at oral argument. (See WebPower Mov. Br. at 4-5; Tr. at 67:3-68:11; 86:8-15). In Wireless
`Media, the court determined that patents were directed to the abstract idea of “monitoring locations,
`movement, and load status of shipping containers within a container-receiving yard, and storing, reporting
`and communicating this information in various forms through generic computer functions.” Wireless
`Media Innovations, 2015 WL 1810378, at *8. Significantly, however, it first determined that “even if the
`Court construes all claim terms in a manner most favorable to Plaintiff, it would still find that none of the
`claims survive § 101.” Id. at *5. That is not the case here.
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`12
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`Case 2:14-cv-02340-ES-JAD Document 61 Filed 09/10/15 Page 13 of 25 PageID: 892
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`to dismiss because “[a]though the [c]ourt has the patents in question before it right now . . . the
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`exact functioning of the patented systems has not yet been fully briefed.”); StoneEagle Servs., Inc.
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`v. Pay-Plus Solutions, Inc., No. 13-2240, 2015 WL 518852, at *4 (M.D. Fl. Feb. 9, 2015) (denying
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`motion to dismiss on § 101 grounds as “premature” where “the parties dispute the basic character
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`of the claimed subject matter”).
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`c. Direct Infringement
`
`Defendants next argue that WAG’s Complaints must be dismissed for failure to adequately
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`plead direct infringement. (Def. Mov. Br. at 23). Pursuant to 35 U.S.C. § 271(a), “whoever
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`without authority makes, uses, offers to sell, or sells any patented invention, within the United
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`States or imports into the United States any patented invention during the term of the patent
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`therefor, infringes the patent.” 35 U.S.C. § 271(a).
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`Defendants first argue that WAG’s direct infringement allegations fail because they refer
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`generally to “Defendants.” (Def. Mov. Br. at 23-35). Specifically, they argue that WAG “must
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`separately plead direct infringement as to each separate defendant.” (Id. at 24). They rely on
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`Richmond v. Lumisol Electrical Ltd., No. 13-1944, 2014 WL 1405159, at *3 (D.N.J. Apr. 10,
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`2014), in which the court held that the plaintiff’s complaint was deficient and that “[p]laintiff’s
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`allegations should be broken into separate counts linking each individual Defendant with a
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`violation of a single patent.” 2014 WL 1405159, at *3. However, a closer review of Richmond
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`reveals that the complaint at issue in that case is easily distinguishable from WAG’s Complaints
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`here. The court in Richmond noted that the complaint was a “shot-gun, one-count Complaint” in
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`which the plaintiff “lumps his direct infringement and indirect infringement claims into one
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`lengthy and rambling count.” Id. The court’s instructions were directed to the plaintiff in that case
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`“[i]f [p]laintiff seeks to amend his Complaint.” Id. The court did not state that the instruction
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`Case 2:14-cv-02340-ES-JAD Document 61 Filed 09/10/15 Page 14 of 25 PageID: 893
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`reflects a pleading requirement applicable to all patent cases. In fact, it specifically noted that it
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`“writes only for the parties.” Id. at *1.
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`Here, by contrast, WAG breaks out its claims by patent and infringement type, and it simply
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`alleges that “Defendants” are responsible in each count. (See, e.g., Sobonito Compl. ¶¶ 61-76
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`(alleging direct infringement of ‘141 patent claims against “Defendants”)). Courts have held that
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`complaints with similar allegations are sufficient to withstand a motion to dismiss. See, e.g.,
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`WesternGeco LLC v. Ion Geophysical Corp., 776 F. Supp. 2d 342, 363 (S.D. Tex. 2011) (“The
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`Federal Circuit has approved the use of a collective term within a complaint to refer to acts of all
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`defendants without distinction among the exact infringing acts performed by each one” (citing
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`McZeal v. Sprint Nextel Corp., 501 F. 3d 1354, 1357 (Fed. Cir. 2007)). The Court is satisfied that
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`WAG’s reference to “Defendants” in WAG’s Complaints means each individual Defendant, and
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`that the Complaint is sufficient to put Defendants on notice of the alleged infringement.
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` Next, Defendants argue that WAG’s Complaints must be dismissed because WAG does
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`not specifically show how Defendants make or use the claimed inventions. (Def. Mov. Br. at 27-
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`44). Specifically, Defendants contend that end-users—not Defendants—“use” the patented
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`inventions because “use” occurs “where control of the system is exercised and beneficial use of
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`the system obtained.” (Id. at 30 (citing NTP, Inc. v. Research In Motion, Ltd., 418 F.3d 1282 (Fed.
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`Cir. 2005)).
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`The Court declines to dismiss Plaintiff’s direct infringement claims on this ground. As
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`recently as July 21, 2015, the Federal Circuit has held that “[a] motion to dismiss a claim of direct
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`infringement . . . will not be granted if the complaint follows Form 18.” Addiction and
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`Detoxification Inst. LLC v. Carpenter, 2015 WL 4430128, at *2 (Fed. Cir. July 21, 2015) (citing
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`In re Bill of Lading Transmission & Processing Sys. Patent Litig., 681 F.3d 1323, 1331 (Fed. Cir.
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`2012)).5 “Form 18 and the Federal Rules of Civil Procedure do not require a plaintiff to plead
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`facts establishing that each element of an asserted claim is met” or “even identify which claims it
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`asserts are being infringed.” In re Bill of Lading, 681 F.3d at 1331 (internal citation omitted).
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`Rather, a complaint complies with Form 18 if it includes “(1) an allegation of jurisdiction; (2) a
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`statement that the plaintiff owns the patent; (3) a statement that defendant has been infringing the
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`patent ‘by making, selling, and using [the device] embodying the patent’; (4) a statement that the
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`plaintiff has given the defendant notice of its infringement; and (5) a demand for an injunction and
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`damages.” K–Tech Telecomm’n, Inc. v. Time Warner Cable, Inc., 714 F.3d 1277, 1283 (Fed. Cir.
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`2013) (internal citation omitted). In addition, “to the extent any conflict exists between Twombly
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`(and its progeny) and the Forms regarding pleadings requirements, the Forms control.” Id.
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`Here, WAG’s complaints not only satisfy the basic requirements of Form 18, but also the
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`heightened the pleading standard of Twombly. With respect to Form 18, WAG’s Complaints each
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`allege subject matter and personal jurisdiction. (See, e.g., Sobonito Compl. ¶¶ 6-7). WAG’s
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`complaints further allege that WAG owns the patents-in-suit. (See, e.g., id. ¶¶ 13). They allege
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`that Defendants have been infringing the patents-in-suit “by making, selling, and using [the device]
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`embodying the patent.” (See, e.g., id. ¶¶ 63, 98-99, 124, 129). They allege that Plaintiff has given
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`Defendants notice of its infringement. (See, e.g., id. ¶¶ 59-60). Finally, they demand an injunction
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`and damages. (See, e.g., id. at 40, Prayer for Relief).
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`Moreover, WAG’s complaints meet the standard of Twombly and Iqbal because they
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`“contain sufficient factual allegations such that a reasonable court could, assuming the allegations
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`5 As Defendants pointed out at oral argument, the Judicial Conference of the United States recently
`recommended the elimination of the Model Forms in the Federal Rules of Civil Procedure. However, the
`recent use of Form 18’s pleading standard by the Federal Circuit suggests its continued relevancy. See
`Addiction and Detoxification, 2015 WL 4430128, at *2. In any event, the Court’s determination that
`WAG’s direct infringement claims are sufficient is based both on its compliance with Form 18, as well as
`its compliance with the pleading standards of Iqbal and Twombly.
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`15
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`Case 2:14-cv-02340-ES-JAD Document 61 Filed 09/10/15 Page 16 of 25 PageID: 895
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`were true, conclude that the defendant infringed.” See Addiction and Detoxification, 2015 WL
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`4430128, at *2. In each of its Complaints, WAG includes detailed allegations of why Defendants
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`infringe specific claims in each of the patents asserted. (See, e.g., Sobonito Compl. ¶¶ 66-76; 99-
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`102; 124-25; 129-30). For example, in its Sobonito Complaint, WAG alleges that Defendants
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`infringe claims 1-8 and 28 of the ‘141 patent, which are directed to providing a server and software
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`to run media players. (Id. ¶ 67). WAG includes, inter alia, the following specific allegations:
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`“Defendants provide servers that meet the first set of requirements recited in these claims. Through
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`such servers, Defendants direct and control users’ Players (as further alleged below) to provide
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`Player Software in accordance with the second set of requirements recited in these claims. By
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`performing these steps (which together comprise all of the steps of the claims), Defendants thereby
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`directly infringe claims 1-8 and 28 of the ‘141 patent.” (Id.). This type of detailed pleading is
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`found throughout WAG’s Complaints, and it is more than sufficient for purposes of pleading direct
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`infringement. See, e.g., Bel Fuse Inc. v. Molex Inc., 27 F. Supp. 3d 557, 562 (D.N.J. 2014);
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`Demodulation