Case 8:11-cv-01681-DOC-JPR Document 46 Filed 05/16/12 Page 1 of 11 Page ID #:260
`
`UNITED STATES DISTRICT COURT
`CENTRAL DISTRICT OF CALIFORNIA
`
`O
`
`CIVIL MINUTES – GENERAL
`
`Case No. SACV 11-1681 DOC (ANx)
`
`Date: May 16, 2012
`
`Title: PROXYCONN INC. –V- CORPORATION, ET AL.
`
`PRESENT:
`
`THE HONORABLE DAVID O. CARTER, JUDGE
`
`
`
`Julie Barrera
`Courtroom Clerk
`
` N/A
`Court Reporter
`
`ATTORNEYS PRESENT FOR PLAINTIFF: ATTORNEYS PRESENT FOR DEFENDANT:
`
`None Present
`
`None Present
`
`PROCEEDINGS: (IN CHAMBERS): ORDER GRANTING DEFENDANTS’
`MOTION TO DISMISS
`
`Before the Court is a Motion to Dismiss (“Motion”) filed by Defendants Microsoft
`Corporation (“Microsoft”), Hewlett-Packard Company (“Hewlett-Packard”), Acer
`America Corporation (“Acer”), and Dell Inc. (“Dell”). (Dkt. 34). The Court finds the
`matter appropriate for decision without oral argument. Fed R. Civ. P. 78; Local R. 7-15.
`After considering the moving, opposing, and replying papers, the Court GRANTS the
`Motion.
`
`I.
`
`Background
`
`The gravamen of the Consolidated Complaint filed by Plaintiff Proxyconn Inc.
`(“Plaintiff”) is that each of four Defendants are directly and indirectly infringing
`Plaintiff’s method patent.
`
`a. The Court Consolidated Four Lawsuits
`
`Plaintiff filed four separate complaints against four individual Defendants
`Microsoft, Hewlett-Packard, Acer, and Dell. On January 3, 2012, the Court ordered all
`parties to show cause why these four cases should not be combined into one and stated
`that, if there were no objections, Plaintiff “shall file an Amended Complaint.” See Order
`(Dkt. 9).
`
`Patent Owner, Ex. 2004, Page 1
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`

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`Case 8:11-cv-01681-DOC-JPR Document 46 Filed 05/16/12 Page 2 of 11 Page ID #:261
`
`UNITED STATES DISTRICT COURT
`CENTRAL DISTRICT OF CALIFORNIA
`
`CIVIL MINUTES – GENERAL
`
`
`Date: March 16, 2012
`Case No. SACV 11-1681-DOC (ANx)
`
` Page 2
`
`
`On January 17, 2012, the Court ordered that these four separate lawsuits be
`combined into one because no party objected to consolidation. See Order (Dkt. 14). As
`per the January 3, 2012, Order, Plaintiff filed an amended complaint against all four
`Defendants. See Consolidated Compl. (Dkt. 23).
`
`
`b. Allegations of Direct Patent Infringement
`
`
`The Consolidated Complaint brings four “Counts” of infringement of U.S. Patent
`No. 6,757,717 (“’717 Patent”); one count against each Defendant. The ’717 Patent is
`attached to the complaint.
`
`Each count has virtually identical language, with the only difference being the
`substitution of a different Defendant’s name and different allegedly infringing
`technology, described as “personal computers” or “computer systems.” Each count
`alleges that the individual Defendant:
`
`. . . has been and still is directly . . . infringing at least claims 1, 10, 11 and
`22 of the ‘717 patent . . . by making, using, selling, offering to sell, or
`importing, without license or authority, [infringing technology] . . . .
`
`See id. ¶¶ 15-16 (Microsoft), 21-23 (Hewlett-Packard), 29-30 (Acer), 35-37
`(Dell).
`
`
`Each count alleges that each Defendant’s infringing technology
`“include[s]” computers using a method; the method’s description parrots the
`description of Plaintiff’s method patent. See id. Ex. A. Specifically, each count
`alleges that Defendant’s infringing technology:
`
`
`. . . include[s] a sender computer and a receiver computer communicating
`through a network, with each computer equipped with a method for
`creating digital digests on data and the receiving computer including a
`means for comparing digital digests.
`
`Each count goes on to allege that:
`
`
`Patent Owner, Ex. 2004, Page 2
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`

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`Case 8:11-cv-01681-DOC-JPR Document 46 Filed 05/16/12 Page 3 of 11 Page ID #:262
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`UNITED STATES DISTRICT COURT
`CENTRAL DISTRICT OF CALIFORNIA
`
`CIVIL MINUTES – GENERAL
`
`
`Date: March 16, 2012
`Case No. SACV 11-1681-DOC (ANx)
`
` Page 3
`
`
`In particular, these [infringing technologies] contain software including, but
`not limited to, the Remote Differential Compression (“RDC”) technology
`used in at least Microsoft's Windows Server 2003 R2, Windows Server
`2008, Windows Small Business Server 2003, Windows Small Business
`Server 2008, Windows Small Business Server 2011, Windows XP with
`Service Pack 3, Windows Vista, and Windows 7 operating systems.
`
`
`See id. ¶¶ 14 (Microsoft), 21 (Hewlett-Packard), 28 (Acer), 35 (Dell).
`
`c. Allegations of Indirect Patent Infringement
`
`
`Each count alleges that the individual Defendant:
`
`. . . has been and still is indirectly infringing, by way of inducing
`infringement by others of the ‘717 patent, by . . . making, using, importing,
`offering for sale, and/or selling, without license or authority, software for
`use in systems that thereby fall within the scope of at least claims 1, 10, 11
`and 22 of the ‘717 patent.
`
`See id. ¶¶ 15 (Microsoft), 22 (Hewlett-Packard), 29 (Acer), 36 (Dell).
`
`
`
`Nearly verbatim allegations also follow each count alleging that the
`individual Defendant is “contributing to the infringement by others of the ‘717
`patent . . . .” See id. ¶¶ 16 (Microsoft), 23 (Hewlett-Packard), 30 (Acer), 37
`(Dell).
`
`
`d. Allegations of Knowledge of Indirect Patent Infringement
`
`
`In addition, each count alleges that the individual Defendant “[s]ince at least the
`filing of the complaint, . . . has knowledge of the ‘717 patent and has had the specific
`knowledge that the combination of its software and computer systems described above
`infringe the ‘717 patent.” See id. ¶¶ 15-16 (Microsoft), 22-23 (Hewlett-Packard), 29-30
`(Acer), 36-37 (Dell).
`
`
`e. The Present Motion to Dismiss
`
`
`
`Patent Owner, Ex. 2004, Page 3
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`

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`Case 8:11-cv-01681-DOC-JPR Document 46 Filed 05/16/12 Page 4 of 11 Page ID #:263
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`UNITED STATES DISTRICT COURT
`CENTRAL DISTRICT OF CALIFORNIA
`
`CIVIL MINUTES – GENERAL
`
`
`Date: March 16, 2012
`Case No. SACV 11-1681-DOC (ANx)
`
` Page 4
`
`
`All four Defendants filed the present Motion to Dismiss (Dkt. 34). While Acer,
`Dell, and Hewlett-Packard moved only as to the claims directed against their respective
`entities, Microsoft moved as to the claims directed against all four Defendants. Mot. at 2
`n.2.
`
`
`Legal Standard
`
`II.
`
`Under Federal Rule of Civil Procedure 12(b)(6), a complaint must be dismissed
`when a plaintiff’s allegations fail to set forth a set of facts which, if true, would entitle the
`complainant to relief.1 Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555 (2007); Ashcroft v.
`Iqbal, 556 U.S. 662, 679 (2009) (holding that a claim must be facially plausible in order
`to survive a motion to dismiss). The pleadings must raise the right to relief beyond the
`speculative level; a plaintiff must provide “more than labels and conclusions, and a
`formulaic recitation of the elements of a cause of action will not do.” Twombly, 550 U.S.
`at 555 (citing Papasan v. Allain, 478 U.S. 265, 286 (1986)). On a motion to dismiss, this
`court accepts as true a plaintiff’s well-pled factual allegations and construes all factual
`inferences in the light most favorable to the plaintiff. Manzarek v. St. Paul Fire &
`Marine Ins. Co., 519 F.3d 1025, 1031 (9th Cir. 2008). The court is not required to accept
`as true legal conclusions couched as factual allegations. Iqbal, 556 U.S. at 678.
`
`In evaluating a Rule 12(b)(6) motion, review is ordinarily limited to the contents
`of the complaint and material properly submitted with the complaint. Clegg v. Cult
`Awareness Network, 18 F.3d 752, 754 (9th Cir. 1994); Hal Roach Studios, Inc. v. Richard
`Feiner & Co., Inc., 896 F.2d 1542, 1555 n.19 (9th Cir. 1990). Under the incorporation
`by reference doctrine, the court may also consider documents “whose contents are
`alleged in a complaint and whose authenticity no party questions, but which are not
`physically attached to the pleading.” Branch v. Tunnell, 14 F.3d 449, 454 (9th Cir.
`1994), overruled on other grounds by 307 F.3d 1119, 1121 (9th Cir. 2002).
`
` A
`
` motion to dismiss under Rule 12(b)(6) can not be granted based upon an
`affirmative defense unless that “defense raises no disputed issues of fact.” Scott v.
`
`
`1 A Rule 12(b)(6) motion raises a “purely procedural question” that is controlled by law
`of the circuit in which the federal court sits, not the law of the Federal Circuit.
`Phonometrics, Inc. v. Hospitality Franchise Sys., Inc., 203 F.3d 790, 793 (Fed. Cir.
`2000).
`
`Patent Owner, Ex. 2004, Page 4
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`

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`Case 8:11-cv-01681-DOC-JPR Document 46 Filed 05/16/12 Page 5 of 11 Page ID #:264
`
`UNITED STATES DISTRICT COURT
`CENTRAL DISTRICT OF CALIFORNIA
`
`CIVIL MINUTES – GENERAL
`
`
`Date: March 16, 2012
`Case No. SACV 11-1681-DOC (ANx)
`
` Page 5
`
`Kuhlmann, 746 F.2d 1377, 1378 (9th Cir. 1984). For example, a motion to dismiss may
`be granted based on an affirmative defense where the allegations in a complaint are
`contradicted by matters properly subject to judicial notice. Daniels-Hall v. Nat’l Educ.
`Ass’n, 629 F.3d 992, 998 (9th Cir. 2010). In addition, a motion to dismiss may be
`granted based upon an affirmative defense where the complaint’s allegations, with all
`inferences drawn in Plaintiff’s favor, nonetheless show that the affirmative defense “is
`apparent on the face of the complaint.” See Von Saher v. Norton Simon Museum of Art at
`Pasadena, 592 F.3d 954, 969 (9th Cir. 2010).
`
`Additionally, Federal Rule of Evidence 201 allows the court to take judicial notice
`of certain items without converting the motion to dismiss into one for summary
`judgment. Barron v. Reich, 13 F.3d 1370, 1377 (9th Cir. 1994). The court may take
`judicial notice of facts “not subject to reasonable dispute” because they are either: “(1)
`generally known within the territorial jurisdiction of the trial court or (2) capable of
`accurate and ready determination by resort to sources whose accuracy cannot reasonably
`be questioned.” Fed. R. Evid. 201; see also Lee v. City of Los Angeles, 250 F.3d 668, 689
`(9th Cir. 2001) (noting that the court may take judicial notice of undisputed “matters of
`public record”), overruled on other grounds by 307 F.3d 1119, 1125-26 (9th Cir. 2002).
`The court may disregard allegations in a complaint that are contradicted by matters
`properly subject to judicial notice. Daniels-Hall v. Nat’l Educ. Ass’n, 629 F.3d 992, 998
`(9th Cir. 2010).
`
`Dismissal without leave to amend is appropriate only when the court is satisfied
`that the deficiencies in the complaint could not possibly be cured by amendment.
`Jackson v. Carey, 353 F.3d 750, 758 (9th Cir. 2003); Lopez v. Smith, 203 F.3d 1122,
`1127 (9th Cir. 2000) (holding that dismissal with leave to amend should be granted even
`if no request to amend was made). Rule 15(a)(2) of the Federal Rules of Civil Procedure
`states that leave to amend should be freely given “when justice so requires.” This policy
`is applied with “extreme liberality.” Morongo Band of Mission Indians v. Rose, 893 F.2d
`1074, 1079 (9th Cir. 1990).
`
`III. Discussion
`
`Defendants argue that dismissal under Rule 12(b)(6) is appropriate because
`Plaintiff fails to plead: (1) facts other than the threadbare recitation of Federal Rule of
`Civil Procedure Form 18, and such facts are necessary to put Defendants on notice of
`
`Patent Owner, Ex. 2004, Page 5
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`

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`Case 8:11-cv-01681-DOC-JPR Document 46 Filed 05/16/12 Page 6 of 11 Page ID #:265
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`UNITED STATES DISTRICT COURT
`CENTRAL DISTRICT OF CALIFORNIA
`
`CIVIL MINUTES – GENERAL
`
`
`Date: March 16, 2012
`Case No. SACV 11-1681-DOC (ANx)
`
` Page 6
`
`how their acts constitute direct infringement; and (2) Defendants’ pre-suit knowledge of
`another’s patent infringement, which is an element of the indirect infringement claim.
`
`
`a. Direct Infringement of Plaintiff’s method patent
`
`
`The parties dispute whether Plaintiff states a claim for direct infringement because
`Plaintiff parrots the language of Federal Rule of Civil Procedure Form 18. As this Court
`has previously noted, there is a split of authority on this issue. See Acco Brands USA
`LLC v. Hewlett Packard Co., SACV 11-275 DOC MLGX, 2011 WL 2516514, *2 (C.D.
`Cal. June 23, 2011) (granting motion to dismiss because complaint did not describe
`which of defendant’s numerous “products” were allegedly infringing).
`
`Form 18 requires only the following: (1) an allegation of jurisdiction; (2) a
`statement that the plaintiff owns the patent; (3) a statement that defendant has been
`infringing the patent by one or more of the activities proscribed under 35 U.S.C. § 271;
`(4) a statement that the plaintiff has given the defendant notice of its infringement; and
`(5) a demand for an injunction and damages. See Fed. R. Civ. P. Form 18; Guzik
`Technical Enterprises, Inc. v. W. Digital Corp., 11-CV-03786-PSG, 2011 WL 6013006,
`*2 (N.D. Cal. Dec. 2, 2011) (summarizing Form 18).
`
`Federal Rule of Civil Procedure 84 provides that forms such as Form 18 “suffice”
`for purposes of a motion to dismiss. Fed. R. Civ. P. 84; see 12 Fed. Prac. & Proc. Civ. §
`3162 (2d ed.). The Federal Circuit, applying Fifth Circuit law regarding Rule 12(b)(6),
`has held that a pro se plaintiff’s patent infringement claim that echoed the five
`requirements in Form 18 “met the low bar for pro se litigants to avoid dismissal.”
`McZeal v. Sprint Nextel Corp., 501 F.3d 1354, 1356-57 (Fed. Cir. 2007) (citing
`predecessor Form 16).
`
`The Court is persuaded by those authorities which hold that threadbare recitations
`
`of the language in Form 18 is no longer sufficient to state a claim. As those other courts
`eloquently explain, “the forms purporting to illustrate what level of pleading is required
`do not reflect the sea change of Twombly and Iqbal.” Tyco Fire Products LP v. Victaulic
`Co., 777 F. Supp. 2d 893, 905 (E.D. Pa. 2011) (granting dismissal of “sparse pleading”
`that merely complied with Form 18). These courts reason that, “notwithstanding the
`suggestion in Form 18 that specificity is not necessary, most courts have, in the wake of
`Twombly and Iqbal, required some level of specificity.” Wistron Corp. v. Phillip M.
`
`Patent Owner, Ex. 2004, Page 6
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`

`

`Case 8:11-cv-01681-DOC-JPR Document 46 Filed 05/16/12 Page 7 of 11 Page ID #:266
`
`UNITED STATES DISTRICT COURT
`CENTRAL DISTRICT OF CALIFORNIA
`
`CIVIL MINUTES – GENERAL
`
`
`Date: March 16, 2012
`Case No. SACV 11-1681-DOC (ANx)
`
` Page 7
`
`Adams & Associates, LLC, C-10-4458 EMC, 2011 WL 4079231, *4 (N.D. Cal. Sept. 12,
`2011).
`Furthermore, since McZeal, the Federal Circuit has recognized that “Form 18 is a
`sample pleading for patent infringement, but . . . was last updated before the Supreme
`Court’s Iqbal decision.” Colida v. Nokia, Inc., 347 F. App’x 568, 571 (Fed. Cir. 2009).
`Given that the Federal Circuit itself recognizes that Form 18 may be inadequate, this
`Court “agrees with those courts that apply Iqbal and Twombly’s ‘plausibility’ standard to
`direct patent infringement actions.” Medsquire LLC v. Spring Med. Sys. Inc., 2:11-CV-
`04504-JHN, 2011 WL 4101093, *2-3 (C.D. Cal. Aug. 31, 2011).
`
`Applying Iqbal and Twombly, it is clear that Plaintiff’s allegations are too
`conclusory when they merely allege that each Defendant is directly infringing “by
`making, using, selling, offering to sell, or importing” technology that infringes
`Plaintiff’s method patent. See Consolidated Compl. ¶¶ 14 (Microsoft), 21
`(Hewlett-Packard), 28 (Acer), 35 (Dell).
`
`
`
`
`
`According, the Court DISMISSES WITHOUT PREJUDICE Plaintiff’s direct
`infringement claims as to all Defendants.
`
`
`b. Indirect Infringement
`
`Plaintiff concedes that it “can only specifically allege that Defendants had
`knowledge of the patent-in-suit as of the filing of the original complaint.” Opp’n at 4 n.1.
`Thus, the dispute is whether a complaint fails to state a claim for indirect patent
`infringement where the only allegation that purports to establish the knowledge element
`is the allegation that the complaint itself or previous complaints in the same lawsuit
`establish the defendant’s knowledge of the patent. There is a split of authority on this
`issue.
`
`
`Plaintiff brings both contributory patent infringement and induced patent
`infringement claims. Both claims require that defendant’s conduct—inducing or
`contributing to another’s infringement—occur after the defendant knew: (1) of patent-in-
`suit; and (2) that the direct-infringers’ “acts constitute patent infringement.” See Global-
`Tech Appliances, Inc. v. SEB S.A., 131 S. Ct. 2060, 2068, 179 L. Ed. 2d 1167 (2011)
`(interpreting “knowing” requirement for inducing infringement claim under 35 U.S.C. §
`271(b)); Aro Mfg. Co. v. Convertible Top Replacement Co., 377 U.S. 476, 488, 84 S. Ct.
`
`Patent Owner, Ex. 2004, Page 7
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`

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`Case 8:11-cv-01681-DOC-JPR Document 46 Filed 05/16/12 Page 8 of 11 Page ID #:267
`
`UNITED STATES DISTRICT COURT
`CENTRAL DISTRICT OF CALIFORNIA
`
`CIVIL MINUTES – GENERAL
`
`
`Date: March 16, 2012
`Case No. SACV 11-1681-DOC (ANx)
`
` Page 8
`
`1526, 1533 (1964) (interpreting “knowing” requirement for contributory infringement
`under 35 U.S.C. § 271(c)); DSU Med. Corp. v. JMS Co., Ltd., 471 F.3d 1293, 1305 (Fed.
`Cir. 2006) (en banc); 2 Annotated Patent Digest § 10:44.
`
`Plaintiff’s argument requires this Court to bootstrap the knowledge Defendants
`now have based on Plaintiff’s filing of the Complaint onto defendant’s acts before
`Plaintiff filed its complaint. Yet, a defendant can not be held liable because it induced or
`contributed to another’s acts before the defendant had knowledge, because to do so
`effectively holds a defendant liable for acts it did without knowledge. See e.g. Insituform
`Technologies, Inc. v. Cat Contracting, Inc., 161 F.3d 688, 695, 48 U.S.P.Q.2d 1610 (Fed.
`Cir. 1998) (reversing a finding of liability for inducing infringement because liability
`could not be predicated on any acts that occurred prior to defendant having notice of the
`patent); Cybiotronics, Ltd. v. Golden Source Electronics Ltd., 130 F. Supp. 2d 1152,
`1165–66 (C.D. Cal. 2001) (granting summary judgment dismissing inducement and
`contributory infringement claim because there was no evidence that accused infringer
`knew of the patent prior to the lawsuit); Zamora Radio, LLC v. Last.FM, Ltd., 2010 WL
`5140678, *12 (S.D. Fla. 2010) (granting accused infringer summary judgment on
`inducing infringement claim because the accused infringer had no knowledge of the
`patent before the complaint was filed).
`
`Furthermore, requiring a Plaintiff to plead knowledge based on facts other than the
`filing of the present lawsuit furthers judicial economy and preserves parties’ resources by
`encouraging resolution prior to filing a lawsuit. Pre-litigation attempts at resolution are
`especially desirable in patent cases, which are often expensive and thus resolved by
`settlement. Indeed, Plaintiff could have notified Defendants of their alleged infringement
`and sought an amicable resolution at any time prior to filing this suit. Defendants should
`not be punished for Plaintiff’s failure to do so.
`
`For these reasons, the Court follows the authorities that hold that “knowledge after
`filing of the present action is not sufficient for pleading the requisite knowledge for
`indirect infringement.” See Xpoint Technologies, Inc. v. Microsoft Corp., 730 F. Supp.
`2d 349, 357 (D. Del. 2010) (granting motion to dismiss indirect infringement claim
`because plaintiff alleged only the defendants had knowledge of the patent “at least since
`the date of the suit”); Mallinckrodt, Inc. v. E-Z-Em Inc., 670 F. Supp. 2d 349, 354 (D.
`Del. 2009) (same); Avocet Sports Tech., Inc. v. Garmin Int’l, Inc., C 11-04049 JW, 2012
`WL 1030031, *4 (N.D. Cal. Mar. 22, 2012) (granting motion to dismiss indirect
`
`Patent Owner, Ex. 2004, Page 8
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`

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`Case 8:11-cv-01681-DOC-JPR Document 46 Filed 05/16/12 Page 9 of 11 Page ID #:268
`
`UNITED STATES DISTRICT COURT
`CENTRAL DISTRICT OF CALIFORNIA
`
`CIVIL MINUTES – GENERAL
`
`
`Date: March 16, 2012
`Case No. SACV 11-1681-DOC (ANx)
`
` Page 9
`
`infringement claim because plaintiff “has not alleged any facts to suggest that Defendants
`. . . had knowledge of the ‘427 Patent prior to the filing of the Complaint.”); McRee v.
`Goldman, 11-CV-00991-LHK, 2011 WL 4831199, *4-5 (N.D. Cal. Oct. 12, 2011)
`(granting motion to dismiss indirect infringement claim because the complaint “does not
`allege that [defendants] knew of Plaintiff’s ‘269 Patent” at the time of the defendants’
`alleged acts of inducement, because allegations that “Plaintiff notified [defendants] of the
`suspected infringement” were insufficient); cf. Fujitsu Ltd. v. Belkin Int’l, Inc., 782 F.
`Supp. 2d 868, 892 (N.D. Cal. 2011) (granting motion to dismiss induced patent
`infringement claim because complaint “only alleged in conclusory terms that the
`defendants have received notice of the patents”).
`
`
`Plaintiff cites cases that are unpersuasive because they are factually
`distinguishable. For example, in Trading Technologies, the complaint alleged additional
`facts other than the filing of the complaint that established the defendants’ knowledge.
`See Trading Technologies Int’l, Inc. v. BCG Partners, Inc., 10 C 715, 2011 WL 3946581,
`*4 (N.D. Ill. Sept. 2, 2011) (denying motion to dismiss in part because complaint “alleges
`various other grounds from which the Court may infer actual knowledge of the patents at
`issue, including press coverage, previously filed litigation, consent judgments entered in
`companion cases”). In Groupon, the complaint alleged that the defendant had knowledge
`but did not specify when it was acquired; the courts reasoned that allegations without a
`time period were sufficient because a motion to dismiss requires all inferences to be
`drawn in the plaintiff’s favor. See Groupon Inc. v. MobGob LLC, 10 C 7456, 2011 WL
`2111986 (N.D. Ill. May 25, 2011) (holding that it “is reasonable to infer that [defendant]
`had actual knowledge of [plaintiff’s] public patent” and only stating in dicta that
`defendant “has such knowledge now and allegedly continues its activities”).
`
`In addition, Plaintiff’s cases are based on an incorrect understanding of the
`consequences of granting a motion to dismiss. In Trading Technologies, the court denied
`the motion to dismiss because it feared that granting the motion would allow “a defendant
`. . . [to] avoid liability for an indirect infringement claim . . . simply because it happened
`to learn of the patent in connection with a lawsuit.” Trading Technologies Int’l, Inc. v.
`BCG Partners, Inc., 10 C 715, 2011 WL 3946581, *4 (N.D. Ill. Sept. 2, 2011). This fear
`is completely unfounded. In fact, nothing prevents a plaintiff from filing a new lawsuit
`alleging that the knowledge requirement is established because the Defendant is aware of
`the previous lawsuit. Alternatively, Federal Rule of Civil Procedure 15(d) provides a
`procedure for pleading post-suit facts. See Fed. R. Civ. P. 15 (“On motion and
`
`Patent Owner, Ex. 2004, Page 9
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`Case 8:11-cv-01681-DOC-JPR Document 46 Filed 05/16/12 Page 10 of 11 Page ID #:269
`
`UNITED STATES DISTRICT COURT
`CENTRAL DISTRICT OF CALIFORNIA
`
`CIVIL MINUTES – GENERAL
`
`Case No. SACV 11-1681-DOC (ANx)
`
`Date: March 16, 2012
`Page 10
`
`reasonable notice, the court may, on just terms, permit a party to serve a supplemental
`pleading setting out any transaction, occurrence, or event that happened after the date of
`the pleading to be supplemented.”).
`
`Finally, the Court is not persuaded that, as some courts urge, “the interests of
`judicial economy” favor denying a motion to dismiss because “by the time the motion to
`dismiss has been filed, defendant in fact has the requisite knowledge.” See Walker
`Digital, LLC v. Facebook, Inc., CIV. 11-313-SLR, 2012 WL 1129370, *6 n.11 (D. Del.
`Apr. 4, 2012). Such a view gives too little weight to the judicial inefficiencies and
`parties’ expenses in litigating potentially meritless claims. Indeed, denying a motion to
`dismiss could create a Kafkaesque scenario in which a defendant is entangled in
`senseless, expensive litigation. Imagine that a plaintiff files a claim for indirect
`infringement alleging that the complaint establishes the defendant’s knowledge. The
`same day, the defendant ceases all activity. Yet, under Plaintiff’s rule, the defendant
`could not succeed on a motion to dismiss because, even though the defendant only
`learned of the patent the day of the complaint, defendant’s knowledge is bootstrapped
`onto its conduct prior to the complaint’s filing. Only at summary judgment—after
`hundreds of thousands of dollars are wasted on discovery—could defendant finally
`prevail by showing that it lacked knowledge at the time its acts of contribution or
`inducement occurred.
`
`In sum, the Court adopts the following rule: a complaint fails to state a claim for
`indirect patent infringement where the only allegation that purports to establish the
`knowledge element is the allegation that the complaint itself or previous complaints in
`the same lawsuit establish the defendant’s knowledge of the patent. Thus, Plaintiff fails
`to state a claim for indirect infringement when it merely alleges that “[s]ince at least the
`filing of the complaint, [Defendant] has had knowledge of the ’717 patent.” See
`Consolidated Compl. ¶¶ 15, 22, 29, 36.
`
`Because Plaintiff concedes that it can not allege Defendants’ knowledge of the
`patent-in-suit prior to the filing of the original complaint in this lawsuit, the Court
`DISMISSES WITH PREJUDICE the indirect infringement claims against all four
`Defendants.
`
`II.
`
`Disposition
`
`Patent Owner, Ex. 2004, Page 10
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`

`

`Case 8:11-cv-01681-DOC-JPR Document 46 Filed 05/16/12 Page 11 of 11 Page ID #:270
`
`UNITED STATES DISTRICT COURT
`CENTRAL DISTRICT OF CALIFORNIA
`
`CIVIL MINUTES – GENERAL
`
`
`Date: March 16, 2012
`Case No. SACV 11-1681-DOC (ANx)
`
` Page 11
`
`
`For the reasons stated above, the Court GRANTS Defendants’ motion to dismiss.
`The Motion is GRANTED WITHOUT PREJUDICE as to Plaintiff’s direct infringement
`claims and GRANTED WITH PREJUDICE as to Plaintiff’s indirect infringement claims.
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`Plaintiff shall file an amended complaint, if at all, by May 29, 2012.
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`MINUTES FORM 11
`CIVIL-GEN
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` Initials of Deputy Clerk: jcb
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`Patent Owner, Ex. 2004, Page 11
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