`
`
`
`IN THE UNITED STATES DISTRICT COURT
`FOR THE WESTERN DISTRICT OF NORTH CAROLINA
`ASHEVILLE DIVISION
`Civil Action No. 1:15-cv-102
`
`WINDY CITY INNOVATIONS, LLC,
`
`
`
`
`
`
`DEFENDANT FACEBOOK,
`INC.’S MEMORANDUM IN
`SUPPORT OF MOTION TO
`DISMISS PURSUANT TO
`FRCP 12(b)(6)
`
`
`
`Plaintiff,
`
`v.
`
`FACEBOOK, INC.,
`
`Defendant.
`
`
`
`
`
`
`
`Case 4:16-cv-01730-YGR Document 20-1 Filed 07/24/15 Page 2 of 17
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`TABLE OF CONTENTS
`
`
`Page
`
`
`INTRODUCTION AND STATEMENT OF ALLEGATIONS .................... 1
`I.
`II. ARGUMENT ................................................................................................ 2
`A.
`The Complaint Fails To State A Claim For Direct Infringement. ...... 3
`B.
`Form 18 and Later Infringement Contentions Do Not Save The
`Complaint. ........................................................................................... 6
`C. No Indirect Infringement Claim Is Properly Pled In The
`Complaint. ........................................................................................... 7
`1.
`The Complaint Fails To State A Claim For Inducement. ......... 7
`2.
`The Complaint Fails To State A Claim For Contributory
`Infringement. ............................................................................. 9
`If This Action Is Dismissed, Windy City Should Not Be
`Granted Leave To Amend. ................................................................ 11
`III. CONCLUSION ........................................................................................... 11
`
`
`E.
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`-i-
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`Case 4:16-cv-01730-YGR Document 20-1 Filed 07/24/15 Page 3 of 17
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`
`
`Cases
`
`TABLE OF AUTHORITIES
`
` Page(s)
`
`Ashcroft v. Iqbal,
`556 U.S. 662 (2009) ...................................................................................... 3, 10
`
`Bell Atl. Corp. v. Twombly,
`550 U.S. 544 (2007) ...................................................................................... 3, 10
`
`In re Bill of Lading Transmission & Processing Sys. Patent Litig.,
`681 F.3d 1323 (Fed. Cir. 2012) ........................................................................... 9
`
`Commil USA, LLC v. Cisco Sys., Inc.,
`--- U.S. ---, 135 S. Ct. 1920 (2015) ..................................................................... 7
`
`Francis v. Giacomelli,
`588 F.3d 186 (4th Cir. 2009) ............................................................................... 3
`
`Global-Tech Appliances, Inc. v. SEB S.A.,
`563 U.S. ---, 131 S. Ct. 2060 (2011) ................................................................... 7
`
`Holmes v. J.C. Penney Corp. Inc.,
`No. 5:09CV115-V, 2011 WL 5974460 (W.D.N.C. Nov. 29, 2011) ................. 11
`
`Intellectual Ventures I LLC v. Bank of Am., Corp.,
`No. 3:13-cv-358-RJC-DSC, 2014 WL 868713 (W.D.N.C. Mar. 5,
`2014) .................................................................................................................... 7
`
`Macronix Int’l Co., Ltd. v. Spansion, Inc.,
`4 F. Supp. 3d 797, 804 (E.D. Va. 2014) .......................................................... 4, 5
`
`McCleary-Evans v. Maryland Dep’t of Transp.,
`780 F.3d 582 (4th Cir. 2015) ............................................................................... 3
`
`Superior Indus., LLC v. Thor Global Enterprises Ltd.,
`700 F.3d 1287 (Fed. Cir. 2012) ........................................................................... 7
`
`Vita-Mix Corp. v. Basic Holding, Inc.,
`581 F.3d 1317 (Fed. Cir. 2009) ........................................................................... 8
`
`
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`-ii-
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`Case 4:16-cv-01730-YGR Document 20-1 Filed 07/24/15 Page 4 of 17
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`
`Ziemba v. Incipio Techs., Inc.,
`No. CIV.A. 13-5590 (JLL), 2014 WL 4637006 (D.N.J. Sept. 16,
`2014) .................................................................................................................... 5
`
`Statutes
`
`35 U.S.C. §271(b) ..................................................................................................... 7
`
`35 U.S.C. § 271(c) .................................................................................................... 9
`
`Other Authorities
`
`Federal Rule of Civil Procedure 12(b)(6) ................................................................. 2
`
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`-iii-
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`I.
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`Case 4:16-cv-01730-YGR Document 20-1 Filed 07/24/15 Page 5 of 17
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`INTRODUCTION AND STATEMENT OF ALLEGATIONS
`
`Plaintiff Windy City Innovations, LLC filed a Complaint vaguely asserting
`
`direct and indirect infringement of four patents, all combined under one “count”
`
`without identifying which specific claims in which specific patents are asserted
`
`against which specific Facebook products in this litigation. The four asserted
`
`patents collectively span hundreds of pages and include 830 claims. Yet, without
`
`identifying a single specific claim, the Complaint alleges that the entirety of
`
`“Facebook.com” as well as “Facebook apps” somehow infringe the patents.
`
`The Complaint alleges that “Facebook’s Accused Instrumentalities meet
`
`claims of the patents-in-suit” (Compl. ¶ 23), and defines “Facebook’s Accused
`
`Instrumentalities” as the entirety of “Facebook.com” and “Facebook apps.”
`
`(Compl. ¶ 20.) Further, the definitions for these terms are hardly comprehensible.
`
`“Facebook.com” allegedly refers to:
`
`the Facebook.com website, client software (including,
`e.g., plug-ins,
`third-party applications, or helper
`applications), Facebook’s internal and developer APIs,
`servers and computers that are used to support the
`described
`functionalities,
`including
`facilitating
`communications and virtual connections between users
`of Facebook.com, and includes any improvements,
`modifications, enhancements, fixes, updates, upgrades
`and future versions through trial.
`
`(Compl. ¶ 16.) “Facebook apps” allegedly refers to:
`
`the Facebook app, the Facebook Messenger app, client
`software
`(including,
`e.g.,
`plug-ins,
`third-party
`
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`-1-
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`Case 4:16-cv-01730-YGR Document 20-1 Filed 07/24/15 Page 6 of 17
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`applications, or helper applications), Facebook’s internal
`and developer APIs, servers and computers that are used
`to support
`the described
`functionalities,
`including
`facilitating communications and virtual connections
`between users of the Facebook apps, and includes any
`improvements,
` modifications, enhancements, fixes,
`updates, upgrades and future versions through trial.
`
`(Compl. ¶ 18.) These abstract and convoluted definitions fail to provide Facebook
`
`with any meaningful notice of what is at issue in this lawsuit. By refusing to
`
`identify the specific asserted claims and specific accused products, Windy City put
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`the burden on Facebook to guess at Windy City’s allegations.
`
`This action cannot proceed in an orderly fashion without a clear
`
`understanding of which specific Facebook products allegedly infringe which
`
`specific patent claims. The absence of meaningful limits will result in cost-
`
`prohibitive discovery, undue motion practice, and inefficiencies for both parties as
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`well as unnecessary work for the Court.
`
`
`
`Because neither direct nor indirect infringement is properly pled in the
`
`Complaint, Facebook respectfully requests that the Court grant its Motion to
`
`Dismiss pursuant to Federal Rule of Civil Procedure 12(b)(6).
`
`II. ARGUMENT
`
`A complaint should be dismissed under Federal Rule of Civil Procedure
`
`12(b)(6) when it fails to state a claim upon which relief can be granted.
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`-2-
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`Case 4:16-cv-01730-YGR Document 20-1 Filed 07/24/15 Page 7 of 17
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`A. The Complaint Fails To State A Claim For Direct Infringement.
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`Windy City’s Complaint falls far short of providing notice of alleged
`
`infringement, let alone a plausible claim of direct infringement. Windy City’s
`
`Complaint, therefore, fails to satisfy the pleading standard under Supreme Court
`
`and Fourth Circuit authority.
`
`In Iqbal and Twombly, the Supreme Court stated that to survive a motion to
`
`dismiss, a complaint must contain sufficient factual matter, accepted as true, to
`
`state a claim for relief that is plausible on its face. Ashcroft v. Iqbal, 556 U.S. 662,
`
`681 (2009). Naked assertions without “factual enhancement” do not suffice. Bell
`
`Atl. Corp. v. Twombly, 550 U.S. 544, 557 (2007). The complaint must do more
`
`than simply recite “labels and conclusions.” Id. at 555. The complaint must allege
`
`enough “factual content” to “nudge[ the] claims across the line from conceivable to
`
`plausible.” Id. at 570. The Fourth Circuit has further stated:
`
`Even though the requirements for pleading a proper
`complaint are substantially aimed at assuring that the
`defendant be given adequate notice of the nature of a
`claim being made against him, they also provide criteria
`for defining issues for trial and for early disposition of
`inappropriate complaints.
`
`Francis v. Giacomelli, 588 F.3d 186, 192 (4th Cir. 2009) (emphasis added)
`
`(addressing Iqbal and Twombly and affirming dismissal of the complaint). When
`
`“[o]nly speculation can fill the gaps in [the] complaint,” McCleary-Evans v.
`
`Maryland Dep’t of Transp., 780 F.3d 582, 586 (4th Cir. 2015) (affirming dismissal
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`-3-
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`Case 4:16-cv-01730-YGR Document 20-1 Filed 07/24/15 Page 8 of 17
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`
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`of complaint), the complaint should be dismissed.
`
`Here, Windy City’s Complaint baldly alleges that ““Facebook’s Accused
`
`Instrumentalities meet claims of the patents-in-suit.” (Compl. ¶ 23.) Windy City
`
`defines Accused Instrumentalities as the entirety of “Facebook.com” and
`
`“Facebook apps.” (Compl. ¶ 20.) Without identifying a single patent claim that is
`
`infringed out of 830 patent claims, Windy City instead mentions in passing three
`
`inscrutable “examples” (Compl. ¶ 23), none of which provide any real insight into
`
`what this lawsuit is about.
`
`
`
`Therefore, Windy City’s Complaint deprives Facebook of any meaningful
`
`way of defending itself because Facebook is left to speculate as to which specific
`
`claims in which specific patents are being read onto which specific Facebook
`
`products. Facebook should not be forced to guess what Windy City believes is
`
`within the scope of this lawsuit. Facebook is entitled to notice of which of the 830
`
`claims is at issue and which specific product is accused.
`
`Other courts have refused to tolerate such unwieldy patent infringement
`
`lawsuits by dismissing the direct infringement claims. In Macronix Int’l Co., Ltd.
`
`v. Spansion, Inc., 4 F. Supp. 3d 797, 804 (E.D. Va. 2014), for example, Judge
`
`Robert Payne granted a motion to dismiss the direct infringement claim where the
`
`41-page complaint identified specific product numbers and identified specific
`
`claims but failed to allege how the offending products infringed. Even with the
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`-4-
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`Case 4:16-cv-01730-YGR Document 20-1 Filed 07/24/15 Page 9 of 17
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`product and claim details, the allegations were not enough to put the defendant on
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`notice of what it had to defend. Ibid. Notably, primarily applying Fourth Circuit
`
`law, Judge Payne wrote:
`
`Thus, before filing a complaint, counsel must ascertain
`exactly what claims should alleged to be infringed [sic]
`and how they are infringed . . . . Indeed, it is high time
`that counsel in patent cases do all of that work before
`filing a complaint. That, of course, will serve to winnow
`out weak (or even baseless) claims and will protect
`defendants from the need to prepare defenses for the
`many claims that inevitably fall by the way side in patent
`cases. That also will serve to reduce the expense and
`burden of this kind of litigation to both parties which,
`like the antitrust litigation in Twombly, is onerous.
`
`
`(Id. at 803.)
`
`
`
`Similarly, in Ziemba v. Incipio Techs., Inc., No. CIV.A. 13-5590
`
`(JLL), 2014 WL 4637006, at *3-5 (D.N.J. Sept. 16, 2014), Judge Jose
`
`Linares dismissed an amended complaint for patent infringement where the
`
`pleading did not allege “which particular products” were the subject of
`
`liability and did not allege “how such products actually infringe any
`
`particular claims.” Id. at *3 (italics in original). The complaint also
`
`improperly combined “three separate claims of infringement (direct,
`
`contributory and induced)” under “Count One.” Ibid.
`
`
`
`Accordingly, the Complaint should be dismissed.
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`-5-
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`Case 4:16-cv-01730-YGR Document 20-1 Filed 07/24/15 Page 10 of 17
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`
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`B.
`
`Form 18 and Later Infringement Contentions Do Not Save
`The Complaint.
`
`Windy City has failed to satisfy Form 18, and future clarification of Windy
`
`City’s allegations cannot cure its deficient Complaint.
`
`First, the Complaint fails to satisfy Form 18 in the Appendix of Forms to the
`
`Federal Rules of Civil Procedure. While Form 18 explains in plain English that the
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`asserted patent purports to cover an “electric motor” and the defendant allegedly
`
`infringed by making, selling, and using “electric motors,” Windy City’s Complaint
`
`does no such thing. Instead, Windy City’s Complaint vaguely alleges that the four
`
`asserted patents “generally cover a real time communications system for managing
`
`and facilitating communication of digital data, including different media types
`
`across networks” and “generally cover a computer network (i.e., a server network)
`
`that arbitrates permissions and distribution of multimedia information messages
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`utilizing, for example, an application program interface (‘API’).” (Compl. ¶ 11.)
`
`Which specific Facebook products allegedly fall into these amorphous descriptions
`
`is never identified.
`
`Second, Facebook is entitled to fair notice of the claims now. It would be
`
`unjust for Windy City to argue that it is permitted to leave Facebook wondering
`
`which specific products are alleged to infringe which specific claims of which
`
`specific patents until thirty days after entry of the Court’s scheduling order. P.R.
`
`3.1. Facebook must be granted an equal opportunity to conduct its own
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`-6-
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`Case 4:16-cv-01730-YGR Document 20-1 Filed 07/24/15 Page 11 of 17
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`
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`investigation in order to defend itself.
`
`Accordingly, Facebook respectfully requests that the Court grant its Motion
`
`to Dismiss the Complaint, including dismissal of the direct infringement claim.
`
`C. No Indirect Infringement Claim Is Properly Pled In The
`Complaint.
`
`Windy City’s allegations of indirect infringement are even barer than its
`
`allegations of direct infringement. Accordingly, they also fail to satisfy the
`
`pleading standard under Supreme Court and Fourth Circuit authority. 1
`
`1.
`
`The Complaint Fails To State A Claim For Inducement.
`
`The Supreme Court has stated that both induced infringement and
`
`contributory infringement require “knowledge of the patent[s] in suit.” Commil
`
`USA, LLC v. Cisco Sys., Inc., --- U.S. ---, 135 S. Ct. 1920, 1926 (2015); see also
`
`Intellectual Ventures I LLC v. Bank of Am., Corp., No. 3:13-cv-358-RJC-DSC,
`
`2014 WL 868713, at *3 (W.D.N.C. Mar. 5, 2014) (Judge Robert J. Conrad, Jr.)
`
`(granting motion to dismiss induced and contributory infringement claims).
`
`Further, “induced infringement under [35 U.S.C. §] 271(b) requires knowledge that
`
`the induced acts constitute patent infringement.” Global-Tech Appliances, Inc. v.
`
`SEB S.A., 563 U.S. ---, 131 S. Ct. 2060, 2068 (2011). That is, “[i]nducement
`
`requires a showing that the alleged inducer knew of the patent, knowingly induced
`
`
`1 Additionally, “Form 18 does not determine the sufficiency of pleading for claims
`of indirect infringement.” Superior Indus., LLC v. Thor Global Enterprises Ltd.,
`700 F.3d 1287, 1295 (Fed. Cir. 2012).
`
`-7-
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`Case 4:16-cv-01730-YGR Document 20-1 Filed 07/24/15 Page 12 of 17
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`
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`the infringing acts, and possessed a specific intent to encourage another’s
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`infringement of the patent.” Vita-Mix Corp. v. Basic Holding, Inc., 581 F.3d 1317,
`
`1328 (Fed. Cir. 2009).
`
`Here, Windy City’s allegations regarding induced infringement in the
`
`Complaint are limited to the following conclusory statements:
`
`26. Facebook has actual knowledge of all patents-in-suit at
`least as of
`the filing of
`this Complaint for Patent
`Infringement.
`
`27. Facebook indirectly infringes the patents-in-suit by
`inducing infringement by others, such as end-users and
`application developers, because Facebook, for example,
`instructs and/or requires these third parties to make, use,
`sell, offer
`to sell or
`import Facebook’s Accused
`Instrumentalities in or into the United States. Facebook
`additionally
`indirectly
`infringes
`the patents-in-suit by
`encouraging, facilitating and instructing its users to use the
`inventions while
`they
`use
`Facebook’s Accused
`Instrumentalities. Facebook does this by, without limitation,
`modifying, in response to user actions, the configuration of
`user computers and devices and by encouraging users to use
`their computers and devices, so modified, to interact with
`Facebook’s Accused Instrumentalities, thereby inducing use
`of the claimed inventions. Facebook also provides APIs for
`use by application developers.
`
`28. Facebook takes the above actions intending to cause
`infringing acts by others.
`
`29. Facebook is aware of the patents-in-suit and knows that
`others’ actions, if taken, would constitute infringement of
`those patents. Alternatively, Facebook believes there is a
`high probability that others would infringe the patents-in-
`suit but remains willfully blind to the infringing nature of
`others’ actions. Facebook therefore infringes the patents-in-
`
`-8-
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`Case 4:16-cv-01730-YGR Document 20-1 Filed 07/24/15 Page 13 of 17
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`
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`suit under 35 U.S.C. § 271(b).
`
`(Compl. ¶¶ 26-29.) These bare allegations do not suffice to plead induced
`
`infringement and cannot support a plausible inference that Facebook possessed the
`
`specific intent to induce infringement.
`
`
`
`Accordingly, Facebook respectfully requests that the Court dismiss the
`
`induced infringement claim.
`
`2.
`
`The Complaint Fails To State A Claim For Contributory
`Infringement.
`
`35 U.S.C. § 271(c) states:
`
`Whoever offers to sell or sells within the United States or
`imports into the United States a component of a patented
`machine, manufacture, combination or composition, or a
`material or apparatus for use in practicing a patented
`process, constituting a material part of the invention,
`knowing the same to be especially made or especially
`adapted for use in an infringement of such patent, and not
`a staple article or commodity of commerce suitable for
`substantial noninfringing use, shall be liable as a
`contributory infringer.
`
`To state a claim for contributory infringement, a complaint must, among other
`
`things, plead facts that allow an inference that the components sold or offered for
`
`sale have no substantial non-infringing uses. In re Bill of Lading Transmission &
`
`Processing Sys. Patent Litig., 681 F.3d 1323, 1337 (Fed. Cir. 2012).
`
`
`
`Here, Windy City’s allegations with respect to contributory infringement are
`
`conclusory and lack supporting facts. The Complaint alleges:
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`-9-
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`Case 4:16-cv-01730-YGR Document 20-1 Filed 07/24/15 Page 14 of 17
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`
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`30. Facebook indirectly infringes the patents-in-suit by
`contributing to infringement by others, such as end-users
`and application developers, by providing within the
`United States software components
`for operating
`Facebook’s Accused Instrumentalities and interacting
`with end user client software and platforms. These
`software components are known by Facebook to be
`especially made or adapted for use in Facebook’s
`Accused Instrumentalities. These software components
`constitute a material part of the inventions claimed in the
`patents-in-suit, and are used to practice one or more
`processes/methods covered by the claims of the patents-
`in-suit. Such Facebook-related components are, for
`example, the software components that perform the
`authentication functionality claimed in the patents-in-
`suit, the software components that query Facebook
`servers to perform arbitration of computer connections,
`the software components comprising Facebook’s internal
`APIs and APIs for application developers, the software
`components
`that perform
`the multiplexing
`and
`demultiplexing of messages,
`and
`the
`software
`components
`that
`install
`Facebook’s Accused
`Instrumentalities on a computer or server.
`
`31. Facebook knows these Facebook-related components
`to be especially made or especially adapted for use in an
`infringement of the patents-in-suit and are not a staple
`article or commodity of commerce suitable
`for
`substantial non-infringing use. Alternatively, Facebook
`believes there is a high probability that others would
`infringe the patents-in-suit but remains willfully blind to
`the infringing nature of others’ actions. Facebook
`therefore infringes the patents-in-suit under 35 U.S.C. §
`271(c).
`
`(Compl. ¶¶ 30, 31.) These bare allegations are nothing more than a “formulaic
`
`recitation of the elements of a cause of action,” forbidden by Iqbal and Twombly.
`
`
`
`Accordingly, Facebook respectfully requests that the Court dismiss the
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`-10-
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`Case 4:16-cv-01730-YGR Document 20-1 Filed 07/24/15 Page 15 of 17
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`
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`contributory infringement claim.
`
`D.
`
`If This Action Is Dismissed, Windy City Should Not Be Granted
`Leave To Amend.
`
`Windy City’s Complaint is so inadequate that not only should the Complaint
`
`be dismissed in its entirety, the Court should consider doing so without leave to
`
`amend. See Holmes v. J.C. Penney Corp. Inc., No. 5:09CV115-V, 2011 WL
`
`5974460, at *5 (W.D.N.C. Nov. 29, 2011) (Judge Richard Voorhees) (rejecting
`
`plaintiff’s request for leave to amend).
`
`III. CONCLUSION
`
`For the reasons stated herein, Facebook respectfully requests that the Court
`
`enter an order dismissing this action with prejudice.
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`-11-
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`Case 4:16-cv-01730-YGR Document 20-1 Filed 07/24/15 Page 16 of 17
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`DATED: July 24, 2015
`
`/s/ Larry McDevitt
`
`
`
`
`
`
`
`
`
`
`
`Larry McDevitt, NC Bar # 5032
`David M. Wilkerson, NC Bar # 35742
`THE VAN WINKLE LAW FIRM
`P.O. Box 7376
`Asheville, NC 28801-7376
`Telephone: (828) 258-2991
`Facsimile: (828) 257-2767
`
`Heidi L. Keefe (Pro Hac Vice)
`Mark R. Weinstein (Pro Hac Vice)
`Reuben H. Chen (Pro Hac Vice)
`COOLEY LLP
`3175 Hanover Street
`Palo Alto, CA 94304-1130
`Telephone: (650)843-5000
`Facsimile: (650)849-7400
`rchen@cooley.com
`
`Attorneys For Defendant,
`Facebook, Inc.
`
`
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`-12-
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`Case 4:16-cv-01730-YGR Document 20-1 Filed 07/24/15 Page 17 of 17
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`
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`CERTIFICATE OF SERVICE
`
`I certify that on July 24, 2015, the foregoing document was electronically
`filed with the Clerk of the Court using the CM/ECF system which will send
`notification of such filing to the following:
`
`Attorneys for Plaintiff
`
`Bradley W. Caldwell
`
`Jason D. Cassady
`John Austin Curry
`Warren J. McCarty, III
`CALDWELL CASSADY & CURRY P.C.
`2101 Cedar Springs Road, Suite 1000
`Dallas, TX 75201
`Telephone: (214) 888-4848
`bcaldwell@caldwellcc.com
`jassadey@caldwellcc.com
`acurry@caldwellcc.com
`wmccarty@caldwellcc.com
`
`Robert B. Long, Jr.
`LONG, PARKER & WARREN, P.A.
`P.O. Box 7216
`Asheville, NC 28802
`Telephone: (828) 258-2296
`Facsimile: (828) 253-1073
`fran@longparker.com
`
`This 24th day of July 2015.
`
`
`
`
`
`
`/s/ Larry McDevitt
`Larry McDevitt
`
`
`
`-13-
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`