Case 2:12-cv-02783-JPM-cgc Document 49 Filed 08/19/13 Page 1 of 8 PageID 454
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`UNITED STATES DISTRICT COURT
`WESTERN DISTRICT OF TENNESSEE
`WESTERN DIVISION
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`B.E. TECHNOLOGY, L.L.C.,
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`Plaintiff/Counter-Defendant,
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`v.
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`TWITTER, INC.,
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`Defendant/Counterclaimant.
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`Case No. 2:12-cv-02783 JPM cgc
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`JURY DEMAND
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`PLAINTIFF B.E. TECHNOLOGY, L.L.C.’S REPLY IN SUPPORT OF ITS
`MOTION TO DISMISS UNDER FED. R. CIV. P. 12(b)(6)
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`Richard M. Carter (TN B.P.R. #7285)
`Adam C. Simpson (TN B.P.R. #24705)
`MARTIN, TATE, MORROW & MARSTON, P.C.
`6410 Poplar Avenue, Suite 1000
`Memphis, TN 38119-4839
`Telephone: (901) 522-9000
`
`Robert E. Freitas (CA Bar No. 80948)
`Craig R. Kaufman (CA Bar No. 159458)
`Daniel J. Weinberg (CA Bar No. 227159)
`Qudus B. Olaniran (CA Bar No. 267838)
`FREITAS TSENG & KAUFMAN LLP
`100 Marine Parkway, Suite 200
`Redwood Shores, CA 94065
`Telephone: (650) 593-6300
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`Attorneys for Plaintiff
`B.E. Technology, L.L.C.
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`Dated: August 19, 2013
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`Case 2:12-cv-02783-JPM-cgc Document 49 Filed 08/19/13 Page 2 of 8 PageID 455
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`Defendant Twitter, Inc. (“Twitter”) presents no legally sufficient response to the points
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`and authorities presented in plaintiff B.E. Technology, L.L.C.’s (“B.E.”) motion to dismiss
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`Twitter’s counterclaims.1 The sufficiency of Twitter’s pleading is not measured against Official
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`Form 18 of the Appendix to the Federal Rules of Civil Procedure. The standard against which
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`Twitter’s counterclaims must be measured is the Supreme Court’s Twombly and Iqbal standard.
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`The Court should grant B.E.’s motion to dismiss because Twitter’s declaratory judgment
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`counterclaims do not meet that standard.
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`I.
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`TWITTER’S COUNTERCLAIMS FOR DECLARATORY JUDGMENT OF NON-
`INFRINGEMENT AND INVALIDITY SHOULD BE DISMISSED.
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`A.
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`The Twombly/Iqbal Standard Governs Twitter’s Counterclaims.
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`As discussed in B.E.’s opening brief, declaratory judgment counterclaims must satisfy the
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`standard set forth by the Supreme Court in Ashcroft v. Iqbal, 556 U.S. 662 (2009) and Bell Atl.
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`Corp. v. Twombly, 550 U.S. 544 (2007). Twitter does not approach the requirements of that
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`standard and its counterclaims are devoid of factual allegations sufficient to permit an inference
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`that B.E.’s patents are not infringed or invalid. Compare D.E. 19 at 5-6 with Xilinx, Inc. v.
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`Invention Inv. Fund I LP, 2011 WL 3206686, at *6 (N.D. Cal. July 27, 2011) (“This bare-bones
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`recitation of statutes does not meet the requirements of Twombly and Iqbal and does not put
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`defendants on notice of the basis of Xilinx’s claims of invalidity.”); see also Iqbal, 556 U.S. at
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`678 (“[W]e are not bound to accept as true a legal conclusion couched as a factual allegation.”)
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`(internal quotation marks omitted).
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`1 B.E. simultaneously moved to dismiss Twitter’s counterclaims and strike certain affirmative
`defenses. See D.E. 29. A party moving for relief under Fed. R. Civ. P. 12(b) has a right to file a
`reply memorandum without leave of court, Civil L.R. 12.1(c), while no such right exists for a
`party seeking relief under Fed. R. Civ. P. 12(f). Civil L.R. 7.2(c). To avoid further burdening
`the Court’s already heavy docket, B.E. files only a reply in support of its Rule 12(b) motion and
`rests on its moving papers to support its Rule 12(f) motion.
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`Case 2:12-cv-02783-JPM-cgc Document 49 Filed 08/19/13 Page 3 of 8 PageID 456
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`Twitter wrongly argues that its counterclaims are adequate because they meet the
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`requirements of Official Form 18 of the Federal Rules of Civil Procedure. D.E. 48 at 5
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`(“Twitter’s compliance with Form 18 and 30 should end the inquiry regardless of Twombly.”);
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`id. at 6 (“Because Twitter’s Counterclaims provide the same level of detail contemplated by
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`Forms 18 and 30, B.E.’s Motion should be denied.”). A complaint for direct patent infringement
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`is measured against Official Form 18. In re Bill of Lading Transmission and Processing Sys.
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`Patent Litig., 681 F.3d 1323, 1334 (Fed. Cir. 2012). There is no Official Form for pleading
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`declaratory judgment claims or counterclaims. See Memory Control Enter., LLC v.
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`Edmunds.com, Inc., 2012 WL 681765, at *3 (C.D. Cal. Feb. 8, 2012) (“[W]hile the Appendix of
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`the Federal Rules of Civil Procedure includes a form for patent infringement, it includes no such
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`form for patent invalidity. Until such a form is included, defendants must meet the pleading
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`standard that the Supreme Court announced in Twombly and Iqbal.”).
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`Twitter cites no authority establishing that Official Form 18 governs the pleading of
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`declaratory judgment claims,2 and the Federal Circuit has made clear that “Form 18 should be
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`strictly construed as measuring only the sufficiency of allegations of direct infringement.” In re
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`Bill of Lading, 681 F.3d at 1336. The Twombly/Iqbal standard, a standard based on Federal Rule
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`of Civil Procedure 8 that is generally applicable to cases filed in federal court, therefore governs
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`the pleading of a declaratory judgment claim. See Iqbal, 556 U.S. at 684 (“Our decision in
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`Twombly expounded the pleading standard for ‘all civil actions,’ and it applies to antitrust and
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`discrimination suits alike.”).
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`2 Twitter incorrectly contends that the Federal Circuit held that Form 18 is “the standard against
`which claims for infringement and non-infringement are to be measured.” D.E. 48 at 5 (citing In
`re Bill of Lading, 681 F.3d at 1334). The Federal Circuit did not address declaratory judgment
`claims or counterclaims for non-infringement or invalidity in In re Bill of Lading.
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`Case 2:12-cv-02783-JPM-cgc Document 49 Filed 08/19/13 Page 4 of 8 PageID 457
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`B.
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`Under the Governing Rules, Twitter’s Burden to Allege Non-Infringement
`and Invalidity Is Different from B.E.’s Burden to Allege Direct Infringement.
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`Twitter argues that the existence of different pleading standards for plaintiffs and
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`counterclaimants3 results in unfairness. D.E. 48 at 9 (“[I]t would be grossly unfair to allow B.E.
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`to plead patent infringement with the meager allegations it has provided and then hold Twitter to
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`a significantly more rigorous standard.”). If there is unfairness, it is the direct result of Rule 8,
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`Twombly and Iqbal, and the decisions that were made in the adoption of the Official Forms. B.E.
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`submits that it would be “unfair” for the Court to make an exception to the Twombly/Iqbal
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`standard governing “all civil actions” benefiting patent infringement defendants, but not other
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`defendants.
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`Twitter also argues that pleading standards for patent declaratory judgment counterclaims
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`can be lowered because of the existence of unique local rules governing patent cases. D.E. 48 at
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`8 (claiming a “pragmatic approach” to pleading is appropriate for non-infringement and
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`invalidity declaratory judgment counterclaims “in light of local patent rules providing for early
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`disclosure of non-infringement and invalidity theories”); id. at 1 (“This District’s Local Patent
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`Rules govern those disclosures, and B.E.’s demands, if accepted, would significantly undermine
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`this carefully considered procedure.”). The adoption of local rules does not “alter a defendant’s
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`pleading obligations” and does not create an exception to a defendant’s pleading obligations
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`under Twombly and Iqbal. See Tyco Fire Prods. LP v. Victaulic Co., 777 F. Supp. 2d 893, 904
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`(E.D. Pa. 2011); see also GE Lighting Solutions, LLC v. Lights of Am., Inc., 2013 WL 1874855,
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`at *2 (N.D. Ohio May 3, 2013) (“[I]t would undermine Rule 8 to permit a threadbare assertion of
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`3 The actual distinction in the law is between infringement claimants and counterclaimants on the
`one hand, and declaratory judgment claimants and counterclaimants, on the other. A
`counterclaimant alleging direct patent infringement may rely on Official Form 18. A plaintiff
`asserting a declaratory judgment claim must satisfy the Twombly/Iqbal standard because there is
`no official form for declaratory judgment claims and counterclaims.
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`Case 2:12-cv-02783-JPM-cgc Document 49 Filed 08/19/13 Page 5 of 8 PageID 458
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`a claim on the promise that discovery will unveil the claim’s factual basis.”). Moreover, under
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`Federal Rules of Civil Procedure 83(a)(1), a local rule cannot modify the pleading requirements
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`of Rule 8, as they have been determined by the Supreme Court. See Fed. R. Civ. P. 83(a)(1) (“A
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`local rule must be consistent with—but not duplicate—federal statutes and rules adopted under
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`28 U.S.C. §§ 2072 and 2075, . . . .”).
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`In Tyco Fire, the district court explained that the difference in pleading standards cannot
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`be remedied by allowing a counterclaimant to evade the Supreme Court’s rulings. 777 F. Supp.
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`2d at 904 (“Two wrongs do not make a right.”). If there is a problem requiring a solution, the
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`appropriate remedy is to modify or eliminate the Rule 84 forms or to update the official forms to
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`comply with the otherwise existing requirements of current law. Id. at 905. Until then,
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`defendants asserting counterclaims must do so in the manner required by Twombly and Iqbal,
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`which requires more than what Twitter has done here. Compare D.E. 19 at 5-6 (“The ’314
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`Patent is invalid for failure to meet one or more of the conditions for patentability specified in
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`Title 35, U.S.C., or the rules, regulations, and law related thereto, including, without limitation,
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`one or more of 35 U.S.C. §§ 101, 102, 103, and/or 112.”) with PPS Data, LLC v. Allscripts
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`Healthcare Solutions, Inc., 2012 WL 243346, at *4 (M.D. Fla. Jan. 25, 2012) (“A fleeting
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`reference to all (or most) of these [invalidity] defenses does not rise to the level of ‘a short and
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`plain statement of the claim showing that the pleader is entitled to relief.’”) (quoting Fed. R. Civ.
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`P. 8(a)(2)); Orientview Techs. LLC v. Seven For All Mankind, LLC, 2013 WL 4016302, at *7
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`(S.D.N.Y. Aug. 7, 2013) (“Measured against the heightened pleading standard, [defendant’s]
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`invalidity counterclaim falls well short.”); Gemcor II, LLC v. Electroimpact Inc., 2012 WL
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`628199, at *2 (D. Kan. Feb. 27, 2012) (granting motion to dismiss); Duramed Pharms, Inc. v.
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`Watson Labs, Inc., 2008 WL 5232908, at *4 (D. Nev. Dec. 12, 2008) (granting motion to dismiss
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`Case 2:12-cv-02783-JPM-cgc Document 49 Filed 08/19/13 Page 6 of 8 PageID 459
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`counterclaims); Sprint Commc’ns. Co. v. Theglobe.com, Inc., 233 F.R.D. 615, 619 (D. Kan.
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`2006) (striking counterclaim); PB Farradyne, Inc. v. Peterson, 2006 WL 132182, at *3 (N.D.
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`Cal. Jan 17, 2006) (dismissing counterclaim).
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`Finally, Twitter argues that “what B.E. demands of Twitter is far in excess of what its
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`own cursory Complaint alleges—making only a one-sentence allegation of infringement.” D.E.
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`48 at 1. Regardless of whether that is true, B.E.’s complaint is sufficient under Official Form 18,
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`whereas Twitter cannot point to a similar safe harbor applicable to its declaratory judgment
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`counterclaims.
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`II.
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`CONCLUSION
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`For the foregoing reasons, B.E. respectfully requests that the Court grant its motion to
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`dismiss pursuant to Federal Rule of Civil Procedure 12(b)(6).
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`Dated: August 19, 2013
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`Respectfully submitted,
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`
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`s/Daniel J. Weinberg
`Robert E. Freitas (CA Bar No. 80948)
`Craig R. Kaufman (CA Bar No. 159458)
`Daniel J. Weinberg (CA Bar No. 227159)
`Qudus B. Olaniran (CA Bar No. 267838)
`FREITAS TSENG & KAUFMAN LLP
`100 Marine Parkway, Suite 200
`Redwood Shores, CA 94065
`Telephone: (650) 593-6300
`Facsimile: (650) 593-6301
`rfreitas@ftklaw.com
`ckaufman@ftklaw.com
`dweinberg@ftklaw.com
`qolaniran@ftklaw.com
`
`
`Richard M. Carter (TN B.P.R. #7285)
`Adam C. Simpson (TN B.P.R. #24705)
`MARTIN, TATE, MORROW & MARSTON, P.C.
`6410 Poplar Avenue, Suite 1000
`Memphis, TN 38119-4839
`Telephone: (901) 522-9000
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`Case 2:12-cv-02783-JPM-cgc Document 49 Filed 08/19/13 Page 7 of 8 PageID 460
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`Facsimile: (901) 527-3746
`rcarter@martintate.com
`asimpson@martintate.com
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`Attorneys for Plaintiff B.E. Technology, L.L.C.
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`Case 2:12-cv-02783-JPM-cgc Document 49 Filed 08/19/13 Page 8 of 8 PageID 461
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`CERTIFICATE OF SERVICE
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`The undersigned hereby certifies that on August 19, 2013 a true and correct copy of the
`foregoing was electronically filed with the United States District Court for the Western District
`of Tennessee and was served on counsel by the Court’s electronic filing notification.
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`s/Daniel J. Weinberg
` Daniel J. Weinberg
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