Case 2:12-cv-02823-JPM-tmp Document 56 Filed 08/09/13 Page 1 of 8 PageID 330
`
`UNITED STATES DISTRICT COURT
`WESTERN DISTRICT OF TENNESSEE
`WESTERN DIVISION
`
`B.E. TECHNOLOGY, L.L.C.,
`
`Plaintiff/Counter-Defendant,
`
`v.
`
`BARNES & NOBLE, INC.,
`
`Defendant/Counterclaimant.
`
`)
`)
`)
`)
`)
`)
`)
`)
`)
`)
`
`
`
`
`
`Case No. 2:12-CV-02823 JPM tmp
`
`JURY DEMAND
`
`PLAINTIFF B.E. TECHNOLOGY, L.L.C.’S REPLY IN SUPPORT OF ITS
`MOTION TO DISMISS UNDER FED. R. CIV. P. 12(b)(6)
`
`
`
`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
`
`Attorneys for Plaintiff
`B.E. Technology, L.L.C.
`
`
`Dated: August 9, 2013
`
`
`
`
`
`
`

`
`Case 2:12-cv-02823-JPM-tmp Document 56 Filed 08/09/13 Page 2 of 8 PageID 331
`
`Defendant Barnes & Noble, Inc. (“Barnes & Noble”) presents no legally sufficient
`
`response to the points and authorities presented in plaintiff B.E. Technology, L.L.C.’s (“B.E.”)
`
`motion to dismiss Barnes & Noble’s counterclaims.1 The sufficiency of Barnes & Noble’s
`
`pleading is not measured against Official Form 18 of the Appendix to the Federal Rules of Civil
`
`Procedure. The standard against which Barnes & Noble’s counterclaims must be measured is the
`
`Supreme Court’s Twombly and Iqbal standard and Barnes & Noble’s declaratory judgment
`
`counterclaims do not measure up. For that reason, the Court should grant B.E.’s motion to
`
`dismiss.
`
`I.
`
`BARNES & NOBLE’S CLAIMS FOR DECLARATORY JUDGMENT OF
`NON-INFRINGEMENT AND INVALIDITY SHOULD BE DISMISSED.
`
`A.
`
`The Twombly/Iqbal Standard Governs Barnes & Noble’s Counterclaims.
`
`As discussed in B.E.’s opening brief,2 declaratory judgment counterclaims must satisfy
`
`the standard set forth by the Supreme Court in Ashcroft v. Iqbal, 556 U.S. 662 (2009) and Bell
`
`Atl. Corp. v. Twombly, 550 U.S. 544 (2007). Barnes & Noble does not approach the
`
`requirements of that standard and its counterclaims are devoid of factual allegations sufficient to
`
`permit an inference that B.E.’s patents are not infringed or invalid. Compare D.E. 26 at 7 with
`
`Groupon, Inc. v. MobGob LLC, 2011 WL 2111986, at *5 (N.D. Ill. May 25, 2011) (the
`
`
`1 B.E. simultaneously moved to dismiss Barnes & Noble’s counterclaims and strike certain
`affirmative defenses. See D.E. 33. 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.
`2 Barnes & Noble complains that B.E. filed its motion to dismiss “without even attempting to
`confer with Barnes & Noble’s counsel.” D.E. 50 at 2. Civil Local Rule 7.2(a)(1)(B) does not
`require prior consultation of counsel for motions made pursuant to Fed. R. Civ. P. 12, 56, 59, and
`60. Since B.E.’s motions were made pursuant to Fed. R. Civ. P. 12(b)(6) and 12(f), B.E. was not
`required “to confer with Barnes & Noble’s counsel.”
`
`- 2 -
`
`

`
`Case 2:12-cv-02823-JPM-tmp Document 56 Filed 08/09/13 Page 3 of 8 PageID 332
`
`counterclaim “provides the Court with no basis for making a reasonable inference in
`
`[defendant’s] favor”).
`
`Barnes & Noble wrongly argues that its counterclaims are adequate because they meet
`
`the requirements of Official Forms 18 and 30 of the Federal Rules of Civil Procedure. D.E. 50
`
`at 2 (“Barnes & Noble’s counterclaims for declaratory judgment are pleaded in accordance with
`
`Forms 18 and 30 of the Federal Rules of Civil Procedure.”). A complaint for direct patent
`
`infringement is measured against Official Form 18. In re Bill of Lading Transmission and
`
`Processing Sys. Patent Litig., 681 F.3d 1323, 1334 (Fed. Cir. 2012). There is no Official Form
`
`for pleading declaratory judgment claims or counterclaims. See Memory Control Enter., LLC v.
`
`Edmunds.com, Inc., 2012 WL 681765, at *3 (C.D. Cal. Feb. 8, 2012) (“[W]hile the Appendix of
`
`the Federal Rules of Civil Procedure includes a form for patent infringement, it includes no such
`
`form for patent invalidity. Until such a form is included, defendants must meet the pleading
`
`standard the Supreme Court announced in Twombly and Iqbal.”).
`
`Barnes & Noble cites no authority establishing that Official Form 18 governs the
`
`pleading of declaratory judgment claims. Instead, Barnes & Noble acknowledges that the form
`
`governs the pleading of a claim of direct patent infringement. D.E. 50 at 3 (“Form 18 sets forth
`
`an example of a sufficient complaint for patent infringement . . . .”); id. (“[T]he forms remain the
`
`standard against which claims for direct infringement are to be measured.”); id. at 4 (“Several
`
`district courts have followed the Federal Circuit’s decision in In re Bill of Lading, holding that
`
`claims related to direct infringement are sufficient if they reflect the degree of particularity
`
`demonstrated by Form 18.”) (emphasis added). The Twombly/Iqbal standard, a standard based
`
`on Federal Rule of Civil Procedure 8 that is generally applicable to cases filed in federal court,
`
`therefore governs the pleading of a declaratory judgment claim. See Iqbal, 556 U.S. at 684
`
`- 3 -
`
`

`
`Case 2:12-cv-02823-JPM-tmp Document 56 Filed 08/09/13 Page 4 of 8 PageID 333
`
`(“Our decision in Twombly expounded the pleading standard for ‘all civil actions,’ and it applies
`
`to antitrust and discrimination suits alike.”).
`
`B.
`
`Under the Governing Rules, Barnes & Noble’s Burden to Allege
`Non-Infringement and Invalidity Is Different from B.E.’s Burden to Allege
`Direct Infringement.
`
`Barnes & Noble argues there is no basis for different pleading standards for plaintiffs and
`
`counterclaimants3 and such differences result in an incongruity. D.E. 50 at 7. If there is an
`
`incongruity, it is the direct result of Rule 8, Twombly and Iqbal, and the decisions that were made
`
`in the adoption of the Official Forms. B.E. submits that the true “incongruity” would result if the
`
`Court were to recognize an exception, benefiting patent infringement defendants, but not other
`
`defendants, to the Twombly/Iqbal standard governing “all civil actions.”
`
`Barnes & Noble also argues that pleading standards for patent declaratory judgment
`
`counterclaims can be lowered because of the existence of unique local rules governing patent
`
`cases. D.E. 50 at 6 (“Barnes & Noble provides a short and plain statement that . . . should be
`
`considered in the context of the Local Patent Rules’ requirement for the early detailed disclosure
`
`of a defendant’s non-infringement theory.”); id. (“[I]t is not necessary to subject Barnes &
`
`Noble’s counterclaims to a heightened standard at the pleading stage,” because the LPR “require
`
`defendants to serve detailed non-infringement contentions within twenty-eight days of a
`
`plaintiff’s service of infringement contentions” and “invalidity and unenforceability contentions
`
`[are] to be served within ninety days after a responsive pleading is filed.”). The adoption of local
`
`rules does not “alter a defendant’s pleading obligations” and does not create an exception to a
`
`defendant’s pleading obligations under Twombly and Iqbal. See Tyco Fire Prods. LP v. Victaulic
`
`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.
`
`- 4 -
`
`

`
`Case 2:12-cv-02823-JPM-tmp Document 56 Filed 08/09/13 Page 5 of 8 PageID 334
`
`Co., 777 F. Supp. 2d 893, 904 (E.D. Pa. 2011); see also GE Lighting Solutions, LLC v. Lights of
`
`Am., Inc., 2013 WL 1874855, at *2 (N.D. Ohio May 3, 2013) (“[I]t would undermine Rule 8 to
`
`permit a threadbare assertion of a claim on the promise that discovery will unveil the claim’s
`
`factual basis.”). Moreover, under Federal Rule of Civil Procedure 83(a)(1), a local rule cannot
`
`modify the pleading requirements of Rule 8, as they have been determined by the Supreme
`
`Court. See Fed. R. Civ. P. 83(a)(1) (“A local rule must be consistent with—but not duplicate—
`
`federal statutes and rules adopted under 28 U.S.C. §§ 2072 and 2075, . . . .”).
`
`In Tyco Fire, the district court explained that the difference in pleading standards cannot
`
`be remedied by allowing a counterclaimant to evade the Supreme Court’s rulings. 777 F. Supp.
`
`2d at 904 (“Two wrongs do not make a right.”). If there is a problem requiring a solution, the
`
`appropriate remedy is to modify or eliminate the Rule 84 forms or to update the official forms to
`
`comply with the otherwise existing requirements of current law. Id. at 905. Until then,
`
`defendants asserting counterclaims must do so in the manner required by Twombly and Iqbal,
`
`which requires more than what Barnes & Noble has done here. Compare PPS Data, LLC v.
`
`Allscripts Healthcare Solutions, Inc., 2012 WL 243346, at *4 (M.D. Fla. Jan. 25, 2012) (“A
`
`fleeting reference to all (or most) of these [invalidity] defenses does not rise to the level of ‘a
`
`short and plain statement of the claim showing that the pleader is entitled to relief.’”) (quoting
`
`Fed. R. Civ. P. 8(a)(2)) with D.E. 50 at 7 (“Barnes & Noble names the statutory bases for
`
`invalidity and further narrows the allegations by pointing to specific sections.”); see also
`
`Duramed Pharms, Inc. v. Watson Labs, Inc., 2008 WL 5232908, at *4 (D. Nev. Dec. 12, 2008)
`
`(granting motion to dismiss counterclaims); Sprint Commc’ns. Co. v. Theglobe.com, Inc., 233
`
`F.R.D. 615, 619 (D. Kansas 2006) (striking counterclaim); PB Farradyne, Inc. v. Peterson, 2006
`
`WL 132182, at *3 (N.D. Cal. Jan 17, 2006) (dismissing counterclaim).
`
`- 5 -
`
`

`
`Case 2:12-cv-02823-JPM-tmp Document 56 Filed 08/09/13 Page 6 of 8 PageID 335
`
`Finally, Barnes & Noble argues that its allegations are at least as detailed as the
`
`allegations in B.E.’s complaint. D.E. 50 at 2 (announcing that Barnes & Noble’s counterclaims
`
`“are stated with substantially the same level of specificity and factual support as B.E.
`
`Technology’s own claims”) (emphasis in original). Regardless of whether that is true, B.E.’s
`
`complaint is sufficient under Official Form 18, whereas Barnes & Noble cannot point to a similar
`
`safe harbor applicable to its declaratory judgment counterclaims.
`
`II.
`
`IF LEAVE TO AMEND IS GRANTED, THERE IS NO BASIS TO DELAY THE
`FILING OF AMENDED COUNTERCLAIMS.
`
`Barnes & Noble requests that if B.E.’s motion is granted, it be given leave to file
`
`amended counterclaims “following completion of the non-infringement and invalidity
`
`contentions required by the Local Patent Rules.” D.E. 50 at 8. There is no basis for such an
`
`accommodation. As explained above, the existence of Local Patent Rules does not alter Barnes
`
`& Noble’s obligations to plead counterclaims sufficient under Rule 8. Moreover, the idea that
`
`the assertion of counterclaims requires the completion of discovery indicates there may not be a
`
`good faith basis for the assertion of the counterclaims in the first place.
`
`Lastly, Barnes & Noble has been in possession of B.E.’s initial infringement contentions
`
`for more than seven months.4 Barnes & Noble offers no explanation why it must complete its
`
`own contentions required by the Local Patent Rules in order to prepare amended counterclaims
`
`that will be sufficient under Rule 8 and Twombly/Iqbal. To the contrary, Barnes & Noble
`
`explained that it was the absence of B.E.’s contentions that made pleading sufficient
`
`counterclaims so challenging. D.E. 50 at 8 (“B.E. Technology [had not] served contentions
`
`
`4 Barnes & Noble incorrectly states that B.E. “filed its motion to dismiss Barnes & Noble’s
`counterclaims before serving its contentions.” D.E. 50 at 8. B.E. served initial infringement
`contentions pursuant to Local Patent Rule 3.1 on January 7, 2013. B.E. moved to dismiss Barnes
`& Noble’s counterclaims on January 25, 2013. D.E. 33.
`
`- 6 -
`
`

`
`Case 2:12-cv-02823-JPM-tmp Document 56 Filed 08/09/13 Page 7 of 8 PageID 336
`
`informing Barnes & Noble of the basis of its infringement claims when Barnes & Noble
`
`answered.”).
`
`If Barnes & Noble cannot plead facts sufficient to state counterclaims for declaratory
`
`judgment of non-infringement and invalidity at this time, then it need not file them. It is not
`
`mandatory that accused infringers assert declaratory judgment counterclaims for non-
`
`infringement and invalidity. The denials in Barnes & Noble’s answer are more than sufficient to
`
`place at issue the question of whether the accused tablet computer products infringe the ’290
`
`patent. If Barnes & Noble needs to complete “the non-infringement and invalidity contentions
`
`required by the Local Patent Rules” before filing amended counterclaims, then Barnes & Noble
`
`should remain mindful of the deadline set forth in the case schedule to amend pleadings. See
`
`D.E. 55. But there is no reason to delay the filing of amended counterclaims, should leave to
`
`amend be granted.
`
`III. CONCLUSION
`
`For the foregoing reasons, B.E. respectfully requests that the Court grant its motion to
`
`dismiss pursuant to Federal Rule of Civil Procedure 12(b)(6).
`
`Dated: August 9, 2013
`
`
`Respectfully submitted,
`
`
`
`
`
`
`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
`
`- 7 -
`
`

`
`Case 2:12-cv-02823-JPM-tmp Document 56 Filed 08/09/13 Page 8 of 8 PageID 337
`
`
`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
`Facsimile: (901) 527-3746
`rcarter@martintate.com
`asimpson@martintate.com
`
`Attorneys for Plaintiff B.E. Technology, L.L.C.
`
`
`
`
`- 8 -