Case 2:12-cv-02831-JPM-tmp Document 52 Filed 07/22/13 Page 1 of 7 PageID 821
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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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`APPLE INC.,
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`Defendant/Counterclaimant.
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`Case No. 2:12-cv-02831 JPM tmp
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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
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`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: July 22, 2013
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`Case 2:12-cv-02831-JPM-tmp Document 52 Filed 07/22/13 Page 2 of 7 PageID 822
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`Defendant Apple Inc. (“Apple”) presents no legally sufficient response to the points and
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`authorities presented in plaintiff B.E. Technology, L.L.C.’s (“B.E.”) motion to dismiss Apple’s
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`counterclaims.1 The sufficiency of Apple’s pleading is not measured against Official Form 18 of
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`the Appendix to the Federal Rules of Civil Procedure. The standard against which Apple’s
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`counterclaims must be measured is the Supreme Court’s Twombly and Iqbal standard and
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`Apple’s declaratory judgment counterclaims do not measure up. For that reason, the Court
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`should grant B.E.’s motion to dismiss.
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`I.
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`APPLE’S CLAIMS 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 Apple’s Counterclaims.
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`As discussed in B.E.’s opening brief,2 declaratory judgment counterclaims must satisfy
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`the standard set forth by the Supreme Court in Ashcroft v. Iqbal, 556 U.S. 662 (2009) and Bell
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`Atl. Corp. v. Twombly, 550 U.S. 544 (2007). Apple 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. 26 at 6, 7 with Groupon, Inc. v.
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`MobGob LLC, 2011 WL 2111986, at *5 (N.D. Ill. May 25, 2011) (the counterclaim “provides
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`the Court with no basis for making a reasonable inference in [defendant’s] favor”).
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`1 B.E. simultaneously moved to dismiss Apple’s counterclaims and strike certain affirmative
`defenses. See D.E. 38. 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 Apple complains that B.E. filed its motion to dismiss “without any attempt to confer with
`Apple’s counsel.” D.E. 49-1 at 1. 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 Apple’s counsel.”
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`Case 2:12-cv-02831-JPM-tmp Document 52 Filed 07/22/13 Page 3 of 7 PageID 823
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`Apple wrongly argues that its counterclaims are adequate because they meet the
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`requirements of Official Forms 18 and 30 of the Federal Rules of Civil Procedure. D.E. 49-1
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`at 2. A complaint for direct patent infringement is measured against Official Form 18. In re Bill
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`of Lading Transmission and Processing Sys. Patent Litig., 681 F.3d 1323, 1334 (Fed. Cir. 2012).
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`There is no Official Form for pleading declaratory judgment claims or counterclaims. See
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`Memory Control Enters., LLC v. Edmunds.com, Inc., 2012 WL 681765, at *3 (C.D. Cal. Feb. 8,
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`2012) (“[W]hile the Appendix of the Federal Rules of Civil Procedure includes a form for patent
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`infringement, it includes no such form for patent invalidity. Until such a form is included,
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`defendants must meet the pleading standard that the Supreme Court announced in Twombly and
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`Iqbal.”).
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`Apple cites no authority establishing that Official Form 18 governs the pleading of
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`declaratory judgment claims. Apple also repeatedly acknowledges that the form governs the
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`pleading of a claim of direct patent infringement. D.E.49-1 at 2 (“Form 18 sets forth an example
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`of a sufficient complaint for patent infringement . . . .”); id. at 3 (“[T]he Federal Circuit has held
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`that the forms remain the standard against which claims for direct infringement are to be
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`measured.”); id. at 4 (“Since In re Bill of Lading, district courts have followed the Federal
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`Circuit and held that claims related to direct infringement are sufficient if they reflect the degree
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`of particularity in Form 18.”) (emphasis added). The Twombly/Iqbal standard, a standard based
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`on Federal Rule of Civil Procedure 8 that is generally applicable to cases filed in federal court,
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`therefore governs the pleading of a declaratory judgment claim. See Iqbal, 556 U.S. at 684
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`(“Our decision in Twombly expounded the pleading standard for ‘all civil actions,’ and it applies
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`to antitrust and discrimination suits alike.”).
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`Case 2:12-cv-02831-JPM-tmp Document 52 Filed 07/22/13 Page 4 of 7 PageID 824
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`B.
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`Under the Governing Rules, Apple’s Burden to Allege Non-Infringement and
`Invalidity Is Different from B.E.’s Burden to Allege Direct Infringement.
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`Apple argues that the existence of different pleading standards for plaintiffs and
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`counterclaimants3 results in an incongruity. D.E. 49-1 at 2 (“B.E. argues incongruously that
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`defendants in patent infringement suits should be held to a higher pleading standard than
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`plaintiffs, . . . .”). If there is an incongruity, it is the direct result of Rule 8, Twombly and Iqbal,
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`and the decisions that were made in the adoption of the Official Forms. B.E. submits that the
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`true “incongruity” would result if the Court were to recognize an exception, benefiting patent
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`infringement defendants, but not other defendants, to the Twombly/Iqbal standard governing “all
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`civil actions.”
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`Apple 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. 49-1
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`at 6 (“Apple’s counterclaims meet . . . the spirit of the overall set of rules governing this case,
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`which includes the District’s Local Patent Rules requiring early and detailed disclosures.”); id. at
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`7 (“Apple’s Counterclaims One and Three, for declaration of non-infringement, . . . should be
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`read in the context of the Local Patent Rules’ requirement for early detailed disclosure of the
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`defendants’ non-infringement theories.”). The adoption of local rules does not “alter a
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`defendant’s pleading obligations” and does not create an exception to a defendant’s pleading
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`obligations under Twombly and Iqbal. See Tyco Fire Prods. LP v. Victaulic Co., 777 F. Supp. 2d
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`893, 904 (E.D. Pa. 2011); see also GE Lighting Solutions, LLC v. Lights of Am., Inc., 2013 WL
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`1874855, at *2 (N.D. Ohio May 3, 2013) (“[I]t would undermine Rule 8 to permit a threadbare
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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-02831-JPM-tmp Document 52 Filed 07/22/13 Page 5 of 7 PageID 825
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`assertion of a claim on the promise that discovery will unveil the claim’s factual basis.”).
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`Moreover, under Federal Rules of Civil Procedure 83(a)(1), a local rule cannot modify the
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`pleading requirements of Rule 8, as they have been determined by the Supreme Court. See Fed.
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`R. Civ. P. 83(a)(1) (“A local rule must be consistent with—but not duplicate—federal statutes
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`and rules adopted under 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 Apple has done here. See 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)); Duramed Pharms, Inc. v. Watson Labs, Inc., 2008 WL 5232908, at *4 (D. Nev. Dec.
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`12, 2008) (granting motion to dismiss counterclaims); Sprint Commc’ns. Co. v. Theglobe.com,
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`Inc., 233 F.R.D. 615, 619 (D. Kansas 2006) (striking counterclaim); PB Farradyne, Inc. v.
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`Peterson, 2006 WL 132182, at *3 (N.D. Cal. Jan 17, 2006) (dismissing counterclaim).
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`Finally, Apple argues that its allegations are at least as detailed as the allegations in
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`B.E.’s complaint. D.E. 49-1 at 8 (“Apple’s counterclaims are supported by at least the same
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`level of detail as B.E.’s allegations.”). Regardless of whether that is true, B.E.’s complaint is
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`Case 2:12-cv-02831-JPM-tmp Document 52 Filed 07/22/13 Page 6 of 7 PageID 826
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`sufficient under Official Form 18, whereas Apple cannot point to a similar safe harbor applicable
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`to its declaratory judgment 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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`Respectfully submitted,
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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
`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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`Dated: July 22, 2013
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`Case 2:12-cv-02831-JPM-tmp Document 52 Filed 07/22/13 Page 7 of 7 PageID 827
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`CERTIFICATE OF SERVICE
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`The undersigned hereby certifies that on July 22, 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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