Case 2:12-cv-02833-JPM-tmp Document 56 Filed 08/12/13 Page 1 of 7 PageID 515
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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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`PEOPLE MEDIA, INC.,
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`Defendant/Counterclaimant.
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`Case No. 2:12-CV-02833 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: August 12, 2013
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`Case 2:12-cv-02833-JPM-tmp Document 56 Filed 08/12/13 Page 2 of 7 PageID 516
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`Defendant People Media, Inc. (“People Media”) presents no legally sufficient response to
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`the points and authorities presented in plaintiff B.E. Technology, L.L.C.’s (“B.E.”) motion to
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`dismiss People Media’s counterclaims.1 The sufficiency of People Media’s pleading is not
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`measured against Official Form 18 of the Appendix to the Federal Rules of Civil Procedure. The
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`standard against which People Media’s counterclaims must be measured is the Supreme Court’s
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`Twombly and Iqbal standard and People Media’s declaratory judgment counterclaims do not
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`measure up. For that reason, the Court should grant B.E.’s motion to dismiss.
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`I.
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`PEOPLE MEDIA’S CLAIMS FOR DECLARATORY JUDGMENT OF
`NON-INFRINGEMENT, INVALIDITY, AND UNENFORCEABILITY SHOULD
`BE DISMISSED.
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`A.
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`The Twombly/Iqbal Standard Governs People Media’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). People Media does not approach the requirements of
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`that standard and its counterclaims are devoid of factual allegations sufficient to permit an
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`inference that B.E.’s patents are not infringed, invalid or unenforceable. Compare D.E. 21 at 8-
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`10 with Groupon, Inc. v. MobGob LLC, 2011 WL 2111986, at *5 (N.D. Ill. May 25, 2011) (the
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`counterclaim “provides the Court with no basis for making a reasonable inference in
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`[defendant’s] favor”).
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`People Media 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. 50 at 5
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`1 B.E. simultaneously moved to dismiss People Media’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.
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`Case 2:12-cv-02833-JPM-tmp Document 56 Filed 08/12/13 Page 3 of 7 PageID 517
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`(“People Media’s counterclaims for declaratory judgment are consistent with Forms 18 and 30 of
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`the Federal Rules of Civil Procedure.”). A complaint for direct patent infringement is measured
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`against Official Form 18. In re Bill of Lading Transmission and Processing Sys. Patent Litig.,
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`681 F.3d 1323, 1334 (Fed. Cir. 2012). There is no Official Form for pleading declaratory
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`judgment claims or counterclaims. See Memory Control Enter., LLC v. Edmunds.com, Inc.,
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`2012 WL 681765, at *3 (C.D. Cal. Feb. 8, 2012) (“[W]hile the Appendix of the Federal Rules of
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`Civil Procedure includes a form for patent infringement, it includes no such form for patent
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`invalidity. Until such a form is included, defendants must meet the pleading standard the
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`Supreme Court announced in Twombly and Iqbal.”).
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`People Media cites no authority establishing that Official Form 18 governs the pleading
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`of declaratory judgment claims. Instead, People Media acknowledges that the form governs the
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`pleading of a claim of direct patent infringement. D.E. 50 at 5 (“Form 18 states that a complaint
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`for patent infringement should include. . . .”). The Twombly/Iqbal standard, a standard based on
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`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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`B.
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`Under the Governing Rules, People Media’s Burden to Allege
`Non-Infringement and Invalidity Is Different from B.E.’s Burden to Allege
`Direct Infringement.
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`People Media argues there is no basis for different pleading standards for plaintiffs and
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`counterclaimants2 and such differences would be “nonsensical.” D.E. 50 at 3 (“[I]t would be
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`2 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
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`Case 2:12-cv-02833-JPM-tmp Document 56 Filed 08/12/13 Page 4 of 7 PageID 518
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`nonsensical to suggest that Plaintiff’s Complaint, which contains fewer allegations than
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`Defendant’s non-infringement counterclaim, is somehow satisfactory while a mirror allegation of
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`non-infringement is not.”). If it is nonsensical, it is the direct result of Rule 8, Twombly and
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`Iqbal, and the decisions that were made in the adoption of the Official Forms. B.E. submits that
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`it would be equally, if not more, nonsensical, for the Court to recognize an exception, benefiting
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`patent infringement defendants, but not other defendants, to the Twombly/Iqbal standard
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`governing “all civil actions.”
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`People Media also argues that pleading standards for patent declaratory judgment
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`counterclaims can be lowered because of the existence of unique local rules governing patent
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`cases. D.E. 50 at 4 (“[D]ismissal of People Media’s counterclaims would undermine the Local
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`Patent Rules, which require more detailed disclosures at a later stage.”); id. (“Under the Local
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`Patent Rules these filings will contain any additional basis for People Media’s counterclaims.”).
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`The adoption of local rules does not “alter a defendant’s pleading obligations” and does not
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`create an exception to a defendant’s pleading obligations under Twombly and Iqbal. See Tyco
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`Fire Prods. LP v. Victaulic Co., 777 F. Supp. 2d 893, 904 (E.D. Pa. 2011); see also GE Lighting
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`Solutions, LLC v. Lights of Am., Inc., 2013 WL 1874855, at *2 (N.D. Ohio May 3, 2013) (“[I]t
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`would undermine Rule 8 to permit a threadbare assertion of a claim on the promise that
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`discovery will unveil the claim’s factual basis.”). Moreover, under Federal Rule of Civil
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`Procedure 83(a)(1), a local rule cannot modify the pleading requirements of Rule 8, as they have
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`been determined by the Supreme Court. See Fed. R. Civ. P. 83(a)(1) (“A local rule must be
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`consistent with—but not duplicate—federal statutes and rules adopted under 28 U.S.C. §§ 2072
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`and 2075, . . . .”).
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`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-02833-JPM-tmp Document 56 Filed 08/12/13 Page 5 of 7 PageID 519
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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 People Media has done here.
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`People Media contends its counterclaims are supported by sufficient factual allegations,
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`but its claims are not plausible, merely possible. For example, People Media contends that it
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`“points to specific prior art as a basis for invalidity,” but it makes no allegations supporting how
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`or why “[t]he ’418 Patent anticipates and/or renders obvious at least claim 11 of the ’314
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`Patent,” or how or why “[t]he ’392 Patent (in view of the ’061 Patent) renders obvious at least
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`claim 11 of the ’314 Patent.” D.E. 50 at 3; see also D.E. 21 at 9. Moreover, People Media’s
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`citation to “Title 35, United States Code, including §§ 101, 102, 103 and/or 112, and the rules,
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`regulations, and laws pertaining thereto,” offers no additional support. Id. But see PPS Data,
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`LLC v. Allscripts Healthcare Solutions, Inc., 2012 WL 243346, at *4 (M.D. Fla. Jan. 25, 2012)
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`(“A fleeting reference to all (or most) of these [invalidity] defenses does not rise to the level of ‘a
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`short and plain statement of the claim showing that the pleader is entitled to relief.’”) (quoting
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`Fed. R. Civ. P. 8(a)(2)). See also Duramed Pharms, Inc. v. Watson Labs, Inc., 2008 WL
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`5232908, at *4 (D. Nev. Dec. 12, 2008) (granting motion to dismiss counterclaims); Sprint
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`Commc’ns. Co. v. Theglobe.com, Inc., 233 F.R.D. 615, 619 (D. Kansas 2006) (striking
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`counterclaim); PB Farradyne, Inc. v. Peterson, 2006 WL 132182, at *3 (N.D. Cal. Jan 17, 2006)
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`(dismissing counterclaim).
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`Case 2:12-cv-02833-JPM-tmp Document 56 Filed 08/12/13 Page 6 of 7 PageID 520
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`People Media’s allegations of laches are equally deficient. See D.E. 21 at 9-10. Rather
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`than cite the substance of its third counterclaim, People Media relies on allegations asserted in its
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`response brief. See D.E. 50 at 3 (“People Media’s products and services . . . have been on the
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`market for many years. . . . [I]t can be reasonably inferred that B.E. knew of its rights against
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`People Media and intended to relinquish those rights.”). A counterclaimant may not satisfy its
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`obligation to plead sufficient facts through arguments in a response brief. See Jocham v. Tuscola
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`Cnty., 239 F. Supp. 2d 714, 732 (E.D. Mich. 2003) (“The pleading contains no such allegation,
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`and the plaintiffs may not amend their complaint through a response brief.”) (citing Shanahan v.
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`City of Chicago, 82 F.3d 776, 781 (7th Cir. 1996).
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`Finally, People Media argues that its allegations are at least as detailed as the allegations
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`in B.E.’s complaint. D.E. 50 at 1 (“People Media’s counterclaims contain the same, if not more,
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`detail than B.E.’s allegations of infringement in its Complaint.”). Regardless of whether that is
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`true, B.E.’s complaint is sufficient under Official Form 18, whereas People Media cannot point
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`to a similar safe harbor applicable 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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`Dated: August 12, 2013
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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
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`Case 2:12-cv-02833-JPM-tmp Document 56 Filed 08/12/13 Page 7 of 7 PageID 521
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`rfreitas@ftklaw.com
`ckaufman@ftklaw.com
`dweinberg@ftklaw.com
`qolaniran@ftklaw.com
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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
`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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