Case 2:15-cv-01575-JRG Document 17 Filed 01/19/16 Page 1 of 8 PageID #: 388
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`IN THE UNITED STATES DISTRICT COURT
`FOR THE EASTERN DISTRICT OF TEXAS
`MARSHALL DIVISION
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`Case No. 2:15-cv-01575-JRG
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`Plaintiff,
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`Defendant.
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`DEFENDANT FITBIT, INC.’S REPLY MEMORANDUM IN SUPPORT OF ITS
`MOTION TO DISMISS PURSUANT TO FED. R. CIV. P. 12(B)(6) OR,
`ALTERNATIVELY, MOTION FOR A MORE DEFINITE STATEMENT
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`LOGANTREE LP,
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`v.
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`FITBIT, INC.,
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`Case 2:15-cv-01575-JRG Document 17 Filed 01/19/16 Page 2 of 8 PageID #: 389
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`LoganTree’s opposition to Fitbit’s motion to dismiss makes three arguments – each of
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`which is demonstrably incorrect.
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`First, LoganTree argues that Fitbit’s motion is a “needless litigation tactic” because “[n]o
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`substantive rights are impacted in any material way” by LoganTree’s failure to comply with
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`Twombly and Iqubal. D.I. 14 at 4. More specifically, LoganTree asserts that – because Fitbit will
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`get more detailed information about LoganTree’s allegations when LoganTree makes its L.R. 3-1
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`disclosures – the current motion serves no purpose.
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`Not so. As Fitbit noted in its opening motion, the patent in suit has one-hundred and eighty
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`five claims. See D.I. 6 at 1. All of those claims contain numerous phrases that are simply not
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`addressed by the Complaint. For example, all of the claims require a movement sensor that
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`“measures the angle and velocity of … movement.” From a reading of the Complaint, however,
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`it is impossible to know what LoganTree thinks this means (e.g. all angles must be measured
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`relative to something and do not exist in the abstract as the claim seems to imply) or what
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`instrumentality supposedly meets this limitation.
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`Without any meaningful information about how LoganTree is reading the claims it is
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`effectively impossible for Fitbit to prepare an IPR.1 Given the one year time limitation for filing
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`such a reexamination, LoganTree’s failure to provide the required specificity is prejudicing Fitbit
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`right now. Nor will the L.R. 3-1 disclosures – even if detailed – obviate this harm. And plaintiffs
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`do not always provide specific L.R. 3-1 disclosures and often argue (instead) that they need to take
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`discovery before identifying specific instrumentalities. Indeed, if LoganTree is allowed to avoid
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`its pleading obligations and then provides vague L.R. 3-1 contentions, Fitbit’s time for filing an
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`IPR could be virtually gone by the time it is told what is being accused. Thus, Fitbit’s motion is
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`1 Fitbit made this point in its opening brief (see D.I. 6 at 6) but LoganTree ignores the issue.
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`Case 2:15-cv-01575-JRG Document 17 Filed 01/19/16 Page 3 of 8 PageID #: 390
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`motivated by substantive prejudice that Fitbit is suffering right now.
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`The same cannot be said for LoganTree’s opposition. As noted in the opening papers,
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`Fitbit asked LoganTree if it would amend its claims before filing this motion. LoganTree never
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`responded – even to decline. The question is why. Presumably, LoganTree complied with its
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`obligations, performed a pre-filing investigation and therefore can identify which functions in
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`Fitbit’s products allegedly meet each of the claim limitations. So why spend money to file an
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`opposition rather than simply amend the Complaint to disclose that information? The answer is
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`that LoganTree knows that by withholding the information it effectively shortens the time Fitbit
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`has to search for prior art and to file an IPR. Put differently, it is LoganTree’s opposition (not
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`Fitbit’s motion) that has been filed for the tactical purpose of delay. Indeed, under the Court’s
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`rules Fitbit’s motion does not delay any aspect of the case schedule.
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`Second, LoganTree is wrong that it has complied with the requirements of Twombly and
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`Iqbal. LoganTree’s argument is that parroting of the claim language is sufficient to create a set of
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`factual allegations that show infringment. As LoganTree puts it “the fact that the recitation of the
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`accused functionality closely tracks the elements of claim 1 only reinforces the strength of
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`LoganTree’s infringement claim.” D.I. 14 at 6.
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`This reasoning is flawed. In the first place, even if the allegations were factual they would
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`not give rise to a “showing” of infringement. As Fitbit documented in its opening papers, the
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`allegations ignore most of the limitations of claim 1. And the allegations in the complaint are not
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`factual, but are instead simply a verbatim recitation of limited portions of the claim language. To
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`call such verbatim and conclusory recitations factual allegations would completely undo the
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`teachings of Twombly and Iqbal.
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`Indeed, courts repeatedly have rejected that same argument in connection with claims of
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`Case 2:15-cv-01575-JRG Document 17 Filed 01/19/16 Page 4 of 8 PageID #: 391
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`indirect infringement. For example, in Core Wireless Licensing S.A.R.L. v. Apple Inc., No. 6:14-
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`CV-752-JRG-JDL, 2015 WL 4910427, at *2 (E.D. Tex. Aug. 14, 2015) (Gilstrap, J.) the Court
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`began by citing Iqbal for the proposition that “[i]t is well settled that ‘[t]hreadbare recitals of the
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`elements of a cause of action, supported by mere conclusory statements, do not suffice.” Id.
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`Although the plaintiff’s opposition “argues that the complaint includes factual allegations about
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`Apple’s specific intent to induce infringement because the complaint alleges that Apple provides
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`instructive materials and information concerning operation and use of the accused products” the
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`Court found that this was inadequate. In particular it held that “that Core Wireless’s failure to
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`allege any facts identifying, even at a basic level, which functionalities of the accused products are
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`at issue, or how the instructions direct customers to use those products in an infringing manner,
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`falls short of satisfying Rule 8’s notice requirement.” Id. Notably, the Core Wireless complaint
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`contained more in the way of factual material than the complaint at issue here, because Core
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`Wireless contained one fact (i.e. that Apple provides instructions) while the present the present
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`complaint provides none.
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`For example, while the Complaint reflects the claim language insofar as it says that Fitbit’s
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`Accused Products are ones in “in which a user defined event can be detected” they never say which
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`allegedly user-defined event is accused of meeting both this and the other claim limitations. And
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`the problem is made worse by the fact that the sole asserted claim (Claim 1) does not talk in terms
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`of capability (i.e. “can be detected”) but instead requires actually “detecting a first user defined
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`event.” There is no way Fitbit can infer from a non-specific statement about the devices’ alleged
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`theoretical capabilities which actual events LoganTree is accusing of infringement. Put
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`differently, LoganTree alleges only that Fitbit’s accused devices are capable of infringing. That
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`is not even a statement that the device does infringe, nevermind an identification of the accused
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`Case 2:15-cv-01575-JRG Document 17 Filed 01/19/16 Page 5 of 8 PageID #: 392
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`instrumentality within the product.
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` Third, LoganTree is wrong when it asserts that the current version of the Federal Rules
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`of Civil Procedure do not apply to this motion. LoganTree argues that “the new rules properly
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`should apply to litigation events going forward (i.e. after the date of enactment) but should not
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`apply retroactively to undo event that already have transpired.” D.I. at 74. This is wrong in at
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`least two ways.
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`In the first place, the current motion was filed after the change to the Federal Rules took
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`effect. Thus, even if LoganTree’s premise were correct, its conclusion would be wrong because
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`the current motion is a “litigation event” that occurred after the rule change. It would be one thing
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`if the pleadings were settled and Fitbit were attempting to go back and redo a phase of the litigation
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`that had already been resolved. But Fitbit seeks no such thing. Instead Fitbit asks the Court to
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`evaluate Fitbit’s motion pursuant to the version of the Federal Rules that were in place at the time
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`the motion was filed.
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`Both the Supreme Court’s amendment to the Federal Rules and Fifth Circuit law make it
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`clear that Fitbit’s approach is the correct one. The Supreme Court’s amendment says that the new
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`version of the Rules should be applied to “all proceedings thereafter commenced and, insofar as
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`just and practicable, all proceedings then pending.”2 And the Fifth Circuit has found that such
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`amendments “should be given retroactive application” to the “maximum extent possible.” Atlantis
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`Dev. Corp. v. United States, 379 F.2d 818, 823 (former 5th Cir. 1967).
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`LoganTree offers no substantive argument for why applying the current rules to this motion
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`would be unjust, impracticable or not “possible.” Instead it asserts that the new version of the
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`Federal Rules should not apply if doing so would force a party to have to “re-do” a pleading
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`2 http://www.supremecourt.gov/orders/courtorders/frcv15(update)_1823.pdf, at 3.
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`Case 2:15-cv-01575-JRG Document 17 Filed 01/19/16 Page 6 of 8 PageID #: 393
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`“particularly when those events merely impact procedural issues rather than substantive rights.”
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`D.I. 14 at 3. LoganTree provides no explanation, however, of how it derives its “re-do” principle
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`from the governing law. Neither the Supreme Court nor the Fifth Circuit make any mention of
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`such an exception to the principle that the rules should be applied “to the maximum extent
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`possible.”3 And, as noted above, LoganTree’s failure to comply with the operative Rules is
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`impacting Fitbit’s substantive rights – including by depriving Fitbit of a meaningful fraction of the
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`statutory time for filing an IPR.
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`Moreover, the Fifth Circuit has applied prior amendments to the Federal Rules retroactively
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`even where doing so imposed a far greater burden than any burden LoganTree may claim. For
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`example, in Skoczylas v. Fed. Bureau of Prisons, 961 F.2d 543, 543 (5th Cir. 1992) the 5th Circuit
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`retroactively applied a new version of Federal Rule 15(c) which came into existence after a final
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`decision at the trial court and while the case was on appeal. The result of this application acted to
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`deprive the defendant of its statute of limitations defense and resulted in the case being sent back
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`to the district court for trial. In express reliance on Atlantis, the Fifth Circuit held that it could
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`“find no reason not to apply the law in effect at the time of our decision” because it could not say
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`that applying the amended Rules “would work a ‘manifest injustice.’” Id. Thus, even where the
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`amendment came into effect after a final decision on the merits and during appeal, the court was
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`obligated to apply the amended version unless doing so would create a “manifest injustice.” It
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`should go without saying that applying the existing rules would not create a manifest injustice
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`here. Indeed, the only thing it will do (according to LoganTree) is force LoganTree to promptly
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`disclose some of the information it is will ultimately have to disclose under Local Rule 3-1. See
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`3 It is also worth noting that, as a result of holding that the new version of the Federal Rules gave
`rise to a right to intervene, the Atlantis decision almost certainly required the existing defendant to
`redo its then pending motion to dismiss (which argued, in contravention of the intervenor’s
`position, that the Court lacked subject matter jurisdiction). See Atlantis Dev. Corp. at 821-822.
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`Case 2:15-cv-01575-JRG Document 17 Filed 01/19/16 Page 7 of 8 PageID #: 394
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`also Burt v. Ware, 14 F.3d 256, 260 (5th Cir. 1994) (applying both Skoczylas and Atlantis to find
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`that amendment to Federal Rule of Appellate Procedure 4 should be applied retroactively to the
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`pending appeal).
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`For all of these reasons, the Court should dismiss the Complaint and order LoganTree to
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`replead to state facts identifying “which functionalities of the accused products are at issue.”
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`Respectfully submitted,
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`/s/ Eric H. Findlay
`ERIC H. FINDLAY
`FINDLAY CRAFT, P.C.
`102 North College Avenue, Suite 900
`Tyler, TX 75702
`Tel: 903-534-1100
`efindlay@findlaycraft.com
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`Clement S. Roberts
`Timothy S. Saulsbury
`James S. Tsuei
`DURIE TANGRI LLP
`217 Leidesdorff Street
`San Francisco, CA 94111
`Tel.: 415-362-6666
`Fax: 415-236-6300
`croberts@durietangri.com
`tsaulsbury@durietangri.com
`jtsuei@durietangri.com
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`ATTORNEYS FOR DEFENDANT
`Fitbit, Inc.
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`By:
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`Dated: January 19, 2016
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`Case 2:15-cv-01575-JRG Document 17 Filed 01/19/16 Page 8 of 8 PageID #: 395
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`CERTIFICATE OF SERVICE
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`I hereby certify that on January 19, 2016 all counsel of record were served with the
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`foregoing document via the Court’s Case Management/Electronic Case Filing system
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`/s/ Eric H. Findlay
`Eric H. Findlay
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`7