Case 4:17-cv-00141-ALM Document 17 Filed 05/19/17 Page 1 of 34 PageID #: 153
`
`IN THE UNITED STATES DISTRICT COURT
`FOR THE EASTERN DISTRICT OF TEXAS
`SHERMAN DIVISION
`
`
` CASE NO. 4:17-CV-00141
`
`
`JURY TRIAL DEMANDED
`
`
`PLECTRUM LLC,
`
`
`Plaintiff,
`
`
`
`v.
`
`
`ORACLE CORPORATION and
`ORACLE AMERICA, INC.,
`
`
`Defendant.
`
`
`
`
`
`DEFENDANTS ORACLE CORPORATION AND
`ORACLE AMERICA, INC.’S MOTION TO DISMISS FIRST AMENDED COMPLAINT
`FOR FAILURE TO STATE A CLAIM
`
`
`
`
`
`
`
`
`
`

`

`Case 4:17-cv-00141-ALM Document 17 Filed 05/19/17 Page 2 of 34 PageID #: 154
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`
`
`TABLE OF CONTENTS
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`Page
`
`INTRODUCTION ...........................................................................................................................1
`
`STATEMENT OF ISSUES TO BE DECIDED ..............................................................................1
`
`FACTUAL BACKGROUND RELEVANT TO THE INSTANT MOTION..................................1
`
`A.
`
`B.
`
`C.
`
`The Allegations Which Purport To Assert Claims Of Liability Against
`Oracle Based On The “Use Of The Accused Products By Its Customers.” ............3
`
`The Willful Infringement Allegations In The FAC. ................................................4
`
`The Indirect Infringement Allegations In The FAC. ...............................................5
`
`DISMISSAL IS APPROPRIATE ....................................................................................................5
`
`I.
`
`PLECTRUM HAS FAILED TO PLEAD FACTS TO PLAUSIBLY ALLEGE
`THAT ORACLE CAN BE HELD LIABLE FOR ITS CUSTOMERS’ USE OF
`THE ACCUSED PRODUCTS. ...........................................................................................6
`
`A.
`
`B.
`
`C.
`
`D.
`
`E.
`
`The Limited “Direction And Control” Exception Recognized By The
`Federal Circuit In Akamai Is Inapplicable Here As It Applies Only Where
`There Is More Than One Actor Involved In Practicing The Steps Of The
`Accused Method Claims. .........................................................................................7
`
`Plaintiff’s Allegations That Oracle “Contracts” With Its Customers And
`Thereby Puts The Accused Products Into Service Is Insufficient. ...........................8
`
`The FAC Fails To Plead Facts To Plausibly Show That The Customers’
`Receipt Of The Unidentified “Benefit” Is “Conditioned” By Oracle. ..................10
`
`The FAC Fails To Allege That Oracle “Establishes The Manner Or
`Timing” Of The Customers Performance Of The Accused Methods. ...................12
`
`The Lack Of Plausibility Of Plaintiff’s Assertion Of Liability Against
`Oracle Under the Limited Akamai Exception ls Further Demonstrated By
`The Fact That It Has Pled The Exact Same Allegations Against A
`Multitude Of Differently Situated Defendants In 15 Other
`Contemporaneously Filed Patent Complaints. .......................................................12
`
`II.
`
`PLECTRUM’S CLAIMS FOR WILLFUL INFRINGEMENT SHOULD BE
`DISMISSED. .....................................................................................................................13
`
`A.
`
`Plaintiff Does Not Allege That Oracle Had Pre-Suit Knowledge Of Any
`Of The Asserted Patents And Post-Suit Knowledge Is Insufficient to
`Plausibly Allege Willful Infringement...................................................................14
`
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`
`
`B.
`
`Plaintiff’s Conclusory Allegations Of Oracle’s Alleged Conduct Are
`Insufficient To State A Claim For Willful Infringement. ......................................15
`
`III.
`
`PLECTRUM HAS FAILED TO PLEAD FACTS TO PLAUSIBLY ALLEGE
`INDIRECT INFRINGEMENT. .........................................................................................16
`
`A.
`
`B.
`
`C.
`
`D.
`
`Plectrum’s Claims For Indirect Infringement Prior To The Filing Of The
`Original Complaint Should Be Dismissed. ............................................................16
`
`Plaintiff’s Conclusory Allegations Are Insufficient To State A Claim For
`Induced Infringement. ............................................................................................19
`
`Plaintiff’s Conclusory Allegations Are Insufficient To State A Claim For
`Contributory Infringement. ....................................................................................22
`
`The Lack Of Plausibility Of Plaintiff’s Indirect Infringement Claims Is
`Also Reflected In The Fact That It Has Pled The Exact Same Allegations
`Against A Multitude Of Different Defendants In Other
`Contemporaneously Filed Patent Complaints. .......................................................25
`
`CONCLUSION ..............................................................................................................................27
`
`
`
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`
`
`TABLE OF AUTHORITIES
`
`FEDERAL CASES
`
`Page
`
`Affinity Labs of Texas, LLC v. Toyota Motor N. Am.,
` No. 6:13-cv-365, 2014 WL 2892285 (W.D. Tex. May 12, 2014) ............................. 17, 19, 21
`
`Akamai Techs., Inc. v. Limelight Networks, Inc.,
` 797 F.3d 1020 (Fed. Cir. 2015)....................................................................................... passim
`
`Apeldyn Corp. v. AU Optronics,
` 831 F. Supp. 2d 817 (D. Del. 2011) ....................................................................................... 18
`
`Ashcroft v. Iqbal,
` 556 U.S. 662 (2009) ........................................................................................................ passim
`
`Bell Atlantic Corp. v. Twombly,
` 550 U.S. 544 (2007) ........................................................................................................ passim
`
`BMC Res., Inc. v. Paymentech,
` 498 F. 3d 1373 (Fed. Cir. 2007)............................................................................................... 6
`
`Bowlby v. City of Aberdeen,
` 681 F.3d 215 (5th Cir. 2012) ................................................................................................... 6
`
`Bush Seismic Techs., LLC v. Global Geophysical Servs., Inc.,
` Case No. 2:15-cv-01809-JRG (Apr. 13, 2016) .......................................................... 14, 15, 19
`
`Commil USA, LLC v. Cisco Sys., Inc.,
` _ U.S. _, 135 S. Ct. 1920 (2015) ............................................................................................ 19
`
`Core Wireless Licensing S.A.R.L. v. Apple Inc.,
` No. 6:14-cv-752-JRG-JDL, 2015 WL 4910427 (E.D. Tex. Aug. 14, 2015) .................. passim
`
`DSU Med. Corp. v. JMS Co., Ltd.,
` 471 F.3d 1293 (Fed Cir. 2006)............................................................................................... 17
`
`Fujitsu Ltd. v. Netgear Inc.,
` 620 F.3d 1321 (Fed Cir. 2010)............................................................................................... 17
`
`Global-Tech Appliances, Inc. v. SEB S.A,
` 131 S. Ct. 2060 (2011) ............................................................................................... 15, 19, 20
`
`Halo Elecs., Inc. v. Pulse Elecs., Inc.,
` _ U.S. _, 136 S. Ct. 1923 (2016) ............................................................................................ 15
`
`In Re Bill of Lading Transmission and Processing System Patent Litig.,
` 681 F.3d 1325 (Fed. Cir. 2012)........................................................................................ 23, 25
`
`Lyda v. CBS Corp.,
` F.3d. 1331 (Fed Cir. 2016)..................................................................................... 8, 11, 12, 22
`
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`
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`Nonend Inventions, N.V. v. Apple Inc.,
` No. 2:150-cv-JRG-RSP, 2016 WL 1253740 (E.D. Tex. Mar. 11, 2016) .............................. 18
`
`Opticurrent, LLC v. Power Integrations, Inc. et al.,
` Case No. 2:16-cv-00325-JRG (E.D. Tex. Oct. 12, 2016) ................................................ 14, 15
`
`PerDiemCo, LLC v. Industrack LLC,
` No. 2:15-cv-00727-JRG-RSP, 2016 WL 8135379 (E.D. Tex. Nov. 8, 2016) ............. 9, 10, 11
`
`Plectrum LLC v. Arista Networks, Inc.,
` Case No. 4:17-cv-00076-ALM (E.D. Tex.) ................................................................. 3, 12, 25
`
`Plectrum LLC v. Brocade Communications Systems, Inc.,
` Case No. 4:17-cv-00077-ALM (E.D. Tex.) ................................................................. 3, 12, 25
`
`Plectrum LLC v. Cisco Systems, Inc.,
` Case No. 4:17-cv-00078-ALM (E.D. Tex.) ................................................................. 3, 13, 25
`
`Plectrum LLC v. Extreme Networks, Inc.,
` Case No. 4:17-cv-00079-ALM (E.D. Tex.) ................................................................. 3, 13, 25
`
`Plectrum LLC v. Facebook, Inc.,
` Case No. 4:17-cv-00081-ALM (E.D. Tex.) ................................................................. 3, 13, 25
`
`Plectrum LLC v. Fortinet, Inc.,
` Case No. 4:17-cv-00082-ALM (E.D. Tex.) ................................................................. 3, 13, 25
`
`Plectrum LLC v. Huawei Technologies USA, Inc.,
` Case No. 4:17-cv-00083-ALM (E.D. Tex.) ................................................................. 3, 13, 25
`
`Plectrum LLC v. Juniper Networks, Inc.,
` Case No. 4:17-cv-00084-ALM (E.D. Tex.) ................................................................. 3, 13, 25
`
`Plectrum LLC v. AT&T Inc., et al.,
` Case No. 4:17-cv-00120-ALM (E.D. Tex.) ....................................................................... 3, 13
`
`Plectrum LLC v. Broadcom Corporation, et al.,
` Case No. 4:17-cv-00121-ALM (E.D. Tex.) ................................................................. 3, 13, 26
`
`Plectrum LLC v. Comcast Corporation, et al.,
` Case No. 4:17-cv-00123-ALM (E.D. Tex.) ....................................................................... 3, 13
`
`Plectrum LLC v. F5 Networks, Inc.,
` Case No. 4:17-cv-00124-ALM (E.D. Tex.) ................................................................. 3, 13, 26
`
`Plectrum LLC v. NEC Corporation Of America, et al.,
` Case No. 4:17-cv-00125-ALM (E.D. Tex.) ................................................................. 3, 13, 26
`
`Plectrum LLC v. Verizon Communications, Inc., et al.,
` Case No. 4:17-cv-00126-ALM (E.D. Tex.) ....................................................................... 3, 13
`
`Plectrum LLC v. Nokia USA, Inc., et al.,
` Case No. 4:17-cv-00140-ALM (E.D. Tex.) ................................................................. 3, 13, 26
`
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`
`
`Ruby Sands LLC v. Am. Nat’l Bank of Texas,
` No. 2:15-cv-1955-JRG, 2016 WL 3542430 (E.D. Tex. June 28, 2016) .................... 19, 21, 26
`
`Tierra Intelectual Borinquen, Inc. v. ASUS Computer Int’l, Inc.,
` No. 2:13-cv-38-JRG, 2014 WL 894805 (E.D. Tex. Mar. 4, 2014)............................ 19, 20, 21
`
`Touchscreen Gestures LLC v. Research in Motion Ltd.,
` No. 6:12-CV-263-MHS, 2013 WL 8505349 (E.D. Tex. Mar. 27, 2013) .............................. 15
`
`FEDERAL STATUTORY AUTHORITIES
`
`35 U.S.C. § 271(a) ........................................................................................................................... 7
`
`35 U.S.C. § 271(b) ............................................................................................................... 5, 17, 19
`
`35 U.S.C. § 271(c) .................................................................................................................. passim
`
`35 U.S.C. § 284 ......................................................................................................................... 4, 13
`
`FEDERAL RULES AND REGULATIONS
`
`Fed. R. Civ. P. 12(b)(6)............................................................................................................. 1, 26
`
`
`
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`
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`INTRODUCTION
`
`Pursuant to Federal Rule of Civil Procedure 12(b)(6), defendants Oracle Corporation and
`
`Oracle America, Inc. (hereinafter collectively “Oracle”) move to dismiss each of the three counts
`
`asserted against them in the First Amended Complaint filed by plaintiff Plectrum LLC
`
`(hereinafter “Plaintiff” or “Plectrum”) on the grounds that each count fails to state a claim
`
`against Oracle upon which relief may be granted.
`
`STATEMENT OF ISSUES TO BE DECIDED
`
`Whether each of the three counts purportedly asserted in Plectrum’s First Amended
`
`Complaint fails to state a claim against Oracle upon which relief can be granted under the
`
`plausibility standard established in Bell Atlantic Corp. v. Twombly, 550 U.S. 544 (2007) and
`
`Ashcroft v. Iqbal, 556 U.S. 662 (2009). This includes particularly whether the First Amended
`
`Complaint fails to adequately plead claims as to each of the three asserted patents for: (a)
`
`liability for Oracle’s customers’ use of the accused products under a limited theory recognized
`
`by the Federal Circuit in Akamai Techs., Inc. v. Limelight Networks, Inc., 797 F.3d 1020, 1022
`
`(Fed. Cir. en banc 2015); (b) willful infringement; and (c) indirect infringement, both as to the
`
`time periods prior to, as well as after the filing of the complaint.
`
`FACTUAL BACKGROUND RELEVANT TO THE INSTANT MOTION
`
`On February 24, 2017, Plectrum filed a complaint for patent infringement naming Oracle
`
`Corporation and Oracle America, Inc. as defendants. (Complaint., Dkt. No. 1). On May 5, 2017,
`
`Oracle filed a motion to dismiss each of the three counts in that complaint pursuant to Federal
`
`Rule of Civil Procedure 12(b)(6). (Dkt. No. 14). On May 17, 2017, Plectrum filed a First
`
`Amended Complaint (hereinafter “FAC”), which though only amended and supplemented a few
`
`minor portions of the original complaint, mooted Oracle’s pending motion to dismiss. (First
`
`Amended Complaint or “FAC”, Dkt. No. 15).
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`The FAC purports to set forth three counts against Oracle, each asserting direct
`
`infringement of a separate patent. Oracle now moves to dismiss each of those three counts.
`
`Count one of the FAC alleges that Oracle has directly infringed claim 1 of U.S. Patent No.
`
`5,978,951 (’951), which is a method claim. (FAC ¶ 22). Count two alleges that Oracle has
`
`directly infringed claim 1 of U.S. Patent No. 6,205,149 (’149), which is also a method claim.
`
`(FAC ¶ 35). The allegations of the first two counts which respectively assert direct infringement
`
`of the ’951 and the ’149 patents, are directed at the same accused Oracle products – both count
`
`one and count two accuse Oracle’s ES1-24 Ethernet switch. (FAC ¶¶ 21, 34).
`
`Count three of the FAC alleges that Oracle has directly infringed claim 1 of U.S. Patent
`
`No. 6,751,677 (’677) is also a method claim. (FAC ¶ 47). The infringement allegations of the
`
`third count based on the ’677 patent are directed at Oracle’s Virtual Network Services. (FAC
`
`¶ 46).
`
`After setting forth three counts for direct infringement of each separate asserted patent,
`
`the FAC includes one paragraph labeled “Additional Allegations Regarding Direct Infringement,”
`
`(FAC ¶ 55), and then several paragraphs of what Plectrum labels “Additional Allegations
`
`Regarding Indirect Infringement.” (FAC ¶¶ 56-62). This portion of the FAC purports to assert
`
`additional claims against Oracle as to each of the three asserted patents for: (a) liability for
`
`Oracle’s customers’ use of the accused products under a limited theory recognized in Akamai; (b)
`
`willful infringement; and (c) indirect infringement based on both inducement and contributory
`
`infringement. (FAC ¶¶ 55-62). The allegations in this portion of the FAC do not differentiate
`
`between the three asserted patents or the different accused products. Id. Rather, these
`
`allegations are based on generalized conclusory statements that lump together and reference all
`
`three patents and all accused Oracle products. Id. Moreover, the exact same generalized
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`statements made in the FAC were also used verbatim by Plectrum in 15 other
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`contemporaneously filed patent infringement lawsuits that it filed in this District asserting the
`
`same “additional” theories of alleged infringement against a multitude of other unrelated
`
`defendants who manufacture and sell entirely different products.1
`
`A.
`
`The Allegations Which Purport To Assert Claims Of Liability Against Oracle Based
`On The “Use Of The Accused Products By Its Customers.”
`
`Each of the claims of the ’951, ’149 and ’677 patents identified in the first three counts of
`
`Plectrum’s FAC against Oracle are method claims. (FAC ¶¶ 22, 35, 47). In paragraph 55 of the
`
`FAC Plectrum attempts to assert claims of direct infringement against Oracle as to all three of
`
`the asserted patents not based on Oracle’s own acts, but rather based on the “use of the accused
`
`products by its customers.” (FAC ¶ 55). Plectrum claims that Oracle is liable for direct
`
`infringement for its customers’ performance of the asserted method claims based on the
`
`conclusory assertion that Oracle “exercises direction or control” over its customers presumably
`
`
`1 See, Plectrum LLC v. Arista Networks, Inc., Case No. 4:17-cv-00076-ALM, (Complaint, Dkt.
`No. 1, ¶¶ 54-56; Dkt. No. 16, ¶¶ 54-56); Plectrum LLC v. Brocade Communications Systems,
`Inc., Case No. 4:17-cv-00077-ALM, (Complaint, Dkt. No. 1, ¶¶ 54-56; Dkt. No. 17, ¶¶ 55-57):
`Plectrum LLC v. Cisco Systems, Inc., Case No. 4:17-cv-00078-ALM, (Complaint, Dkt. No. 1, ¶¶
`63-65); Plectrum LLC v. Extreme Networks, Inc., Case No. 4:17-cv-00079-ALM, (Complaint,
`Dkt. No. 1, ¶¶ 54-46); Plectrum LLC v. Facebook, Inc., Case No. 4:17-cv-00081-ALM,
`(Complaint, Dkt. No. 1, ¶¶ 39-41); Plectrum LLC v. Fortinet, Inc., Case No. 4:17-cv-00082-
`ALM, (Complaint, Dkt. No. 1, ¶¶ 54-56); Plectrum LLC v. Huawei Technologies USA, Inc., Case
`No. 4:17-cv-00083-ALM, (Complaint, Dkt. No. 1, ¶¶ 56-58); Plectrum LLC v. Juniper Networks,
`Inc., Case No. 4:17-cv-00084-ALM, (Complaint, Dkt. No. 1, ¶¶ 56-58; Dkt. No. 16, ¶¶ 56-58);
`Plectrum LLC v. AT&T Inc., et al., Case No. 4:17-cv-00120-ALM, (Complaint, Dkt. No. 1, ¶ 63;
`Dkt. No. 27, ¶ 67); Plectrum LLC v. Broadcom Corporation, et al., Case No. 4:17-cv-00121-
`ALM, (Complaint, Dkt. No. 1, ¶¶ 61-63; Dkt. No. 19, ¶¶ 61-63); Plectrum LLC v. Comcast
`Corporation, et al., Case No. 4:17-cv-00123-ALM, (Complaint, Dkt. No. 1, ¶ 63; Dkt. No. 26, ¶
`63); Plectrum LLC v. F5 Networks, Inc., Case No. 4:17-cv-00124-ALM, (Complaint, Dkt. No. 1,
`¶¶ 23-25); Plectrum LLC v. NEC Corporation Of America, et al., Case No. 4:17-cv-00125-ALM,
`(Complaint, Dkt. No. 1, ¶¶ 58-60; Dkt. No. 20, ¶¶ 58-60); Plectrum LLC v. Verizon
`Communications, Inc., et al., Case No. 4:17-cv-00126-ALM, (Complaint, Dkt. No. 1, ¶ 68);
`Plectrum LLC v. Nokia USA, Inc., et al., Case No. 4:17-cv-00140-ALM, (Complaint, Dkt. No. 1,
`¶¶ 59-62).
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`
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`attempting to rely on the Federal Circuit decision in Akamai Techs., Inc. v. Limelight Networks,
`
`Inc., 797 F.3d 1020, 1022 (Fed. Cir. en banc 2015).
`
`The only facts pled in paragraph 55 in support of the conclusion that Oracle exercises
`
`such “direction and control” are that: (1) in some unspecified manner Oracle “contracts with the
`
`customer to provide network services and equipment, including the accused products” and by
`
`doing so “is putting the accused products into service”; and (2) that Oracle in some unexplained
`
`way “…conditions the benefit received by each customer from using the accused products…such
`
`benefit including improved network functionality, only if the accused products are used in the
`
`manner prescribed by Defendants.” (FAC ¶ 55). No other specificity is provided and no other
`
`facts are alleged to demonstrate that, or how, Oracle exercises “direction and control over the use”
`
`of each of the accused products by its customers. Id. As discussed below, Plectrum repeats
`
`verbatim the exact same language set forth in paragraph 55 of the FAC against Oracle in each of
`
`the 15 other contemporaneously filed patent infringement complaints that Plectrum has filed in
`
`this District. In these complaints, Plectrum alleges that each of many other unrelated defendants
`
`sued in those cases also exercise “direction and control” over their customers’ use of the distinct
`
`products each of them manufacture and sell based on the exact same factual allegations set forth
`
`in the FAC against Oracle.
`
`B.
`
`The Willful Infringement Allegations In The FAC.
`
`The FAC fails to allege any specific facts with respect to any conduct by Oracle to
`
`support Plectrum’s willful infringement claims, and instead relies on boilerplate generalized
`
`legal conclusions. (FAC ¶¶ 58-61). The FAC recites the exact same language to attempt to
`
`assert willfulness by Oracle as to each of the three asserted patents. (FAC ¶¶ 58-61). Based on
`
`these allegations, the FAC prays for an award of increased damages under 35 U.S.C. § 284.
`
`(FAC Prayer, ¶ (c)). The FAC does not allege that Oracle had knowledge of any of the asserted
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`patents before being served with the FAC, instead stating that Oracle had knowledge of the three
`
`patents “at least as early as of the date when it was notified of the filing of this action.” (FAC ¶
`
`58).
`
`C.
`
`The Indirect Infringement Allegations In The FAC.
`
`In paragraphs 56 and 57, the FAC attempts to state claims against Oracle for alleged
`
`indirect infringement of each of the three patents based on inducement and contributory
`
`infringement. (FAC ¶¶ 56-57). Paragraph 56 purports to state facts to support a claim for
`
`induced infringement as to all three asserted patents under 35 U.S.C. § 271(b), while paragraph
`
`57 attempts to state claims for contributory infringement under 35 U.S.C. § 271(c).
`
`As noted above, the FAC does not allege that Oracle had knowledge of any of the
`
`asserted patents before Plectrum’s original complaint was filed. (FAC ¶ 58). Though the FAC
`
`attempts to assert claims of indirect infringement based on three separate patents and directed at
`
`different accused Oracle products, the FAC does not set forth any separate or distinct allegations
`
`to support its indirect infringement claims with respect to the three separate asserted patents or
`
`the different accused products.
`
`DISMISSAL IS APPROPRIATE
`
`To state a claim, the complaint must include “enough facts to state a claim to relief that is
`
`plausible on its face.” Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 570, 127 S. Ct. 1955
`
`(2007). A plaintiff must provide the grounds of its entitlement to relief beyond “mere labels and
`
`conclusions,” and “a formulaic recitation of the elements of a cause of action will not do.” Id. at
`
`555. “To survive a motion to dismiss, a complaint must contain sufficient factual matter,
`
`accepted as true, to ‘state a claim to relief that is plausible on its face.’” Ashcroft v Iqbal, 556
`
`U.S. 662, 129 S. Ct. 1937 (2009) (quoting Twombly, 550 U.S. at 570). “‘A claim has facial
`
`plausibility when the pleaded factual content allows the court to draw the reasonable inference
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`
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`that the defendant is liable for the misconduct alleged.’” Bowlby v. City of Aberdeen, 681 F.3d
`
`215, 219 (5th Cir. 2012) (quoting Iqbal, 556 U.S. at 678 ). “[T]hreadbare recitals of the elements
`
`of a cause of action, supported by mere conclusory statements,” without any factual support are
`
`insufficient to overcome a motion to dismiss. Iqbal, 556 U.S. at 678.
`
`I.
`
`PLECTRUM HAS FAILED TO PLEAD FACTS TO PLAUSIBLY ALLEGE
`THAT ORACLE CAN BE HELD LIABLE FOR ITS CUSTOMERS’ USE OF
`THE ACCUSED PRODUCTS.
`
`Oracle moves to dismiss Plectrum’s claims which assert that Oracle can be liable for
`
`direct infringement for the “use of the accused products by its customers” based on the
`
`conclusory assertion that Oracle supposedly exercises “direction or control over the use of the
`
`accused products by its customers.” (FAC ¶ 55). The theory accepted by the Federal Circuit in
`
`Akamai on which Plectrum’s FAC attempts to plead as a basis for liability against Oracle was
`
`established as a limited exception to the general rule that a claim for direct infringement requires
`
`that all steps of an asserted method claim be performed by a single entity. Akamai Techs., Inc. v.
`
`Limelight Networks, Inc., 797 F.3d 1020, 1022 (Fed. Cir. en banc 2015); BMC Res., Inc. v
`
`Paymentech, 498 F. 3d 1373, 1378-79 (Fed. Cir. 2007). In Akamai, the Federal Circuit held that
`
`in certain specific factual circumstances an entity may be held liable for direct infringement
`
`based on another’s performance of some of the steps of a method claim – specifically “when an
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`alleged infringer conditions participation in an activity or receipt of a benefit upon performance
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`of a step or steps of a patented method and establishes the manner or timing of that performance.”
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`Akamai, 797 F.3d at 1023.
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`However, as a threshold matter the limited exception recognized in Akamai is
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`inapplicable here. Unlike the “divided infringement” situation addressed in Akamai in which
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`Limelight performed some of the steps of the asserted method claims and its customers
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`performed other steps, Plectrum asserts claims against Oracle for direct infringement in
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`34317\5977014.1
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`Case 4:17-cv-00141-ALM Document 17 Filed 05/19/17 Page 13 of 34 PageID #: 165
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`circumstances where Oracle’s customers allegedly perform all of the steps of the asserted
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`method claims of the ‘951, ‘149 and ‘677 patents. (FAC ¶ 55).
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`Moreover, the FAC fails to allege facts sufficient to plausibly establish Oracle’s liability
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`under this limited Akamai exception, even if it could be applied outside the context of “divided
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`infringement” claims. The only facts pled in the FAC to attempt to support this theory are in
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`paragraph 55 and consist of the general and vague allegations that: (1) in some unspecified
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`manner Oracle “contracts with the customer to provide network services and equipment,
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`including the accused products” and by doing so “is putting the accused products into service”;
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`and (2) that Oracle in some unexplained way “…conditions the benefit received by each
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`customer from using the accused products… such benefit including improved network
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`functionality, only if the accused products are used in the manner prescribed by Defendants.”
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`(FAC ¶ 55). No other specificity or facts are alleged in the FAC.
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`A.
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`The Limited “Direction And Control” Exception Recognized By The Federal
`Circuit In Akamai Is Inapplicable Here As It Applies Only Where There Is More
`Than One Actor Involved In Practicing The Steps Of The Accused Method Claims.
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`Plectrum’s claims, which assert that Oracle can be liable for direct infringement based
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`solely on the “use of the accused products by its customers,” should be dismissed in the first
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`instance because the limited exception to the “single entity” requirement for direct infringement
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`recognized by the Federal Circuit in Akamai is inapplicable here because Plectrum is not
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`claiming “divided infringement.”
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`It is well settled that a claim for direct infringement under 35 U.S.C. § 271(a) requires
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`that all steps of an asserted method claim be performed by a single entity. Akamai, 797 F.3d at
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`1022 (Fed. Cir. en banc 2015). While the Federal Circuit recognized in its 2015 en banc
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`decision in Akamai Techs., Inc. v. Limelight Networks, Inc. that there may be limited exceptions
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`to that general rule in certain factual circumstances, it recognized these exceptions only in
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`Case 4:17-cv-00141-ALM Document 17 Filed 05/19/17 Page 14 of 34 PageID #: 166
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`circumstances where “more than one actor is involved in practicing the steps” – the so called
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`“divided infringement” situation. See Akamai Techs., Inc. v. Limelight Networks, Inc., supra at
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`1022 (“Where more than one actor is involved in practicing the steps, a court must determine
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`whether the acts of one are attributable to the other such that a single entity is responsible for the
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`infringement.”) (emphasis added).
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`Here, the FAC does not allege that some steps of the asserted method claims are
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`performed by Oracle while other steps are performed by Oracle’s customers. Rather, Plectrum
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`attempts to apply the limited exception recognized in Akamai to claim Oracle is liable for direct
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`infringement based on claims that all of the steps of the asserted method claims are allegedly
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`performed by Oracle’s customers. (FAC ¶ 55). But the Federal Circuit’s en banc decision in
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`Akamai does not support this theory, and Oracle is not aware of any subsequent court decision
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`applying the Akamai exception where only one actor practices all of the steps of the accused
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`method claims. Plectrum’s attempted reliance on the limited “direction and control“ exception
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`recognized by the Federal Circuit in Akamai is accordingly misplaced. Plectrun’s claims seeking
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`to impose liability against Oracle for direct infringement based solely on the use of the accused
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`products by Oracle’s customers should therefore be dismissed.
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`B.
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`Plaintiff’s Allegations That Oracle “Contracts” With Its Customers And Thereby
`Puts The Accused Products Into Service Is Insufficient.
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`Even assuming arguendo that the limited Akamai exception could be applied outside the
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`context of “divided infringement” claims, the FAC fails to allege facts sufficient to plausibly
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`establish Oracle’s liability under this theory. See Lyda v. CBS Corp., 838 F.3d. 1331, 1338 (Fed
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`Cir. 2016) (claims for divided infringement required to meet the Iqbal/Towmbly pleading
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`standards).
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`34317\5977014.1
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`Case 4:17-cv-00141-ALM Document 17 Filed 05/19/17 Page 15 of 34 PageID #: 167
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`Plaintiff’s allegation in paragraph 55 that Oracle contracts with its customers to provide
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`them with the accused products is insufficient to plausibly establish a basis for liability under the
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`exception recognized in Akamai. Notably, nothing is stated in the FAC about the nature or terms
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`of any “contracts” that Oracle is alleged to have entered into with its customers. Id. Rather, the
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`FAC alleges “[w]hen Defendant contracts with the customer to provide network services and
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`equipment . . . .” (FAC ¶ 55). However, such a generalized and vague reference to the fact that
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`in some unspecified manner Oracle contracts with its customers to provide them with the
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`accused products does not plausibly show the basis for liability addressed in Akamai, where the
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`content of the contracts at issue specifically delineated that the customers must perform the
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`tagging and serving content steps of the method claims at issue in Akamai. Akamai Techs., Inc.
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`v. Limelight Networks, Inc., supra at 1024. PerDiemCo, LLC v. Industrack LLC, No. 2:15-cv-
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`00727-JRG-RSP, 2016 WL 8135379, at *3 (E.D. Tex. Nov. 8, 2016) (“PerDiem’s theory stands
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`in stark contrast to the circumstances considered by the Federal Circuit in Akamai, in which the
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`accused infringer required customers to sign a standard form contract that delineated which
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`claimed steps the customers “must perform.”).
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`Moreover, even though the FAC alleges infringement based on two entirely separate
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`accused products one of which is hardware and one of which is software,2 the FAC fails to
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`separately plead or independently address the nature or terms of the alleged “contracts”
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`supposedly entered into with customers as to these disparate accused products. (FAC ¶ 55).
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`Such a general, conclusory and lumped together “across the board” statement as to alleged
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`contracts relating to all asserted patents and all accused products is on its face implausible. Core
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`2 The FAC alleges that Oracle’s ES1-24 Ethernet switches infringe the ‘951 and ‘149 patents and
`alleges that the asserted method claim of the ‘677 patent is infringed by Oracle’s