Case 6:14-cv-00982-KNM Document 63 Filed 05/21/15 Page 1 of 8 PageID #: 378
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`IN THE UNITED STATES DISTRICT COURT
`FOR THE EASTERN DISTRICT OF TEXAS
`TYLER DIVISION
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`Civil Action No. 6:14-cv-982
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`JURY TRIAL DEMANDED
`(Consolidated Lead Case)
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`Civil Action No. 6:14-cv-983
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`JURY TRIAL DEMANDED
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`Civil Action No. 6:15-cv-049
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`JURY TRIAL DEMANDED
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`CELLULAR COMMUNICATIONS
`EQUIPMENT LLC,
`Plaintiff,
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`v.
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`LG ELECTRONICS, INC., et al.,
`Defendants.
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`CELLULAR COMMUNICATIONS
`EQUIPMENT LLC,
`Plaintiff,
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`v.
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`SONY MOBILE COMMUNICATIONS
`INC., et al.,
`Defendants.
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`CELLULAR COMMUNICATIONS
`EQUIPMENT LLC,
`Plaintiff,
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`v.
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`KYOCERA CORPORATION, et al.,
`Defendants.
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`PLAINTIFF CELLULAR COMMUNICATIONS EQUIPMENT LLC’S
`RESPONSE IN OPPOSITION TO DEFENDANTS’ JOINT MOTION TO DISMISS
`PLAINTIFF’S CONTRIBUTORY INFRINGEMENT CLAIMS
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`Case 6:14-cv-00982-KNM Document 63 Filed 05/21/15 Page 2 of 8 PageID #: 379
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`I.
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`INTRODUCTION
`The Amended Complaints1 filed in these actions meet the pleading requirements
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`articulated in Twombly and Iqbal. Consistent with the Court’s March 27, 2015 Order issued in
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`related CCE matters,2 the Amended Complaints plead combinations of specifically-identified
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`hardware components with distinct software functionality. Each combination is: (1) a material
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`part of the subject invention; and (2) not capable of any substantial non-infringing use. CCE has
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`met its burden in properly pleading claims for contributory infringement, and Defendants’
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`motion should be denied.
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`II.
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`FACTUAL BACKGROUND
`By Order of March 27, 2015 entered in the Related Cases (see Dkt. No. 373), the Court
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`sided with CCE in holding that its prior complaints were sufficient with respect to direct
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`infringement, induced infringement, and willfulness. With respect to contributory infringement,
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`however, the Court noted that CCE’s “complaints [did] not identify any components of the
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`accused devices that are a material part of the invention.” See Order at 10. For this reason, the
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`Court found that CCE’s allegations “do not support a plausible inference that the accused devices
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`or components thereof cannot be used for any other purpose than infringement” and ordered
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`CCE to amend. Id.
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`In view of the Order in the Related Cases, CCE chose to amend its complaints here to
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`clarify that the accused products “include proprietary hardware components and software
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`1 The relevant complaints are Dkt. Nos. 28 and 29 in Case No. 6:14-cv-982 and Dkt. No. 44 in
`Case No. 6:15-cv-049. They are hereinafter referred to collectively as the “Amended
`Complaints.”
`2 CCE and several of the Defendants here (i.e., LG, AT&T, Sprint, T-Mobile, and Verizon) are
`involved in related litigation that includes a nearly identical issue. See CCE v. HTC Corp., et al.,
`Case No. 6:13-cv-507 (consolidated lead case) (hereinafter the “Related Cases”); see also Case
`No. 6:13-cv-507, Dkt. Nos. 373 (Court Order regarding motion to dismiss), 396 (Defendants’
`Motion to Dismiss Contributory Infringement Claims), and 410 (CCE’s Response in Opposition
`to Defendants’ Motion to Dismiss).
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`Case 6:14-cv-00982-KNM Document 63 Filed 05/21/15 Page 3 of 8 PageID #: 380
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`instructions that work in concert to perform specific, intended functions.” See, e.g., LG
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`Amended Complaint (Dkt. No. 28) at ¶ 27.3 CCE alleges accordingly that the “specific, intended
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`functions, carried out by these hardware and software combinations, are a material part of the
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`inventions of the [asserted] patent and are not staple articles of commerce suitable for substantial
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`non-infringing use.” See id. The Amended Complaints further identify the particularly relevant
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`hardware component(s) in the accused devices and make clear that those hardware components
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`are configured and/or programmed to perform the functionality of the asserted claims:
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`Specifically each of the [accused devices] contain at least [1] a
`baseband processor, memory, and a transmitter which [2] contain[]
`functionality that is specifically programmed and/or configured to
`at least initialize a first power control adjustment state for an
`uplink control channel and a second power control adjustment state
`for an uplink shared channel, compute an initial trans[m]it power
`for the uplink shared channel using full path loss compensation,
`and send a message on the uplink shared channel at the initial
`transmit power, as recited in claims 1-7 and 10-17 of the ’966
`patent.
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`See, e.g., id. at ¶ 28 (emphasis added).
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`III. LEGAL STANDARDS
`Motions to dismiss are procedural vehicles reviewed under regional circuit law.
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`CoreBrace LLC v. Star Seismic LLC, 566 F.3d 1069, 1072 (Fed. Cir. 2009). “In the Fifth
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`Circuit, motions to dismiss under Rule 12(b)(6) are viewed with disfavor and rarely granted.”
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`Inmotion Imagery Techs. v. Brain Damage Films, No. 2:11-cv-414, 2012 U.S. Dist. LEXIS
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`112630, at *3 (E.D. Tex., Aug. 10, 2012) (citing, among others, Lormand v. U.S. Unwired, Inc.,
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`565 F.3d 228, 232 (5th Cir. 2009)). “When considering a motion to dismiss under Rule 12(b)(6),
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`a court must assume that all well-pleaded facts are true, and view those facts in the light most
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`3 In this Response, CCE cites to the live complaint in Case No. 6:14-cv-982, Dkt. No. 28. Each
`of the subject complaints contains allegations that are substantively the same.
`2
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`Case 6:14-cv-00982-KNM Document 63 Filed 05/21/15 Page 4 of 8 PageID #: 381
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`favorable to the plaintiff.” Achates Reference Publishing, Inc. v. Symantec Corp., No. 2:11-cv-
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`294, 2013 U.S. Dist. LEXIS 27143, at *5-6 (E.D. Tex. Jan 10, 2013).
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`While Fed. R. Civ. P. 8(a)(2) requires only that a complaint contain a short and plain
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`statement of the claim showing that the pleader is entitled to relief, the Supreme Court clarified
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`in its Twombly and Iqbal opinions that providing the “grounds of [the pleader’s] entitlement to
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`relief requires more than labels and conclusions.” Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555
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`(2007). To this end, this Court has explained:
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`[A] complaint must allege sufficient factual matter, accepted as
`true, to state a claim that is plausible on its face. A claim has facial
`plausibility when the pleaded factual content allows the court to
`draw the reasonable inference that the defendant is liable for the
`misconduct alleged.
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`Patent Harbor, LLC v. Dreamworks Animation SKG, Inc., No. 6:11-cv-229, 2012 U.S. Dist.
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`LEXIS 114199, at *7 (E.D. Tex. Jul. 27, 2012) (citations to Twombly and Iqbal omitted).
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`The Twombly / Iqbal pleadings standard applies to allegations of indirect infringement.
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`See Patent Harbor, 2012 U.S. Dist. LEXIS 114199, at *9. However, allegations of indirect and
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`willful infringement are not viewed in a vacuum. Analysis of pleaded content is a “context-
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`specific task that requires the reviewing court to draw on its judicial experience and common
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`sense.” Ashcroft v. Iqbal, 556 U.S. 662, 679 (2009) (emphasis added). Moreover, the Twombly /
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`Iqbal pleadings standard does not mean that a plaintiff “must prove itself at the pleading stage.”
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`Patent Harbor, 2012 U.S. Dist. LEXIS 114199, at *16.
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`To show contributory infringement, a complaint must establish (1) direct infringement;
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`(2) knowledge of the patent by the accused infringer; (3) that the accused component has no
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`substantial noninfringing uses; and (4) that the component is a material part of the invention.
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`Fujitsu Ltd. v. Netgear Inc., 620 F.3d 1321, 1326 (Fed. Cir. 2010).
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`Case 6:14-cv-00982-KNM Document 63 Filed 05/21/15 Page 5 of 8 PageID #: 382
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`IV. ARGUMENT
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`Defendants challenge only whether CCE has adequately alleged that the accused
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`components are a material part of the invention that are not capable of any substantial non-
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`infringing use. CCE’s Amended Complaints meet the pleadings requirements for those elements
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`under Twombly and Iqbal.
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`A.
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`CCE’s allegations identify components and software of the accused devices
`that are a material part of the invention.
`CCE’s Amended Complaints identify particularly the hardware components and software
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`functionality that are material to the subject inventions. With respect to the ’966 patent, for
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`instance, CCE notes — as a threshold matter — that the accused products include “proprietary
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`hardware components and software instructions that work in concert to perform specific,
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`intended functions” and that “[s]uch specific, intended functions, carried out by these hardware
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`and software combinations are a material part of the inventions of the ’966 patent….” See, e.g.,
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`LG Amended Complaint (Dkt. No. 28) at ¶ 27. The Amended Complaints also detail the
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`hardware components (e.g., “at least a baseband processor, memory, and a transmitter”) and
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`specifically characterize the software involved (e.g., “functionality that is specifically
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`programmed and/or configured to initialize…, compute …, and send … as claimed in [the
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`asserted claims] of the ’966 patent.”) Id. at ¶ 28. In so doing, CCE has met its burden.
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`Yet Defendants complain that these allegations are “conclusory.” This position ignores
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`the plainly pleaded facts and purports to require more than the law requires. To require CCE to
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`identify, for instance, specific names of software modules or source code files at the complaint
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`stage turns discovery on its head, requiring CCE to prove its case at the outset. CCE cannot
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`possibly identify particular modules or files without discovery, which has yet to occur. CCE has,
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`Case 6:14-cv-00982-KNM Document 63 Filed 05/21/15 Page 6 of 8 PageID #: 383
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`instead, expressly described the material software functionality. This necessarily must suffice at
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`this juncture.
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`B.
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`CCE properly alleges that the accused components have no substantial non-
`infringing uses.
`CCE asserts that each infringing product includes hardware components (e.g., a baseband
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`processor, memory, and transmitter) and the particular program code (software instructions)
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`specifically configured to implement claim elements. See, e.g., LG Amended Complaint (Dkt.
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`No. 28) at ¶ 28. These unique components — comprising both hardware and discrete portions of
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`the software it executes — have no substantial non-infringing uses. See id. at ¶ 28.
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`Defendants’ focus on user guides and instructional materials identified in the Amended
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`Complaints attacks a straw man. CCE does not allege that the accused cellular devices, in their
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`entirety, have no substantial non-infringing uses. Rather, it contends that specifically-identified
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`hardware and software components within those devices are a material part of each invention and
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`have no substantial non-infringing uses. Whether or not the accused devices include extraneous
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`components; one cannot escape contributory infringement merely by packaging an infringing
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`feature in a larger product. See Lucent Techs., Inc. v. Gateway, Inc., 580 F.3d 1301, 1320 (Fed.
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`Cir. 2009) (“an infringer ‘should not be permitted to escape liability as a contributory infringer
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`merely by embedding [the infringing apparatus] in a larger product with some additional,
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`separable feature before importing and selling it.’”) (internal citation omitted). Further, the
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`presence of instructions (which CCE pleaded for purposes of demonstrating induced
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`infringement) pertaining to use of such extraneous components does not imply that the identified
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`components have non-infringing uses.
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`Defendants also twist CCE’s allegations in a misguided effort to invoke Bill of Lading.
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`CCE does not contend that the baseband processor “can be” configured to perform infringing
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`functions. Rather, the Amended Complaints plainly state that each infringing product includes
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`targeted software instructions, implemented by identified hardware, for performing specific
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`predetermined tasks. See id. at ¶¶ 49-50. There is nothing conditional in CCE’s allegations, and
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`the software instructions have no other purpose or use. The Bill of Lading case — which
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`addressed pleadings directed to hypothetical uses of a product rather than specific hardware and
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`software combinations resident in a device — is inapposite. See generally In re Bill of Lading
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`Transmission and Processing System Patent Litigation, 681 F.3d 1323, 1337-38 (Fed. Cir. 2012).
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`V.
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`CONCLUSION
`CCE’s complaint properly substantiates its contributory infringement allegations. Absent
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`discovery, it is impossible to provide further detail. CCE cannot name individual software
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`instructions by function or file name until it obtains that information from Defendants, and their
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`implicit demand for such detail at this stage is improper. See, e.g., Achates 2013 U.S. Dist.
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`LEXIS 27143 at *8-9 (“[I]n light of the nature of the patented technology and the accused
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`components, the complaint states adequate facts to infer that the activation component has no
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`other use than to perform the method steps.”).
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`Defendants’ motions ignore common sense and obfuscate the standards of Twombly and
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`Iqbal to, once again, achieve procedural delay. For the reasons set forth above, the motions
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`should be denied in their entirety and Defendants ordered to answer the complaints.
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`Dated: May 21, 2015
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`Respectfully submitted,
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`/s/ Edward R. Nelson III
`Edward R. Nelson III
`enelson@nbclaw.net
`Texas State Bar No. 00797142
`S. Brannon Latimer
`blatimer@nbclaw.net
`Texas State Bar No. 24060137
`Thomas C. Cecil
`tcecil@nbclaw.net
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`Case 6:14-cv-00982-KNM Document 63 Filed 05/21/15 Page 8 of 8 PageID #: 385
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`Texas State Bar No. 24069489
`NELSON BUMGARDNER PC
`3131 West 7th Street, Suite 300
`Fort Worth, Texas 76107
`Phone: (817) 377-9111
`Fax: (817) 377-3485
`
`T. John Ward, Jr.
`Texas State Bar No. 00794818
`J. Wesley Hill
`Texas State Bar No. 24032294
`Claire Abernathy Henry
`Texas State Bar No. 24053063
`WARD & SMITH LAW FIRM
`P.O. Box 1231
`1127 Judson Rd. Ste. 220
`Longview, Texas 75606-1231
`(903) 757-6400
`(903) 757-2323 (fax)
`jw@jwfirm.com
`wh@wsfirm.com
`claire@wsfirm.com
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`ATTORNEYS FOR PLAINTIFF
`CELLULAR COMMUNICATIONS
`EQUIPMENT LLC
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`CERTIFICATE OF SERVICE
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`I hereby certify that a true and correct copy of the foregoing document was filed
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`electronically in compliance with Local Rule CV-5 on this 21st day of May, 2015. As of this
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`date, all counsel of record that has consented to electronic service and are being served with a
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`copy of this document through the Court’s CM/ECF system under Local Rule CV-5(a)(3)(A).
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`/s/ Edward R. Nelson, III
`Edward R. Nelson, III
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