Case 2:17-cv-05184-JVS-JCG Document 58 Filed 01/12/18 Page 1 of 19 Page ID #:626
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`
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`RUSS AUGUST & KABAT
`Brian Ledahl (CA SB No. 186579)
`Neil A. Rubin (CA SB No. 250761)
`Jacob Buczko (CA SB No. 269408)
`Paul A. Kroeger (CA SB No. 229074)
`Timothy T. Hsieh (CA SB No. 255953)
`12424 Wilshire Boulevard 12th Floor
`Los Angeles, California 90025
`Telephone: 310-826-7474
`Facsimile: 310-826-6991
`bledahl@raklaw.com
`nrubin@raklaw.com
`jbuczko@raklaw.com
`pkroeger@raklaw.com
`thsieh@raklaw.com
`
`Attorneys for Plaintiff
`Document Security Systems, Inc.
`
`
`
`UNITED STATES DISTRICT COURT
`
`CENTRAL DISTRICT OF CALIFORNIA
`
`Plaintiff,
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`DOCUMENT SECURITY SYSTEMS,
`INC., a New York corporation,
`
`
`vs.
`
`OSRAM GMBH; OSRAM OPTO
`SEMICONDUCTORS GMBH & CO.;
`and OSRAM SYLVANIA INC.
`
`
`
`
`Defendants.
`
`Case No. 2:17-cv-05184-JVS-JCG
`
`PLAINTIFF DOCUMENT
`SECURITY SYSTEMS, INC.’S
`OPPOSITION TO DEFENDANT’S
`MOTION TO DISMISS THE FIRST
`AMENDED COMPLAINT
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`PLAINTIFF DOCUMENT SECURITY SYSTEMS, INC.’S OPPOSITION
`TO DEFENDANTS’ MOTION TO DISMISS THE FIRST AMENDED COMPLAINT
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`RUSS, AUGUST & KABAT
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`Case 2:17-cv-05184-JVS-JCG Document 58 Filed 01/12/18 Page 2 of 19 Page ID #:627
`TABLE OF CONTENTS
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`
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`PAGE
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`I.
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`INTRODUCTION .............................................................................................. 1
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`II. BACKGROUND ................................................................................................ 1
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`III. LEGAL STANDARDS .................................................................................. 3
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`IV. ARGUMENT .................................................................................................. 5
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`A. DSS Pleads Willful Infringement Beyond the Required Standard .................... 5
`1. OSI Confuses Pleading with Proving Willfulness .......................................... 5
`2. DSS Sufficiently Pleads Willfulness Under Halo .......................................... 8
`3. Though Not Necessary at this Stage, DSS Pleads Specific Egregious
`Infringement by Defendants. ................................................................................. 9
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`B. DSS Properly Addressed the Court’s Order (Dkt. No. 44) and Removed the
`Language the Court Deemed a Concession Regarding Willful Infringement. ....... 11
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`C. DSS’s FAC Introduces New Allegations to Support Its Pleading of Willful
`Infringement ............................................................................................................ 12
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`V. CONCLUSION ................................................................................................ 13
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`Case 2:17-cv-05184-JVS-JCG Document 58 Filed 01/12/18 Page 3 of 19 Page ID #:628
`TABLE OF AUTHORITIES
`
`
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`PAGE
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`Cases
`
`Advanced Analogic Technologies, Inc. v. Kinetic Technologies, Inc.,
`No. C-09-1360 MMC, 2009 WL 1974602 (N.D. Cal. July 8, 2009).............. 6
`
`Apple Inc. v. Samsung Electronics Co., Ltd.,
`258 F. Supp. 3d 1013 (N.D. Cal. 2017) .......................................................... 9
`
`Ashcroft v. Iqbal,
`556 U.S. 662 (2009) ........................................................................................ 3
`
`Bayer Healthcare, LLC v. Baxalta, Inc.,
`No. 16-1122, 2017 U.S. Dist. LEXIS 126904 (D. Del. Aug. 10, 2017) ....... 10
`
`Bell Atlantic Corp. v. Twombly,
`550 U.S. 544 (2007) ........................................................................................ 3
`
`Bio-Rad Labs. Inc. v. Thermo Fisher Sci. Inc.,
`No. CV 16-358-RGA, 2017 WL 438733 (D. Del. Feb. 1, 2017) ............... 6, 9
`
`Bobcar Media, LLC v. Aardvark Event Logistics, Inc.,
`No. 16-885, 2017 WL 74729 (S.D.N.Y. Jan. 4, 2017) ......................... 8, 9, 10
`
`Boundaries Sols. Inc. v. CoreLogic, Inc.,
`No. 5:14-CV-00761-PSG, 2014 WL 4954017
`(N.D. Cal. Sept. 29, 2014) ...................................................................... 4, 7, 9
`
`CG Tech. Dev., LLC v. Big Fish Games, Inc.,
`No. 16-cv-857, 2016 WL 4521682 (D. Nev. Aug 29, 2016) .......................... 7
`
`Cont’l Circuits LLC v. Intel Corp.,
`No. 16-cv-2026 PHX DGC, 2017 WL 2651709 (D. Ariz. June 19, 2017) .... 8
`
`DermaFocus LLC v. Ulthera, Inc.,
`201 F. Supp. 3d 465 (D. Del. 2016) ............................................................ 6, 9
`
`DeSoto v. Yellow Freight System, Inc.,
`957 F.2d 655 (9th Cir. 1992) ........................................................................ 12
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`
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`TABLE OF AUTHORITIES
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`PAGE
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`Case 2:17-cv-05184-JVS-JCG Document 58 Filed 01/12/18 Page 4 of 19 Page ID #:629
`TABLE OF AUTHORITIES
`(continued)
`DRG-International, Inc. v. Bachem Americas, Inc.,
`Case No. CV-15-7276-MWF (SSx), 2016 WL 3460791
`(C.D. Cal. Jan. 5, 2016) .............................................................................. 1, 4
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`Emazing Lights, LLC v. De Oca,
`No. 15-cv-1561, 2016 WL 7507765 (C.D. Cal. June 20, 2016) ..................... 7
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`Emblaze Ltd. v. Apple Inc.,
`No. C11-01079 SBA, 2012 WL 5940782 (N.D. Cal. Nov. 27, 2012) .... 1, 4, 6
`
`Finjan Inc. v. Cisco Sys. Inc.,
`No. 17-cv-00072-BLF, 2017 WL 2462423 (N.D. Cal. June 7, 2017) ............ 7
`
`Global–Tech Appliances, Inc. v. SEB S.A.,
`563 U.S. 754 (2011) ...................................................................................... 12
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`Halo Electronics, Inc. v. Pulse Electronics, Inc.,
`__ U.S. __, 136 S. Ct. 1923, 195 L. Ed. 2d 278 (2016) ......................... passim
`
`IpVenture, Inc. v. Cellco P’ship,
`No. C 10-04755 JSW, 2011 WL 207978 (N.D. Cal. Jan. 21, 2011) .............. 4
`
`Jardin v. Datallegro, Inc.,
`No. 08CV1462-IEG-RBB, 2009 WL 186194 (S.D. Cal. Jan. 20, 2009) .... 4, 6
`
`Manzarek v. St. Paul Fire & Marine Ins. Co.,
`519 F.3d 1025 (9th Cir. 2008) ........................................................................ 3
`
`McZeal v. Sprint Nextel Corp.,
`501 F.3d 1354 (Fed. Cir. 2007) ...................................................................... 8
`
`MobileMedia Ideas LLC v. HTC Corp.,
`No. 2:10-CV-112-TJW, 2011 WL 4347037 (E.D. Tex. Sept. 15, 2011)........ 4
`
`Nanosys, Inc. v. QD Vision, Inc.,
`No. 16-cv-01957, 2016 WL 49430006 (N.D. Cal. Sept. 16, 2016) ........ 4, 6, 8
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`Novitaz, Inc. v. inMarket Media, LLC,
`No. 16-cv-06795-EJD, 2017 WL 2311407 (N.D. Cal. May 26, 2017) ........ 10
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`Oakley, Inc. v. 5.11, Inc.,
`No. 11CV2173 WQH CAB, 2012 WL 5363245 (S.D. Cal. Oct. 29, 2012) ... 6
`iii
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`TABLE OF AUTHORITIES
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`Case 2:17-cv-05184-JVS-JCG Document 58 Filed 01/12/18 Page 5 of 19 Page ID #:630
`TABLE OF AUTHORITIES
`(continued)
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`
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`PAGE
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`Oracle Corp. v. DrugLogic, Inc.,
`807 F. Supp. 2d 885 (N.D. Cal. 2011) ........................................................ 1, 4
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`Progme Corp. v. Comcast Cable Commc'n LLC,
`No. 17-1488, 2017 WL 5070723 (E.D. Pa. Nov. 3, 2017) ......................... 6, 9
`
`Rambus, Inc. v. Nvidia Corp.,
`No. C 08-3343 SI, 2008 WL 4911165 (N.D. Cal. Nov. 13, 2008) ............. 1, 6
`
`Robert Bosch Healthcare Sys., Inc. v. Express MD Sols., LLC,
`No. C 12-00068 JW, 2012 WL 2803617 (N.D. Cal. July 10, 2012) .............. 8
`
`Shire Viropharma Inc. v. CSL Behring LLC et al.,
`No. 17-414, 2018 WL 326406 (D. Del. Jan. 8, 2018) .................................... 6
`
`Shroyer v. New Cingular Wireless Servs., Inc.,
`622 F.3d 1035 (9th Cir. 2010) ......................................................................... 3
`
`Sony Corp. v. LG Electronics U.S.A., Inc.,
`768 F. Supp. 2d 1058 (C.D. Cal. 2011) .......................................................... 6
`
`Straight Path IP Grp., Inc. v. Apple Inc.,
`No. C 16-03582 WHA, 2017 WL 3967864 (N.D. Cal. Sept. 9, 2017) ....... 3, 8
`
`Varion Med. Sys., Inc. v. Elekta AB,
`No. 15-cv-871-LPS, 2016 WL 3748772 (D. Del. July 12, 2016) ................... 7
`
`Zimmer Surgical, Inc. v. Stryker Corp.,
`No. CV 16-679-RGA-MPT, 2017 WL 3736750 (D. Del. Aug. 30, 2017) ..... 9
`
`Statutes
`
`35 U.S.C. § 284 ..................................................................................................... 3, 8
`
`Rules
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`Fed. R. Civ. P. 15(a)(2) ........................................................................................... 12
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`
`
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`TABLE OF AUTHORITIES
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`iv
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`

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`Case 2:17-cv-05184-JVS-JCG Document 58 Filed 01/12/18 Page 6 of 19 Page ID #:631
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`I.
`
`INTRODUCTION
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`Defendant OSRAM SYLVANIA Inc. (“OSI”) moves to dismiss the willful
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`infringement allegations in plaintiff Document Security Systems, Inc. (“DSS” or
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`“Plaintiff”)’s First Amended Complaint (“FAC”). OSI’s motion (Dkt. No. 54)
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`mischaracterizes the FAC’s willful infringement allegations and misapplies the
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`law. OSI confuses the standard for pleading willful infringement – the issue here –
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`with the standard for ultimately proving willful infringement – which is not at issue
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`in this motion. The standard for pleading willful infringement is unquestionably
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`not the same as the standard to prove willfulness. DRG-International, Inc. v.
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`Bachem Americas, Inc., Case No. CV-15-7276-MWF (SSx), 2016 WL 3460791, at
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`*9 (C.D. Cal. Jan. 5, 2016); Emblaze Ltd. v. Apple Inc., No. C11-01079 SBA, 2012
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`WL 5940782, at *8 (N.D. Cal. Nov. 27, 2012); Rambus, Inc. v. Nvidia Corp., No.
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`C 08-3343 SI, 2008 WL 4911165, at *2 (N.D. Cal. Nov. 13, 2008). To plead
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`willful infringement, a party only need only plead “the barest factual assertion of
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`knowledge of an issued patent.” DRG-International, 2016 WL 3460791, at *9,
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`quoting Oracle Corp. v. DrugLogic, Inc., 807 F. Supp. 2d 885, 902 (N.D. Cal.
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`2011) (citation omitted). DSS has undoubtedly surpassed and exceeded the
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`pleading requirements, and OSI’s motion must be denied.
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`II. BACKGROUND
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`On November 16, 2017, DSS filed its FAC alleging that Defendants
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`OSRAM GmbH (“OSRAM”), OSRAM Opto Semiconductor GmbH (“OOS”),
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`OSRAM Licht AG (“OL”) and OSI (collectively, “Defendants”) infringed the four
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`asserted patents: the ’771 Patent, the ’087 Patent, the ’486 Patent and the ’297
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`Patent (Dkt. No. 47). The FAC accuses Defendants of willfully infringing the ’771
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`and ’087 patents. The FAC also alleges Defendants’ knowledge of the ’771 and
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`’087 patents and Defendants’ knowledge that it and its customers infringed and
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`continued to infringe each patent.
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`PLAINTIFF DOCUMENT SECURITY SYSTEMS, INC.’S OPPOSITION
`TO DEFENDANTS’ MOTION TO DISMISS THE FIRST AMENDED COMPLAINT
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`1
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`RUSS, AUGUST & KABAT
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`

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`Case 2:17-cv-05184-JVS-JCG Document 58 Filed 01/12/18 Page 7 of 19 Page ID #:632
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`The language of the paragraphs in the FAC that allege willful infringement
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`and knowledge of the patents-in-suit recite, in pertinent part:
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`“Defendants have been aware of the [asserted patent] and of its
`infringement as of a date no later than [earliest date and how
`Defendants were notified]. Since that date, Defendants have failed to
`investigate and remedy their infringement of the [asserted patent] and
`thus willfully and egregiously continue to infringe the [asserted
`patent]. On information and belief, Defendants continued to offer
`infringing products without having modified or altered those products
`in a manner that would not infringe the [asserted patent]. Defendants,
`at the very least, have been egregiously and willfully blind to
`infringement of the [asserted patent]. Further evidence of Defendants’
`egregious and willful infringement are the acts of active inducement
`described
`in
`this Complaint. Defendants actively
`induce and
`encourage customers to make, use, sell, offer to sell and/or import the
`[asserted patent] Accused Instrumentalities with knowledge that these
`acts constitute infringement of the [asserted patent], with the purpose
`of, inter alia, developing and serving the United States market for
`Defendants’ LED products and consumer devices that include
`Defendants’ products.”
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`(Dkt. No. 47 at ¶¶ 24 & 34).
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`Regarding pre-suit notice, specifically, paragraph 24 of the FAC states that
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`“Defendants have been aware of the ’771 Patent and of its infringement as of a
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`date no later than October 27, 2006, when the ’771 Patent was cited by a USPTO
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`examiner during the prosecution of Defendants’ patent that issued as U.S.
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`7,570,147. Thereafter, on June 1, 2009, Defendants listed the 771 Patent in an
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`Information Disclosure Statement they filed during prosecution of U.S. Patent
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`8,071,997. Defendants again, on February 10, 2013, listed the ’771 Patent in an
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`Information Disclosure Statement they filed during prosecution of U.S. Patent
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`9,240,536. Again, on January 19, 2017, the ’771 Patent was on a list of references
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`cited by a USPTO examiner during the prosecution of Defendants’ U.S. Patent
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`application 20160172559A1.” (Dkt. No. 47 at ¶ 24).
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`Furthermore, paragraph 34 of the FAC states that “Defendants have been
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`aware of the ’087 Patent and of its infringement as of a date no later than January
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`24, 2013, when a USPTO examiner included the ’087 patent on a search strategy
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`report sent to Defendants during the prosecution of Defendants’ U.S. Patent No.
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`PLAINTIFF DOCUMENT SECURITY SYSTEMS, INC.’S OPPOSITION
`TO DEFENDANTS’ MOTION TO DISMISS THE FIRST AMENDED COMPLAINT
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`2
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`RUSS, AUGUST & KABAT
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`

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`Case 2:17-cv-05184-JVS-JCG Document 58 Filed 01/12/18 Page 8 of 19 Page ID #:633
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`8,558,271. Thereafter, Defendants cited the ’087 Patent during the prosecution of
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`its U.S. Patent No. 9,673,136.” Id. at ¶ 34.
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`III. LEGAL STANDARDS
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`A claim can be dismissed only if there is “no cognizable legal theory” for
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`the claim or where there is “an absence of sufficient facts alleged to support a
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`cognizable legal theory.” Shroyer v. New Cingular Wireless Servs., Inc., 622 F.3d
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`1035, 1041 (9th Cir. 2010). A complaint must state a claim that is “plausible on its
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`face,” but need not establish that the claim is “probable.” Ashcroft v. Iqbal, 556
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`U.S. 662, 678 (2009). The complaint “does not need detailed factual allegations”
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`to state a claim. Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 555 (2007).
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`On a motion to dismiss, courts accept as true a plaintiff’s well-pleaded
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`factual allegations and construe all factual inferences in the light most favorable to
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`the plaintiff. See Manzarek v. St. Paul Fire & Marine Ins. Co., 519 F.3d 1025,
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`1031 (9th Cir. 2008.) Therefore, as long as a Complaint “pleads factual content
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`that allows the court to draw the reasonable inference that the defendant is liable
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`for the misconduct alleged” it is sufficient under Rule 12(b)(6). Iqbal, 556 U.S. at
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`678 (quoting Twombly, 550 U.S. at 570.)
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`In Halo Electronics, Inc. v. Pulse Electronics, Inc., __ U.S. __, 136 S. Ct.
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`1923, 195 L. Ed. 2d 278 (2016), the Supreme Court emphasized that the district
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`court should exercise its discretion as provided in 35 U.S.C. § 284 to determine
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`whether to award enhanced damages. The Supreme Court further explained that
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`the patentee must show that the infringement was an “egregious case[] of
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`misconduct beyond typical infringement.” Id. at 1935.
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`The Halo case replaced the previous “unduly rigid” legal standard for
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`willful/egregious infringement under 35 U.S.C. § 284 with a “more flexible
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`standard.” Id. Moreover, “a patent infringement plaintiff does not have to prove
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`willfulness at the pleading stage.” Straight Path IP Grp., Inc. v. Apple Inc., No. C
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`16-03582 WHA, 2017 WL 3967864, at *4 (N.D. Cal. Sept. 9, 2017).
`3
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`PLAINTIFF DOCUMENT SECURITY SYSTEMS, INC.’S OPPOSITION
`TO DEFENDANTS’ MOTION TO DISMISS THE FIRST AMENDED COMPLAINT
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`RUSS, AUGUST & KABAT
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`The standard for pleading willful infringement is lower than and different
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`from the standard for proving willful infringement, under, for example, the 2016
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`U.S. Supreme Court case of Halo. See Nanosys, Inc. v. QD Vision, Inc., No. 16-cv-
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`01957, 2016 WL 49430006, at *7 (N.D. Cal. Sept. 16, 2016) (“Despite defendants’
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`assertion [that plaintiffs need to allege more than ‘mere knowledge’ to sustain a
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`willfulness claim], the Court disagrees that Halo created a special test [for
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`pleading because it] did not address pleading standards at the motion to dismiss
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`stage”); DRG-International, 2016 WL 3460791, at *10; see also MobileMedia
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`Ideas LLC v. HTC Corp., No. 2:10-CV-112-TJW, 2011 WL 4347037, at *2 (E.D.
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`Tex. Sept. 15, 2011) (“this Court has observed that, much like direct infringement
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`and its pleading requirements in accordance with Form 18 and Federal Circuit law,
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`the bar for pleading willful infringement is not high”).
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`To state a claim for willful infringement, the plaintiff must provide “a
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`pleading equivalent” to the defendant having “knowledge of the patent and of his
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`infringement.” Oracle, 807 F. Supp. 2d at 902. “Therefore, to plead willful
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`infringement, a party must make out ‘the barest factual assertion of knowledge of
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`an issued patent.’” Id.; IpVenture, Inc. v. Cellco P’ship, No. C 10-04755 JSW,
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`2011 WL 207978, at *2 (N.D. Cal. Jan. 21, 2011).
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`Moreover, “[w]here a complaint (1) specifically identifies the accused
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`products, (2) alleges pre-suit knowledge, (3) alleges the infringing acts are willful,
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`intentional and conscious and (4) alleges plaintiff has and will continue to be
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`irreparably harmed by the infringement, that complaint sufficiently states a claim
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`for willful infringement.” DRG-International, 2016 WL 3460791, at *11, quoting
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`Boundaries Sols. Inc. v. CoreLogic, Inc., No. 5:14-CV-00761-PSG, 2014 WL
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`4954017, at *5 (N.D. Cal. Sept. 29, 2014); Emblaze Ltd., 2012 WL 59409782, at
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`*8; Jardin v. Datallegro, Inc., No. 08CV1462-IEG-RBB, 2009 WL 186194, at *7
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`(S.D. Cal. Jan. 20, 2009).
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`
`
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`PLAINTIFF DOCUMENT SECURITY SYSTEMS, INC.’S OPPOSITION
`TO DEFENDANTS’ MOTION TO DISMISS THE FIRST AMENDED COMPLAINT
`
`4
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`RUSS, AUGUST & KABAT
`
`

`

`Case 2:17-cv-05184-JVS-JCG Document 58 Filed 01/12/18 Page 10 of 19 Page ID #:635
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`IV. ARGUMENT
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`The FAC more than sufficiently pleads willful infringement for the ’771 and
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`’087 Patents because it provides “a pleading equivalent” to OSI having knowledge
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`of those patents and their infringement, makes out the factual basis of OSI’s
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`knowledge of those patents, and finally because it: (1) specifically identifies the
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`accused products (See e.g., Dkt. No. 47 at ¶ 16-21 & 26-31), (2) alleges pre-suit
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`knowledge (See Dkt. No. 47 at ¶ 24 & 34), (3) alleges the infringing acts are
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`willful, intentional and conscious (See Dkt. No. 47 at ¶ 24 & 34) and (4) alleges
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`plaintiff has and will continue to be irreparably harmed by the infringement (See
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`Dkt. No. 47 at ¶ 24 & 34).
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`OSI attempts to side-step the applicable law by arguing that DSS’s FAC
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`consists of mere “boilerplate,” which replaced the alleged boilerplate in the
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`original complaint. (Dkt. No. 54 at 5-6). This mischaracterizes the allegations of
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`the FAC. The FAC adds substantial specific allegations of Defendants’ knowledge
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`of the ’771 and ’087 patents, knowledge that Defendants and their customers
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`infringed, and, though not required, specific allegations of egregious behavior by
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`the Defendants, including actively inducing and instructing customers to infringe
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`DSS’s patents knowing such actions constitute infringement of DSS’s patents.
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`A. DSS Pleads Willful Infringement Beyond the Required
`Standard
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`OSI argues that the allegations in DSS’s FAC fall short of alleging any facts
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`sufficient to state a plausible willful infringement claim under Halo, which
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`requires willful infringement claims for “egregious cases of misconduct beyond
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`typical infringement.” (Dkt. No. 54 at 7).
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`1. OSI Confuses Pleading with Proving Willfulness
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`It is clear that OSI confuses the standard for proving willful infringement
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`with the standard for pleading willful infringement. See Shire Viropharma Inc. v.
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`CSL Behring LLC et al., No. 17-414, 2018 WL 326406, at *1 (D. Del. Jan. 8,
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`
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`PLAINTIFF DOCUMENT SECURITY SYSTEMS, INC.’S OPPOSITION
`TO DEFENDANTS’ MOTION TO DISMISS THE FIRST AMENDED COMPLAINT
`
`5
`
`RUSS, AUGUST & KABAT
`
`

`

`Case 2:17-cv-05184-JVS-JCG Document 58 Filed 01/12/18 Page 11 of 19 Page ID #:636
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`2018) (“Defendants’ argument seems to conflate the standards for pleading willful
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`infringement with the standards for proving willful infringement. Even after Halo,
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`broader allegations of willfulness, without a specific showing of egregiousness, are
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`sufficient to withstand a motion to dismiss.”); accord Progme Corp. v. Comcast
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`Cable Commc'n LLC, No. 17-1488, 2017 WL 5070723, at *12 (E.D. Pa. Nov. 3,
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`2017); Bio-Rad Labs. Inc. v. Thermo Fisher Sci. Inc., No. CV 16-358-RGA, 2017
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`WL 438733, at *1 (D. Del. Feb. 1, 2017); DermaFocus LLC v. Ulthera, Inc., 201
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`F. Supp. 3d 465, 473 (D. Del. 2016) (“Under the less rigid standard announced in
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`Halo, however, the court will allow plaintiff’s general allegations of willful
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`infringement to withstand the motion to dismiss”).
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`Many district courts agree that cases like Halo or Seagate do not alter the
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`pleading requirements for a willful infringement claim. See, e.g., Nanosys, 2016
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`WL 49430006, at *7 (“Despite defendants’ assertion [that plaintiffs need to allege
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`more than ‘mere knowledge’ to sustain a willfulness claim], the Court disagrees
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`that Halo created a special test [for pleading because it] did not address pleading
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`standards at the motion to dismiss stage”); see also Oakley, Inc. v. 5.11, Inc., No.
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`11CV2173 WQH CAB, 2012 WL 5363245, at *2 (S.D. Cal. Oct. 29, 2012)
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`(“‘[T]he issue at this stage in the proceedings is limited to the sufficiency of the
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`pleadings. The [SAC] identifies the specific products alleged to infringe and
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`alleges that the Defendants' had written notice of the issued patents before the
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`action was filed. The Court concludes that [SAC] sufficiently alleges willful
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`infringement.”); Emblaze Ltd., 2012 WL 5940782, at *8; Sony Corp. v. LG
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`Electronics U.S.A., Inc., 768 F. Supp. 2d 1058, 1064 (C.D. Cal. 2011); Advanced
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`Analogic Technologies, Inc. v. Kinetic Technologies, Inc., No. C-09-1360 MMC,
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`2009 WL 1974602, at *2 (N.D. Cal. July 8, 2009); Jardin, 2009 WL 186194, at *7;
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`Rambus v. Nvidia Corp., No. C 08-3343 SI, 2008 WL 4911165, at *2 (N.D. Cal.
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`Nov. 13, 2008).
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`
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`DSS has more than sufficiently pled willful infringement at least because its
`6
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`
`PLAINTIFF DOCUMENT SECURITY SYSTEMS, INC.’S OPPOSITION
`TO DEFENDANTS’ MOTION TO DISMISS THE FIRST AMENDED COMPLAINT
`
`RUSS, AUGUST & KABAT
`
`

`

`Case 2:17-cv-05184-JVS-JCG Document 58 Filed 01/12/18 Page 12 of 19 Page ID #:637
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`FAC (1) specifically identifies the accused products (See e.g., Dkt. No. 47 at ¶ 16-
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`21 & 26-31), (2) alleges pre-suit knowledge (See Dkt. No. 47 at ¶ 24 & 34), (3)
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`alleges the infringing acts are willful, intentional and conscious (See Dkt. No. 47 at
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`¶ 24 & 34) and (4) alleges plaintiff has and will continue to be irreparably harmed
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`by the infringement (See Dkt. No. 47 at ¶ 24 & 34). Boundaries, 2014 WL
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`4954017, at *5.
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`Furthermore, the cases that OSI cites are inapposite and distinguishable
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`because they involve bare conclusory statements far below the substance that
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`DSS’s FAC provides, as described above. See Emazing Lights, LLC v. De Oca, No.
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`15-cv-1561, 2016 WL 7507765, at *2 (C.D. Cal. June 20, 2016) (the “first two
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`statements present legal conclusions without factual basis and are precisely the
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`type of allegation deemed insufficient under the Twombly/Iqbal standard. On its
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`face, the third statement also lacks an adequate factual basis to make a plausible
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`allegation that the Defendants knew about the [asserted patent] and acted in a
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`manner that amounted to willful infringement.”); Finjan Inc. v. Cisco Sys. Inc., No.
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`17-cv-00072-BLF, 2017 WL 2462423, at *5 (N.D. Cal. June 7, 2017) (“the FAC
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`does not contain factual allegations that would enable the Court to plausibly
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`conclude that Cisco had pre-suit knowledge of any of the Asserted Patents”); CG
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`Tech. Dev., LLC v. Big Fish Games, Inc., No. 16-cv-857, 2016 WL 4521682, at
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`*14 (D. Nev. Aug 29, 2016) (“Plaintiffs simply state conclusory allegations that
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`Defendant ‘was made aware of the … patents [and] … [its] continued use of its
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`infringing products constitutes willful and blatant infringement”); Varion Med.
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`Sys., Inc. v. Elekta AB, No. 15-cv-871-LPS, 2016 WL 3748772, at *8 (D. Del. July
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`12, 2016) (“Plaintiff does little more than provide a formulaic recitation of the pre-
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`Halo elements of a willful infringement claim”); Cont’l Circuits LLC v. Intel
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`Corp1., No. 16-cv-2026 PHX DGC, 2017 WL 2651709, at *8 (D. Ariz. June 19,
`
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`1 The cases that OSI cites not within the Ninth Circuit are further distinguishable
`because “a motion to dismiss for failure to state a claim upon which relief can be
`7
`
`PLAINTIFF DOCUMENT SECURITY SYSTEMS, INC.’S OPPOSITION
`TO DEFENDANTS’ MOTION TO DISMISS THE FIRST AMENDED COMPLAINT
`
`
`
`RUSS, AUGUST & KABAT
`
`

`

`Case 2:17-cv-05184-JVS-JCG Document 58 Filed 01/12/18 Page 13 of 19 Page ID #:638
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`2017) (“The second amended complaint adds the word ‘egregious’ to its
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`allegations that Defendants’ ‘infringement of the Patents-in-Suit has been and
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`continues to be egregious, willful, wanton, malicious, in bad faith, deliberate,
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`consciously wrongful, and/or flagrant’…but this is merely a conclusion, which is
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`not sufficient.”). In sum, these cases failed to allege facts of pre-suit knowledge
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`(beyond a mere conclusory recital). Here there is no dispute that DSS has alleged
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`factually how Defendants obtained knowledge of the patents-in-suit (and the
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`allegations of infringement).
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`2.
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`DSS Sufficiently Pleads Willfulness Under Halo
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`Since the U.S. Supreme Court altered the legal standard for willful/egregious
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`infringement in in Halo in 2016, there have been few, if any, decisions altering the
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`pleading standard under the new law. See Bobcar Media, LLC v. Aardvark Event
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`Logistics, Inc. No. 16-885, 2017 WL 74729, at *5-6 (S.D.N.Y. Jan. 4, 2017)
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`(Halo’s “effect on the pleading standard for willful infringement remains
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`unclear.”); Nanosys, 2016 WL 4943006, at *8 (“Halo did not address pleading
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`standards at the motion to dismiss stage.”). One recent decision, however, held that
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`similar, if not less detailed, allegations of willful infringement were sufficient to
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`sustain a willful/egregious infringement claim at the pleading stage. Straight Path
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`IP Grp., Inc. 2017 WL 3967864, at *4. The Northern District of California court
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`reasoned that Halo rejected the previous “unduly rigid” test under 35 U.S.C. § 284
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`for a more “flexible” inquiry and this affected the pleading requirements for
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`willful/egregious
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`infringement post-Halo. Id. The court accordingly held
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`allegations a defendant “was aware of the [] asserted patents and their infringement
`
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`granted is a purely procedural question not pertaining to patent law” and thus,
`courts should apply “the law of the regional circuit” in evaluating such a motion.
`Robert Bosch Healthcare Sys., Inc. v. Express MD Sols., LLC, No. C 12-00068
`JW, 2012 WL 2803617, at *2–4 (N.D. Cal. July 10, 2012), quoting McZeal v.
`Sprint Nextel Corp., 501 F.3d 1354, 1355–56 (Fed. Cir. 2007).
`8
`
`PLAINTIFF DOCUMENT SECURITY SYSTEMS, INC.’S OPPOSITION
`TO DEFENDANTS’ MOTION TO DISMISS THE FIRST AMENDED COMPLAINT
`
`
`
`RUSS, AUGUST & KABAT
`
`

`

`Case 2:17-cv-05184-JVS-JCG Document 58 Filed 01/12/18 Page 14 of 19 Page ID #:639
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`since at least September 24, 2014, and that [defendant] nonetheless continued to
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`sell the accused products and induce infringement by its customers after that date”
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`were sufficient to sustain a willful/egregious infringement claim at the pleading
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`stage. Id. DSS’s allegations in its FAC go much further than this and more than
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`sufficiently plead willful infringement because its FAC (1) specifically identifies
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`the accused products (See e.g., Dkt. No. 47 at ¶ 16-21 & 26-31), (2) alleges pre-suit
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`knowledge (See Dkt. No. 47 at ¶ 24 & 34), (3) alleges the infringing acts are
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`willful, intentional and conscious (See Dkt. No. 47 at ¶ 24 & 34)2 and (4) alleges
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`plaintiff has and will continue to be irreparably harmed by the infringement (See
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`Dkt. No. 47 at ¶ 24 & 34). Boundaries, 2014 WL 4954017, at *5; see also Bobcar
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`Media, 2017 WL 74729, at *6 (finding that plaintiff “carried its burden” when
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`pleading willfulness when letters were sent to defendant alleging infringement and
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`defendant continued to engage in allegedly infringing activities).
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`3.
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`Though Not Necessary at this Stage, DSS Pleads
`Specific Egregious Infringement by Defendants.
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`“At the pleading stage, it is not necessary to show that the case is
`
`egregious.” Bio-Rad Labs. Inc. v. Thermo Fisher Sci. Inc., No. CV 16-358-RGA,
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`2017 WL 438733, at *1 (D. Del. Feb. 1, 2017); see also Bayer Healthcare, LLC v.
`
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`2 The FAC alleges specific pre-filing and post-filing willful and egregious conduct.
`Several district courts have held that after Halo, post-filing conduct can also serve
`as a basis for willful infringement. See Apple Inc. v. Samsung Electronics Co.,
`Ltd., 258 F. Supp. 3d 1013, 1027 (N.D. Cal. 2017) (“[Defendant]’s post-filing
`conduct alone can serve as the basis of a jury’s willfulness finding and an award
`of enhanced damages.”); Zimmer Surgical, Inc. v. Stryker Corp., No. CV 16-679-
`RGA-MPT, 2017 WL 3736750, at *2 (D. Del. Aug. 30, 2017) (“I am going to
`conclude, based on the analysis in Apple v. Samsung, that allegations of post-filing
`conduct can support a finding of willfulness.”); Progme Corp. v. Comcast Cable
`Commc'ns LLC, No. CV 17-1488, 2017 WL 5070723, at *12 (E.D. Pa. Nov. 3,
`2017); DermaFocus LLC v. Ulthera, Inc., 201 F. Supp. 3d 465 (D. Del. 2016)
`(“Under the less rigid standard announced in Halo, however, the court will allow
`plaintiff’s general allegations of willful infringement to withstand the motion to
`dismiss.”)
`
`
`
`
`PLAINTIFF DOCUMENT SECURITY SYSTEMS, INC.’S OPPOSITION
`TO DEFENDANTS’ MOTION TO DISMISS THE FIRST AMENDED COMPLAINT
`
`9
`
`RUSS, AUGUST & KABAT
`
`

`

`Case 2:17-cv-05184-JVS-JCG Document 58 Filed 01/12/18 Page 15 of 19 Page ID #:640
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`
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`Baxalta, Inc., No. 16-1122, 2017 U.S. Dist. LEXIS 126904, at *3 (D. Del. Aug. 10,
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`2017) (“At this [pleading] stage of the litigation…Plaintiff need not allege
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`egregiousness.”). “At a minimum, the discretion that Halo confers on