Case 2:17-cv-05184-JVS-JCG Document 61 Filed 01/22/18 Page 1 of 15 Page ID #:650
`
`Benjamin W. Hattenbach (SBN 186455)
`bhattenbach@irell.com
`Ellisen S. Turner (SBN 224842)
`eturner@irell.com
`Christopher T. Abernethy (SBN 275986)
`cabernethy@irell.com
`Rosalyn M. Kautz (SBN 307831)
`rkautz@irell.com
`IRELL & MANELLA LLP
`1800 Avenue of the Stars, Suite 900
`Los Angeles, CA 90067
`Telephone: (310) 277-1010
`Facsimile:
`(310) 203-7199
`
`Attorneys for Defendant
`OSRAM SYLVANIA Inc.
`
`
`
`IN THE UNITED STATES DISTRICT COURT
`FOR THE CENTRAL DISTRICT OF CALIFORNIA
`SOUTHERN DIVISION
`
`DOCUMENT SECURITY SYSTEMS,
`INC.,
`
`Plaintiff,
`
`v.
`OSRAM GMBH; OSRAM OPTO
`SEMICONDUCTORS GMBH & CO.;
`OSRAM LICHT AG; and OSRAM
`SYLVANIA INC.,
`Defendants.
`
`
`
`Case No. 2:17-cv-05184-JVS-JCG
`
`DEFENDANT
`OSRAM SYLVANIA INC.'S
`REPLY IN SUPPORT OF ITS
`MOTION TO DISMISS THE
`FIRST AMENDED COMPLAINT
`
`Judge:
`Honorable James V. Selna
`Date:
`February 5, 2018
`Time:
`1:30 pm
`Courtroom: 10C
`
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`10429721
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`OSRAM SYLVANIA INC.'S REPLY
`IN SUPPORT OF ITS MOTION TO DISMISS
`Case No. 2:17-cv-05184-JVS-JCG
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`

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`Case 2:17-cv-05184-JVS-JCG Document 61 Filed 01/22/18 Page 2 of 15 Page ID #:651
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`TABLE OF CONTENTS
`
`I. 
`II. 
`
`Page
`Introduction ..................................................................................................... 1 
`Argument ......................................................................................................... 2 
`A. 
`Plaintiff's Admission and Failure to Plead Additional Facts
`Exemplify the Implausibility of Its Willfulness Claims ....................... 2 
`Plaintiff Fails to State Any Plausible Willful Infringement
`Claim as a Matter of Law ..................................................................... 5 
`Leave to Amend a Second Time Is Unwarranted ............................... 10 
`C. 
`III.  Conclusion ..................................................................................................... 11 
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`
`B. 
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`OSRAM SYLVANIA INC.'S REPLY
`IN SUPPORT OF ITS MOTION TO DISMISS
`Case No. 2:17-cv-05184-JVS-JCG
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`Case 2:17-cv-05184-JVS-JCG Document 61 Filed 01/22/18 Page 3 of 15 Page ID #:652
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`TABLE OF AUTHORITIES
`
` Page(s)
`
`Cases
`American Title Ins. Co. v. Lacelaw Corp.,
`861 F.2d 224 (9th Cir. 1988) .................................................................................. 3
`Ashcroft v. Iqbal,
`556 U.S. 662 (2009) ...................................................................................... passim
`Bell Atlantic v. Twombly,
`550 U.S. 544 (2007) ...................................................................................... passim
`Bio-Rad Labs. Inc. v. Thermo Fisher Sci. Inc.,
`No. CV 16-358-RGA, 2017 WL 438733 (D. Del. Feb. 1, 2017) ........................... 9
`Bobcar Media, LLC v. Aardvark Event Logistics, Inc.
`No. 16-885, 2017 WL 74729 (S.D.N.Y. Jan. 4, 2017) ........................................... 8
`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, 2017 WL 2651709 (D. Ariz. June 19, 2017) .............................. 8
`DRG-International, Inc. v. Bachem Americas, Inc., Case No. CV-15-
`7276-MWF, 2016 WL 3460791
`(C.D. Cal. Jan. 5, 2016) .......................................................................................... 6
`Emazing Lights, LLC v. De Oca,
`No. 15-cv-1561, 2016 WL 7507765 (C.D. Cal. June 20, 2016) .................... 2, 6, 7
`Emblaze Ltd. v. Apple Inc..,
`No. C11-01079 SBA, 2012 WL 5940782 (N.D. Cal. Nov. 27, 2012) ................... 8
`Finjan, Inc. v. Cisco Sys. Inc.,
`No. 17-cv-72, 2017 WL 2462423 (N.D. Cal. June 7, 2017) .............................. 5, 7
`Hakopian v. Mukasey,
`551 F.3d 843 (9th Cir. 2008) .................................................................................. 3
`Halo Elecs., Inc. v. Pulse Elecs., Inc.,
`136 S. Ct. 1923 (2016) .................................................................................. passim
`Hawkins v. Thomas,
`No. 09-cv-1862, 2012 WL 1944828 (C.D. Cal. May 29, 2012) .......................... 10
`Irori Techs., Inc. v. Luminex Corp.,
`No. 13-cv-2647, 2014 WL 769435 (S.D. Cal. Feb. 25, 2014) ............................... 6
`Nanosys, Inc. v. QD Vision, Inc.,
`No. 16-cv-01957, 2016 WL 49430006 (N.D. Cal. Sept. 16, 2016) ....................... 9
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`OSRAM SYLVANIA INC.'S REPLY
`IN SUPPORT OF ITS MOTION TO DISMISS
`Case No. 2:17-cv-05184-JVS-JCG
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`Case 2:17-cv-05184-JVS-JCG Document 61 Filed 01/22/18 Page 4 of 15 Page ID #:653
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`Page(s)
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`
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`Nanosys, Inc. v. QD Vision, Inc.,
`No. 16-cv-1957, 2017 WL 35511 (N.D. Cal. Jan. 4, 2017) ................................... 9
`Oakley, Inc. v. 5.11, Inc.,
`No. 11CV2173 WQH , 2012 WL 5363245
`(S.D. Cal. Oct. 29, 2012) ........................................................................................ 9
`Oracle Corp. v. DrugLogic, Inc.,
`807 F. Supp. 2d 885 (N.D. Cal. 2011) .................................................................... 8
`Rambus v. Nvidia Corp.,
`No. C 08-3343 SI, 2008 WL 4911165 (N.D. Cal. Nov. 13, 2008) ........................ 8
`Shire Viropharma Inc. v. CSL Behring LLC et al.,
`No. 17-414, 2018 WL 326406 (D. Del. Jan. 8, 2018) ............................................ 9
`Sony Corp. v. LG Electronics U.S.A, Inc.,
`768 F. Supp. 2d 1058 (C.D. Cal. 2011) .................................................................. 6
`Varian Med. Sys., Inc. v. Elekta AB,
`No. 15-cv-871, 2016 WL 3748772 (D. Del. July 12, 2016) .................................. 7
`Warren v. Fox Family Worldwide, Inc.,
`171 F. Supp. 2d 1057 (C.D. Cal. 2011) .................................................................. 3
`Zucco Partners, LLC v. Digimarc Corp.,
`552 F.3d 981 (9th Cir. 2009) ................................................................................ 10
`Rules
`Fed. R. Civ. P 12(b)(6) ............................................................................................ 2, 6
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`OSRAM SYLVANIA INC.'S MOTION TO
`DISMISS FIRST AMENDED COMPLAINT
`Case No. 2:17-cv-05184-JVS-JCG
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`

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`Case 2:17-cv-05184-JVS-JCG Document 61 Filed 01/22/18 Page 5 of 15 Page ID #:654
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`I.
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`Introduction
`Plaintiff Document Security Systems, Inc. ("DSS" or "Plaintiff") bought a
`portfolio of patents from another company, then rapidly asserted them against an
`entire industry. Plaintiff launched a raft of complaints against an array of
`defendants, mostly just repeating the same boilerplate accusations from one
`complaint to the next. After this Court dismissed Plaintiff's original willful
`infringement allegations, Plaintiff had an opportunity to plead additional facts in an
`effort to state a plausible willfulness claim, yet it did not do so. Instead, Plaintiff's
`First Amended Complaint merely replaces old boilerplate with new boilerplate,
`alleging no new facts that could make Plaintiff's willfulness allegations plausible.
`As this Court found, in Plaintiff's original Complaint "DSS concede[d] that at
`this time, it cannot plead facts sufficient to state a plausible claim for willful
`infringement." (D.I. 44-1 at 17.) Plaintiff now asks the Court to completely ignore
`this admission when assessing Plaintiff's First Amended Complaint, merely because
`"DSS removed the language found . . . to be a concession." (D.I. 58, Opp. Br. at 11.)
`But Plaintiff's admission remains on the record in this litigation, and to overcome it
`Plaintiff would have needed to plead new facts in its First Amended Complaint that
`support a plausible willful infringement claim. Plaintiff did not do so. Its prior
`admission thus applies equally to the facts alleged in its First Amended Complaint.
`Plaintiff's admission on the record, coupled with its failure to plead any new facts,
`readily establishes the continued implausibility of it willfulness allegations.
`Further, even without considering Plaintiff's admission, the allegations in its
`First Amended Complaint fall far short of stating any plausible willfulness claim.
`Plaintiff boldly asserts that, "[t]o plead willful infringement, a party need only plead
`'the barest factual assertion of knowledge of an issued patent.'" (D.I. 58, Opp. Br.
`at 1.) Plaintiff misstates the law, ignoring binding Supreme Court authority along
`with the rulings of this Court and numerous other district courts. This Court has
`held—applying the standards provided by the Supreme Court in Twombly, Iqbal,
`OSRAM SYLVANIA INC.'S REPLY
`IN SUPPORT OF ITS MOTION TO DISMISS
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`and Halo—that a "'mere allegation, without more,' that Defendants knew of the
`patents-in-suit will not survive a Rule 12(b)(6) motion." Emazing Lights, LLC v. De
`Oca, No. 15-cv-1561, 2016 WL 7507765, at *2 (C.D. Cal. June 20, 2016). Plaintiff
`does not seriously attempt to grapple with the relevant controlling authorities.
`Instead, Plaintiff merely cites a handful of inapposite district court cases where—
`unlike here—the pleadings included specific factual allegations indicating that the
`patentee provided the accused infringer "actual notice" of the alleged infringement
`prior to filing suit. Plaintiff's First Amended Complaint includes no allegations of
`"actual notice" of alleged infringement, and merely alleging knowledge of an
`asserted patent fails as a matter of law to support a "plausible" inference of
`"egregious" misconduct—the core required element of a willfulness claim.
`Accordingly, Defendant OSRAM SYLVANIA Inc. ("OSI") respectfully
`requests dismissal of Plaintiff's willful infringement allegations. And because the
`Court already granted Plaintiff leave to amend its willfulness allegations a first time,
`OSI requests dismissal without leave to amend.
`II. Argument
`A.
`
`Plaintiff's Admission and Failure to Plead Additional Facts
`Exemplify the Implausibility of Its Willfulness Claims
`
`In its original Complaint, Plaintiff attempted to "reserve[] the right to request"
`a finding of willful infringement "[t]o the extent facts learned in discovery" may
`later support such a claim. (D.I. 1, Compl. ¶¶ 23, 33, 45 & 54.) This Court
`accordingly found that "DSS concedes that at this time, it cannot plead facts
`sufficient to state a plausible claim for willful infringement." (D.I. 44-1 at 17
`(citing D.I. 1 ¶¶ 23, 33, 45 & 54) (emphasis added).) The Court further explained
`that "[f]actual allegations must be enough to raise a right to relief above the
`speculative level," and thus "DSS's willful infringement claims do not meet the
`standards of Twombly and Iqbal." (Id. at 17-18 (citing Bell Atlantic v. Twombly, 550
`U.S. 544, 555 (2007); Ashcroft v. Iqbal, 556 U.S. 662 (2009).)
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`IN SUPPORT OF ITS MOTION TO DISMISS
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`Plaintiff now contends its prior admission should be entirely ignored when
`assessing its First Amended Complaint, merely because "DSS removed the
`language found . . . to be a concession." (D.I. 58, Opp. Br. at 11 (emphasis added).)
`This argument lacks merit. Plaintiff's admission remains on the record in this
`litigation—right on the face of its original Complaint. (D.I. 1, Compl. ¶¶ 23, 33, 45
`& 54.) Ninth Circuit law holds that "admissions in the pleadings are generally
`binding on the parties and the Court." American Title Ins. Co. v. Lacelaw Corp., 861
`F.2d 224, 226 (9th Cir. 1988); see also Hakopian v. Mukasey, 551 F.3d 843, 846
`(9th Cir. 2008) ("Allegations in a complaint are considered judicial admissions.").
`Merely filing a new pleading that omits the offending language does not erase
`Plaintiff's prior admission. While "prior pleadings" may be amended, they remain
`"competent, admissible evidence of the facts stated" that would need to be
`"controverted" with other evidence. Warren v. Fox Family Worldwide, Inc., 171 F.
`Supp. 2d 1057, 1066 (C.D. Cal. 2011) (emphasis added). Thus, to overcome its
`admission and satisfy the plausibility requirement of Twombly and Iqbal, Plaintiff
`would have needed to plead new facts in its First Amended Complaint that support a
`plausible willful infringement claim. Plaintiff did not do so.
`Plaintiff contends its First Amended Complaint "adds considerable detail
`regarding Defendants' [alleged] willful infringement." (D.I. 58, Opp. Br. at 12.)
`This assertion is meritless. The allegedly added "considerable detail" consists of
`only the following boilerplate statement, repeated for both the '771 and '087 patents:
`Since that date, Defendants have failed to investigate and remedy their
`infringement of the ['###] Patent and thus willfully and egregiously
`continue to infringe the ['###] 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 ['###] patent. Defendants, at the very least, have been egregiously
`and willfully blind to infringement of the ['###] Patent. Further
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`IN SUPPORT OF ITS MOTION TO DISMISS
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`evidence of Defendants' egregious and willful infringement are the acts
`of active inducement described in this Complaint.
`(Ex. 1 ¶¶ 24 & 34.) Simply put, there are no new factual allegations in Plaintiff's
`First Amended Complaint that could render its willfulness claim plausible.
`For example, Plaintiff says its amended pleading now "makes clear that
`Defendants are refusing to alter their infringing products knowing they infringe."
`(D.I. 58, Opp. Br. at 12.) But such allegations were already present in Plaintiff's
`original Complaint. (See, e.g., D.I. 1, Compl. ¶ 23 ("Defendants have been aware of
`the '771 Patent and of its infringement as of a date no later than October 27, 2006,
`. . . ."); id. ¶ 16 ("Defendants . . . continue to directly infringe the '771 Patent . . . .");
`id. ¶ 33 ("Defendants have been aware of the '087 Patent and of its infringement as
`of a date no later than January 24, 2013, . . . ."); id. ¶ 26 ("Defendants . . . continue
`to directly infringe the '087 Patent . . . .").
`Plaintiff further points to its "allegations of active inducement." (D.I. 58, Opp.
`Br. at 12.) But once again, Plaintiff's inducement allegations were already provided
`in its original Complaint. (See, e.g., D.I. 1, Compl. ¶¶ 22-23 (inducement allegations
`for '771 patent); id. ¶¶ 32-33 (inducement allegations for '087 patent).)
`Nor does Plaintiff's First Amended Complaint add any new factual allegations
`regarding alleged "willful blindness," as Plaintiff contends. (D.I. 58, Opp. Br. at 12.)
`All the amended pleading adds in this regard is a single sentence for each of the '771
`and '087 patents: "Defendants, at the very least, have been egregiously and willfully
`blind to infringement of the [###] Patent." (Ex. 1 ¶¶ 24 & 34.) This assertion is a
`bare legal conclusion, not a factual allegation. See Twombly, 550 U.S. at 555
`(plausibility standard "requires more than labels and conclusions"); Iqbal, 556 U.S.
`at 678 ("Threadbare recitals of the elements of a cause of action, supported by mere
`conclusory statements, do not suffice," because "the tenet that a court must accept as
`true all of the allegations in a complaint is inapplicable to legal conclusions.").
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`OSRAM SYLVANIA INC.'S REPLY
`IN SUPPORT OF ITS MOTION TO DISMISS
`Case No. 2:17-cv-05184-JVS-JCG
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`Plaintiff's failure to plead any new facts means that its prior admission applies
`equally to the facts alleged in its First Amended Complaint. Plaintiff argues that its
`concession was not a "permanent admission resulting in res judicata." (D.I. 58, Opp.
`Br. at 11.) This is a straw man argument, as the doctrine of res judicata (claim
`preclusion) is wholly inapplicable here. Rather, the issue is that under the facts
`alleged—the same facts asserted in both Plaintiff's original Complaint and in its
`First Amended Complaint—"DSS concedes that at this time, it cannot plead facts
`sufficient to state a plausible claim for willful infringement." (D.I. 44-1 at 17 (citing
`D.I. 1 ¶¶ 23, 33, 45 & 54).) This admission on the record, coupled with Plaintiff's
`failure to plead any new facts, establishes the continued implausibility of Plaintiff's
`amended willfulness allegations. In other words, Plaintiff has already conceded its
`factual allegations fail "to raise a right to relief above the speculative level."
`Twombly, 550 U.S. at 555. Plaintiff could have tried to overcome its prior admission
`by alleging new facts, but it failed to do so. This Court need proceed no further.
`B.
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`Plaintiff Fails to State Any Plausible Willful Infringement Claim
`as a Matter of Law
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`Even without considering Plaintiff's prior admission, the allegations in
`Plaintiff's First Amended Complaint fall far short of alleging any facts sufficient to
`state a plausible willfulness claim. Willful infringement claims are reserved solely
`for "egregious cases of misconduct beyond typical infringement." Halo Elecs., Inc.
`v. Pulse Elecs., Inc., 136 S. Ct. 1923, 1935 (2016) (emphasis added). Here,
`Plaintiff's First Amended Complaint "makes no specific factual allegations about
`[OSI's] subjective intent, or any other aspects of [OSI's] behavior that would suggest
`its behavior was 'egregious.'" Finjan, Inc. v. Cisco Sys. Inc., No. 17-cv-72, 2017 WL
`2462423, at *5 (N.D. Cal. June 7, 2017). That is what the Supreme Court's pleading
`jurisprudence requires, as the complaint must contain "[f]actual allegations [that
`would] be enough to raise a right to [such] relief above the speculative level."
`Twombly, 550 U.S. at 555. Without pleading any facts from which "egregious"
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`IN SUPPORT OF ITS MOTION TO DISMISS
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`misconduct could be plausibly inferred (Halo, 136 S. Ct. at 1935), Plaintiff's bare
`willfulness allegations fail to "state a claim to relief that is plausible on its face."
`Iqbal, 556 U.S. at 678 (quoting Twombly, 550 U.S. at 570).
`Ignoring these binding Supreme Court authorities, Plaintiff boldly asserts that
`"[t]o plead willful infringement, a party need only plead 'the barest factual assertion
`of knowledge of an issued patent.'" (D.I. 58, Opp. Br. at 1.) For this proposition
`Plaintiff cites DRG-International, Inc. v. Bachem Americas, Inc., Case No. CV-15-
`7276-MWF (SSx), 2016 WL 3460791, at *9 (C.D. Cal. Jan. 5, 2016). But in that
`case the court dismissed a willfulness claim "for being entirely silent on the requisite
`element of knowledge." Id. at *3, *10. And the court found a willfulness claim
`sufficient only where, unlike here, the complaint "plead[ed] 'actual notice' of the
`asserted patents and alleged infringement" from a pre-suit notice letter. Id. at *2,
`*11 (emphasis added). Anything else is dicta, as the DRG-International court did
`not have occasion to decide whether a bare assertion of knowledge of the asserted
`patent—absent allegations of "actual notice" of the alleged infringement—is alone
`sufficient to state a plausible willfulness claim. Id.; see also Sony Corp. v. LG
`Electronics U.S.A, Inc., 768 F. Supp. 2d 1058, 1063-64 (C.D. Cal. 2011) (finding
`willful infringement claim sufficient only where the complaint alleged that plaintiff
`provided defendant "actual notice" of its infringement claims) (emphasis added).
`But a subsequent case in this district did present precisely the issue at hand,
`and this Court held that a "'mere allegation, without more,' that Defendants knew
`of the patents-in-suit will not survive a Rule 12(b)(6) motion." Emazing Lights,
`LLC v. De Oca, No. 15-cv-1561, 2016 WL 7507765, at *2 (C.D. Cal. June 20, 2016)
`(quoting Irori Techs., Inc. v. Luminex Corp., No. 13-cv-2647, 2014 WL 769435, at
`*2 (S.D. Cal. Feb. 25, 2014)) (emphasis added). In Emazing Lights, the complaint
`even alleged that "Plaintiff has provided written notice to each of Defendants of
`their infringing actions and has demanded that Defendants cease and desist from
`their wrongful activities." Id. Yet that allegation still failed to satisfy Twombly and
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`Iqbal, as it "lack[ed] an adequate factual basis to make a plausible allegation" that
`the Defendants "acted in a manner that amounted to willful infringement." Id.
`Plaintiff contends Emazing Lights is distinguishable because the complaint there
`recited "bare conclusory statements." (D.I. 58, Opp. Br. at 7.) But that is precisely
`the point, and it is not a distinction—Plaintiff's amended pleading also recites "bare
`conclusory statements," which are similarly deficient. (See D.I. 54, OSI Br. at 5-9.)
`The weight of authority agrees with this Court's holding in Emazing Lights.
`See, e.g., CG Tech. Dev., LLC v. Big Fish Games, Inc., No. 16-cv-857, 2016 WL
`4521682, at *14 (D. Nev. Aug. 29, 2016) ("Under Halo, Plaintiffs fail to state a
`claim for willful infringement because they fail to allege any facts suggesting that
`Defendant's conduct is 'egregious . . . beyond typical infringement.' Plaintiffs simply
`state conclusory allegations that Defendant 'was made aware of the . . . patents [and]
`. . . [its] continued use of its infringing products constitutes willful and blatant
`infringement.' . . . As Justice Breyer stated, alleging that Defendant only knew about
`the patent is insufficient to constitute willful infringement. Furthermore, although
`Plaintiffs allege that Defendant acted with reckless disregard of a high likelihood
`that its actions constitute infringement, . . . they allege no facts to support their legal
`theory."); Finjan, Inc. v. Cisco Sys. Inc., No. 17-cv-72, 2017 WL 2462423, at *5
`(N.D. Cal. June 7, 2017) (holding that, "even if Finjan had adequately alleged that
`Cisco had pre-suit knowledge of the Asserted Patents, dismissal would also be
`warranted because the FAC does not contain sufficient factual allegations to make it
`plausible that Cisco engaged in 'egregious' conduct that would warrant enhanced
`damages under Halo."); Varian Med. Sys., Inc. v. Elekta AB, No. 15-cv-871, 2016
`WL 3748772, at *8 (D. Del. July 12, 2016) (dismissing willfulness claim even
`though complaint alleged that defendants "continued their actions 'despite an
`objectively high likelihood' that those actions constitute infringement" and "know[]
`or should have known about [the] risk of infringing the '919 patent," because such
`allegations did "not sufficiently articulate how . . . making, using or offering for sale
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`IN SUPPORT OF ITS MOTION TO DISMISS
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`of the [accused product] actually amounted to an egregious case of infringement");
`Cont'l Circuits LLC v. Intel Corp., No. 16-cv-2026, 2017 WL 2651709, at *8 (D.
`Ariz. June 19, 2017) (dismissing willfulness claims because "allegations of
`knowledge alone are insufficient," as mere "allegations of continued infringing
`activities . . . . do not create a reasonable inference that Defendants' actions go
`beyond those 'in a typical infringement case'"). Plaintiff vaguely asserts that such
`cases are somehow "inapposite and distinguishable," but it fails to explain how or
`why that is purportedly so. (See D.I. 58, Opp. Br. at 7-8.)
`Plaintiff also relies upon a handful of disparate cases from other districts,
`contending they support the view that merely pleading knowledge of the asserted
`patent is sufficient to state a plausible willfulness claim. For example, Plaintiff
`repeatedly cites Bobcar Media, LLC v. Aardvark Event Logistics, Inc. No. 16-885,
`2017 WL 74729, at *6 (S.D.N.Y. Jan. 4, 2017). (See D.I. 58, Opp. Br. at 8, 9, 10.)
`But as one court recently noted in distinguishing Bobcar and other similar cases,
`"[w]hile some courts have found allegations of continued infringing activities
`sufficient to plead willfulness, such situations involved . . . multiple instances of
`express notice of the alleged infringement." Cont'l Circuits, 2017 WL 2651709, at
`*8 (citing Bobcar Media, 2017 WL 74729, at *6 ("In support of its claim for willful
`infringement, Bobcar describes multiple letters sent to Aardvark describing the
`alleged infringement.")) (emphases added).1 In contrast, Plaintiff's First Amended
`Complaint does not allege any such actual pre-suit notice of alleged infringement.
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`See also, e.g., Oracle Corp. v. DrugLogic, Inc., 807 F. Supp. 2d 885,
`902 (N.D. Cal. 2011) (declining to dismiss willfulness claims only where complaint
`alleged defendants "had 'actual notice' of [the plaintiff's] infringement claims")
`(emphasis added); Emblaze Ltd. v. Apple Inc., No. C11-01079 SBA, 2012 WL
`5940782, at *8 (N.D. Cal. Nov. 27, 2012) (declining to dismiss where complaint
`"allege[d] that Apple received pre-suit notice that its HTTP Live Streaming
`Standard technology infringes the #473 patent") (emphasis added); Rambus v.
`Nvidia Corp., No. C 08-3343 SI, 2008 WL 4911165, at *2 n.3 (N.D. Cal. Nov. 13,
`2008) (declining to dismiss where, "before filing this patent infringement case,
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`As another example, Plaintiff also repeatedly cites Nanosys, Inc. v. QD
`Vision, Inc., No. 16-cv-01957, 2016 WL 49430006, at *7 (N.D. Cal. Sept. 16,
`2016). (See D.I. 58, Opp. Br. at 4, 6, 8.) But that case rejected DSS's position,
`dismissing the willful infringement allegations at issue because "plaintiffs need to
`allege more than 'mere knowledge' to sustain a willfulness claim," and "the Court
`finds it should consider the totality of the allegations to determine whether a claim
`of willfulness is plausible." Nanosys, 2016 WL 49430006, at *7 (emphasis added).
`The plaintiff thereafter corrected its deficiencies in an amended pleading only by
`providing new "allegations [that] constitute more than 'mere knowledge,'" including
`specific factual allegations "that the former founder of Nanosys who is also named
`as an inventor of the patents at issue used his specific knowledge regarding such
`patents to develop competing technology at another company." Nanosys, Inc. v. QD
`Vision, Inc., No. 16-cv-1957, 2017 WL 35511, at *1 (N.D. Cal. Jan. 4, 2017).
`In sum, Plaintiff contends it can adequately plead willful infringement by
`merely alleging "the barest factual assertion of knowledge of an issued patent."
`(D.I. 58, Opp. Br. at 1.) OSI respectfully submits that such a rule would not comport
`with the factual "plausibility" requirement of Twombly and Iqbal. As Justice Breyer
`explained in his Halo concurrence, "the Court's references to 'willful misconduct' do
`not mean that a court may award damages simply because the evidence shows that
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`Rambus demanded that NVIDIA license Rambus' patents") (emphasis added);
`Oakley, Inc. v. 5.11, Inc., No. 11CV2173 WQH CAB, 2012 WL 5363245, at *2
`(S.D. Cal. Oct. 29, 2012) (declining to dismiss where complaint "alleges that the
`Defendants' had written notice of the issued patents before the action was filed")
`(emphasis added); Bio-Rad Labs. Inc. v. Thermo Fisher Sci. Inc., No. CV 16-358-
`RGA, 2017 WL 438733, at *1 (D. Del. Feb. 1, 2017) (declining to dismiss where
`the "complaint alleges that Bio-Rad gave Thermo Fisher notice of its infringement
`of the patent-in-suit as early as March 2013") (emphasis added); Shire Viropharma
`Inc. v. CSL Behring LLC et al., No. 17-414, 2018 WL 326406, at *4 n.2 (D. Del.
`Jan. 8, 2018) (declining to dismiss where allegations in complaint "showed how the
`defendant was put on notice of its own willful infringement" over a "three-month
`period" of pre-suit discussions) (emphasis added).
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`OSRAM SYLVANIA INC.'S REPLY
`IN SUPPORT OF ITS MOTION TO DISMISS
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`the infringer knew about the patent and nothing more." Halo, 136 S. Ct. at 1936
`(Breyer, J., concurring) (emphasis in original). It necessarily follows that merely
`pleading knowledge of an asserted patent, accepted as true, does not provide
`"plausible grounds to infer" egregious misconduct—the core required element of a
`willful infringement claim. Twombly, 550 U.S. at 556.
`C. Leave to Amend a Second Time Is Unwarranted
`"It is appropriate to dismiss a claim without leave to amend when (1) the
`plaintiff has already had opportunities to amend [its] complaint and (2) further
`amendment would be futile." Hawkins v. Thomas, No. 09-cv-1862, 2012 WL
`1944828, at *1 (C.D. Cal. May 29, 2012); see also Zucco Partners, LLC v.
`Digimarc Corp., 552 F.3d 981, 1007 (9th Cir. 2009) (affirming dismissal without
`leave to amend where court advised plaintiff of pleading deficiencies but plaintiff
`failed to correct them). Here, Plaintiff has already had an opportunity to amend its
`willfulness allegations, yet it was unable to plead any new facts that could render its
`willfulness claim plausible. Plaintiff's silence—coupled with its prior admission that
`it cannot plead willfulness unless it happens to learn facts in discovery that support
`such a claim—indicates that granting leave to amend a second time would be futile.
`As OSI previously explained, "[i]f Plaintiff should later discover facts that it
`believes are sufficient to state a plausible willful infringement claim, then Plaintiff
`should be required to seek the Court's leave to amend at that time." (D.I. 54, Br.
`at 9.) Plaintiff strains logic by suggesting that this means "even OSI believes that
`further amendments would not be futile." (D.I. 58, Opp. Br. at 13.) Not so. This is
`about who should bear the burden going forward. Plaintiff does not even attempt to
`identify any new facts it would plead if granted leave to amend a second time.
`Plaintiff should not be given a blank check to file serial deficient pleadings, wasting
`time and resources by forcing OSI to repeatedly file motions to dismiss reworded
`boilerplate allegations. At this poi