Case 8:19-cv-02192-GW-AS Document 40 Filed 04/06/20 Page 1 of 19 Page ID #:365
`
`
`1
`2
`3
`4
`5
`6
`7
`8
`9
`10
`11
`12
`13
`14
`15
`16
`17
`18
`19
`20
`21
`22
`23
`24
`25
`26
`27
`28
`
`
`
`
`
`John P. Schnurer, Bar No. 185725
`JSchnurer@perkinscoie.com
`Yun (Louise) Lu, Bar No. 253114
`LLu@perkinscoie.com
`Kyle R. Canavera, Bar No. 314664
`KCanavera@perkinscoie.com
`PERKINS COIE LLP
`11452 El Camino Real, Suite 300
`San Diego, CA 92130-2080
`Telephone: 858.720.5700
`Facsimile: 858.720.5799
`Attorneys for Defendants
`TCT Mobile (US) Inc., Huizhou TCL Mobile
`Communication Co., Ltd., and Shenzhen TCL Creative
`Cloud Technology Co., Ltd.
`
`IN THE UNITED STATES DISTRICT COURT
`FOR THE CENTRAL DISTRICT OF CALIFORNIA
`
`
`ANCORA TECHNOLOGIES, INC.,
`Plaintiff,
`
`vs.
`TCT MOBILE (US) INC., HUIZHOU
`TCL MOBILE COMMUNICATION
`CO., LTD., and SHENZHEN TCL
`CREATIVE CLOUD TECHNOLOGY
`CO., LTD.,
`
`Defendants.
`
`Case No. 8:19-cv-02192-GW-ASx
`(LEAD CASE)
`Case No. 2:20-cv-01252-GW-ASx
`(CONSOLIDATED CASE)
`DEFENDANTS’ REPLY
`MEMORANDUM OF POINTS
`AND AUTHORITIES IN
`SUPPORT OF MOTION TO
`DISMISS THE AMENDED
`COMPLAINT FOR FAILURE
`TO STATE A CLAIM
`Hearing Date: April 20, 2020
`Time: 8:30 AM
`Before: Hon. George H. Wu
`United States Courthouse
`Courtroom 9D, 9th Floor
`
`
`REPLY ISO MTD
`AMENDED COMPLAINT
`
`
`
`
`Case No. 8:19-cv-0219-GW-ASx
`
`

`

`Case 8:19-cv-02192-GW-AS Document 40 Filed 04/06/20 Page 2 of 19 Page ID #:366
`
`
`TABLE OF CONTENTS
`
`Page
`
`1
`2
`3
`4
`5
`6
`7
`8
`9
`10
`11
`12
`13
`14
`15
`16
`17
`18
`19
`20
`21
`22
`23
`24
`25
`26
`27
`28
`
`
`
`
`
`I.
`II.
`
`2.
`
`3.
`
`b.
`
`ii.
`
`INTRODUCTION .......................................................................................................... 1
`ARGUMENT ................................................................................................................... 4
`A. Ancora Fails To Rebut TCL’s Arguments ............................................. 4
`Ancora Fails To Identify The Devices Or Systems That
`1.
`Allegedly Practice The Patented Method .................................... 4
`a.
`Ancora’s Allegations Are Contradictory ............................... 4
`b.
`Ancora Cannot Fix Its Ambiguities Through Briefing ...... 5
`The Amended Complaint Does Not Identify the Required
`Elements in the Method Steps as the Opposition Claims. ........... 6
`Ancora Fails To Allege A Proper Theory Of Infringement
`Legally Sufficient To Plausibly State A Claim Of Relief ........... 8
`a.
`The Method Steps Allegedly Performed by Software on
`TCL Smartphones Could Only Be “Performed” by the
`End-Users ...................................................................................... 9
`Ancora Mistakes the Law and Does Not Allege Direction
`or Control of End-Users .......................................................... 10
`i.
`Ancora Must Allege Direction or Control To Plead
`Direct Infringement. ..................................................... 10
`Ancora Does Not Allege the Direction or Control
`Necessary to Attribute the End-Users’ Performance
`to TCL. ............................................................................. 12
`iii. Ancora’s Opposition Is Not Consistent with the
`Legal Theory Presented in the Amended
`Complaint. ....................................................................... 12
`III. CONCLUSION .............................................................................................................. 14
`
`REPLY ISO MTD
`AMENDED COMPLAINT
`
`
`-i-
`
`Case No. 8:19-cv-0219-GW-ASx
`
`

`

`Case 8:19-cv-02192-GW-AS Document 40 Filed 04/06/20 Page 3 of 19 Page ID #:367
`
`
`1
`2
`3
`4
`5
`6
`7
`8
`9
`10
`11
`12
`13
`14
`15
`16
`17
`18
`19
`20
`21
`22
`23
`24
`25
`26
`27
`28
`
`TABLE OF AUTHORITIES
`
`Page
`
`CASES
`
`Akamai Techs., Inc. v. Limelight Networks, Inc.,
`797 F.3d 1020 (Fed. Cir. 2015) .................................................................................................10
`
`Ancora Techs. Inc. v. Lenovo Grp. Ltd.,
`No. 1:19-cv-01712 (D. Del. Nov. 6, 2019), ECF No. 9 ..............................................................2
`
`Ancora Techs., Inc. v. Sony Corp.,
`No. 1:19-cv-01703 (D. Del. Sept. 11, 2019), ECF No. 1 ............................................................2
`
`Bell Atl. Corp. v. Twombly,
`550 U.S. 544 (2007) ....................................................................................................................1
`
`Broam v. Bogan,
`320 F.3d 1023 (9th Cir. 2003) .....................................................................................................5
`
`Car Carriers, Inc. v. Ford Motor Co.,
`745 F.2d 1101 (7th Cir. 1984) .....................................................................................................5
`
`Deckers Corp. v. United States,
`752 F.3d 949 (Fed. Cir. 2014) ...................................................................................................11
`
`Ericsson, Inc. v. D-Link Sys.,
`773 F.3d 1201 (Fed. Cir. 2014) ...........................................................................................10, 11
`
`IBM v. Booking Holdings,
`775 F. App’x .......................................................................................................................11, 13
`
`InCom Corp. v. Walt Disney Co.,
`No. 15-cv-3011, 2016 WL 4942032 (C.D. Cal. Apr. 4, 2016) ...................................................7
`
`Int’l Bus. Machs. v. Booking Holdings Inc.,
`775 F. App’x 674 (Fed. Cir. 2019) ...........................................................................................11
`
`Joy Techs., Inc. v. Flakt, Inc.,
`6 F.3d 770 (Fed. Cir. 1993) .......................................................................................................10
`
`Koninklijke Philips N.V. v. Zoll Med. Corp.,
`656 F. App’x 504 (Fed. Cir. 2016) ...........................................................................................11
`
`Lyda v. CBS Corp.,
`838 F.3d 1331 (Fed. Cir. 2016) .............................................................................................3, 13
`
`Ormco Corp. v. Align Tech., Inc.,
`463 F.3d 1299 (Fed. Cir. 2006) ...................................................................................................9
`-ii-
`REPLY ISO MTD
`Case No. 8:19-cv-0219-GW-ASx
`AMENDED COMPLAINT
`
`
`
`
`
`
`

`

`Case 8:19-cv-02192-GW-AS Document 40 Filed 04/06/20 Page 4 of 19 Page ID #:368
`
`
`1
`2
`3
`4
`5
`6
`7
`8
`9
`10
`11
`12
`13
`14
`15
`16
`17
`18
`19
`20
`21
`22
`23
`24
`25
`26
`27
`28
`
`
`
`
`
`Preservation Technologies LLC v. MindGeek USA Inc.,
`No. 17-cv-8906, 2019 WL 3213585 (C.D. Cal. Apr. 2, 2019) ...............................................7, 8
`
`Ricoh Co., Ltd. v. Quanta Computer Inc.,
`550 F.3d 1325 (Fed. Cir. 2008) ...........................................................................................10, 11
`
`SiRF Tech., Inc. v. Int’l Trade Comm’n,
`601 F.3d 1319 (Fed. Cir. 2010). (See Opposition .) ........................................................3, 11, 13
`
`OTHER AUTHORITIES
`
`Fed. R. Civ. Proc. 12(b)(6) ..........................................................................................................5, 13
`
`Local Rule CV-5(b)(1) ......................................................................................................................1
`
`REPLY ISO MTD
`AMENDED COMPLAINT
`
`
`-iii-
`
`Case No. 8:19-cv-0219-GW-ASx
`
`

`

`Case 8:19-cv-02192-GW-AS Document 40 Filed 04/06/20 Page 5 of 19 Page ID #:369
`
`
`1
`2
`3
`4
`5
`6
`7
`8
`9
`10
`11
`12
`13
`14
`15
`16
`17
`18
`19
`20
`21
`22
`23
`24
`25
`26
`27
`28
`
`
`
`
`
`I.
`
`INTRODUCTION
`In its Opposition (Dkt. No. 39) to TCL’s Motion (Dkt. No. 37-1), Ancora
`attempts to backfill the numerous and significant holes in the Amended Complaint
`(Dkt. No. 24). But those holes could not be filled, and the Opposition essentially
`abandons several legal theories pleaded in the Amended Complaint in an attempt to
`save other aspects of its case. Ancora no longer claims infringement by TCL for acts
`of making, selling, offering to sell, or importing. Ancora no longer attempts to
`maintain a joint infringement claim. Even if this approach of excise-and-explain
`were a proper way to supplement the pleadings, which it is not, the Opposition still
`leaves significant questions unanswered as to the nature of its claims, as discussed
`below. Even with the supplemental explanation of the Opposition, the Amended
`Complaint fails to provide TCL with “fair notice of what the claim is and the grounds
`upon which it rests.” Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555 (2007).
`In the Opposition, Ancora argues that TCL’s earlier Declaratory Judgement
`Complaint (Dkt. No. 1) somehow shows that TCL really does understand the
`infringement allegations in the Amended Complaint. The opposite is actually true.
`TCL brought the declaratory judgment action on behalf of the manufacturer and
`importer of the TCL smartphones. (Declaratory Judgment Complaint at ¶¶ 3–4.)
`TCL disclaimed infringement by a list of TCL smartphones. (Id. at 13.)
`But it turns out that TCL’s making and importing of the smartphones—or even
`apparently its selling or offering to sell them—are not the allegedly infringing
`activities at all. (See generally Opposition (containing no allegation of infringement
`based on making, selling, offering to sell, or importing).) The Opposition seems to
`allege that the infringement is constituted by TCL’s “using” of the claimed method.
`(See, e.g., id. at p. 5; see also id. at p. 20, n. 4 (explicitly alleging a “use” type of
`direct infringement).) And the infringing instrumentalities are not the smartphones,
`but the smartphones in combination with servers. (See, e.g., id. at p. 5.) Thus, the
`Declaratory Judgment Complaint actually demonstrates that TCL has been, and
`-1-
`
`REPLY ISO MTD
`AMENDED COMPLAINT
`
`
`Case No. 8:19-cv-0219-GW-ASx
`
`

`

`
`
`Case 8:19-cv-02192-GW-AS Document 40 Filed 04/06/20 Page 6 of 19 Page ID #:370
`
`
`remains, thoroughly confused as to which of its instrumentalities and/or actions are
`supposedly infringing the asserted patent.
`But then again, it is not just TCL who cannot get the allegations straight. The
`Amended Complaint does contain an allegation that TCL infringes the asserted patent
`by “selling, and/or offering for sale . . . and/or importing . . . products capable of
`performing at least Claim 1 of the ’941 patent . . . and/or . . . causing products to
`perform each step of at least Claim 1 of the ’941 patent.” (Amended Complaint at
`¶ 26; see also id. at ¶ 13.) The Opposition either cannot be reconciled with these
`allegations in the Amended Complaint, or Ancora has abandoned all but the last
`clause of the above allegation: “causing products to perform each step of at least
`Claim 1 of the ’941 patent.”
`The Opposition criticizes the Motion as being “a nearly duplicative copy” of a
`motion filed by Sony in a case in Delaware. (Opposition at p. 1 n. 1.) But what
`Ancora does not note is that the Amended Complaint is itself a nearly duplicative
`copy of the complaint against Sony. (Compare Amended Complaint with Complaint
`for Patent Infringement, Ancora Techs., Inc. v. Sony Corp., No. 1:19-cv-01703
`(D. Del. Sept. 11, 2019), ECF No. 1.) The Motion and Amended Complaint are
`likewise similar to corresponding papers in another case. (See Complaint for Patent
`Infringement, Ancora Techs. Inc. v. Lenovo Grp. Ltd., No. 1:19-cv-01712 (D. Del.
`Sept. 12, 2019), ECF No. 1; Motion to Dismiss for Failure to State a Claim, Ancora
`Techs. Inc. v. Lenovo Grp. Ltd., No. 1:19-cv-01712 (D. Del. Nov. 6, 2019), ECF
`No. 9.) Ancora does not explain why, when it files the same factually and legally
`opaque complaint in three cases, it is inappropriate or even unexpected to receive the
`same challenge to the sufficiency of those pleadings in each case.
`The Opposition repeatedly asserts that TCL does not dispute Ancora’s factual
`allegations. (See Opposition at pp. 10, 18, 19, 21.) This is incorrect and irrelevant,
`because the Court must assume the truth of Ancora’s factual allegations on a motion
`
`1
`2
`3
`4
`5
`6
`7
`8
`9
`10
`11
`12
`13
`14
`15
`16
`17
`18
`19
`20
`21
`22
`23
`24
`25
`26
`27
`28
`
`
`
`REPLY ISO MTD
`AMENDED COMPLAINT
`
`
`-2-
`
`Case No. 8:19-cv-0219-GW-ASx
`
`

`

`Case 8:19-cv-02192-GW-AS Document 40 Filed 04/06/20 Page 7 of 19 Page ID #:371
`
`
`1
`2
`3
`4
`5
`6
`7
`8
`9
`10
`11
`12
`13
`14
`15
`16
`17
`18
`19
`20
`21
`22
`23
`24
`25
`26
`27
`28
`
`
`
`
`
`to dismiss. Despite this standard, Ancora’s allegations do not provide fair notice or
`state a plausible claim for relief.
`The Opposition ultimately ends up highlighting in greater relief the
`deficiencies of the allegations in the Amended Complaint. The Amended Complaint
`uses language that only makes sense for a “divided” or “joint” direct infringement
`claim. (See Amended Complaint at ¶ 44 (“conditions . . . receipt of the benefit”),
`¶ 49 (“controlled the timing of the performance”), ¶ 50 (“had the right and ability to
`stop or limit infringement”).) With such a claim, Ancora must plead that TCL
`directed or controlled another entity to perform at least some of the steps of the
`claimed method. See Lyda v. CBS Corp., 838 F.3d 1331, 1340 (Fed. Cir. 2016). The
`Motion argues that the Amended Complaint fails to sufficiently plead the direction
`or control required by joint infringement. (See Motion at pp. 12–14.)
`Ancora’s response is two-fold: TCL actually does not direct or control any
`other entity, and the pleading is sufficient due to factual similarities to SiRF Tech.,
`Inc. v. Int’l Trade Comm’n, 601 F.3d 1319, 1331 (Fed. Cir. 2010). (See Opposition
`at 20–23.) The former overtly abandons a joint infringement theory. And the latter
`does so as well, because the court in SiRF explicitly said that it was not considering
`a joint infringement legal theory. SiRF, 601 F.3d at 1329. Thus Ancora claims its
`allegations are perfectly clear, but when challenged as to the basis of its apparent
`joint infringement claim, Ancora provides fact and law that are demonstrably
`irrelevant. It seems that Ancora leaves yet another substantial part of its Amended
`Complaint abandoned at the roadside.
`For the parts of the Amended Complaint that Ancora does not wholly discard
`in the Opposition, it attempts to bolster the deficient pleadings through briefing,
`which should not be allowed. Ancora now: (i) includes explanation correlating the
`Amended Complaint with claim elements (see Opposition at pp. 14–20); (ii) adds a
`new claim chart which purportedly (and in novel ways) “correlates the claim
`limitations with the infringement allegations in the Amended Complaint” (see id. at
`-3-
`
`Case No. 8:19-cv-0219-GW-ASx
`
`REPLY ISO MTD
`AMENDED COMPLAINT
`
`
`

`

`Case 8:19-cv-02192-GW-AS Document 40 Filed 04/06/20 Page 8 of 19 Page ID #:372
`
`
`1
`2
`3
`4
`5
`6
`7
`8
`9
`10
`11
`12
`13
`14
`15
`16
`17
`18
`19
`20
`21
`22
`23
`24
`25
`26
`27
`28
`
`
`
`
`
`pp. 6–9); (iii) and attempts to clarify which devices or systems are allegedly carrying
`out the steps (see id. at pp. 11–13). As shown below, the Opposition fails to fix the
`deficient pleadings of the Amended Complaint.
`II. ARGUMENT
`A. Ancora Fails to Rebut TCL’s Arguments.
`Ancora Fails to Identify the Devices or Systems that
`1.
`Allegedly Practice the Patented Method.
`Ancora fails to clearly identify the devices or systems that would practice the
`claimed method. The Amended Complaint ambiguously suggests at least two
`conflicting possibilities: either all steps are performed by using TCL’s smartphones,
`or the steps are split between smartphones and servers. While Ancora identifies (i)
`smartphones, (ii) servers, and/or (iii) software as accused products, it does not
`plausibly explain which steps are performed by which devices.
`Ancora’s Allegations Are Contradictory.
`a.
`Ancora argues that the Amended Complaint is not contradictory about whether
`a smartphone or smartphone/server combination is used in practicing the asserted
`method. (Opposition at pp. 11–13.) This is wrong based on its allegations.
`First, Ancora does not dispute that the Amended Complaint provides two
`different meanings for the “Accused Products,” namely: (1) smartphones (Amended
`Complaint at ¶ 27), and (2) smartphones in combination with “servers/software” and
`other unnamed devices (id. at ¶ 31). Instead, the Opposition provides a new
`definition for the accused products, that it must be the combination of “both TCL
`smartphones and ‘Over-the-Air’ (‘OTA’) update servers.” (Opposition at p. 5.)
`But the Amended Complaint is not consistent with itself or this new definition.
`The Amended Complaint uses “Accused Products” in ways that could not include a
`server. (See, e.g., Amended Complaint at ¶ 40 (“Once the verification structure has
`been set up in the BIOS, the Accused Products are configured by TCL to reboot into
`recovery mode . . . [.]” (emphasis added)), ¶ 41 (“If the OTA update is verified, the
`-4-
`
`Case No. 8:19-cv-0219-GW-ASx
`
`REPLY ISO MTD
`AMENDED COMPLAINT
`
`
`

`

`
`
`Case 8:19-cv-02192-GW-AS Document 40 Filed 04/06/20 Page 9 of 19 Page ID #:373
`
`
`Accused Products are configured to load and execute the update.” (emphasis
`added)).) And the Amended Complaint alleges that “TCL pre-configures/programs
`each Accused Product to perform the above described steps upon receiving an OTA
`update from TCL” (id. at ¶ 45), as if each device is individually capable of
`performing the steps of claim 1. And the Amended Complaint alleges that “TCL
`configured each Accused Product such that, upon receiving an OTA update, it would
`perform each remaining step of the claimed method” (Opposition at ¶ 48), as if some
`apparatus other than TCL’s smartphones or servers is performing some of the steps
`of Claim 1.
`Ancora pretends in the Opposition as if there is some simple, straightforward
`way to interpret the allegations in the Amended Complaint, but this is not true.
`Ancora Cannot Fix Its Ambiguities Through Briefing
`b.
`In view of the Opposition, it seems that Ancora believes its Complaint should
`be interpreted in a different way than presented. For example, Ancora suggest that
`TCL should focus on the portions of the Amended Complaint, like paragraph 31, that
`suggest that TCL’s smartphones and servers are together the accused apparatuses,
`and ignore portions of the Complaint, like paragraphs 40, 41, 45, and 48 that
`contradict that interpretation. Regardless of the interpretation that the Opposition
`advocates, the Amended Complaint remains deficient. “In determining the propriety
`of a Rule 12(b)(6) dismissal, a court may not look beyond the complaint to a
`plaintiff’s moving papers, such as a memorandum in opposition to a defendant’s
`motion to dismiss.” Broam v. Bogan, 320 F.3d 1023, 1026 n. 2 (9th Cir. 2003)
`(quoting Schneider v. Cal. Dep’t of Corr., 151 F.3d 1194, 1197 n. 1 (9th Cir. 1998))
`(quotation marks omitted); see also Car Carriers, Inc. v. Ford Motor Co., 745 F.2d
`1101, 1107 (7th Cir. 1984) (“[I]t is axiomatic that the complaint may not be amended
`by the briefs in opposition to a motion to dismiss.”).
`
`1
`2
`3
`4
`5
`6
`7
`8
`9
`10
`11
`12
`13
`14
`15
`16
`17
`18
`19
`20
`21
`22
`23
`24
`25
`26
`27
`28
`
`
`
`REPLY ISO MTD
`AMENDED COMPLAINT
`
`
`-5-
`
`Case No. 8:19-cv-0219-GW-ASx
`
`

`

`Case 8:19-cv-02192-GW-AS Document 40 Filed 04/06/20 Page 10 of 19 Page ID #:374
`
`
`1
`2
`3
`4
`5
`6
`7
`8
`9
`10
`11
`12
`13
`14
`15
`16
`17
`18
`19
`20
`21
`22
`23
`24
`25
`26
`27
`28
`
`
`
`
`
`2.
`
`The Amended Complaint Does Not Identify the Required
`Elements in the Method Steps as the Opposition Claims.
`The Opposition attempts to connect the dots between the vague and
`contradictory language of the Amended Complaint and the steps of Claim 1. But the
`Amended Complaint does not, as the Opposition alleges, provide sufficient clarity as
`to Ancora’s legal claims and factual basis thereof.
`For the “using an agent . . .” step of claim 1, the Opposition claims that
`“paragraphs 32 and 33” of the Amended Complaint identify “the program running
`on defendants’ OTA servers” as the claimed “agent.” (See Opposition at pp. 15–16.)
`But the Amended Complaint never even uses the word “agent” after using it in the
`recitation of the claim language. The Opposition quotes paragraphs 37 and 38
`(mislabeled as paragraphs 32 and 33), but neither of those paragraphs states what the
`“agent” is. The term “agent” appears nowhere in the patent other than the claims.
`(See ’941 Patent, 1:1–8:64.) TCL cannot tell from the Amended Complaint or the
`patent itself what of its instrumentalities or activities is allegedly infringing claim 1.
`For the limitation of “set up a verification structure in the erasable, non-volatile
`memory of the BIOS,” the Opposition points to paragraph 37 of the Amended
`Complaint. (See Opposition at p. 18.) But that paragraph simply recites the claim
`language, saying that a program on a TCL server “set up a verification structure in
`the erasable, non-volatile memory of the BIOS of the Accused Products by
`transmitting to the device an OTA update.” (Amended Complaint at ¶ 37.) Neither
`this paragraph nor any other in the Amended Complaint actually says what the
`verification structure is, or what part of the “Accused Products” is the “BIOS.”
`Elsewhere saying that the “Accused Products” must be smartphones and servers (see
`Opposition at p. 5), the Opposition here reinterprets the use of “Accused Products”
`in paragraph 37 of the Amended Complaint to only be smartphones (see Opposition
`at p. 18). In any case, neither the Amended Complaint nor the Opposition plead any
`facts as to what part of the TCL smartphones are an “erasable, non-volatile memory
`-6-
`
`REPLY ISO MTD
`AMENDED COMPLAINT
`
`
`Case No. 8:19-cv-0219-GW-ASx
`
`

`

`Case 8:19-cv-02192-GW-AS Document 40 Filed 04/06/20 Page 11 of 19 Page ID #:375
`
`
`1
`2
`3
`4
`5
`6
`7
`8
`9
`10
`11
`12
`13
`14
`15
`16
`17
`18
`19
`20
`21
`22
`23
`24
`25
`26
`27
`28
`
`
`
`
`
`of the BIOS.” TCL cannot tell from the Amended Complaint what aspect of its
`smartphones allegedly makes them infringing.
`For the limitation of “selecting a program . . . ,” the Opposition points to
`paragraph 40 of the Amended Complaint as explaining that the claimed “program”
`is the “OTA update.” (See Opposition at p. 17.) But paragraph 40 does not say that:
`40. Once the verification structure has been set up in the BIOS, the
`Accused Products are configured by TCL to reboot into recovery mode,
`load the OTA update into its volatile memory (e.g., RAM), and use the
`at least one license record from the BIOS to verify the OTA update.
`(Amended Complaint at ¶ 40.) This does not say that the OTA update is the claimed
`“program,” or that it is even a program at all. And neither paragraph 40 nor any other
`in the Amended Complaint contains factual allegations as to what aspect of TCL’s
`products constitutes “selecting a program.” That is the very first step in the method
`of claim 1, yet the Amended Complaint fails to plead any facts that it is performed
`by TCL. TCL cannot tell from the Amended Complaint which of its acts are
`allegedly infringing the asserted patent.
`The deficiencies identified above are not rectified by Ancora’s citation to
`Preservation Technologies LLC v. MindGeek USA Inc., No. 17-cv-8906, 2019 WL
`3213585 (C.D. Cal. Apr. 2, 2019), and InCom Corp. v. Walt Disney Co., No. 15-cv-
`3011, 2016 WL 4942032 (C.D. Cal. Apr. 4, 2016). In Preservation Technologies,
`the Court explained that the “complaint must place the ‘potential infringer . . . on
`notice of what activity . . . is being accused of infringement.’” Pres. Techs., 2019
`WL 3213585, at *2 (quoting Nalco Co. v. Chem-Mod, LLC, 883 F.3d 1337, 1350
`(Fed. Cir. 2018)). The Court in InCom found that standard met where the complaint
`identified a single device as part of a single system that allegedly infringed the
`patents. It is this notice that the Amended Complaint lacks; it does not explain in any
`decipherable manner what activities of TCL allegedly constitute infringement of
`claim 1. Further, all claims of the ’941 patent are method claims, which cannot be
`-7-
`
`Case No. 8:19-cv-0219-GW-ASx
`
`REPLY ISO MTD
`AMENDED COMPLAINT
`
`
`

`

`
`
`Case 8:19-cv-02192-GW-AS Document 40 Filed 04/06/20 Page 12 of 19 Page ID #:376
`
`
`1
`2
`3
`4
`5
`6
`7
`8
`9
`10
`11
`12
`13
`14
`15
`16
`17
`18
`19
`20
`21
`22
`23
`24
`25
`26
`27
`28
`
`infringed by a device at all; the device must perform the method. Identifying an
`open-ended set of “Accused Products” is not sufficient to allege infringement of the
`claims of the ’941 patent.
`The facts in Preservation Technologies could also scarcely be more different
`from the present case. The Court dispensed with a detailed explanation of why the
`operative complaint in that case pleaded sufficient factual assertions. Pres. Techs.,
`2019 WL 3213585, at *3 (“The Court need not march through each patent to
`demonstrate the existence of sufficient factual assertions.”). But a review of that
`pleading easily demonstrates why; the pleading was a 201-page dissertation
`explaining the technology in detail and methodically mapping each claim element to
`the accused products of the defendants. (See Third Amended Complaint for Patent
`Infringement, Pres. Techs. LLC v. MindGeek USA Inc., No. 17-cv-8906 (C.D. Cal.
`Nov. 26, 2018), ECF No. 82-1 (redacted version of sealed Third Amended
`Complaint, filed as ECF No. 87).) After 116 pages of background on the patent, the
`allegedly infringing activities, and other topics, the pleading walked element-by-
`element through each claim, providing a prose explanation for each claim element as
`well as a sample image of the element-specific functionality in the defendants’
`webpages. (See, e.g., id. at 117–123.) The Amended Complaint has no such clarity,
`and no such methodical explanation. The Amended Complaint has missing
`explanation and contradictory allegations. Preservation Technologies highlights the
`level of detail that Ancora could have, but did not, provide in the Amended
`Complaint.
`
`3.
`
`Ancora Fails to Allege a Proper Theory of Infringement
`Legally Sufficient to Plausibly State a Claim of Relief.
`Ancora now alleges direct infringement by only TCL’s software, not end-
`users. (Opposition at p. 20.) But as shown below, Ancora:
`(i)
`incorrectly alleges that software alone can infringe the method claim,
`
`and
`
`
`
`REPLY ISO MTD
`AMENDED COMPLAINT
`
`
`-8-
`
`Case No. 8:19-cv-0219-GW-ASx
`
`

`

`Case 8:19-cv-02192-GW-AS Document 40 Filed 04/06/20 Page 13 of 19 Page ID #:377
`
`
`1
`2
`3
`4
`5
`6
`7
`8
`9
`10
`11
`12
`13
`14
`15
`16
`17
`18
`19
`20
`21
`22
`23
`24
`25
`26
`27
`28
`
`
`
`
`
`does not allege that TCL directs or controls end-users who could
`(ii)
`perform the steps as required for direct infringement. Thus, Ancora has not stated a
`theory of direct infringement legally sufficient to state a claim for relief.
`First, asserted claim 1 is a method claim. It is black-letter law that equipment
`containing software—alone—cannot perform a method claim. Ormco Corp. v. Align
`Tech., Inc., 463 F.3d 1299, 1311 (Fed. Cir. 2006) (“Method claims are only infringed
`when the claimed process is performed, not by the sale of an apparatus that is capable
`of infringing use.”). Ancora, however, alleges that “TCL’s software, which is
`actively deployed on TCL servers and smartphones, performs the method steps—not
`‘end users.’” (Opposition at p. 20.) Whether or not TCL deploys such software, and
`regardless of whether the alleged “OTA update” software is automatically or
`manually sent to the smartphone, the method would only be practiced when an end-
`user operates and takes steps to update a TCL smartphone. Without the end-user, the
`method never takes place, and there is no infringement. In alleging that TCL’s
`software performs the steps of claim 1, without alleging an end-user is involved in
`those steps, Ancora mutates its method claim into a “computer-readable medium
`storing instructions” claim, which claim 1 clearly is not.
`Second, as explained below, Ancora has not alleged TCL itself performs the
`steps of the asserted method that may occur on the smartphone. Thus, for direct
`infringement Ancora must then allege direction or control to attribute those steps to
`TCL. (Motion at pp. 12–13.) According to Ancora, because it has alleged that TCL’s
`software performs those steps, there is no need to allege attribution via direction or
`control. (Opposition at pp. 21–22.) Ancora is wrong on the law.
`The Method Steps Allegedly Performed by Software
`a.
`on TCL Smartphones Could Only Be “Performed” by
`the End-Users.
`Ancora argues that the method steps allegedly executed on the smartphone are
`executed by software. (Opposition at 21.) The Federal Circuit has addressed the
`-9-
`
`Case No. 8:19-cv-0219-GW-ASx
`
`REPLY ISO MTD
`AMENDED COMPLAINT
`
`
`

`

`
`
`Case 8:19-cv-02192-GW-AS Document 40 Filed 04/06/20 Page 14 of 19 Page ID #:378
`
`
`question of who “performs” the steps executed by software on a device; it is the end
`user who owns the device and not the manufacturer.
`This is because software must be run for the steps to occur—the mere act of
`providing software does not actually implement the steps. See Ricoh Co., Ltd. v.
`Quanta Computer Inc., 550 F.3d 1325, 1335 (Fed. Cir. 2008); Ericsson, Inc. v. D-
`Link Sys., 773 F.3d 1201, 1222 (Fed. Cir. 2014); Joy Techs., Inc. v. Flakt, Inc., 6 F.3d
`770, 773 (Fed. Cir. 1993) (“The law is unequivocal that the sale of equipment to
`perform a process is not a sale of the process within the meaning of section 271(a).”).
`Thus, because TCL does not perform the alleged method steps executed on the
`smartphones, Ancora must plead the requisite direction or control to attribute that
`performance to TCL for a viable theory of direct infringement. It admits it has not
`done so.
`
`b.
`
`Ancora Mistakes the Law and Does Not Allege
`Direction or Control of End-Users.
`As explained below, Ancora (i) misinterprets Federal Circuit precedent, (ii)
`does not allege direction or control, and (iii) provides explanation inconsistent with
`the allegations in the Amended Complaint.
`i. Ancora Must Allege Direction or Control to Plead
`Direct Infringement.
`“Direct infringement under § 271(a) occurs where all steps of a claimed
`method are performed by or attributable to a single entity.” Akamai Techs., Inc. v.
`Limelight Networks, Inc., 797 F.3d 1020, 1022 (Fed. Cir. 2015) (emphasis added). A
`first party’s (e.g., an end-user’s) performance of a method step might be attributed
`to a second party (e.g., a manufacturer) if the second party directs or controls the first
`party’s performance of the step. Id.
`Ancora asserts that it need not allege direction or control because it is TCL
`(alone) that performs the steps executed by software running on end-user devices.
`
`1
`2
`3
`4
`5
`6
`7
`8
`9
`10
`11
`12
`13
`14
`15
`16
`17
`18
`19
`20
`21
`22
`23
`24
`25
`26
`27
`28
`
`
`
`REPLY ISO MTD
`AMENDED COMPLAINT
`
`
`-10-
`
`Case No. 8:19-cv-0219-GW-ASx
`
`

`

`Case 8:19-cv-02192-GW-AS Document 40 Filed 04/06/20 Page 15 of 19 Page ID #:379
`
`
`1
`2
`3
`4
`5
`6
`7
`8
`9
`10
`11
`12
`13
`14
`15
`16
`17
`18
`19
`20
`21
`22
`23
`24
`25
`26
`27
`28
`
`
`
`
`
`(See Opposition at 21–22.) Ancora incorrectly relies on SiRF Tech., Inc. v. Int’l
`Trade Comm’n, 601 F.3d 1319 (Fed. Cir. 2010).
`The Federal Circuit has repeatedly distinguished SiRF for the very same reason
`Ancora seeks to rely on it, i.e., a product that automatically performs a method does
`not fall within the scope of the decision in SiRF. See Ericsson, 773 F.3d at 1221–22;
`Int’l Bus. Machs. v. Booking Holdings Inc., 775 F. App’x 674, 678 (Fed. Cir. 2019);
`Koninklijke Philips N.V. v. Zoll Med. Corp., 656 F. App’x 504, 521 (Fed. Cir. 2016).
`And even if Ancora’s reading of SiRF were correct, it would place SiRF in direct
`conflict with Ricoh. As a result, the Court would need to follow Ricoh because older
`Federal Circuit decisions control when in conflict with newer decisions. See Deckers
`Corp. v. United States, 752 F.3d 949, 965 (Fed. Cir. 2014).
`The court recently explained this distinction between SiRF and cases like the
`present in IBM v. Booking Holdings, 775 F. App’x at 677–678. Distinguishing SiRF,
`the court stated the following:
`In contrast, neither party disputes that in this case, the storing step occurs
`at the user’s reception system. Therefore, this case is distinguishable
`from SiRF because some third party