Freyssinet Inc v. Dywidag-Systems International USA Inc

Motion to Dismiss for Failure to State a Claim

N.D. Tex.February 20, 2017

WAS:298449.5 IN THE UNITED STATES DISTRICT COURT FOR THE NORTHERN DISTRICT OF TEXAS DALLAS DIVISION Freyssinet Inc., § Plaintiff, § § Civil Action No. 3:16-cv-2707-N v. § § JURY TRIAL DEMANDED DYWIDAG-Systems International USA Inc., § Defendant. § DEFENDANT DYWIDAG-SYSTEMS INTERNATIONAL USA INC.’S MOTION TO DISMISS FOR FAILURE TO STATE A CLAIM PURSUANT TO FED. R. CIV. P. 12(b)(6) AND BRIEF IN SUPPORT ANDREWS KURTH KENYON LLP Tonya M. Gray Texas Bar No. 24012726 1717 Main Street, Ste. 3700 Dallas, TX 75201 Ph: 214-659-4545 Fax: 214-659-4401 tonyagray@andrewskurth.com John R. Hutchins (Pro Hac Vice) 1350 I Street, NW Suite 1100 Washington, DC 20005 Ph: 202-662-3038 Fax: 202-662-2739 johnhutchins@andrewskurth.com ATTORNEYS FOR DEFENDANT DYWIDAG-SYSTEMS INTERNATIONAL USA INC. Case 3:16-cv-02707-N Document 22 Filed 02/20/17 Page 1 of 23 PageID 164 WAS:298449.5 i TABLE OF CONTENTS I. INTRODUCTION ....................................................................................................................... 1 II. FACTUAL BACKGROUND .................................................................................................... 1 III. ARGUMENT AND AUTHORITIES ....................................................................................... 4 A. Plaintiff’s Direct Infringement Allegations Fail to State a Claim ....................................... 5 B. Plaintiff’s Indirect Infringement Allegations Fail to State a Claim ................................... 11 1. The Complaint fails to plead induced infringement. ...................................................... 11 2. The Complaint fails to plead contributory infringement. ............................................... 14 C. Plaintiff’s Willfulness Allegations Fail to State a Claim ................................................... 15 IV. CONCLUSION....................................................................................................................... 16 Case 3:16-cv-02707-N Document 22 Filed 02/20/17 Page 2 of 23 PageID 165 WAS:298449.5 ii TABLE OF AUTHORITIES Page(s) Cases Ashcroft v. Iqbal, 556 U.S. 662 (2009) ...........................................................................................................1, 5, 6 Associated Builders, Inc. v. Alabama Power Co., 505 F. 2d 97 (5th Cir. 1974) ....................................................................................................10 Atlas IP LLC v. Pacific Gas and Electric Co., No. 15 C 10744, 2016 WL 1719545 (N.D. Cal. Mar. 9, 2016) .................................................6 Bell Atl. Corp. v. Twombly, 550 U.S. 544 (2007) .......................................................................................................1, 4, 5, 6 In re Bill of Lading Transmissions & Processing Sys. Patent Litig., 681 F.3d 1323 (Fed. Cir. 2012)......................................................................................6, 11, 14 Core Wireless Licensing S.A.R.L. v. Apple Inc., No. 6:14-CV-752-JRG-JDL, 2015 WL 4910427 (E.D. Tex. 2015) ......................................15 United States ex rel Doe v. Dow Chem. Co., 343 F.3d 325 (5th Cir. 2003) ...................................................................................................12 Dorman Products, Inc. v. Paccar, Inc., No. 13-6383, 2016 WL 4440322 (E.D. Penn. Oct. 17, 2016) .................................................13 DSU Med. Corp. v. JMS Co., 471 F.3d 1293 (Fed. Cir. 2006)................................................................................................11 Erickson v. Pardus, 551 U.S. 89 (2007) .....................................................................................................................5 Evolved Wireless, LLC v. Samsung Elecs. Co., No. 15-545-SLR-SRF, 2016 WL 1019667 (D. Del. Mar. 15, 2016) .......................................16 Global-Tech Appliances, Inc. v. SEB S.A., 131 S. Ct. 2060 (2011) .............................................................................................................11 Global-Tech Appliances, Inc. v. SEB S.A., 563 U.S. 754 (2011) .................................................................................................................13 Halo Electronics, Inc. v. Pulse Electronics, Inc., 136 S. Ct. 1923 (2016) .......................................................................................................15, 16 Case 3:16-cv-02707-N Document 22 Filed 02/20/17 Page 3 of 23 PageID 166 WAS:298449.5 iii Hole v. Texas A&M Univ., 360 Fed. Appx. 571 (5th Cir. 2010) ...........................................................................................5 Intravisual Inc. v. Fujitsu Microelectronics Am. Inc., No. 2:10-CV-90-TJW, 2011 WL 1004873 (E.D. Tex. Mar. 18, 2011) ...................................12 Joao Control & Monitoring Sys., LLC v. Protect Am., Inc., No. 1-14-CV-134-LY, 2015 WL 3513151 (W.D. Tex. 2015) .................................................14 K-Tech Telecomm., Inc. v. Time Warner Cable, Inc., 714 F.3d 1277 (Fed. Cir. 2013)..................................................................................................6 In re Katrina Canal Breaches Litig., 495 F.3d 191 (5th Cir. 2007) .....................................................................................................5 Kyocera Wireless Corp. v. Int’l Trade Comm’n, 545 F.3d 1340 (Fed. Cir. 2008)................................................................................................13 LifeNet Health v. LifeCell Corp., 837 F.3d 1316 (Fed. Cir. 2016)............................................................................................6, 11 Macronix Intern. Co., Ltd. v. Spansion Inc., 4 F. Supp. 3d 797 (E.D. Va. 2014) ............................................................................................7 Mathews v. Bowie Cty., No. 5:12CV82, 2013 WL 5142381 (E.D. Tex. Sept. 13, 2013) ..............................................12 MEMC Elec. Materials, Inc. v. Mitsubishi Materials Silicon Corp., 420 F.3d 1369 (Fed. Cir. 2005)................................................................................................11 OIP Techs., Inc. v. Amazon.com, Inc., 788 F.3d 1359 (Fed. Cir. 2015)..................................................................................................4 S. Christian Leadership Conference v. Supreme Ct., 252 F.3d 781 (5th Cir. 2001) .....................................................................................................5 Scripps Research Institute v. Illumina, Inc., No. 16-cv-661 JLS (BGS), 2016 WL 6834024 (S.D. Cal. Nov. 21, 2016) .............................16 In re Seagate Tech., LLC, 497 F.3d 1360 (Fed. Cir. 2007)................................................................................................16 WBIP, LLC v. Kohler Co., 829 F.3d 1317 (Fed. Cir. 2016)................................................................................................16 U.S. ex rel Willard v. Humana Health Plan of Texas, 336 F.3d 375 (5th Cir. 2003) ...................................................................................................13 Case 3:16-cv-02707-N Document 22 Filed 02/20/17 Page 4 of 23 PageID 167 WAS:298449.5 iv Windy City Innovations, LLC v. Microsoft Corporation, No. 16-cv-01729-YGR, 2016 WL 3361858 (N.D. Cal. Jun. 17, 2016) ...................................15 Statutes 35 U.S.C. § 271(b) .........................................................................................................................11 35 U.S.C. § 271(c) .........................................................................................................................14 Case 3:16-cv-02707-N Document 22 Filed 02/20/17 Page 5 of 23 PageID 168 WAS:298449.5 1 I. INTRODUCTION Pursuant to Federal Rule of Civil Procedure 12(b)(6), Defendant DYWIDAG-Systems International USA Inc. (“DSI”) moves to dismiss all of Plaintiff Freyssinet Inc.’s (“Freyssinet”) claims for failure to state a claim. Freyssinet’s Complaint, (Dkt. 1), alleges theories of direct infringement, induced infringement, contributory infringement, and willful infringement, but the Complaint omits necessary factual allegations to support any of its alleged theories of infringement. In short, the Complaint evidences an incomplete investigation of the claims asserted and fails to provide DSI with fair notice of their factual basis. Under Supreme Court precedent, this Motion to Dismiss should be granted. See Bell Atl. Corp. v. Twombly, 550 U.S. 544 (2007) and Ashcroft v. Iqbal, 556 U.S. 662 (2009). II. FACTUAL BACKGROUND Freyssinet alleges infringement of U.S. Patent No. 6,748,708 (“the ’708 patent”), entitled “Device for Anchoring Structural Cable.” According to its Field of the Invention, the ’708 patent “relates to the devices used to anchor structural cables used in construction work. It applies in particular to stays, pre-stressing cables and suspension cables of suspension bridges.” (Dkt. 1, Ex. 1 at 1:6-10). Freyssinet alleges that only two enumerated claims are infringed: claims 5 and 10. (Dkt. 1 at ¶¶ 13, 38). Claim 5 depends from claims 1, 3 and 4 and thus includes the elements recited in each of those claims. Claim 1 reads: A device for anchoring a structural cable, comprising: an anchor block having orifices therethrough, each accommodating a respective tendon of the cable and a means of immobilizing said tendon; a bearing piece for the anchor block; and guide means for guiding the tendons between the anchor block and a running part of the cable, the guide means being connected to the Case 3:16-cv-02707-N Document 22 Filed 02/20/17 Page 6 of 23 PageID 169 WAS:298449.5 2 bearing piece and including an individual guide passage for each tendon of the cable, wherein each guide passage widens toward the running part of the cable so as to allow angular deflection of the tendon accommodated in said passage, and wherein the guide passages have, in the direction of the anchor block, a transverse layout aligned with that of the orifices in the anchor block. Claim 3 reads: The device as claimed in claim 1, wherein the guide means comprise at least one first guide member housed in a tube connected to the bearing piece and the guide passages are formed through said first guide member. Claim 4 reads: The device as claimed in claim 3, wherein the first guide member is spaced away from the anchor block. Claim 5 reads: The device as claimed in claim 4, wherein the tendons of the cable are strands having an individual protection member in the running part, wherein the individual protection member of each tendon is interrupted in a chamber lying between the first guide member and the anchor block, wherein sealing means are placed between said chamber and the first guide member so as to form a sealed separation between the chamber and the running part of the cable, and wherein a filler product is injected into the chamber. Claim 10 is an independent claim and requires: A device for anchoring a structural cable, comprising: an anchor block having orifices therethrough, each accommodating a respective tendon of the cable and a means of immobilizing said tendon; a bearing piece for the anchor block; and guide means for guiding the tendons between the anchor block and a running part of the cable, the guide means being connected to the bearing piece and including an individual guide passage for each tendon of the cable, wherein each guide passage widens toward the running part of the cable so as to allow angular deflection of the tendon accommodated in said passage, and wherein the guide passages Case 3:16-cv-02707-N Document 22 Filed 02/20/17 Page 7 of 23 PageID 170 WAS:298449.5 3 have, in the direction of the anchor block, a transverse layout aligned with that of the orifices in the anchor block, wherein the guide means comprise at least one first guide member housed in a tube connected to the bearing piece and the guide passages are formed through said first guide member, wherein the first guide member is made of a deformable material, wherein, in the direction of the running part of the cable, a clearance is left between a circumference of the first guide member and the tube in which said first guide member is housed, so as to allow the collection of tendons of the cable an angular deflection by deformation of the material of the guide member. The accused infringing product is DSI’s DYNA Grip® Anchorage, a device allegedly used in a cable-stayed bridge project in the United States. (Dkt. 1 at ¶¶ 13-15). However, the Complaint fails to even fully recite each of the limitations of claims 5 and 10 (set forth above), much less provide an explanation or other factual basis that would support a finding that the DYNA Grip® Anchorage used in the U.S. bridge project actually possesses each of those limitations. Instead of laying out each claim limitation and clearly providing a factual basis for why that limitation is found in the accused product, Freyssinet paraphrases small portions of the claims, and merely provides bald conclusions that the DYNA Grip® Anchorage possesses those portions. See, e.g., id. at ¶ 19. As one example of the shortcomings, with respect to claims 5 and 10, the Complaint does not even mention the requirement that the guide passages have a transverse layout that is aligned with the anchor block orifices. Id. at ¶¶ 18-25. Elsewhere in the Complaint, Freyssinet pulls quotes or figures from DSI’s product literature that contradict the allegations they are intended to support. For instance, Freyssinet points to DSI’s use of HDPE (high-density polyethylene) in its products and states that “HDPE is a deformable material” as required by claim 10, (id. at ¶ 22), though the ’708 patent says explicitly that it is not. (Dkt. 1, Ex. 1 at 4:23-25). Freyssinet also alleges that the DYNA Grip® Anchorage has “an individual protection member […] that is Case 3:16-cv-02707-N Document 22 Filed 02/20/17 Page 8 of 23 PageID 171 WAS:298449.5 4 interrupted” before reaching the anchor block as required by claim 5, and yet cites DSI’s literature which shows that there is no such interruption, i.e., the protective sheathing continues into the anchor block. Id. at ¶ 20. Freyssinet also concludes that the accused product has a guide means having guide passages that widen, as required by claims 5 and 10, but the figures it includes with its Complaint do not show any widening. Id. at ¶ 19. For other claim limitations, such as the requirement in claim 10 that there be a clearance between the guide member and the tube in which the guide member is located, Freyssinet does not discuss the accused product, and instead alleges only that a test specimen (not accused of infringement and created for DSI for failure testing purposes), includes the required claim element. Id. at ¶¶ 24-25. As explained herein, Freyssinet’s allegations with respect to indirect infringement are likewise conclusory. Id. at ¶¶ 26-27, 39-40. Finally, Freyssinet alleges that the “infringement” of which it complains was committed knowingly by DSI, without in fact alleging that DSI was aware of the ’708 patent and the alleged infringement. The basis for this alleged “willful” infringement is a letter sent by Freyssinet’s foreign affiliate to a foreign DSI affiliate, DSI Holding, in which Plaintiff’s foreign affiliate identified a European patent. Id. at ¶¶ 29-30. Plaintiff relies on this letter referencing a different patent, and Defendant DSI’s general existence in the same market space as the Plaintiff, as somehow supporting the conclusion that Defendant DSI should have searched for and discovered the ’708 patent. Id. at ¶ 33, 35. III. ARGUMENT AND AUTHORITIES To survive a motion to dismiss, a claimant must allege “enough facts to state a claim to relief that is plausible on its face.” Twombly, 550 U.S. at 570. The Federal Circuit applies the law of the regional circuit …in reviewing motions to dismiss. See OIP Techs., Inc. v. Amazon.com, Case 3:16-cv-02707-N Document 22 Filed 02/20/17 Page 9 of 23 PageID 172 WAS:298449.5 5 Inc., 788 F.3d 1359, 1362 (Fed. Cir. 2015), cert. denied, 136 S. Ct. 701 (2015). Although the Court “must accept as true all factual allegations” of the complaint, Erickson v. Pardus, 551 U.S. 89, 94 (2007), the complaint’s “[f]actual allegations must be enough to raise a right to relief above the speculative level.” In re Katrina Canal Breaches Litig., 495 F.3d 191, 205 (5th Cir. 2007) (quoting Twombly). A pleading offering only “labels and conclusions” or “a formulaic recitation of the elements of a cause of action will not do.” Twombly, 550 U.S. at 555. The Court must, therefore, conduct a two-part analysis in evaluating this motion to dismiss for failure to state a claim. Iqbal, 556 U.S. at 677-79. First, while accepting all of the Complaint’s well-pleaded facts as true, the Court may disregard any legal conclusions. Id. Second, the Court must determine whether the facts alleged in the Complaint are sufficient to show that the plaintiff has a plausible claim for relief. Id. Put another way, a complaint must do more than aver that the plaintiff is entitled to relief -- it must “show” such an entitlement through its facts. S. Christian Leadership Conference v. Supreme Ct., 252 F.3d 781, 786 (5th Cir. 2001) (“[C]onclusory allegations or legal conclusions masquerading as factual conclusions will not suffice to prevent a motion to dismiss.”) (internal citation omitted). “[W]here the well-pleaded facts do not permit the court to infer more than the mere possibility of misconduct, the complaint has alleged -- but it has not ‘shown’ -- ‘that the pleader is entitled to relief.’” Iqbal, 556 U.S. at 679; Hole v. Texas A&M Univ., 360 Fed. Appx. 571, 573 (5th Cir. 2010). The “plausibility” determination is a “context-specific task that requires the reviewing court to draw on its judicial experience and common sense.” Iqbal, 556 U.S. at 679. A. Plaintiff’s Direct Infringement Allegations Fail to State a Claim Plaintiff’s allegations fail to comport with the pleading requirements of Federal Rule of Civil Procedure 8, as clarified by the Supreme Court in Twombly and Iqbal. See generally Case 3:16-cv-02707-N Document 22 Filed 02/20/17 Page 10 of 23 PageID 173 WAS:298449.5 6 Twombly, 550 U.S. 544; Iqbal, 556 U.S. 662. Rule 8(a)(2) requires that a complaint contain “a short and plain statement of the claim showing that the pleader is entitled to relief, in order to give the defendant fair notice of what the . . . claim is and the grounds upon which it rests.” Twombly, 550 U.S. at 545. Prior to December 1, 2015, a plaintiff pleading a claim of direct infringement was required to set forth allegations that equaled or exceeded the level of specificity required by Form 18 of the Federal Rules of Civil Procedure. In re Bill of Lading Transmissions & Processing Sys. Patent Litig., 681 F.3d 1323, 1334 (Fed. Cir. 2012). Form 18 required only “(1) an allegation of jurisdiction; (2) a statement that the plaintiff owns the patent; (3) a statement that defendant has been infringing the patent ‘by making, selling, and using [a device] embodying the patented invention;’ (4) a statement that the plaintiff has given the defendant notice of its infringement; and (5) a demand for an injunction and damages.” K-Tech Telecomm., Inc. v. Time Warner Cable, Inc., 714 F.3d 1277, 1283 (Fed. Cir. 2013). Amendments to the Federal Rules of Civil Procedure took effect on December 1, 2015, abrogating Rule 84 and the Appendix of Forms, including Form 18. Under the new rules, allegations of direct infringement are subject to the pleading standards established by Twombly and Iqbal, requiring plaintiffs to demonstrate a “plausible claim for relief.”1 “Direct infringement of an apparatus claim ‘requires that each and every limitation set forth in a claim appear in an accused product.’” LifeNet Health v. LifeCell Corp., 837 F.3d 1316, 1325 (Fed. Cir. 2016) (quoting Cross Med. Prods., Inc. v. Medtronic Sofamor Danek, Inc., 424 F.3d 1293, 1310 (Fed. Cir. 2005)). A complaint which recites “only some of the elements of [a] sole asserted claim, and provides only a threadbare description of the alleged abilities of the accused device,” fails to state a plausible claim of direct infringement. Atlas IP LLC v. Pacific 1 Order of the Supreme Court of the United States, Amendment to the Federal Rules of Civil Procedure, Apr. 29, 2015, http://www.supremecourt.gov/orders/courtorders/frcv15(update)_1823.pdf (last visited January 12, 2017). Case 3:16-cv-02707-N Document 22 Filed 02/20/17 Page 11 of 23 PageID 174 WAS:298449.5 7 Gas and Electric Co., No. 15 C 10744, 2016 WL 1719545, at *3 (N.D. Cal. Mar. 9, 2016). Similarly, a complaint which “simply alleges that each element of a cited claim is infringed and then parrot[s] the claim language for each element,” likewise falls short of the threshold. Macronix Intern. Co., Ltd. v. Spansion Inc., 4 F. Supp. 3d 797, 804 (E.D. Va. 2014). Here, Freyssinet’s Complaint fails for both of these reasons; it does not recite all of the claim limitations, and fails to adequately explain how the limitations (even those it does mention) are met by the accused product. As described above, Freyssinet’s Complaint does little more than paraphrase some of the limitations of claims 5 and 10 and vaguely associate those partial limitations with nondescript labels from DSI’s product literature. In so doing, Freyssinet omits explanation of how lengthy and specific limitations are met by the accused product, thus failing to sufficiently plead infringement of either claim. In many cases, DSI is left to guess how the product literature supports Freyssinet’s allegations. First among its fatal omissions, Freyssinet fails to allege that the accused product has guide passages that have a transverse layout that is aligned with the anchor block orifices. (Dkt. 1 at ¶¶ 18-25). Further, Freyssinet does not properly address the requirement of claims 5 and 10 requiring “guide means […] including an individual guide passage for each tendon of the cable,” wherein “each guide passage widens toward the running part of the cable.” As best understood, Freyssinet’s Complaint alleges that a component labeled “Spacer” in a first graphic copied from DSI’s literature (page 8 of Exhibit 2 to the Complaint) meets the “guide means” limitation. (Dkt. 1 at ¶ 19). Freyssinet then copies a second graphic (from page 6 of Exhibit 2 to the Complaint) into the text of the complaint and in conclusory fashion states that the image shows a guide passage as claimed. Id. But, neither of the figures shows any widening. Case 3:16-cv-02707-N Document 22 Filed 02/20/17 Page 12 of 23 PageID 175 WAS:298449.5 8 Further, as shown below, the figure included in the Complaint actually shows that the spacer (the alleged guide means) is not housed in a tube connected to the bearing plate (the blue tube), as the Complaint states, (Dkt. 1 at ¶ 19), but rather in a different tube (the red tube) that extends from the anchor block, not the bearing plate. Thus, the Complaint also does not provide factual support for any allegation that the alleged guide means is “connected to the bearing piece,” as required by the asserted claims. Case 3:16-cv-02707-N Document 22 Filed 02/20/17 Page 13 of 23 PageID 176 WAS:298449.5 9 Infringement of claim 5 is not plausible from the Complaint for the additional reason that Freyssinet provides no factual basis for concluding that the accused product possesses the limitation requiring that the cable tendons have “an individual protection member […] that is interrupted in a chamber lying between the first guide member and the anchor block.” Freyssinet cites several passages from DSI’s product literature, attached as Exhibits 2 and 3 to the Complaint, and subsequently recites the claim limitation, (Dkt. 1 at¶ 20), but fails to explain what it contends constitutes either an interruption in the “individual protection member” or a “chamber.” Instead of explaining where such an interruption purportedly exists in DSI’s product, Freyssinet contradicts its position by citing a passage of DSI’s literature which states that “[t]he factory applied corrosion protection of the strands continues directly up to the wedges.” Id. In other words, in the accused product, the protective sheathing for the cable strands continue all the way into the anchor block, and is not interrupted before reaching the anchor block. As best understood, Freyssinet’s allegation reads as a concession that there is no interruption as opposed to an allegation that the limitation is met. With respect to claim 10, Freyssinet’s allegation that the “first guide member is made of a deformable material” is likewise flatly inconsistent with the ’708 patent. The ’708 patent describes multiple embodiments with guide members made from either rigid or deformable material, explaining that the deformable material, when implemented, may dissipate vibrational energy in the cable. (Dkt. 1, Ex. 1 at 4:45-50). The ’708 patent offers examples of each type of material, categorizing HDPE (high density polyethylene) as rigid, (id. at 4:23-25), and neoprene as deformable, (id. at 4:45-47). Claim 10 requires that its first guide member be made of a deformable material, which could include neoprene according to the ’708 patent’s specification. Case 3:16-cv-02707-N Document 22 Filed 02/20/17 Page 14 of 23 PageID 177 WAS:298449.5 10 In an attempt to address this limitation in its Complaint, Freyssinet cites to a portion of DSI’s website that describes an HDPE spacer. (Dkt. 1 at ¶ 22). With no explanation, Freyssinet avers that “HDPE is a deformable material.” Id. Yet, Freyssinet’s own patent explicitly refutes this contention. Freyssinet makes no attempt to address the ’708 patent’s description of HDPE and alleges no facts to suggest that claim 10 is entitled to a claim scope other than one consistent with the plain language of the claim and the specification. Freyssinet’s characterizing of HDPE for the sake of satisfying the claim limitation thus cannot be taken as true. See Associated Builders, Inc. v. Alabama Power Co., 505 F. 2d 97, 100 (5th Cir. 1974) (“Conclusory allegations and unwarranted deductions of fact are not admitted as true […] especially when such conclusions are contradicted by facts disclosed by a document appended to the complaint.”) (internal citations omitted). In addition, Freyssinet alleges that at least one limitation of claim 10 is met not by the product it accuses of infringement, but by a special test setup used by the Technical University of Denmark in fatigue bending tests of the DSI DYNA Grip® System. (Dkt. 1 at ¶ 25 & Ex. 4). Freyssinet has copied a schematic diagram of the test setup into its Complaint and states that it includes “a clearance […] that allows angular deflection by deformation of the material of the guide member.” Id. However, as the schematic and the webpage from which it came make clear, the test subject is a “single strand specimen,” (Dkt. 1, Ex. 4 at 2), and not the accused product which includes multiple strands. (Dkt. 1, Ex. 2 at 8). Even taking Freyssinet’s allegation that the single strand specimen meets the ultimate limitation of claim 10 as true, Freyssinet makes no allegation that the single strand specimen is representative of the accused product. Freyssinet cannot pick and choose features of a different Case 3:16-cv-02707-N Document 22 Filed 02/20/17 Page 15 of 23 PageID 178 WAS:298449.5 11 device to patch the holes in its allegations of infringement by the accused product. LifeNet Health, 837 F.3d 1316, 1325. Freyssinet’s failure to allege facts sufficient to show that each and every limitation of claims 5 and claim 10 is satisfied by DSI’s DYNA Grip® Anchorage requires that its allegations of direct infringement be dismissed. B. Plaintiff’s Indirect Infringement Allegations Fail to State a Claim 1. The Complaint fails to plead induced infringement. Freyssinet’s allegations also do not meet the pleading standard for induced infringement. To state a claim for induced infringement, Freyssinet must plead facts demonstrating that DSI “actively induce[d] infringement of a patent.” 35 U.S.C. §271(b). A claim for induced infringement under 35 U.S.C. §271(b) requires proof (1) of an act of direct infringement by another, and (2) that the defendant knowingly induced the infringement with the specific intent to encourage the other’s infringement. MEMC Elec. Materials, Inc. v. Mitsubishi Materials Silicon Corp., 420 F.3d 1369, 1378 (Fed. Cir. 2005). The intent element requires that the defendant “[know] that the induced acts constitute patent infringement.” Global-Tech Appliances, Inc. v. SEB S.A., 131 S. Ct. 2060, 2068 (2011); see also DSU Med. Corp. v. JMS Co., 471 F.3d 1293, 1306 (Fed. Cir. 2006) (“[I]nducement requires that the alleged infringer knowingly induced infringement and possessed specific intent to encourage another’s infringement.”). Thus, the Complaint must contain facts plausibly showing that DSI (1) specifically intended for its customer to infringe the asserted patent, and (2) knew that the customer’s acts constituted infringement. See In re Bill of Lading, 681 F.3d at 1339. The Complaint fails to plead facts plausibly showing that DSI even knew of the ’708 patent, let alone that it specifically intended for its customer to infringe the ’708 patent. Freyssinet alleges that its foreign affiliate Soletanche Freyssinet S.A.S. sent a letter to DSI’s Case 3:16-cv-02707-N Document 22 Filed 02/20/17 Page 16 of 23 PageID 179 WAS:298449.5 12 foreign affiliate, DSI Holding, asserting infringement of a patent issued by the European Patent Office. (Dkt. 1 at ¶ 29). There is no allegation that DSI Holding, much less the named defendant DSI, was ever notified of how the European patent relates to the ’708 patent. Rather, the Complaint refers generally to “techniques and elements which are protected by patents held by Soletanche Freyssinet worldwide, in the United States of America and Germany amongst other countries.” (Dkt. 1, Ex. 6 at 1). But at the time of the December 8, 2011 letter, the ’708 patent appears to have been assigned to another third party, Freyssinet International (STUP). (Dkt. 1 at Ex. 1). At most, the letter informed DSI Holding that Soletanche Freyssinet S.A.S. owned European and U.S. patents other than the ’708 patent. Not only do these allegations fall short of pleading DSI Holding’s knowledge of the ’708 patent, Freyssinet makes no attempt to plead that the defendant named here, DSI, received any of this information from DSI Holding. With only DSI Holding’s alleged notice of the European patent, and Freyssinet’s general allegations that it competes with DSI, (Dkt. 1 at ¶¶ 32, 33, 35), Freyssinet goes on to assert that “[o]n information and belief, DSI or its agents did, in fact, access the ’708 patent.” (Dkt. 1 at ¶ 34). While a plaintiff is allowed to plead claims upon information and belief, “the complaint must set forth the basis for such belief.” United States ex rel Doe v. Dow Chem. Co., 343 F.3d 325, 329 (5th Cir. 2003). “[T]he mere invocation of the phrase . . . does not circumvent the pleader’s responsibility to set forth a claim . . . which presents factual content allowing the court to draw the reasonable inference that the defendant is liable for the misconduct alleged.” Mathews v. Bowie Cty., No. 5:12CV82, 2013 WL 5142381, at *3 (E.D. Tex. Sept. 13, 2013); see also Intravisual Inc. v. Fujitsu Microelectronics Am. Inc., No. 2:10-CV-90-TJW, 2011 WL 1004873, at *5 (E.D. Tex. Mar. 18, 2011) (“[A]llegations pled on ‘information and belief’ should be reviewed under Twombly’s 12(b)(6) formulation requiring sufficient facts pleading to make a Case 3:16-cv-02707-N Document 22 Filed 02/20/17 Page 17 of 23 PageID 180 WAS:298449.5 13 claim plausible.”). Thus, while pleading on information and belief is permissible in certain circumstances, it “must not be mistaken for license to base claims […] on speculation and conclusory allegations.” U.S. ex rel Willard v. Humana Health Plan of Texas, 336 F.3d 375, 385 (5th Cir. 2003). The allegations in the Complaint do not compel the illogical leap that DSI, a separate and distinct entity from DSI Holding, affirmatively accessed the ’708 patent. Freyssinet appears to acknowledge the weakness of its pleadings with respect to actual knowledge of the ’708 patent, hedging its allegations of inducement with a willful blindness theory. Id. at ¶¶ 35, 39. The Supreme Court’s formulation of willful blindness requires two elements: “(1) the defendant must subjectively believe that there is a high probability that a fact exists and (2) the defendant must take deliberate actions to avoid learning of that fact.” Global- Tech Appliances, Inc. v. SEB S.A., 563 U.S. 754, 769 (2011). Freyssinet’s allegations satisfy neither of these elements. First, Soletanche Freyssinet S.A.S.’s notice of a European patent to DSI Holding and Freyssinet’s general competition with DSI do not support an inference that DSI subjectively believed a patent such as the ’708 patent existed in the United States. Second, Freyssinet alleges no deliberate actions taken by DSI to avoid learning of the ’708 patent. Freyssinet instead contends that the circumstances “should have compelled DSI to have conducted a patent search,” which DSI indeed has no obligation to conduct. Dorman Products, Inc. v. Paccar, Inc., No. 13- 6383, 2016 WL 4440322, at *8, n. 4 (E.D. Penn. Oct. 17, 2016) (rejecting argument that “a patent search, or lack thereof, is probative of the issue of willful infringement”). Freyssinet’s inducement claim also fails on another independent ground -- inducement requires proof of underlying direct infringement. Kyocera Wireless Corp. v. Int’l Trade Comm’n, 545 F.3d 1340, 1354 (Fed. Cir. 2008). As discussed above, Freyssinet has failed to adequately Case 3:16-cv-02707-N Document 22 Filed 02/20/17 Page 18 of 23 PageID 181 WAS:298449.5 14 plead a plausible claim that DSI, or any other entity, is directly infringing its apparatus claims because it fails to identify a product that plausibly meets all limitations of the asserted claims. As a result, Freyssinet’s inducement claim fails along with its direct infringement claim. 2. The Complaint fails to plead contributory infringement. Similarly, Freyssinet’s allegations of contributory infringement are lacking. To adequately state a claim for contributory infringement, a plaintiff must include specific, non- conclusory factual allegations demonstrating that the defendant offered to sell or sold a “component of a patented machine […] constituting a material part of the invention, knowing the same to be especially made or especially adapted for use in an infringement of such patent” and the component sold or offered for sale has no “substantial non-infringing use….” 35 U.S.C. § 271(c); see In re Bill of Lading, 681 F.3d at 1332 n.4, 1337. Freyssinet’s contributory infringement allegations amount to no more than parroting the elements of contributory infringement. First, as discussed above, Freyssinet fails to allege that DSI even knew about the ’708 patent. Thus, there is no factual support for Freyssinet’s boilerplate recitation that “DSI undertook such activities with knowledge, or, at minimum, willful blindness to gaining knowledge, that the components of the infringing anchor devices like the DynaGrip Anchor were especially adapted for infringement of the ’708 Patent.” (Dkt. 1 at ¶ 40). Freyssinet further recites that “[t]he DynaGrip Anchors, and components thereof, are not staple articles or commodities of commerce suitable for substantial noninfringing use,” (id. at ¶ 27), and “components of anchoring devices, including components of the DynaGrip Anchor […] were and are a material part of the invention of the ’708 Patent.” Id. at ¶ 40. These barebones recitals of the elements of contributory infringement are insufficient to withstand dismissal. Joao Control & Monitoring Sys., LLC v. Protect Am., Inc., No. 1-14-CV-134-LY, 2015 WL 3513151, Case 3:16-cv-02707-N Document 22 Filed 02/20/17 Page 19 of 23 PageID 182 WAS:298449.5 15 at *5 (W.D. Tex. 2015) (dismissing contributory infringement claim where allegations “consist[ed] of conclusory allegations that merely recite the elements of contributory infringement”). Windy City Innovations, LLC v. Microsoft Corporation, No. 16-cv-01729-YGR, 2016 WL 3361858, *6 (N.D. Cal. Jun. 17, 2016) (dismissing contributory infringement claim where allegations included only boilerplate language stating the elements of the claim). Compounding the inadequacy of the pleadings, Freyssinet fails to identify which components it is even referencing. With no understanding of what components are in play, it is impossible to derive a plausible inference that any such components are both material to the invention of the ’708 patent and have no substantial non-infringing uses, as required for contributory infringement. Core Wireless Licensing S.A.R.L. v. Apple Inc., No. 6:14-CV-752- JRG-JDL, 2015 WL 4910427, *5 (E.D. Tex. 2015) (dismissing contributory infringement claim where “the complaint fail[ed] to identify the components of the accused products used to infringe the asserted patents”). The Complaint thus lacks any allegations that could establish DSI’s liability for indirect infringement, by either inducement or by contribution. Freyssinet’s claims for indirect infringement should therefore be dismissed. C. Plaintiff’s Willfulness Allegations Fail to State a Claim Freyssinet’s failure to adequately allege a plausible basis for believing that DSI had knowledge of the ’708 patent also requires dismissal of its willful infringement claim. Prior to the Supreme Court’s recent decision in Halo Electronics, Inc. v. Pulse Electronics, Inc., 136 S. Ct. 1923, 1927 (2016), willful infringement required (1) that “the infringer acted despite an objectively high likelihood that its actions constituted infringement of a valid patent” and (2) the “objectively-defined risk […] was either known or so obvious that it should have been known to Case 3:16-cv-02707-N Document 22 Filed 02/20/17 Page 20 of 23 PageID 183 WAS:298449.5 16 the accused infringer.” In re Seagate Tech., LLC, 497 F.3d 1360, 1371 (Fed. Cir. 2007). The Supreme Court’s Halo decision abrogated that standard, holding that “[t]he subjective willfulness of a patent infringer, intentional or knowing, may warrant enhanced damages, without regard to whether his infringement was objectively reckless.” Halo, 136 S. Ct. at 1933. In Halo’s wake, “[k]nowledge of the patent alleged to be willfully infringed continues to be a prerequisite to enhanced damages.” WBIP, LLC v. Kohler Co., 829 F.3d 1317, 1341 (Fed. Cir. 2016). As discussed above, Freyssinet’s Complaint fails to allege facts sufficient to infer that DSI even had knowledge of the ’708 patent, let alone that any actions could possibly constitute infringement. Freyssinet’s willfulness allegations rest on Soletanche Freyssinet S.A.S.’s identification of a European patent in a letter to DSI’s affiliate, along with Freyssinet’s competition with DSI. Less attenuated bases for knowledge of asserted patents have been rejected at the pleading stage. See, e.g., Scripps Research Institute v. Illumina, Inc., No. 16-cv- 661 JLS (BGS), 2016 WL 6834024, *6 (S.D. Cal. Nov. 21, 2016) (dismissing willfulness claims based on allegations that defendant knew of the asserted patent because it licensed one or more other patents with a common named inventor); Evolved Wireless, LLC v. Samsung Elecs. Co., No. 15-545-SLR-SRF, 2016 WL 1019667, at *3 (D. Del. Mar. 15, 2016), report and recommendation adopted, 2016 WL 1381765 (D. Del. Apr. 6, 2016) (recommending dismissal of willfulness where plaintiff alleged knowledge of asserted patents based on a letter identifying the patents and dozens of others). This Court should likewise dismiss the willfulness claim here. IV. CONCLUSION For the foregoing reasons, DSI respectfully requests that the Court grant DSI’s Motion and dismiss all of Freyssinet’s claims and causes of action. Case 3:16-cv-02707-N Document 22 Filed 02/20/17 Page 21 of 23 PageID 184 WAS:298449.5 17 Dated: February 20, 2017 Respectfully submitted, ANDREWS KURTH KENYON LLP By: /s/ Tonya M. Gray Tonya M. Gray Texas Bar No. 24012726 1717 Main Street, Ste. 3700 Dallas, TX 75201 Ph: 214-659-4545 Fax: 214-659-4401 tonyagray@andrewskurth.com John R. Hutchins (Pro Hac Vice) 1350 I Street, NW Suite 1100 Washington, DC 20005 Ph: 202-662-3038 Fax: 202-662-2739 johnhutchins@andrewskurth.com ATTORNEYS FOR DEFENDANT DYWIDAG-SYSTEMS INTERNATIONAL USA INC. Case 3:16-cv-02707-N Document 22 Filed 02/20/17 Page 22 of 23 PageID 185 WAS:298449.5 18 CERTIFICATE OF SERVICE I certify that, on February 20, 2017, I electronically submitted the foregoing document with the clerk of court for the U.S. District Court, Northern District of Texas, using the electronic case filing system of the court. I hereby certify that I have served all counsel of record electronically or by another manner authorized by Federal Rule of Civil Procedure 5(b)(2). /s/ Tonya M. Gray Case 3:16-cv-02707-N Document 22 Filed 02/20/17 Page 23 of 23 PageID 186 DAL:953563.1 IN THE UNITED STATES DISTRICT COURT FOR THE NORTHERN DISTRICT OF TEXAS DALLAS DIVISION FREYSSINET, INC., § Plaintiff, § § v. § CIVIL ACTION NO. 3:16-cv-2707-N § DYWIDAG-SYSTEMS § JURY TRIAL DEMANDED INTERNATIONAL USA INC. § Defendant. § ORDER GRANTING DEFENDANT DYWIDAG-SYSTEMS INTERNATIONAL USA INC.’S MOTION TO DISMISS FOR FAILURE TO STATE A CLAIM ON THIS DATE CAME ON FOR CONSIDERATION Defendant DYWIDAG-Systems International USA Inc.’s Motion to Dismiss for Failure to State a Claim Pursuant to Federal Rule of Civil Procedure 12(b)(6) (the “Motion”). The Court, having considered the Motion and all pleadings related thereto, finds that the Motion to dismiss should be and is hereby GRANTED. IT IS THEREFORE ORDERED that the case and causes of action asserted against Defendant DYWIDAG-Systems International USA Inc. be and are hereby dismissed. SO ORDERED. SIGNED: ________________, 2017. __________________________________ UNITED STATES DISTRICT JUDGE Case 3:16-cv-02707-N Document 22-1 Filed 02/20/17 Page 1 of 1 PageID 187