Smart Wearable Technologies Inc. v. Motorola Mobility, Llc

Brief / Memorandum in Opposition re MOTION TO DISMISS FOR FAILURE TO STATE A CLAIM .

W.D. Va.May 30, 2017

IN THE UNITED STATES DISTRICT COURT WESTERN DISTRICT OF VIRGINIA CHARLOTTESVILLE DIVISION SMART WEARABLE TECHNOLOGIES INC., Plaintiff, v. MOTOROLA MOBILITY, LLC, Defendant. § § § § § § § § § Case No. 3:17-cv-00022-GEC JURY TRIAL DEMANDED PLAINTIFF’S OPPOSITION TO DEFENDANT MOTOROLA MOBILITY, LLC’S MOTION TO DISMISS PLAINTIFF’S AMENDED COMPLAINT Case 3:17-cv-00022-GEC Document 21 Filed 05/30/17 Page 1 of 21 Pageid#: 132 ii TABLE OF CONTENTS TABLE OF AUTHORITIES ......................................................................................................... iii I. INTRODUCTION ...............................................................................................................1 II. LEGAL STANDARD ..........................................................................................................2 III. ARGUMENT .......................................................................................................................3 A. SWT’s Direct Infringement Claim is Sufficiently Pled ...........................................3 B. SWT’s Complaint has Adequately Pled All Elements of Induced Infringement ....5 1. SWT has Adequately Pled Dnowledge of the ‘882 Patent by Motorola .....6 2. SWT has Adequately Pled that Motorola Acted with the Specific Intent that End Users of the Accused Products Infringe the ‘882 Patent ......................7 C. SWT’s Contributory Infringement Claim is Sufficiently Pled ................................9 D. The Court Should Not Dismiss SWT’s Induced Infringement Claim for the Pre- Filing Period...........................................................................................................14 IV. CONCLUSION ..................................................................................................................16 CERTIFICATE OF SERVICE ......................................................................................................17 Case 3:17-cv-00022-GEC Document 21 Filed 05/30/17 Page 2 of 21 Pageid#: 133 iii TABLE OF AUTHORITIES Cases: Ashcroft v. Iqbal, 556 U.S. 662 (2009) ...............................................................................................2, 4, 5, 15 Bell Atl. Corp. v. Twombly, 550 U.S. 544 (2007) ...........................................................................................2, 3, 4, 5, 15 Conley v. Gibson, 355 U.S. 41 (1957) ...............................................................................................................2 DSU Med. Corp. v. JMS Co., 471 F.3d 1293 (Fed. Cir. 2006)......................................................................................6, 14 e.Digital v. Intel Corp., No. 13-cv-2905-H-BGS, 2014 U.S. Dist. LEXIS 81049 (S.D. Cal. April 23, 2014) ..........8 Fujitsu Ltd. v. Netgear Inc., 620 F.3d 1321 (Fed. Cir. 2010)....................................................................................10, 12 Global-Tech Appliances, Inc. v. SEB S.A., 563 U.S. 754 (2011) .......................................................................................................6, 14 i4i Ltd. P’ship v. Microsoft Corp., 598 F.3d 831 (Fed. Cir. 2010)............................................................................................12 Jenkins v. LogicMark, LLC, Civil Action No. 3:16-CV-751-HEH, 2017 U.S. Dist. LEXIS 10975 (E.D. Va. Jan. 25, 2017)...............................................................................................2, 3, 4 Koninklijke Philips N.V. v. Zoll Med. Corp., 656 F. App’x 504 (Fed. Cir. 2016) ..............................................................................10, 12 Lucent Techs., Inc. v. Gateway, Inc., 580 F.3d 1301 (Fed. Cir. 2009)................................................................................6, 11, 13 McZeal v. Spring Nextel Corp., 501 F.3d 1354 (Fed. Cir. 2007)............................................................................................2 Moleculon Research Corp. v. CBS, Inc., 793 F.2d 1261 (Fed. Cir. 1986)............................................................................................6 Rembrandt Soc. Media, LP v. Facebook, Inc., 950 F. Supp. 2d 876 (E. D. Va. 2013) .............................................................................2, 7 Case 3:17-cv-00022-GEC Document 21 Filed 05/30/17 Page 3 of 21 Pageid#: 134 iv Republican Party of N.C. v. Martin, 980 F.2d 943 (4th Cir. 1992) ................................................................................................2 Ricoh Co., Ltd. v. Quanta Comput. Inc., 550 F.3d 1325 (Fed. Cir. 2008)..........................................................................................12 Skinner v. Switzer, 562 U.S. 521 (2011) .............................................................................................................2 Smart Wearable Techs. Inc. v. Fitbit, Inc., No. 3:16CV00077, 2017 WL 1314195 (W.D. Va. Apr. 6, 2017)........................................1 T.G. Slater & Son v. Donald P. & Patricia A. Brennan LLC, 385 F.3d 836 (4th Cir. 2004) ...............................................................................................3 Vita-Mix Corp. v. Basic Holding, Inc., 581 F.3d 1317 (Fed. Cir. 2009)............................................................................................9 ZUP, LLC v. Nash Mfg., Inc., Civil Action No. 3:16-CV-125-HEH, 2017 U.S. Dist. LEXIS 5477 (E.D. Va. Jan. 13, 2017)............................................................................................. 5-6, 14 Other Fed. R. Civ. P. 8(a)(2) ..............................................................................................................3, 4, 5 Section 271(b) ............................................................................................................................6, 13 Case 3:17-cv-00022-GEC Document 21 Filed 05/30/17 Page 4 of 21 Pageid#: 135 1 Plaintiff Smart Wearable Technologies, Inc. (“Plaintiff” or “SWT”) hereby provides this response to Defendant Motorola Mobility LLC’s (“Motorola”) Motion to Dismiss Plaintiff’s Amended Complaint under Federal Rule of Civil Procedure 12(b)(6), alleging that SWT has insufficiently pled its claims for direct, induced, and contributory infringement. For at least the reasons provided herein, Defendant’s Motion should be denied. I. INTRODUCTION SWT filed its Original Complaint on March 14, 2017 (Dkt. No. 1) alleging direct, induced, and contributory infringement of claim 8 of U.S. Patent No. 6,997,882 (“the ‘882 Patent”) by Motorola through its making and selling of the Moto 360. Following this Court’s order in a related case in which SWT’s contributory infringement claim and inducement claim for the pre-filing period were dismissed without prejudice1, SWT filed its Amended Complaint in this case on April 20, 2017 (Dkt. No. 9). In its Amended Complaint, SWT maintains its claims of direct, induced, and contributory infringement by Motorola and provides further factual allegations supporting the same. The ‘882 patent relates to systems and methods of monitoring a subject (e.g., a person) using acquired six degree-of-freedom (“6-DOF”) data regarding the subject as well as acquired physiological data of the subject. More specifically, the ‘882 Patent discloses deriving 6-DOF data descriptive of the movement of a subject which is synchronized and displayed with physiological data, such as the heart rate of the subject, for example. Motorola designs, manufactures and sells fitness tracking products, including at least the Moto 360 (“the Accused Product”), that incorporate the technology of the ‘882 patent. 1 Smart Wearable Techs. Inc. v. Fitbit, Inc., No. 3:16CV00077, 2017 WL 1314195, at *5 (W.D. Va. Apr. 6, 2017). Case 3:17-cv-00022-GEC Document 21 Filed 05/30/17 Page 5 of 21 Pageid#: 136 2 Motorola’s Motion asks the Court to dismiss SWT’s claims of direct, induced, and contributory infringement. For at least the reasons discussed herein, the Court should deny Motorola’s Motion and SWT should be permitted the chance to provide evidence in support of all claims of the Amended Complaint. II. LEGAL STANDARD To determine whether a Complaint fails to state a claim for which relief can be granted, regional circuit law is applied. McZeal v. Spring Nextel Corp., 501 F.3d 1354, 1355-56 (Fed. Cir. 2007). “The analytical framework for reviewing motions to dismiss for failure to state a claim is well settled in both the Fourth and Federal Circuits.” Jenkins v. LogicMark, LLC, Civil Action No. 3:16-CV-751-HEH, 2017 U.S. Dist. LEXIS 10975, at *4-5 (E.D. Va. Jan. 25, 2017). A motion to dismiss under Rule 12(b)(6) tests the sufficiency of a Complaint, only, and does not resolve contests surrounding the facts or the merits of a claim. Republican Party of N.C. v. Martin, 980 F.2d 943, 952 (4th Cir. 1992). The question answered by courts is, therefore, not whether the plaintiff will ultimately prevail, but whether the “Complaint is sufficient to cross the federal court’s threshold.” Skinner v. Switzer, 562 U.S. 521, 530 (2011). The Federal Rules of Civil Procedure “require[] only ‘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.’” Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555, (2007) (quoting Conley v. Gibson, 355 U.S. 41, 47 (1957)). A Complaint must allege facts that, if true, plausibly satisfy each element of the claims for which relief is sought. Rembrandt Soc. Media, LP v. Facebook, Inc., 950 F. Supp. 2d 876, 880 (E.D. Va. 2013) (discussing Ashcroft v. Iqbal, 556 U.S. 662 (2009) and Bell Atl. Corp. v. Twombly, 550 U.S. 544 (2007)). The factual allegations made must be “more than labels and conclusions” or “formulaic recitation[s] of the Case 3:17-cv-00022-GEC Document 21 Filed 05/30/17 Page 6 of 21 Pageid#: 137 3 elements” such that they “be enough to raise a right to relief above the speculative level” but need not comprise detailed factual allegations. Twombly, 550 U.S. at 555, 570. The allegations within a Complaint are taken as true and viewed in the light most favorable to the plaintiff. T.G. Slater & Son v. Donald P. & Patricia A. Brennan LLC, 385 F.3d 836, 841 (4th Cir. 2004). A court should not dismiss a Complaint for failure to state a claim if it contains factual allegations supporting a reasonable expectation that discovery will reveal evidence supporting the claims for relief. Twombly, 550 U.S. at 556. As such, issue before this Court is not whether SWT will ultimately prevail on its claims, but instead whether SWT is entitled to offer evidence to support its allegations. III. ARGUMENT SWT’s Amended Complaint provides a detailed recitation of facts explaining how Motorola both directly and indirectly infringes claim 8 of the ‘882 patent in relation to Motorola’s making, using, and selling its Moto 360 products. The adequacy of the allegations in the Amended Complaint relating to Motorola’s specific challenges are discussed below. A. SWT’s Direct Infringement Claim is Sufficiently Pled. The Federal Rules of Civil Procedure require that a complaint contain “‘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.’” Fed. R. Civ. P. 8(a)(2); Jenkins v. LogicMark, LLC, Civil Action No. 3:16-CV-751-HEH, 2017 U.S. Dist. LEXIS 10975, at *4 (E.D. Va. Jan. 25, 2017). SWT’s Amended Complaint meets this standard and adequately puts Motorola on notice of the claims they must defend. Motorola relies upon Jenkins as supporting its position that a direct infringement claim is insufficiently pled if it fails to allege with “particularity how each allegedly infringing feature of Case 3:17-cv-00022-GEC Document 21 Filed 05/30/17 Page 7 of 21 Pageid#: 138 4 the accused products infringes any of the named patents, either literally or under the doctrine of equivalents.” Dkt. No. 18 at 10 (citing Jenkins, 2017 WL 376154 at *3). Motorola fails to note that the primary rationale provided by the District Court in finding the Jenkins complaint deficient was that it asserted four patents against several accused products but failed to specifically identify any particular claim that the accused products infringed. Jenkins, 2017 WL 376154 at *6. It follows that because no claim was identified in the Jenkins complaint, regardless of whether any factual allegations relating to infringement were contained therein, the complaint could not meet the standards of Rule 8(a)(2) or Iqbal and Twombly by providing the defendant fair notice of what Plaintiff’s claim is and the grounds upon which it rests. Fed. R. Civ. P. 8(a)(2); Jenkins, 2017 WL 376154 at *4 (citing Twombly, 550 U.S. at 555). SWT’s Amended Complaint sets out the patent being asserted and the asserted claim. (Dkt. No. 9 at ¶¶ 5, 13); describes the technology at issue in (Id. at ¶¶ 6, 13); sets out the numerous actions undertaken by Motorola that constitute infringing activity (Id. at ¶¶ 9-13), including identifying which specific Motorola product is being accused and describing the features and functions thereof which are alleged to constitute infringement. (Id. at ¶ 12-13). Such detail is above and beyond the threshold of a “short and plain statement” providing Motorola notice of SWT’s claims. As noted above, SWT is not required by the applicable Federal Rules to prove its case at this point, only to adequately set out its allegations. SWT has done so through providing facts describing how the accused product infringes the asserted claim, stating that: “…the Accused Product is attachable to the wrist of a user and includes at least an accelerometer and gyroscope for providing data from which 6-DOF movement information descriptive of the movement of the user is obtained. Upon Case 3:17-cv-00022-GEC Document 21 Filed 05/30/17 Page 8 of 21 Pageid#: 139 5 information and belief, the Accused Product includes, at least, a heart rate sensor for obtaining physiological data of the user. The Accused Product synchronizes the 6-DOF data with obtained physiological data of the subject and displays the synchronized 6-DOF and physiological data on, at least, the display of the Accused Product.” (Id. at ¶ 13). Motorola contends that this description is somehow insufficient because it does not address or list each element of claim 8 of the ‘882 Patent. Dkt. No. 18 at 5-6. Notably, Motorola’s provides no citation to a Federal Rule or case law supporting this requirement. This is because such specific details of how the accused product meets every limitation of an asserted claim are not required at the pleading stage of a patent infringement case.2 Instead, these specific details are set out in detail in Plaintiff’s Preliminary Infringement Contentions. Infringement contentions require an element- by-element, detailed explanation of a plaintiff’s infringement theory and disclosure of documents in support - that detail is not required of the complaint. The level of detail required in the complaint is merely that which is sufficient to set forth facts showing Plaintiff’s claims to be plausible on its face. Defendants’ motion to dismiss with respect to direct infringement should therefore be denied. B. SWT’s Complaint has Adequately Pled All Elements of Induced Infringement. In order to adequately plead a claim of induced infringement, the Amended Complaint must include allegations sufficient to support a claim of direct infringement by users of the Accused Products and, additionally, show knowledge of the ‘882 Patent by Motorola along with specific intent by Motorola to induce the infringing conduct of users of the Accused Products. ZUP, LLC v. Nash Mfg., Inc., Civil Action No. 3:16-CV-125-HEH, 2017 U.S. Dist. LEXIS 5477, 2 The Supreme Court has explicitly stated that Rule 8 does not require that a complaint contain detailed factual allegations. Iqbal, 556 U.S. at 678; Twombly, 550 U.S. at 555 n.3. Case 3:17-cv-00022-GEC Document 21 Filed 05/30/17 Page 9 of 21 Pageid#: 140 6 at *52-53 (E.D. Va. Jan. 13, 2017); see also DSU Med. Corp. v. JMS Co., 471 F.3d 1293, 1306 (Fed. Cir. 2006) (“inducement requires that the alleged infringer knowingly induced infringement and possessed specific intent to encourage another’s infringement”) (citations omitted)). The knowledge of the accused infringer may be shown by actual knowledge or willful blindness. Global-Tech Appliances, Inc., 563 U.S. at 766-71. Inducement involves the taking of affirmative steps to bring about the directly infringing conduct. Id. at 760. These elements may be shown by circumstantial evidence. See Lucent Techs., Inc. v. Gateway, Inc., 580 F.3d 1301, 1318 (Fed. Cir. 2009) (citing Moleculon Research Corp. v. CBS, Inc., 793 F.2d 1261, 1272 (Fed. Cir. 1986) (patentee “met its burden of showing infringement under section 271(b) with circumstantial evidence of extensive puzzle sales, dissemination of an instruction sheet teaching the method of restoring the preselected pattern with each puzzle, and the availability of a solution booklet on how to solve the puzzle”)). In the present case, each of these elements are satisfied by SWT’s Amended Complaint. The sufficiency of the Complaint in alleging direct infringement by Motorola and by end users of the Accused Products is discussed in Section III.A, above. The knowledge and specific intent requirements are adequately pled, as discussed herein. 1. SWT has Adequately Pled Knowledge of the ‘882 Patent by Motorola. Motorola contends that SWT has failed to allege knowledge by Motorola of third party infringement of the ‘882 Patent because the Amended Complaint contains no facts showing Motorola know of the ’882 Patent prior to the filing of the Original Complaint in this lawsuit. Dkt. No. 18 at 16-17. This contention finds no basis in the law of the district courts of the 4th Circuit, as Motorola acknowledges. Dkt 28 at fn. 2. While there is disagreement between the district courts as to whether post-suit knowledge is sufficient to support claims of indirect infringement, Case 3:17-cv-00022-GEC Document 21 Filed 05/30/17 Page 10 of 21 Pageid#: 141 7 the majority view is that “post-suit knowledge (i.e., knowledge provided by the filing of the lawsuit) satisfies the knowledge element for indirect infringement.” Rembrandt, 950 F. Supp. 2d at 881. The district courts of the 4th Circuit have adopted the majority view on this issue because knowledge of the patent and its claims are essential to a claim for indirect infringement regardless of how obtained. Id. at 882. “The filing and service of an infringement suit is merely one way of establishing this essential element of the indirect infringement claim.” Id. Here, as Motorola admits, SWT has alleged knowledge of the ’882 Patent by Motorola in paragraph 9 of the Amended Complaint, alleging “Motorola has had knowledge of, or was willfully blind to, the existence of the ‘882 Patent since the filing of the Original Complaint on March 4, 2017, if not earlier.” Dkt. 9 at 3. This allegation is sufficient to establish knowledge supporting an indirect infringement claim under the holding in Rembrandt. Id. Motorola’s assertion that there exists any requirement of SWT to allege facts supporting pre-suit knowledge of the ‘882 Patent are baseless and find no statutory or case law support within the 4th Circuit. As such, SWT’s Amended Complaint adequately pleads facts satisfying the knowledge element of its inducement claim. 2. SWT has Adequately Pled that Motorola Acted with the Specific Intent that End Users of the Accused Products Infringe the ‘882 Patent. Motorola asks the Court to dismiss SWT’s inducement claim contending that the Complaint fails to “plead sufficient facts to support Motorola’s specific intent that a third party infringes the ‘882 Patent.” Dkt. No. 18 at 14. To the contrary, paragraph 15 of the Amended Complaint states: 15. On information and belief, Motorola possessed a specific intent to induce infringement by at a minimum, providing user guides and other sales-related materials, and by way of advertising, solicitation, and provision of product instruction materials, that instruct its customers and end users on the normal Case 3:17-cv-00022-GEC Document 21 Filed 05/30/17 Page 11 of 21 Pageid#: 142 8 operation of at least the Accused Product including heart rate, active minutes, calories burned, heart rate zone training, and/or sleep tracking features that infringe the ‘882 Patent. Dkt. 9 at 4. This paragraph, in the context of the entirety of the Complaint, provides sufficient facts and allegations upon which a plausible claim for induced infringement is made. SWT alleged that Motorola acted with the specific intent to induce infringement and provided a factual basis for this allegation- that Motorola provides user guides and other materials instructing its customers and end users to use the heart rate, active minutes, calories burned, heart rate zone training, and/or sleep tracking features of the Accused Products that infringe the ‘882 Patent. This is clear from the preceding paragraph of the Complaint, which alleges that “end users of at least the Accused Products directly infringe at least claim 8 of the ‘882 Patent when using the Accused Products to, at least, monitor their heart rate, active minutes, calories burned, heart rate zone training, and/or sleep tracking.” Dkt. 9 at 3. Additionally, the Complaint alleges that Motorola provides a mobile application which Motorola instructs users to download, the use of which along with the Accused Products is alleged to directly infringe the ‘882 Patent. Dkt. 9 at 3. These allegations are more than sufficient to satisfy the pleading standards and avoid dismissal of SWT’s inducement claim at this early stage. Such business practices (i.e., providing user manuals instructing users on use of the accused product in an infringing way), if and when proven later in a case, are in fact sufficient to meet the intent requirement for induced infringement, and when alleged in a complaint, are sufficient to reach the pleading requirement threshold. See e.g. e.Digital v. Intel Corp., No. 13-cv-2905-H- BGS, 2014 U.S. Dist. LEXIS 81049, at *9-10 (S.D. Cal. April 23, 2014) (denying a motion to dismiss allegations of induced infringement because the Complaint set forth “how defendant induced that infringement by providing them with product literature, instructional videos, Case 3:17-cv-00022-GEC Document 21 Filed 05/30/17 Page 12 of 21 Pageid#: 143 9 operating manuals, installation guides, instructional and how-to videos, webcasts, and other instructions on how to use the accused product in an infringing manner.”) (internal quotations omitted). Motorola asserts that SWT’s allegations do not plausibly show a specific intent to induce the end users to infringe relying on a Federal Circuit Court holding that instructions telling a consumer how to use the product in an infringing mode were insufficient to infer a specific intent to induce infringement. Dkt. 18 at 15; Vita-Mix Corp. v. Basic Holding, Inc., 581 F.3d 1317, 1329 (Fed. Cir. 2009). Motorola fails to mention, however, that Vita-Mix was decided at the summary judgment phase and with the benefit of discovery rather than at the pleadings stage. While Vita- Mix is inapplicable in the present case, it further demonstrates that this case should, at a minimum, proceed through discovery before the merits of SWT’s inducement claim should be decided. Motorola further asserts that SWT’s Amended Complaint is insufficiently pled because it does not specifically identify the product manuals or statements of Motorola which induced third party infringement of the ‘882 Patent. As discussed above, however, this type of detailed allegation is not required at the pleading stage. It is enough that SWT has identified several documents by type which are alleged to contain statements of Motorola which have induced and continue to induce infringement of the ‘882 Patent by users of the Moto 360 product. More detailed factual allegations relating to SWT’s inducement claim will be provided with SWT’s Preliminary Infringement Contentions. As such, SWT respectfully submits that dismissal of its inducement claim at this early stage would be improper. C. SWT’s Contributory Infringement Claim is Sufficiently Pled. To adequately plead contributory infringement a Complaint must allege: 1) “there is direct infringement,” 2) “the accused infringer had knowledge of the patent,” 3) “the component has no Case 3:17-cv-00022-GEC Document 21 Filed 05/30/17 Page 13 of 21 Pageid#: 144 10 substantial noninfringing uses,” and 4) “the component is a material part of the invention.” Koninklijke Philips N.V. v. Zoll Med. Corp., 656 F. App'x 504, 522 (Fed. Cir. 2016) (quoting Fujitsu Ltd. v. Netgear Inc., 620 F.3d 1321, 1326 (Fed. Cir. 2010). Arguments relating to both direct infringement and knowledge have been discussed, above, and will not be repeated here. With regard to the fourth element, that the component be a material part of the invention, the Amended Complaint makes clear that the Accused Product, the Moto 360, need not be used with any other device to infringe claim 8 of the ‘882 Patent and, therefore, is a material part of the invention. Any argument to the contrary is disingenuous, at best. The third element of contributory infringement is discussed, herein. Referring to paragraphs 16 and 17 of the Amended Complaint, reproduced below, SWT’s allegations center on certain features of the Accused Products which employ a particular component configuration, alleging that this configuration is only used in the Accused Products to support features and functions material to infringing claim 8 of the ‘882 Patent. As such, the Accused Products are configured in a manner for which there are no non-infringing uses. Paragraphs 16 and 17 state: 16. By providing the Accused Products, which comprise a sensor configuration especially adapted to accommodate functionality that infringes claim 8 of the ‘882 Patent, including an acceleration module comprising accelerometers and gyroscopes as well as a heart rate sensor, all contained within a housing comprising a display and attachable to the wrist of a user, Motorola has in the past and continues to contribute to the infringement of their customers and/or end users of at least claim 8 of the ‘882 Patent. 17. The sensor configuration present in the Accused Products accommodates acquisition of both movement data and physiological data regarding a user of the Accused Products. The acquired data are processed, synchronized, and displayed (via the built-in display or via an external display using the Motorola App Case 3:17-cv-00022-GEC Document 21 Filed 05/30/17 Page 14 of 21 Pageid#: 145 11 developed and promoted by Motorola) to provide at least calories burned, heart rate zone training, sleep tracking, and/or a combination of heart rate and activity information. The Accused Products have no substantial non-infringing uses because, although there may exist certain non-infringing functions which utilize data obtained from only one of the acceleration module or the heart rate sensor, there exists no non-infringing function of the Accused Products that displays synchronized data acquired from both the acceleration module and the heart rate sensor. Motorola knows that the Accused Products are implemented with a unique component configuration making them especially made or especially adapted for use in a product that infringes the ‘882 Patent. Dkt. No. 41 at 4-5 (emphasis added). The factual allegations made in these paragraphs are sufficient to identify separate and distinct functions of the Accused Products which are accommodated only via implementation of the Accused Products with the particular component configuration described, and for which there are no substantial non-infringing uses. More specifically, considering the entirety of the Amended Complaint, the Accused Products are alleged to comprise accelerometers and gyroscopes for deriving six degree of freedom movement information along with a heart rate sensor and are implemented with software routines for synchronizing this data. The Accused Products, when utilizing this component configuration, are alleged to have no substantial non-infringing uses. These allegations are sufficient for the pleading stage and entitle SWT to the benefits of discovery, through which additional evidence of uses of the Accused Products may be obtained. In cases where the asserted patent claims cover only one aspect or feature of the component or material or apparatus that the accused contributory infringer sells, courts seek to assure that the accused contributory infringer is not “‘permitted to escape liability as a contributory infringer merely by embedding [the infringing apparatus] in a larger product with some additional, separable feature before importing and selling it.’” Lucent Techs., Inc. v. Gateway, Inc., 580 F.3d 1301, 1320 Case 3:17-cv-00022-GEC Document 21 Filed 05/30/17 Page 15 of 21 Pageid#: 146 12 (Fed. Cir. 2009) (quoting Ricoh Co., Ltd. v. Quanta Comput. Inc., 550 F.3d 1325, 1337 (Fed. Cir. 2008)). The inquiry focuses on whether the infringing feature is “‘separate and distinct’” from other features of the composite product. Koninklijke, 656 F. App'x at 523-25 (quoting i4i Ltd. P'ship v. Microsoft Corp., 598 F.3d 831, 849 (Fed. Cir. 2010), aff'd on other grounds, 564 U.S. 91 (2011)). Courts are “fairly liberal in finding the accused components separate.” Koninklijke, 656 F. App'x at 524. In Fujitsu, for example, the accused products were wireless access point devices (i.e. a routers) and the asserted patents were directed to fragmentation software used for sending and receiving messages. Fujitsu, 620 F.3d at 1325. Despite these devices comprise many hardware and software modules configured for performing various functions, many of which did not infringe the asserted patents, the Federal Circuit Court found the “no substantial non-infringing use” element satisfied because the “fragmentation software does not have substantial noninfringing uses.” Id. at 1331. The Court reasoned that only the “‘particular tool’ in question, when that tool is ‘a separate and distinct feature’ of a larger product” should be considered. Id. at 1330. Further, “the component at issue here is the specific hardware and software that performs fragmentation” and, therefore, the Court declined to accept Plaintiffs non-infringing use arguments based on uses of the router, as a whole, which did not implicate the fragmentation hardware and software. Id. The Court noted the consistency of its rationale with another contributory infringement case in which a component or feature within a larger device was held to have no non-infringing uses despite the larger device within which it was embedded having many non-infringing uses. See i4i Ltd., 598 F.3d at 849 (holding that the many uses of Microsoft Word which did not utilize the allegedly infringing XML Editor module did not constitute non-infringing uses to allow Microsoft to escape liability for contributory infringement). Case 3:17-cv-00022-GEC Document 21 Filed 05/30/17 Page 16 of 21 Pageid#: 147 13 In a similar case, the Federal Circuit Court found that a date picker tool within Microsoft’s Outlook program was suitable for only infringing uses despite the Outlook program in which it was embedded, as a whole, having many substantial non-infringing uses. Lucent Techs., 580 F.3d at 1321. The Court rejected Microsoft’s argument that all features and functions of the larger Outlook program (the accused product) need be considered when identifying substantial non- infringing uses, stating: One example illustrates the problem with Microsoft's approach. Consider a software program comprising five--and only five--features. Each of the five features is separately and distinctly patented using a method claim. That is, the first feature infringes a method claim in a first patent, the second feature infringes a method claim in a second patent, and so forth. Assume also that the company selling the software doesn't provide specific instructions on how to use the five features, thus taking potential liability outside the realm of § 271 (b). In this scenario, under Microsoft's position, the software seller can never be liable for contributory infringement of any one of the method patents because the entire software program is capable of substantial noninfringing use. This seems both untenable as a practical outcome and inconsistent with both the statute and governing precedent. Id. at 1320. (Emphasis added.) The present case falls squarely within the cited case law in that the larger accused product, the Moto 360, has embedded within it many separate and distinct features that both infringe the ‘882 Patent and have no substantial non-infringing uses. The particular component configuration of the Accused Products accommodating these features is explicitly described in paragraph 16 of SWT’s Amended Complaint. This component configuration and the features it accommodates are separate and distinct from other features of the Accused Products, such as providing the time of day or counting lap times during exercise, for example. Whether the Accused Products comprise Case 3:17-cv-00022-GEC Document 21 Filed 05/30/17 Page 17 of 21 Pageid#: 148 14 additional, separate, non-infringing features is irrelevant to the present inquiry and cannot be relied upon to challenge SWT’s sufficiently pled claim for contributory infringement. As such, SWT’s contributory infringement claim should not be dismissed because all elements of the claim, and namely the showing that there are no substantial non-infringing uses, are clearly and adequately pled. D. The Court Should Not Dismiss SWT’s Induced Infringement Claim for the Pre- Filing Period. Motorola asks the Court to dismiss SWT’s induced infringement claim for all actions of Motorola occurring before the filing of this suit. In order to adequately plead a claim of induced infringement, the Complaint must include allegations sufficient to support a claim of direct infringement by users of the Accused Products and, additionally, show knowledge of the ‘882 Patent by Motorola along with specific intent by Motorola to induce the infringing conduct of users of the Accused Products. ZUP, LLC v. Nash Mfg., Inc., Civil Action No. 3:16-CV-125-HEH, 2017 U.S. Dist. LEXIS 5477, at *52-53 (E.D. Va. Jan. 13, 2017); see also DSU Med. Corp. v. JMS Co., 471 F.3d 1293, 1306 (Fed. Cir. 2006) (“inducement requires that the alleged infringer knowingly induced infringement and possessed specific intent to encourage another’s infringement”) (citations omitted)). The knowledge of the accused infringer may be shown by actual knowledge or by willful blindness. Global-Tech Appliances, Inc. v. SEB S.A., 563 U.S. 754, 766-71 (2011). Paragraph 9 of SWT’s Amended Complaint alleges that “Motorola has had knowledge of, or was willfully blind to, the existence of the ‘882 Patent since the filing of the Original Complaint in this lawsuit, on March 14, 2017, if not earlier.” Dkt. No. 9 at ¶ 9. This allegation states the element of its induced infringement claim (knowledge by Motorola) in language mirroring the case law, see Global-Tech, for example, while also providing factual information demonstrating at least Case 3:17-cv-00022-GEC Document 21 Filed 05/30/17 Page 18 of 21 Pageid#: 149 15 one plausible manner in which the element is met. This is all that is required of a Complaint under Twombly and Iqbal, as noted in Section II, above. This should end the inquiry- SWT’s induced infringement claim is sufficiently pled. Beyond this, practical considerations counsel against granting Motorola’s Motion. Motorola seeks to parse the language of paragraph 9 of SWT’s Amended Complaint, rather than viewing the allegation in its entirety, as part of a thinly veiled attempt to improperly limit SWT’s damages under its induced infringement claim at the pleading stage, before SWT has the benefit of discovery to uncover evidence to more fully develop its infringement theories. Surely Motorola will argue that the Court may dismiss SWT’s induced infringement claim for the pre-suit period, now, because in the event that SWT discovers additional facts relating to earlier knowledge of, or willful blindness to, the existence of the ‘882 Patent then SWT could simply amend its complaint at that time to reinsert those allegations. This course of action would most likely result in Motorola opposing production of any documents relevant to pre-filing knowledge or willful blindness on the basis that those aspects of SWT’s induced infringement claim had been dismissed by the Court, necessitating the filing of motions to compel by SWT and further involvement by the Court. Beyond that, in the event that SWT did uncover additional evidence relating to pre-suit knowledge or willful blindness, it is a virtual certainty that Motorola would oppose any motion by SWT to amend its Amended Complaint to reinsert the dismissed portion of its original inducement claim. On the other hand, denying Motorola’s Motion does no harm to either party since SWT’s damages derived from its inducement claim may only extend as far back as all elements of the claim, including knowledge, can be proven. If no additional evidence relating to knowledge of the ‘882 Patent is uncovered by SWT during discovery, SWT’s damages window would only extend back to the filing of the present suit and no earlier. Denying Motorola’s Motion, therefore, Case 3:17-cv-00022-GEC Document 21 Filed 05/30/17 Page 19 of 21 Pageid#: 150 16 promotes the parties reaching the correct final disposition of SWT’s inducement claim without creating the potential for unnecessary and repeated involvement by the Court in discovery disputes. IV. CONCLUSION For the foregoing reasons, Plaintiff respectfully requests that the Court deny Defendant’s Motion in its entirety. In the event SWT’s allegations in its Complaint are inadequate in any respect, this Court should not dismiss the Complaint outright, but should instead grant SWT leave to amend its Complaint. Dated: May 30, 2017 /s/ Mark D. Obenshain Mark D. Obenshain (VSB # 27476) Justin M. Wolcott (VSB # 83367) OBENSHAIN LAW GROUP 420 Neff Avenue, Suite 130 Harrisonburg, VA 22801 Telephone: (540) 208-0727 Facsimile: (540) 266-3568 Email: mdo@obenshainlaw.com Email: jmw@obenshainlaw.com Counsel for Plaintiff Smart Wearable Technologies Inc. Of Counsel: Michael T. Cooke (Admitted Pro Hac Vice) Corby R. Vowell (Admitted Pro Hac Vice) Richard A. Wojcio Jr. (Admitted Pro Hac Vice) FRIEDMAN, SUDER & COOKE Tindall Square Warehouse No. 1 604 East 4th Street, Suite 200 Fort Worth, TX 76102 Telephone: (817) 334-0400 Facsimile: (817) 334-0401 Email: mtc@fsclaw.com Email: vowell@fsclaw.com Email: wojcio@fsclaw.com Case 3:17-cv-00022-GEC Document 21 Filed 05/30/17 Page 20 of 21 Pageid#: 151 17 CERTIFICATE OF SERVICE I hereby certify that on the 30th day of May, 2017, I electronically filed the foregoing document with the clerk of the court for the U.S. District Court for the Western District of Virginia, using the electronic case filing system of the court. The electronic case filing system sent a “Notice of Electronic Filing” to the attorneys of record who have consented in writing to accept this Notice as service of this document by electronic means. /s/ Mark D. Obenshain Case 3:17-cv-00022-GEC Document 21 Filed 05/30/17 Page 21 of 21 Pageid#: 152