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Motiva Patents, LLC v. Sony Corporation

United States District Court, E.D. Texas, Lufkin Division

September 27, 2019

MOTIVA PATENTS, LLC, Plaintiff,
v.
SONY CORPORATION HTC CORPORATION, Defendants.

          MEMORANDUM OPINION AND ORDER

          RODNEY GILSCRAP UNITED STATES DISTRICT JUDGE

         Before the Court is the Motion to Dismiss Plaintiff’s Original Complaint Under Rule 12(b)(6) (“the Motion to Dismiss”) filed by Defendant HTC Corporation (“HTC”). (Dkt. No. 18). In the Motion to Dismiss, HTC argues that Plaintiff Motiva Patents, LLC (“Motiva”) has failed to plead, with adequate specificity, a claim for indirect infringement and willful infringement. Having considered the Motion to Dismiss, and for the reasons set forth herein, the Court finds the Motion should be and hereby is DENIED.

         I. Factual and Procedural Background

         Motiva alleges that HTC directly, indirectly, and willfully infringes various claims of United States Patent Nos. 7, 292, 151 (“the ’151 patent”), 7, 952, 483 (“the ’483 patent”), 8, 159, 354 (“the ’354 patent”), 8, 427, 325 (“the ’325 patent”), or 9, 427, 659 (“the ’659 patent”) (collectively, the “Asserted Patents”). (No. 9:18-cv-179, Dkt. No. 1 at 16 ¶ 68) [hereinafter “Complaint”].[1] The Complaint alleges that Asserted Patents are broadly directed towards “systems, including video game systems, for tracking a user’s movement, position, and/or orientation.” (Id. at 2 ¶ 7).

Specifically, the [patented] systems include one or more hand-held transponders that are in communication with a processing system, such as a computer. Using sensors located on the transponder, such as gyroscopes and accelerometers, along with external sensors, the transponder’s movement, position, and orientation are tracked and portrayed on a digital display. The transponder can also include buttons or other input mechanisms that enable the user to manipulate virtual objects in 3D.

(Id.) Motiva alleges that various HTC products both directly and indirectly infringe the Asserted Patents. In addition to a general allegation that HTC sells infringing products, Motiva identifies a number of products that are specifically alleged to infringe the Asserted Patents, including HTC’s “Vive, Vive Pro, and Vive BE Virtual Reality System (including, for example, the Controller(s), ‘Lighthouse’ Base Stations, Wireless Adapter, and/or Tracker(s) with accompanying peripherals) (‘Accused Vive Products’).” (Id. at 3 ¶ 10). Motiva’s Complaint includes a short and plain statement explaining how the Accused Vive Products infringe the Asserted Patents. The Complaint specifically identifies the hardware involved in the Accused Vive Products that is accused of infringement. The Complaint recites:

64. The accused products include a first hand-held game controller comprised of an accelerometer, a transmitter that sends wireless signals to the remote processing system, a receiver that receives wireless signals from the remote processing system, a user input device on the exterior of the first hand-held game controller, an output device, a data storage memory, and a processing system in communication with the accelerometer, transmitter, receiver, user input device, output device, and data storage memory.

(Id. at 15 ¶ 64) (emphasis added). The Complaint also includes a description of the software processing system embodied in the Accused Vive Products, as well as the tasks performed by that software which are alleged to infringe. The Complaint recites:

65. The accused products include a processing system programmed with one or more software routines executing on the processing system to: 1) receive input relating to motion of the first hand-held game controller and provide data to the output device for outputting feedback based on the motion of the first hand-held game controller; 2) receive user input data from the user input device and, and in response to the user input data, output control data for communication to the remote processing system; 3) output data for communication to the remote processing system for controlling motion of a first virtual object displayed in a computer generated virtual environment displayed on a remote display and where the motion of the first virtual object is in proportion with the motion of the first hand-held game controller.

(Id. at 15 ¶ 65) (emphasis added). The Complaint further offers illustrative photographs of the Accused Vive Products to demonstrate how the accused features interact:

         (Image Omitted)

(Id. at 14).

         Motiva includes a separate section addressed to its "allegations regarding indirect infringement." (Id. at 16). Motiva alleges indirect infringement under a theory of induced infringement and a theory of contributory infringement. (Id. at 16 ¶ 68; id. at 17 ¶ 70). For both theories of indirect infringement, the Complaint alleges pre-suit knowledge and post-suit knowledge of the Asserted Patents. Motiva relies on an allegation of willful blindness to demonstrate that HTC’s knowledge of the Asserted Patents. The Complaint alleges that:

Defendant has a policy or practice of not reviewing the patents of others (including instructing its employees to not review the patents of others), and thus has been willfully blind of Motiva’s patent rights.

(Id. at 18 ¶ 72) (emphasis added). In addition, specific to post-suit knowledge, the Complaint alleges that HTC “has knowledge of the Asserted Patents at least as of the date when it was notified of the filing of this action.” (Id. at 18 ¶ 71).

         With respect to its theory of induced infringement, Motiva alleges that HTC took specific, affirmative, and intentional steps to induce infringement. The Complaint recites:

Defendant took active steps, directly and/or through contractual relationships with others, with the specific intent to cause them to use the accused products in a manner that infringes one or more claims of the patents-in-suit, including, for example, Claim 28 of the ‘151 Patent, Claim 44 of the ‘483 Patent, Claim 32 of the ‘354 Patent, Claim 1 of the ‘325 Patent, and Claim 45 of the ‘659 Patent. Such steps by Defendant included, among other things, advising or directing customers and end-users to use the accused products in an infringing manner; advertising and promoting the use of the accused products in an infringing manner; and/or distributing instructions that guide users to use the accused products in an infringing manner. Defendant is performing these steps, which constitute induced infringement with the knowledge of the Asserted Patents and with the knowledge that the induced acts constitute infringement. Defendant is aware that the normal and customary use of the accused products by Defendant’s customers would infringe the Asserted Patent. Defendant’s inducement is ongoing.

(Id. at 16 ¶ 68) (emphasis added); (see also Id . at 16–17 ¶ 69).

         Further, with respect to its theory of contributory infringement, Motiva alleges that HTC’s products contain a software processing system specifically designed in a manner that has no substantial noninfringing uses. The Complaint alleges:

Defendant has also indirectly infringed by contributing to the infringement of the Asserted Patents. Defendant has contributed to the direct infringement of the Asserted Patents by the end-user of the accused products. The accused products have special features that are specially designed to be used in an infringing way and that have no substantial uses other than ones that infringe the Asserted Patents, including, for example, Claim 28 of the ‘151 Patent, Claim 44 of the ‘483 Patent, Claim 32 of the ‘354 Patent, Claim 1 of the ‘325 Patent, and Claim 45 of the ‘659 Patent. The special features include, for example, a processing system that receives wireless signals from a remote communication device and determines movement information for the remote communication device that is used in a manner that infringes the Asserted Patents. The special features constitute a material part of the invention of one or more of the claims of the Asserted Patents and are not staple articles of commerce suitable for substantial non-infringing use. Defendant’s contributory infringement is ongoing.

(Id. at 17–18 ¶ 70) (emphasis added). Finally, Motiva alleges that HTC’s infringement is willful. Motiva alleges that HTC’s “direct and indirect infringement of the Asserted Patents is, has been, and continues to be willful, intentional, deliberate, and/or in conscious disregard of Motiva’s rights under the patent.” (Id. at 18 ¶ 74).

         On December 17, 2018, HTC brought the present Motion to Dismiss pursuant to Fed.R.Civ.P. 12(b)(6). HTC argues that Motiva has failed to allege adequate factual support for indirect infringement in three respects: HTC’s knowledge of the Asserted Patents; HTC’s intent to induce infringement; and the existence of substantial noninfringing uses for HTC’s products. HTC also claims that Motiva has failed to plead adequate factual support for willful infringement. Accordingly, HTC asks the Court to dismiss Motiva’s “both pre- and post-suit” claims for induced, contributory, and willful infringement. (Dkt. No. 18 at 10, 12, 13).

         II. Legal Standard

         A. Motion to Dismiss

         This Court applies Fifth Circuit law to the procedural aspects of a motion to dismiss. OIP Techs., Inc. v. Amazon.com, Inc., 788 F.3d 1359, 1362 (Fed. Cir. 2015) (“We apply regional circuit law to the review of motions to dismiss.”). “Federal Rule of Civil Procedure 12(b)(6) authorizes a court to dismiss a complaint if the complaint ‘fail[s] to state a claim upon which relief can be granted.’” Script Sec. Sols. L.L.C. v. Amazon.com, Inc., 170 F.Supp.3d 928, 935 (E.D. Tex. 2016) (Bryson, J.) (quoting Fed.R.Civ.P. 12(b)(6)). “The question resolved on a motion to dismiss for a failure to state a claim is not whether the plaintiff will ultimately prevail, ‘but whether [the] complaint was sufficient to cross the federal court’s threshold.’” Id. (quoting Skinner v. Switzer, 562 U.S. 521, 530 (2011)). “[A] plaintiff is generally required to provide ‘only a plausible “short and plain” statement of the plaintiff’s claim . . . ’” Id. at 936 (quoting Skinner, 562 U.S. at 530; Fed. R Civ. P. 8(a)(2)) (alteration in original). “The ‘short and plain’ statement does ‘not countenance dismissal of a complaint for imperfect statement of the legal theory supporting the claim asserted.’” Id. (quoting Johnson v. City of Shelby, Miss., 574 U.S. 10, 10 (2014)).

         In evaluating a motion to dismiss under Rule 12(b)(6), the Court must “accept all well-pleaded facts in the complaint as true and view the facts in the light most favorable to the plaintiff.” O’Daniel v. Indus. Serv. Sols., 922 F.3d 299, 304 (5th Cir. 2019). As such, courts “are not authorized or required to determine whether the plaintiff’s plausible inference . . . is equally or more plausible than other competing inferences . . . .” Lormand v. U.S. Unwired, Inc., 565 F.3d 228, 267 (5th Cir. 2009) (citing Bell Atl. Corp. v. Twombly, 550 U.S. 544, 556 (2007)).

         After drawing every reasonable inference in favor of the plaintiff, “the court must then decide whether those facts state a claim for relief that is plausible on its face.” Script, 170 F.Supp.3d at 935 (citing Bowlby v. City of Aberdeen, Miss., 681 F.3d 215, 219 (5th Cir. 2012)). “Asking for plausible grounds does not impose a probability requirement at the pleading stage . . . .” Twombly, 550 U.S. at 556 (emphasis added). Nor does the plausibility standard authorize courts “to look behind [a complaint’s] allegations and independently assess the likelihood that the plaintiff will be able to prove them at trial.” Harold H. Huggins Realty, Inc. v. FNC, Inc., 634 F.3d 787, 803 n.44 (5th Cir. 2011)).

         Instead, the plausibility standard is met when the complaint pleads “enough fact to raise a reasonable expectation that discovery will reveal evidence” in support of the alleged claims. Twombly, 550 U.S. at 556; accord Id . at 559 (explaining that claims should only be dismissed at the pleading stage when there is “no ‘reasonably founded hope that the [discovery] process will reveal relevant evidence’” (quoting Dura Pharm., Inc. v. Broudo, 544 U.S. 336, 347 (2005))); In re Bill of Lading Transmission & Processing Sys. Patent Litig., 681 F.3d 1323, 1341 (Fed. Cir. 2012) (“As the Supreme Court has explained, the plausibility requirement is not akin to a ‘probability requirement at the pleading stage; it simply calls for enough fact[s] to raise a reasonable expectation that discovery will reveal’ that the defendant is liable for the misconduct alleged.” (quoting Twombly, 550 U.S. at 556)). Thus, particularly where the relevant information is beyond the access of the plaintiff, courts should generally permit discovery to proceed unless the complaint recites no more than sheer speculation about the plaintiff’s entitlement to relief. See Wooten v. McDonald Transit Assocs., Inc., 788 F.3d 490, 498 (5th Cir. 2015) (“The factual allegations in the complaint need only ‘be enough to raise a right to relief above the speculative level, on the assumption that all the allegations in the complaint are true (even if doubtful in fact).’” (quoting Twombly, 550 U.S. at 555)); Ashcroft v. Iqbal, 556 U.S. 662, 679 (2009) (“Determining whether a complaint states a plausible claim for relief will . . . be a context-specific task that requires the reviewing court to draw on its judicial experience and common sense.”).

         In evaluating a motion to dismiss, the Court may review only “the complaint, any documents attached to the complaint, and any documents attached to the motion to dismiss that are central to the claim and referenced by the complaint.” PPS Data, LLC v. Jack Henry & Assocs., Inc., No. 2:18-cv-7-JRG, Dkt. No. 156, at 19 (E.D. Tex. Sept. 6, 2019) (quoting Ironshore Europe DAC v. Schiff Hardin, L.L.P., 912 F.3d 759, 763 (5th Cir. 2019)).

         With these principles in mind, the Court turns to the question of whether Motiva has adequately stated a claim for induced, contributory, and willful infringement.

         B. Indirect Infringement

         1. ...


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