United States District Court, N.D. Texas, Dallas Division
MEMORANDUM OPINION AND ORDER
C. Godbey United States District Judge
Order addresses Defendant Diebold Nixdorf, Inc.'s
(“Diebold”) motion to dismiss under Rule 12(b)(6)
 and Plaintiff Hyosung TNS, Inc's
(“Hyosung”) motion to continue mediation .
For the reasons below, the Court denies Diebold's motion
to dismiss and orders the parties to mediate by January 31,
The Patent Infringement Dispute
a patent dispute between two manufacturers and sellers of
automated teller machines (“ATMs”) and ATM
components and modules. Am. Compl. 1, 3 . In February
2016, Hyosung filed both this patent suit and a complaint
with the International Trade Commission (“ITC”),
alleging Diebold infringed four Hyosung patents. Brief
Support Mot. Dismiss 4-5 ; Compl. 3 . Hyosung's
patent number 8, 523, 235 (‘235 patent), now the sole
asserted patent in this suit, claims an ATM feature enabling
deposits of bundles of checks using an element - a
“cheque standby unit” - that holds each check
pending customer verification prior to deposit. Brief Support
Mot. Dismiss 2-3 .
Court stayed this case during the pendency of the ITC action.
Id. at 5. In that proceeding, the administrative law
judge found that the term “cheque standby unit”
in Hyosung's ‘235 patent was sufficiently definite
and that Diebold infringed six of its claims. Pltf.'s
Resp. Mot. Dismiss 3 . The ITC affirmed, but the Federal
Circuit reversed, holding that the term “cheque standby
unit” was invalid as indefinite under 35 U.S.C. §
112(f) because the term indicated a function and because the
patent specification did not recite corresponding structure.
Id. at 3-4. Following the Federal Circuit decision,
this Court lifted the stay in this action in March 2019, and
Hyosung filed an amended complaint alleging infringement of
only the ‘235 patent. Id. at 4. Diebold then
filed its motion to dismiss, and Hyosung filed its motion to
Rule 12(b)(6) Motion to Dismiss
addressing a Rule 12(b)(6) motion to dismiss, a court must
determine whether the plaintiff has asserted a legally
sufficient claim for relief. Blackburn v. City of
Marshall, 42 F.3d 925, 931 (5th Cir. 1995). A viable
complaint must include “enough facts to state a claim
to relief that is plausible on its face.” Bell
Atlantic Corp. v. Twombly, 550 U.S. 544, 570 (2007). To
meet this standard, a plaintiff must “plead[ ] factual
content that allows the court to draw the reasonable
inference that the defendant is liable for the misconduct
alleged.” Ashcroft v. Iqbal, 556 U.S. 662, 678
(2009). A court generally accepts well-pleaded facts as true
and construes the complaint in the light most favorable to
the plaintiff. Gines v. D.R. Horton, Inc., 699 F.3d
812, 816 (5th Cir. 2012). But a court does not “accept
as true conclusory allegations, unwarranted factual
inferences, or legal conclusions.” Ferrer v.
Chevron Corp., 484 F.3d 776, 780 (5th Cir. 2007)
(citation omitted). “Factual allegations must 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).” Twombly, 550 U.S.
Patent Infringement and Patent Invalidity
claiming direct infringement of its patent must show that the
accused party “makes, uses, offers to sell, or sells
any patented invention, within the United States . . . during
the term of the patent.” 35 U.S.C. § 271(a). The
complaint must “place the alleged infringer on notice
of what activity . . . is being accused of
infringement.” Lifetime Indus., Inc. v. Trim-Lok,
Inc., 869 F.3d 1372, 1379 (Fed. Cir. 2017) (internal
patent claim is invalid as indefinite if it “fail[s] to
inform, with reasonable certainty, those skilled in the art
about the scope of the invention.” Nautilus, Inc.
v. Biosig Instruments, Inc., 572 U.S. 898, 901 (2014).
Claims that recite “a means or step for performing a
specified function” are governed by 35 U.S.C. §
112(f) and are definite if the patent specification discloses
a corresponding structure capable of performing the function.
35 U.S.C. § 112(f); Diebold Nixdorf, Inc. v.
Int'l Trade Comm'n, 899 F.3d 1291, 1303 (Fed.
Cir. 2018). To determine whether a patent claim is
indefinite, courts generally must engage in claim
construction, which often involves reviewing evidence and
making factual findings. See Cox Commc'ns, Inc. v.
Sprint Commc'n Co., 838 F.3d 1224, 1232 (Fed. Cir.
2016); H-W Tech., L.C. v. Apple, Inc., 2012 WL
959316, at *3 (N.D. Tex. 2012). The party challenging a
patent's validity bears the burden of proving
indefiniteness. Dow Chem. Co. v. Nova Chems. Corp.
(Can.), 809 F.3d 1223, 1224 (Fed. Cir. 2015).
Hyosung Has Stated A Claim For Patent Infringement
Rule 12(b)(6) motion, Diebold's primary argument is that
the Federal Circuit opinion holding Hyosung's ‘235
patent invalid as indefinite, while not preclusive, requires
dismissal because patent validity determinations are legal
conclusions that may not be disregarded without
“thoroughly justified grounds.” See Tex.
Instruments, Inc. v. Cypress Semiconductor Corp., 90
F.3d 1558, 1569 (Fed. Cir. 1996); see also Diebold
Nixdorf, Inc., 899 F.3d at 1294, 1299. While Diebold is
correct in noting that Federal Circuit legal interpretations
are binding precedent, the Court disagrees that th e
Diebold decision requires Rule 12(b)(6) dismissal
Diebold, the Federal Circuit acknowledged that trial
courts “interpret patent claims” and arrive at
legal conclusions “after deciding factual
disputes.” Diebold Nixdorf, Inc., 899 F.3d at
1299 (emphasis added). Further, the Federal Circuit expressly
noted evidence, not presented at the time, that could warrant
a different determination on the issue of the ‘235
patent's validity. Id. at 1300 n.4; see also
Tex. Instruments, Inc., 90 F.3d at 1562-63, 1570