Carson Optical Inc. v. eBay Inc.
202 F. Supp. 3d 247
E.D.N.Y2016Background
- Plaintiff Carson Optical owns two patents ('729 head magnifying glass; '601 head belt) and sells the MagniVisor Deluxe.
- Defendant eBay operates a large online marketplace that facilitates listings but does not take possession of items sold.
- Plaintiff alleges eBay induced infringement by permitting infringing items to be sold via its VeRO program and policies.
- Plaintiff submitted NOCI notices under VeRO and claimed eBay refused to remove or evaluate infringing listings.
- Plaintiff also asserts a New York unfair competition claim premised on eBay's conduct related to VeRO and alleged infringement.
- The court grants in part and denies in part defendant’s motion to dismiss, allowing induced infringement claims to proceed but dismissing the unfair competition claim.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether plaintiff states a claim for induced infringement under §271(b). | Plaintiff asserts knowledge, willful blindness, and intent to encourage infringement. | eBay contends lack of knowledge or intent and proper pleading. | Plaintiff states a claim for induced infringement given willful blindness and intent at pleading stage. |
| Whether §298 Advice of Counsel applies to this action. | Plaintiff may rely on lack of counsel advice to prove willful infringement. | §298 bars use of lack of counsel as proof of willfulness/intent. | §298 applies to actions commenced on/after Jan 14, 2013; cannot rely on lack of counsel here. |
| Whether plaintiff adequately pleads actual knowledge of infringement. | Plaintiff asserts actual knowledge or willful blindness by defendant. | Defendant contends pleadings show inconsistency or lack of knowledge. | Actual knowledge inadequately pled; willful blindness theory survives. |
| Whether plaintiff adequately pleads willful blindness (deliberate actions to avoid learning). | Plaintiff pleads subjective belief of high infringement probability and actions to avoid learning. | Defense disputes reliance on notices and non-removal as evidence of willful blindness. | Willful blindness adequately pled; facts suggest deliberate avoidance of learning of infringement. |
| Whether plaintiff’s unfair competition claim is preempted or viable. | Unfair competition is not purely patent law and includes misappropriation/palming-off theories. | Preempted by federal patent law; bad-faith/VeRO-based theory insufficient. | Unfair competition claim is preempted and, even if not, fails to state a claim. |
Key Cases Cited
- Commil USA, LLC. v. Cisco Sys., Inc., 135 S. Ct. 1920 (U.S. 2015) (knowledge and intent required for inducement)
- Global-Tech Appliances, Inc. v. SEB S.A., 563 U.S. 754 (U.S. 2011) (willful blindness establishes knowledge for inducement liability)
- Bill of Lading Transmission & Processing Sys. Patent Litig., 681 F.3d 1323 (Fed. Cir. 2012) (discusses knowledge and intent for inducement; direct infringement not necessary to plead)
- Limelight Networks, Inc. v. Akamai Techs., Inc., 134 S. Ct. 2111 (U.S. 2014) (no inducement without direct infringement)
- DSU Med. Corp. v. JMS Co., 471 F.3d 1293 (Fed. Cir. 2006) (intent can be shown by circumstantial evidence)