543 F.Supp.3d 814
N.D. Cal.2021Background
- Fortinet owns five cybersecurity patents and sued competitor Forescout for induced, contributory, and willful infringement; original complaint asserted three patents; amended complaint added two more.
- The Court previously denied dismissal as to three patents on § 101 grounds and found inducement adequately pleaded, but dismissed contributory and willfulness claims with leave to amend.
- In the Amended Complaint Fortinet identified specific Forescout documentation (with URLs) allegedly instructing customers to use accused products in infringing ways and alleged Forescout refused meaningful licensing discussions.
- Forescout moved to dismiss arguing the two newly asserted patents (’034 and ’421) are § 101-ineligible and that Fortinet again failed to plead induced, contributory, or willful infringement.
- The Court applied the Alice two-step framework, discussed conflicting Federal Circuit precedent on the role of the specification at step one, and concluded factual disputes prevent resolving § 101 at the pleading stage for the two newly asserted patents.
- Ruling: the Court denied Forescout’s § 101 challenge to the ’034 and ’421 patents and denied dismissal of induced and contributory infringement claims, but granted dismissal of willful infringement claims without further leave to amend.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| §101 – ’034 Patent eligibility | ’034 recites a concrete technological solution (client security app that detects network state, selects configs, launches functions); spec and dependent claims show technical improvements | Claims are an abstract if/then selection and launching of generic functions; no inventive concept or specialized hardware | Denied dismissal; court finds on claim face arguably abstract but specification and dependent claims raise factual issues precluding §101 dismissal now |
| §101 – ’421 Patent eligibility | ’421 claims a specialized SIEM that schedules, executes, and collects results from security tasks to solve interoperabilty and automation problems; spec shows concrete improvements | Claims merely automate longstanding human workflow (organize tasks, schedule, collect results); functional/black-box language lacks how-to details | Denied dismissal; court finds claim language abstract but specification and dependent claims create factual questions for later stages |
| Induced infringement (§271(b)) | Fortinet identified Forescout documentation and provided URLs showing instructions that coach customers to practice claim elements; also alleged notice to Forescout | Forescout argues amended pleading still lacks the specificity required to show specific intent and knowledge that induced acts infringe | Denied dismissal; alleged manuals/URLs and notice allegations plausibly plead knowledge and specific intent to induce infringement |
| Contributory infringement (§271(c)) | Amended Complaint alleges accused software components are "programmed to be used to infringe," identifies components and asserts no substantial noninfringing uses | Forescout says Fortinet still fails to plead factual underpinnings showing absence of substantial noninfringing uses | Denied dismissal; court finds allegations plausible at pleading stage (allows inference that components lack substantial noninfringing uses) |
| Willful infringement / enhanced damages (§284) | Fortinet points to pre-suit notice and Forescout’s alleged refusal to meaningfully engage in licensing discussions; pleads willful blindness | Forescout argues Fortinet’s allegations are conclusory and insufficient to show egregious, conscious wrongdoing or subjective belief of high probability of infringement | Granted dismissal of willfulness claims; court finds allegations amount to ordinary dispute and do not plausibly plead egregious or willfully blind conduct; no further leave to amend |
Key Cases Cited
- Ashcroft v. Iqbal, 556 U.S. 662 (pleading standard: plausibility)
- Bell Atl. Corp. v. Twombly, 550 U.S. 544 (plausibility requirement for complaints)
- Alice Corp. Pty. Ltd. v. CLS Bank Int'l, 573 U.S. 208 (two-step framework for § 101)
- Mayo Collaborative Servs. v. Prometheus Labs., 566 U.S. 66 (Alice/Mayo framework)
- Diamond v. Diehr, 450 U.S. 175 (laws of nature/abstract ideas exclusion)
- Gottschalk v. Benson, 409 U.S. 63 (basic tools/abstract ideas preemption concern)
- Enfish, LLC v. Microsoft Corp., 822 F.3d 1327 (consider claims in light of specification; improvements to computer functionality)
- Berkheimer v. HP Inc., 881 F.3d 1360 (inventive-concept inquiry may involve factual issues; 12(b)(6) relief sometimes inappropriate)
- CardioNet, LLC v. InfoBionic, Inc., 955 F.3d 1358 (specification can inform step-one analysis; accept specification's statements at pleading stage)
- Visual Memory LLC v. NVIDIA Corp., 867 F.3d 1253 (specification showing technical advantages supports eligibility)
- American Axle & Mfg. v. Neapco Holdings LLC, 967 F.3d 1285 (focus on claim language; claimed result without how-to can be ineligible)
- In re Bill of Lading Transmission & Processing Sys. Patent Litig., 681 F.3d 1323 (indirect infringement requires underlying direct infringement)
- Global-Tech Appliances, Inc. v. SEB S.A., 563 U.S. 754 (inducement requires knowledge that induced acts constitute infringement)
- Halo Elecs., Inc. v. Pulse Elecs., Inc., 136 S. Ct. 1923 (enhanced damages reserved for egregious infringement conduct)