408 F.Supp.3d 819
E.D. Tex.2019Background:
- Motiva Patents sued HTC alleging direct, induced, contributory, and willful infringement of five patents directed to systems (e.g., video‑game/VR) that track motion/orientation; accused products include HTC Vive, Vive Pro, and Vive BE (controllers, base stations, wireless adapter, trackers).
- Complaint identifies accused hardware and a software "processing system" that receives wireless signals, determines movement, and drives virtual objects; alleges HTC’s manuals, communications, and advertisements induce infringing customer use.
- Motiva pleaded pre‑suit and post‑suit knowledge theories, relying on willful blindness by alleging HTC has a policy/practice of instructing employees not to review others’ patents.
- HTC moved to dismiss under Fed. R. Civ. P. 12(b)(6), arguing Motiva failed to plead (1) inducement intent and patent knowledge, (2) lack of substantial noninfringing uses for accused components, and (3) a sufficient predicate for willful infringement.
- The Court applied Twombly/Iqbal plausibility standards, found Motiva had pleaded classes of evidence (manuals, communications, ads), identified a software component with no substantial noninfringing uses, and alleged a concrete willful‑blindness policy and implementation; the motion to dismiss was denied.
- The Court also criticized HTC’s Rule 11 threat as unwarranted and noted such threats can reflect litigation misconduct relevant to fee motions under 35 U.S.C. § 285.
Issues:
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Induced infringement — intent to induce | Motiva alleges HTC took active steps (manuals, directions, ads) to induce customers to use Vive products in an infringing manner | HTC says Motiva must identify specific customers and specific excerpts/acts showing inducement | Court: identification of classes of evidence (manuals, communications, ads) plus well‑pleaded direct infringement suffices at pleading stage; no need to identify specific customers or excerpts pre‑discovery |
| Induced infringement — knowledge | Motiva pleads willful blindness (policy of not reviewing others’ patents; instructing employees not to review) to supply knowledge | HTC contends willful‑blindness allegations are conclusory/insufficient | Court: willful‑blindness allegations (specific policy and implementation) plausibly plead knowledge for inducement |
| Contributory infringement — substantial noninfringing uses | Motiva alleges a processing software component that determines movement info and has no substantial noninfringing uses | HTC argues Motiva failed to identify a specific accused product/component or merely parrots claim language | Court: Motiva sufficiently identified a software component by functionality; pleading lack of substantial noninfringing uses is plausible pre‑discovery |
| Willful infringement | Motiva contends willful blindness supports willful infringement allegations | HTC argues willful blindness is insufficient to plead willfulness | Court: willful blindness can substitute for actual knowledge and, when well‑pled, suffices to state a claim for willful infringement consistent with Global‑Tech and Halo |
Key Cases Cited
- In re Bill of Lading Transmission & Processing Sys. Patent Litig., 681 F.3d 1323 (Fed. Cir. 2012) (plaintiff need not identify specific direct infringers; may plead indirect infringement via circumstantial evidence)
- Global‑Tech Appliances, Inc. v. SEB S.A., 563 U.S. 754 (2011) (willful blindness can supply knowledge for inducement)
- Commil USA, LLC v. Cisco Sys., Inc., 135 S. Ct. 1920 (2015) (inducement requires knowledge of the patent and that induced acts infringe)
- Halo Elecs., Inc. v. Pulse Elecs., Inc., 136 S. Ct. 1923 (2016) (willfulness involves subjective knowledge or reckless disregard; informs willful infringement analysis)
- Ricoh Co. v. Quanta Computer Inc., 550 F.3d 1325 (Fed. Cir. 2008) (selling a component that can only infringe permits an inference of intent; lack of substantial noninfringing use supports contributory liability)
- Microsoft Corp. v. AT & T Corp., 550 U.S. 437 (2007) (software embodied in a computer‑readable medium can be a §271 component)