Case Information
UNITED STATES DISTRICT COURT NORTHERN DISTRICT OF CALIFORNIA FORTINET, INC., Case No. 20-cv-03343-EMC Plaintiff, ORDER GRANTING IN PART AND v. DENYING IN PART DEFENDANT’S
MOTION TO DISMISS FORESCOUT TECHNOLOGIES, INC., Docket No. 71 Defendant.
I. INTRODUCTION In this case, Plaintiff Fortinet, Inc. (“Fortinet”) alleges that Defendant Forescout
Technologies, Inc. (“Forescout”) has committed numerous acts of patent infringement. Fortinet brings claims for contributory, induced, and willful infringement against Forescout based on five patents relating to cybersecurity technology.
In November 2020, the Court granted in part and denied in part Forescout’s motion to dismiss Fortinet’s original complaint, which asserted three of the patents currently at issue. See Docket No. 55 (“Order”). The Court rejected Forescout’s contention that the three patents claimed ineligible subject matter and were therefore invalid under 35 U.S.C. § 101; it also found that Fortinet sufficiently stated a claim for induced infringement. Order at 1. The Court granted Forescout’s motion with respect to Fortinet’s contributory and willful infringement claims, finding them inadequately pled. Id. Fortinet was given leave to amend, id. , and filed its Amended Complaint in December 2020. See Docket No. 67 (“Compl.”).
Pending before the Court is Forescout’s motion to dismiss Fortinet’s Amended Complaint. Docket No. 71 (“Mot”). In the new motion, Forescout argues that the two newly asserted patents claim ineligible subject matter under § 101 and that Fortinet has failed to adequately plead induced, contributory, or willful infringement of any of the five patents in suit. See id. For the reasons given below, the Court GRANTS the motion with respect to Fortinet’s willful infringement claims and DENIES the motion as to all other issues.
II. BACKGROUND
A. Factual Background
According to the Amended Complaint, Fortinet sells “cybersecurity products, software, and services” to large institutional customers. Compl. ¶ 3; see also id. ¶¶ 21-23. Many of Fortinet’s product offerings specifically address “[t]he proliferation of [Internet of Things] devices,” which “has made it necessary for organizations to improve their visibility into what is attached to their networks.” Id. ¶ 25. The company’s products thus “provide[] network visibility to see devices connected to a network as well as the ability to control those devices and users.” Id. ¶ 26. Fortinet is the owner, by assignment, of five patents relating to cybersecurity and network access control. These include United States Patent No. 8,458,314 (“’314 Patent”), titled “System and method for offloading IT network tasks”; No. 9,369,299 (“’299 Patent”), titled “Network access control system and method for devices connecting to network using remote access control methods”; No. 9,948,662 (“’662 Patent”), titled “Providing security in a communication network”; No. 9,894,034 (“’034 Patent”), titled “Automated Configuration of Endpoint Security Management”; and No. 9,503,421 (“’421 Patent”), titled “Security Information and Event Management.” ¶¶ 2, 30-39.
Forescout is a competitor of Fortinet, also selling cybersecurity products to businesses. See id. ¶ 6. In February 2020, “Fortinet attempted to initiate licensing discussions with Forescout” on the belief that Forescout's product offerings infringe the aforementioned patents. Id. ¶ 10. Fortinet continued its attempts throughout March and April 2020, eventually providing Forescout with “identification of specific patents that are infringed by Forescout's technology.” Id. ¶¶ 11-12. Forescout has so far refused to engage in licensing negotiations. ¶ 12.
B. Procedural Background
In its original complaint, Fortinet alleged infringement of the ’314, ’299, and ’662 Patents on theories of induced, contributory, and willful infringement. Docket No. 1 ¶¶ 37, 49, 51, 63, 65, 77. Forescout moved to dismiss for failure to state a claim, arguing primarily that the ’314, ’299, and ’662 Patents are all “directed to an abstract idea that lacks any inventive concept, and are therefore patent-ineligible” under 35 U.S.C. § 101. Order at 4; see also Docket No. 24. More specifically, Forescout contended that the patents focus on “the abstract idea of controlling access” to a computer network “using conventional technology.” Order at 4. Forescout also asserted that the original complaint did not “adequately plead indirect infringement” because it failed to allege “any factual allegations regarding the knowledge and intent elements of Fortinet's claims for contributory and induced infringement,” and that it “fail[ed] to adequately plead willful infringement” since it did not allege facts showing “that Forescout's conduct [was] egregious.” Id. In ruling on the earlier motion to dismiss, the Court declined to invalidate the ’314, ’299, and ’662 Patents on § 101 grounds. The Court agreed with Forescout that the ’314 and ’662 Patents are directed to abstract ideas, id. at 10-12, 17-18, but was unable to conclude, at this early stage of the litigation, that the patents lacked an inventive concept, id. at 12-14, 18-19. The Court also declined to hold that the ’299 Patent is directed to an abstract idea because the invention plausibly recites a technological solution to a technological problem. See id. at 14-16. While the Court expressed its skepticism about the ultimate validity of the ’314, ’299, and ’662 Patents and stated that “the outcome of claim construction,” in particular, “might make it appropriate . . . to revisit the eligibility questions” later in the proceedings, the Court could not conclude that the patents claim ineligible subject matter on a motion to dismiss. See id. at 19.
Regarding Forescout’s arguments that Fortinet’s original complaint failed to adequately allege induced, contributory, or willful infringement, the Court disagreed with the first point but agreed with the latter two. It held that the complaint “set forth sufficient facts showing a ‘specific intent to encourage another’s infringement,’” and so stated a claim for inducement. See id. at 22- 23. But the Court ruled that the complaint did not adequately allege contributory infringement because it did not establish “that Forescout’s products are not suitable for a substantial non- infringing use,” as the applicable statute requires. Id. at 24-25. The complaint also failed to state a claim for willful infringement because it alleged only that Forescout knew of the patents in suit and continued to sell its own products—not that Forescout’s conduct was “egregious,” “wanton,” or “malicious.” See id. at 25-27. The Court therefore granted in part and denied in part Forescout’s motion to dismiss, giving Fortinet leave to amend. at 27.
Fortinet filed its Amended Complaint in December 2020. See Compl. Forescout then
moved to dismiss the Amended Complaint. Mot.
III. LEGAL STANDARD
Federal Rule of Civil Procedure 8(a)(2) requires a complaint to include “a short and plain
statement of the claim showing that the pleader is entitled to relief.” Fed. R. Civ. P. 8(a)(2). A
complaint that fails to meet this standard may be dismissed pursuant to Rule 12(b)(6).
See
Fed. R.
Civ. P. 12(b)(6). To overcome a Rule 12(b)(6) motion to dismiss after the Supreme Court's
decisions in
Ashcroft v. Iqbal
,
Under the Patent Act of 1952, patents are “presumed valid.” 35 U.S.C. § 282(a). “As
such, an alleged infringer asserting an invalidity defense pursuant to § 101 bears the burden of
proving invalidity by clear and convincing evidence.”
Cisco Sys., Inc. v. Uniloc USA, Inc.
, 386 F.
Supp. 3d 1185, 1190 (N.D. Cal. 2019) (citing
Microsoft Corp. v. i4i Ltd. P’ship
,
“Patent eligibility under 35 U.S.C. § 101 is ultimately an issue of law” but “may contain
underlying issues of fact.”
Berkheimer v. HP Inc.
,
contends that both are directed to simple abstract ideas—the ’034 Patent to “selecting a course of action based on a determined condition . . . and then launching predetermined functions,” the ’421 Patent to “performing a set of tasks and collecting data from those tasks.” Mot. at 6. Forescout further argues that neither patent “recite[s] any specialized hardware, technological improvement, or any other allegedly inventive concept.” Id. The patents thus fail both steps of the Supreme Court’s Alice test, see infra , and must be invalidated under § 101. Forescout also maintains that the Amended Complaint fails to state a claim for induced or contributory infringement because the pleading merely recites “legal standards without any supporting factual contentions as to [the accused products’] lack of substantial non-infringing uses.” Mot. at 3. Forescout lastly contends that Fortinet’s willful infringement claims also fail because the Amended Complaint “again fails to allege any facts showing that Forescout’s conduct has been in any way egregious.” Id.
Fortinet responds that the ’034 and ’421 Patents claim eligible subject matter under § 101
because they are not directed to abstract ideas. Instead, they address “specific problems in the . . .
field of network security and endpoint security.” Docket No. 73 (“Opp’n”) at 2. Fortinet also
suggests that, even if the patents incorporate abstract ideas, the Court should refrain from
invalidating them “at such an early state of litigation,”
id.
, where the Court must accept a
complaint’s allegations about a patent’s advances over the prior art “as true and consider them
important in [the] determination that [the patent’s] claims are drawn to a technological
improvement,”
id.
at 3-4 (quoting
CardioNet, LLC v. InfoBionic, Inc.
,
nature, natural phenomena, and abstract ideas,”
Diamond v. Diehr
,
In
Alice
, the Court codified a two-part test, first articulated in
Mayo
, for “distinguishing
patents that claim laws of nature, natural phenomena, and abstract ideas from those that claim
patent-eligible applications of those concepts.”
The closer question at step one, however, tends to be not “whether the claims
involve
a
patent-ineligible concept,” but whether they are “
directed to
excluded subject matter.”
See Enfish
,
Put another way, courts at
Alice
step one seek to determine whether a patent's claimed
advance represents a concrete “technological solution to a technological problem.”
See Packet
Intelligence LLC v. NetScout Sys., Inc.
,
If a patent is directed to an abstract idea at
Alice
step one, then the essential inquiry at
Alice
step two is whether “the elements of [a] claim both individually and ‘as an ordered combination’”
go beyond “‘well-understood, routine, conventional activit[ies]’ previously known to the
industry.”
Alice
,
With the step-two analysis, “[t]he question of whether a claim element or combination of
elements is well-understood, routine[,] and conventional to a skilled artisan in the relevant field is
a question of fact.”
Berkheimer
,
1. The ’034 Patent
The ’034 Patent concerns “[s]ystems and methods for managing configuration of a client security application based on a network environment in which the client device is operating.” Compl. ¶ 37 (quoting ’034 Patent at Abstract). Claim 1, one of the patent’s two independent claims and the focus of the parties’ discussion in their moving papers, recites:
1. A method comprising: during initialization of a client security application running on a client device: [1] determining, by the client security application, a network connection state of the client device with respect to a private network; [2] selecting, by the client security application, a configuration for the client security application based on the determined network’s connection state; and [3] launching, by the client security application, one or more functions of the client security application that are designated by the selected configuration to be performed by the client security application, wherein the one or more functions include one or more of web content filtering, anti-virus scanning and network access logging.
’034 Patent at Clm. 1 (bracketed numbers added).
According to the patent’s specification, “it is a challenge in network security management to keep a network secure while allowing many different devices to connect to the network.” Compl. ¶ 37 (citing ’034 Patent at 1:23-25). One way that user devices can connect to a network remotely is through a client security application, which must be configured “based on information regarding the network environment in which the user device is operating.” (citing ’034 Patent at 1:50-54). The inventors of the ’034 Patent solved the aforementioned security challenge “by having the client security application [1] determine [the user device’s] network connection state with respect to a private network, [2] select a configuration based on this, and [3] launch functionality” ( e.g. , “web content filtering, anti-virus scanning, and network access logging”) “based on [the application’s] determination and selected configuration.” Id. (citing ’034 Patent at 1:56-60) (bracketed numbers added). The invention purportedly represents an advance over the prior art, which “typically required users to change the configuration of their device manually when changing networks or access methods in order for the corresponding functions of the client security application to be launched.” Id. (citing ’034 Patent at 1:44-50). The Amended Complaint states that the patent “solved this problem in a non-conventional way” and that the “ordered combination of the claimed steps is not generic and was neither routine nor conventional at the time of invention.” Id.
Forescout argues that the ’034 Patent is “directed to [a] simple abstract idea[]” and therefore fails step one of the Alice test. Mot. at 6. That abstract idea is “selecting a course of action based on a condition”— i.e. , a “network connection state to a private network”—“and then launching predetermined functions.” Id. at 8, 6. This process, Forescout insists, represents “a simple type of if/then logic that is a common and well-understood business organization strategy.” [2] Id. at 8. Forescout analogizes this process to that of “generating tasks based on rules to be completed upon the occurrence of an event,” which the Federal Circuit has found abstract. Mot. at 6, 9 (quoting Accenture Glob. Servs., GmbH v. Guidewire Software, Inc. , 728 F.3d 1336, 1344 (Fed. Cir. 2013)). “Here,” Forescout concludes, “the ‘event’ is connecting to a network, the ‘rules’ are the selected configuration, and the ‘tasks’ are the functions designated by that configuration.” Id. at 9. Computers are therefore being invoked “merely as tools to execute fundamental economic practices.” Id. at 10 (quoting Smartflash LLC v. Apple Inc. , 680 Fed. Appx. 977, 982 (Fed. Cir. 2017)).
Forescout also analogizes the ’034 Patent (as well as the ’421 Patent) to network-access-
control inventions that the Federal Circuit invalidated in
Prism Technologies LLC v. T-Mobile
USA, Inc.
,
In arguing that the ’034 Patent is directed to more than an abstract idea, Fortinet disputes Forescout’s contention that “the claims could be met by ‘keeping a mental or written list of which programs to launch when connecting to a network.’” Id. at 6 (quoting Mot. at 10). The “client security application’s methods of determining a ‘network connection state,’” Fortinet argues, are far more complicated than the analog comparison would allow, as the claims “may encompass information beyond what is readily accessible to a human operator.” Id. For example, “based on [a] network connection state, the client security application . . . automatically and flexibly implements its configuration by launching various features, such as web content filtering . . . [,] that are more effective at securing large computer networks when automatically deployed at scale across an entire network.” Id. (citing ’034 Patent at 5:48-65). In contrast, “the manual application of security configurations” that Forescout posits as a substitute for the ’034 Patent “is a problem to be addressed,” since “[p]ast reliance on users performing manual security tasks undercut the effectiveness of the computer itself.” Id. at 7 (citing ’034 Patent at 1:35-54) (internal quotation omitted).
As with the patents contested in the previous motion to dismiss, the step-one inquiry
presents a close question. First, the caselaw that the parties rely on provides only limited
guidance, as it does not address technology directly analogous to that which is at issue here.
See
Enfish
,
be relevant at
Alice
step one. There, the Federal Circuit stated that “the ‘directed to’ inquiry
applies a stage-one filter to claims,
considered in light of the specification
, based on whether their
character as a whole is directed to excluded subject matter.”
The Federal Circuit went further in
CardioNet,
where it reversed a district court’s
invalidation, on § 101 grounds, of a patent related to cardiac monitoring technology. 955 F.3d
at 1362. In framing the “directed to” inquiry, the court stated that while it looks first to claim
language it “also consider[s] the patent’s written description, as it informs [the court’s]
understanding of the claims.”
Id.
at 1367-68;
see also id.
at 1368 (quoting
Chamberlain Group,
Inc. v. Techtronic Industries Co.
,
Taken together,
CardioNet
and
Visual Memory
seem to stand for the proposition that a
patent’s specification may play an “important” role in the step-one, or “directed to,” inquiry and
that a district court should consider the specification when deciding whether the patent is focused
more on an abstract idea or a technological solution to a technological problem.
See id.
at 1367-
70. These cases also stress that “all factual inferences drawn from the specification” are to be
resolved in favor of the nonmoving party at the pleadings stage.
See id.
at 1369. And unlike other
recent cases such as
Ericsson
and
Dropbox
, which suggest that computer-based inventions must
“describe
how
to solve the [technological] problem” they address in meaningful detail,
see
Dropbox
,
precise role at step one of the
Alice
test, as well as the level of detail the invention must provide in
explaining how it functions, the Court believes it prudent, at this still-early stage of the litigation,
to construe the focus of the ’034 Patent “in light of the specification,”
Enfish
,
desired result (
i.e.
, improved endpoint security management) is achieved that the Federal Circuit
has oftentimes required to satisfy step one.
See, e.g.
,
Dropbox
,
As Fortinet contends, however, other features of the ’034 Patent suggest that it may satisfy
the step-one inquiry, at least in light of cases such as
CardioNet
and
Visual Memory
. First, several
dependent claims refer to specific technological features that plausibly restrict the invention to the
realm of the technologically concrete rather than the abstract. Claim 5, for example, comprises a
limitation of dependent Claim 3, and entails a “Dynamic Host Configuration Protocol (DHCP)
client of the client device” sending a “DHCP packet to a network appliance” and then
“receiving . . . an acknowledgment DHCP packet” that contains the appliance’s “identification
information.” ’034 Patent at Clm. 5. Claim 8 then further limits Claim 5 so that the
aforementioned functions “include one or more of Secure Sockets Layer (SSL)/Internet Protocol
Security Protocol (IPSec) Virtual Private Networking (VPN), application firewalling, two-factor
authentication, vulnerability scanning and Wide Area Network (WAN) optimization.” at Clm.
8. While Forescout insists that such features are merely “conventional,” Reply at 4, the Court is
unable to deduce as much from the claims themselves or the specification. Rather, these
dependent-claim limitations seem to “further specif[y] the physical features or operations” of the
patented device, suggesting that it is directed to something that is technologically concrete.
See
CardioNet
,
Additionally, the ’034 Patent’s specification provides reasonably detailed explanations of
how the invention functions in preferred embodiments and suggests “that the claimed invention
achieves [multiple] benefits over conventional” technology in the field.
See Enfish
, 822 F.3d at
1337. Describing Figure 5, for instance, the specification explains that “[a]fter the appropriate
configuration is selected based on the client device’s network environment state . . . the client
security application continues the startup procedure by launching the functions/engines that are
associated with the corresponding configuration.” ’034 Patent at 8:55-59. The specification then
provides a more detailed example of how the startup procedure works: “[W]hen an off-net
configuration is selected and SSL/IPsec VPN and web filtering are enabled . . . the client security
application launches a VPN dial-up module and establishes a VPN connection with a gateway of a
private network using predefined VPN parameters.” at 8:59-65. Based on details like these in
the specification, it may be argued that the’034 Patent is “more effective at securing large
computer networks when automatically deployed at scale across an entire network,” and that the
manual version of patent’s security tasks “reduc[es] the security of the entire network by limiting
compliance with security protocols to that provided by human users.”
See id.
at 6-7 (citing ’034
Patent at 1:35-54). Absent further developments in this case (
e.g
., claim construction or expert
testimony), the Court is reluctant to reach a conclusion at this stage as to whether “the claimed
invention achieves multiple technological improvements” over the prior art.
See CardioNet
, 955
F.3d at 1368-69.
Nevertheless, even if the Court were to find the ’034 Patent directed to ineligible subject
matter at step one, it would be hard pressed to reach the same conclusion at step two—
recognizing, again, that “an analysis of whether there are arguably concrete improvements in the
recited computer technology could take place under” either step one or step two.
See Enfish
, 822
F.3d at 1339. The step-two inquiry, as stated above, focuses on whether the claims contain an
“inventive concept,”
i.e.
, “a claim element or combination of elements” that goes beyond that
which is “well-understood, routine[,] and conventional to a skilled artisan in the relevant field.”
Berkheimer
,
Here, Fortinet plausibly argues that “fact questions exist as to whether the limitations of at
least Claims [1 and 5] contain features, either individually or in an ordered combination, that are
non-generic, not well understood, and not well known.” Opp’n at 15. Claim 5, as noted above,
involves “sending, by a [DHCP] client of the client device, a DHCP packet to a network appliance
of the one or more network appliances,” and then “receiving[,] by the DHCP client, an
acknowledgement DHCP packet containing . . . identification information.” ’034 Patent at Clm. 5.
Similarly, Claim 14 recites identification information that “comprises (i) a serial number or a hash
value of the serial number of the one or more network appliances, (ii) a unique name of the one or
more network appliances or (iii) a hash value of a plurality of serial numbers of the one or more
network appliances.” at Clm. 14. Again, the Court cannot conclude at this stage of the
litigation that clear and convincing evidence proves this combination of claim elements to be
“well-understood, routine[,] and conventional to a skilled artisan in the relevant field.”
See
Berkheimer
,
The Court therefore declines, at this time, to hold the ’034 Patent invalid on the grounds of § 101, whether viewed in light of the step-one or step-two analyses, or as a consolidation thereof. The Court clarifies that its ruling here is not prejudicial to Forescout’s ability to renew its subject- matter-eligibility arguments at a later stage of the litigation, such as at summary judgment. The Court also observes that, as with the ’314, ’299, and ’662 Patents, it remains skeptical of the ultimate validity of ’034 Patent, especially given Fortinet’s failure, to this point, to articulate meaningful differences between the patent’s independent and dependent claims. For now, however, the Court DENIES Forescout’s motion to dismiss on the grounds that the ’034 Patent claims ineligible subject matter. 2. The ’421 Patent The ’421 Patent claims “[s]ystems and methods . . . for conducting work flows by [a Security Information and Event Management (“SIEM”)] device to carry out a complex task
automatically.” ’421 Patent at Abstract. Claim 1, one of the patent’s two independent claims and the focus of the parties’ discussion in their moving papers, recites:
1. A method comprising:
[1] creating, by a security information and event management (SIEM) device associated with a private network, a work flow, said work flow including information defining a plurality of security tasks that are to be performed by one or more security devices associated with the private network and managed by the SIEM device, wherein the plurality of security tasks include operations that are intended to protect the private network against attacks; [2] starting, by the SIEM device, the work flow by scheduling the one or more security devices to perform the plurality of security tasks defined in the work flow; and [3] collecting, by the SIEM device, results of the plurality of security tasks after they are performed by the one or more security devices. at Clm. 1 (bracketed numbers added).
According to the patent’s specification, contemporary computer networks “may comprise hundreds of . . . devices located in different places, including multiple security devices deployed to protect the network from attacks.” Compl. ¶ 39 (citing ’421 Patent at 1:21-25). As part of these networks, SIEM devices “may be deployed to aggregate results of tasks performed by the various security devices on a network and alert network administrators” in event of a security breach. Id. (citing ’421 Patent at 1:30-35). But “problems arise in that the tasks conducted by these disparate security devices are independent,” and so may involve “different parameters” and “different configurations depending on the device . . . and its manufacturer.” [6] Id. (citing ’421 Patent at 1:35- 36). There was thus “a need for improved SIEM devices that may schedule multiple complex tasks of various security devices to achieve comprehensive management of multiple security devices.” Id. (citing ’421 Patent at 1:43-55). The ’421 Patent allegedly solved this problem “in a non-conventional way by having the SIEM configured to allow users [1] to create a work flow that includes multiple security tasks to be performed by one or more security devices, [2] performing these tasks, and [3] collecting the results of these tasks after they are performed.” (citing ’421 Patent at 1:50-60, 18:17-42) (bracketed numbers added). As with the ’034 Patent, the Amended Complaint asserts that “[t]he claims of the ’421 Patent include inventive concepts” and that “the ordered combination of the recited limitations is not generic and was neither routine nor conventional at the time of invention.” Id.
In arguing that the ’421 Patent is directed to ineligible subject matter, Forescout argues that
the “idea of ‘conducting work flows’ to carry out tasks and then collecting data about those tasks
is a longstanding human activity,” and that the patent merely automates this abstract idea. Mot. at
11;
see also id.
at 12 (asserting that the ’421 Patent is directed to the idea of “organizing a list of
tasks and collecting data related to them,” which is “a basic mental process that could be
performed” manually).
[7]
Forescout analogizes the claims at issue here those in
Yodlee, Inc. v.
Plaid Technologies Inc.
,
The Court again conducts the step-one inquiry in light of the Federal Circuit’s forgiving standard for subject-matter eligibility, as articulated in CardioNet and Visual Memory .
To start, the language of Claim 1 of the ’421 Patent is again abstract. The claim “on its
face” involves three straightforward steps performed by a SIEM device: (1) “creating . . . a work
flow” that includes “security tasks” performed by other “security devices” on a computer network,
(2) “starting . . . the work flow . . . by scheduling” the security devices “to perform” the security
tasks, and (3) “collecting . . . results” of the security tasks after the security devices perform those
tasks.
See
’421 Patent at Clm. 1;
see also Am. Axle
,
Additionally, Forescout’s analogy between the three-step process of Claim 1 and the
travel-agent example in
Yodlee
is revealing, suggesting that the conversion of work flows in Claim
1 “into specific tasks [monitored] by a specialized [actor] coordinating with a variety of [other
actors], and then executing those tasks,” closely resembles longstanding analog versions of work
flow execution and data collection. Reply at 6. This resemblance weighs against finding
Claim 1 patent-eligible, as limiting otherwise abstract “claims to a particular field of invention”—
e.g.
, network security—“does not move the claims out of the realm of abstract ideas.”
See SAP
,
As with the ’034 Patent, however, Fortinet raises colorable arguments in favor of finding
the ’421 Patent non-abstract at step one. Fortinet notes, first, the greater degree of technological
specificity contained in some of the patent’s dependent claims. For example, Claim 11 derives
from Claim 1 but limits the aforementioned work flow to “a website automatic discovery work
flow” and the aforementioned security tasks to “a service discovery, a test Hypertext Transfer
Protocol (HTTP) service and a website scan.” ’421 Patent at Clm. 11. And Claim 13, which also
depends from Claim 1, confines the work flow to “a closed-loop security event processing work
flow,” which in turn “comprises event collecting, leakage verification and emergency response
processing.” at Clm. 13. This level of computer-oriented detail suggests that the ’421
Patent—at least in its dependent claims—may be “understood as being necessarily rooted in
computer technology in order to solve a specific problem in the realm of computer networks.”
See
SRI Int’l
,
The specification also mitigates concerns that the ’421 Patent is merely a “black box,”
see
Dropbox
,
The Court therefore declines to hold, at this stage of the litigation, that the ’421 Patent claims ineligible subject matter. It notes, however, that it remains doubtful of the patent’s ultimate validity on § 101 grounds, and that Fortinet will face a higher bar in demonstrating as much as the case progresses. The Court thus DENIES Forescout’s motion to dismiss the ’421 Patent on the grounds of subject-matter eligibility, but its ruling here is without prejudice to Forescout’s ability to re-raise the § 101 issue later in the proceedings. B. Infringement Allegations
Section 271(a) of the Patent Act provides that “whoever without authority makes, uses,
offers to sell, or sells any patented invention . . . during the term of the patent therefor, infringes
the patent.” 35 U.S.C. § 271(a). Infringement may be either direct or indirect but “liability for
indirect infringement of a patent requires direct infringement” by a third party.
See In re Bill of
Lading Transmission & Processing Sys. Patent Litig.
,
1. Induced Infringement
Under § 271(b) of the Patent Act, “[w]hoever actively induces infringement of a patent
shall be liable as an infringer.” 35 U.S.C. § 271(b). Addressing the intent element of this
provision, the Supreme Court has held that induced infringement “requires knowledge that the
induced acts constitute patent infringement.”
Glob.-Tech Appliances, Inc. v. SEB S.A.
, 563 U.S.
754, 766 (2011). Thus, a plaintiff alleging inducement must show that the defendant “both (1)
‘knew of the patent’
and
(2) knew as well ‘that the induced acts constitute patent infringement.’”
Google LLC v. Princeps Interface Techs.
,
In its prior order, the Court found that Fortinet’s allegations of inducement were
sufficiently pled. The Court first noted that Forescout possessed knowledge of its allegedly
infringing activity at least as of the filing of the original complaint; as a result, “the crux of the
inducement question [was] whether Fortinet ha[d] set forth sufficient facts showing a specific
intent to encourage another’s infringement.” Order at 22 (internal quotation omitted). The
original complaint stated that “Forescout ‘instruct[s], direct[s], and/or requir[es] others, including
customers, purchasers, users and developers, to perform some of the steps of the method claims’
via specific instructional materials on Forescout’s website.”
See id.
(quoting,
e.g.
, Docket No. 1
¶ 39). The complaint also described the content of Forescout’s instructional materials (specifically
in their teaching of how to infringe the asserted patents) in additional detail and provided URLs
for those materials.
See id.
at 23 (citing,
e.g.
, Docket No. 1 ¶¶ 72-73). The Court held that the
first set of allegations, standing alone, was insufficient to state a claim for inducement because it
failed to show that the defendant possessed the requisite specific intent.
Id.
(citing
Hypermedia Navigation v. Google LLC
,
In the instant motion, Forescout acknowledges that the Court previously sustained Fortinet’s inducement claims but argues that “Fortinet did not comply” with the Court’s instructions to allege more specific facts in its Amended Complaint. Mot. at 22. Fortinet responds that it complied with the earlier order, pointing to new paragraphs 48, 63, and 78 in the Amended Complaint, which concern the three previously asserted patents, and paragraphs 93 and 104, which concern the two newly asserted patents. Opp’n at 20-21 & n.3. Fortinet thus argues that it has “further bolstered” factual allegations already deemed sufficient to survive a motion to dismiss. See id. at 22. Fortinet has sufficiently pled inducement with respect to both the original and newly
asserted patents. For example, Paragraphs 93 and 94 of the Amended Complaint, concerning the ’034 Patent, read as follows: Forescout's technical documentation evidences specific intent, at least as of the filing [of] this Amended Complaint, to encourage infringement of the ’034 Patent. Forescout's CounterACT Admin Guide (https://www.forescout.com/wp- content/uploads/2018/11/counteract administration-guide-8.0.1.pdf), its HPS Inspection Engine Configuration Guide (https://www.forescout.com/company/resources/hps-inspection-
engine-configuration-guide-10-7-1/), its SecureConnector Advanced Features How-to Guide (https://www.forescout.com/company/resources/secure-connector- advanced-features-how-to-guide-8-0/), and its Forescout Windows Applications Configuration Guide (https://www.forescout.com/company/resources/windows-
applications-19-0-12/) instruct users on how to infringe the claims of ’034 Patent. These materials actively coach users to use the ’034 Accused Products in an infringing manner. Indeed, these materials instruct customers to infringe each and every element of at least claim 1 of the ’034 Patent and, on their own, fully support Fortinet's allegations of infringement.
By at least the filing of this Amended Complaint, Fortinet disclosed the existence of the ’034 patent and identified at least some of Forescout's and others' activities that infringe the ’034 patent.
Thus, based on this disclosure, Forescout had knowledge of the ’034 patent, including claim 1, and that its activities infringe the ’034 patent, including claim 1, since at least the filing of this Amended Complaint . Based on Fortinet's disclosures, Forescout has also known or should have known since at least the filing of this Amended Complaint that its customers, distributors, suppliers, and other purchasers of the ’034 Accused Products are infringing the ’034 patent, including claim 1.
Compl. ¶¶ 93-94 (emphasis added). Fortinet’s inducement allegations with respect to the ’421 Patent contain a similar amount of factual detail. See id. ¶¶ 103-04, 108.
These references to particular instructional materials, inclusion of URLs for those materials, and allegations that Fortinet “disclosed the existence of the [asserted patents]” to Forescout and that the materials “instruct customers to infringe each and every element of at least claim 1 of [each] Patent,” id. ¶ 93, plausibly state a claim for induced infringement. Forescout protests that Fortinet fails to “link[] any specific part of a manual to any specific patent claim infringement allegation.” Reply at 12-13. But that information can be “further detailed in Fortinet’s infringement contentions” as the litigation proceeds. Opp’n at 21. At present, the Amended Complaint gives Forescout adequate notice of the nature of Fortinet’s inducement claims and the specific instructional materials that Fortinet will use to support those claims, which is all that is required by Rule 8. The Court therefore DENIES Forescout’s motion with respect to Fortinet’s claim for induced infringement. 2. Contributory Infringement Under § 271(c) of the Patent Act, a plaintiff pleading contributory infringement must show
that the defendant sells (or offers to sell) a component of a patent, “knowing the same to be
especially made or especially adapted for use in an infringement of such patent, and not a staple
article or commodity of commerce suitable for substantial noninfringing use.” 35 U.S.C. § 271(c).
The plaintiff must “provide factual underpinnings for its allegations” that the accused products are
made or especially adapted for an infringing use and “that there are no substantial noninfringing
uses of the accused devices.”
Uniloc USA, Inc. v. Logitech, Inc.
,
In its previous order, the Court held that Fortinet’s original complaint failed to adequately plead contributory infringement. The complaint contained only a single paragraph, repeated for each asserted patent, that simply “parrot[ed]” the contributory infringement statute. Order at 24. While the Court allowed that these statements could suggest that the accused products are “especially made or especially adapted for an infringing use,” the statements failed to “allege facts establishing that Forescout’s products are not suitable for a substantial non-infringing use.” at 24-25. The Court thus granted Forescout’s motion to dismiss with leave to amend. at 25.
Forescout observes that Fortinet’s Amended Complaint still “includes only a single . . . paragraph alleging contributory infringement,” repeated five times for each asserted patent and with the name of Forescout’s accused product substituted accordingly. The relevant paragraph reads:
On information and belief, Forescout further contributes to the infringement of one or more claims of the ’314 patent under 35 U.S.C. § 271(c) by offering to sell, selling, and/or importing into the United States a component of the ’314 Accused Products, or a material or apparatus for use in practicing a process claimed in the ’314 patent, that constitutes a material part of the invention, knowing the same to be especially made or especially adapted for use in an infringement of the ’314 patent, including claim 1, and is not a staple article or commodity of commerce suitable for substantial noninfringing use. The Forescout CounterACT software as sold by Forescout includes software components (e.g., the Guest Management Portal) which are programmed to be used to infringe the methods for delegating limited admin control through the use of sets of profiles and templates. These software components, sold as part of CounterACT, are especially made for an infringing use, and have no substantial noninfringing use other than to practice the claimed methods.
Compl. ¶ 50 (emphasis added); see also id. ¶¶ 65, 80, 95, 110. The paragraph’s first sentence is a verbatim repetition of the sentence that comprised the entirety of the contributory-infringement allegation in the original complaint. The second and third sentences (italicized above) have been newly added to the Amended Complaint.
The issue, therefore, is whether Fortinet’s new allegation that each accused product “includes software components . . . which are programmed to be used to infringe the [patented] methods” suffices to state a claim for contributory infringement. Forescout argues that the statement “at most relates to the first prong of the contributory infringement test, i.e. , that ‘the accused products are made or are especially adapted for an infringing use.’” Mot. at 21. But, Forescout contends, the statement “contains no ‘factual underpinnings’ for any allegation ‘that there are no substantial noninfringing uses of the accused products,’” which was the basis for the Court’s dismissal of Fortinet’s earlier contributory infringement claims. Id. (quoting Order at 24).
Fortinet responds by comparing its new allegation to those that have been found sufficient
to state a claim for contributory infringement in this District and elsewhere. In
Software Research
,
this Court found the allegation that an accused product, “when used in its normal and intended
usage . . . , infringes” adequate to show “that there are no other substantial uses of” the accused
product “that do not infringe.” Opp’n at 18 (quoting
Software Rsch.
,
While the issue is a close one, the Court finds the Amended Complaint’s allegations
sufficient. Under
Twombly
and
Iqbal
, a complaint must allege facts sufficient to make the
plaintiff’s entitlement to relief
plausible
(rather than probable, on the one hand, or merely
possible, on the other).
See, e.g.
,
Iqbal
,
The Court therefore DENIES Forescout’s motion with respect to Fortinet’s contributory infringement claim.
3. Willful Infringement
Section 284 of the Patent Act directs courts to award a prevailing claimant “damages
adequate to compensate for the infringement” and “may increase the damages up to three times the
amount found or assessed.” 35 U.S.C. § 284. The Supreme Court has held that while district
courts should “take into account the particular circumstances of each case in deciding whether to
award [enhanced] damages,” “such punishment should generally be reserved for egregious cases
typified by willful misconduct.”
See Halo Elecs., Inc. v. Pulse Elecs., Inc.
,
this an exceptional case and justifying an award to Fortinet of increased damages under 35 U.S.C. § 284 . . . .
Compl. ¶ 57 (emphasis added); see also id. at ¶¶ 72, 87, 102, 117.
Forescout argues that Fortinet “has not identified any new factual allegation that would
support a willful infringement claim; it is simply parroting the exact same willfulness claim that
the Court already dismissed.” Mot. at 24. In response, Fortinet emphasizes that the Amended
Complaint’s “willfulness allegations are based not simply on continued infringement following
notice of the asserted patents, but rather on [Forescout’s] refusal to participate in discussions
regarding its infringement,” and that the allegations are sufficient to sustain a willfulness claim.
Opp’n at 22 (citing
TC Tech. LLC v. Spring Corp.
,
Fortinet’s arguments regarding both traditional willful infringement and willful blindness
are unavailing. The Amended Complaint alleges the following facts: (1) that in late February
2020 “Fortinet attempted to initiate licensing discussions with Forescout”; (2) that “Fortinet
continued [to] make substantial attempts to engage with Forescout, including [via]
correspondence,” from March to May of 2020; (3) that Forescout “delayed progressing the
discussions” during this period; (4) that “Forescout has refused to have its internal business
employees discuss this matter with business representative of Fortinet,” instead making available
“Forescout’s outside counsel” for an important phone call on April 24, 2020; and (5) that
“Forescout still has not indicated a willingness” to license the contested patents.
See
Compl.
¶¶ 10-12. While the Amended Complaint thus contains statements to the effect that Forescout
declined to engage in serious licensing negotiations during the early months of 2020, its account is
far more redolent of a run-of-the-mill patent dispute than the “egregious infringement behavior”
that the Supreme Court has identified as meriting enhanced damages for infringement.
[8]
See Halo
,
In particular, Fortinet’s generalized allegations that Forescout “delayed progressing
[licensing] discussions” in early 2020 do not plausibly show that Forescout
knew
its conduct to be
egregious,
i.e.
, “wanton, malicious, [or] bad-faith.”
See id.
Nor do they establish willful
blindness, which requires that Forescout “subjectively believe[d] that there [was] a high
probability that” it was infringing Fortinet’s asserted patents. Reply at 14-15 (quoting
Global-
Tech Appliances
,
The Court therefore
GRANTS
Forescout’s motion to dismiss Fortinet’s claims for willful
infringement. Because Fortinet was previously given leave to amend and failed to add new factual
allegations to its complaint, the Court denies Fortinet further leave to amend.
See, e.g.
,
Bonin v.
Calderon
,
under 35 U.S.C. § 101. The Court also DENIES Forescout’s motion with respect to Fortinet’s claims for induced and contributory infringement. The Court GRANTS the motion with respect to Fortinet’s willful infringement claims without further leave to amend.
This order disposes of Docket No. 71.
IT IS SO ORDERED .
Dated: June 14, 2021
______________________________________ EDWARD M. CHEN United States District Judge
Notes
[1] For some of the “varied approaches to determining whether particular claims are directed to an
28
abstract idea” that courts have taken, see
Voip-Pal.Com
,
[2] The if/then logic runs as follows: “[I]f the network is connected, select configuration X; but if the network is disconnected, select configuration Y.” Mot. at 10. These different configurations then launch “certain generic programs, such as ‘web content filtering’ or ‘anti-virus scanning.’”
[3] As with the previous motion to dismiss, Fortinet also relies on
Ancora
and
Packet Intelligence
,
where the Federal Circuit held, respectively, that method patents recited “a specific technique that
depart[ed] from earlier approaches to solve a specific computer problem” and provided a
“granular, nuanced, and useful” advance over previous approaches “rather than an abstract result.”
Opp’n at 5-6 (quoting
Ancora
,
[4] As Forescout observed during the motion hearing, Hearing Tr. at 40, the patent at issue in
Enfish
25
was a means-plus-function invention under 35 U.S.C. § 112(f), which requires that courts first
“determine the claimed function” and then “identify the corresponding structure in the written
description of the patent that performs the function.”
[5] In developing this argument, the
American Axle
majority refuted the dissent’s objection that the
26
majority had “improperly merg[ed] enablement and eligibility” inquiries.
[6] At the motion hearing, Fortinet offered, as a simple example of the problem the ’421 Patent was designed to solve, the need to “make Apple and Windows machines work on the same network.” Hearing Tr. at 30.
[7] As with the ’034 Patent, Forescout associates the claimed method with the abstract idea in
Accenture
, “generating tasks based on rules to be completed upon the occurrence of an event.”
Mot. at 12 (quoting
[8] Fortinet’s allegation that Forescout has permitted only its legal representatives, rather than
“internal business employees,” to discuss a licensing agreement, for example, falls short of the
mark, as “[r]etaining counsel is not ‘egregious conduct’” within the meaning of
Halo
. Mot. at
25;
see also Halo
,