MEMORANDUM AND ORDER
At a motion session on November 26, 2013, this Court heard two motions regarding Zond, Inc.’s (“Zond”) second amended complaint for patent infringement. Second Am. Compl. Patent Infringement (“2nd. Am. Compl.”), ECF No. 19. The Court heard a joint motion to dismiss, filed by Fujitsu Semiconductor Ltd. (“Fujitsu Ltd.”) and Fujitsu Semiconductor America, Inc., (“Fujitsu USA”) (jointly, “Fujitsu”), and a joint motion to dismiss filed by Taiwan Semiconductor Manufacturing Company, Ltd., TSMC North America Corporation, TSMC Development, Inc., and Wafertech, LLC (jointly, “TSMC”).
Having had the opportunity further to consider Fujitsu’s motion to dismiss, for the reasons stated below, this Court GRANTS Fujitsu’s motion insofar as Zond seeks to recover for alleged pre-filing knowledge, but otherwise DENIES their motion
I. ANALYSIS
Federal Rule of Civil Procedure 8(a) (“Rule 8(a)”) requires the plaintiff state a claim upon which relief can be granted. See Fed.R.Civ.P. 8(a)(2). For the reasons
A. Improper Group Pleading
Fujitsu argues that Zond’s decision to treat Fujitsu Ltd. and Fujitsu USA as an “undifferentiated mass” and to make all allegations against the group as a whole fails to notify the separate defendants of the specific allegations against them. Fujitsu Semiconductor Ltd. & Fujitsu Semiconductor America, Inc.’s Mem. Law Supp. Their Mot. Dismiss (“Fujitsu Mem. Supp. Mot.”) 5, 7-8, ECF No. 27; Fujitsu Semiconductor Ltd. & Fujitsu Semiconductor America, Inc.’s Reply Mem. Law Supp. Their Mot. Dismiss (“Fujitsu Reply Mem. Supp. Mot.”) 2, ECF-No. 38.
Whilst a pleading, group or otherwise, must be sufficiently clear to put the defendants on notice as to “who did what to whom, when, where and why”, Educadores Puertorriqueños en Acción v. Hernández,
Zond alleges that “Fujitsu” is directly infringing, willfully infringing, and inducing the infringement of, the patents-in-suit. See generally 2nd Am. Compl. These allegations, as made in the filed second amended complaint, are facially plausible — it is not impossible for both Fujitsu USA and Fujitsu Ltd. to have engaged in each of the acts alleged by Zond. Though it may be a stretch for the court to infer that “both parent [Fujitsu Ltd.] and subsidiary [Fujitsu USA] ‘design[ ] and develop[ ] ... [the same] semiconductor products’ made by Taiwan-based TSMC,” Fujitsu Reply Mem. Supp. Mot. 3 (third, fourth, and fifth alterations original), and it is not for the Court to evaluate, at this stage, whether the plaintiff will be able to obtain the necessary evidence to prove its claims. See Hague v. Massachusetts Dep’t of Elementary & Secondary Educ., Nos. 10-30138 DJC, 10-30142 DJC, 10-30143 DJC, 10-30144 DJC,
Further, despite making all allegations in the second amended complaint against the Fujitsu corporate group, Zond provides each individual defendant with fair notice of each claim alleged against it. Unlike in Automated Transaction, where the plaintiff did not consistently group the defendants together when making allegations,
B. Direct Infringement 35 U.S.C. Section 271(g)
Pursuant to Federal Rule of Civil Procedure 8(a)(2) (“Rule 8(a)(2)”) a pleading must contain a “short and plain statement of the claim showing that the pleader is entitled to relief’. Fed.R.Civ.P. 8(a)(2). Fujitsu states that for a claim to satisfy Rule 8(a)(2) it must be plead in accordance with the standard outlined in Ashcroft v. Iqbal,
The standard required by Form 18 cannot be easily reconciled with the judgments of the Supreme Court in both Twombly and Iqbal. See e.g., Tyco Fire Prods. LP v. Victaulic Co.,
Form 18, an example of a direct patent infringement complaint included in the Appendix to the Federal Rules of Civil Procedure, requires a pleading equivalent to:
(1) an allegation of jurisdiction; (2) a statement that the plaintiff owns the patent; (3) a statement that defendant has been infringing the patent ‘by making, selling, and using [the device] embodying the patent’; (4) a statement that the plaintiff has given the defendant notice of its infringement; and (5) a demand for an injunction and damages.
Bill of Lading,
C. Induced Infringement 35 U.S.C. Section 271(b)
Fujitsu asserts that Zond has failed to plead properly a claim of induced infringement. Fujitsu Mem. Supp. Mot. 8. Specifically, Fujitsu alleges that any and all allegations made concerning this claim are speculative and do not support a plausible claim of induced infringement. Id. at 8, 13, 14. In contrast, Zond alleges that its second amended complaint contains a plausible claim of induced infringement, adequately pleading both pre-filing and post-filing knowledge, specific intent and encouragement. Reply 9-19.
1. Standard
Twombly articulates the relevant standard for pleading an indirect patent infringement claim. Bill of Lading,
2. The Knowledge Element of Induced Infringement
A person or entity which “actively induces infringement of a patent [will] be liable as an infringer.” 35 U.S.C. § 271(b). To establish inducement the plaintiff must show that the alleged inducer: “[1] knew of the patent, [2] knowingly induced the infringing acts, and [3] possessed a specific intent to encourage another’s infringement of the patent.” Vita-Mix Corp. v. Basic Holding, Inc.,
Further, as actual knowledge of the purported infringement is necessary to establish a claim of induced infringement, where the alleged inducer is not the primary infringer the alleged inducer must have had knowledge of the patent in question combined with an intent to cause the infringing acts, for example, by providing third-parties with a product which does not have any substantial non-infringing uses. See, e.g., Hughes Aircraft Co. v. National Semiconductor Corp.,
Must the alleged inducer have this knowledge prior to the filing of the suit or can the filing of the suit itself trigger the knowledge if the alleged misconduct continues? This is a contentious issue, and one of first impression before this court.
a. Post-Filing Knowledge
Central to the argument that post-filing knowledge is sufficient to establish an induced infringement is the need for efficiency in court proceedings. See Proxyconn Inc.,
b. Pre-Filing Knowledge
Those decisions that require a claim of induced infringement to include pre-filing knowledge of the patent-in-suit dispute the reality of this alleged efficiency, reasoning that the efficiency obtained is
These decisions also cite the Supreme Court’s ruling in Global-Tech Appliances,
Finally, Federal Rule of Civil Procedure 11(b)(3) requires that factual contentions made in a pleading have “evidentiary support.” Fed.R.Civ.P. 11(b)(3). It is difficult to perceive how a plaintiff, when relying upon post-filing knowledge to satisfy the requirements of a claim of induced infringement, can have any evidentiary support for its claim at the time of filing.
Whilst as a practical matter the argument for post-filing knowledge makes considerable sense, given the ethical requirements of the Federal Rules of Civil Procedure, pre-filing knowledge of the patent must be established before a claim of induced infringement may succeed. This requirement, however, would not prevent a plaintiff from filing and then subsequently amending its filing were the defendant to continue to induce others to infringe, though any damages would be confined to conduct after the filing of the complaint.
3. Application in this Case
This Court concludes that the arguments requiring pre-filing knowledge are more persuasive, as there is no bar to a plaintiff subsequently amending a complaint to include a claim of induced infringement where the defendant, upon obtaining knowledge through the filing of the lawsuit, of the patent and the alleged direct infringement of others, does not cease inducement. It must be noted, however, that any damages would be confined to post-filing conduct. ’
a. Pre-Filing
Here, Fujitsu is not alleged to be the primary infringer; rather, TSMC makes products which allegedly infringe the patents-in-suit and these are then incorporated by Fujitsu in the products which it manufactures. 2nd Am. Compl. ¶ 28. Consequently, for Zond to state a claim of induced infringement against Fujitsu it must allege both knowledge of the patent and knowledge of TSMC’s use of the patented processes. Whilst Zond alleges that Fujitsu had pre-filing knowledge of the patent, see Id. at ¶ 36, the second amended complaint contains no allegations concerning Fujitsu’s knowledge of TSMC’s infringement of the patents. Further, the allegation that “unique manufacturing processes had to be developed by or for Fujitsu that ... employ Zond’s patented technology,” id. ¶ 28, does not provide any factual basis from which Fujitsu’s actual pre-filing knowledge may be inferred. Zond does hot allege pre-filing knowledge of the patent and its use sufficient to support a pre-filing willful infringement claim and therefore this Court GRANTS Fujitsu’s motion to dismiss the pre-filing induced infringement claim, ECF No. 26.
Zond has, however, twice amended its complaint against Fujitsu. Knowledge of the patent and TSMC’s conduct may be inferred from the filing and serving of the second amended complaint, see e.g., Rembrandt Social Media,
c. Inducement
For Zond to sufficiently plead the inducement requirement of 35 U.S.C. section 271(b) it must allege that Fujitsu “induced [a third party’s] infringing acts and that [Fujitsu] knew or should have known [its] actions would induce actual infringements.” DSU Med. Corp.,
d.Intent to Encourage Infringement
The more difficult issue is whether intent to encourage infringement may also be inferred from Fujitsu’s post-filing knowledge of both the existence of the patents-in-suit and their use. Zond’s sole allegation regarding encouragement is that Fujitsu, through “advertising, marketing and sales activity,”, entices its original equipment and design manufacturers to use the allegedly infringing products. 2nd Am. Compl. ¶¶ 52, 59, 66, 73, 80, 87, 94. Whilst a conclusory pleading, see e.g., id. ¶ 52, it seems illogical that the production, for sale, ’ of goods, for which there is no potential non-infringing use,
Thus, for the above reasons Zond has sufficiently stated a claim for post-filing induced infringement and Fujitsu’s motion to dismiss this claim is DENIED, ECF No. 26.
II. MARKMAN PROCEDURES
Zond has filed a number of separate lawsuits in this district involving these same patents. Zond, Inc. v. Gillette Co., No. 13-11567-DCJ; Zond, Inc. v. Intel Corp., No. 13-11570-RGS; Zond, Inc. v. Advanced Micro Devices, Inc., No. 13-11577-DPW; Zond, Inc. v. Toshiba America Elec. Components, Inc., No. 13-11581-DJC; Zond, Inc. v. SK Hynix, Inc., No. 13-11591-RGS; Zond, Inc. v. Renesas Elecs. Corp., No. 13-11625-NMG. In one of these cases, Judge Stearns has scheduled a Markman hearing to construe the claims at issue in this case. Zond, Inc. v. Intel Corp., No. 13-11570-RGS, Elec. Notice Hearing, ECF No. 30. With the consent of the parties and the agreement of Judge. Stearns, his Markman claim construction will apply with full force and effect in this case. In return, Judge Stearns will permit the defendants in this case fully to participate in his Markman claim construction proceedings. This is an efficient procedure. I followed it while sitting as a visiting judge in the Western District of Tennessee where Judge McCalla handled the claim construction for the following four cases, Multilayer Stretch Cling Film Holdings, Inc. v. Inteplast Group Ltd., No. 12-2107-WGY; Multilayer Stretch Cling Film Holdings, Inc. v. Berry Plastics Corp., 12-2108-WGY; Multilayer Stretch Cling Film Holdings, Inc. v. Intertape Polymer Grp., Inc., 12-2109-JPM and Multilayer Stretch Cling Film Holdings, Inc. v. MSC Mktg and Tech., Inc., 12-2112-JPM, though I am handling all other pre-trial aspects of two of them.
SO ORDERED.
Notes
. Since the filing of the motion to dismiss the claims against both TSMC Development, Inc. and Wafertech, LLC have been dismissed without prejudice. Stipulation Dismissal Without Prejudice Defs. TSMC Development, Inc., & Wafertech, LLC, ECF No. 47.
. This issue has been considered by a court in this district. In that case, however, the judge was not required to decide on this issue and consequently all statements are obiter dicta. See Select Retrieval,
. Zond’s allegations consist of barely more than the statement that Fujitsu is "knowingly and with intent, actively encouraging its customers, suppliers, original equipment manufacturers ... to use, sell, offer for sale, and import Fujitsu’s Infringing Products in a manner that constitutes infringement of one or more claims of the ... Patent.” 2nd Am. Compl. ¶ 52.
. Where there are substantial non-infringing uses of an infringing product, intent to induce infringement cannot be inferred, even where the defendant has actual knowledge that some users may be infringing the patent. Vita-Mix Corp.,
