Do you remember when Google, Apple, Facebook, OfficeMax, Yahoo! and Netflix/OfficeDepot/Staples/eBay all filed motions to dismiss or sever Paul Allen's Interval Licensing's patent infringement complaint? They filed to dismiss for misjoinder and Google filed a motion to dismiss for failure to state a claim. Google and the others want the cases separated into eleven instead of one humungous case, if the court doesn't toss the complaint out. Allen has answered with his opposition to both ideas. And the accused Gang of Eleven read the filings and their response could be described simply like this: What do we all have in common? How can it possibly work for any of us to have to go forward as a group? And Google writes, "Interval has not
identified any products of any of the defendants that are allegedly
infringing." All it has said "without explanation" is that all the defendants infringe one of its patents with "similar" functionality, but there are no facts to support the claim. What functionality? What is the claim?
All of them say the same thing: that Interval Licensing's complaint is too vague, and thus they can't prepare. Google tells the court:
Interval's Complaint provides no notice as to what Google (or any of the other named disparate
Defendants) does that purportedly infringes the patents-in-suit. That, Google argues, is enough to kick the complaint out of the courtroom. You are supposed to tell the defendant what he did. Not a single product or service is identified. Facebook, for example, says that all Interval has told them is infringing is "websites". Well, what does that mean?
Here are all the filings:
11/08/2010 - 122 - RESPONSE, by Plaintiff Interval Licensing LLC, to 63 MOTION to Dismiss Party or Sever for Misjoinder Pursuant to Fed. R. Civ. P. 20 and 21. Oral Argument Requested. (Sargent, Edgar) (Entered: 11/08/2010)
11/08/2010 - 123 - RESPONSE, by Plaintiff Interval Licensing LLC, to 62 MOTION to Dismiss For Failure to State Claim Upon Which Relief can be Granted Pursuant to Fed. R. Civ. P. 12(B)(6). Oral Argument Requested. (Sargent, Edgar) (Entered: 11/08/2010)
11/08/2010 - 124 - JOINT STATUS REPORT signed by all parties estimated Trial Days: 7-10.. (Nelson, Justin) (Entered: 11/08/2010)
11/11/2010 - 125 - APPLICATION OF ATTORNEY Kristin L. Cleveland FOR LEAVE TO APPEAR PRO HAC VICE for Defendants Netflix Inc, Office Depot Inc, Staples Inc, eBay Inc (Fee Paid) Receipt No. 0981-2243892. (Attachments: # 1 ECF Registration Form)(Carraway, J) (Entered: 11/11/2010)
11/11/2010 - 126 - APPLICATION OF ATTORNEY Klaus H. Hamm FOR LEAVE TO APPEAR PRO HAC VICE for Defendants Netflix Inc, Office Depot Inc, Staples Inc, eBay Inc (Fee Paid) Receipt No. 0981-2243897. (Attachments: # 1 ECF Registration Form)(Carraway, J) (Entered: 11/11/2010)
11/12/2010 - 127 - ORDER re 125 Application for Leave to Appear Pro Hac Vice. The Court ADMITS Attorney Kristin L Cleveland for Netflix Inc, Office Depot Inc, Staples Inc, and for eBay Inc, by William M. McCool. (No document associated with this docket entry, text only.)(DS) (Entered: 11/12/2010)
11/12/2010 - 128 - ORDER re 126 Application for Leave to Appear Pro Hac Vice. The Court ADMITS Attorney Klaus H Hamm for Netflix Inc, Office Depot Inc, Staples Inc, and for eBay Inc, by William M. McCool. (No document associated with this docket entry, text only.)(DS) (Entered: 11/12/2010)
11/12/2010 - 129 - REPLY, filed by Defendants Google Inc, YouTube LLC, TO RESPONSE to 63 MOTION to Dismiss Party or Sever for Misjoinder Pursuant to Fed. R. Civ. P. 20 and 21 (Jost, Shannon) (Entered: 11/12/2010)
11/12/2010 - 130 - REPLY, filed by Defendants Google Inc, YouTube LLC, TO RESPONSE to 62 MOTION to Dismiss For Failure to State Claim Upon Which Relief can be Granted Pursuant to Fed. R. Civ. P. 12(B)(6) (Jost, Shannon) (Entered: 11/12/2010)
11/12/2010 - 131 - REPLY, filed by Defendant Apple Inc, TO RESPONSE to 80 MOTION to Dismiss (Wilsdon, Scott) (Entered: 11/12/2010)
11/12/2010 - 132 - REPLY, filed by Defendant Apple Inc, TO RESPONSE to 81 MOTION to Dismiss or Sever Pursuant to FRCP 20 & 21 (Wilsdon, Scott) (Entered: 11/12/2010)
11/12/2010 - 133 - REPLY, filed by Defendant Facebook Inc, TO RESPONSE to 62 MOTION to Dismiss For Failure to State Claim Upon Which Relief can be Granted Pursuant to Fed. R. Civ. P. 12(B)(6) (Durbin, Christopher) (Entered: 11/12/2010)
11/12/2010 - 134 - REPLY, filed by Defendant Facebook Inc, TO RESPONSE to 63 MOTION to Dismiss Party or Sever for Misjoinder Pursuant to Fed. R. Civ. P. 20 and 21 (Durbin, Christopher) (Entered: 11/12/2010)
11/12/2010 - 135 - REPLY, filed by Defendant OfficeMax Inc, TO RESPONSE to 62 MOTION to Dismiss For Failure to State Claim Upon Which Relief can be Granted Pursuant to Fed. R. Civ. P. 12(B)(6) (Fogg, Steven) (Entered: 11/12/2010)
11/12/2010 - 136 - REPLY, filed by Defendant Yahoo! Inc, TO RESPONSE to 63 MOTION to Dismiss Party or Sever for Misjoinder Pursuant to Fed. R. Civ. P. 20 and 21 (Walters, Mark) (Entered: 11/12/2010)
11/12/2010 - 137 - REPLY, filed by Defendants Netflix Inc, Office Depot Inc, Staples Inc, eBay Inc, TO RESPONSE to 63 MOTION to Dismiss Party or Sever for Misjoinder Pursuant to Fed. R. Civ. P. 20 and 21 (Cleveland, Kristin) (Entered: 11/12/2010)
11/12/2010 - 138 - REPLY, filed by Defendant Yahoo! Inc, TO RESPONSE to 62 MOTION to Dismiss For Failure to State Claim Upon Which Relief can be Granted Pursuant to Fed. R. Civ. P. 12(B)(6) (Walters, Mark) (Entered: 11/12/2010)
11/12/2010 - 139 - REPLY, filed by Defendants Netflix Inc, Office Depot Inc, Staples Inc, eBay Inc, TO RESPONSE to 62 MOTION to Dismiss For Failure to State Claim Upon Which Relief can be Granted Pursuant to Fed. R. Civ. P. 12(B)(6) (Cleveland, Kristin) (Entered: 11/12/2010)
Here's Interval's response to Google's motion to dismiss for failure to state a claim:If the Court determines that any of the allegations in the Complaint are not sufficient
to state a claim, Interval asks that instead of dismissing the case, the Court give Interval
leave to file a more definite statement incorporating the initial infringement contentions and
that the current calendar for the case be maintained.
A little nervy, eh? Instead of just telling where on the map the defendants can find the alleged infringement, it has held back now twice, and now it has the nerve to ask for a third shot, in case the judge falls asleep and lets them play the guessing game with the defendants a little longer, still without showing what the infringement allegedly is.
Why do plaintiffs play such games? Usually so the defendants can't prepare properly. It can also sometimes be a big hint that maybe the claims aren't precisely air-tight and solid when viewed under a microscope. And it also happens sometimes because courts frown on dismissing a complaint based on a technicality, because the whole purpose of courts is to settle disputes, so they often get away with it.
On the other side, the universe shifted with two Supreme Court decisions, in Iqbal and Twombly, both of which tightened the screws on plaintiffs, forcing them supposedly to show their cards in a complaint enough for the defendant to begin, at least, to get a picture of what the litigation is about, so the defendant can prepare. And also to make sure that a defendant isn't burdened with huge discovery costs before the plaintiff at least shows enough facts to demonstrate that he is, if he can prove his claims, entitled to relief. But now what happens is interpretations of those two decisions. Where exactly is the line? Interval claims that the two cases haven't changed the notice pleading requirements for *patent* cases, in that the requirements for those are found in Form 18. They'd rather argue about that than just tell these eleven defendants what their claims actually are. Here's an article that explains the issue with Form 18, if you are curious. It says that the Supreme Court did settle the issue in Twombly, writing "Twombly's plausibility standard applies to all patent-related actions brought in federal court". And you can find at the end of the article a sample patent complaint as it looks under Form 18. But Interval is right that courts have gone both ways. This article in Law.com by a Fish & Richardson attorney, David Healey, argues that since a plaintiff is supposed to do an investigation before suing, why not meet the Iqbal standard? Motions on the adequacy of pleadings in patent cases simply cause delay and waste, which is troublesome since most patent cases are already bogged down with too much delay and waste for most clients. Assuming a plaintiff has done its Rule 11 investigation, it should be able to plead all of its claims under the slightly elevated standard required by Iqbal. If the plaintiff can plead the elements of these other claims, it should do so; if not, it should take discovery and plead them as it can. Iqbal acts as a loose screen on frivolous pleadings, and there is no reason judges should fail to implement that screen in patent cases. "Proper application of these principles [in Twombly and Iqbal] in the patent context remains an open issue," Interval cooly states. Those two cases weren't about patents or IP at all, so ... nyah, nyah, we don't have to tell ya, Interval argues. This is patent law! And in *Texas* we win! Hahahaha. Let them read the patents. What else do they need to know? They know what they did. We get to roll right over them, because we own patents! Anyway, patent law is its own little world, and here we don't have to tell them until we hand the defendants our initial infringement charts. That comes later, not now, and it's early enough. This is patents, dude, not Iqbal territory. If I were a patent troll, I'd be as annoying as possible, because my goal would be to avoid litigation by being so annoying, you'd pay me to stop. So I'd come up with a complex but very new, undecided, legal theory that would presumably require going all the way to the Supreme Court if I felt like it to really settle the question. Like whether Twombly and Iqbal apply to patent cases or not. What would I care what you think of me? It's all about the money, honey. And the very hint of having to go through all that would have defendants doing some higher math to see if this is all going to be worth fighting. I can't help but wonder if Paul Allen no longer trusts in his Microsoft stock to support him in the manner in which he has become accustomed?
You know how you can tell when an area of law has gotten too pro-plaintiff? When the trolls figure out how to game it, and they can. There are no legislators in the world who deliberately design laws to benefit trolls. But it happens. Get a load of Interval's whining about its rights if Google gets to apply Iqbal, which by the way only requires that a plaintiff's complaint be plausible:
Third, requiring patent plaintiffs to accurately plead infringement based on a detailed
understanding of the operation of the defendant's accused product would erect an
unjustifiable barrier to enforcement of patent rights.
It's too much to require, plausibility. Why, that'd require ... you know... due diligence and research before suing and stuff. How can trolls function in a system like that? I mean, you'd need to have a case before you file. Boo hoo. That would mean knowing how a defendant's product works instead of just guessing and all. How mean would that be? Why, it'd slow down the patent steam roller if plaintiffs can't rely on discovery to try to find something to justify the litigation. All right. I hate software patents, and it shows. Happily I'm not a patent troll, so I don't have to actually live like that. But if I were, that's how I'd be. Anyway, Interval told Google et al what the product is that infringes, they say. The website: Interval has identified, with specificity, particular products
that infringe Interval's patents. In most instances, the infringement is manifested by the
defendant's website and the Complaint states exactly that. For example, the `682 patent
protects technology that provides alerts to users about current information of interest to the
user. Defendants AOL, Apple, eBay, Facebook, Google, Netflix, Office Depot, OfficeMax,
Staples, Yahoo, and YouTube all operate websites that infringe claims in this patent by
providing such alerts to users. Your website infringes my patent, because you alert your readers to current info, so read the patent and see if you can figure it out, in other words. Yes, I'm kidding around. But not far beyond how I read what Interval is arguing. Read it for yourself, by all means, and draw your own conclusions, but that's what I come up with. I'm not at all predicting that the judge will agree with me, by the way. Texas has a rep, for one thing, of being patent plaintiff-friendly, but this is Washington, so I have no idea. And Interval's complaint is for direct infringement, which is the kind of case that I see from my research seem to be the type that squeeze past Iqbal and Twombly the best with Form 18. What more do they need to know, Interval asks? But think about Google or Facebook. Which page of the website do they mean? Which functionality or service? They're not identical. Google Maps? Google News? Google Scholar? Gmail? Google Patents? Seriously, all of them? If not, which one? And Interval says the infringement involves both hardware and software. So... what hardware? Interval says it'll tell them later, when they do the charts. Anyway, they can figure it out, the four that aren't about websites:
Interval's Complaint, by contrast, identifies
the product and provides an explanation of the functionality that infringes one or more
claims of the patent.
Interval's allegations concerning the `652 and `314 patents--which are asserted
against only four of the eleven defendants in this case--do not accuse the defendants'
websites of infringement, but accuse "products that display information in a way that
occupies the peripheral attention of the user as claimed in the patent." See, e.g., Cmplt ¶ 32.
In context, and given that the patent itself is attached to and incorporated in the Complaint,
these allegations are sufficient to satisfy Rule 8 and to put defendants AOL, Apple, Google,
and Yahoo on notice about which features of which products are being accused of
infringement. OOOh. Fun. It's a guessing game. So, let me guess. Android maybe? The iPhone and iPad? Search engines? Where the deep pockets are? You think? What do I win if I get it right? A stuffed animal? A doll? Google, and we, the public, will find out "in weeks" when the charts are due. If necessary, Interval will do a more definite statement, but it opines that Google is a "sophisticated repeat patent litigant" -- meaning it gets sued a lot, I presume -- and so it knows all this and is just seeking delay, Interval claims: Google's motion appears to serve no purpose other than delay. As a sophisticated,
repeat patent litigant, Google is well aware that it will receive a more detailed description of
Interval's allegations in the initial infringement contentions. Under the Court's scheduling
order, these infringement contentions will be due within weeks. Uh, no. Google wants an early termination to this case, actually. You can figure that out by the relief it's asking for -- that the complaint be dismissed for failure to state a claim. And then Interval gives us a big hint that it knows Google has a point and might actually prevail: Google has suffered no
cognizable prejudice from any claimed lack of specificity in Interval's Complaint. Indeed,
Interval has agreed, at the defendants' request, to refrain from serving any discovery
requests until two weeks after the initial infringement contentions are served.
Ha. Annoying litigants don't agree to nuttin' unless they are worried about losing the point. So I take this as an indication that Interval is at least a bit worried that even if it were in Texas, it didn't put enough in its complaint to survive this motion: If the Court determines that any of the allegations in the Complaint are not sufficient
to state a claim, Interval asks that instead of dismissing the case, the Court give Interval
leave to file a more definite statement incorporating the initial infringement contentions and
that the current calendar for the case be maintained. Oh. A favor. Interval would like a favor. And the sad part is it will probably get it.
I was glad to see in your comments some asking for news about this case, because this was a lot of work, doing the documents as text, and it's good to know you are interested. Here's Interval Licensing's Opposition to the Eleven's Motions to Dismiss or Sever, then, as text, followed by Google's Reply, and then Interval's Opposition to the Motion to Dismiss for Failure to State a Claim, followed by Google's Reply:
*******************************
INTERVAL LICENSING LLC,
Plaintiff,
v.
AOL, INC.; APPLE, INC.; eBAY, INC.;
FACEBOOK, INC.; GOOGLE INC.;
NETFLIX, INC.; OFFICE DEPOT, INC.;
OFFICEMAX INC.; STAPLES, INC.;
YAHOO! INC.; AND YOUTUBE, LLC,
Defendants.
INTERVAL LICENSING LLC
OPPOSITION TO DEFENDANTS'
MOTION TO DISMISS OR SEVER
FOR MISJOINDER PURSUANT
TO FED. R. CIV. P. 20 AND 21
JURY DEMAND
Plaintiff Interval Licensing LLC ("Interval") responds to the
motion to dismiss for misjoinder filed by defendants Google Inc.
and YouTube LLC. and joined by the other defendants in this
litigation (the moving parties are referred to collectively in this
brief as "Google.")
INTRODUCTION
Google and its co-defendants seek to sever this patent
infringement case into eleven different actions, all involving the
same patents and very similar technology. This motion is based on
an overly-technical reading of the joinder requirements in Rule 20
and ignores the obvious efficiencies gained by deciding common
issues once instead of eleven different times in eleven different
proceedings.
(1)
Google does not deny that the patent claims asserted in this
case involve many common legal and factual questions. In addition
to the claim construction and invalidity issues that would overlap
in any group of claims against multiple defendants for infringing
the same patent, the infringement arguments in this litigation are
also likely to involve common issues because the different
defendants' accused technology appears to operate in nearly
identical fashion.
Google fails to identify any meaningful prejudice it would face
from keeping the cases together at this stage, nor does it argue
that the litigation would somehow be more efficient if the claims
were severed. Indeed, the justification for the requested relief is
difficult to identify given that Google and all of its
co-defendants (save one) agree to maintain the litigation in this
Court. The motion to sever should not be granted. If, however, the
Court is inclined to sever the litigation into eleven different
cases as the defendants request, then all of the cases should
remain consolidated before this Court so that discovery can be
coordinated and common issues can be resolved consistently and
efficiently.
BACKGROUND
Interval filed its Complaint in this case on August 27, 2010,
asserting claims for patent infringement against eleven defendants.
As explained in the Complaint, Plaintiff Interval Licensing is the
assignee of Interval Research, a high-tech research company founded
in 1992 by Paul Allen and David Liddle. Interval Research focused
its development efforts on consumer-oriented applications with a
pioneering emphasis on the Internet.
(2)
Interval's Complaint asserts claims of infringement under four
patents, each of which protects technology developed by engineers
at Interval Research in the mid- or late1990s. All four of the
patents describe advances in methods of displaying information,
typically displaying information to users of computer systems.
Since the mid-1990s, when engineers at Interval first developed
these techniques, they have been adopted by a wide- range of
businesses, including the eleven defendants in this case.
Interval's Complaint properly joins multiple defendants who
infringe the same claims of the same patents by operating websites
that display information in very similar ways. Although detailed
information about the operation of infringing functionality for
each of the defendants will need to be developed in discovery, it
is likely that in many cases the defendants' products all operate
similarly and therefore raise identical infringement issues.
Interval's claims against all eleven defendants under the '507
patent demonstrate the nature of the similarities. All of the
defendants operate websites that display related products or
related content in response to a user selecting to view a webpage
associated with a particular product or content item. On Office
Max's website, for example, when a customer brings up a particular
model of stapler, the website also displays a list of other items
captioned "Related Products." Similar, and in some cases virtually
identical, functionality exists on the websites of each of the
eleven defendants.
This technology is claimed in the '507 patent. Because the
operation of the defendants' infringing websites are apparently
similar, there is every reason to believe that not only will there
be common issues in this case related to invalidity and claim
construction, but also with respect to infringement. Judicial
efficiency unquestionably favors joint resolution of these common
issues. Google's attempt to sever these cases and
(3)
potentially require repetitious and possibly inconsistent
judicial proceedings addressing the same issues would be wasteful
and is not mandated by the Federal Rules or controlling
precedent.
ARGUMENT
A. Federal Rules and Ninth Circuit Precedent Strongly Favor
Joinder.
Federal Courts recognize that permissive joinder promotes
fairness and judicial efficiency. In an early case interpreting the
modern Federal Rules, the Supreme Court made the policy clear:
Under the rules, the impulse is toward entertaining the broadest
possible scope of action consistent with fairness to the parties;
joinder of claims, parties, and remedies is strongly
encouraged.
United Mine Workers of America v. Gibbs, 383 U.S. 715,
724 (1966). Consistent with this mandate, the Ninth Circuit holds
that "Rule 20 regarding permissive joinder is to be construed
liberally in order to promote trial convenience and to expedite the
final determination of disputes, thereby preventing multiple
lawsuits." League to Save Lake Tahoe v. Tahoe Regional Planning
Agency, 558 F.2d 914, 917 (9th Cir. 1977).
Under the Federal Rules, a plaintiff may join multiple
defendants if the claims against both satisfy two elements: (1)
"any question of law or fact common to all defendants will arise in
the action;" and (2) "any right to relief is asserted against them
jointly, severally, or in the alternative with respect to or
arising out of the same transaction, occurrence, or series of
transactions or occurrences." Fed. R. Civ. P. 20. Interval's claims
against the eleven defendants in this case satisfy both
elements.
B. Interval's Claims Against Different Defendants Involve a
Host of Common Issues.
(4)
Google does not dispute that the claims against it and the other
defendants involve common issues. Although there are eleven
defendants in this case, there are only four patents being
asserted. Two of the patents are being asserted against four
defendants, one is being asserted against ten defendants, and one
is being asserted against all eleven. There will be claim
construction issues for each patent and, particularly given the
similarity of many of the defendants' infringing products, those
claim construction issues are likely to be repeated from one
defendant to the next.
Google and the other defendants will inevitably challenge the
validity of the patents in suit. The issues relevant to an
invalidity defense are, of course, all based on the patent-insuit,
not on accused product, and so these issues too will repeat from
one defendant to the next.
There is also reason to believe that there will be common issues
related to infringement by different defendants. Based on the
information currently available to Interval about the infringing
products and devices, there appears to be substantial similarity
among the defendants' infringing products, and therefore likely
substantial commonality in the infringement arguments. For example,
as discussed above, all eleven defendants infringe claims of the
'507 patent by displaying information on their websites in a format
equivalent to Office Max's "Related Products" lists.1 Repetition of
infringement arguments in addition to claim construction and
invalidity would render every aspect of the claims against
different defendants the same, apart from damages.
C. Interval Satisfies the "Common Series of Transactions"
Requirement
Because of the Logical Relationship Between the Claims.
(5)
Google mischaracterizes the second prong of the permissive
joinder rule by suggesting that it requires allegations that all
defendants conspired or cooperated in producing the same infringing
product. (Br. at 4:8-9.) Consistent with the general mandate
favoring joinder, courts have not interpreted the phrase "same
transaction or series of transactions" so strictly, but instead
require allegations showing a logical relationship between the
claims against different defendants. See, e.g., Alexander v.
Fulton County, Ga., 207 F.3d 1303, 1323 (11th Cir. 2000);
Fisher v. CIBA Specialty Chemicals Corp., 245 F.R.D. 539,
542 (S.D. Ala. 2007); Cf. 4 James Wm. Moore et al.,
Moore's Federal Practice § 20.05[3] (3d ed. 2010)
("same transaction" test met if "claims involve enough related
operative facts to make joinder in a single case fair.")
The Ninth Circuit has not addressed joinder of multiple
defendants under Rule 20 in a patent case. Opinions discussing
joinder in other contexts indicate that "same transaction or series
of transactions" should be given a flexible meaning to promote
judicial economy and fairness. See League to Save Lake
Tahoe, 588 F.2d at 917 (finding that claims against Lake Tahoe
authority and several developers for allegedly improper approvals
of different projects initiated by the different developers
satisfied the "same transaction or occurrence" prong of Rule 20 and
could be joined in a single action); Coughlin v. Rogers, 130
F.3d 1348, 1350 (9th Cir. 1997) ("the 'same transaction'
requirement refers to similarity in the factual background of a
claim.") (internal punctuation omitted.)
Particularly given the paucity of decisions interpreting Rule
20, courts have frequently sought guidance in the interpretation of
the "same transaction" requirement of Rule 13 concerning mandatory
counterclaims. See, e.g., Alexander, 207 F.3d at 1323;
Mosley v. General Motors Corp., 497 F.2d 1330, 1333 (8th
Cir. 1974); see also 4 James
(6)
Wm. Moore et al., Moore's Federal Practice §
20.05[2] (3d ed. 2010). In this context, the Ninth Circuit has
unequivocally endorsed a very broad and liberal interpretation of
"same transaction:"
We apply the "logical relationship" test to determine whether
two claims arise out of the same transaction or occurrence."
Pochiro v. Prudential Ins. Co. of America, 827 F.2d 1246,
1249 (9th Cir.1987) " 'This flexible approach to Rule 13 problems
attempts to analyze whether the essential facts of the various
claims are so logically connected that considerations of judicial
economy and fairness dictate that all the issues be resolved in one
lawsuit.' " Id. (quoting Harris v. Steinem, 571 F.2d
119, 123 (2d Cir.1978)); see also Albright v. Gates, 362
F.2d 928, 929 (9th Cir.1966) (noting that we have given Rule 13 an
"increasingly liberal construction").
Johnson v. Swinney, 1993 WL 230192 *3 (9th Cir.
1993).
Other District Courts have relied upon this interpretation of
"same transaction" to support joinder of multiple defendants
allegedly infringing the same patent with different accused
devices. See, e.g., Manatech, Inc. v. Country Life LLC, 2010
WL 2944574 at *1-2 (N.D. Tex.) (finding that claims against
different defendants for infringing the same patent by
manufacturing similar products satisfied the same transaction prong
of Rule 20); My Mail Ltd. v. America Online, Inc., et al.,
223 F.R.D. 455, 457 (E.D. Tex. 2004) (upholding joinder against
multiple defendants based on its finding "that there is a nucleus
of operative facts or law in the claims against all the defendants
and, therefore, the claims against [the defendants moving to sever]
do arise out of the same series of transactions or occurrences as
the claims against the other defendants.") The My Mail Court
emphasized the importance of flexibility and criticized a "per se"
rule that different defendants manufacturing different products did
not satisfy Rule 20 as "a hypertechnical [interpretation of the
rule] that perhaps fails to recognize the realities of complex, and
particularly patent, litigation." Id.
(7)
Google relies on a series of district court cases that apply a
per se rule against joinder of multiple defendants in a
patent case for infringing the same patent by manufacturing
different products. Philips Electronics North Amer. Corp. v.
Contec Corp., 220 F.R.D. 415, 417 (D. Del. 2004) (severing
claims against different defendants after discovery and before
trial because "[a]llegations of infringement against two unrelated
parties based on different acts do not arise from the same
transaction"); New Jersey Machine v. Alford
Inddustries¸1991 WL 340196 *2 (D. N.J. 1991)
(holding that intellectual property claims against different
defendants should be tried separately); Reid v. General Motors
Corp., 240 F.R.D. 260, 263 (E.D. Tex. 2007) (finding patents
claims against multiple defendants do not satisfy Rule 20 and
relying on Philips and New Jersey Machine); Androphy v. Smith
& Nephew, Inc.¸31 F.Supp. 2d 620, 623 (N.D.
Ill. 1998) (applying a per se rule against joinder of claims
against multiple defendants who infringed the same patent with
different products as "clearly" not satisfying Rule 20); Spread
Spectrum v. Eastman Kodak Co., 2010 WL 3516106 *2 (N.D. Ill.)
(same); Paine, Webber, Jackson & Curtis, Inc. v. Merrill
Lynch, Pierce, Fenner & Smith, Inc., 564 F.Supp. 1358, 1371
(D. Del. 1983).
None of these cases are binding on this Court and none of them
apply the sort of flexible, case-by-case analysis of "same
transaction" set out in Ninth Circuit case law. The one case cited
by Google from this Circuit is a recent Northern District of
California decision in which the plaintiff sued sixty-eight
different defendants for infringing two patents. WIAV Networks,
Inc. v. 3COM Corp., 2010 WL 3895047 *1 (N.D. Cal). After the
plaintiff agreed to drop all but twelve of the defendants which
were to be divided into seven groups, Judge Alsop analyzed the
issues that would arise in the case and determined that the common
issues were "overwhelmed" by individual issues, in the areas of
claim construction
(8)
and validity as well as infringement. Id. at *3. Here, by
contrast, the similarity between different defendants' infringing
products, as well as common issues in claim construction and
invalidity support continued consolidation rather than
severance.
Interval's claims against multiple defendants satisfy the
"logical relationship" test endorsed by the Ninth Circuit's
interpretation of "same transaction" in the context of Rule 13.
Interval has sued multiple defendants, each of whom operates a
website that infringes Interval's patents in closely related ways.
These claims will raise a series of identical or very closely
related issues against each of the defendants. Severance of these
claims into different cases would be inefficient and contrary to
the policies embodied in the Federal Rules.
D. Severance Now Would Be Premature and Serves No Immediate
Purpose.
Google fails to identify any pressing need for immediate
severance.2
On the contrary, apparently conceding that the overwhelming number
of common issues in this case justifies a consolidated proceeding,
Google indicates that it does not oppose this Court's continuing
jurisdiction over this case and states that it will not seek to
transfer to another Court. (Br. at p. 6 n.2) With the exception of
Apple, each of the other defendants joined this portion of Google's
brief. And even Apple has not filed a motion to transfer to another
Court.
(9)
The only prejudice Google identifies as a justification for
severance is potential jury confusion at trial. (Br. at 5-6.) There
is no need to address the question of potentially separate trials
at this point; after discovery (which Google apparently agrees
should remain consolidated or at least coordinated) the parties and
the Court will have more information with which to determine
whether the risk of confusion outweighs the benefits of a single
trial. However, based on the defendants' length of trial proposal
submitted in the Joint Status Report, even they acknowledge that
there are substantial overlapping issues at the trial stage. The
defendants' propose eleven individual trials of 7 to 10 days each,
for a total of between 77 and 110 total trial days. By contrast,
they propose only 20 to 30 days for a consolidated trial addressing
all eleven defendants. The efficiencies gained by proceeding
together are clear even to the defendants.
Whether proceeding under a single case number or severed into
multiple cases, there is no doubt that at this preliminary stage of
the litigation, the claims against the eleven defendants should be
consolidated so that common issues can be resolved together,
avoiding wasteful duplication and the risk of inconsistent
findings. The Federal Rules authorize consolidation of any matters
involving common issues "to avoid unnecessary cost or delay." Fed.
R. Civ. P. 42(a)(3). The prospect of eleven different claim
construction hearings addressing identical terms, or of multiple,
un-coordinated discovery investigations into invalidity issues for
the same patent, plainly justify the consolidation of these cases
under this rule.
Under the local patent rules, the parties will be addressing
claim construction first, an area where there is very likely to be
substantial overlap between defendants. The Court should consider
these overlapping issues together, providing a uniform resolution
for each
(10)
common claim construction issue, a procedure to which the
defendants (with the possible exception of Apple) apparently do not
object.
Given that the claims against the different defendants will be
proceeding jointly at least through claim construction, severance
into multiple cases at this early stage would be premature. If the
Court is inclined to consider severance into different matters for
purposes of addressing issues unique to the individual defendants,
it should do so when those unique issues have been more clearly
identified and can be balanced against the benefits from proceeding
jointly.
CONCLUSION
For the reasons stated above, Interval respectfully requests
that Google's motion to dismiss for misjoinder be denied.
Dated: November 8, 2010
/s/ Edgar Sargent
Justin A. Nelson
WA Bar No. 31864
[email]
Matthew R. Berry
WA Bar No. 37364
[email]
Edgar Sargent
WA Bar No. 28283
[email]
SUSMAN GODFREY L.L.P.
[address]
[phone]
[fax]
Max L. Tribble, Jr.
[email]
SUSMAN GODFREY L.L.P.
[address]
[phone]
[fax]
(11)
Michael F. Heim
[email]
Eric J. Enger
[email]
Nate Davis
[email]
HEIM, PAYNE & CHORUSH, L.L.P.
[address]
[phone]
[fax]
Attorneys for INTERVAL LICENSING LLC
(12)
|
Additional information about the similarities among the
different defendants' accused products will be clear from
Interval's initial infringement contentions. |
|
Google's motion seeks alternative remedies of dismissal or
severance. Severance is unquestionably the proper remedy, should
the Court find that the cases against different defendants
improperly joined. Google and all of the other defendants except
Apple indicate that they have no objection to continuing to proceed
in this Court. Dismissal, then, would simply force Interval to file
a new Complaint against each defendant for no purpose other than
obtaining a new case number, generating needless delay. |
*******************************
*******************************
HONORABLE MARSHA J. PECHMAN
UNITED STATES DISTRICT COURT
WESTERN DISTRICT OF WASHINGTON
AT SEATTLE
INTERVAL LICENSING LLC,
Plaintiff,
v.
AOL, INC, et al.,
Defendants.
__________________________
Case No.: 2:10-cv-01385-MJP
DEFENDANTS GOOGLE INC. AND YOUTUBE, LLC'S REPLY IN
SUPPORT OF THEIR MOTION TO DISMISS OR SEVER FOR
MISJOINDER PURSUANT TO FED. R. CIV. P. 20 AND 21
Note on Motion Calendar:
November 12, 2010
Oral Argument Requested
___________________________
Defendants Google Inc. and YouTube, LLC (together "Google")
submit this reply in support of their Motion to Dismiss or Sever
For Misjoinder Pursuant to Fed. R. Civ. P. 20 and 21.
I. ARGUMENT
Interval Licensing LLC's ("Interval") Opposition Brief
demonstrates why Interval's attempt to join eleven separate
defendants with distinct products and services is improper and
prejudicial to the defendants.
(1)
A. Interval's Brief Demonstrates The Prejudice Caused By
Improper Joinder
Interval's Opposition Brief misconstrues what it means for a
right to relief to arise out of the "same transaction, occurrence,
or series of transactions or occurrences." Joinder is not proper
just because a plaintiff makes common allegations of patent
infringement. Rather, as is the case here, when the allegations of
infringement involve a multitude of disparate products and
offerings,1
each of which is unique except in the broadest sense (e.g.,
that they relate to the Internet and websites), joinder is
improper. In failing to recognize that its claim does not arise
from a common set of operative facts, Interval's brief illustrates
the exact kind of harm that the joinder rules are designed to guard
against.
For example, Interval makes unsupported allegations concerning
Office Max's website, and then concludes that joinder is
appropriate because all of the defendants "display[] information on
their websites in a format equivalent to Office Max's 'Related
Products' lists." (Dkt. No. 122 at 5:19-22.) Taking this example at
face value,2 Interval inappropriately assumes that each
of the defendant's underlying systems operate in the same manner.
It is naïve, at best, for Interval to suggest that because
both Office Max and Google purportedly have websites that
"display[] a list of other items captioned 'Related Products'" that
any difference between the defendants' offerings would be
immaterial to the issue of non-infringement. (Dkt. No. 122 at
3:19-20). Moreover, it would be improper for Interval to attempt to
prove its claims against Google by reference to another defendant's
unrelated operations rather than by showing that each of Google's
(as yet unidentified) products or services include every limitation
of one of Interval's patent claims. Markman v. Westview
Instruments, Inc., 52 F.3d 967, 976 (Fed. Cir. 1995)
(infringement analysis requires comparison of properly construed
claims to accused product), aff'd, 517 U.S. 370 (1996). For
this very reason, joinder is improper and severance is
appropriate.
(2)
Although there may be some overlap in invalidity arguments
advanced by the defendants, this does not support joinder and does
nothing to negate the very real prejudice Google will face as a
result of the potentially numerous and/or conflicting
non-infringement and remedies arguments that may be advanced by
other defendants. WIAV Networks LLC v. 3COM Corp., 2010 WL
3895047, at *3 (N.D. Cal. Oct. 1. 2010) ("FRCP 20(a)(2)(A) does not
encompass defenses asserted by a defendant. Rather, only a 'right
to relief' asserted by the plaintiff can satisfy the
requirements for joining defendants under FRCP 20(a)(2)(A).")
(emphasis in original). For example, differences in defendants'
systems and accused products may cause them to develop different
non-infringement or claim construction positions. Lumping all the
defendants together, by improper joinder without factual
commonality, will likely impair Google's ability to advance
positions that are different from, or conflict with, the positions
of other defendants during claim construction and trial. At a
minimum, Google will be prejudiced by the sheer number of different
arguments that this Court or a jury will be asked to consider if
all eleven defendants are joined in a single action. The resulting
confusion and prejudice is precisely why Rule 20 requires
"transactional relatedness" for joinder of unrelated
defendants.
The only commonality between the defendants here is that they
are improperly joined codefendants in a patent case. This is not
enough to justify joining all the defendants in one action.
B. Interval Has Failed Allege Facts that Show a Common
Transaction or Occurrence
As explained in Google's Motion, the Ninth Circuit has
interpreted the phrase "same transaction, occurrence, or series of
occurrences" to require a degree of factual commonality underlying
the claims. Bravado Int'l Group Merchandising Servs. v. Cha,
2010 WL 2650432, at *4 (C.D. Cal. June 30, 2010) (citing
Coughlin v. Rogers, 130 F.3d 1348, 1350 (9th Cir. 1997)). A
party typically must assert rights that arise from related
activities. WIAV Networks, 2010 WL 3895047, at *1 (citation
omitted).
Interval's interpretation of joinder would read the "same
transaction or occurrence" requirement out of Rule 20 (Dkt. No. 122
at 7) because Interval has put forth no allegations that
(3)
show any degree of factual commonality underlying its claims.
Under Interval's reasoning, any time multiple entities are accused
of the same legal wrong, those entities could be joined in a single
action. In other words, under Interval's interpretation, the "same
transaction or occurrence" requirement is met simply because a
single plaintiff asserts that a disparate set of companies infringe
one or more of several asserted patents. This is not what Rule 20
means.
The very cases cited by Interval demonstrate what relatedness
means in the context of Rule 20 — there must be facts common
to the claims asserted by the plaintiff or plaintiffs that apply to
claims against the defendants, not merely that there is a similar
legal claim. (Dkt. No. 122 at 6:6-23.) For example, in League to
Save Lake Tahoe v. Tahoe Reg'l Planning Agency, 558 F.2d 914,
917 (9th Cir. 1977) ("League") the plaintiffs alleged in
their complaint that one of the defendants had illegally approved
the developer defendants' projects and, if those approvals were
found to be illegal, the plaintiffs could prohibit the developers'
activities. The court found that joinder was proper because these
facts showed that the claim against the developers arose out of the
same occurrence. League, 558 F.2d at 917. Likewise,
Fisher v. CIBA Specialty Chemicals Corp., 245 F.R.D. 539,
540 (S.D. Ala. 2007) involved claims brought by nearby property
owners against a manufacturer for release of chemicals at a
particular manufacturing site. In Alexander v. Fulton County
Ga., 207 F.3d 1303, 1324 (11th Cir. 2000), the plaintiffs
claims arose out of allegations of a pattern of discriminatory
conduct by the same sheriff in the same year.
In contrast, Interval has not alleged that its claims against
the defendants arise out of any concerted actions or related
activities or that there are any common facts regarding defendants'
accused products that would support joinder in this case.
(See Dkt. No. 63 at 5:1-14.) Moreover, even if Interval had
alleged in the complaint that all of the defendants' websites are
"similar," this is not enough to satisfy the "transactional
relatedness" prong of Rule 20. WIAV Networks, 2010 WL
3895047 at *1-3 (joinder of only the subset of defendants that
manufactured laptop computers would still be improper because there
were no allegations of any related actions among those defendants).
"The mere fact that twelve defendants all manufacture, sell, or
(4)
distribute their own laptop computers does nothing to obviate
the bone crushing burden of individualized methods of proof unique
to each product." Id. at *1-2. Interval's allegations here
likewise fail to provide any suggestion of factual relatedness;
thus, joinder is improper.
C. Interval Mischaracterizes Authority as Applying a Per Se
Rule Against Joinder of Multiple Defendants in Patent Cases
Contrary to Interval's assertion (Dkt. No. 122 at 8:1-18), the
courts in the cases Google relies upon did not apply a per se rule.
Instead, the allegations in those cases, like those here, failed to
show any factual commonality that would support joinder. The courts
in those cases were able to deal with the joinder issue without a
lengthy discussion because none of the defendants were related, the
accused products were separate and distinct, and there were no
allegations that any acts of alleged infringement were connected in
any manner. (See Dkt. No. 62 at 3:7-12 & 5:1-6:14 and cases
cited therein.) In other words, those cases involved exactly the
same situation that is before the Court in this instance. It was
not the adoption of a per se rule, but the clarity of what was
wrong with the plaintiffs allegations that allowed the courts to
resolve the issue in short order.
II. CONCLUSION
Google respectfully requests that the Court dismiss Google from
this case, or sever the claims against it, because joinder of
defendants here is improper.
DATED this 12th day of November, 2010.
STOKES LAWRENCE, P.S.
By:
Shannon M. Jost (WSBA #32511)
Scott A.W. Johnson (WSBA #15543)
Aneelah Afzali (WSBA #34552)
and
(5)
Admitted Pro Hac Vice
Dimitrios T. Drivas
Kevin X. McGann
John HandyAaron Chase
WHITE & CASE LLP
[address]
Warren S. Heit
Wendi R. Schepler
WHITE & CASE LLP
[address]
Attorneys for Defendants Google Inc. and YouTube, LLC
(6)
|
As explained more fully in Google's Motion to Dismiss for
Failure to State a Claim Upon Which Relief Can Be Granted Pursuant
to Fed. R. Civ. P. 12(b)(6) (Dkt. No. 62), Interval has not
identified any products of any of the defendants that are allegedly
infringing, nor has it identified any of the asserted claims of any
of the patents-in-suit. |
|
Although Interval contends without explanation that the
defendants infringe one of its patents with "similar" functionality
(Dkt. No. 122 at 3:18-22), Interval made no factual allegations to
support such a claim in its complaint. |
*******************************
*******************************
*******************************
Hon. Marsha J. Pechman
UNITED STATES DISTRICT COURT
WESTERN DISTRICT OF WASHINGTON
AT SEATTLE
_____________________________
INTERVAL LICENSING LLC,
Plaintiff,
v.
AOL, INC.; APPLE, INC.; eBAY, INC.;
FACEBOOK, INC.; GOOGLE INC.;
NETFLIX, INC.; OFFICE DEPOT, INC.;
OFFICEMAX INC.; STAPLES, INC.;
YAHOO! INC.; AND YOUTUBE, LLC,
Defendants.
__________________________
INTERVAL LICENSING LLC
OPPOSITION TO DEFENDANTS'
MOTION TO DISMISS FOR
FAILURE TO STATE A CLAIM
UPON WHICH RELIEF CAN BE
GRANTED
JURY DEMAND
_________________________
Plaintiff Interval Licensing LLC ("Interval") responds to the motion to dismiss for
failure to state a claim filed by defendants Google Inc. and YouTube LLC. and joined by the
other defendants in this litigation (the moving parties are referred to collectively in this brief
as "Google.")
INTRODUCTION
With service of detailed infringement contentions only a few weeks away, Google
seeks dismissal of the Complaint in this case because it fails to state a claim of patent
infringement with sufficient specificity for Google to prepare its defense. (Br. at 2:11-13).
The motion is nothing more than a delay tactic. Any alleged vagueness in the Complaint--
1
which conforms to well-established patent practice--will be cured by Interval's
infringement contentions. Google faces no meaningful prejudice from the nature of the
allegations in the Complaint. Google and its fellow defendants seek only to slow the
progress of this case on the merits through a distracting sideshow of baseless procedural
objections.
To make its argument for dismissal, Google misstates the applicable legal standard
and misreads Interval's Complaint. Google insists that the Supreme Court's 12(b)(6)
decisions in Twombly and Iqbal have re-written the rules of patent pleading. Google fails to
acknowledge that there is no binding authority adopting this view of Twombly and Iqbal,
and other District Courts have been inconsistent, at best, in the application of these
precedents to patent cases.
Google also repeatedly insists that Interval's Complaint fails to name the accused
products. Again, Google is wrong. The Complaint explicitly alleges that each of the
defendants' websites, and associated software and hardware, perform specified functions
claimed in Interval's patents. The Complaint could not be more clear that the websites are
the accused products, that they are accused because they execute certain functions, and that
the associated hardware and software which allows the websites to perform these functions
is also accused.
Google's argument that the Complaint in this case is too vague to allow it to prepare
a response is utterly without merit. This motion should be denied.
BACKGROUND
Interval filed its Complaint in this case on August 27, 2010, asserting claims for
patent infringement against eleven defendants. As explained in the Complaint, Plaintiff
2
Interval Licensing is the assignee of Interval Research, a high-tech research company
founded in 1992 by Paul Allen and David Liddle. Interval Research focused its
development efforts on consumer-oriented applications with a pioneering emphasis on the
Internet.
Interval's Complaint asserts claims of infringement under four patents, each of
which protects technology developed by engineers at Interval Research in the mid- or late-1990s. All four of the patents describe advances in methods of displaying information,
typically displaying information to users of computer systems. Since the 1990s, when
engineers at Interval first developed these techniques, they have been adopted by a wide-range of businesses, including the eleven defendants in this case.
Interval's Complaint properly alleges this Court's jurisdiction and Interval's
ownership of the patents-in-suit. Cmplt ¶¶ 13, 19, 31, 37, and 43. Google does not
challenge the sufficiency of these allegations but argues that the Complaint's allegations that
Google's products infringe the four named patents are so lacking in specificity that Google
(and the other defendants who have joined the motion) are unable to prepare a response and
the Complaint must therefore be dismissed under Fed. R. Civ. P. 12(b)(6). The defendants
are wrong about the standard and wrong about the content of this Complaint.
ARGUMENT
A. Motions to Dismiss a Complaint Are Disfavored and Must Meet a
Strict Standard.
Notice pleading has long been a bedrock principle of the Federal Rules. Federal
Rule of Civil Procedure 8(a) requires only a "short and plain statement of the claim showing
that the pleader is entitled to relief," in order to "give the defendant fair notice of what the .
3
. . claim is and the grounds upon which it rests." Bell Atl. Corp. v. Twombly, 550 U.S. 544,
555 (2007) (quotingConley v. Gibson, 355 U.S. 41, 47 (1957)).
Because the standard for pleading a claim is minimal, the standard for granting a
motion to dismiss for failure to state a claim is correspondingly strict. Motions to dismiss at
the pleading stage are "viewed with disfavor and are rarely granted." Eriksen v. Serpas,
2009 WL 2406171 at *1 (E.D. Wa. 2009) (citing Hall v. City of Santa Barbara, 833 F.2d
1270 (9th Cir. 1986)). The Complaint is construed in the plaintiff's favor and all non-conclusory facts are accepted as true. Ashcroft v. Iqbal, 129 S.Ct. 1937, 1950 (2009).
B. Twombly and Iqbal Have Not Altered the Notice Pleading
Requirements for Patent Cases.
The requirements for pleading a claim of patent infringement consistent with Rule
8(a) are demonstrated by the template patent complaint contained in the Appendix of Forms
to the Federal Rules of Civil Procedure. Form 18 contains only four short paragraphs of
factual allegations: (1) statement of the court's jurisdiction; (2) a statement of the date of
issuance and plaintiff's ownership of the patents; (3) a statement that the defendant is
infringing the patents by "making selling, and using [specified devices] that embody the
patented invention and the defendant will continue to do so unless enjoined by this court";
and (4) a statement that the plaintiff has complied with notice requirements. This standard
has governed the pleading of patent cases for years with no apparent impairment of
defendants' ability to answer the complaint or prepare a proper defense.
Google's motion is premised on the argument that the Supreme Court's recent
decisions in Twombly and Iqbal radically revised the pleading requirements for patent
infringement claims, effectively invalidating the notice pleading exemplified by Form 18.
Twombly and Iqbal established a plausibility standard for pleadings under Rule 8(a) and held
4
that a Complaint must contain sufficient non-conclusory factual allegations to render the
plaintiff's claim "plausible." See Iqbal, 129 S.Ct. at 1949 (citing Twombly, 550 U.S. at
556.) The standard was first described in Twombly, but Iqbal clarified that it applied to any
civil case. Iqbal, 129 S.Ct. at 1953. Iqbal emphasized that the plausibility analysis on a
motion to dismiss should be "a context specific task." Id. at 1950.
Proper application of these principles in the patent context remains an open issue.
Neither Twombly nor Iqbal addressed patent claims or, for that matter, intellectual property
claims of any sort. Twombly was an anti-trust case involving allegations that defendants had
conspired to divide markets and keep out new entrants and Iqbal was a Bivens action
alleging that the plaintiff prisoner had suffered physical abuse while in Federal custody. See
Twombly, 550 U.S. at 550-51; Iqbal, 129 S.Ct. at 1943-44.
Price-fixing and prisoner abuse allegations are inherently different from patent
infringement in many ways, including the types of allegations necessary to render the claim
plausible. But the courts have not definitively addressed "context specific" implementation
of the Twombly plausibility test in patent cases, as mandated by Iqbal. In particular, there
has been no determination that the notice pleading standard exemplified by Form 18 no
longer satisfies Rule 8(a). No Circuit Court has applied Twombly or Iqbal to a patent case
and held that those decisions invalidate Form 18.1
The only Circuit-level authority on the
issue is a Federal Circuit case decided after Twombly but before Iqbal that expressly upheld
the continuing validity of Form 18 and notice pleading in patent cases. McZeal v. Sprint
5
Nextel Corp., 501 F.3d 1354, 1356-57 (Fed. Cir. 2008). Since Iqbal, some district courts
considering the issue have questioned the continued validity of Form 18 as a template,
others have reaffirmed it. Compare, Bender v. LG Electronics USA, Inc., 2010 WL 889541,
*5 (N.D. Cal.) (questioning the continuing viability of Form 18); with Ware v. Circuit City
Stores, et al., 2010 WL 767094, *2 (N.D. Ga.) (citing Form 18 as a complaint that "meets
the requirements of Rule 8").
Google would replace notice pleading with a requirement that the Complaint contain
a detailed explanation of how the allegedly infringing product satisfies each of the claim
limitations contained in the patents in suit (see, e.g., Br. at 6:9-10). Several context specific
factors in patent cases suggest that such detailed claim-by-claim analysis is not necessary or
justified at the pleading stage.
First, at least in this District and in most districts with patent-specific local rules,
plaintiffs are required to provide a more detailed description of their infringement
allegations in their initial infringement charts very early in the litigation. These more
detailed early disclosures of infringement contentions undermines Google's overwrought
claim that it would be "impossible" for it to "reasonably prepare a defense" to the current
Complaint. (Br. at 2:12-13). See PA Advisors v. Google, Inc., 2008 WL 4136426 at *6
(E.D. Tex). Requiring patent plaintiffs to incorporate infringement charts in every
complaint would be duplicative and unwieldy and would extend Iqbal to the point of
virtually eliminating the principle of notice pleading in patent cases.
6
Second, the extensive disclosure contained in patents themselves (which in this case
are attached to the Complaint) provide additional detail supporting allegations of
infringement in a patent complaint. As a result of the specification and claim language in
any patent, defendants and their counsel are provided with a level of detail about the
allegations in patent cases that goes far beyond that provided in almost any other kind of
case.
Third, requiring patent plaintiffs to accurately plead infringement based on a detailed
understanding of the operation of the defendant's accused product would erect an
unjustifiable barrier to enforcement of patent rights. The Federal Circuit has rejected the
argument that patent complaints must describe how the accused device satisfies each
limitation of each asserted claim, and it has reiterated this position in a decision issued after
Twombly. McZeal, 501 F.3d at 1357 (citing Phonometrics, Inc. v. Hospitality Franchise
Sys. Inc., 203 F.3d 790, 794 (Fed. Cir. 2000)). Notably, the Circuit Court recognized the
importance of allowing the plaintiff to develop evidence in discovery about how the
infringing device works. Id. at 1358. Detailed knowledge about the operation of the
defendant's products is uniquely within the defendant's possession. Requiring the plaintiff
to somehow obtain this level of detail about the defendant's products before bringing suit
would prevent many patent owners from asserting legitimate claims because infringers
manage to conceal details about how their products function.
Given these unique characteristics of patent litigation, Twombly and Iqbal should not
be interpreted to have modified the well-established notice pleading requirements for patent
cases, as exemplified by Form 18.
C. Interval's Complaint Satisfies the Notice Pleading Requirements
of Fed. R. Civ. P. 8(a).
7
Google complains repeatedly, indeed it is virtually the foundation of its motion, that
Interval has failed to identify the specific product that allegedly infringes. (Br. at 2:10-11,
13-14; 5:5, 25-26; 6:1-2, 21; 7:11-12, 19-20). Google insists that because Interval has not
identified any products, the Complaint fails to satisfy the notice pleading requirements
exemplified by Form 18, much less the heightened pleading standard Google contends
derives from Twombly and Iqbal. (Br. at 6:21-23).
Google misreads the Complaint and its characterization of the infringement
allegations is simply incorrect. Interval has identified, with specificity, particular products
that infringe Interval's patents. In most instances, the infringement is manifested by the
defendant's website and the Complaint states exactly that. For example, the `682 patent
protects technology that provides alerts to users about current information of interest to the
user. Defendants AOL, Apple, eBay, Facebook, Google, Netflix, Office Depot, OfficeMax,
Staples, Yahoo, and YouTube all operate websites that infringe claims in this patent by
providing such alerts to users. The Complaint alleges in each case that the defendant is
liable for "making and using websites and associated hardware and software to provide
alerts that information is of current interest to a user as claimed in the patent." The claimed
functionality is present in the websites operated by these defendants and so no more specific
disclosure of the accused "product" is necessary.
Google also argues that the Complaint is vague because it accuses both hardware and
software. (Br. at 6:1-2). In support of this argument, Google cites a case in which a patent
plaintiff accused products including:
without limitation, cell phones, computers, network drivers, high definition
television sets, ultrasound machines, MRI machines, lab equipment, arbitrary
waveform generators, audio amplifiers, video amplifiers, hard disc drives,
8
ADC/DAC converters, DVD-RW players, DSL modems, CCD cameras,
satellite communication technology, and other products where high
performance, high speed analog circuits are used, and/or components thereof...
Bender v. LG Electronics USA, Inc., 2010 WL 889541 at *2 (N.D. Cal.) (cited in Br. at 6:2-3). But Interval's allegations are not remotely similar to this lengthy but seemingly random
laundry list of electronics (and "lab equipment"). Interval accuses hardware and software
not because Interval is unable to determine which of the two infringes, but because both do.
Interval's patents include both claims that read on software and claims that read on
hardware. As the Complaint indicates, Interval will provide claim charts explaining how the
limitations of certain claims in the patents are met by software for each defendant who is
accused of operating infringing software, and how limitations of other claims are met by
hardware for each defendant who is accused of operating infringing hardware. Ironically,
this element of the pleading, which Google criticizes for vagueness, is an example of
precisely the sort of specificity Google claims to need in order to prepare a defense.
Other cases cited by Google also fail to establish that the allegations here are
insufficient. The District Court for the Northern District of Georgia, for example, granted a
motion to dismiss a patent complaint that identified the accused products with no more
specificity than as "apparatuses covered by one or more claims of the `592 patent." Ware v.
Circuit City Stores, et al., 2010 WL 767094, *1 (N.D. Ga.) This allegation lacks the
specificity about the accused product provided by Interval's allegation that the defendants'
websites and associated hardware and software infringe the patents. Similarly, a plaintiff
who alleged that the defendants "use of CYBON Systems infringes" one or more claims of
the patent in suit, without explaining what CYBON Systems is, how it works, or what
functionality is claimed by the patent, had not stated a claim sufficiently to withstand a
9
motion to dismiss. Calif. Institute of Computer Assisted Surgery, Inc. v. Med-Surgical
Services, Inc., 2010 WL 3063132 (N.D. Cal.) Interval's Complaint, by contrast, identifies
the product and provides an explanation of the functionality that infringes one or more
claims of the patent.
Interval's allegations concerning the `652 and `314 patents--which are asserted
against only four of the eleven defendants in this case--do not accuse the defendants'
websites of infringement, but accuse "products that display information in a way that
occupies the peripheral attention of the user as claimed in the patent." See, e.g., Cmplt ¶ 32.
In context, and given that the patent itself is attached to and incorporated in the Complaint,
these allegations are sufficient to satisfy Rule 8 and to put defendants AOL, Apple, Google,
and Yahoo on notice about which features of which products are being accused of
infringement.
D. If Necessary, Interval Will Provide a More Definite Statement
Incorporating Detailed Infringement Contentions.
Google's motion appears to serve no purpose other than delay. As a sophisticated,
repeat patent litigant, Google is well aware that it will receive a more detailed description of
Interval's allegations in the initial infringement contentions. Under the Court's scheduling
order, these infringement contentions will be due within weeks. Google has suffered no
cognizable prejudice from any claimed lack of specificity in Interval's Complaint. Indeed,
Interval has agreed, at the defendants' request, to refrain from serving any discovery
requests until two weeks after the initial infringement contentions are served.2
10
If the Court determines that any of the allegations in the Complaint are not sufficient
to state a claim, Interval asks that instead of dismissing the case, the Court give Interval
leave to file a more definite statement incorporating the initial infringement contentions and
that the current calendar for the case be maintained.
CONCLUSION
For the reasons stated above, Interval respectfully requests that Google's motion to
dismiss for failure to state a claim be denied.
Dated: November 8, 2010 /s/ Edgar Sargent
Justin A. Nelson
WA Bar No. 31864
[email]
Matthew R. Berry
WA Bar No. 37364
[email]
Edgar Sargent
WA Bar No. 28283
[email]
SUSMAN GODFREY L.L.P.
12
Michael F. Heim
[email]
Eric J. Enger [email]
Nate Davis [email
HEIM, PAYNE & CHORUSH, L.L.P.
1
Google argues that the Federal Circuit "questioned" whether compliance with Form
18 remains sufficient to state a claim for patent infringement. The unreported case on which
Google relies for this point says only, in a footnote, that Form 18 is inapplicable to a claim involving a design patent and that the form has not been updated since Iqbal. Colida v.
Nokia, Inc., 347 Fed.Appx. 568, 571 n. 2 (Fed. Cir. 2009).
2
Defendant Yahoo submitted a declaration from its in-house counsel in support of its joinder
with Google's motion to dismiss claiming that Yahoo is unable to place a "litigation hold" on
destruction of potentially relevant documents because it is unable to identify the nature of the claims.
13
CERTIFICATE OF SERVICE
[see PDF]
14
*******************************
*******************************
*******************************
*******************************
HONORABLE MARSHA J. PECHMAN
UNITED STATES DISTRICT COURT
WESTERN DISTRICT OF WASHINGTON
AT SEATTLE
INTERVAL LICENSING LLC,
Plaintiff,
v.
AOL, INC, et al.,
Defendants.
__________________________
Case No.: 2:10-cv-01385-MJP
DEFENDANTS GOOGLE INC. AND
YOUTUBE, LLC'S REPLY IN
SUPPORT OF THEIR MOTION TO
DISMISS FOR FAILURE TO STATE
A CLAIM UPON WHICH RELIEF
CAN BE GRANTED PURSUANT TO
FED. R. CIV. P. 12(B)(6)
Note on Motion Calendar:
November 12, 2010
Oral Argument Requested
___________________________
Defendants Google Inc. and YouTube, LLC (together "Google"), submit this reply in
support of their motion to dismiss Interval Licensing LLC's ("Interval") Complaint for Patent
Infringement (the "Complaint") for failure to state a claim upon which relief can be granted
pursuant to Fed. R. Civ. P. 12(b)(6).
Interval has asserted four patents containing nearly two hundred claims against eleven
disparate Defendants, yet has failed to identify a single specific product that it accuses of
infringement. If Interval has conducted the Rule 11 investigation it was required to perform
before bringing its Complaint, it should easily be able to at least identify the specific products
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accused of infringement. It is Interval's refusal to do so that necessitates this motion practice
and any resulting delay is squarely the fault of Interval.
Because the filing of a complaint begins the "litigation clock," it is unfair to Google (and
the other Defendants) to allow this clock to run without notice being given as to what products,
services, or offerings are alleged to infringe. While Google can begin to investigate defenses
such as invalidity and unenforceability, Google cannot properly begin to analyze its non-infringement defenses because Plaintiff has failed to identify accused products or services.
Plaintiff's argument that the Local Rules require infringement contentions does not excuse or
mitigate the flaws in its Complaint. For example, the local rules of the Northern District of
California have similar infringement contention requirements and its courts have not hesitated to
dismiss deficient complaints regardless of this discovery device. See generally, e.g., Bender v.
LG Elecs. U.S.A., Inc., No. 09-cv-02114, 2010 WL 889541 (N.D. Cal. Mar. 11, 2010);
California Inst. of Computer Assisted Surgery, Inc. v. Med-Surgical Servs., Inc., No. 10-cv-02042, 2010 WL 3063132 (N.D. Cal. Aug. 3, 2010); Enlink Geoenergy Servs., Inc. v. Jackson &
Sons Drilling & Pump, Inc., No. 09-cv-03524, 2010 WL 1221861 (N.D. Cal. Mar. 24, 2010);
Bender v. Motorola, Inc., No. 09-cv-1245, 2010 WL 726739 (N.D. Cal. Feb. 26, 2010).
I. ARGUMENT
A. Interval's Complaint Does Not Identify a Specific Product Accused of
Infringement
Plaintiff does not dispute that a complaint for patent infringement must, in order to satisfy
the requirements of notice pleading, put a defendant on notice of both the patents alleged to be
infringed and the defendant's products, services, or offerings that are alleged to infringe. (Dkt.
No. 123 at 4:17-21). Plaintiff's argument that its disclosure of Google's "website" as the
allegedly infringing instrumentality somehow satisfies the minimal standards of notice pleading
should be seen for what it is a disingenuous and unproductive end-run around the requirements
of Rule 8 of the Federal Rules of Civil Procedure. Plaintiff's allegations are fatally deficient and,
as a matter of black letter law, Plaintiff's Complaint should be dismissed.
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Plaintiff's argument with respect to continued sufficiency of Form 18 is a red herring --
Plaintiff has not satisfied even the minimal pleading requirements suggested by the form.
Moreover, as explained in Google's opening brief, following the Supreme Court decisions in
Bell Atlantic Corp. v. Twombly, 550 U.S. 544 (2007) ("Twombly") and Ashcroft v. Iqbal, 129 S.
Ct. 1937 (2009) ("Iqbal"), several courts have questioned whether Form 18 is sufficient to meet
the pleading requirements for a patent infringement matter. (Dkt. No. 62 at 6:21-7:9).1
Notwithstanding Interval's assertions to the contrary, generically referencing a website
(for only two of the four asserted patents) and other unspecified "products that display
information in a way that occupies the peripheral attention of the user as claimed in the patent"
(for the `652 and `314 patents), does not identify a specific product accused of infringement.
(Dkt. No. 123 at 8:17-22 & 10:5-14). Such generic statements that Google's "website" infringes
no more satisfies the requirement of notice pleading than if Plaintiff had accused a conglomerate
with allegations that it infringes because it manufactures "things."
Websites are not specific products. Even a cursory inspection of www.Google.com
shows that there are dozens if not hundreds of products and services accessible through Google's
numerous websites and webpages. (See, e.g., www.googlelabs.com and
www.google.com/intl/en/options). Interval's Complaint never identifies any specific products,
services, or offerings that it accuses of infringement. Thus, Interval has been no more specific in
its identification of the products accused of infringement, or the bases for such claims, than the
deficient plaintiffs in the cases cited in Google's opening brief. (Dkt. No. 62 at 5:1 to 7:9).
As part of its argument, Interval also suggests that its "website" allegations are sufficient
because "the patent itself is attached to and incorporated in the Complaint." (Dkt. No. 123 at
10). This argument is specious. Merely attaching the patent does not give a defendant notice of
what is accused of infringement. Even under the minimal pleading of Form 18, it is not
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sufficient to merely identify a patent without also identifying a specific product or offering
alleged to infringe the patent.
B. Form 18 Does Not Supplant the Iqbal and Twombly Pleading Standards
This Court need not address the question of whether Form 18 satisfies the pleading
requirements for a patent case in light of the Supreme Court's decisions in Twombly and Iqbal
because Plaintiff's Complaint fails to meet even the minimal requirements for pleading in a
patent case suggested by Form 18. Nevertheless, Plaintiff misstates the Federal Circuit's holding
in McZeal v. Sprint Nextel Corp., 501 F.3d 1354 (Fed. Cir. 2007) (split decision). McZeal was
decided prior to the Supreme Court's decision in Iqbal and involved the "low bar for pro se
litigants." See Koninklijke Philips Elecs. N.V. v. The ADS Grp., 694 F. Supp. 2d 246, 252 n. 8
(S.D.N.Y. 2010) ("The decision in McZeal, however, was motivated by a (perhaps) misplaced
indulgence of the pleadings of a pro se plaintiff."). Most importantly, the Federal Circuit in
McZeal never "expressly upheld the continuing validity of Form 18 and notice pleading in patent
cases" as Interval alleges. (Dkt. No. 123 at 5:21-24.) In fact, numerous courts have noted and
held to the contrary. See, e.g., Bender v. Motorola, Inc., No. C 09-1245, 2010 WL 726739, at *3
(N.D. Cal. Feb. 26, 2010) (criticizing plaintiff for "misplaced" reliance on McZeal as "read[ing]
too much into" that case); Bender v. LG Elecs. U.S.A., Inc., No. C 09-02114, 2010 WL 889541,
at *3 (N.D. Cal. Mar. 11, 2010) (discounting McZeal's precedential authority because it was
decided before Iqbal). Interval's Complaint, which does not even satisfy the requirements of
Form 18, much less the pleading requirements set forth in Twombly and Iqbal, should be
dismissed.
To compound Interval's misstatement of the law, Interval tries to distinguish Iqbal as
factually inapposite because it was not a patent infringement case. (D.I. 123, at 5.) This
argument is meritless because, as Interval acknowledges, the Supreme Court in Iqbal held that
the plausibility pleading standards of Twombly "applied to any civil case." (Id.) Therefore,
patent pleadings must be assessed in view of these Supreme Court cases.
-4-
C. Interval's Preliminary Infringement Contentions Are Not a Substitute for
Compliance with Rule 8
Interval improperly suggests that providing preliminary infringement contentions
somehow supersedes its obligation to comply with Rule 8 of the Federal Rules of Civil
Procedure. (Dkt. No. 123 at. 6:14-24, 10:17-11:4.) Interval cites no authority to suggest that
because this district has adopted local rules that require disclosure of infringement contentions
Rule 8 is no longer applicable. Common sense and Supreme Court precedent mandate the
contrary conclusion. See, e.g., Iqbal, 129 S. Ct. at 1950 ("Rule 8 ... does not unlock the doors of
discovery for a plaintiff armed with nothing more than conclusions.") & 1953 ("[T]he question
presented by a motion to dismiss a complaint for insufficient pleadings does not turn on the
controls placed on the discovery process.").
Several courts, including the Northern District of California, have (for years) had patent
local rules that required certain disclosures as part of discovery. Nonetheless, as shown by the
decisions Google cited in its opening brief, courts in such districts have repeatedly dismissed
complaints that fell short of the pleading requirements of Rule 8. (Dkt. No. 62 at 5:15-16, 6:9-12
& 7:10-18.) Moreover, infringement contentions are due months after the complaint and Google
is already being prejudiced in the preparation of its defenses by not having a specific
identification of the products accused of infringement. If Interval has done the proper
investigation under Rule 11, it should have had no problem indentifying accused products with
specificity.
Interval's self-serving proposal to have the Court pardon its deficient Complaint in favor
of preliminary infringement contentions should be rejected.
D. Interval Could Avoid Any Alleged "Delay" by Amending Its Complaint Now
Lacking legal authority for its other arguments, Interval tries to frame Google's motion to
dismiss as a delay tactic. It is not.
Google simply seeks to have Interval comply with the Federal Rules by giving Google
notice, based on factual allegations rather than legal conclusions, of what it is that Google is
-5-
doing that is allegedly harming Interval. Cf. Iqbal, 129 S. Ct. at 1949 ("Threadbare recitals of
the elements of a cause of action, supported by mere conclusory statements, do not suffice.").
Interval's Complaint provides no notice as to what Google (or any of the other named disparate
Defendants) does that purportedly infringes the patents-in-suit. Google is not seeking such
information for the purposes of delay; instead, Google is seeking such information so that it can
properly prepare its defenses, as is its right. Any delay caused by Interval's failure to meet the
pleading requirements is both irrelevant and of Interval's own making. If Interval was truly
concerned with delay, it should have pleaded sufficient facts in its original Complaint or
amended its Complaint immediately to conform to the requirements of Rule 8. Interval should
not now complain of a delay that it alone caused.
II. CONCLUSION
For the reasons stated above and in Google's original motion to dismiss, the Court should
dismiss Interval's Complaint against Google because Interval's Complaint fails to meet the
pleading standards of Rule 8 of the Federal Rules of Civil Procedure.
DATED this 12th day of November, 2010.
STOKES LAWRENCE, P.S.
17
By: s/ Shannon M. Jost
Shannon M. Jost (WSBA #32511)
Scott A.W. Johnson (WSBA #15543)
Aneelah Afzali (WSBA #34552)
and
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Admitted Pro Hac Vice
Kevin X. McGann
Dimitrios T. Drivas
John E. Handy
Aaron Chase
WHITE & CASE LLP
[address]
Warren S. Heit
Wendi R. Schepler
WHITE & CASE LLP
[address]
Attorneys for Defendants Google Inc. and
YouTube, LLC
________________
1
In this regard, Interval's reliance on Ware v. Circuit City Stores, Inc., 4:05-CV-0156, 2010 WL 767094 (N.D. Ga.
Jan. 5, 2010), as suggesting that Form 18 is sufficient following the decisions in Twombly and Iqbal, is misplaced as
the court in Ware never even references the Twombly or Iqbal decisions.
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CERTIFICATE OF SERVICE
[See PDF]
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|