1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 v. ARVINMERITOR, INC., et al., Defendants.

ELEN IP LLC, Plaintiff, UNITED STATES DISTRICT COURT WESTERN DISTRICT OF WASHINGTON AT SEATTLE CASE NO. C11-140-RSM ORDER ON DEFENDANTS MOTION TO DISMISS

I. INTRODUCTION
This matter comes before the Court upon Defendant WABCOs Motion to Dismiss

18 Pursuant to Fed. R. Civ. P. 12(b)(6). Dkt. # 130. Elen IP LLC (Elen IP) is the owner by 19 exclusive license of United States Patent No. 6,452,487 (the 487 Patent), entitled System and 20 Method for Warning of a Tip Over Condition in a Tractor Trailer or Tanker. Elen IP alleges in 21 its Third Amended Complaint (Dkt. # 151) that, on information and belief, Defendants 22 WABCO Holdings Inc. and Meritor WABCO Vehicle Control Systems (together for the 23 purposes of this Order, WABCO) are making, using, offering for sale, and/or selling within 24 the United States, and/or importing into the United States, at least the WABCO RSSplus System,
ORDER ON DEFENDANTS MOTION TO DISMISS - 1

1 infringing one or more claims of the 487 Patent. Dkt. # 151, 23. WABCO moves to dismiss 2 Elen IPs Third Amended Complaint on the basis that there is no plausible interpretation of the 3 487 Patent claims that could possibly cover WABCOs accused RSSplus product. For the 4 reasons set forth below, Defendant WABCOs Motion to Dismiss is DENIED. 5

II. DISCUSSION

6 A. Consideration of Extrinsic Evidence 7 The 487 Patent consists of two independent claims, each of which recite the same six

8 required limitations. WABCO argues that its RSSplus product does not meet any of the six 9 required patent claim limitations, and therefore cannot infringe the 487 Patent. To support this 10 contention, WABCO refers to technical documentation about its RSSplus product (the 11 Noninfringement Disclosure), which it attaches to a declaration filed with its motion. Dkt. # 12 131. It states that it provided the Noninfringement Disclosure to Elen IP prior to Elen IPs 13 motion to file a Second Amended Complaint. According to WABCO, under these special 14 circumstances, Elen IP was required not only to name the accused product in its complaint, but 15 also to explain in its pleading how RSSplus could plausibly infringe the 487 Patent when it 16 does not include a single one of the six required patent claims. The Court disagrees. 17 First, the sufficiency of a plaintiffs pleading does not turn on the amount of information

18 at the plaintiffs disposal upon filing. Otherwise, each motion to dismiss would require an 19 evidentiary hearing as to what the plaintiff knew; how much information it had been given; and 20 the degree to which it should have credited or not credited such information. Such an inquiry is 21 inappropriate at the pleading stage. Rather, Rule 8 requires only that the plaintiff give a short 22 and plain statement of the claim showing that the pleader is entitled to relief. Fed. R. Civ. P. 23 8(a)(2). The Court must determine whether the defendant has fair notice of what the claim is 24
ORDER ON DEFENDANTS MOTION TO DISMISS - 2

1 and the grounds upon which it rests. Erickson v. Pardus, 551 U.S 89, 93 (2007). Accordingly, 2 whether Plaintiff had access to the Noninfringment Disclosure prior to filing an amended 3 complaint is irrelevant to the question of whether the complaint contains sufficient factual matter 4 to state a claim to relief that is plausible on its face. Bell Atlantic Corp. v. Twombly, 550 U.S. 5 544, 570 (2007). 6 Second, the Noninfringement Disclosure constitutes evidence outside the pleadings. A

7 court may not consider evidence outside the pleadings when ruling on a motion to dismiss under 8 Fed. R. Civ. P. 12(b)(6). See U.S. v. Ritchie, 342 F.3d 903, 907-908 (9th Cir. 2003) (citing 9 Parrino v. FHP, Inc., 146 F.3d 699, 706 n. 4 (9th Cir.1998)). If the Court does consider such 10 evidence, the motion must be converted into a motion for summary judgment and the other party 11 must be given an opportunity to respond. Id. An exception exists for matters of judicial notice 12 and documents attached to or incorporated by reference into the complaint. Id. (citing Van 13 Buskirk v. CNN, 284 F.3d 977, 980(9th Cir.2002); Barron v. Reich, 13 F.3d 1370, 1377 (9th 14 Cir.1994); 2 James Wm. Moore et al., Moore's Federal Practice 12.34[2] (3d ed.1999)). 15 WABCO argues that the Noninfringment Disclosure is incorporated by reference in Elen

16 IPs complaint because Elen IP received it before seeking amendment and presumably relied 17 upon it in forming the basis of its Second and Third Amended Complaints. A document is 18 incorporated by reference in the pleadings if the plaintiff refers extensively to the document or 19 the document forms the basis of plaintiffs claim. Ritchie, 342 F.3d at 908. The doctrine of 20 incorporation by reference may apply, for example, where a plaintiffs claim for insurance 21 coverage is based on an insurance contract, see Parrino, 146 F.3d at 705-06, or a plaintiffs 22 securities fraud claim is based on SEC filings, see In re Silicon Graphics Secs. Litig., 183 F.3d 23 970, 986 (9th Cir.1999). 24
ORDER ON DEFENDANTS MOTION TO DISMISS - 3

Granted, Elen IPs claim here is based on the accused product. However, to deem

2 technical documentation about the product as incorporated into the complaint on that basis alone 3 turns the exception into the rule. Where, as here, the Defendant presents technical 4 documentation to refute the allegations made in Plaintiffs complaint, considering such 5 documentation on a motion to dismiss would be akin to considering medical records in a 6 personal injury lawsuit at the pleading stage simply because the claim alleged was based on 7 injuries described therein. The exception is not designed to sweep so broadly. See Global 8 Network Communications, Inc. v. City of New York, 458 F.3d 150, 157 (2d Cir. 2006) (In most 9 instances where [the incorporation by reference doctrine] is recognized, the incorporated material 10 is a contract or other legal document containing obligations upon which the plaintiff's complaint 11 stands or falls, but which for some reason-usually because the document, read in its entirety, 12 would undermine the legitimacy of the plaintiff's claim-was not attached to the complaint.) 13 While district courts in the Second Circuit have considered technical product documentation at 14 the motion to dismiss stage in patent infringement lawsuits, such cases are distinguishable from 15 the case at bar. See Catapano v. Wyeth Ayerst Pharms., Inc., 88 F. Supp. 2d 27, 29 (E.D.N.Y. 16 2000) (the material was attached to the moving papers of both parties); Colida v. Nokia Inc., No. 17 07 Civ. 8056, 2008 WL 4517188, at *3 (S.D.N.Y. May 6, 2008) (page from defendants website 18 was attached to plaintiffs complaint). 19 The Court concludes that it would be improper to consider the Noninfringment

20 Disclosure without converting Defendants Motion to Dismiss into a motion for summary 21 judgment and giving Elen IP an opportunity to respond. Summary judgment is appropriate 22 where the movant shows that there is no genuine dispute as to any material fact and the movant 23 is entitled to judgment as a matter of law. Fed. R. Civ. P. 56(a). Here, WABCO argues that the 24
ORDER ON DEFENDANTS MOTION TO DISMISS - 4

1 RSSplus does not have a left side sensor for sensing a proportion of the cargo load carried on 2 the left side of the motor vehicle, nor does it have a right side sensor for sensing a proportion 3 of the cargo load carried on the right side of the motor vehicle. 487 Patent 5:60 6:10. 4 Accordingly, it does not infringe two of the six required limitations of the 487 Patent and 5 judgment must be entered as a matter of law. WABCOs evidence consists of three internally 6 generated documents regarding the technical specifications of the RSSplus product. See Dkt. # 7 131, Exs. B, C, & D. WABCO has provided no affidavit or declaration attesting to the veracity 8 of the alleged fact that it has but one sensor. The Court cannot enter summary judgment on this 9 basis. In any case, no discovery has taken place in this matter and Elen IP has not had a 10 meaningful opportunity to respond to a motion for summary judgment. Accordingly, the Court 11 declines to convert the motion to dismiss into a motion for summary judgment at this time. 12 Notwithstanding the above, WABCO is entitled to move for summary judgment at any time and 13 the Court will decide the merits of its noninfringement contentions when such a motion is before 14 it. 15 B. Motion to Dismiss for Failure to State a Claim 16 Even without the extrinsic evidence, WABCO argues that Elen IPs Third Amended

17 Complaint should be dismissed pursuant to Rule 12(b)(6) because it does not allege that all six 18 limitations are found in the RSSplus product. Generally, in considering a Rule 12(b)(6) motion 19 to dismiss, the Court must determine whether the plaintiff has alleged sufficient facts to state a 20 claim for relief which is plausible on its face. Ashcroft v. Iqbal, 129 S. Ct. 1937, 1951 (2009) 21 (quoting Twombly, 550 U.S. at 570). A claim is facially plausible if the plaintiff has pled 22 factual content that allows the court to draw the reasonable inference that the defendant is liable 23 for the misconduct alleged. Id. (citing Twombly, 550 U.S. 556). In making this assessment, the 24 Court accepts all facts alleged in the complaint as true, and makes all inferences in the light most
ORDER ON DEFENDANTS MOTION TO DISMISS - 5

1 favorable to the non-moving party. Baker v. Riverside County Office of Educ., 584 F.3d 821, 2 824 (9th Cir. 2009) (internal citations omitted). The Court is not, however, bound to accept the 3 plaintiffs legal conclusions. Iqbal, 129 S. Ct. at 1949-50. While detailed factual allegations are 4 not necessary, the plaintiff must provide more than labels and conclusions or a formulaic 5 recitation of the elements of a cause of action. Twombly, 550 U.S. at 555. 6 In the patent context, the Federal Circuit has held that a complaint for patent infringement

7 contains enough detail when it alleges ownership of the asserted patent, names each individual 8 defendant, cites the patent that is allegedly infringed, describes the means by which the 9 defendants allegedly infringe, and points to the specific sections of the patent law invoked. 10 Phonometrics, Inc. v. Hospitality Franchise Sys., Inc., 203 F.3d 790, 794 (Fed.Cir.2000). This 11 standard appears to have survived Iqbal and Twombly. See McZeal v. Sprint Nextel Corp., 501 12 F.3d 1354, 1357 (Fed.Cir.2007). However, some district courts have concluded that under Iqbal 13 and Twombly a patent infringement complaint must also include, at a minimum, a brief 14 description of what the patent at issue does, and an allegation that certain named and specifically 15 identified products or product components also do what the patent does, thereby raising a 16 plausible claim that the named products are infringing. Bender v. LG Elecs. U.S.A., Inc., No. C 17 0902114 JF (PVT), 2010 WL 889541, at *6 (N.D.Cal. Mar. 11, 2010). See, e.g., Anticancer Inc. 18 v. Xenogen Corp., 248 F.R.D. 278, 282 (S.D.Cal.2007) (holding Twombly's plausibility standard 19 applies to pleadings in patent infringement actions); Li Ming Tseng v. Marukai Corp. U.S.A., No. 20 SACV 090968 AG (RNBx), 2009 WL 3841933, at *1 (C.D.Cal. Nov. 13, 2009) (applying 21 plausibility standard to direct infringement allegations and dismissing patent infringement claim 22 for failing to state a claim). However, in actions for direct infringement, where pleading is in 23 conformance with Form 18, many district courts have been loath to dismiss a complaint for 24
ORDER ON DEFENDANTS MOTION TO DISMISS - 6

1 failure to comply with the Iqbal and Twombly plausibility standard. See, e.g., Swingless Golf 2 Club Corp. v. Taylor, No. C 08-05574, 2009 WL 2031768, at *3 (N.D.Cal. July 7, 2009); WiAV 3 Networks, LLC v. 3com Corp., 2009 WL 6048922, at *3 (E.D.Tex. Dec. 15, 2009). 4 Here, Elen IP is alleging direct infringement and has pled in conformance with Form 18.

5 Pursuant to Rule 84, the Court is bound to accept a form pleading as sufficiently stating a claim 6 for which relief can be granted. Fed. R. Civ. P. 84 (The forms in the Appendix suffice under 7 these rules ). See also McZeal, 501 F.3d at 1357. Accordingly, WABCO argues that Elen 8 IPs use of the modifier on information and belief, which is not contained in Form 18, renders 9 the presumption under Rule 84 inapplicable. WABCO urges the Court to apply the plausibility 10 standard of Iqbal and Twombly and dismiss the complaint for not containing more specific 11 allegations regarding how the accused product practices the six limitations of the 487 Patent. 12 See Elan Microelecs. Corp. v. Apple, Inc., No. C 09-1531 RS, 2009 WL 2972374, at *2 (N.D. 13 Cal. Sept. 14, 2009) (applying plausibility standard to dismiss claims for indirect infringement on 14 the basis that Form 18 only applied to claims for direct infringement and therefore Rule 84 did 15 not apply). 16 The use of modifying language is permitted under Rule 11(b). Using the words on

17 information and belief does not materially change Form 18, nor does it impede the reader's 18 ability to understand the allegations made or how those allegations satisfy the elements of the 19 patent infringement claim. Wu v. Pearson Educ., Inc., No. 09 Civ. 6557(RJH), 2010 WL 20 3791676, *6 (S.D.N.Y. September 29, 2010). See also Bean v. Pearson Educ., Inc., 2011 WL 21 1882367, at *4 (D.Ariz. May 17, 2011). The Court is satisfied that Elen IPs allegations conform 22 to Form 18, stating a plausible claim for relief for patent infringement. WABCOs motion to 23 dismiss is DENIED. 24
ORDER ON DEFENDANTS MOTION TO DISMISS - 7

1 C. Motion for Stay of General Discovery 2 WABCO requests a stay of general discovery to allow the parties to conduct limited

3 discovery on the threshold issue of infringement. A Court has broad discretion to stay discovery 4 in the interests of justice. See Little v. City of Seattle, 863 F.2d 681, 685 (9th Cir. 1988) 5 (affirming stay of discovery to resolve dispositive threshold issue). The Court is concerned that 6 here, where a non-practicing entity has sued a large number of defendants, that the defendants 7 will be inclined to settle with plaintiff merely to avoid the costs associated with discovery, 8 regardless of whether they believe they have a legitimate defense. As this issue is addressed in 9 the parties Joint Status Report (Dkt. # 204), the Court will defer any decision on the matter until 10 the scheduling conference on August 25, 2011. The stay on general discovery that was imposed 11 during the pendency of the Courts consideration of the instant Motion to Dismiss, see Dkt. # 12 206, shall remain in effect until that time. 13 14

III. CONCLUSION
Having considered the briefing, the exhibits and declarations attached thereto, and the

15 remainder of the record, the Court hereby finds and ORDERS: 16 17 18 19 20 21 22 23 24

(1) Defendants WABCO Holdings Inc. and Meritor WABCO Vehicle Control Systems Motion to Dismiss is hereby DENIED. (2) The Clerk of the Court is directed to forward a copy of this order to all counsel of record.

Dated this 18th day of August 2011.

RICARDO S. MARTINEZ UNITED STATES DISTRICT JUDGE