Allegation that Defendants Knew of Patent at Time of Service of Complaint Sufficient to Establish Knowledge Requirement for Inducing Infringement

April 17, 2013

Potter Voice filed a patent infringement action against Apple, Google, HTC, Sony, LG, Motorola, ZTE, Kyocera, Sharp, Huawei, Pantech, Research in Motion, Microsoft and Nokia. Many of the defendants filed several motions to dismiss pursuant to Fed.R.Civ.P. 12(b)(6).

After addressing the pleading standard for determining a Rule 12(b)(6) motion and denying certain motions without prejudice based on severance and transfer issues, the district court turned to the allegations of induced infringement. As explained by the district court, "[e]ach of the defendants who filed a motion to dismiss argues that the allegations in the plaintiff's complaint are not sufficient to state a claim for inducement of
infringement. To allege induced infringement, the plaintiff must allege direct infringement by another, knowing inducement of that infringement by the defendant, and the defendant's specific intent to encourage another's infringement. Toshiba Corp. v. Imation Corp., 681 F.3d 1358, 1363 (Fed. Cir. 2012). In addition, the plaintiff must allege that the defendant had knowledge of the plaintiff's patent. Global-Tech Appliances, Inc. v. SEB S.A., ___ U.S. ___, ___, 131 S. Ct. 2060, 2068-69 (2011). "The requirement that the alleged infringer knew or should have known his actions would induce actual infringement necessarily includes the requirement that he or she knew of the patent." DSU Med. Corp. v. JMS Co., Ltd., 471 F.3d 1293, 1304 (Fed. Cir. 2006)."

Potter Voice asserted in the complaint that the defendants had knowledge of the patent from the date of the service of the initial complaint. The defendants asserted that this allegation was insufficient to support a claim of induced infringement. The district court disagreed: "The defendants argue that knowledge first gained when a lawsuit is filed alleging induced infringement is not sufficient to support a claim of induced infringement. I disagree. An allege violation or infringement can continue beyond the date on which a civil action was filed. The allegations in the
complaint properly are read to allege past and continuing infringement of the plaintiff's patent. For the purpose of allegedly induced infringements occurring after the date of the filing of the initial complaint, an allegation of knowledge gained with the filing of the initial complaint is sufficient. I disagree with the cases cited by the defendants which hold that knowledge of a patent gained solely from the filing of a complaint is not sufficient. See, e.g., Mallinckrodt, Inc. v. E-Z-Em Inc., 670 F. Supp. 2d 349, 354 (D. Del. 2009)."

The defendants also asserted that Potter Voice had not alleged specific facts concerning know inducement of the patent. The district court also disagreed with this argument. "The defendants argue also that the plaintiff has not alleged specific facts concerning knowing inducement of the plaintiff's patent by the defendants. For the purposes of Rule 8, I conclude that the allegations in the complaint are sufficient to plead knowing inducement. The plaintiff alleges that the defendants knew of the plaintiffs patent, that other software used by the defendants infringes the patent, and that the defendants actively induce their customer to use the infringing software. Of course, whether or not the accused software actually infringes the plaintiff's patent is an issue that is hotly disputed, as are issues surrounding what each defendant knew and
when. But, assuming the specific factual allegations in the complaint to be true, and drawing all reasonable inferences from those allegations in favor of the plaintiff, I conclude that the plaintiff's allegations of knowing inducement are sufficient."

Finally, the defendants asserted that Potter Vice had not alleged intentional inducement with sufficient particularity and again the district court disagreed. "The defendants argue also that the plaintiff has not alleged intentional inducement with sufficient particularity. Generally, the plaintiff alleges that the defendants who make and sell mobile phone handsets on which the allegedly infringing software can be run instruct their customers about how to run infringing software, such as Google Voice Search and/or Google Voice Actions. ¶ 48. Those instructions allegedly are distributed via the defendant's individual websites. ¶ 48. Given the sufficient allegations of the defendants' knowledge, it is reasonable to infer that the defendants' distribution of instructions about how to run infringing software on the defendants' devices demonstrates intentional inducement. Other inferences are possible but, at the moment, all reasonable inferences must be drawn in favor of the plaintiff."

Accordingly, the district court denied the motions to dismiss.


Potter Voice Technologies LLC v. Apple, Inc., et al., Case No. 12-cv-01096-REB-CBS (D. Col. March 29, 2013)

The authors of www.PatentLawyerBlog.com are patent trial lawyers at Jeffer Mangels Butler & Mitchell LLP. We represent inventors, patent owners and technology companies in patent licensing and litigation. Whether pursuing patent violations or defending infringement claims, we are aggressive and effective advocates for our clients. For more information contact Stan Gibson at 310.201.3548 or SGibson@jmbm.com.