Englishtown, Inc. ("Englishtown") filed a patent infringement action against Rosetta Stone, Inc. ("Rosetta Stone") for alleged infringement of patents pertaining to language-learning products, software, online services and practice tools. Englishtown sought leave to amend its complaint to include an allegation of willfulness based solely on post-litigation knowledge and conduct. Rosetta Stone opposed the motion on the ground that the amendment would be futile.
As explained by the district court, "[t]o prevail on a claim of willful infringement, the patentee must prove that: (1) the accused infringer 'acted despite an objectively high likelihood that its actions constituted infringement of a valid patent'; and (2) this objectively defined risk was either known or so obvious that the accused infringer should have known about it. K-Tec, Inc. v. Vita-Mix Corp., 696 F.3d 1364, 1378 (Fed. Cir. 2012)."
Englishtown alleged that Rosetta Stone had willfully infringed the patent-in-suit (the '354 Patent) because it had continued selling infringing products despite learning of the '354 Patent through service of the Complaint in April, 2012. As a result, Englishtown's allegation of willful infringement of the '354 Patent was based entirely upon post-filing conduct.
Rosetta Stone opposed the motion for leaved to amend by arguing that willful infringement allegations based solely upon post-filing conduct "fail to state a plausible claim for willful infringement because, ordinarily, 'willfulness will depend on an infringer's prelitigation conduct' and when an accused infringer engages in reckless conduct, post-filing, the patentee can seek injunctive relief. See In re Seagate, 497 F.3d 1360, 1374 (Fed. Cir. 2007)." Rosetta Stone pointed out that "[s]everal courts, interpreting that language, conclude that Seagate prohibits plaintiffs from alleging willful infringement based solely upon post-filing conduct unless they also seek preliminary injunctive relief to stop such conduct. See Brandywine Commc'ns Technologies, LLC v. Casio Computer Co. Ltd., 912 F. Supp. 2d 1338, 1353 (M.D. Fla. 2012); Execware, LLC v. Staples, Inc., Civ. No. 11-836-LPS, 2012 WL 6138340, at *6 (D. Del. Dec. 10, 2012) report and recommendation adopted, Civ. No. 11-836-LPS, 2013 WL 171906 (D. Del. Jan. 16, 2013)."
Nonetheless, the district court noted that "[o]ther courts, however, have recognized an exception to the foregoing principle based upon other language in Seagate and the notion that certain plaintiffs would not be eligible for preliminary injunctive relief, not for want of demonstrating a likelihood of success on the merits, but rather because they could not demonstrate that they would suffer irreparable harm absent injunctive relief. See, e.g. DataQuill Ltd. v. High Tech Computer Corp., 887 F. Supp. 2d 999, 1015-16 (S.D. Cal. 2011). In DataQuill, plaintiff no longer practiced the patents-in-suit, did not compete with defendant and had a history of licensing its patents. Id. at 1015. Under those circumstances, the district court concluded that plaintiff could not demonstrate irreparable harm because monetary damages provided an adequate remedy and, therefore, requiring plaintiff to seek a preliminary injunction simply to preserve a willful infringement claim would be a 'waste of time and resources.' See id. at 1015-16."
The district court then determined it would follow the DataQuill line of cases. "This Court agrees with (and will adopt) the logic of the DataQuill court. Plaintiff alleges willful infringement based upon post-filing conduct but avers that it no longer practices the patents-in-suit and does not compete with defendant. It is therefore likely that, as in DataQuill, plaintiff could not obtain injunctive relief from this Court because it could not demonstrate irreparable harm and requiring it to seek a preliminary injunction would be a waste of this Court's time and resources."
As a result, the district court granted the motion for leave to amend to permit the allegations of willfulness.
Englishtown, Inc. v. Rosetta Stone Inc., Case No. 12-10636-NMG (D. Mass. July 25, 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.