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Finjan, Inc. v. Eset, LLC

United States District Court, S.D. California

March 21, 2017

FINJAN, INC., Plaintiff,
v.
ESET, LLC, a California Limited Liability and ESET SPOL. S.R.O., a Slovak Republic Corporation, Defendants.

          ORDER ON ESET LLC'S MOTION TO DISMISS [DOC. NO. 47]

          Hon. Cathy Ann Bencivengo United States District Judge

         Before the Court is Defendant ESET LLC's Rule 12(b)(6) motion to dismiss Plaintiff Finjan, Inc.'s complaint for willful infringement of six patents. [Doc. No. 47.] This motion comes to the Court with an unusual procedural history.

         I. Background

         Finjan's complaint was filed in the Northern District of California on July 1, 2016 ("N.D. Case"). Earlier that same day, ESET filed a complaint in the Southern District of California, 16-cv-1704, for declaratory judgment of non-infringement of one the patents at issue in the Finjan complaint ("S.D. Case"). On July 26, 2016, Finjan moved to dismiss the S.D. Case in light of the N.D. Case. On July 27, 2016, ESET moved to dismiss the N.D. Case in light of the S.D. Case. On September 1, 2016, District Judge James Donato stayed the N.D. Case while this Court considered Finjan's motion to dismiss the S.D. Case. On September 26, 2016, this Court granted Finjan's motion to dismiss the S.D. Case.

         At a hearing on October 6, 2016, Judge Donato lifted the stay in the N.D. Case and discussed with the parties setting a case management conference and issuing a scheduling order. [Doc. No. 56-3, at 10-11.] Judge Donato instructed the parties to proceed with initial disclosures in accordance with the local patent rules and submit a proposed scheduling order. [Id.] The court also discussed the negotiation history between the parties and mediation potential.

         Although an answer had not yet been filed, there was no discussion regarding ESET filing a responsive pleading to the complaint. Defense counsel stated ESET would file a motion for change of venue, which was filed November 14, 2016 [Doc. No. 60], he never apprised the court however that ESET would also file a motion to dismiss pursuant to Rule 12(b)(6) to challenge the adequacy of the pleadings under Rule 8. [Doc. No. 56-3 at 16.] On October 20, 2016, the parties filed a Joint Case Management Statement [Doc. No. 49] as directed by the court, and at the same time ESET filed this motion to dismiss for failure to state a claim, that is now before this Court.

         On November 14, 2016, despite the pending motion to dismiss the complaint, Judge Donato entered a Scheduling Order [Doc. No. 61] that among other things required: (1) the parties make initial disclosures by November 21, 2016; (2) Finjan provide infringement contentions by December 9, 2016 and make a Preliminary Election of Asserted Claims by January 11, 2017 [Doc. No. 72]; and (3) ESET provide invalidity contentions by January 20, 2017 and make a Preliminary Election of Prior Art by January 25, 2017 [Doc. No. 74]. On January 26, 2017, without ruling on the motion to dismiss, Judge Donato granted ESET's motion for change of venue and ordered this case transferred to the Southern District of California [Doc. No. 75] and it was ultimately assigned to the undersigned by low number rule [Doc. No. 84] with the motion to dismiss still pending. On March 20, 2017, the Court heard argument on the motion.

         II. Discussion

         ESET challenges the sufficiency of the pleadings with regard to the allegations of direct infringement, inducing infringement and willful infringement of the six patents at issue. Although a motion to dismiss is based on the adequacy of the pleading itself, the Court does not believe in the context of this particular case that it would be a proper application of Rule 1, which directs the Court and the parties to construe and administer the rules of civil procedure to secure the just, speedy and inexpensive determination of every action and proceeding, for the Court to simply ignore all that has transpired since the complaint was filed. The Court will therefore consider ESET's motion to dismiss in light of all the information that has been disclosed between the parties regarding the allegations of patent infringement in this case pursuant to the Scheduling Order entered by Judge Donato.

         1. Dismissal of all Patents Based on Unsupported Allegations All Claims Infringed.

         Defendant moved in part to dismiss the complaint as to all asserted patents because the complaint alleges infringement of every claim of each asserted patent without providing plausible allegations specific to each and every claim as to what accused product infringes each element of each claim and how. Plaintiff has however at this point, pursuant to the court's scheduling order, narrowed the list to 25 total claims and provided claim charts for each of those asserted claims directed to an accused product. The Court therefore deems the matter of the sufficiency of the pleadings with regard to the now unasserted claims to be moot.[1]

         Based on Finjan's Preliminary Election of Asserted Claims and Preliminary Infringement Contentions the following claims are presently at issue before the Court:

Patent

Claim

Type of Infringement Alleged

6, 154, 844

Independent Claim 1

Direct 271(a) and Inducing 271(b)

Dependent Claim 7

Direct 271(a) and Inducing 271(b)

Dependent Claim 11

Direct 271(a) and Inducing 271(b)

Independent Claim 15

Direct 271(a)

Dependent Claim 16

Direct 271(a)

Dependent Claim 21

Direct 271(a)

6, 804, 780

Independent Claim 9

Direct 271(a)

Dependent Claim 13

Direct 271(a)

Independent Claim 18

Direct 271(a)

7, 975, 305

Independent Claim 1

Direct 271(a)

Dependent Claim 2

Direct 271(a)

Dependent Claim 7

Direct 271(a)

Dependent Claim 11

Direct 271(a)

8, 079, 086

Independent Claim 1

Direct 271(a) and Inducing 271(b)

Dependent Claim 2

Direct 271(a) and Inducing 271(b)

Independent Claim 9

Direct 271(a)

Dependent Claim 10

Direct 271(a)

Independent Claim 24

Direct 271(a)

9, 189, 621

Independent Claim 1

Direct 271(a) and Inducing 271(b)

Dependent Claim 5

Direct 271(a) and Inducing 271(b)

Independent Claim 10

Direct 271(a) and Inducing 271(b)

Dependent Claim 13

Direct 271(a) and Inducing 271(b)

Dependent Claim 15

Direct 271(a) and Inducing 271(b)

9, 219, 755

Independent Claim 3

Direct 271(a) and Inducing 271(b)

Dependent Claim 6

Direct 271(a) and Inducing 271(b)

         2. Dismissal of Direct Infringement Claims of ‘621, ...


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