United States District Court, N.D. California, San Jose Division
ORDER GRANTING IN PART AND DENYING IN PART
DEFENDANT'S MOTION TO DISMISS WITH LEAVE TO AMEND RE:
DKT. NO. 19
J. DAVILA, UNITED STATES DISTRICT JUDGE
Novitaz, Inc. (“Novitaz”) brings the instant
patent infringement suit against Defendant inMarket Media,
LLC (“inMarket”). Presently before the Court is
inMarket's motion to dismiss the complaint for failure to
state a claim. Pursuant to Civil Local Rule 7-1(b), the Court
finds the instant motion suitable for decision without oral
argument and hereby VACATES the hearing set for August 10,
2017 at 09:00 A.M. For the reasons set forth below, the
motion is GRANTED IN PART and DENIED IN PART with leave to
March 7, 2016, Notivaz filed a complaint against inMarket in
the District of Connecticut, alleging direct, indirect, and
willful infringement of U.S. Patent No. 8, 229, 787 (the
“'787 patent”). Dkt. No. 1. It amended its
complaint on March 14, 2016. Dkt. No. 13 (“Amended
7, 2016, inMarket responded by filing the instant motion to
dismiss. Dkt. No. 19 (“Mot.”). The next day,
inMarket moved to transfer the case. Dkt. No. 21. On November
18, 2016, the District of Connecticut court granted
inMarket's motion to transfer, and the case was
transferred to this district. Dkt. No. 33. The motion to
dismiss is still pending.
Rule 12(b)(6) motion to dismiss for failure to state a claim,
the complaint must be construed in the light most favorable
to the non-moving party, and all material allegations in the
complaint are taken as true. Sanders v. Kennedy, 794
F.2d 478, 481 (9th Cir. 1986). This rule does not apply to
legal conclusions: “[t]hreadbare recitals of the
elements of a cause of action, supported by mere conclusory
statements, do not suffice” to state a claim.
Ashcroft v. Iqbal, 556 U.S. 662, 129 S.Ct. 1937,
1949, 173 L.Ed.2d 868 (2009). While a complaint does not need
detailed factual allegations to survive a 12(b)(6) motion,
the plaintiff must provide grounds demonstrating its
entitlement to relief. Bell Atlantic Corp. v.
Twombly, 550 U.S. 544, 555, 127 S.Ct. 1955, 167 L.Ed.2d
929 (2007). Thus, the plaintiff must allege sufficient
factual allegations “to raise a right to relief above
the speculative level.” Id. Under the Supreme
Court's decisions in Twombly and Iqbal,
this threshold requires that the complaint contains
“sufficient factual matter . . . to ‘state a
claim to relief that is plausible on its face.'”
Iqbal, 556 U.S. at 678 (quoting Twombly,
550 U.S. at 570).
December 1, 2015, the Federal Circuit recognized that, for
allegations of direct patent infringement, it was sufficient
to comply with the standard set by Form 18 of the Appendix of
Forms to the Federal Rules of Civil Procedure, rather than
that articulated in Twombly and Iqbal.
See In re Bill of Lading Transmission & Processing
Sys. Patent Litig., 681 F.3d 1323, 1333-35 (Fed. Cir.
2012). Form 18 only required: “(1) an allegation of
jurisdiction; (2) a statement that the plaintiff owns the
patent; (3) a statement that defendant has been infringing
the patent 'by making, selling, and using [the device]
embodying the patent'; (4) a statement that the plaintiff
has given the defendant notice of its infringement; and (5) a
demand for an injunction and damages.” Id. The
Form 18 standard “d[id] not require a plaintiff to
plead facts establishing that each element of an asserted
claim is met” nor “even identify which claims it
asserts are being infringed.” Id.
effective December 1, 2015, the Federal Rules of Civil
Procedure were amended to abrogate Rule 84, which provided
that “[t]he forms in the Appendix suffice under these
rules and illustrate the simplicity and brevity that these
rules contemplate.” This abrogated the Appendix of
Forms, including Form 18. Since this change, the majority of
district courts have assessed the sufficiency of claims for
direct patent infringement under the standard set forth in
Twombly and Iqbal. See, e.g.,
e.Digital Corp. v. iBaby Labs, Inc., No.
15-CV-05790-JST, 2016 WL 4427209, at *3 (N.D. Cal. Aug. 22,
2016) (“the Court concludes that former Form 18 no
longer controls and that allegations of direct infringement
are now subject to the pleading standards established by
Twombly and Iqbal . . . .”) (internal
citation and quotation marks omitted); Atlas IP LLC v.
Pac. Gas & Elec. Co., No. 15-CV-05469-EDL, 2016 WL
1719545, at *2 (N.D. Cal. Mar. 9, 2016) (“Under the
amended rules, allegations of direct infringement are now
subject to the pleading standards established by
Twombly and Iqbal . . . .”);
Rembrandt Patent Innovations LLC v. Apple Inc., No.
14-cv-05094-WHA, 2015 WL 8607390, at *2 (N.D. Cal. Dec. 13,
2015) (“Form 18, however, no longer applies.”);
Incom Corp. v. The Walt Disney Company, No.
15-cv-3011-PSG, ECF No. 39, at *3 (C.D. Cal. Feb. 4, 2016)
(“Form 18 no longer provides a safe harbor for pleading
direct infringement.”). At least one court, however,
has continued to apply the Form 18 standard after the
amendments took effect. See Hologram USA, Inc. v. Pulse
Evolution Corp., No. 14-cv-0772-GMN-NJK, 2016 WL 199417,
at *2 (D. Nev. Jan. 15, 2016).
challenges the sufficiency of Novitaz's allegations with
respect to direct infringement, indirect infringement, and
willful infringement. The Court addresses each in turn.
Pleading Standard After the Abrogation of Form 18
turning to the complaint at issue, the Court must address the
initial question of what pleading standard governs
Novitaz's allegations of direct infringement. As
discussed above, the December 1, 2015 amendments to the
Federal Rules of Civil Procedure abrogated the Appendix of
Forms, including Rule 18. In light of this change, most
district courts have found that Form 18 no longer sets the
standard for allegations of direct patent infringement, and
have instead judged the sufficiency of such pleadings under
the standards set forth by Twombly and
Iqbal. See, e.g., e.Digital, No.