United States District Court, N.D. California
ORDER RE: DKT. 104, 106, 109, 116
PHYLLIS J. HAMILTON UNITED STATES DISTRICT JUDGE
Inc.'s (“Apple”) motion to dismiss (Dkt.
116), motion for sanctions (Dkt. 109), and motion for
protective order (Dkt. 104), as well as Uniloc USA,
Inc.'s and Uniloc Luxembourg, S.A.'s (together
“Uniloc”) motion to file under seal (Dkt. 106)
came on for hearing before this court on April 11, 2018.
Plaintiffs appeared through their counsel, James Foster.
Defendant appeared through its counsel, Clayton James, Srecko
Vidmar, and Alali Dagogo-Jack. Having read the papers filed
by the parties and carefully considered their arguments and
the relevant legal authority, and good cause appearing, the
court hereby rules as follows.
2, 2017, Uniloc filed its original Complaint in this action
in the Eastern District of Texas, asserting infringement of
U.S. Patent No. 7, 690, 556. Dkt. 1. On August 22, 2017, this
action was consolidated with other cases in the Eastern
District of Texas, with this as the Lead Case. Dkt. 24. As
such, the docket contains a number of filings concerning
December 19, 2017, Uniloc filed a First Amended Complaint,
the operative complaint in this case. Dkt. 68. The amended
complaint alleges direct infringement, induced infringement,
and contributory infringement of a single patent.
December 22, 2017, the Eastern District of Texas court
granted Apple's motion to transfer the consolidated cases
to the Northern District of California. Dkt. 71. On January
9, 2018, Apple filed a motion to dismiss Uniloc's First
Amended Complaint. Dkts. 76, 116. The case was transferred to
this District on January 17, 2018. Dkt. 78.
January 2-4, Uniloc's expert Chuck Easttom inspected
portions of Apple's source code at the offices of
Apple's counsel. Dkt. 107-10 ¶ 8.
January 9, 2018, Apple moved for sanctions pursuant to Rule
11 based on Uniloc filing its complaint without undertaking
an adequate investigation. Dkts. 77, 109.
January 19, 2018, the case was assigned to Magistrate Judge
Sallie Kim. Dkt. 79. On January 25, 2018, Magistrate Judge
jurisdiction was declined. Dkt. 82. On January 26, 2018, this
case was reassigned to Judge White. Dkt. 84. On January 29,
2018, Judge White granted the parties' stipulation to
extend Uniloc's deadline to reply to Apple's motion
for sanctions. Dkt. 87. Uniloc stated that it needed to
examine Apple's source code and depose an Apple employee
to reply to Apple's motion. Dkt. 87.
February 7-8, Uniloc's expert Chuck Easttom again
inspected portions of Apple's source code at the offices
of Apple's counsel. Dkt. 107-10 ¶ 8. Uniloc served a
deposition notice for Apple employee Steve Jackson to take
place on February 14, 2018, and when that date was refused a
new notice was issued for March 12, 2018. Dkt. 115- 2.
Similarly, Uniloc served a deposition notice for former Apple
employee Anil Kandangath to take place on February 7 (Dkt.
102-8), and when that date was refused a new notice was
issued for February 12 (Dkt. 102-2).
February 21, 2018, this case was related with case 18-cv-361,
and on February 22, 2018, it was reassigned to this court.
Dkts. 103, 105. On February 21, 2018, Apple filed a motion
for a protective order to preclude Uniloc from conducting
depositions related to Apple's Rule 11 sanctions motion.
Motion to Dismiss Under Rule 12(b)(6)
motion to dismiss under Federal Rule of Civil Procedure
12(b)(6) tests for the legal sufficiency of the claims
alleged in the complaint. Ileto v. Glock, 349 F.3d
1191, 1199-1200 (9th Cir. 2003). Under Federal Rule of Civil
Procedure 8, which requires that a complaint include a
“short and plain statement of the claim showing that
the pleader is entitled to relief, ” a complaint may be
dismissed under Rule 12(b)(6) if the plaintiff fails to state
a cognizable legal theory, or has not alleged sufficient
facts to support a cognizable legal theory. Somers v.
Apple, Inc., 729 F.3d 953, 959 (9th Cir. 2013).
the court accepts as true the factual allegations in the
complaint, legally conclusory statements not supported by
actual factual allegations need not be accepted. Ashcroft
v. Iqbal, 556 U.S. 662, 678-79 (2009). The complaint
must proffer sufficient facts to state a claim for relief
that is plausible on its face. Bell Atlantic Corp. v.
Twombly, 550 U.S. 544, 555, 558-59 (2007).
claim has facial plausibility when the plaintiff pleads
factual content that allows the court to draw the reasonable
inference that the defendant is liable for the misconduct
alleged.” Iqbal, 556 U.S. at 678 (citation
omitted). “[W]here the well-pleaded facts do not permit
the court to infer more than the mere possibility of
misconduct, the complaint has alleged-but it has not
‘show[n]'-‘that the pleader is entitled to
relief.'” Id. at 679 (quoting Fed.R.Civ.P.
8(a)(2)). Where dismissal is warranted, it is generally
without prejudice, unless it is clear the complaint cannot be
saved by any amendment. Sparling v. Daou, 411 F.3d
1006, 1013 (9th Cir. 2005).
Motion for Sanctions Under Rule 11
Rule of Civil Procedure 11 imposes upon attorneys a duty to
certify that they have read any pleadings or motions they
file with the court and that such pleadings and motions are
well-grounded in fact, have a colorable basis in law, and are
not filed for an improper purpose. Fed.R.Civ.P. 11(b);
see also Business Guides, Inc. v. Chromatic Comm.
Enters., Inc., 498 U.S. 533, 542 (1991). Rule 11
authorizes sanctions for its violation and serves “to
deter baseless filings in district court and thus . . .
streamline the administration and procedure of the federal
courts.” Cooter & Gell v. Hartmarx Corp.,
496 U.S. 384, 393 (1990).
Circuit has held that an attorney may not be sanctioned under
Rule 11 “for a complaint that is not well-founded, so
long as she conducted a reasonable inquiry . . . [nor] [m]ay
she be sanctioned for a complaint which is well-founded,
solely because she failed to conduct a reasonable
inquiry.” In re Keegan Management Co. Sec.
Litig., 78 F.3d 431, 434 (9th Cir. 1996). Under that
test, the district court must “consider after-acquired
factual evidence that would have adequately supported the
complaint” when determining whether sanctions are
appropriate under Rule 11. Id. ...