Boundary Solutions, Inc. v. Corelogic, Inc., No. 5:2014cv00761 - Document 35 (N.D. Cal. 2014)
Court Description: ORDER GRANTING-IN-PART DEFENDANT'S MOTION TO DISMISS by Magistrate Judge Paul Singh Grewal granting-in-part 28 (psglc2, COURT STAFF) (Filed on 9/29/2014)
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Boundary Solutions, Inc. v. Corelogic, Inc. Doc. 35 1 2 3 4 5 6 7 UNITED STATES DISTRICT COURT 8 NORTHERN DISTRICT OF CALIFORNIA 9 SAN JOSE DIVISION United States District Court For the Northern District of California 10 11 12 BOUNDARIES SOLUTIONS INC., 13 Plaintiff, v. 14 15 CORELOGIC, INC., 16 Defendant. 17 ) ) ) ) ) ) ) ) ) ) ) Case No. 5:14-cv-00761-PSG ORDER GRANTING-IN-PART DEFENDANT’S MOTION TO DISMISS (Re: Docket No. 28) Defendant CoreLogic, Inc. moves to dismiss Plaintiff Boundaries Solutions Inc.’s First 18 Amended Complaint for failure to state facts sufficient to support BSI’s claims for induced, 19 20 contributory and willful patent infringement. 1 BSI opposes, and the parties appeared for a hearing. 2 Having considered the arguments and evidence presented, the court hereby GRANTS 21 CoreLogic’s motion to dismiss, but only IN PART. 22 23 24 25 26 1 See Docket No. 28. 2 See Docket Nos. 29, 34. 27 28 1 Case No.: 14-00761-PSG ORDER GRANTING-IN-PART DEFENDANTS’ MOTION TO DISMISS Dockets.Justia.com I. BACKGROUND 3 1 BSI is the owner of U.S. Patent Nos. 7,092,957, 7,499,946 and 8,065,352. 4 The patents all 2 3 relate to methods for the online delivery of parcel-level maps and linked attribute data. 5 BSI’s 4 flagship product, National ParcelMap Data Portal, incorporates the methods covered in these 5 patents by managing a database of parcel data in a spatial format that enables geocoded parcel 6 boundaries to be linked to property tax and other records. 6 Users also may customize NPDP to 7 incorporate a parcel boundary layer into their own mapping applications. 7 For example, NPDP 8 may be customized to streamline flood insurance disclosure decisions by determining whether a 9 parcel boundary is in or crosses a flood zone boundary. 8 United States District Court For the Northern District of California 10 CoreLogic develops, markets and distributes products to customers including ParcelPoint, 11 PxPoint, Xiance, Marcellus & Utica Shale Data Suites. 9 These products enable the searching, 12 retrieving and display of parcel boundary maps joined with associated information. 10 For example, 13 CoreLogic’s website explains how ParcelPoint helped the Trust for Public Land use parcel data to 14 identify how many children live within a half mile from a given park. 11 15 Pursuant to a non-disclosure agreement, BSI shared its NPDP-related technology and the 16 related pending non-provisional patent application with CoreLogic’s predecessor, First American 17 Title. 12 FirstAm expressed interest in acquiring BSI and indicated that the patent application was 18 3 19 Except where otherwise noted, the court draws the following facts, taken as true for the purposes of a motion to dismiss, from BSI’s FAC. 4 See Docket No. 25 at ¶ 8. 5 See id. at ¶ 16. 6 See id. 7 See id. 8 See id. 9 See id. at ¶ 18. 20 21 22 23 24 25 10 See id. 11 See id. 12 See id. at ¶ 2. 26 27 28 2 Case No.: 14-00761-PSG ORDER GRANTING-IN-PART DEFENDANTS’ MOTION TO DISMISS 1 an enticing asset in such a transaction. 13 But FirstAm ultimately elected not to pursue any business 2 relationship and instead directed its engineers to copy BSI’s product plans and introduce its own 3 NPDP. 14 FirstAm later filed several copycat patent applications adopting many of BSI’s 4 inventions without disclosing the true inventors to the United States Patent and Trademark 5 Office. 15 6 At or about the time FirstAm declined a business relationship with BSI, CoreLogic introduced a series of improvements to its products to include parcel mapping functions and 8 applications. 16 CoreLogic cited the patents-in-suit multiple times in connection with the 9 prosecution of its own patents. 17 In particular, CoreLogic cited the ‘957 patent and the ‘946 patent 10 United States District Court For the Northern District of California 7 application in connection with the application that led to its U.S. Patent No. 7,917,292. The same 11 disclosure was made in connection with the application that led to U.S. Patent No. 8,542,884. 18 12 On May 28, 2014, BSI filed the FAC. Among other things, the FAC alleges: (1) CoreLogic 13 directly infringed the ‘957, ‘946 and ‘352 patents by developing, marketing and distributing its 14 products; (2) CoreLogic contributed and continues to contribute to acts of infringement by 15 inducing its consumers to use its infringing products; (3) CoreLogic has sold or used its products— 16 which have no substantial non-infringing uses—with the knowledge that these products infringe 17 BSI’s patents; and (4) CoreLogic’s infringing conduct is willful. 19 18 II. LEGAL STANDARDS 19 20 21 13 See id. at ¶ 4. 14 See id. at ¶ 6. 15 See id. 16 See id. at ¶ 7. 17 See id. at ¶ 19. 18 See id. 19 See id. at ¶ 22-25. 22 23 24 25 26 27 28 3 Case No.: 14-00761-PSG ORDER GRANTING-IN-PART DEFENDANTS’ MOTION TO DISMISS 1 To survive a motion to dismiss, the plaintiff must allege “enough facts to state a claim to 2 relief that is plausible on its face.” 20 This “facial plausibility” standard requires the plaintiff to 3 allege facts that add up to “more than a sheer possibility that a Defendant has acted unlawfully.” 21 4 While courts do not require “heightened fact pleading of specifics,” a plaintiff must allege facts 5 sufficient to “raise a right to relief above the speculative level.” 22 “A pleading that offers ‘labels 6 and conclusions’ or ‘a formulaic recitation of the elements of a cause of action will not do.’” 23 7 “Nor does a complaint suffice if it tenders ‘naked assertion[s]’ devoid of ‘further factual 8 enhancement.’” 24 “While legal conclusions can provide the framework of a complaint, they must 9 be supported by factual allegations.” 25 United States District Court For the Northern District of California 10 Fed. R. Civ. P. 12(b)(6) requires that a district court considering a motion to dismiss accept 11 as true all facts alleged in the complaint, and draw all reasonable inferences in favor of the 12 plaintiff. 26 However, a district court is not required to accept as true “allegations that are merely 13 conclusory, unwarranted deductions of fact, or unreasonable inferences.” 27 Moreover, “the tenet 14 that a court must accept as true all of the allegations contained in a complaint is inapplicable to 15 legal conclusions.” 28 16 To state a claim of patent infringement, “a plaintiff must allege that the defendant makes, 17 uses, offers to sell, or sells the patented invention within the United States, during the term of the 18 19 20 Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007). 21 Ashcroft v. Iqbal, 129 S. Ct. 1937, 1949 (2009). 22 Twombly, 550 U.S. at 544, 555. 23 Iqbal, 556 U.S. at 678 (quoting Twombly, 550 U.S. at 555). 24 Id. (quoting Twombly, 550 U.S. at 557). 25 Id. 26 See al-Kidd v. Ashcroft, 580 F.3d 949, 956 (9th Cir. 2009). 27 In re Gilead Scis. Sec. Litig., 536 F.3d 1049, 1055 (9th Cir. 2008). 28 Iqbal, 556 U.S. at 678. 20 21 22 23 24 25 26 27 28 4 Case No.: 14-00761-PSG ORDER GRANTING-IN-PART DEFENDANTS’ MOTION TO DISMISS 1 patent, and without authority of the patent holder.” 29 A claimant is not required to “to set out in 2 detail the facts upon which he bases his claim;” instead, the complaint “need only plead facts 3 sufficient to place the alleged infringer on notice.” 30 4 If the court dismisses a complaint, it must decide whether to grant leave to amend. Because 5 whether to grant leave is purely a question of procedure, courts apply the law of the regional 6 circuit. 31 The Ninth Circuit has “repeatedly held that a district court should grant leave to amend 7 even if no request to amend the pleading was made, unless it determines that the pleading could not 8 possibly be cured by the allegation of other facts.” 32 III. DISCUSSION 10 United States District Court For the Northern District of California 9 CoreLogic has not moved to dismiss BSI’s claim that CoreLogic directly infringes. 33 11 Instead, CoreLogic argues that the FAC does not provide the facts necessary to support BSI’s 12 allegations of patent infringement by inducement, contributory infringement and willful 13 infringement. 34 CoreLogic presents four specific challenges. First, BSI has not pleaded facts 14 sufficient to establish direct infringement by a third party. Second, BSI has not pleaded that 15 CoreLogic had knowledge of the patents-in-suit or that CoreLogic specifically intended its 16 customers infringe BSI’s patents as required to establish a claim of inducement and contributory 17 infringement. Third, BSI’s conclusory statement that there are no substantial non-infringing uses is 18 insufficient to establish a basis for contributory infringement. Fourth, the FAC fails to establish 19 pre-litigation knowledge of the patents necessary to support a claim for willful infringement. 20 21 29 22 Advanced Cardiovascular Sys., Inc. v. SciMed Life Sys., Inc., 989 F. Supp. 1237, 1249 (N.D. Cal. 1997). 23 30 Phonometrics, Inc. v. Hospitality Franchise Sys., Inc., 203 F.3d 790, 794 (Fed. Cir. 2000). 24 31 See McZeal v. Sprint Nextel Corp., 501 F.3d 1354, 1356 (Fed. Cir. 2007). 25 32 26 Lopez v. Smith, 203 F.3d 1122, 1130 (9th Cir. 2000) (citations and internal quotation marks omitted). 33 See Docket No. 28 at 5-10. 34 Id. 27 28 5 Case No.: 14-00761-PSG ORDER GRANTING-IN-PART DEFENDANTS’ MOTION TO DISMISS 1 2 3 A. BSI’s Allegations Of Third-Party Direct Infringement Are Sufficient 4 There can be no indirect infringement without an underlying act of direct infringement. 35 CoreLogic alleges that the FAC fails to identify any specific or necessary third-party infringing use 6 or any specific or necessary third-party infringer, referring only to unnamed CoreLogic 7 customers. 36 The FAC’s reference to CoreLogic customers who have purchased and used the 8 allegedly infringing products is sufficient to support a reasonable inference that these customers 9 have directly infringed. This district has held that patentees need not identify individual customers 10 United States District Court For the Northern District of California 5 in order to state a plausible claim for patent infringement provided there exists at least an allegation 11 by the patentee that the defendant’s customers directly infringe or that customers necessarily 12 infringe. 37 BSI’s complaint alleges that CoreLogic’s infringing products are sold to customers and 13 used by them. 38 This allegation thus sufficiently identifies who infringes (CoreLogic’s customers) 14 and how (by using the infringing products). 15 B. BSI’s Allegations Of Induced Infringement Are Sufficient In Part 16 “Liability [for induced infringement] under § 271(b) requires knowledge that the induced 17 acts constitute patent infringement.” 39 In addition, “the specific intent necessary to induce 18 35 19 In re Bill of Lading Transmission and Processing Sys. Patent Litig., 681 F.3d 1323, 1333 (Fed. Cir. 2012) (quoting Global Tech Appliances, Inc. v. SEB S.A., 131 S.Ct. 2060, 2068 (2011) (quotation marks omitted)). 20 36 21 37 22 23 24 25 26 See Docket No. 28 at 6. See e.g. Symantec Corp. v. Veeam Software Corp., Case No. 12-700, 2012 WL 1965832, at *4 (N.D. Cal. May 31, 2012); Rambus, Inc. v. Nvidia Corp., Case No. 08-3343, 2008 WL 4911165, at *3 (N.D. Cal. Nov. 13, 2008); Talon Research, LLC v. Hynix Semiconductor Am. Inc., Case No. 11-5058, 2012 WL 1188909, at *1 (N.D. Cal. Apr. 9, 2012); Skyworks Solutions Inc., v. Kinetic Tech. Inc., Case No. 14-0010, 2014 WL 1339829, at *5 (N.D. Cal. Apr. 2, 2014) (explaining it is sufficient for a claim of indirect infringement to allege “both who committed the alleged direct infringement (Kinetic’s customers) and how”): cf. CreAgri, Inc. v. Pinnaclife, Inc., Case No. 116635, 2013 WL 11569, at *3 (N.D. Cal. Jan. 1, 2013) (dismissing a claim for indirect infringement where “there is no allegation that any of these third parties has actually directly infringed, nor than use of any Pinnaclife product necessarily infringes”). 38 See Docket No. 25 at ¶ 18. 39 In re Bill of Lading, 681 F.3d at 1339. 27 28 6 Case No.: 14-00761-PSG ORDER GRANTING-IN-PART DEFENDANTS’ MOTION TO DISMISS 1 infringement requires more than just intent to cause the acts that produce direct infringement. 2 Beyond that threshold knowledge, the inducer must have an affirmative intent to cause direct 3 infringement.” 40 CoreLogic asserts that the FAC does not allege sufficient facts to support a 4 reasonable inference that CoreLogic either knew its customers actually infringed or had the 5 specific intent for its customers to infringe the patents. 41 6 The court agrees that the FAC fails to state sufficient knowledge and intent, at least as to 7 the ‘946 and ‘352 patents. The FAC alleges that CoreLogic referenced the ‘957 patent in 8 connection with its own patents. Based on this allegation, it is reasonably plausible that CoreLogic 9 knew of the ‘957 patent. 42 But BSI has not pleaded sufficient facts to demonstrate that CoreLogic United States District Court For the Northern District of California 10 knew of the ‘946 and ‘352 patents. While BSI does allege that CoreLogic knew about the 11 application pending to the ‘946 patent, knowledge of a patent application does not equal 12 knowledge of issued patents. 43 Furthermore, there is no allegation in the FAC whatsoever to 13 establish CoreLogic had any knowledge of the ‘352 patent. For a claim of induced infringement, 14 knowledge of the patent can be established through an earlier complaint filed with the district 15 court, but the claim is limited to the post-filing conduct. 44 BSI argues that knowledge of the ‘946 16 and ‘352 patents thus may be established at least with respect to CoreLogic’s post-filing conduct. 17 The FAC fails, however, even to reference that BSI ever filed a previous complaint. The FAC 18 therefore does not sufficiently allege knowledge of the ‘946 and ‘352 patents prior to the present 19 action. 45 20 40 Kyocera Wireless Corp. v. ITC, 545 F.3d 1340, 1353-54 (Fed. Cir. 2008) (citations omitted). 41 See Docket No. 28 at 6-8. 21 22 42 23 24 Cf. Potter Voice Technologies, LLC v. Apple Inc., Case No. 13-1710, 2014 WL 46768, at *3 (N.D. Cal. Jan. 6, 2014) (explaining that the Apple’s knowledge of the ‘659 patent may be reasonably inferred from its employees’ earlier references to the ‘659 patent as prior art). 43 25 See DSU Med. Corp. v. JMS Co., Ltd., 471 F.3d 1293, 1304 (Fed. Cir. 2006). 44 26 See Bascom Research LLC v. Facebook, Inc., Case No. 12-6293, 2013 WL 968210, at *4 (N.D. Cal. Mar. 12, 2013). 27 45 28 See e.g. Smartwater, Ltd. v. Applied DNA Sciences, Inc., 12-5731, 2013 WL 5440599, at *8 (E.D.N.Y. Sept. 27, 2013) (holding that the plaintiff’s allegation of induced infringement was sufficient insofar as the amended complaint alleged knowledge based on the previous complaint). 7 Case No.: 14-00761-PSG ORDER GRANTING-IN-PART DEFENDANTS’ MOTION TO DISMISS 1 As for the specific intent requirement, the FAC does provide sufficient facts to show 2 CoreLogic specifically intended its customers to infringe the surviving ‘957 patent. The FAC 3 asserts that CoreLogic encourages its customers to use its allegedly infringing products which are 4 sold directly to customers and used by them “in conjunction with CoreLogic’s online services, or 5 combined with other data by the customer to provide their own online services or GIS 6 applications.” 46 The FAC further indicates that CoreLogic provides online services to help its 7 customers use the products. 47 From this language, it is plausible that CoreLogic, by selling the 8 infringing products, specifically intended that their customers use them and thus infringe the 9 patents. 48 United States District Court For the Northern District of California 10 C. BSI’s Allegations Of Contributory Infringement Are Sufficient In Part 11 “Contributory infringement occurs if a party sells or offers to sell, a material or apparatus for 12 use in practicing a patented process, and that ‘material or apparatus’ is material to practicing the 13 invention, has no substantial non-infringing uses, and is known by the party ‘to be especially made 14 or especially adapted for use in an infringement of such patent.” 49 The knowledge requirement for 15 contributory infringement and inducement are the same. 50 For the reasons mentioned above, the 16 FAC alleges sufficient knowledge of the ‘957 patent to support a claim of contributory 17 infringement. 18 19 46 See Docket No. 25 at ¶ 18. 47 Id. 20 21 48 22 23 24 25 26 See CreAgri, Inc. v. Pinnaclife Inc., Case No. 11-06635, 2013 WL 3958379, at *4 (N.D. Cal. Jul. 29, 2013) (explaining that “where … a party, with knowledge of another party's patent, advertises or promotes its product for use in an infringing manner, this is sufficient to support an inference that the promoting party intended to induce infringement”); see also California Inst. of Computer Assisted Surgery, Inc. v. Med-Surgical Services, Inc., Case No. 1005067, 2011 WL 672709, at *5 (N.D. Cal. Feb. 16, 2011) (“[O]ne can infer from the information on the website, publicizing the technologies, offering brochures describing the products and users' manuals, as well as listing company customers, that Defendants were advertising and intended to use or sell the technologies”). 49 In re Bill of Lading, 681 F.3d at 1337 (quoting 35 U.S.C. § 271(c)). 50 Global Tech Appliances, Inc., 131 S.Ct. at 2068. 27 28 8 Case No.: 14-00761-PSG ORDER GRANTING-IN-PART DEFENDANTS’ MOTION TO DISMISS 1 Additionally, in order to state a claim for contributory infringement, “a plaintiff must, among 2 other things, plead facts that allow an inference that the components sold or offered for sale 3 have no substantial non-infringing uses.” 51 The FAC asserts that the accused products feature the 4 searching, retrieving and display of infringing parcel boundary maps and associated information 5 that are designed for use in an infringing manner and have no substantial non-infringing uses. 52 6 This plain assertion is sufficient to give CoreLogic notice of the claim. 53 7 D. BSI’s Allegations Of Willful Infringement Are Sufficient In Part 8 “[T]o establish willful infringement, a patentee must show by clear and convincing evidence 9 that the infringer acted despite an objectively high likelihood that its actions constituted United States District Court For the Northern District of California 10 infringement of a valid patent. . . . If this threshold objective standard is satisfied, the patentee must 11 also demonstrate that this objectively-defined risk (determined by the record developed in the 12 infringement proceeding) was either known or so obvious that it should have been known to the 13 accused infringer.” 54 “[A] willfulness claim asserted in the original complaint must necessarily be 14 grounded exclusively in the accused infringer’s pre-filing conduct.” 55 15 Where a complaint (1) specifically identifies the accused products, (2) alleges pre-suit 16 knowledge, (3) alleges the infringing acts are willful, intentional and conscious and (4) alleges 17 plaintiff has and will continue to be irreparably harmed by the infringement, that complaint 18 sufficiently states a claim for willful infringement. 56 The FAC specifically identifies the accused 19 products, alleges CoreLogic had pre-suit knowledge of the ‘957 patent, alleges the infringing acts 20 51 Id. 21 52 See Docket No. 25 at ¶ 18. 22 53 See Skyworks Solutions Inc., 2014 WL 1339829, at *3. 23 54 In re Seagate Technology, LLC, 497 F.3d 1360, 1371 (Fed. Cir. 2007). 24 55 Id. at 1374. 25 56 26 27 28 See Emblaze Ltd. v. Apple Inc., Case No. 11-1079, 2012 WL 5940782, at *8 (N.D. Cal. Nov. 27, 2012); see also Oracle Corp. v. DrugLogic, Inc., 807 F.Supp. 2d 885, 902-903 (N.D. Cal. 2011) (finding sufficient facts to support a claim for willful infringement where plaintiff identified the accused products, alleged defendant was aware of the patent and had actual notice of the infringement claims). 9 Case No.: 14-00761-PSG ORDER GRANTING-IN-PART DEFENDANTS’ MOTION TO DISMISS
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