NATHANIEL M. GORTON, District Judge.
Plaintiff Zond, LLC ("Zond") accuses defendants Renesas Electronics Corporation and Renesas Electronics America, Inc. (collectively, "Renesas") of infringing seven of its patents. The asserted patents are directed to apparatus and methods for generating plasma and "sputtering" metals using plasma.
Now pending before the Court is the motion by Renesas to dismiss for failure to state a claim under Fed. R. Civ. P. 12(b)(6). For the reasons that follow, that motion will be allowed, in part, and denied, in part.
Zond is a Delaware corporation with a principal place of business in Mansfield, Massachusetts. Its wholly owned subsidiary, Zpulser, LLC ("Zpulser"), commercializes Zond's patented technology by manufacturing and selling high-power plasma generators.
Renesas Electronics Corporation is a Japanese corporation with its headquarters in Tokyo, Japan. Its wholly owned subsidiary, Renesas Electronics America, Inc., is a California corporation with its principal place of business in Santa Clara. According to the Amended Complaint, Renesas supplies devices such as microcontrollers and transistors that are constructed using semiconductor circuit technology.
Zond filed its initial Complaint in July, 2013 and an Amended Complaint in September, 2013. The Amended Complaint asserts that Renesas directly and willfully infringes seven patents and has induced and continues to induce others to do so. The asserted patents are United States Patent Nos. 6,853,142 ("the `142 patent"), 6,806,652 ("the `652 patent"), 7,604,716 ("the `716 patent"), 7,147,759 ("the `759 patent"), 7,811,421 ("the `421 patent"), 6,805,779 ("the `779 patent") and 7,808,184 ("the `184 patent"). All seven patents-in-suit are directed to apparatus and methods for generating plasma and disclose applications that include "sputtering," which is a technique of using plasma to cause atoms of metal to flow to a substrate and, in some cases, form a thin film. Certain claims of the `421 and `759 patent are directed to sputtering.
To survive a motion to dismiss, a complaint must contain sufficient factual matter, accepted as true, to "state a claim to relief that is plausible on its face."
Renesas moves to dismiss the claims of direct infringement on two grounds. First, it contends that the accused products cannot directly infringe because they are not "products which [are] made by a process patented in the United States" as required by 35 U.S.C. § 271(g). Second, it maintains that the Amended Complaint does not meet the standard of pleading direct infringement as laid out in Form 18 of the Federal Rules of Civil Procedure.
Renesas contends that Zond fails to state a claim to direct infringement under 35 U.S.C. § 271(g) because the accused products are not "products which [are] made by" a process claimed by any of Zond's asserted patents.
Section 271(g) of the Process Patent Amendments Act ("PPAA") states, in relevant part, that
35 U.S.C. § 271(g) (emphasis added).
The Federal Circuit has addressed the meaning of the phrase "a product made by a process" in two cases,
In 1996, the Federal Circuit addressed whether the production of human growth hormone (hGH) infringed a patented process directed to producing a plasmid that was capable of expressing hGH.
On appeal, the Federal Circuit agreed that the accused hGH fell within § 271(g), notwithstanding its conclusions that there was "little doubt that the plasmid product of the claimed process and hGH are entirely different materials" and "hGH is not a mere modification of the plasmid."
Next, in 2003, the Federal Circuit addressed whether a pharmaceutical drug infringes a patented process for screening for substances that inhibit or activate certain proteins by incorporating a substance identified through that process.
The Federal Circuit began its analysis by construing the meaning of the phrase "a product made by a process" as it is used in § 271(g). After examining other language in the Process Patent Amendments Act of 1988 ("the PPAA") and the legislative history, the court concluded that the term "made" means "manufactured" and the term "product" means a "physical article".
Renesas contends that its products cannot infringe § 271(g) as a matter of law. The first step in the analysis is determining what is produced by the patented process.
Here, the threshold question is satisfied because the patents-in-suit claim methods of producing plasma and do not merely claim methods of producing information.
With respect to the second part of the inquiry, the Court must accept as true at this stage the allegation that Renesas uses the patented processes to manufacture semiconductor chips abroad. That claim is plausible and is consistent with the fact that the patents-in-suit disclose applications to the manufacture of semiconductors.
Infringement under § 271(g) is a form of direct patent infringement.
(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.
Renesas contends that Zond fails to meet even the low bar of Form 18 because it has not identified "a single barrier layer, seed layer, metal layer or other feature in any Renesas semiconductor chip" that is made by one of Zond's patented processes. Such specificity is not required by Form 18. It is sufficient that, as here, Zond has identified the class of products by a salient characteristic: semiconductor products with a node measuring 40-28 nm. It need not identify a particular structure within those products to state a claim using Form 18.
Renesas also moves to dismiss the claims alleging willful infringement of the patents-in-suit.
To 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) that the high likelihood of infringement was either known or so obvious that the accused infringer should have known about it.
Here, Zond asserts that Renesas willfully infringed its patents before Zond initiated this suit and that it continued to do so after receiving notice of the Complaint. The Court will consider whether there is sufficient factual support in the Amended Claim to allow the claim to proceed on either basis.
The Amended Complaint alleges that, "upon information and belief," Renesas knew about the patented technology and patents-in-suit prior to the initiation of this action because
Such sparse and speculative allegations are insufficient to state a claim to relief under the pleading standard articulated in
Zond alleges that it is entitled to a finding of willful infringement because Renesas continues to sell the allegedly infringing products despite learning of the patents-in-suit through the service of the initial Complaint in July, 2013. Renesas maintains that Zond cannot prevail because it has not moved for a preliminary injunction in this case.
Renesas invokes a rule derived from dicta in
Here, Zond admits that it practices the patented technology but attempts to avoid dismissal by suggesting that it does not manufacture semiconductor chips and therefore does not compete with Renesas directly. It asserts that it would be unlikely to prove irreparable harm at the preliminary injunction stage, notwithstanding the fact that it asserts in its Amended Complaint that it is being irreparably harmed by the ongoing infringement. The Court agrees that seeking preliminary injunctive relief would have been futile where there is no allegation of direct competition. As a result, plaintiff may proceed on its claim of willful post-filing infringement.
Zond claims that Renesas actively induced its customers, suppliers, original equipment manufacturers and original design manufacturers to make, use, sell and offer for sale the accused products in a manner that infringes one or more claims in the patents-in-suit under 35 U.S.C. § 271(b). It suggests that the inducing activity began before this action was initiated and continues to occur after the filing of the initial Complaint.
To prove induced infringement of a patent under § 271(b), a patentee must show 1) direct infringement by a third party, 2) that the accused infringer knowingly induced that infringement and 3) that the accused infringer had the specific intent to encourage infringement by third parties.
For the reasons stated above, Zond has successfully pled direct infringement by third parties under § 271(g). The Amended Complaint alleges that customers, suppliers and others directly infringe by offering to sell, selling or importing products that contain the accused semi-conductor chips. That allegation is sufficient to meet the standards of Form 18. See
For the reasons stated previously, the facts alleged by Zond do not support a plausible inference that Renesas had knowledge of the patents-in-suit before being served with the initial Complaint in July, 2013. Thus, Zond's claims of induced infringement based upon conduct prior to the filing of the instant lawsuit will be dismissed because Renesas could not have "knowingly" induced infringement when it lacked knowledge of the patents-in-suit.
On the other hand, Zond has stated a claim of post-filing knowledge because the filing of the Complaint put Renesas on notice. See Zond, 2014 WL 346008, at *3 (holding that a patentee may base a claim of induced infringement on post-filing conduct by filing an amended complaint that alleges that the accused infringer obtained the requisite knowledge upon receiving the initial complaint).
The Amended Complaint alleges that, upon information and belief, Renesas uses "advertising, marketing and sales activity" to entice its original equipment manufacturers and original design manufacturers to infringe the patents-in-suit by using the infringing semiconductor chips in their own products. Renesas argues that such formulaic and generalized assertions do not satisfy the pleading standards of
For the foregoing reasons, defendants' motion to dismiss (Docket No. 16) is, with respect to the claims of willful infringement based upon pre-filing conduct and induced infringement based upon pre-filing conduct,