SHERRY R. FALLON, Magistrate Judge.
Presently before the court in this patent infringement action is the motion to strike portions of plaintiff T-Jat Systems 2006, Ltd.'s ("T-Jat") initial identification of accused products and to clarify the proper scope of the case,
T-Jat filed the instant patent infringement action against Expedia on July 7, 2016, accusing a number of mobile applications and mobile websites of infringing United States Patent Nos. 8,064,434 ("the '434 patent") and 9,210,142 ("the '142 patent") (together, the "patents-in-suit").
On September 27, 2016, T-Jat filed a first amended complaint, adding Expedia, Inc. (WA) ("Expedia-WA") and Orbitz Worldwide, Inc. ("Orbitz;" collectively, "defendants") as defendants and maintaining claims against Expedia based on an alter ego/agency theory. (D.I. 10 at ¶¶ 3-8) Expedia-WA is a wholly-owned subsidiary of Expedia, and Orbitz is a wholly-owned subsidiary of Expedia-WA. (D.I. 24 at ¶¶ 4, 6) The first amended complaint identified the Expedia and Orbitz mobile applications and websites as infringing products. (D.I. 10 at ¶¶ 23-85)
Expedia filed a motion to dismiss the first amended complaint, alleging that T-Jat failed to plead a viable alter ego or agency theory of infringement. (D.I. 13) A Report and Recommendation was issued on March 7, 2017, granting-in-part Expedia's motion to dismiss. (D.I. 20) Specifically, the Report and Recommendation recommended dismissal of T-Jat's alter ego theory, but determined that T-Jat's agency theory might survive if the pleading was amended to show that each defendant committed at least one infringing act. (Id. at 15) On March 22, 2017, the District Judge adopted the Report and Recommendation. (D.I. 22)
T-Jat filed its second amended complaint on July 7, 2017. (D.I. 24) Defendants filed a motion to dismiss the second amended complaint on July 21, 2017. (D.I. 25) On March 28, 2018, the court dismissed Counts I and II against Expedia-WA for improper venue. (D.I. 45 at 15-16; D.I. 46) T-Jat filed a motion for reconsideration, arguing that proper venue over Expedia-WA is established by the fact that its wholly-owned subsidiary, CSC International, has a regular and established place of business in Delaware. (D.I. 47) On January 29, 2019, the court denied the motion for reconsideration and denied T-Jat's request for venue-related discovery. (D.I. 101 at 7, 10)
On June 22, 2018, T-Jat served its "Initial Identification of Accused Products" on Expedia and Orbitz, accusing fourteen mobile applications and websites as follows:
(D.I. 106 at ¶ 14; Ex. 3) Defendants served their core technical documents for the accused Orbitz mobile website and mobile application on August 6, 2018. (Id. at ¶ 15) Defendants objected to the inclusion of other products in T-Jat's Initial Identification of Accused Products. (D.I. 106 at ¶ 15; Ex. 4 at 1 & n.2)
T-Jat served its first set of interrogatories and first set of requests for production on Expedia on November 21, 2018. (D.I. 106 at ¶ 16) Expedia objected to the scope of the requests. (Id.; Ex. 5) Expedia filed the pending motion to strike on May 3, 2019. (D.I. 105) Expedia made its first production of documents on May 21, 2019. (D.I. 112, Exs. D-F)
Expedia brings the present motion to strike T-Jat's Initial Identification of Accused Products in accordance with the court's inherent power to strike submissions to the court other than pleadings.
In support of the motion to strike, Expedia contends that T-Jat waived any claim of infringement regarding products besides the Expedia and Orbitz mobile applications and websites when it voluntarily excluded mention of products owned and operated by other brands in its first and second amended complaints. (D.I. 105 at 11-12) In response, T-Jat contends that it did not voluntarily dismiss claims by omitting a footnote from its second amended complaint because it preserved the substance of its allegations regarding those additional products. (D.I. 112 at 10) According to T-Jat, the second amended complaint pleads sufficient facts regarding exemplary products to avoid waiver of allegations regarding additional products by other brands. (Id. at 13-14)
T-Jat has not waived any claim of infringement regarding products in addition to the Expedia and Orbitz mobile applications and websites. Paragraph 3 of the second amended complaint identifies a non-exhaustive list of travel products and services provided by Expedia "through a portfolio of brands." (D.I. 24 at ¶ 3) The list of brands in the second amended complaint largely overlaps with the list of brands in the original complaint.
During oral argument, Expedia took the position that each of the enumerated products is owned and operated by a separate entity and, therefore, the products fall outside the scope of the case absent joinder of the separate entities as defendants. (8/8/19 Tr. at 37:12-21) Expedia also contends that the court previously found allegations that the provision of products and services through a "portfolio of brands" were insufficient to plead infringement by other products. (D.I. 114 at 4) However, Expedia did not challenge the sufficiency of the allegations regarding products in addition to the Expedia and Orbitz mobile applications and websites in the briefing associated with either the motion to dismiss for failure to state a claim or the motion to dismiss for improper venue, respectively. (D.I. 14; D.I. 26) As a result, the court did not evaluate the sufficiency of these allegations and did not affirmatively exclude them from the pleadings. (D.I. 20; D.I. 45; D.I. 101) Rule 12(h)(2) provides that failure to state a claim and failure to join a person required by Rule 19(b) may properly be raised by a Rule 12(c) motion or at trial, if not raised at the pleading stage. Fed. R. Civ. P. 12(h)(2).
The original complaint includes two footnotes which were omitted from the first and second amended complaints. (D.I. 1 at 5 n.2, 11 n.5)
Expedia cites several cases for the proposition that an amended complaint supersedes and nullifies the original complaint. (D.I. 105 at 11) (citing Lacey v. Maricopa County, 693 F.3d 896, 927-28 (9th Cir. 2012); Palakovic v. Wetzel, 854 F.3d 209, 220 (3d Cir. 2017); Mowrer v. U.S. Dep't of Transp., 326 F.R.D. 350, 353 (D.D.C. 2018); Jackson v. Rohm & Haas Co., 2006 WL 3761981, at *1 n.1 (E.D. Pa. Dec. 19, 2006)). For the reasons previously discussed, the second amended complaint sufficiently identifies products besides the Expedia and Orbitz mobile applications and websites to preserve allegations of infringement against those products, independent of the allegations in the original complaint. In this regard, T-Jat did not voluntarily dismiss any claims regarding these products from its second amended complaint. Cf. Mowrer v. U.S. Dep't of Transp., 326 F.R.D. 350, 353 (D.D.C. 2018) (denying leave to replead claims asserted in the first complaint which were subsequently voluntarily omitted from the pleading); Jackson v. Rohm & Haas Co., 2006 WL 3761981, at *1 n.1 (E.D. Pa. Dec. 19, 2006) (omission of claims from second amended complaint constituted a voluntary dismissal where the counts were previously adjudged frivolous). The two remaining cases cited by Expedia are inapposite because they address the issue of whether a dismissed claim which is not re-alleged in an amended pleading may be the subject of an appeal. Lacey v. Maricopa County, 693 F.3d 896, 927-28 (9th Cir. 2012); Palakovic v. Wetzel, 854 F.3d 209, 220 (3d Cir. 2017). T-Jat's claims regarding products in addition to the Expedia and Orbitz mobile applications and websites were not dismissed or deemed frivolous. Consequently, T-Jat has not waived its allegations of infringement with respect to products besides the Expedia and Orbitz mobile applications and websites.
Expedia alleges that T-Jat's claims against the Expedia mobile application and website were eliminated from the case when the court dismissed the claims against Expedia-WA because the second amended complaint does not allege any act of direct infringement by Expedia. (D.I. 105 at 13) According to Expedia, the generic agency allegations in the second amended complaint are insufficient because Expedia-WA owns and operates the allegedly infringing products, and infringement allegations against its products should not be litigated in absentia. (Id. at 14) Expedia argues that Expedia-WA should not be forced to choose between either abandoning the protections of its dismissal for improper venue to defend its product, or allowing its technology to be the subject of an infringement action in which it is not a party. (Id. at 16-17)
In response, T-Jat contends that it added Expedia-WA and Orbitz as defendants at Expedia's request, and not because naming operating companies is necessary to state a claim. (D.I. 112 at 15) To the contrary, T-Jat alleges that its claims arise from Expedia's actions as the principal of Expedia-WA and Orbitz, and the court has ruled that T-Jat adequately alleged a principal-agent relationship. (Id. at 16) According to T-Jat, Expedia can be liable for infringement as a principal in directing and/or overseeing the actions of its agents regardless of whether the agents are joined as parties because a wholly-owned subsidiary is not an indispensable party. (Id. at 16-17)
Expedia's motion to strike Expedia-WA's products from the Initial Identification of Accused Products is denied. Expedia contends that its motion "seeks to vindicate the SAC not strike portions of it." (D.I. 114 at 5) The second amended complaint alleges that, "[u]pon information and belief, Expedia-WA is the agent of Expedia-DE in the performance of the acts of infringement committed by Expedia-WA alleged herein, and thereby Expedia-DE is responsible for such acts and incurred liability therefore." (D.I. 24 at ¶ 13) On March 22, 2017, Expedia and T-Jat executed a stipulation agreeing to confer prior to the filing of the second amended complaint "to ensure that Defendants will not need to seek dismissal of the amended complaint on the same or similar grounds, i.e. failure to plead facts establishing defendants' vicarious liability for each others' actions." (D.I. 22 at ¶ 3) Nonetheless, the form of relief sought by Expedia would effectively require a dispositive ruling adjudicating Expedia's lack of an agency relationship with certain third party entities identified in its corporate organizational structure,
The only narrowing of the scope of the case which has been established with certainty thus far is the dismissal of the defendant Expedia-WA for improper venue. (D.I. 101 at 5-10) At its core, the matter in controversy is a discovery dispute that has not been presented as such. There is no pending motion to compel discovery on the accused products in issue nor is there a pending motion for a protective order brought by Expedia to limit or preclude such discovery. Whether the discovery requests served by T-Jat are an attempt to circumvent the dismissal of Expedia-WA for improper venue and obtain information possessed by a dismissed party awaits decision on another day when the matter is properly presented as a discovery dispute requiring resolution by the court.
For the foregoing reasons, Expedia's motion to strike is denied. An Order consistent with this Memorandum Opinion shall issue.
This Memorandum Opinion is filed pursuant to 28 U.S.C. § 636(b)(1)(B), Fed. R. Civ. P. 72(b)(1), and D. Del. LR 72.1. The parties may serve and file specific written objections within fourteen (14) days after being served with a copy of this Memorandum Opinion. Fed. R. Civ. P. 72(b)(2). The objections and responses to the objections are limited to ten (10) pages each. The failure of a party to object to legal conclusions may result in the loss of the right to de novo review in the District Court. See Sincavage v. Barnhart, 171 F. App'x 924, 925 n.1 (3d Cir. 2006); Henderson v. Carlson, 812 F.2d 874, 878-79 (3d Cir. 1987).
The parties are directed to the court's Standing Order For Objections Filed Under Fed. R. Civ. P. 72, dated October 9, 2013, a copy of which is available on the court's website, http://www.ded.uscourts.gov.
(D.I. 20 at 2-3)
(D.I. 1 at 5 n.2) Footnote 5 of the original complaint states:
(Id. at 11 n.5) This language identifying Expedia's mobile application and website as exemplary products was omitted from the first amended complaint and the second amended complaint.