The opinion
IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF DELAWARE
DYNAMIC DATA TECHNOLOGIES, )
)
Plaintiff, )
)
v. ) Civil Action No. 19-1529-CFC
)
GOOGLE LLC and )
YOUTUBE, LLC, )
)
Defendants. )
REPORT AND RECOMMENDATION
In this patent infringement action filed by Plaintiff Dynamic Data Technologies
(“Plaintiff”) against Defendants Google LLC (“Google”) and YouTube, LLC (“YouTube,” and
collectively with Google, “Defendants”), pending is Defendants’ motion to dismiss Plaintiff’s
allegations of pre-suit induced infringement and willful infringement of the 10 patents-in-suit
(the “patents-in-suit”), filed pursuant to Federal Rule of Civil Procedure 12(b)(6) (the “Motion”).
(D.I. 17; see also D.I. 60) For the reasons that follow, the Court recommends that Defendants’
Motion be GRANTED.
I. BACKGROUND AND STANDARD OF REVIEW
This action was originally filed on November 5, 2018 in the United States District Court
for the Eastern District of Texas. (D.I. 1) On January 11, 2019, Defendants filed the instant
Motion; in addition to the grounds for dismissal that the Court will resolve here, the Motion also
asserted that Plaintiff’s Complaint should be dismissed for improper venue, pursuant to Federal
Rule of Civil Procedure 12(b)(3). (D.I. 17) Later, the parties jointly moved that the case be
transferred to this District, (D.I. 48), and, as a result, the venue portion of the Motion is now
moot, (D.I. 60). The Court was thereafter referred the remainder of the Motion for resolution by
United States District Judge Colm F. Connolly, (D.I. 61), and, at the parties’ suggestion, (D.I.
60), the Court allowed the parties to file additional letter briefs (containing, inter alia,
supplemental authority from this Court) relevant to the remaining Rule 12(b)(6) issues. (D.I. 63;
D.I. 64; D.I. 65) That briefing concluded on October 30, 2019. (D.I. 65)
The standard of review here is the familiar two-part analysis applicable to motions to
dismiss that are filed pursuant to Rule 12(b)(6), which is set out, inter alia, in Fowler v. UPMC
Shadyside, 578 F.3d 203, 210-11 (3d Cir. 2009).
II. DISCUSSION
Defendants argue that Plaintiff’s allegations in the Complaint are “insufficient to state a
claim for induced or willful infringement for any pre-suit conduct.” (D.I. 63 at 2)1 Plaintiff, for
its part, asserts that Defendant Google had knowledge of the asserted patents and of its induced
and/or willful infringement since at least September 10, 2018 (i.e., about two months prior to the
filing of the Complaint in this case). (D.I. 1 at ¶¶ 133-37, 155-59, 178-82, 198-202, 219-23, 238-
43, 261-65, 282-86, 307-11, 333-37) Plaintiff points to three factual bases, referenced in the
Complaint, to support its argument that Google had pre-suit knowledge of the patents-in-suit:
• On September 10, 2018, Plaintiff’s Chinese counsel sent a letter to
certain of Google’s executives “regarding [Plaintiff’s patent]
portfolio and Google’s infringement of certain Chinese patents
owned by [Plaintiff]”; this letter, which Google received, also
included a list of all of the approximately 400 patents in Plaintiff’s
portfolio, including the 10 patents-in-suit here, and a request to
discuss the potential for a mutually-acceptable license agreement.
(Id. at ¶¶ 12-13; see also id. at ¶¶ 9, 134, 156, 179, 199, 220, 239,
262, 283, 308, 334);
1 Claims for induced and willful patent infringement each require that the infringer
had knowledge of the patent and knowledge of its infringement. Commil USA, LLC v. Cisco
Sys., Inc., 135 S. Ct. 1920, 1926 (2015); Välinge Innovation AB v. Halstead New England Corp.,
Civil Action No. 16-1082-LPS-CJB, 2018 WL 2411218, at *13 (D. Del. May 29, 2018).
• Google cited to the underlying patent application of what became
one of the patents-in-suit, United States Patent No. 8,311,112,
identifying that application as relevant prior art during Google’s
prosecution of one of Google’s own patent applications. (Id. at ¶¶
11, 78; see also D.I. 64 at 3); and
• Plaintiffs allege that the patents-in-suit were well-known in the
video processing industry (the relevant field here) and, relatedly,
that various third-party companies have cited to the patents-in-suit
and/or the underlying patent applications when those companies
were prosecuting their own patent applications. (D.I. 1 at ¶ 11; see
also id. at ¶¶ 39, 48, 57, 64, 72, 78, 87, 94, 105, 117, 137, 159,
182, 202, 223, 243, 265, 286, 311, 337).
None of these three factual bases, considered individually, would allow for a plausible
allegation of Defendant Google’s pre-suit knowledge of the patents-in-suit. And it is arguable
whether—even considering all three factual bases together—such allegations would be sufficient
to plausibly set out Google’s pre-suit knowledge of those patents. But the Court need not reach
that issue.
That is because even assuming that it is plausible that as of September 2018, Google
somehow knew of the existence of each of the patents-in-suit, Defendants’ Motion would still be
well taken—since the Complaint does not contain plausible allegations that Google would then
have known that it was infringing each of the patents-in-suit. After all, the September 10, 2018
letter did not allege that Google infringed any of the patents-in-suit, let alone explain why it is
that the accused Google products at issue, (see, e.g., id. at ¶ 120), infringed those particular
patents. And while the Complaint does assert, in conclusory language, that Google was aware
pre-suit that the “normal and customary use of the accused products would infringe” the patents-
in-suit, (see id. at ¶ 136, 158, 181, 201, 222, 242, 264, 285, 310, 336), it does not include
allegations further explaining why that is so. That is, it does not articulate why, in the absence of
having received a pre-suit notice letter explaining why the accused products infringed the
patents-in-suit, Google would have nevertheless understood (prior to being served with the
Complaint) that such infringement had been occurring. For this reason, the Court recommends
that the Motion be granted as to the claims-at-issue against Google.2
As to Defendant YouTube, the Court agrees with Defendants that the Complaint’s
allegations are insufficient to plausibly set out YouTube’s pre-suit knowledge of the patents-in-
suit and YouTube’s pre-suit knowledge of infringement. (See D.I. 63 at 2) None of the
Complaint’s allegations of pre-suit knowledge are specific to YouTube. (Id.) Though Plaintiff
notes in its letter brief that YouTube is a “subsidiary of Google[,]” (D.I. 64 at 3), it provides no
factual basis in its brief (or, more importantly, in the Complaint), for the conclusion that
Google’s knowledge should be imputed to YouTube. (D.I. 63 at 3 n.2); see also Varian Med.
Sys., Inc. v. Elekta AB, Civil Action No. 15-871-LPS, 2016 WL 3748772, at *5 (D. Del. July 12,
2016) (noting that concrete allegations that a parent corporation had pre-suit knowledge of a
patent were insufficient, without more, to plausibly allege that lesser subsidiaries of that parent
had the requisite knowledge) (citing cases), report and recommendation adopted, 2016 WL
2 See Deere & Co. v. AGCO Corp., Civil Action No. 18-827-CFC, 2019 WL
668492, at *6-7 (D. Del. Feb. 19, 2019) (concluding that allegations about a pre-suit letter, which
made reference to four patents and was sent to a defendant, were insufficient to plausibly allege
that the letter gave defendant pre-suit knowledge that its accused products infringed those
patents, in part because the complaints at issue “[did] not allege that the letter identified the
[accused products]; nor [did] the . . . complaints allege that the letter stated that (let alone
explained how) the combination[s] of [the accused products] infringe[d] the four patents” at
issue); cf. VLSI Tech. LLC v. Intel Corp., Civil Action No. 18-966-CFC, 2019 WL 1349468, at
*2 (D. Del. Mar. 26, 2019) (concluding that a complaint’s failure to allege sufficient facts as to
why a defendant was willfully blind to its infringement of the patents-in-suit provided an
independent basis to dismiss willful infringement allegations, even if the complaint had
sufficiently alleged that the defendant was willfully blind to the existence of those patents).
9307500 (D. Del. Dec. 22, 2016). For that reason alone, the Court recommends that the Motion
be granted as to the claims at issue against YouTube.?
Wl. CONCLUSION
For the foregoing reasons, the Court recommends that the Motion be GRANTED, and
that Plaintiffs claims of pre-suit induced infringement and of willful infringement be dismissed.
This Report and Recommendation 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 Report and Recommendation.
Fed. R. Civ. P. 72(b)(2). 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 District Court’s website,
located at http://www.ded.uscourts.gov.
Dated: March 18, 2020 ( Asaitipad Ae ) Burke
Christopher J. Bur
UNITED STATES MAGISTRATE JUDGE
3 Moreover, since Plaintiff’s argument as to YouTube relies on Plaintiff having
established the requisite types of pre-suit knowledge as to Google, and since the Court has found
the allegations as to Google wanting, that would provide another reason why the Motion should
be granted with regard to YouTube.