United States District Court, D. Nevada
C. JONES United States District Judge.
consolidates cases arise out of the alleged infringement of
several patents relating to automated gambling. Defendant in
the Lead Case, No. 2:16-cv-801, has filed a partial motion to
dismiss the Second Amended Complaint (“SAC”).
FACTS AND PROCEDURAL HISTORY
CG Technology Development, Inc. (“CG Tech”),
Interactive Games Limited (“IG Ltd.”), and
Interactive Games LLC (“IG LLC”) accuse Defendant
FanDuel, Inc. of infringing the following claims of the
listed patents (“the Patents”) through the use of
its online fantasy sports contests (“the Accused
Games”): (1) Claim 20 of U.S. Patent No. RE39, 818; (2)
Claim 31 of U.S. Patent No. 6, 899, 628; (3) Claim 1 of U.S.
Patent No. 9, 111, 417; (4) Claim 16 of U.S. Patent No. 8,
641, 511; (5) Claim 11 of U.S. Patent No. 8, 342, 924; (6)
Claim 1 of U.S. Patent No. 7, 029, 394; (7) Claim 39 of U.S.
Patent No. 6, 884, 166; (8) Claim 1 of U.S. Patent No. 7,
534, 169; (9) Claim 19 of U.S. Patent No. 8, 771, 058; (10)
Claim 17 of U.S. Patent No. 8, 814, 664; (11) Claim 9 of U.S.
Patent No. 9, 355, 518; and (12) Claim 1 of U.S. Patent No.
9, 306, 952. CG Tech owns the ‘818 Patent for a
wireless controller (Cause of Action 1); IG Ltd. owns the
‘628, ‘417, ‘924, ‘394, and
‘166 Patents for enhanced services for gaming
applications (Causes of Action 2, 3, 5, 6, and 7), and IG LLC
owns the ‘511, ‘169, ‘058, ‘664,
‘518, and ‘952 Patents for location-based game
configurations (Causes of Action 4, 8, 9, 10, 11, and 12).
previously asked the Court to: (1) dismiss for failure to
state a claim; (2) stay the case with respect to the
‘818 Patent pending the resolution of its ownership in
the U.S. District Court for the Southern District of New
York; and (3) sever the case into three cases according to
ownership of the Patents and category of technology. The
Court denied the motions to stay and to sever and granted the
motion to dismiss, with leave to amend. Specifically, the
Court ruled that the ‘628, ‘417, ‘924,
‘394, and ‘169 Patents were directed to
unpatentable subject matter under 35 U.S.C. § 101 and
Alice Corp. Pty. Ltd. v. CLS Bank Int'l, 134
S.Ct. 2347 (2014), and that Plaintiffs had failed to state a
claim of infringement as to the ‘818, ‘511,
‘166, ‘058, ‘664, ‘518, and
have filed the SAC, alleging infringement of the ‘818,
‘511, '166, ‘058, ‘518, and ‘952
Patents in the first six causes of action, respectively, and
willful infringement of each of them in the seventh cause of
action. Defendant has asked the Court to: (1) dismiss the
claims of infringement of the ‘818, ‘511, and
‘166 Patents for failure to state a claim and without
leave to amend; (2) dismiss the claims of infringement of the
‘511, and ‘166 Patents under § 101 and
Alice Corp.; and (3) dismiss the claims of willful
infringement of the ‘058, ‘518, and ‘952
Patents for failure to state a claim and without leave to
amend. Because Defendant answered the SAC before filing the
present motion to dismiss it, the present motion must be
treated under Rule 12(c) rather than Rule 12(b).
Rule of Civil Procedure 8(a)(2) requires only “a short
and plain statement of the claim showing that the pleader is
entitled to relief” in order to “give the
defendant fair notice of what the . . . claim is and the
grounds upon which it rests.” Conley v.
Gibson, 355 U.S. 41, 47 (1957). Federal Rule of Civil
Procedure 12(b)(6) mandates that a court dismiss a cause of
action that fails to state a claim upon which relief can be
granted. A motion to dismiss under Rule 12(b)(6) tests the
complaint's sufficiency. See N. Star Int'l v.
Ariz. Corp. Comm'n, 720 F.2d 578, 581 (9th Cir.
1983). When considering a motion to dismiss under Rule
12(b)(6) for failure to state a claim, dismissal is
appropriate only when the complaint does not give the
defendant fair notice of a legally cognizable claim and the
grounds on which it rests. See Bell Atl. Corp. v.
Twombly, 550 U.S. 544, 555 (2007). In considering
whether the complaint is sufficient to state a claim, the
court will take all material allegations as true and construe
them in the light most favorable to the plaintiff. See NL
Indus., Inc. v. Kaplan, 792 F.2d 896, 898 (9th Cir.
1986). The court, however, is not required to accept as true
allegations that are merely conclusory, unwarranted
deductions of fact, or unreasonable inferences. See
Sprewell v. Golden State Warriors, 266 F.3d 979, 988
(9th Cir. 2001).
formulaic recitation of a cause of action with conclusory
allegations is not sufficient; a plaintiff must plead facts
pertaining to his own case making a violation
“plausible, ” not just “possible.”
Ashcroft v. Iqbal, 556 U.S. 662, 677-79 (2009)
(citing Twombly, 550 U.S. at 556) (“A 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.”). That is, under the modern interpretation of
Rule 8(a), a plaintiff must not only specify or imply a
cognizable cause of action (Conley review), but also
must allege the facts of his case so that the court can
determine whether the plaintiff has any basis for relief
under the cause of action he has specified or implied,
assuming the facts are as he alleges (Twombly-Iqbal
review). Put differently, Conley only required a
plaintiff to identify a major premise (a cause of action),
but Twombly and Iqbal require a plaintiff
also to allege minor premises (facts of the plaintiff's
case) such that the syllogism showing liability is logically
complete and that liability necessarily, not only possibly,
follows (assuming the allegations are true).
a district court may not consider any material beyond the
pleadings in ruling on a Rule 12(b)(6) motion. However,
material which is properly submitted as part of the complaint
may be considered on a motion to dismiss.” Hal
Roach Studios, Inc. v. Richard Feiner & Co., 896
F.2d 1542, 1555 n.19 (9th Cir. 1990) (citation omitted).
Similarly, “documents whose contents are alleged in a
complaint and whose authenticity no party questions, but
which are not physically attached to the pleading, may be
considered in ruling on a Rule 12(b)(6) motion to
dismiss” without converting the motion to dismiss into
a motion for summary judgment. Branch v. Tunnell, 14
F.3d 449, 454 (9th Cir. 1994). Moreover, under Federal Rule
of Evidence 201, a court may take judicial notice of
“matters of public record.” Mack v. S. Bay
Beer Distribs., Inc., 798 F.2d 1279, 1282 (9th Cir.
1986). Otherwise, if the district court considers materials
outside of the pleadings, the motion to dismiss is converted
into a motion for summary judgment. See Arpin v. Santa
Clara Valley Transp. Agency, 261 F.3d 912, 925 (9th Cir.
the pleadings are closed-but early enough not to delay
trial-a party may move for judgment on the pleadings.”
Fed.R.Civ.P. 12(c). The standards governing a Rule 12(c)
motion are the same as those governing a Rule 12(b)(6)
motion. See Dworkin v. Hustler Magazine, Inc., 867
F.2d 1188, 1192 (9th Cir. 1989) (“The principal
difference . . . is the time of filing. . . . [T]he motions
are functionally identical . . . .”).
Infringement of the ‘818, ‘511, and ‘166
defendant is liable for direct patent infringement if he
“without authority makes, uses, offers to sell, or
sells any patented invention, within the United States or
imports into the United States any patented invention during
the term of the patent therefor . . . .” 35 U.S.C.
§ 271(a). “Under the ‘all elements'
rule, to find infringement, the accused device must contain
‘each limitation of the claim, either literally or by
an equivalent.'” TIP Sys., LLC v. Phillips
& Brooks/Gladwin, Inc., 529 F.3d 1364, 1379 (Fed.
Cir. 2008) (quoting Freedman Seating Co. v. Am. Seating
Co., 420 F.3d 1350, 1358 (Fed. Cir. 2005) (citing
Warner-Jenkinson Co. v. Hilton Davis Chem. Co., 520
U.S. 17, 29 (1997))).
requirement of providing infringement contentions
element-by-element under the Local Rules does not permit a
more flexible application of Civil Rule 8(a) at the dismissal
stage. Iqbal and Twombly have always
applied to claims of indirect infringement. See Superior
Indus., LLC v. Thor Global Enters. Ltd., 700 F.3d 1287,
1295 (Fed. Cir. 2012) (citing In re Bill of Lading
Transmission & Processing Sys. Patent Litig. (R
Carriers, Inc. v. DriverTech LLC), 681 F.3d 1323, 1336
(Fed. Cir. 2012)) (noting that only claims of direct
infringement, not claims of indirect infringement, could be
pled using Form 18). Although Form 18 formerly applied to
claims of direct infringement, obviating the
Twombly/Iqbal pleading standard for such
claims if the form was used, both Form 18 and Civil Rule 84
(authorizing the form) were deleted from the Civil Rules in
2015, extinguishing the exception to the
Twombly/Iqbal pleading standard for direct
Rule 16.1-6, providing for the initial disclosure of
infringement contentions before discovery, was adopted no
later than 2011, i.e., at a time when Form 18 permitted a
direct infringement plaintiff to obtain full discovery with a
bare-bones pleading that would not survive Iqbal and
Twombly. As in other districts with similar local
rules, “[b]y requiring the party claiming invalidity to
flesh out and support its invalidity contentions early on,
the Patent Local Rules fulfill[ed] the function of
Twombly and Iqbal.” Wistron Corp.
v. Phillip M. Adams & Assocs., LLC, 2011 WL 1654466,
at *11 (N.D. Cal. Apr. 28, 2011) (Chen, Mag. J.). But the
fact that certain aspects of Local Rule 16.1-6 may have been
rendered redundant via Civil Rule 84's deletion and the
resulting application of Iqbal and Twombly
to direct infringement claims does not mean that the Local
Rules may be interpreted so as to abrogate the operation of
the Civil Rules. See Fed. R. Civ. P. 83(a)(1). The
Supreme Court's interpretation of Civil Rule 8(a)
requires plausible allegations as to all elements of a cause
of action, and the elements of a cause of action for direct
infringement include each limitation of the patent claim at
issue. In any case, the current (2016) version of Local
Patent Rule 1-6 (the infringement contentions rule) requires
much more detailed allegations than Iqbal and
Twombly do, so it is not redundant to hold
infringement plaintiffs to the lesser strictures of Civil
Rule 8(a) at the pleading stage.