Nexeon Ltd. v. Eaglepicher Techs., LLC
| Decision Date | 26 July 2016 |
| Docket Number | C.A. No. 15-955-RGA-MPT |
| Parties | NEXEON LIMITED, Plaintiff, v. EAGLEPICHER TECHNOLOGIES, LLC and ONED MATERIAL LLC, Defendant |
| Court | U.S. District Court — District of Delaware |
On October 21, 2015, Nexeon Limited ("Nexeon") filed this action against EaglePicher Technologies, LLC ("EaglePicher") and OneD Material LLC ("OneD") (collectively, "defendants"), alleging infringement of U.S. Patent No. 8,597,831 ("the '831 patent") and U.S. Patent No. 8,940,437 ("the '437 patent") (collectively, "the patents-in-suit"). Nexeon seeks a preliminary and permanent injunction of all allegedly infringing activities by defendants, damages, and costs for defendants' direct, induced, and contributory infringement of the patents-in-suit. Defendants filed a motion to dismiss pursuant to FED. R. CIV. P. 12(b)(6) for failure to state a claim on April 18, 2016 in response to plaintiffs' original complaint. Nexeon thereafter filed its first amended complaint against defendants on May 5, 2016.
Pending before the court is defendants' motion to dismiss for failure to state a claim upon which relief can be granted under FED. R. CIV. P. 12(b)(6) against Nexeon's first amended complaint. This Report and Recommendation addresses whether Nexeon sufficiently stated a claim upon which relief can be granted. For the reasons stated below, it is recommended that the defendants' motion be granted in part and denied in part.
Nexeon is a company organized and existing under the laws of England and Wales, with its principal place of business in Oxfordshire, United Kingdom.1 Defendant EaglePicher is a limited liability corporation organized and existing under the laws of Delaware, with its principal place of business in Joplin, Missouri.2 Defendant OneD is a limited liability corporation organized and existing under the laws of Delaware, with its principal place of business in Palo Alto, California.3
Nexeon asserts it currently holds and has held all rights to the patents-in-suit by assignment from inventors Mino Green and Feng-Ming Liu since the issuance of the '831 patent and the '437 patent from the United States Patent and Trademark Office ("USPTO") on December 3, 2013 and January 27, 2015 respectively.4 The '831 patent is entitled "Method of Fabricating Fibres Composed of Silicon or a Silicon-Based Material and Their Use in Lithium Rechargeable Batteries."5 The '437 patent is titled "Method of Fabricating Structured Particles Composed of Silicon or a Silicon-BasedMaterial and Their Use in Lithium Rechargeable Batteries."6
OneD is the owner of U.S. Patent Application 12/783243, published as U.S. Patent Application Publication No. 2010/0297502 ("the '502 Publication"), which describes its SiNANOde™ ("SiNANOde") materials and manufacturing process.7 This process includes: silicon nanowires grown on carbonaceous substrates (i.e. graphite powder particles), formation of porous networks, and growth of silicon nanowires on carbonaceous powders.8 In January 2015, OneD announced it entered into a License Agreement and Engineering Services Agreement with EaglePicher.9 By March 2015, EaglePicher broke ground on a new facility named "Lithium Ion Center of Excellence," where it hopes to "increase its manufacturing of lithium ion materials and products" using the SiNANOde materials.10 Nexeon notified EaglePicher of possible infringement by a letter dated June 11, 2015 and through the subsequent correspondence between the parties.11
FED. R. CIV. P. 12(b)(6) governs a motion to dismiss a complaint for failure to state a claim upon which relief can be granted. The purpose of a motion under Rule 12(b)(6) is to test the sufficiency of the complaint, not to resolve disputed facts ordecide the merits of the case.12 "The issue is not whether a plaintiff will ultimately prevail but whether the claimant is entitled to offer evidence to support the claims."13 A motion to dismiss may be granted only if, after "accepting all well-pleaded allegations in the complaint as true, and viewing them in the light most favorable to plaintiff, plaintiff is not entitled to relief."14 While the court draws all reasonable factual inferences in the light most favorable to a plaintiff, it rejects unsupported allegations, "bald assertions," and "legal conclusions."15
To survive a motion to dismiss, a plaintiff's factual allegations must be sufficient to "raise a right to relief above the speculative level . . . ."16 Plaintiffs are therefore required to provide the grounds of their entitlement to relief beyond mere labels and conclusions.17 Although heightened fact pleading is not required, "enough facts to state a claim to relief that is plausible on its face" must be alleged.18
A claim has facial plausibility when a plaintiff pleads factual content sufficient for the court to draw the reasonable inference that the defendant is liable for the misconduct alleged.19 The plausibility standard does not rise to a "probability requirement," but requires "more than a sheer possibility that a defendant has acted unlawfully."20 Once stated adequately, a claim may be supported by showing any set of facts consistent with the allegations in the complaint.21 Courts generally consider only the allegations contained in the complaint, the exhibits attached, and matters of public record when reviewing a motion to dismiss.22
In McZeal v. Sprint Nextel, Corp., the Federal Circuit held that FED. R. CIV. P. Form 1823 is sufficient to state a claim of direct infringement.24 This finding was reiterated in In re Bill of Lading Trans. & Proc. Sys. Patent Litig.,25 where the court stated "to the extent . . . that Twombly and its progeny conflict with the Forms and create different pleading requirements, the Forms control."26 Thus, in order to adequately plead direct infringement, the complaint needed only recite:
(1) an allegation of jurisdiction; (2) a statement that the plaintiff owns the patent; (3) a statement that the defendant has been infringing the patent 'by making, selling and using [the device] embodying the patent'; (4) a statement that the plaintiff has given notice of its infringement; and (5) a demand for an injunction and damages.27
Effective December 1, 2015, Form 18 was abrogated, leaving direct infringement claims subject to the Twombly and Iqbal pleading standard.28
As a precursor to stating a claim for indirect infringement, inducement, or contributory infringement, a plaintiff must "plead[] facts sufficient to allow an inference that at least one direct infringer exist[]."29 A plaintiff "need not identify a specific direct infringer."30 Once there are facts sufficient to allow an inference of direct infringement, the court will then look at the individual requirements necessary to plead inducement and contributory infringement.
35 U.S.C. §271(b) states that: "[w]hoever actively induces infringement of a patent shall be liable as an infringer." To establish induced infringement, a patentee must prove "that the alleged infringer 'knowingly induced infringement and possessed specific intent to encourage another's infringement.'"31 A plaintiff must aver the alleged infringer had "knowledge that the induced acts constitute patent infringement."32 Thiselement inherently requires the alleged infringer have knowledge of the patent, and "knew or should have known [its] actions would induce actual infringement."33 For inducement, a plaintiff must assert "culpable conduct, directed to encourage another's infringement, not merely that the inducer had knowledge of the direct infringer's activities."34 The culpable conduct may be plead circumstantially.35
Further, a court must apply Twombly and Iqbal in determining whether the requisite knowledge and specific intent have been properly pled.36 The "complaint must contain facts 'plausibly showing that [the alleged indirect infringer] specifically intended [the direct infringer] to infringe [the patent] and knew that the [direct infringer's] acts constituted infringement.'"37
Under 35 U.S.C. § 271(c):
Whoever offers to sell or sells within the United States or imports into the United States a component of a patented machine, manufacture, combination or composition, or a material or apparatus for use in practicing a patented process, constituting a material part of the invention, knowing the same to be especially made or especially adapted for use in an infringement of such patent, and not a staple article or commodity of commerce suitable for substantial non-infringing use, shall be liable as a contributory infringer.
A plaintiff, therefore, must aver an alleged infringer (1) offered to sell, sells, or imports, (2) a material part of a patented invention, (3) knew of the patented invention, (4) knew the part was made for, or adapted to use, in a patented invention, and (5) the part has no substantial non-infringing use.38 Similarly with inducement, the court must apply Twombly and Iqbal to determine whether sufficient facts have been alleged to make a plausible claim for contributory infringement.
With respect to elements (3) and (4), the pleading may use the same knowledge for contributory infringement as under inducement, because the knowledge for inducement is the same for contributory infringement.39 Therefore, when a plaintiff has pled sufficient facts to show knowledge of inducement, adequate facts to show knowledge of contributory infringement have also been pled. For element (5), a plaintiff must assert "facts that allow an inference that the [parts] . . . have no substantial non-infringing uses."40 A substantial non-infringing use is one that is "not unusual, far-fetched, illusory, impractical, occasional, aberrant, or experimental."41
The complaint in this matter was filed...
To continue reading
Request your trial