Niazi Licensing Corp. v. St. Jude Med. S.C., Inc.

• Decision Date: 30 April 2018
• Docket Number: Case No. 17–cv–5096 (WMW/BRT)
• Citation: 311 F.Supp.3d 1078
• Parties: NIAZI LICENSING CORP., Plaintiff, v. ST. JUDE MEDICAL S.C., INC., Defendant.
• Court: U.S. District Court — District of Minnesota

311 F.Supp.3d 1078

NIAZI LICENSING CORP., Plaintiff,

v.ST. JUDE MEDICAL S.C., INC., Defendant.

Case No. 17–cv–5096 (WMW/BRT)

United States District Court, D. Minnesota.

Signed April 30, 2018

Cody Blades, J. Ashwin Madia, Joshua A Newville, Zane A. Umsted, Madia Law LLC, Minneapolis, MN, Michael T. Griggs, Pro Hac Vice, Sarah M. Wong, Pro Hac Vice, Milwaukee, WI, for Plaintiff.

Aaron R. Hartman, Mae B. Van Lengerich, Minneapolis, MN, Kalpesh Shah, Benesch, Friedlander, Coplan & Aronoff LLP, Chicago, IL, Katherine A. Smith, Pro Hac Vice, Benesch Friedlander Coplan & Aronoff, Cleveland, OH, for Defendant.

ORDER DENYING DEFENDANT'S MOTION TO DISMISS

Wilhelmina M. Wright, United States District Judge

This patent-infringement dispute is before the Court on Defendant St. Jude Medical S.C., Inc.'s motion to dismiss Plaintiff Niazi Licensing Corp.'s claims for indirect infringement and willful infringement. (Dkt. 8.) For the reasons addressed below, St. Jude's motion is denied.

BACKGROUND

Niazi owns United States Patent No. 6,638,268 (the '268 Patent), which is titled "Catheter to Cannulate the Coronary Sinus." The '268 Patent generally embodies an invention related to medical devices—namely, catheters of the type used to cannulate the coronary sinus. The '268 Patent includes 27 claims, but only claim 1 is expressly referenced in Niazi's complaint. Claim 1 is directed to a double catheter for cannulating the coronary sinus of a human heart.

In its complaint, Niazi alleges that St. Jude "manufactures, sells and/or offers to sell ... a telescoping catheter system that it sells under the ‘CPS’ mark." According to Niazi, St. Jude's CPS catheter system (the accused product) directly infringes the '268 Patent. In addition, Niazi alleges that St. Jude has indirectly infringed the '268 Patent by inducing and contributorily causing its customers to infringe the '268 Patent, and that St. Jude's infringement of the '268 Patent is willful. St. Jude moves to dismiss Niazi's claims of indirect and willful infringement, arguing that the complaint fails to state a claim on which relief can be granted. See Fed. R. Civ. P. 12(b)(6).

ANALYSIS

A complaint must allege sufficient facts such that, when accepted as true, a facially plausible claim to relief is stated. Ashcroft v. Iqbal , 556 U.S. 662, 678, 129 S.Ct. 1937, 173 L.Ed.2d 868 (2009). If a complaint fails to state a claim on which relief can be granted, dismissal is warranted. Fed. R. Civ. P. 12(b)(6). When determining whether a complaint states a facially plausible claim, a district court accepts as true all of the factual allegations in the complaint and draws all reasonable inferences in the plaintiff's favor. Blankenship v. USA Truck, Inc. , 601 F.3d 852, 853 (8th Cir. 2010). To meet the federal pleading standard, factual allegations must be sufficient to "raise a right to relief above the speculative level" and "state a claim to relief that is plausible on its face." Bell Atl. Corp. v. Twombly , 550 U.S. 544, 555, 570, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007). Mere "labels and conclusions" or a "formulaic recitation of the elements of a cause of action" are insufficient; and legal conclusions couched as factual allegations may be disregarded. See id. at 555, 127 S.Ct. 1955.

I. Indirect Infringement

St. Jude argues that Niazi has not alleged sufficient facts to support its indirect-infringement claims.¹ Niazi pleads two types of indirect infringement: induced infringement and contributory infringement. The Court addresses each type of indirect infringement in turn.

A. Induced Infringement

"Whoever actively induces infringement of a patent shall be liable as an infringer." 35 U.S.C. § 271(b). An induced-infringement claim requires the defendant to know that the induced acts result in patent infringement. Global–Tech Appliances, Inc. v. SEB S.A. , 563 U.S. 754, 765–66, 131 S.Ct. 2060, 179 L.Ed.2d 1167 (2011). In addition, the plaintiff must establish that it was the defendant's specific intent to encourage another's infringement. DSU Med. Corp. v. JMS Co. , 471 F.3d 1293, 1306 (Fed. Cir. 2006).

St. Jude argues that the complaint fails to allege facts sufficient to conclude that St. Jude had either knowledge of the '268 Patent, knowledge that the induced acts constitute infringement, or specific intent to encourage another's infringement. In relevant part, the complaint alleges that "St. Jude was aware of the '268 Patent prior to the filing of this lawsuit," that St. Jude "encouraged the end users to use the [accused] [p]roduct," and that "St. Jude knew that the use of [the accused] [p]roduct would infringe" the '268 Patent. Although these allegations are not particularly comprehensive or specific, they nonetheless are factual allegations that the Court accepts as true for the purpose of a motion to dismiss. Iqbal , 556 U.S. at 678, 129 S.Ct. 1937. St. Jude's dissatisfaction with the specificity of the factual allegations in the complaint is not a legal basis for dismissal. See Twombly , 550 U.S. at 555, 127 S.Ct. 1955 (stating that a complaint "does not need detailed factual allegations" to survive a motion to dismiss); L.L. Nelson Enters., Inc. v. Cty. of St. Louis , 673 F.3d 799, 805 (8th Cir. 2012) (observing that specific facts are not necessary and a complaint need only give the defendant fair notice of what the claim is and the grounds on which it rests).

Courts have denied motions to dismiss induced-infringement claims in circumstances analogous to those presented here. In Script Security Solutions L.L.C. v. Amazon.com, Inc. , for example, the court held that plaintiff sufficiently pleaded induced infringement when the complaint specifically identified the allegedly infringing products and described their functionality, alleged that the defendants had pre-suit knowledge of the patents, and alleged that the defendants induced customers to infringe the patents. 170 F.Supp.3d 928, 936–38 (E.D. Tex. 2016) ; see also Regents of Univ. of Minn. v. AT&T Mobility LLC , 135 F.Supp.3d 1000, 1014 (D. Minn. 2015) (denying motion to dismiss even though the plaintiff had not provided additional facts as to the precise manner that customers indirectly infringed the asserted patents and the complaint was not "particularly robust and comprehensive"). Indeed, how the putative infringer learned of the patents is not legally significant when determining the sufficiency of the pleadings. Rembrandt Social Media, LP v. Facebook, Inc. , 950 F.Supp.2d 876, 881–82 (E.D. Va. 2013). "What matters is ... simply that the putative infringer has knowledge of the allegedly infringed patent and its claims." Id. at 882. "[I]t is this knowledge of the patent and its claims by a putative infringer—however obtained—that is essential to a claim for indirect infringement." Id.

The legal decisions on which St. Jude relies are inapposite. See Mastermine Software, Inc. v. Microsoft Corp. , No. 13-cv-0971, 2013 WL 12155289, at *1 (D. Minn. Oct. 8, 2013) (granting motion to dismiss induced-infringement claim "because the complaint does not allege—even in conclusory form—that [defendant] knew" of the patent); see also Prism Techs., LLC v. AT&T Mobility, LLC , No. 8:12CV122, 2012 WL 3867971, at *5 (D. Neb. Sept. 6, 2012) (granting motion to dismiss induced-infringement claim when complaint did not identify the induced parties or allege either knowledge of the patent or intent to infringe). Unlike the complaints in Mastermine and Prism , Niazi's complaint alleges both that St. Jude had knowledge of the '268 Patent and that St. Jude encouraged its end-user customers to use the accused product despite St. Jude's knowledge that the accused product infringes the '268 Patent.

Accordingly, St. Jude's motion to dismiss is denied with respect to Niazi's induced-infringement claim.

B. Contributory Infringement

Niazi also alleges that St. Jude contributorily caused its customers to infringe the '268 Patent. Liability for contributory infringement arises when a party sells or offers to sell an apparatus for use in a patented process and (1) the apparatus "is material to practicing the invention," (2) the apparatus "has no substantial non-infringing uses," and (3) the party selling or offering to sell the apparatus knows that the apparatus is "especially made or especially adapted for use in an infringement of [the] patent." Script , 170 F.Supp.3d at 938 (quoting In re Bill of Lading Transmission & Processing Sys. Patent Litig. , 681 F.3d 1323, 1337 (Fed. Cir. 2012) ); accord 35 U.S.C. § 271(c). St. Jude argues that the complaint includes "only generic statements regarding St. Jude's alleged knowledge and [the] purported non-infringing uses of St. Jude's devices."

As addressed in Section I.A. of this order, the complaint sufficiently alleges that St. Jude had knowledge of the '268 Patent before the commencement of this lawsuit. Niazi's complaint also alleges, in relevant part, that "St. Jude knew that the [accused ] [p]roduct [was] made or adapted for a use that would infringe" the '268 Patent and that the accused product "is not a commonly available item with substantial non-infringing uses." St. Jude contends that these allegations are deficient because they do not specify "how or when or on what basis St. Jude knew of the patent, let alone knew that the accused product was especially made or adapted to infringe." But St. Jude cites no legal authority requiring this level of specificity for a claim to survive at the pleading stage; and none exists. See Twombly , 550 U.S. at 555, 127 S.Ct. 1955 (stating that a complaint "does not need detailed factual allegations" to survive a motion to dismiss); L.L. Nelson Enters. , 673 F.3d at 805 (same); see also Rembrandt , 950 F.Supp.2d at 881–82 (explaining that how defendant obtained knowledge of the patent is not essential to an indirect-infringement claim). Niazi's allegations that St. Jude had knowledge of the '268 Patent and that St. Jude made or adapted the accused product for an infringing use are...