Pulse Elecs. v. U.D. Elec. Corp.

• Decision Date: 09 April 2021
• Docket Number: Case No.: 3:20-cv-01676-BEN-DEB
• Parties: PULSE ELECTRONICS, INC., a Delaware corporation, Plaintiff, v. U.D. ELECTRONIC CORP., a Taiwan corporation, Defendant.
• Court: U.S. District Court — Southern District of California

PULSE ELECTRONICS, INC.,
a Delaware corporation, Plaintiff,
v.
U.D. ELECTRONIC CORP.,
a Taiwan corporation, Defendant.

Case No.: 3:20-cv-01676-BEN-DEB

UNITED STATES DISTRICT COURT SOUTHERN DISTRICT OF CALIFORNIA

April 9, 2021

Related Case: 3:18-cv-00373-BEN-MSB

ORDER GRANTING DEFENDANT'S MOTION TO DISMISS

[ECF Nos. 13, 16, 18]

I. INTRODUCTION

Plaintiff PULSE ELECTRONICS, INC., a Delaware corporation ("Plaintiff" or "Pulse") brings this action for patent infringement against Defendant U.D. Electronic Corp., a Taiwan corporation ("Defendant" or "UDE"). Complaint, ECF No. 1 ("Compl.").

Before the Court is Defendant's Motion to Dismiss Pursuant to Rule 12(b)(1) of the Federal Rules of Civil Procedure (the "Motion"). ECF No. 13. The Motion was submitted on the papers without oral argument pursuant to Civil Local Rule 7.1(d)(1) and Rule 78(b) of the Federal Rules of Civil Procedure ("FRCP"). ECF No. 19.

After considering the papers submitted, supporting documentation, and applicable law, the Court GRANTS Plaintiff's Motion to Dismiss without prejudice.

/ / /

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II. BACKGROUND

This case is one of several lawsuits in which Plaintiff accuses Defendant of infringing on the claims of various patents it owns.

A. Statement of Facts

The accused products in this case relate to RJ-45 Integrated Connector Modules ("ICMs")¹ that connect electronic devices across local area networks ("LANs"). Compl. at 3²:6-13.

Founded in 1947, Plaintiff designs and manufactures electronic components, including RJ-45 ICMs, which are intended for use with electronics. Compl. at 3:6-10. Plaintiff maintains its headquarters in San Diego, California, id. at 2:5-7, but its "engineering design centers and manufacturing facilities supply products to a broad international customer base," id. at 3:9-10. Plaintiff owns more than 100 United States and international patents dealing with RJ-45 ICM technology, id. at 3:23-25, one of which is at issue in this case and covers various methods for limiting electromagnetic interference ("EMI"), or the disruption of the operation of an electronic product due to electromagnetic waves. Pulse I, 2021 WL 981123, at *2. On August 10, 2004, the United States Patent and Trademark Office (the "USPTO") issued the relevant patent in suit pertaining to this case, United States Patent Number 6,773,302 (the "302 Patent"):

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Patent No.	Title	Description	Issue; Date	Expiration; Date
6,773,302	Advanced; Microelectronic; Connector; Assembly and; Method of; Manufacturing	An advanced modular plug connector; assembly incorporating a substrate; disposed in the rear portion of the; connector housing, the substrate; adapted to receive one or more; electronic components such as choke; coils, transformers, or other signal; conditioning elements or magnetics.	August 10,; 2004	March 28,; 20223

Reply at 9:27-28; see also Exhibit "A" to Complaint, ECF No. 1-3 at 2.

Founded in 2005, Defendant is a Taiwan corporation that manufactures and supplies communications equipment, including RJ-45 ICMs, for integration into computer networking devices overseas. Compl. at 2:8-10, 3:26-27. Defendant is headquartered in Taoyuan City, Taiwan and operates two factories in Guandong and Sichuan, China. See Exhibit "M" to Compl., ECF No. 1-15 at 4.

Plaintiff alleges that "Defendant makes, uses, offers to sell, sells and/or imports into the United States products that infringe" on the 302 Patent, including, but not limited to, the following Accused Products:

Accused Products:	Series:	Claims Infringed:
1G multi-port ICM products	M1, M4, M6, MC, N1, N6, N8,; RM, and RN series 1G devices	18; 19; 22; 23
"Multi-Gigabyte" (e.g., 2.5G/5G); single- and multi-port ICM products	GM2, GM4, and GM6 series; 2.5G devices

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See Compl. at 5:5-11, 8:13-18.

Plaintiff alleges Defendant directly infringes, in violation of 35 U.S.C. § 271(a), "by making, using, offering to sell, selling, and/or importing into the United States, without authority, Accused Products that infringe at least claims 18, 19, 22 and 23 of the '302 Patent." Compl. at 8:13-17. Plaintiff also alleges that Defendant has induced infringement of the 302 Patent in violation of 35 U.S.C § 271(b), "by actively inducing related entities, retailers, and/or customers to make, use, sell, offer to sell, and/or import, products covered by one or more claims of the '302 patent." Id. at 18:1-4. Finally, Plaintiff also argues that Defendant commits contributory infringement of the 302 Patent, in violation of 35 U.S.C. § 271(c), by performing the below acts:

offering to sell or selling within the United States and/or importing into the United States, without authorization, one or more components or products of which the '302 Patent covers with the knowledge (at least as of October 14, 2016 or the filing of the Original Complaint in Case No. 3:18-CV-00373 filed on February 16, 2018) that such component(s) are especially made or especially adapted for use in infringement of the '302 Patent and are not are staple articles of commerce suitable for substantial non-infringing use.

Compl. at 30:13-22.

Finally, Plaintiff also alleges that "the Accused Products underwent an extensive sales cycle that involved Defendant's substantial U.S.-based use of the Accused Devices." Compl. at 5:12-22. Plaintiff pleads that "[b]ut for this U.S.-based infringing activity by Defendant, such design wins would not have been achieved, and Defendant would not have benefited from the resulting sales and associated revenue and profit." Id.

B. Procedural History

1. Pulse I⁴

On February 16, 2018, Plaintiff first asserted the 302 Patent against Defendant in

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Pulse I, where it initially accused Defendant of infringing on four patents: U.S. Patent No. (1) 7,959,473 (the "473 Patent"), (2) 9,178,318 (the "318 Patent"), (3) 6,593,840 (the "840 Patent"), and (4) the 302 Patent. See ECF. No. 25-1 ¶ 14; see also Compl. at 4:8-11. On June 11, 2018, UDE filed its Answer along with eight counterclaims for non-infringement and invalidity of the 302, 473, 318, and 840 Patents. ECF. No. 13.

On January 17, 2020, Plaintiff filed a First Amended Complaint. ECF No. 61. However, on July 6, 2020, the Court granted Defendant's motion to dismiss the FAC without prejudice and granted leave to amend. Order, ECF No. 100. The Court found Plaintiff did not allege sufficient facts to establish a plausible claim for relief under the Twombly/Iqbal standard as to both induced and contributory infringement. Id. at 4-5.

On December 17, 2018, the Court granted Defendant's motion to stay Pulse I, pending inter partes review ("IPR") of all four patents-in-suit. Order, ECF No. 28 at 6-7. Later that month, the Patent Trial and Appeal Board ("PTAB") granted IPR of the 302 Patent. ECF No. 45 at 4:20-28. As such, on February 14, 2020, this Court granted a joint motion for dismissal of the claims related to the 302 Patent without prejudice. ECF No. 72. As to the other patents, however, the PTAB denied institution of a trial. ECF No. 46 at 5:23-27. Thus, on November 18, 2019, this Court granted Plaintiff's Motion to Lift the Stay as to the remaining patents-in-suit, which had been in place during the IPR. Order, ECF No. 52.

On July 16, 2020, Plaintiff filed a Second Amended Complaint, which became the operative complaint and alleged three claims for relief for direct, induced, and contributory infringement of the 473, 318, and 840 Patents. SAC. Shortly thereafter, on July 30, 2020, the Court issued its Claim Construction Order. ECF No. 107.

On March 15, 2021, the Court in Pulse I denied Plaintiff's motion for summary judgment, granted-in-part Defendant's motion for summary judgment, and ordered Plaintiff to show cause as to why summary judgment should not be granted in Defendant's favor by coming forward with evidence of infringing acts within the United States. See ECF No. 160. Two weeks later, on March 31, 2021, the Court dismissed the remaining

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claims and granted summary judgment in Defendant's favor because Plaintiff had failed to submit evidence of Defendant's infringing activities within the United States. Pulse Elecs., Inc. v. U.D. Elec. Corp., No. 318CV00373BENMSB, --- F. Supp. 3d ----, 2021 WL 1226470, at *1 (S.D. Cal. Mar. 31, 2021).

2. USPTO/PTAB

On July 24, 2019, in the midst of Pulse I, the PTAB instituted IPR of the 302 Patent. Defendant's Motion to Dismiss, ECF No. 13 ("Mot.") at 5:26-27.

On July 22, 2020, the PTAB issued a final written decision finding claims 1, 3-9, and 11-16 unpatentable. Mot. at 6:3-4 (citing Exhibit "B" to Compl., ECF No. 1-4 at 3). However, during the IPR, Plaintiff submitted new claims 17-23 for addition to the 302 Patent in the event the PTAB found the original claims unpatentable. Id. at 6:5-7. In the Final Written Decision, the PTAB determined that some of the new claims (e.g., claims 18, 19, 22, and 23) were patentable. Id. at 6:7-8 (citing Exhibit "B" to Compl., ECF No. 1-4 at 46); see also Opposition, ECF No. 16 ("Oppo.") at 2:12-15.

On August 6, 2020, Plaintiff filed an appeal challenging the decision fining the original claims of the 302 Patent unpatentable. See Pulse Electronics, Inv. v. U.D. Electronic Corp., United States Court of Appeals for the Federal Circuit Case No. 20-2129 (Fed. Cir. Aug., 6, 2020), ECF No. 1. Meanwhile, on August 20, 2020, Defendant filed a cross-appeal, challenging the PTAB's holding that claims 22 and 23 were patentable. See U.D. Electronic Corp. v. Pulse Electronics, Inc., United States Court of Appeals for the Federal Circuit Case No. 20-2177 (Fed. Cir. Aug., 20, 2020), ECF No. 1. Defendant did not, however, challenge the PTAB's finding that amended claims 18 and 19 were patentable. See id.; see also Oppo. at 2:18-22. The Federal Circuit later consolidated the two appeals, and the parties remain in the briefing stage of the appeal. Mot. at 6:14-15.

3. Pulse II

On August 27, 2020, before the Certificate had issued on the PTAB's IPR and while the cross-appeals of the PTAB's Final Written Decision were still...