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Zond, LLC v. Toshiba Corporation

United States District Court, D. Massachusetts

August 14, 2014

ZOND, LLC, Plaintiff,
v.
TOSHIBA CORPORATION, TOSHIBA AMERICA ELECTRONIC COMPONENTS, INC., and TOSHIBA AMERICA INFORMATION SYSTEMS, INC., Defendants.

MEMORANDUM AND ORDER

DENISE J. CASPER, District Judge.

I. Introduction

Plaintiff Zond, LLC ("Zond") brings this action against Toshiba Corporation, Toshiba America Electronic Components, Inc. and Toshiba America Information Systems, Inc. (collectively, "Toshiba") for direct, induced and willful infringement of seven of its patents pursuant to 35 U.S.C. §§ 271(g) and (b). Toshiba now moves to dismiss pursuant to Fed.R.Civ.P. 12(b)(6). D. 14. For the reasons set forth below, Toshiba's motion is DENIED.

II. Background

This summary is drawn from the factual allegations in the amended complaint. Zond is a Massachusetts-based technology development company. Am. Compl., D. 13 ¶ 16. Its patents "are generally directed to the generation, use and/or applications of unique plasma discharge technology that employs a strongly ionized plasma of commercial significance and has wideranging applicability in various industries." Id . The plasmas generated using Zond's processes can be used in the manufacture of semiconductor chips, of which Toshiba is a designer and manufacturer. Id . ¶¶ 18-21.

On July 3, 2013, Zond filed its initial complaint in this action, alleging that a subset of the Toshiba defendants infringed eight of Zond's patents. D. 1. On September 27, 2013, Zond filed its amended complaint, adding an additional Toshiba defendant and narrowing the patents-in-suit to seven. D. 13. Zond alleges that, in violation of 35 U.S.C. § 271(g), Toshiba directly infringes Zond's patents by "using, offering to sell and selling within the United States, and importing into the United States, without authority, " D. 13 ¶¶ 35, 42, 49, 56, 63, 70, 77, certain semiconductor devices manufactured overseas. Id.¶ 24. Specifically, Zond alleges that Toshiba could not manufacture the allegedly infringing semiconductor devices without using Zond's patented processes. Id . ¶¶ 24-31.

Zond further claims that Toshiba induced the infringement of Zond's patents by "knowingly and with intent, actively encouraging its customers, suppliers, original equipment manufacturers ("OEMs") and original design manufacturers ("ODMs") to use, sell, offer for sale, and import" the infringing semiconductor devices. Id . ¶¶ 36, 43, 50, 57, 64, 78. According to Zond, "Toshiba actively entices its OEMs and ODMs through advertising, marketing and sales activity to use Toshiba's [semiconductor devices] as part of their own infringing products and to sell, offer for sale and import those infringing products containing [the semiconductor devices] in the United States." Id.

Zond's final claim is for willful infringement. Id . ¶¶ 37, 44, 51, 58, 65, 79. Zond contends that Toshiba's continued infringement since it became aware of Zond's patents demonstrates a "deliberate and conscious decision to infringe" the patents-in-suit, "or at the very least, a reckless disregard of Zond's patent rights." Id.

III. Discussion

A. Direct Infringement

1. Pleading Standard

When evaluating a motion to dismiss pursuant to Rule 12(b)(6), the general standard set forth in Ashcroft v. Iqbal , 556 U.S. 662 (2009), and Bell Atlantic Corp. v. Twombly , 550 U.S. 544 (2007) govern. To survive such a motion, a plaintiff must plead "enough facts to state a claim to relief that is plausible on its face." Twombly , 550 U.S. at 570. For a claim to be plausible, the complaint must contain sufficient facts that, accepted as true, would allow a court "to draw the reasonable inference that the defendant is liable for the misconduct alleged." Iqbal , 556 U.S. at 678. This standard requires "more than the sheer possibility that a defendant has acted unlawfully." Id . "A complaint that merely pleads facts that are consistent with a defendant's liability stops short of the line between possibility and plausibility....'" In re Bill of Lading Transmission & Processing Sys. Patent Litig. , 681 F.3d 1323, 1332 (Fed. Cir. 2012) (quoting Twombly , 550 U.S. at 546).

The Appendix of Forms to the Federal Rules of Civil Procedure contains Form 18 which sets forth a sample complaint for direct patent infringement. Form 18 requires:

(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 the defendant ...

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