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Judge Hellerstein Upholds the Sufficiency of a Complaint that Alleges "Any Implementation" of a Standard is Infringed by Components that Comply with that Standard

On April 23, 2019, United States District Judge Alvin Hellerstein (S.D.N.Y.) denied Defendant Dell Inc.'s motion to dismiss Data Technologies' amended complaint for failure to state a claim pursuant to Rule 12(b)(6).

Data Technologies' complaint alleges that certain Dell products containing graphics processing chips complying with either the H.265/High Efficiency Video Coding ("HEVC") standard or the VP9 standard infringe at least one of fourteen asserted patents. The complaint also alleges that “any implementation” of the HEVC standard would necessarily infringe the asserted claims.

Dell argued that Data Technologies failed to plead direct infringement as to all products accused of complying with the VP9 standard and certain products accused of complying with the HEVC standard, and further failed to plead indirect infringement and willful infringement as to all counts.  In particular, Dell argued that (i) allegations directed at VP9 compliant products merely parrot the language of the asserted claims, and that (ii) allegations directed at HEVC compliant products were insufficient for all but a small subset of the accused products.

Judge Hellerstein's decision, citing Lifetime Indus., Inc. v. Trim-Lok, Inc., 869 F.3d 1372, 1379 (Fed. Cir. 2017), starts by characterizing the applicable pleading standard for patent cases as merely requiring that "the alleged infringer [be placed] on notice of what activity is being accused of infringement."

With respect to the VP9-related claims, Judge Hellerstein concluded that Data Technologies' uncorroborated allegations that representative claim limitations were present in the accused products, when combined with more detailed allegations that the accused products "enable the use of segmentation . . . to identify background and foreground areas in encoded video content" and provide "technology for selecting a background motion vector for a pixel in an occlusion region of an image," were sufficient to put Dell on notice of its allegedly infringing activity.

With respect to the HEVC products, Data Technologies maintained that its allegations against a subset of the accused products were representative, and that Defendant could easily determine the similarly infringing technology for the remaining products. Data Technologies also alleged that any implementation of HEVC would infringe.  These allegations, according to Judge Hellerstein, were sufficient to survive Dell's motion to dismiss.

Judge Hellerstein also found Data Technologies' adequately pled induced infringement.  Specifically, he concluded Dell's inducement was sufficiently supported by allegations that: (i) Dell was aware that normal and customary use of its products would infringe, and (ii) Dell encouraged its customers to infringe by providing them with product manuals and other information.  Knowledge of the patents, according to Judge Hellerstein, could be inferred from Data Technologies' allegation that the patents were well known and commonly cited in the industry.  These same allegations were also held sufficient to support Data Technologies' willfulness claim.

Case: Dynamic Data Techs., LLC v. Dell Inc., 18-CV-10454 (AKH), Dkt. No. 50 (S.D.N.Y. April 23, 2019).