Align Tech., Inc. v. 3shape

339 F.Supp.3d 435

ALIGN TECHNOLOGY, INC., Plaintiff,

v.3SHAPE A/S and 3Shape Inc., Defendants.

Align Technology, Inc., Plaintiff,

v.3Shape A/S and 3Shape Inc., Defendants.

C.A. No. 17-1646-LPS-CJB

C.A. No. 17-1647-LPS-CJB

United States District Court, D. Delaware.

Signed September 7, 2018

John W. Shaw and Karen E. Keller, SHAW KELLER LLP, Wilmington, DE, Blair M. Jacobs, Christina A. Ondrick, Patrick J. Stafford, John S. Holley, and Diva Ranade, PAUL HASTINGS LLP, Washington, DC, Thomas A. Counts, PAUL HASTINGS LLP, San Francisco, CA, Attorneys for Plaintiff

Geoffrey Grivner, BUCHANAN INGERSOLL & ROONEY PC, Wilmington, DE, S. Lloyd Smith and Kimberly E. Coghill, BUCHANAN INGERSOLL & ROONEY PC, Alexandria, VA, Attorneys for Defendants

MEMORANDUM OPINION

STARK, U.S. District Judge

Plaintiff Align Technology, Inc. ("Align") filed four separate suits against Defendants 3Shape A/S and 3Shape Inc. (together, "3Shape" or "Defendants") on November 14, 2017. On February 2, 2018, 3Shape moved to dismiss the complaints in Civil Action Nos. 17-1646-LPS-CJB and 17-1647-LPS-CJB (the "Complaints") for failure to state a claim, pursuant to Federal Rule of Civil Procedure 12(b)(6), based on its contention that Align failed to plausibly allege direct, indirect, and willful infringement of all asserted patents and that certain of the asserted patents are not directed to patent-eligible subject matter under 35 U.S.C. § 101. (C.A. No. 17-1646-LPS-CJB D.I. 21; C.A. No. 17-1647-LPS-CJB D.I. 21) 3Shape's motions are fully briefed and the Court heard oral argument on July 20, 2018. (See D.I. 55 ("Tr.") )

For the reasons stated below, the Court will grant in part and deny in part Defendants' motions to dismiss.

I. BACKGROUND

The parties are competitors in the field of intraoral scanners and software. (D.I. 1 at ¶ 29) Align is a global medical device company selling products such as the iTero intraoral scanner and OrthoCAD software, both of which "help dental and orthodontic professionals deliver effective, cutting-edge dental and orthodontic options to their patients." (D.I. 1 at ¶ 23; D.I. 25 at 2) 3Shape "designs, develops, manufactures, and markets the TRIOS and TRIOS 3 scanners, as well as related Dental Software products" such as the Implant Studio, Ortho System, Ortho Analyzer, Ortho Planner, Appliance Designer, and Ortho Control Patent. (D.I. 1 at ¶ 28; D.I. 25 at 2)

On November 14, 2017, Align filed four actions against 3Shape in this District. The patents asserted in each action are as follows:

C.A. No. 17-1646-LPS-CJB: United States Patent Nos. 9,510,757 ; 7,112,065 (" '065 patent") ; 9,451,873 (" '873 patent") ; 9,299,192 ; 9,427,916 ; 8,454,364 ; and 8,845,330. (C.A. No. 17-1646-LPS-CJB D.I. 1 at ¶¶ 16-22)

C.A. No. 17-1647-LPS-CJB: U.S. Patent Nos. 9,566,132 ; 8,545,221 ; 8,092,215 ; 7,056,115 ; 8,734,149 (" '149 patent") ; and 6,227,850 (" '850 patent"). (C.A. No. 17-1647-LPS-CJB D.I. 1 at ¶¶ 16-21)

C.A. No. 17-1648-LPS-CJB: U.S. Patent Nos. 7,092,107 (" '107 patent") ; 9,615,901 ; 8,638,448 ; 8,638,447 ; 6,845,175 ; and 6,334,853. (C.A. No. 17-1648-LPS-CJB D.I. 1 at ¶¶ 16-21)

C.A. No. 17-1649-LPS-CJB: U.S. Patent Nos. 6,948,931 ; 6,685,470 ; 6,514,074 (" '074 patent") ; 8,363,228 ; 8,451,456 ; 8,675,207 ; and 9,101,433. (C.A. No. 17-1649-LPS-CJB D.I. 1 at ¶¶ 16-22)

In total, Align asserts 26 patents, all of which relate to "dental scanning technology." (C.A. No. 17-1646-LPS-CJB D.I. 22 at 1)

Align also filed two complaints with the International Trade Commission ("ITC"), involving 11 of the 26 patents also at issue here. The ITC instituted investigations as to those 11 patents on December 14, 2017. (C.A. No. 17-1646-LPS-CJB D.I. 15 at 1) The 11 patents involved in the ITC proceedings include all but one of the patents at issue in C.A. No. 17-1648-LPS-CJB (the '107 patent) and all but one at issue in C.A. No. 17-1649-LPS-CJB (the '074 patent).

3Shape moved to stay all four District Court actions pending the ITC investigations. All of the patents subject to the ITC investigations were subject to a mandatory stay; Align stipulated on January 23, 2018 to a stay of both C.A. Nos. 17-1648-LPS-CJB and 17-1649-LPS-CJB as to all claims, pending resolution of the ITC investigations. (C.A. No. 17-1648-LPS-CJB D.I. 19; C.A. No. 17-1649-LPS-CJB D.I. 20) 3Shape's motions to stay as to C.A. Nos. 17-1646-LPS-CJB and 17-1647-LPS-CJB remained pending.¹

On February 1, 2018, 3Shape moved to dismiss the Complaints in C.A. Nos. 17-1646-LPS-CJB and 17-1647-LPS-CJB for failing to plausibly allege direct, indirect, and willful infringement of any of the 13 patents asserted in those actions (hereinafter, the "asserted patents" or "patents-in-suit"). (C.A. No. 17-1646-LPS-CJB D.I. 21; C.A. No. 17-1647-LPS-CJB D.I. 21) 3Shape's motions further sought to dismiss patent infringement claims as to some of the asserted patents on the grounds that they claim ineligible subject matter under Section 101. Specifically, this portion of 3Shape's motions is directed to the '873 and '065 patents in C.A. No. 17-1646-LPS-CJB and the '850 and '149 patents in C.A. No. 17-1647-LPS-CJB.²

II. LEGAL STANDARDS

A. Rule 12(b)(6) Motion to Dismiss

Evaluating a motion to dismiss under Federal Rule of Civil Procedure 12(b)(6) requires the Court to accept as true all material allegations of the complaint. See Spruill v. Gillis , 372 F.3d 218, 223 (3d Cir. 2004). "The issue is not whether a plaintiff will ultimately prevail but whether the claimant is entitled to offer evidence to support the claims." In re Burlington Coat Factory Sec. Litig. , 114 F.3d 1410, 1420 (3d Cir. 1997) (internal quotation marks omitted). Thus, the Court may grant such a motion to dismiss 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." Maio v. Aetna, Inc. , 221 F.3d 472, 481-82 (3d Cir. 2000) (internal quotation marks omitted).

A well-pleaded complaint must contain more than mere labels and conclusions. See Ashcroft v. Iqbal , 556 U.S. 662, 678, 129 S.Ct. 1937, 173 L.Ed.2d 868 (2009) ; Bell Atl. Corp. v. Twombly , 550 U.S. 544, 555, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007). A plaintiff must plead facts sufficient to show that a claim has substantive plausibility. See Johnson v. City of Shelby , ––– U.S. ––––, 135 S.Ct. 346, 347, 190 L.Ed.2d 309 (2014). A complaint may not be dismissed, however, for imperfect statements of the legal theory supporting the claim asserted. See id. at 346.

"To survive a motion to dismiss, a civil plaintiff must allege facts that ‘raise a right to relief above the speculative level on the assumption that the allegations in the complaint are true (even if doubtful in fact).’ " Victaulic Co. v. Tieman , 499 F.3d 227, 234 (3d Cir. 2007) (quoting Twombly , 550 U.S. at 555, 127 S.Ct. 1955 ). A claim is facially plausible "when the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged." Iqbal , 556 U.S. at 678, 129 S.Ct. 1937. At bottom, "[t]he complaint must state enough facts to raise a reasonable expectation that discovery will reveal evidence of [each] necessary element" of a plaintiff's claim. Wilkerson v. New Media Tech. Charter Sch. Inc. , 522 F.3d 315, 321 (3d Cir. 2008) (internal quotation marks omitted).

The Court is not obligated to accept as true "bald assertions," Morse v. Lower Merion Sch. Dist. , 132 F.3d 902, 906 (3d Cir. 1997) (internal quotation marks omitted), "unsupported conclusions and unwarranted inferences," Schuylkill Energy Res., Inc. v. Pa. Power & Light Co. , 113 F.3d 405, 417 (3d Cir. 1997), or allegations that are "self-evidently false," Nami v. Fauver , 82 F.3d 63, 69 (3d Cir. 1996).

B. Patentable Subject Matter

Under 35 U.S.C. § 101, "[w]hoever invents or discovers any new and useful process, machine, manufacture, or composition of matter, or any new and useful improvement thereof, may obtain a patent therefor, subject to the conditions and requirements of this title." There are three exceptions to § 101's broad patent-eligibility principles: "laws of nature, physical phenomena, and abstract ideas." Diamond v. Chakrabarty , 447 U.S. 303, 309, 100 S.Ct. 2204, 65 L.Ed.2d 144 (1980). "Whether a claim recites patent eligible subject matter is a question of law which may contain disputes over underlying facts." Berkheimer v. HP Inc. , 881 F.3d 1360, 1368 (Fed. Cir. 2018).

In Mayo Collaborative Services v. Prometheus Laboratories, Inc. , 566 U.S. 66, 132 S.Ct. 1289, 182 L.Ed.2d 321 (2012), the Supreme Court set out a two-step "framework for distinguishing patents that claim laws of nature, natural phenomena, and abstract ideas from those that claim patent-eligible applications of those concepts." Alice Corp. Pty. Ltd. v. CLS Bank Int'l , 573 U.S. 208, 134 S.Ct. 2347, 2355, 189 L.Ed.2d 296 (2014). First, courts must determine if the claims at issue are directed to a patent-ineligible concept ("step one"). See id. If so, the next step is to look for an " ‘inventive concept’ – i.e., an element or combination of elements that is sufficient to ensure that the patent in practice amounts to significantly more than a patent upon the [ineligible concept] itself" ("step two"). Id. The two steps are "plainly related" and "involve overlapping scrutiny of the content of the claims." Elec. Power Grp., LLC v. Alstom S.A. , 830 F.3d 1350, 1353 (Fed. Cir. 2016).

At step one, "the claims are considered in their entirety to ascertain whether their character as a whole is directed to excluded subject matter." Internet Patents Corp. v. Active Network, Inc. , 790 F.3d 1343, 1346 (Fed. Cir. 2015) (emphasis added); see also Affinity Labs of Texas, LLC v. DIRECTV, LLC , 838 F.3d 1253, 1257 (Fed. Cir. 2016) (" Affinity Labs I ") (stating first step "calls upon us to look at the ‘focus of the claimed advance over the prior art’ to determine if the claim's ‘character as a whole’ is...