Smart Wearable Techs. Inc. v. Fitbit, Inc.

274 F.Supp.3d 371

SMART WEARABLE TECHNOLOGIES INC., Plaintiff,

v.FITBIT, INC., Defendant.

Civil Action No. 3:16CV00077

United States District Court, W.D. Virginia, Charlottesville Division.

Signed April 6, 2017

Corby Robert Vowell, Pro Hac Vice, Jonathan T. Suder, Pro Hac Vice, Richard Allen Wojcio, Jr., Pro Hac Vice, Friedman, Suder & Cooke, Fort Worth, TX, Justin Manning Wolcott, Mark D. Obenshain, Obenshain Law Group, Harrisonburg, VA, for Plaintiff.

Clement Seth Roberts, Pro Hac Vice, Eugene Novikov, Pro Hac Vice, James S. Tsuei, Pro Hac Vice, Timothy C. Saulsbury, Pro Hac Vice, Durie Tangri LLP, San Francsico, CA, Robert Charles Van Arnam, Pro Hac Vice, Raleigh, NC, Joseph Earl Blackburn, III, Patrick Risdon Hanes, Richmond, VA, for Defendant.

MEMORANDUM OPINION

Glen E. Conrad, Chief United States District JudgeSmart Wearable Technologies Inc. ("Smart Wearable") filed this action against Fitbit, Inc. ("Fitbit") for alleged infringement of U.S. Patent No. 6,997,882 B1 ("the '882 Patent"). Smart Wearable asserts claims of direct and indirect infringement. Fitbit has moved to dismiss the claims of indirect infringement under Rule 12(b)(6) of the Federal Rules of Civil Procedure. The court held a hearing on the motion on March 22, 2017. For the reasons set forth below, the motion to dismiss will be granted in part and denied in part.

Background

Smart Wearable is a Delaware corporation based in Virginia. It is the owner of the '882 Patent, titled "6–DOF Subject Monitoring Device and Method," which was issued by the United States Patent and Trademark Office on February 14, 2006. The patent "relates to systems and methods of monitoring a subject using acquired six degree-of-freedom ("6–DOF") data regarding the subject as well as acquired physiological data of the subject." Compl. ¶ 6, Docket No. 1. "Specifically, certain claims of the '882 Patent disclose the use of an acceleration module to obtain 6–DOF data descriptive of the movement of a subject." Id."The 6–DOF data is synchronized with obtained physiological data, such as the sensed, detected, or measured heart rate of the subject," and "[t]he synchronized 6–DOF and physiological data is then displayed." Id.

Fitbit is a Delaware corporation based in California. Smart Wearable claims that Fitbit has infringed the '882 Patent by making and selling certain fitness tracker products (referred to collectively as "the Accused Products"), which "monitor a subject using acquired 6–DOF data regarding the subject as well as acquired physiological data of the subject." Id. at ¶ 12. In particular, Smart Wearable alleges that "the Accused Products in the past directly infringed and continue to directly infringe at least claim 8 of the '882 Patent." Id. at ¶ 13.

In addition to alleging direct infringement by Fitbit, Smart Wearable claims that Fitbit has engaged in indirect infringement, both by inducing customers and/or end users to infringe the '882 Patent, and by contributing to the infringement of the patent by customers and/or end users. To support the claims of indirect infringement, Smart Wearable alleges that "Fitbit has had knowledge of, or was willfully blind to, the existence of the '882 Patent since the filing of this Complaint, if not earlier." Id. at ¶ 9. Smart Wearable alleges that end users of the Accused Products directly infringe claim 8 "when using the products to, at least, monitor their heart rate, active minutes, calories burned, heart rate zone training, and/or sleep tracking." Id. at ¶ 14. Smart Wearable asserts that Fitbit possessed a specific intent to induce such infringement by, at a minimum, providing user guides, sales-related materials, and product instruction materials that "instruct its customers and end users on the normal operation of at least the Accused Products including heart rate, active minutes, calories burned, heart rate zone training, and/or sleep tracking features that infringe the '882 Patent." Id. at ¶ 15. Smart Wearable further asserts, upon information and belief, that "the heart rate, active minutes, calories burned, heart rate zone training, and/or sleep tracking features of the Accused Products have no substantial non-infringing uses, and Fitbit knows that these features are especially made or especially adapted for use in a product that infringes the '882 Patent." Id. at ¶ 17.

Standard of Review

Fitbit has moved to dismiss the claims of indirect infringement pursuant to Rule 12(b)(6) of the Federal Rules of Civil Procedure. "The purpose of a Rule 12(b)(6) motion is to test the sufficiency of a complaint." Edwards v. City of Goldsboro, 178 F.3d 231, 243 (4th Cir. 1999). Accordingly, the court's "evaluation is thus generally limited to a review of the allegations of the complaint itself." Goines v. Valley Cmty. Servs. Bd., 822 F.3d 159, 165–66 (4th Cir. 2016). "While a complaint attacked by a Rule 12(b)(6) motion does not need detailed factual allegations, a plaintiff's obligation to provide the grounds of [its] entitlement to relief requires more than labels and conclusions, and a formulaic recitation of the elements of a cause of action will not do." Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007) (citation and internal quotation marks omitted). To survive dismissal for failure to state a claim, "a complaint must contain sufficient factual matter, accepted as true, to ‘state a claim for relief that is plausible on its face,’ " meaning that it must "plead[ ] factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged." Ashcroft v. Iqbal, 556 U.S. 662, 678, 129 S.Ct. 1937, 173 L.Ed.2d 868 (2009) (quoting Twombly, 550 U.S. at 570, 127 S.Ct. 1955 ).

Discussion

The Patent Act provides that "whoever without authority makes, uses, offers to sell, or sells any patented invention, within the United States or imports into the United States any patented invention during the term of the patent therefor, infringes the patent." 35 U.S.C. § 271(a). The statute also prohibits a person from indirectly infringing a patent. See 35 U.S.C. § 271(b) - (c). The two types of indirect infringement are induced infringement under § 271(b) and contributory infringement under § 271(c).

I. Induced Infringement

Section 271(b) provides that "[w]hoever actively induces infringement of a patent shall be liable as an infringer." 35 U.S.C. § 271(b)."Inducement requires a showing that the alleged inducer knew of the patent, knowingly induced the in fringing acts, and possessed a specific intent to encourage another's infringement of the patent." Vita–Mix Corp. v. Basic Holding, Inc., 581 F.3d 1317, 1328 (Fed. Cir. 2009). Additionally, a plaintiff must plead facts showing direct infringement by someone other than the defendant. Nielsen Co. (US), LLC v. comScore, Inc., 819 F.Supp.2d 589, 593 (E.D. Va. 2011).

In moving to dismiss the claim of induced infringement, Fitbit contends that the plaintiff has not adequately alleged (1) that Fitbit had knowledge of the '882 Patent, or (2) that it specifically intended to encourage others to infringe the patent. The court will address each argument in turn.

A. Knowledge of the '882 Patent

The original complaint contains one allegation relevant to the issue of knowledge. In paragraph 9, Smart Wearable alleges that "Fitbit has had knowledge of, or was willfully blind to, the existence of the '882 Patent since the filing of this Complaint, if not earlier." Compl. ¶ 9.

To the extent the complaint can be read to assert a claim for induced infringement based on pre-suit knowledge of the '882 Patent, the court agrees with Fitbit that the foregoing allegation does not pass muster under Twombly and Iqbal. In short, Smart Wearable has not pled any facts which plausibly suggest that Fitbit had knowledge of, or was willfully blind to, the existence of the patent prior to the filing of this lawsuit. Accordingly, any claim for induced infringement based on pre-suit knowledge will be dismissed without prejudice.¹

Nevertheless, Smart Wearable also alleges that Fitbit has known about the '882 Patent since the instant action was filed, and that the infringement remains ongoing. In other words, to the extent Smart Wearable seeks to recover for induced infringement occurring after it filed suit, Smart Wearable relies on the filing of the complaint to satisfy the knowledge requirement. See Rembrandt Social Media, LP v. Facebook, Inc., 950 F.Supp.2d 876, 882 (E.D. Va. 2013) (holding that knowledge of the patent and its claims can be established by the filing and service of an infringement suit).

"This approach, although rejected by some district courts, is in keeping with the decisions of most courts that have considered the issue recently." Script Sec. Solutions, LLC v. Amazon.com, Inc., 170 F.Supp.3d 928, 937 (E.D. Tex. 2016) (collecting cases); see also Rembrandt, 950 F.Supp.2d at 881–82 (observing that "a majority of district courts considering this issue have held that post-suit knowledge (i.e., knowledge provided by the filing of the lawsuit) satisfies the knowledge element for indirect infringement," and concluding that "the majority view is the sounder view"); Regents of the Univ. of Minn. v. AT & T Mobility LLC, 135 F.Supp.3d 1000, 1011–12 (D. Minn. 2015) (surveying decisions from other districts and concluding that "the notice pleading requirement for indirect infringement claims is satisfied by the filing of a complaint"). In the absence of any decision by the United States Court of Appeals for the Federal Circuit addressing this issue, the court is persuaded by the reasoning adopted by the majority of district courts that have ruled that a complaint provides sufficient notice of the existence of a patent to support a claim for indirect infringement occurring after the filing date. Accordingly, to the extent that Smart Wearable seeks to recover for acts of induced infringement that occurred after the commencement of this action, the...