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Macronix International Co., Ltd. v. Spansion Inc.

United States District Court, E.D. Virginia, Richmond Division

March 10, 2014

MACRONIX INTERNATIONAL CO., LTD., a Taiwanese Corporation, Plaintiff,
v.
SPANSION INC., a Delaware Corporation, et al., Defendants.

          MEMORANDUM OPINION

          Robert E. Payne, Senior United States District Judge

         This matter is before the Court on DEFENDANTS' MOTION TO DISMISS (Docket No. 22), filed pursuant to Fed.R.Civ.P. 12(b)(6) for failure to state a claim upon which relief can be granted. For the reasons set forth below, the motion will be denied in part and granted in part.

         BACKGROUND

         On October 2, 2013, Macronix International Co., Ltd. ("Macronix") filed this civil action against Spansion Inc. and Spansion LLC ("Spansion") alleging that Spansion had infringed one or more claims of seven patents owned by Macronix. By Order entered November 1, 2013 (Docket No. 13) (the "November 1 Order"), the Court, sua sponte, concluded that "the Complaint failed to satisfy the fundamental requirements of Bell Atlantic v. Twombly, 550 U.S. 544 (2007) and Ashcroft v. Iqbal, 556 U.S. 662 (2009), " and ordered Macronix to file an Amended Complaint which Macronix did on November 20, 2013 (Docket No. 17) ("FAC"). The original Complaint was of the boilerplate variety modeled upon Form 18 in the APPENDIX OF FORMS at the end of the Federal Rules of Civil Procedure (the "Appendix") and referred to in Fed.R.Civ.P. 84.

         The November 1 Order directed Macronix to file an Amended Complaint "that, in all respects, conforms with the pleading requirements of Twombly and Iqbal and that, in particular, recites the specific claim or claims which are alleged to be infringed, and the elements thereof that are alleged to be infringed by the allegedly infringing product, and how that product is alleged to infringe those elements." The November 1 Order also directed that the "Amended Complaint shall satisfy in the same way Twombly and Iqbal, as respects the alleged infringement under the doctrine of equivalents."

         DISCUSSION

         Spansion contends that the FAC fails to comply with the requirements of the November 1 Order insofar as the FAC asserts claims of direct infringement whether by way of literal infringement or under the doctrine of equivalents. That argument, in essence, is that, as to claims of direct infringement, the FAC does not pass muster under Twombly and Iqbal.

         Spansion then argues that the FAC fails adequately to allege claims for induced infringement, for contributory infringement, and for willful infringement. As to induced infringement, Spansion contends that Macronix has not asserted the knowledge element of an induced infringement claim for four of the patents-in-suit and that the FAC alleges no facts suggesting that Spansion had knowledge of or specific intent to induce any infringing conduct by a third-party. As to contributory infringement, Spansion contends that Macronix has failed to allege that there are no substantial non-infringing uses of Spansion's accused products, thus failing to allege an element of contributory infringement. As to willful infringement, Spansion contends that the FAC pleads no facts showing that Spansion was aware of the asserted patents before Macronix filed this action and that, because pre-suit knowledge is a critical element of a willful infringement claim, the FAC is legally insufficient as to willful infringement.

         DISCUSSION

         Under Fed.R.Civ.P. 8 (a), "[a] pleading that states a claim for relief must contain ... a short and plain statement of the claim showing that the pleader is entitled to relief." Under Fed.R.Civ.P. 12(b)(6), if the complaint fails to state a claim upon which relief can be granted, the complaint is to be dismissed.

         In 2007, the Supreme Court of the United States set forth a new standard to be applied in assessing whether, under Rule 8(a)(2), a claim was articulated sufficiently to permit a court to conclude that, if its allegations were proved, relief could be granted. In so doing, the Supreme Court retired the standard of sufficiency under Rule 8(a)(2) that was set in Conley v. Gibson, 355 U.S. 41 (1957). In Conley, the Supreme Court had assessed what was required for a legally sufficient complaint as follows:

The decisive answer to this is that the Federal Rules of Civil Procedure do not require a claimant to set out in detail the facts upon which he bases his claim. To the contrary, all the Rules require is 'a short and plain statement of the claim' [citing Rule 8(a)(2)] that will give the defendant fair notice of what the plaintiff s claim is and the grounds upon which it rests. The illustrative forms appended to the Rules plainly demonstrate this.

Conley v. Gibson, 355 U.S. at 48. In Twombly, the Court changed significantly how the legal sufficiency of a claim is to be measured when it is attacked under Rule 12(b)(6). As one eminent scholar of federal civil procedure has said of Twombly "Notice pleading is dead. Say hello to plausibility pleading." A. Benjamin Spencer, Plausibility Pleading, 49 B.C. L. Rev. 431, 431-32 (2008). That is because the "liberal pleading standard of Federal Rule of Civil Procedure 8(a)(2) has been decidedly tightened (if not discarded) in favor of a stricter standard requiring the pleading of facts painting a 'plausible' picture of liability." Id. Two years after Twombly, the Supreme Court expounded more fully on the topic in Iqbal. And, as the Fourth Circuit has put it, "Twombly and Iqbal announce a new, stricter pleading standard." Nemet Chevrolet, Ltd. v. Consumeraffairs.com, Inc., 591 F.3d 250, 262 (4th Cir. 2009) (Jones concurring in part, dissenting in part).

         Now, as the Supreme Court explained in Twombly, "[w]hile a complaint attacked by a Rule 12(b)(6) motion to dismiss does not need detailed factual allegations, ... a plaintiff's obligation to provide the 'grounds' of his 'entitle[ment] to relief requires more than labels and conclusions, and a formulaic recitation of the elements of a cause of action will not do." Bell Atlantic v. Twombly, 550 U.S. at 555 (citations . omitted). Therefore, the "[f]actual allegations must be enough to raise a right to relief above the speculative level. . . ." Id. Twombly then made quite clear that:

While, for most types of cases, the Federal Rules eliminated the cumbersome requirement that a claimant 'set out in detail the facts upon which he bases his claim, ' Rule 8 (a) (2) still requires a 'showing, ' rather than a blanket assertion of entitlement to relief. Without some factual allegation in the complaint, it is hard to see how a complainant could satisfy the requirement of providing not only 'fair notice/ of the nature of the claim, but also 'grounds' upon which the claim rests.

Bell Atlantic v. Twombly, 550 U.S. at 555 n.3. (emphasis in original and added). Explaining the relationship between Rule 12(b)(6) and Rule ...


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