Case 1:17-cv-01635-CFC Document 12 Filed 02/20/18 Page 1 of 13 PageID #: 283
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`REALTIME DATA LLC d/b/a IXO,
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`Plaintiff,
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`IN THE UNITED STATES DISTRICT COURT
`FOR THE DISTRICT OF DELAWARE
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`Defendant.
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`DEFENDANT FORTINET, INC.’S OPENING BRIEF
`IN SUPPORT OF ITS MOTION TO DISMISS
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`C.A. No. 17-1635 (GMS)
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`FORTINET, INC.
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`v.
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`
`
`MORRIS, NICHOLS, ARSHT & TUNNELL LLP
`Jack B. Blumenfeld (#1014)
`Brian P. Egan (#6227)
`1201 North Market Street
`P.O. Box 1347
`Wilmington, DE 19899
`(302) 658-9200
`jblumenfeld@mnat.com
`began@mnat.com
`
`Attorneys for Defendant
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`
`
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`
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`OF COUNSEL:
`
`John (Jay) Neukom
`William J. Casey
`SKADDEN, ARPS, SLATE, MEAGHER &
` FLOM LLP
`525 University Avenue
`Palo Alto, CA 94301
`(650) 470-4500
`
`February 20, 2018
`
`
`
`

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`Case 1:17-cv-01635-CFC Document 12 Filed 02/20/18 Page 2 of 13 PageID #: 284
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`TABLE OF CONTENTS
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`PAGE
`
`NATURE AND STAGE OF THE PROCEEDING.............................................................1
`SUMMARY OF ARGUMENT ...........................................................................................2
`STATEMENT OF FACTS ..................................................................................................2
`A.
`The ’728 Patent ........................................................................................................2
`B.
`The ’751 Patent ........................................................................................................3
`C.
`The ’203 Patent ........................................................................................................3
`D.
`The ’908 Patent ........................................................................................................3
`LEGAL STANDARD ..........................................................................................................4
`ARGUMENT .......................................................................................................................5
`A.
`Allegations of Induced Infringement Require Knowledge of the Asserted
`Patents ......................................................................................................................5
`Because Realtime Did Not Plead That Fortinet Had Knowledge of The
`Patents-In-Suit, Its Claims of Induced and Contributory Infringement Fail ...........6
`The Claim of Contributory Infringement Is Not Adequately Pleaded .....................7
`Realtime Should Be Required To File An Amended Complaint To
`Proceed on Its Claim of Infringement of the ’908 Patent ........................................8
`All Claims Should Be Dismissed Under Section 101 ..............................................8
`E.
`CONCLUSION ....................................................................................................................9
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`C.
`D.
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`B.
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`I.
`II.
`III.
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`IV.
`V.
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`VI.
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`i
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`

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`Case 1:17-cv-01635-CFC Document 12 Filed 02/20/18 Page 3 of 13 PageID #: 285
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`TABLE OF AUTHORITIES
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`PAGES
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`Cases
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`Ashcroft v. Iqbal,
`556 U.S. 662 (2009) .................................................................................................................... 4
`Bell Atl. Corp. v. Twombly,
`550 U.S. 544 (2007) .................................................................................................................... 4
`Commil USA, LLC v. Cisco Sys., Inc.,
`135 S.Ct. 1920 (2015) ................................................................................................................. 5
`Connelly v. Lane Const. Corp.,
`809 F.3d 780 (3d Cir. 2016)........................................................................................................ 4
`Evolved Wireless, LLC v. Samsung Elecs. Co.,
`C.A. No. 15-545-SLR-SRF, 2016 WL 1019667 (D. Del. Mar. 15, 2016) ............................. 5, 7
`Fujitsu Ltd. v. Netgear Inc.,
`620 F.3d 1321 (Fed. Cir. 2010)................................................................................................... 7
`Global-Tech Applicances, Inc. v. SEB S.A.,
`563 U.S. 754 (2011) .................................................................................................................... 5
`Realtime Data LLC d/b/a IXO v. Commvault Systems, Inc.,
`C.A. No. 17-925-GMS ............................................................................................................ 1, 8
`Realtime Data LLC d/b/a IXO v. Pure Storage, Inc.,
`C.A. No. 17-1544-GMS .......................................................................................................... 1, 8
`Realtime Data LLC d/b/a/ IXO v. IXSystems, Inc.,
`C.A. No. 17-1769-GMS .......................................................................................................... 1, 8
`Toshiba Corp v. Imation Corp.,
`681 F.3d 1358 (Fed. Cir. 2012)................................................................................................... 5
`Valinge Innovation AB v. Halstead New England Corp.,
`C.A. No. 16-1082-LPS-CJB, 2017 WL 5196379 (D. Del. Nov. 9, 2017) .............................. 5, 6
`Federal Statutes
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`35 U.S.C. § 101 ........................................................................................................................... 1, 7
`Federal Rules
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`Fed. R. Civ. P. 12(b)(6)................................................................................................................... 1
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`ii
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`

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`Case 1:17-cv-01635-CFC Document 12 Filed 02/20/18 Page 4 of 13 PageID #: 286
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`I.
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`NATURE AND STAGE OF THE PROCEEDING
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`Defendant Fortinet, Inc. (“Fortinet”) has filed this motion to dismiss, as well as a motion
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`to transfer this case to the Northern District of California. As between the two motions, Fortinet
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`respectfully asks the Court to address its transfer motion first. If the Court grants that transfer
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`motion, it would be unnecessary for the Court to decide Fortinet’s motion to dismiss, leaving all
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`issues that Fortinet raises below for the transferee court to decide.
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`Pursuant to Fed. R. Civ. P. 12(b)(6) and 35 U.S.C. § 101, Fortinet moves to dismiss the
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`Complaint of Plaintiff Realtime Data LLC d/b/a IXO (“Realtime”) for failure to state a claim
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`upon which relief can be granted because: (1) each of U.S. Patent Nos. 9,054,728 (“the ’728
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`Patent”), 9,667,751 (“the ’751 Patent”), 8,717,203 (“the ’203 Patent”), and 9,116,908 (“the ’908
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`Patent”) (collectively, “the asserted patents”) is directed to patent-ineligible subject matter and
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`thus invalid under 35 U.S.C. § 101; (2) the Complaint fails to plead required elements of indirect
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`infringement; and (3) Realtime has failed to comply with D.Del. LR 3.2 and the required AO
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`Form 120 (D.I. 3) with respect to the ’908 Patent.
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`Rather than providing repetitive arguments on the § 101 issues, Fortinet joins and
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`incorporates by reference the arguments made in support of invalidity of the asserted patents
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`under 35 U.S.C. § 101 included in the motions to dismiss filed in Realtime Data LLC d/b/a/ IXO
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`v. IXSystems, Inc., C.A. No. 17-1769-GMS, D.I. 7, 8; Realtime Data LLC d/b/a IXO v. Pure
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`Storage, Inc., C.A. No. 17-1544-GMS, D.I. 10, 11, 12, 15; and Realtime Data LLC d/b/a IXO v.
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`Commvault Systems, Inc., C.A. No. 17-925-GMS, D.I. 13, 14, 22, and moves to dismiss each of
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`the asserted patents on those grounds reflected in those papers.
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`1
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`Case 1:17-cv-01635-CFC Document 12 Filed 02/20/18 Page 5 of 13 PageID #: 287
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`II.
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`SUMMARY OF ARGUMENT
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`Realtime’s pleading alleges that Fortinet induced infringement of the asserted patents, but
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`fails to allege that Fortinet had pre-suit knowledge of those patents. In such circumstances, any
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`claims of pre-suit induced infringement should be dismissed.
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`Similarly, Realtime appears to allege contributory infringement of the ’728 Patent for
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`claims other than claim 1, based upon the “similar reasons” identified with respect to claim 1 of
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`the ’728 Patent. But Realtime did not allege contributory infringement of claim 1 of the ’728
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`Patent. Accordingly, Realtime’s claim of contributory infringement should be dismissed.
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`Realtime also did not attach the ’908 Patent to the Complaint, as required by the Court’s
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`local rules, and did not include it on the AO 120 form submitted to the Court (D.I. 3). Realtime
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`should amend its Complaint if it intends to include the ’908 Patent.
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`Finally, Fortinet moves to dismiss all claims based on the asserted patents, under 35
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`U.S.C. § 101, for reasons set forth by other movants in other cases commenced by Realtime.
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`III.
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`STATEMENT OF FACTS
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`Realtime filed its Complaint on November 10, 2017, asserting infringement of the ’728
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`Patent, the ’751 Patent, the ’203 Patent, and the ’908 patent. D.I. 1. Realtime’s allegations are
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`summarized as follows:
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`The ’728 Patent
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`A.
`Realtime alleges that Fortinet “has offered for sale, sold and/or imported into the United
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`States Fortinet products and services that infringe the ’728 Patent” including Fortinet’s FortiGate
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`products and systems that operate FortiOS (collectively, the “Fortinet Products”). D.I. 1 ¶ 8.
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`Realtime further alleges that Fortinet’s activities induce users of the Fortinet Products to infringe
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`the ’728 Patent. Id. ¶ 11. And Realtime alleges that Fortinet’s activities also infringe other
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`2
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`

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`Case 1:17-cv-01635-CFC Document 12 Filed 02/20/18 Page 6 of 13 PageID #: 288
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`
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`claims of the ’728 Patent “through inducing infringement and contributory infringement.” Id.
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`¶ 18.
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`Realtime does not allege, however, that Fortinet had knowledge of the ’728 Patent before
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`the Complaint was filed. D.I. 1 ¶¶ 10, 11.
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`The ’751 Patent
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`B.
`Realtime alleges that Fortinet “has offered for sale, sold and/or imported into the United
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`States Fortinet products and services that infringe the ’751 Patent” including the Fortinet
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`Products. D.I. 1 ¶ 24. Realtime further alleges that Fortinet’s activities induce users of the
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`Fortinet Products to infringe the ’751 Patent. Id. ¶ 27. And Realtime alleges that Fortinet’s
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`activities also infringe other claims of the ’751 Patent “through induced infringement.” Id. ¶ 35.
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`Again, however, Realtime does not allege that Fortinet had knowledge of the ’751 Patent
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`before the Complaint was filed. D.I. 1 ¶¶ 26, 27.
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`The ’203 Patent
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`C.
`Realtime alleges that Fortinet “has offered for sale, sold and/or imported into the United
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`States Fortinet products and services that infringe the ’203 Patent” including the Fortinet
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`Products. D.I. 1 ¶ 41. Realtime further alleges that Fortinet’s activities induce users of the
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`Fortinet Products to infringe the ’203 Patent. Id. ¶ 44. And Realtime alleges that Fortinet’s
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`activities also infringe other claims of the ’203 Patent “through induced infringement.” Id. ¶ 52.
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`Again, however, Realtime does not allege that Fortinet had knowledge of the ’203 Patent
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`before the Complaint was filed. D.I. 1 ¶¶ 43, 44.
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`The ’908 Patent
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`D.
`Although the Complaint states that “[a] true and correct copy of the ’908 Patent is
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`included as Exhibit D,” D.I. 1 ¶ 57, the ’908 Patent was not attached as an exhibit to the
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`3
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`

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`Case 1:17-cv-01635-CFC Document 12 Filed 02/20/18 Page 7 of 13 PageID #: 289
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`
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`Complaint. It was also not listed on the AO 120 form submitted by Realtime to the Patent
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`Office. (D.I. 3.)
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`As with the other asserted patents, Realtime alleges that Fortinet “has offered for sale,
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`sold and/or imported into the United States Fortinet products and services that infringe the ’908
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`Patent” including the Fortinet Products. D.I. 1 ¶ 58. Realtime further alleges that Fortinet’s
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`activities induce users of the Fortinet Products to infringe the ’908 Patent. Id. ¶ 62. And
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`Realtime alleges that Fortinet’s activities also infringe other claims of the ’908 Patent “through
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`induced infringement.” Id. ¶ 65.
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`As in the case of the other asserted patents, however, Realtime does not allege that
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`Fortinet had knowledge of the ’908 Patent before the Complaint was filed. D.I. 1 ¶¶ 61, 62.
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`IV.
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`LEGAL STANDARD
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`Dismissal under Fed. R. Civ. P. 12(b)(6) is appropriate where a plaintiff “fail[s] to state a
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`claim upon which relief can be granted.” A plaintiff’s burden is to provide sufficient factual
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`allegations so that each of plaintiff’s claims “is plausible on its face.” Bell Atl. Corp. v.
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`Twombly, 550 U.S. 544, 570 (2007). To satisfy this requirement, the plaintiff must plead
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`“factual content that allows the court to draw the reasonable inference that the defendant is liable
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`for the misconduct alleged.” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (citing Twombly, 550
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`U.S. at 556).
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`A three-part analysis is used to determine whether a Rule 12(b)(6) motion should be
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`granted. Connelly v. Lane Const. Corp., 809 F.3d 780, 787 (3d Cir. 2016). First, the Court
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`“must tak[e] note of the elements a plaintiff must plead to state a claim.” Second, the Court
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`“should identify allegations that, because they are no more than conclusions, are not entitled to
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`the assumption of truth.” Third, “[w]hen there are well-pleaded factual allegations, a court
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`4
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`Case 1:17-cv-01635-CFC Document 12 Filed 02/20/18 Page 8 of 13 PageID #: 290
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`should assume their veracity and then determine whether they plausibly give rise to an
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`entitlement for relief.” Id. (citations omitted).
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`V.
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`ARGUMENT
`Allegations of Induced Infringement Require Knowledge of
`A.
`the Asserted Patents
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`“To prove induced infringement, the patentee must show direct infringement, and that the
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`alleged infringer knowingly induced infringement and possessed specific intent to encourage
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`another’s infringement.” Toshiba Corp v. Imation Corp., 681 F.3d 1358, 1363 (Fed. Cir. 2012)
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`(citation and quotation marks omitted). “[I]nduced infringement under § 271(b) requires
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`knowledge that the induced acts constitute patent infringement.” Global-Tech Applicances, Inc.
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`v. SEB S.A., 563 U.S. 754, 766 (2011). This knowledge requirement may be satisfied with a
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`showing of either actual knowledge or willful blindness. See id. “Like induced infringement,
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`contributory infringement requires knowledge of the patent in suit and knowledge of patent
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`infringement.” Commil USA, LLC v. Cisco Sys., Inc., 135 S.Ct. 1920, 1926 (2015).
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`If the plaintiff fails to allege pre-suit knowledge, it is appropriate to dismiss claims of
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`pre-suit inducement and contributory infringement. See, e.g., Valinge Innovation AB v. Halstead
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`New England Corp., C.A. No. 16-1082-LPS-CJB, 2017 WL 5196379, at *3 (D. Del. Nov. 9,
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`2017) (“With regard to the allegations of indirect infringement, the ‘knowledge of infringement’
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`element of such claims has only been met as of March 28, 2017—the date of the filing of the
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`SAC.”); Evolved Wireless, LLC v. Samsung Elecs. Co., C.A. No. 15-545-SLR-SRF, 2016 WL
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`1019667, at *6 (D. Del. Mar. 15, 2016), report and recommendation adopted, No. 15-545-SLR-
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`SRF, 2016 WL 1381765 (D. Del. Apr. 6, 2016) (dismissing causes of action for pre-suit
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`inducement and contributory infringement for failure to plead pre-suit knowledge of the patents-
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`in-suit).
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`5
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`Case 1:17-cv-01635-CFC Document 12 Filed 02/20/18 Page 9 of 13 PageID #: 291
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`
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`B.
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`Because Realtime Did Not Plead That Fortinet Had Knowledge of The
`Patents-In-Suit, Its Claims of Induced and Contributory Infringement Fail
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`Each of the four counts in the Complaint devotes a single, nearly identical paragraph to
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`allege when Fortinet supposedly became aware of the patents-in suit:
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`On information and belief, Fortinet has had knowledge of the
`[asserted patents] since at least the filing of this Complaint, or
`shortly thereafter, and on information and belief, Fortinet knew of
`the [asserted patents] and knew of [their] infringement, including
`by way of this lawsuit.
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`D.I. 1 ¶¶ 10, 26, 43, 61.
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`Based on that bare allegation, Realtime goes on to allege:
`
`the Accused
`to use
`its customers
`induces
`Fortinet also
`Instrumentalities to infringe other claims of the [accused patents].
`Fortinet specifically intended and was aware that these normal and
`customary activities would infringe the [accused patents]. Fortinet
`performed the acts that constituted induced infringement, and
`would induce actual infringement, with the knowledge of the
`[asserted patents] and with the knowledge, or willful blindness to
`the probability,
`that
`the
`induced acts would constitute
`infringement. Accordingly, Fortinet has induced and continues to
`induce users of the accused products to use the accused products in
`their ordinary and customary way to infringe the [accused patents],
`knowing that such use constitutes infringement of the [accused
`patents].
`Id. ¶¶ 11, 27, 44, 62.
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`With respect to the ’728 Patent, Realtime also alleges that “Fortinet also infringes other
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`claims of the ’728 Patent . . . through inducing infringement and contributory infringement.” Id.
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`¶ 18. As to the other three asserted patents, Realtime alleges, “Fortinet also infringes . . . through
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`induced infringement . . . other claims of the [asserted patents].” Id. ¶ 35, 52, 65.
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`Nowhere in the Complaint does Realtime allege that Fortinet had pre-suit knowledge of
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`any of the asserted patents. Yet, the Complaint does not limit the allegations of induced
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`infringement to the time period after the filing of the suit.
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`In similar circumstances, Courts in this District have dismissed pre-suit claims of indirect
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`infringement. See, e.g., Valinge Innovation AB v. Halstead New England Corp., supra, at *3
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`6
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`

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`Case 1:17-cv-01635-CFC Document 12 Filed 02/20/18 Page 10 of 13 PageID #: 292
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`
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`(“With regard to the allegations of indirect infringement, the ‘knowledge of infringement’
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`element of such claims has only been met as of March 28, 2017—the date of the filing of the
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`SAC.”); Evolved Wireless, LLC v. Samsung Elecs. Co., supra at *6 (dismissing causes of action
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`for pre-suit inducement and contributory infringement for failure to plead pre-suit knowledge of
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`the patents-in-suit).
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`Accordingly, the claims of induced infringement and contributory infringement arising
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`prior to the filing of the Complaint should be dismissed.
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`The Claim of Contributory Infringement Is Not Adequately Pleaded
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`C.
`To establish contributory infringement, a plaintiff must demonstrate (1) an offer to sell,
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`sale or import; (2) a component or material for use in a patented process constituting a material
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`part of the invention; (3) knowledge by the defendant that the component is especially made or
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`especially adapted for use in an infringement of such patents; and (4) that the component is not a
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`staple or article suitable for substantial noninfringing use. See Fujitsu Ltd. v. Netgear Inc., 620
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`F.3d 1321, 1326 (Fed. Cir. 2010) (citing 35 U.S.C. § 271).
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`Contributory infringement is mentioned only one time in the Complaint:
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`Fortinet also infringes other claims of the ’728 Patent, directly and
`through inducing infringement and contributory infringement, for
`similar reasons as explained above with respect to Claim 1 of
`the ’728 Patent.
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`D.I. 1 at ¶ 18.
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`The Complaint contains no other allegations of contributory infringement. As to the ‘728
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`Patent, the Complaint does not allege (1) what component or material for use in a process that
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`Fortinet provides constitutes a material part of the ’728 Patent; (2) that any component is
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`especially made or especially adapted for use in infringing the ’728 Patent; and (3) such
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`knowledge by Fortinet. See generally id. Thus, there are no “similar reasons” on which to base
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`7
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`Case 1:17-cv-01635-CFC Document 12 Filed 02/20/18 Page 11 of 13 PageID #: 293
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`
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`Realtime’s claim of contributory infringement. Accordingly, any claim of contributory
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`infringement of the ’728 Patent should be dismissed.
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`D.
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`Realtime Should Be Required To File An Amended Complaint To Proceed
`on Its Claim of Infringement of the ’908 Patent
`
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`D.Del. LR 3.2 requires: “In all patent cases, copies of the patents at issue shall be
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`attached and filed with the complaint.” L.R. 3.2 (emphasis added). Where a party files a
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`document that does not follow the Local Rules, “the Court, in its discretion: (a) May give notice
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`to the filing party that no action will be taken by the Court on the matter raised in the paper until
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`the defect is corrected; or (b) Take such other action as the Court deems appropriate.” Rule
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`5.1.2. In addition, Realtime did not list the ’908 Patent on the AO 120 form filed with the Court
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`(D.I. 3) (“Report of the Filing . . . of an Action Regarding a Patent . . .”). At the very least,
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`Realtime should be required to amend its Complaint to meet the filing requirements before it is
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`permitted to go forward with its action.
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`All Claims Should Be Dismissed Under Section 101
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`E.
`Fortinet hereby joins and incorporates by reference the arguments made in support of
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`invalidity of the asserted patents under 35 U.S.C. § 101 in the motions to dismiss filed in
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`Realtime Data LLC d/b/a/ IXO v. IXSystems, Inc., C.A. No. 17-1769-GMS, D.I. 7, 8; Realtime
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`Data LLC d/b/a IXO v. Pure Storage, Inc., C.A. No. 17-1544-GMS, D.I. 10, 11, 12, 15; and
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`Realtime Data LLC d/b/a IXO v. Commvalut Systems, Inc., C.A. No. 17-925-GMS, D.I. 13, 14,
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`22 and moves to dismiss each of the asserted patents on those grounds.
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`8
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`

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`Case 1:17-cv-01635-CFC Document 12 Filed 02/20/18 Page 12 of 13 PageID #: 294
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`VI. CONCLUSION
`For the reasons stated above, Fortinet’s motion should be granted and Realtime’s
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`
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`
`
`MORRIS, NICHOLS, ARSHT & TUNNELL LLP
`
`/s/ Jack B. Blumenfeld
`
`
`
`
`Jack B. Blumenfeld (#1014)
`Brian P. Egan (#6227)
`1201 North Market Street
`P.O. Box 1347
`Wilmington, DE 19899
`(302) 658-9200
`jblumenfeld@mnat.com
`began@mnat.com
`
`Attorneys for Defendant
`
`Complaint should be dismissed.
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`
`
`OF COUNSEL:
`
`John (Jay) Neukom
`William J. Casey
`SKADDEN, ARPS, SLATE, MEAGHER &
` FLOM LLP
`525 University Avenue
`Palo Alto, CA 94301
`(650) 470-4500
`
`February 20, 2018
`
`9
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`

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`Case 1:17-cv-01635-CFC Document 12 Filed 02/20/18 Page 13 of 13 PageID #: 295
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`
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`CERTIFICATE OF SERVICE
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`I hereby certify that on February 20, 2018, I caused the foregoing to be
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`electronically filed with the Clerk of the Court using CM/ECF, which will send notification of
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`such filing to all registered participants.
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`I further certify that I caused copies of the foregoing document to be served on
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`February 20, 2018, upon the following in the manner indicated:
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`VIA ELECTRONIC MAIL
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`VIA ELECTRONIC MAIL
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`/s/ Jack B. Blumenfeld
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`
`
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`Jack B. Blumenfeld (#1014)
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`Stephen B. Brauerman, Esquire
`Sara E. Bussiere, Esquire
`BAYARD, P.A.
`600 North King Street, Suite 400
`Wilmington, DE 19801
`Attorneys for Plaintiff
`
`Mark A. Fenster, Esquire
`Paul A. Kroeger, Esquire
`Reza Mirzaie, Esquire
`Stanley H. Thompson, Jr., Esquire
`RUSS, AUGUST & KABAT
`12424 Wilshire Boulevard, 12th Floor
`Los Angeles, CA 90025-1031
`Attorneys for Plaintiff
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