throbber
Case 1:20-cv-01243-CFC Document 23 Filed 08/26/22 Page 1 of 29 PageID #: 996
`
`
`Plaintiffs,
`
`v.
`
`
`
`
`
`
`C.A. No. 20-1243 (CFC)
`
`
`
`KONINKLIJKE PHILIPS N.V. and
`PHILIPS NORTH AMERICA LLC,
`
`
`
`
`
`
`
`
`IN THE UNITED STATES DISTRICT COURT
`FOR THE DISTRICT OF DELAWARE
`
`)
`)
`)
`)
`)
`)
`)
`
`)
`INTEL CORP.,
`)
`
`)
`Defendant.
`
`
`
`DEFENDANT INTEL CORPORATION’S OPENING BRIEF IN SUPPORT
`OF ITS RENEWED MOTION TO DISMISS PLAINTIFFS’ CLAIMS
`FOR INDIRECT INFRINGEMENT
`
`MORRIS, NICHOLS, ARSHT & TUNNELL LLP
`Jack B. Blumenfeld (#1014)
`Jennifer Ying (#5550)
`1201 North Market Street
`P.O. Box 1347
`Wilmington, DE 19899
`(302) 658-9200
`jblumenfeld@morrisnichols.com
`jying@morrisnichols.com
`
`Attorneys for Defendant Intel Corp.
`
`
`
`
`
`
`
`OF COUNSEL:
`
`Chad S. Campbell
`PERKINS COIE LLP
`2901 N. Central Avenue, Suite 2000
`Phoenix, AZ 85012-2788
`(602) 351-8000
`
`Ryan J. McBrayer
`Christina J. McCullough
`James S. Miller
`PERKINS COIE LLP
`1201 Third Avenue, Suite 4900
`Seattle, WA 98101-3099
`(206) 359-8000
`
`
`
`
`

`

`Case 1:20-cv-01243-CFC Document 23 Filed 08/26/22 Page 2 of 29 PageID #: 997
`
`
`Sarah E. Piepmeier
`PERKINS COIE LLP
`505 Howard Street, Suite 1000
`San Francisco, CA 94105-3204
`(415) 344-7000
`
`Kourtney Mueller Merrill
`PERKINS COIE LLP
`1900 Sixteenth Street, Suite 1400
`Denver, CO 80202-5255
`(302) 291-2300
`
`August 26, 2022
`
`
`
`

`

`Case 1:20-cv-01243-CFC Document 23 Filed 08/26/22 Page 3 of 29 PageID #: 998
`
`
`TABLE OF CONTENTS
`
`Page
`NATURE AND STATE OF THE PROCEEDINGS ..................................... 1 
`SUMMARY OF ARGUMENT ...................................................................... 2 
`STATEMENT OF FACTS ............................................................................. 4 
`A. 
`Filing of this action............................................................................... 4 
`B. 
`Philips’ indirect infringement allegations ............................................ 4 
`C. 
`The 1224 ITC Investigation ................................................................. 7 
`D. 
`The ’809 and ’186 patents .................................................................... 9 
`IV.  ARGUMENT ................................................................................................ 12 
`A. 
`Philips’ Amended Complaint fails to state a plausible
`claim for indirect infringement .......................................................... 13 
`The ITC’s noninfringement determination renders
`implausible the allegation that Intel believes it is
`inducing or contributing to its customer’s alleged
`infringement ....................................................................................... 16 
`Philips’ indirect infringement claims should be dismissed
`without leave to amend ...................................................................... 19 
`CONCLUSION ............................................................................................. 21 
`
`I. 
`II. 
`III. 
`
`V. 
`
`
`B. 
`
`C. 
`
`-i-
`
`

`

`Case 1:20-cv-01243-CFC Document 23 Filed 08/26/22 Page 4 of 29 PageID #: 999
`
`
`TABLE OF AUTHORITIES
`Cases ............................................................................................................... Page(s)
`AgroFresh Inc. v. Essentiv LLC,
`C.A. No. 16-662, 2019 WL 350620 (D. Del. Jan. 29, 2019) ....................... 12, 15
`Aro Mfg. Co. v. Convertible Top Replacement Co.,
`377 U.S. 476, 845 S. Ct. 1526, 12 L. Ed. 2d 457 (1964) ................................... 13
`Ashcroft v. Iqbal,
`556 U.S. 662 (2009) ................................................................................ 12, 13, 17
`Bell Atl. Corp. v. Twombly,
`550 U.S. 544 (2007) ............................................................................................ 12
`Commil USA, LLC v. Cisco Sys., Inc.,
`575 U.S. 632, 135 S. Ct. 1920 (2015) ................................................................. 13
`Cornell Univ. v. Illumina, Inc.,
`No. 10-433-LPS-MPT, 2017 WL 89165 (D. Del. Jan. 10, 2017) ...................... 19
`Dodots Licensing Sols. LLC v. Lenovo Holding Co., Inc.,
`C.A. No. 18-098, 2018 WL 6629709 (D. Del. Dec. 19, 2018) .................... 12, 16
`Dynamic Data Techs., LLC v. Brightcove Inc.,
`2020 WL 4192613 (D. Del. July 21, 2020) ........................................................ 14
`
`E.I. Du Pont de Nemours & Co. v. Heraeus Precious Metals N. Am.
`Conshohocken LLC,
`No. 11-773-SLR, 2013 WL 4047648 (D. Del. Aug. 8, 2013) ............................ 20
`Enzo Life Scis., Inc. v. Digene Corp.,
`270 F. Supp. 2d 484 (D. Del. 2003) .................................................................... 19
`Express Mobile, Inc. v. Squarespace, Inc.,
`C.A. No. 20-1163-RGA, 2021 WL 3772040 (D. Del. Aug. 25,
`2021) ................................................................................................................... 14
`Global-Tech Appliances, Inc. v. SEB S.A.,
`563 U.S. 754, 131 S. Ct. 2060, L.Ed. 2d 1167 (2011) ....................................... 13
`
`-ii-
`
`

`

`Case 1:20-cv-01243-CFC Document 23 Filed 08/26/22 Page 5 of 29 PageID #: 1000
`
`TABLE OF AUTHORITIES
`(continued)
`
`Page(s)
`
`Hoai Dang v. Samsung Elecs. Co.,
`No. 14-CV-00530-LHK, 2018 WL 6308738 (N.D. Cal. Dec. 3,
`2018), aff'd sub nom. Dang v. Samsung Elecs. Co., Ltd, 803 F.
`App’x 137 (9th Cir. 2020) .................................................................................. 17
`IPtronics Inc. v. Avago Techs. U.S., Inc.,
`No. 14-CV-05647-BLF, 2015 WL 5029282 (N.D. Cal. Aug. 25,
`2015) ................................................................................................................... 17
`Koloni Reklam, Sanayi, Ticaret LTD/STI v. Viacom, Inc.,
`No. 16-285-SLR, 2017 WL 726660 (D. Del. Feb. 23, 2017) ............................. 17
`TriPlay, Inc. v. WhatsApp Inc.,
`C.A. No. 13-1703, 2018 WL 1479027 (D. Del. Mar. 27, 2018) ........................ 12
`Wilkerson v. New Media Tech. Charter Sch. Inc.,
`522 F.3d 315 (3d Cir. 2008) ............................................................................... 12
`ZapFraud, Inc. v. Barracuda Networks, Inc.,
`528 F. Supp. 3d 247 (D. Del. 2021) ........................................................ 13, 14, 20
`Statutes
`28 U.S.C. § 1659 ........................................................................................................ 1
`Rules
`Fed. R. Civ. P. 12(b)(6) ........................................................................................ 2, 19
`
`
`
`-iii-
`
`

`

`Case 1:20-cv-01243-CFC Document 23 Filed 08/26/22 Page 6 of 29 PageID #: 1001
`
`
`I.
`
`NATURE AND STATE OF THE PROCEEDINGS
`Plaintiffs Koninklijke Philips N.V. and Philips North America LLC
`
`(collectively, “Philips”) filed this patent infringement lawsuit against Intel
`
`Corporation (“Intel”) on September 17, 2020, without warning. The next day Philips
`
`also filed a complaint with the U.S. International Trade Commission (“ITC”),
`
`naming as respondents Intel, its customers, and others, in which the ITC instituted
`
`as the 1224 Investigation. Miller Decl., Ex. A (Complaint in 337-TA-1224, EDIS
`
`Doc. No. 720008). The Court stayed this case pending ITC resolution, as required
`
`by 28 U.S.C. § 1659, because Philips asserted the same infringement claims here
`
`and in the 1224 Investigation.1 D.I. 9. In a March 23, 2022 Opinion, the ITC found
`
`that Intel processors and Intel-based computers do not infringe and terminated the
`
`337-TA-1224 Investigation. Miller Decl., Ex. B (Commission Op., EDIS Doc. No.
`
`769212). Philips did not appeal.
`
`In view of the ITC’s noninfringement findings, Intel moved to dismiss
`
`Philips’ induced and contributory infringement claims from this case for failure to
`
`
`1 The Court also stayed five other suits that Philips filed in this district against other
`respondents named in the ITC investigation. Koninklijke Philips N.V. et al v. Dell
`Technologies, Inc. et al, C.A. No. 20-1240-CFC, D.I. 9 (July 26, 2021); Koninklijke
`Philips N.V. et al v. HP Inc., C.A. No. 20-1241-CFC, D.I. 14 (July 26, 2021);
`Koninklijke Philips N.V. et al v. Lenovo Group Ltd. Et al, C.A. No. 20-1242-CFC,
`D.I. 14 (July 26, 2021); Koninklijke Philips N.V. et al v. MediaTek Inc. et al, C.A.
`No. 20-1246-CFC, D.I. 9 (July 26, 2021); Koninklijke Philips N.V. et al v. Realtek
`Semiconductor Corp., C.A. No. 20-1247-CFC, D.I. 16 (July 26, 2021).
`
`-1-
`
`

`

`Case 1:20-cv-01243-CFC Document 23 Filed 08/26/22 Page 7 of 29 PageID #: 1002
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`
`state a claim under Fed. R. Civ. P. 12(b)(6). D.I. 14, 15. Rather than address that
`
`motion, Philips filed a First Amended Complaint (“Amended Complaint”). D.I. 21.
`
`Because the new allegations of the Amended Complaint still fail to state a plausible
`
`claim of indirect infringement, Intel renews its motion.
`
`II.
`
`SUMMARY OF ARGUMENT
`Philips’ claims for indirect infringement (both induced and contributory)
`
`should be dismissed for failure to state a claim that is facially plausible. Like the
`
`original, Philips’ Amended Complaint still fails to allege facts sufficient to support
`
`a reasonable inference that Intel acted with knowledge that: (i) its processors and
`
`firmware have no substantial noninfringing use, and (ii) it induces customers to
`
`make computers that directly infringe the asserted patents. Without such knowledge,
`
`Intel cannot be indirectly liable for the purported infringement of its customers’
`
`computers.
`
`First, the Amended Complaint (like the original) asserts that Intel has actual
`
`notice of the alleged infringement based on the filing of the original and Amended
`
`Complaints and a letter Philips sent to Intel the same day as the original complaint.
`
`Courts in this district have repeatedly held that such truncated notice cannot provide
`
`a plausible basis for alleging the required knowledge and particular intent required
`
`for indirect patent infringement. The Amended Complaint’s new assertions still do
`
`not satisfy these requirements. Philips points to letters, lawsuits, and settlements
`
`-2-
`
`

`

`Case 1:20-cv-01243-CFC Document 23 Filed 08/26/22 Page 8 of 29 PageID #: 1003
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`involving allegations of infringement by others (not Intel) under one of the two
`
`asserted patents and to subpoenas served to Intel in those cases. But Philips does
`
`not (and cannot) allege that any of those papers or events stated that Intel’s
`
`processors and driver code lack noninfringing uses or that Intel’s supply of those
`
`components was a knowing inducement of downstream infringement. As Philips
`
`confirmed through testimony during the ITC investigation, it sued Intel without
`
`warning.
`
`Second, Philips’ knowledge and intent allegations also are implausible for a
`
`more fundamental and unavoidable reason. When assessing facial plausibility of
`
`complaint allegations, context matters. And the context here is that the ITC—after
`
`full fact and expert discovery, a week-long evidentiary hearing, and voluminous
`
`briefing—found that all of Intel’s noninfringement defenses are correct. Although
`
`the Amended Complaint tries to allege knowledge of the alleged infringement based
`
`on Intel’s post-complaint adjustments to the HDCP 2.3 specification and its
`
`submission of “design-around” driver code implementations, the ITC found all Intel
`
`implementations, including the “design-around” code, to be noninfringing. Philips
`
`cannot allege any facts that plausibly suggest that Intel actually believes the ITC was
`
`wrong and that the accused Intel processors, driver code, or customer computers
`
`infringe. Given that Philips already amended its claims once, any further attempted
`
`-3-
`
`

`

`Case 1:20-cv-01243-CFC Document 23 Filed 08/26/22 Page 9 of 29 PageID #: 1004
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`amendment would still be futile. The indirect infringement claims against Intel
`
`should thus be dismissed without leave to amend.
`
`III. STATEMENT OF FACTS
`A.
`Filing of this action
`Philips filed this case on September 17, 2020, asserting two related patents
`
`directed to secure authenticated distance measurement between transmitting and
`
`receiving devices—U.S. Patent Nos. 9,436,809 and 10,091,186 (the “’809 and ’186
`
`patents”). D.I. 1. Philips has identified as “Accused Products” “digital video-
`
`capable devices, integrated circuits, and associated firmware designed to facilitate
`
`digital video-capable playback supporting the HDCP 2.0 protocol and above,” which
`
`the Amended Complaint refers to as “HDCP 2+.” D.I. 21, ¶ 19. The examples the
`
`Amended Complaint lists include laptop, desktop, and server devices that
`
`incorporate Intel’s 6th, 7th, 8th, 9th, and 10th Generation Processors and firmware
`
`associated with those processors. Id.
`
`“HDCP” refers to the High-bandwidth Digital Content Protection protocol, a
`
`form of digital copy protection developed by Intel and widely licensed to makers of
`
`computers, streaming devices, monitors, TVs, and related equipment. See
`
`https://www.digital-cp.com/.
`
`B.
`Philips’ indirect infringement allegations
`Philips’ Amended Complaint asserts that Intel received “actual notice” of the
`
`’809 and ’186 patents “by way of a letter to Defendant dated September 17, 2020”—
`
`-4-
`
`

`

`Case 1:20-cv-01243-CFC Document 23 Filed 08/26/22 Page 10 of 29 PageID #: 1005
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`the same date Philips filed the original Complaint—and through the filing of the
`
`original complaint and then the Amended Complaint. D.I. 21 at ¶ 16. Philips alleges
`
`that Intel induced and materially contributed to its customers’ alleged infringement
`
`by supplying its “digital video-capable integrated circuits and associated firmware
`
`for use within digital video-capable devices such as laptops and desktops,” including
`
`advertising that the integrated circuits and firmware provide “HDCP 2.2 support,”
`
`and providing unspecified user instructions about how to use the accused Intel
`
`processors and firmware. D.I. 21, ¶¶ 30, 31.
`
`Endeavoring to shore up the inadequate knowledge and intent allegations, the
`
`Amended Complaint attempts to add three sources of Intel’s purported pre-suit
`
`knowledge that its processors and firmware have no noninfringing uses and that by
`
`supplying them, Intel causes its customers to infringe under the ’809 patent. First,
`
`Philips identifies November 2016 amended complaints in litigations it filed against
`
`third-parties ASUS, Acer, and HTC. Second, Philips identifies subpoenas served to
`
`Intel in those cases regarding the HDCP specifications. D.I. 21, ¶ 21. And third,
`
`Philips identifies alleged letters it sent to third-parties Lenovo and LG, not Intel.
`
`Notably, Philips does not allege that any of the letters, the lawsuits, or the subpoenas
`
`claimed that Intel processors and firmware lack noninfringing uses, or that Intel was
`
`inducing customers to infringe the ’809 or ’186 patents. D.I. 21, ¶¶ 22-23. As the
`
`publicly-available amended complaints confirm, Philips did not accuse Intel of
`
`-5-
`
`

`

`Case 1:20-cv-01243-CFC Document 23 Filed 08/26/22 Page 11 of 29 PageID #: 1006
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`inducing the alleged infringement in those prior cases or allege that Intel component
`
`products have no noninfringing uses. See Koninklijke Philips N.V. et al v. Acer Inc.
`
`et al, C.A. No. 15-1170, D.I. 82 (D. Del. Nov. 23, 2016); Koninklijke Philips N.V.
`
`et al v. ASUSTeK Computer Inc. et al, C.A. No. 15-1125-GMS, D.I. 76 (D. Del. Nov.
`
`23, 2016); Koninklijke Philips N.V. et al v. HTC Corp. et al, C.A. No. 15-1126-GMS,
`
`D.I. 73 (D. Del. Nov. 23, 2016). In fact, the amended complaints in the prior
`
`litigations alleged that it was those third parties, i.e., ASUS, Acer, and HTC, not
`
`Intel, that induced the alleged infringement of the ’809 patent. Koninklijke Philips
`
`N.V. et al v. Acer Inc. et al, C.A. No. 15-1170, D.I. 82 at ¶ 151; Koninklijke Philips
`
`N.V. et al v. ASUSTeK Computer Inc. et al, C.A. No. 15-1125-GMS, D.I. 76 at ¶ 151;
`
`Koninklijke Philips N.V. et al v. HTC Corp. et al, C.A. No. 15-1126-GMS, D.I. 73
`
`at ¶ 151. Regarding the ’186 patent, citing no factual support whatsoever, the
`
`Amended Complaint nevertheless speculates that Intel knew about the ’186 patent
`
`when it issued in 2018, because Intel is a large corporation. D.I. 21, ¶ 24.
`
`The Amended Complaint concludes with two counts directed to the ’809 and
`
`’186 patents, respectively. D.I. 21, ¶¶ 35-44, 45-54. Each count alleges that Intel
`
`provided unspecified instructions, user guides, and other documentation about the
`
`use and operation of the Accused Products. D.I. 21, ¶¶ 41, 51. The counts also
`
`incorporate claim charts at Exhibits C and D to the Complaint, which refer to
`
`exemplary Dell laptop computers containing Intel processors and firmware capable
`
`-6-
`
`

`

`Case 1:20-cv-01243-CFC Document 23 Filed 08/26/22 Page 12 of 29 PageID #: 1007
`
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`of supporting HDCP 2.2 transmission. D.I. 21, Exs. C & D. The charts cite to
`
`various sections of the HDCP 2.2 specification, but do not identify any facts or
`
`sources of Intel’s purported pre-suit knowledge of induced or contributory
`
`infringement. Id.
`
`C. The 1224 ITC Investigation
`The day after filing this case, on September 18, 2020, Philips filed its ITC
`
`complaint naming Intel and others as respondents. Miller Decl., Ex. A. As in this
`
`action, the ITC complaint asserted the ’809 and ’186 patents against Intel’s
`
`processors and associated firmware and the Dell, Lenovo, and HP computers that
`
`incorporate those processors and firmware and that support HDCP 2.0 and higher
`
`protocol transmissions. Id. at ¶¶ 61, 106. Philips alleged that Intel induced and
`
`contributed to its customers’ infringement by furnishing processors and firmware
`
`for HDCP-capable laptop computers sold by Dell, HP, and Lenovo. Id. at ¶¶ 92-95.
`
`After fact and expert discovery concluded, Philips dropped the ’809 patent
`
`and subsequently tried the case on the ’186 patent to the Administrative Law Judge
`
`(“ALJ”) over five days of live testimony and exhibits, which concluded with more
`
`than 800 pages of briefing. The ALJ’s Initial Determination found that, for
`
`commercially released products, the accused HDCP 2.0 and higher-capable Dell,
`
`HP, and Lenovo laptop computers that incorporate Intel processors and firmware do
`
`not satisfy the asserted claims of the ’186 patent and thus Intel has not infringed
`
`-7-
`
`

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`Case 1:20-cv-01243-CFC Document 23 Filed 08/26/22 Page 13 of 29 PageID #: 1008
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`directly or indirectly. Miller Decl., Ex. D at 52-55 (Initial Determination, 337-TA-
`
`1224, EDIS No. 758903). The ALJ adopted one of two noninfringement defenses
`
`presented by Intel. Id. at 45. The ALJ further found that Philips had failed to prove
`
`indirect infringement because it only provided perfunctory evidence of knowledge
`
`of the patents occurring on the same day as the filing of the investigation, presented
`
`no evidence as to whether Intel understood its actions infringed or that “Intel
`
`specifically intended that its customers infringe a claim of the ’186 patent,” and
`
`provided no evidence that the Intel processors have no noninfringing uses. Miller
`
`Decl., Ex. D at 54-55; Miller Decl., Ex. B at 9-10. After reviewing the record and
`
`further briefing by Philips and respondents, the full Commission concluded that none
`
`of the accused Intel processors or customer computers infringe, expressly adopted
`
`all of Intel’s noninfringement defenses, and terminated the investigation. Miller
`
`Decl., Ex. B at 14-25, 34-40.
`
`Attempting to blunt the impact of the ITC’s decision in undercutting any basis
`
`Philips relied on to allege that Intel purportedly knows its processors and associated
`
`firmware have no noninfringing uses and induces downstream infringement, the
`
`Amended Complaint points to the modification of the HDCP 2.3 specification and
`
`Intel’s submission of alternative driver code designs for adjudication as part of the
`
`investigation. D.I. 21, ¶¶ 27-28. Although the ALJ initially reasoned that one of the
`
`alternative driver code designs would infringe (even though the code as shipped was
`
`-8-
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`

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`Case 1:20-cv-01243-CFC Document 23 Filed 08/26/22 Page 14 of 29 PageID #: 1009
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`noninfringing), the full Commission unanimously reversed that finding and
`
`concluded that none of Intel’s driver code designs infringe. Miller Decl., Ex. B at
`
`14-25, 34-40.
`
`D. The ’809 and ’186 patents
`The ’809 and ’186 patents are closely related. Both share the same written
`
`description and figures, and, on its face, the ’186 patent claims priority through the
`
`’809 patent to a common original application. Miller Decl., Ex. E at 1-2 (the ’186
`
`patent).
`
`The basic concept is depicted in patent Figure 1 (annotated below). Ex. E at
`
`5. A computer with protected content to transmit is shown in the center of a circle,
`
`which represents the maximum distance from the transmitting computer that a
`
`receiving computer may be and still receive the
`
`protected content. Computers inside the circle
`
`(green) are allowed to receive the protected
`
`content, while computers outside the circle
`
`(pink) are too far away for permitted access. To
`
`implement this arrangement, the patents present
`
`a
`
`two-part
`
`approach.
`
` First,
`
`during
`
`authentication, the transmitting computer receives a digital certificate from the
`
`receiving device where the certificate indicates or includes information that can be
`
`-9-
`
`

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`Case 1:20-cv-01243-CFC Document 23 Filed 08/26/22 Page 15 of 29 PageID #: 1010
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`used to determine whether the receiving device is compliant with compliance rules.
`
`Miller Decl., Ex. E at 2:43-49, 3:60-65; Miller Decl., Ex. F at 2:38-44, 3:56-61 (the
`
`’809 patent). If so, the transmitting computer uses the time between sending a first
`
`signal and receiving a responsive signal back from the receiving device to measure
`
`the distance. Miller Decl., Ex. E at 2:61-3:19, 4:36-48, 5:39-50; Ex. F at 2:56-3:14,
`
`4:32-44, 5:36-47.
`
`The claims of the ’809 and ’186 patents are very similar, and all require that
`
`the transmitting computer is arranged (i) to receive a certificate that indicates or
`
`includes information for determining whether the receiving device is compliant with
`
`compliance rules (highlighted in yellow). Compare Miller Decl., Ex. E at 7:11-20;
`
`Ex. F at 7:13-15. The claims further require that the transmitter be arranged (ii) to
`
`compare the round trip time of first and second signals exchanged between the
`
`devices to ensure that the elapsed time does not exceed a predetermined time
`
`(highlighted in green). Miller Decl., Ex. E at 7:16-20; Ex. F at 7:23-25.
`
`’186 Patent Claim 1
`1. A first device for controlling delivery
`of protected content to a second device,
`the first device comprising a processor
`circuit, the processor circuit arranged to
`execute instructions, the instructions
`arranged to:
`receive a second device certificate
`from the second device prior to
`sending a first signal;
`
`’809 Patent Claim 1
`1. A first device for controlling
`delivery of protected content to a
`second device, the first device
`comprising:
`a memory;
`a processor, said processor arranged
`to:
`receive a certificate of the second
`device, the certificate providing
`
`-10-
`
`

`

`Case 1:20-cv-01243-CFC Document 23 Filed 08/26/22 Page 16 of 29 PageID #: 1011
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`
`provide the first signal to the second
`device when the second device
`certificate indicates that the second
`device is compliant with at least one
`compliance rule;
`receive a second signal from the
`second device after providing the
`first signal; and
`provide the protected content to the
`second device when the second
`signal is derived from a secret and a
`time between the providing of the
`first signal and the receiving of the
`second signal is less than a
`predetermined time,
`wherein the secret is known by the
`first device.
`
`
`
`information regarding the second
`device;
`determine whether the second device
`is compliant with a set of
`compliance rules utilizing said
`information provided in said
`certificate;
`provide a first signal to the second
`device depending when the second
`device is determined to be compliant
`with the set of compliance rules;
`receive a second signal from the
`second device after providing the
`first signal;
`determine whether the second signal
`is derived from a secret known by
`the first device;
`determine whether a time difference
`between providing the first signal
`and receiving the second signal is
`less than a predetermined time; and
`allow the protected content to be
`provided to the second device when
`at least the second signal is
`determined to be derived from the
`secret and the time difference is less
`than the predetermined time.
`
`
`
`In the 1224 Investigation, the Commission agreed with Intel that the digital
`
`certificates used in HDCP 2.0 and higher transmissions include a public encryption
`
`key and a serial number, but lack information or an indication of whether the
`
`receiving device does or does not obey one or more compliance rules. Miller Decl.,
`
`Ex. B at 17-25. The Commission further agreed with Intel that the accused Intel-
`
`based products are not arranged to measure the round trip time when first and second
`
`-11-
`
`

`

`Case 1:20-cv-01243-CFC Document 23 Filed 08/26/22 Page 17 of 29 PageID #: 1012
`
`
`signals are exchanged or to compare such elapsed time to a predetermined time. Id.
`
`at 33-40. For both reasons, the Commission concluded that the Intel and customer
`
`accused products do not infringe the ’186 patent. Id. at 2, 41.
`
`IV. ARGUMENT
`To plead a claim for patent infringement, Philips’ complaint must contain
`
`“sufficient factual matter, accepted as true, to state a claim to relief that is plausible
`
`on its face.” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (internal quotations and
`
`citation omitted). This requires more than “labels and conclusions, and a formulaic
`
`recitation of the elements of a cause of action.” Bell Atl. Corp. v. Twombly, 550 U.S.
`
`544, 555 (2007); Dodots Licensing Sols. LLC v. Lenovo Holding Co., Inc., C.A. No.
`
`18-098, 2018 WL 6629709, at *1 (D. Del. Dec. 19, 2018) (holding that it is improper
`
`to accept as true “bald assertions, unsupported conclusions or unwarranted
`
`inferences”). Allegations that “simply parrot the statutory language” fail to state a
`
`plausible claim of indirect infringement. AgroFresh Inc. v. Essentiv LLC, C.A. No.
`
`16-662, 2019 WL 350620, at *5 (D. Del. Jan. 29, 2019). Rather, “‘the complaint
`
`must state enough facts to raise a reasonable expectation that discovery will reveal
`
`evidence of each necessary element’ of a plaintiff’s claim.” TriPlay, Inc. v.
`
`WhatsApp Inc., C.A. No. 13-1703, 2018 WL 1479027, at *3 (D. Del. Mar. 27, 2018)
`
`(quoting Wilkerson v. New Media Tech. Charter Sch. Inc., 522 F.3d 315, 321 (3d
`
`Cir. 2008)). Assessing plausibility is “a context-specific task that requires the
`
`-12-
`
`

`

`Case 1:20-cv-01243-CFC Document 23 Filed 08/26/22 Page 18 of 29 PageID #: 1013
`
`
`reviewing court to draw on its judicial experience and common sense.” Iqbal, 556
`
`U.S. at 678.
`
`A.
`
`Philips’ Amended Complaint fails to state a plausible claim
`for indirect infringement
`“Claims of
`indirect
`infringement—that
`
`is,
`
`induced or contributory
`
`infringement—require proof that the defendant’s conduct occurred after the
`
`defendant (1) knew of the existence of the asserted patent and (2) knew that a third
`
`party’s acts constituted infringement of the patent.” ZapFraud, Inc. v. Barracuda
`
`Networks, Inc., 528 F. Supp. 3d 247, 249 (D. Del. 2021) (citing Commil USA, LLC
`
`v. Cisco Sys., Inc., 575 U.S. 632, 135 S. Ct. 1920, 1926 (2015); Global-Tech
`
`Appliances, Inc. v. SEB S.A., 563 U.S. 754, 766, 131 S. Ct. 2060, L.Ed. 2d 1167
`
`(2011); and Aro Mfg. Co. v. Convertible Top Replacement Co., 377 U.S. 476, 488,
`
`845 S. Ct. 1526, 12 L. Ed. 2d 457 (1964)).
`
`Philips’ Amended Complaint does not allege facts that plausibly support an
`
`inference that Intel had actual pre-suit knowledge of Philips’ indirect infringement
`
`claims against it. Nor do Philips’ allegations plausibly support an inference that Intel
`
`subjectively believed that it was inducing customers infringe the ’809 or ’186 patents
`
`by using accused Intel processors and firmware to make computers capable of HDCP
`
`2.0 or higher transmission, or that its processors and firmware have no substantial
`
`noninfringing uses.
`
`-13-
`
`

`

`Case 1:20-cv-01243-CFC Document 23 Filed 08/26/22 Page 19 of 29 PageID #: 1014
`
`
`Philips’ original Complaint and contemporaneous notice letter cannot serve
`
`as a plausible basis to infer that Intel had the requisite knowledge or intent for
`
`indirect infringement before this lawsuit began. See ZapFraud, Inc., 528 F. Supp.
`
`3d at 250, 252; Dynamic Data Techs., LLC v. Brightcove Inc., 2020 WL 4192613,
`
`at *3 (D. Del. July 21, 2020) (dismissing induced infringement claims where
`
`requisite knowledge of infringement was purportedly provided by the complaint);
`
`Express Mobile, Inc. v. Squarespace, Inc., C.A. No. 20-1163-RGA, 2021 WL
`
`3772040 (D. Del. Aug. 25, 2021) (letter sent one day before the complaint could not
`
`plausibly support indirect infringement claims). Nor did filing the Amended
`
`Complaint alter that outcome. ZapFraud, 528 F. Supp. 3d at 252 (allegation of intent
`
`for indirect infringement may not be based solely “on the content of [an amended]
`
`complaint or a prior version of the complaint filed in the same lawsuit”).
`
`The allegations regarding pre-suit notice and intent likewise do not recite facts
`
`that plausibly suggest Intel believed its products are specially adapted for
`
`infringement or knew that by supplying its products it was inducing customers to
`
`infringe. As alleged, the prior litigation and letters were directed to, and alleged
`
`infringement by, ASUS, Acer, HTC, Lenovo, and LG, not by Intel. The Amended
`
`Complaint mentions no indirect infringement allegations raised against Intel.
`
`Moreover, the prior litigation complaints that Philips cites further confirm that those
`
`lawsuits did not allege that Intel’s processors and associated firmware lack
`
`-14-
`
`

`

`Case 1:20-cv-01243-CFC Document 23 Filed 08/26/22 Page 20 of 29 PageID #: 1015
`
`
`noninfringing uses, or that Intel was knowingly inducing alleged infringement by
`
`others. If Philips had such a contention, its patent assertion and litigation behavior
`
`belied such as a position. As Philips has acknowledged, the filing of this action was
`
`the first time Philips raised and presented infringement claims to Intel. See Miller
`
`Decl. Ex. G (excerpt from the July 19, 2021, Open Session ITC Hearing Transcript)
`
`at 287:22-25 (“Q: And you see that he testified that Philips did not speak with Intel
`
`. . . before bringing this case right? A: Yes, I see that.”).
`
`The Amended Complaint’s other indirect infringement allegations do not
`
`close the pleading gap. Philips alleges that Intel advertises its processors and
`
`firmware for use in laptops and desktops that support HDCP 2.2; that Intel furnishes
`
`user guides and instructions about how to incorporate its processors and firmware
`
`into accused computers; and that Intel knows that “Exemplary Customers” Dell, HP,
`
`and Lenovo do in fact incorporate Intel processors with HDCP support in their
`
`computer products. D.I. 1, ¶¶ 19-23, 39-42. But such allegations do not amount to
`
`an inference that Intel actually knew that its customers were infringing or that its
`
`processors and firmware have no noninfringing uses. Philips cannot state a claim
`
`by merely parroting the intent elements of induced or contributory infringement. See
`
`AgroFresh, 2019 WL 350620, at *5 (allegations tracking statutory language were
`
`insufficient for contributory infringement claim given no pleaded facts would “allow
`
`an inference that the components sold or offered for sale have no substantial non-
`
`-15-
`
`

`

`Case 1:20-cv-01243-CFC Document 23 Filed 08/26/22 Page 21 of 29 PageID #: 1016
`
`
`infringing uses”); Dodots Licensing Sols., 2018 WL 6629709, at *1 (generic
`
`references to “marketing materials, brochures, product manuals, and [Defendants’]
`
`website could not support inducement claim because they do not “plausibly
`
`suggest[] Defendants intend to induce infringement of the Patents-in-Suit”).
`
`Because the Amended Complaint has alleged no plausible basis to infer the
`
`actual knowledge or specific intent Intel must have for induced or contributory
`
`infringement, the indirect infringement claims should be dismissed.
`
`B.
`
`renders
`ITC’s noninfringement determinatio

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