Case 1:23-cv-00758-GBW Document 22-1 Filed 12/15/23 Page 1 of 7 PageID #: 1169
`Case 1:23-cv-00758-GBW Document 22-1 Filed 12/15/23 Page 1 of 7 PagelD #: 1169
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`EXHIBIT 1
`EXHIBIT 1
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`Case 1:22-cv-00751-GBW Document 95 Filed 02/02/23 Page 1 of 6 PageID #: 2804Case 1:23-cv-00758-GBW Document 22-1 Filed 12/15/23 Page 2 of 7 PageID #: 1170
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`IN THE UNITED STATES DISTRICT COURT
`FOR THE DISTRICT OF DELAWARE
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`TORCHLIGHT TECHNOLOGIES LLC,
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`Plaintiff,
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`V.
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`C.A. No. 22-751-GBW
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`DAIMLER AG, MERCEDES-BENZ USA,
`LLC, VOLKSWAGEN AG, AUDI AG,
`AUDI OF AMERICA, LLC, PORSCHE AG,
`and PORSCHE CARS NORTH AMERICA,
`INC.,
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`Defendants.
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`UNSEALED 2/24/2023
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`MEMORANDUM ORDER
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`Pending before this Court is Plaintiff Torchlight Technologies LLC’s (“Torchlight”)
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`Motion for Leave to File a Second Amended Complaint (“SAC”) pursuant to Federal Rule of Civil
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`Procedure 15(a)(2). ^ See D.I. 45; 46. Defendants Mercedes-Benz USA, LLC (“MBUSA”),
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`Porsche Cars North America, Inc. (“PCNA”), and Audi of America, LLC (“Audi America”)
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`(collectively, “Defendants”) oppose Torchlight’s Motion on the grounds that such an amended
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`pleading would be futile. See D.I. 57; 59; 60. For the reasons explained below, the Court grants
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`Torchlight’s Motion for Leave to File a Second Amended Complaint.
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`1 Torchlight’s First Amended Complaint (“FAC”) was filed on August 26, 2022, and is the
`operative pleading. D.I. 24.
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`1
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`I.
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`LEGAL STANDARD
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`Federal Rule of Civil Procedure 15 provides that, apart from amendments as a matter of
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`course, “a party may amend its pleading only with the opposing party’s written consent or the
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`court’s leave. The court should freely give leave when justice so requires.
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`Fed. R. Civ. P.
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`15(a)(2). “The decision to grant or deny leave to amend lies within the discretion of the court.
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`Compagnie des Grands Hotels d’Afrique SA v. Starwood Cap. Grp. Glob. ILLC, No. CV 18-654-
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`SB-SRF, 2021 WL 6883231, at *4 (D. Del. Feb. 10, 2021) (citations omitted).
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`Leave to amend must generally be granted unless equitable considerations render it
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`otherwise unjust.” Arthur v. Maersk, Inc., 434 F.3d 196, 204 (3d Cir. 2006); see also Foman v.
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`Davis, 371 U.S. 178, 182 (1962).
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`The Third Circuit has adopted a liberal approach to the
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`amendment of pleadings.” Id. “In the absence of undue delay, bad faith, or dilatory motives on
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`the part of the moving party, the amendment should be freely granted, unless it is futile or unfairly
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`prejudicial to the non-moving party.” Id. (citations omitted). An amendment is futile if it “would
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`fail to state a claim upon which relief could be granted.” In re Burlington Coat Factory Sec. Litig.,
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`114 F.3d 1410,1434 (3d Cir. 1997). “The standard for assessing futility is the ‘same standard for
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`legal sufficiency as applies under [Federal] Rule [of Civil Procedure] Rule 12(b)(6).’” Great W
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`Mining & Min. Co. v. Fox Rothschild, LLP, 615 F.3d 159, 175 (3d Cir. 2010) (quoting Shane v.
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`Fauver,2U F.3d 113, 115 (3d Cir. 2000)).
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`IL
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`DISCUSSION
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`Torchlight seeks leave to amend its First Amended Complaint pursuant to Federal Rule of
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`Civil Procedure 15(a)(2) and Delaware Local Rule 15.1, arguing that its proposed Second
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`Amended Complaint merely “address[es] technical defects” of its operative pleading. D.I. 45 at
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`1. Specifically, Torchlight seeks to amend its FAC to include: (1) “supporting factual allegations
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`2
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`that Torchlight has ‘all substantial rights’ as an exclusive licensee of the Asserted Patents and thus
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`has standing to sue on its own;” and (2) “to aver that Torchlight is making a claim for Defendants’
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`willful ongoing infringement predicated on the notice of infringement provided in the Original
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`Complaint and the FAC.” Id. Torchlight insists that “no prejudice will result if the amendment is
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`allowed because the original Complaint provided notice of Torchlight’s intention to pursue a claim
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`of patent infringement against the defendants, answers have not been filed, and discovery has yet
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`to commence.
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`Id. at 2. Defendants argue that such amendment would be futile because “[t]he
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`proposed SAC does not sufficiently allege or establish that Torchlight has all substantial rights in
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`the Asserted Patents,” and because Torchlight’s “ambiguous reference to willful infringement,
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`without alleging willful infringement, is futile. See D.I. 57; 59; 60.
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`Defendants’ contention that Torchlight lacks “standing to sue alone” is a facial challenge
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`which contests the sufficiency of the pleading. Therefore, “[i]n evaluating whether a complaint
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`adequately pleads the elements of standing, courts apply the standard of reviewing a complaint
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`pursuant to a Rule 12(b)(6) motion to dismiss for failure to state a claim.” In re Schering Plough
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`Corp. Intron/Temodar Consumer Class Action, 678 F.3d 235, 243 (3d Cir. 2012). Here, the Court
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`finds that, when looking only to the sufficiency of the pleadings and not the underlying evidence
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`as required by the Rule 12(b)(6) standard, amendment of the complaint to include “supporting
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`factual allegations that Torchlight has ‘all substantial rights’ as an exclusive licensee of the
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`Asserted Patents and thus has standing to sue on its own” would not be futile. Considering the
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`liberal approach” to amending pleadings, if Torchlight alleges in its SAC that it is an exclusive
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`licensee with all substantial rights in the Asserted Patents, it has indeed asserted standing to sue.
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`Univ. ofS. Florida Rsch. Found., Inc. v. FujiFilm Med. Sys. U.S.A., Inc, 19 F.4th 1315 (Fed. Cir.
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`2021). Consequently, assuming the undisputed aspects of the SAC are sufficient, and taking into
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`3
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`account the liberal approach to amend pleadings. Torchlight has stated a claim upon which relief
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`can be granted sufficient to survive the Rule 12(b)(6) standard. Further, this is Torchlight’s second
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`attempt to amend its complaint and it purportedly does so in good faith “to address technical
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`defects with the pleadings.” D.L 45 at 1. At this early juncture, there are no genuine concerns that
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`Defendants will suffer prejudice as a result of the amendment. Therefore, the Court is inclined to
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`grant Torchlight leave to file its SAC. However, because standing is a threshold requirement in
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`every case, the Court is also inclined to grant Defendant MBUSA’s request to stay the case in all
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`respects except for limited purpose of conducting early discovery related to the threshold issue of
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`standing. See D.L 57 at 5; see also Mithril GP Emp. Feeder LLC v. McKellar, No. 19-2144-RGA,
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`2020 WL 3206555, at *2 (D. Del. June 15, 2020).
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`Turning to Torchlight’s request for leave to amend its pleading “to aver that Torchlight is
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`making a claim for Defendants’ willful ongoing infringement predicated on the notice of
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`infringement provided in the Original Complaint and the FAC,” see D.I. 45 at 1, the Court is also
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`persuaded to allow Torchlight leave to file its SAC to add a claim for willful infringement. The
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`Court acknowledges that there is a disagreement amongst courts, including in this District, about
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`whether a plaintiff can sufficiently plead knowledge of a patent-in-suit in an amended complaint
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`by simply pointing back to the notice that the accused infringer received of the patent’s existence
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`via the filing of a prior complaint in the same case. See, e.g., Wrinkl, Inc. v. Facebook, Inc., No.
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`20-CV-1345-RGA, 2021 WL 4477022, at *6-7 (D. Del. Sept. 30, 2021) (recognizing disagreement
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`as to whether an amended complaint can cite to service of a prior complaint in order to establish
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`the knowledge element for post-suit induced infringement and willful infringement claims, and
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`finding that it can as to induced infringement but not as to willful infringement); Longhorn
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`Vaccines & Diagnostics, LLC v. Spectrum Sols. LLC, 2021 WL 4324508, at *9-10 & nn. 95, 96
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`4
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`(D. Utah Sept. 23, 2021) (recognizing the split on this issue and finding that knowledge of patents
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`gained from an original complaint is sufficient to establish post-filing indirect and willful
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`infringement claims); Ravgen, Inc. v. Ariosa Diagnostics, 7«c., No. 20- 1646-RGA-JLH, 2021 WL
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`3526178, at *4 (D. Del. Aug. 11, 2021) (acknowledging the split and concluding that a party may
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`maintain a claim for willful infringement made in an amended complaint if the accused infringer
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`first gained knowledge of the patent from the original complaint); ZapFraud, Inc. v. Barracuda
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`Networks, Inc., 528 F. Supp. 3d 247, 249-50 (D. Del. 2021) (recognizing the division and
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`concluding that a “complaint itself cannot be the source of the knowledge required to sustain
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`claims of induced infringement and willfulness-based enhanced damages”). However, based
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`solely on the pleadings, the Court finds that Torchlight has at least alleged sufficient facts to push
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`its SAC beyond the bounds of futility. And again, this case is at its early stages, Torchlight
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`purportedly seeks leave in good faith, and there are no genuine concerns that Defendants will suffer
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`prejudice by allowing Torchlight to file its SAC. Thus, the Court will also grant Torchlight leave
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`to file its SAC to add its claim for willful infringement.
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`HI. CONCLUSION
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`For the foregoing reasons, the Court grants Torchlight’s Motion for Leave to File a Second
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`Amended Complaint. Further, subsequent to Torchlight filing its Second Amended Complaint,
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`this case is stayed in all respects for forty-five (45) days except for the limited purpose of
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`conducting early discovery related to the threshold issue of standing. The Court also denies
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`Defendant PCNA’s Motion to Dismiss (D.I. 26), MBUSA’s Motion to Dismiss (D.I. 29), and
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`Defendant Audi’s Motion to Dismiss (D.I. 32) as moot without prejudice to renew following the
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`automatic lift of the forty-five (45) day stay.
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`5% A H
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`5
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`Case 1:22-cv-00751-GBW Document 95 Filed 02/02/23 Page 6 of 6 PageID #: 2809Case 1:23-cv-00758-GBW Document 22-1 Filed 12/15/23 Page 7 of 7 PageID #: 1175
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`WHEREFORE, at Wilmington this 2nd day of February, 2023, IT IS HEREBY
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`ORDERED that:
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`1. Torchlight’s Motion for Leave to File a Second Amended Complaint (D.I. 45; 46) is
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`GRANTED.
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`2. Defendants Mercedes-Benz USA, LLC’s request for leave to conduct early discovery
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`limited to the threshold issue of standing (D.I. 57 at 5) is GRANTED. Subsequent to
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`Torchlight’s filing of its Second Amended Complaint, the case is STAYED for forty-
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`five (45) days to allow Defendants to conduct early discovery limited to the threshold
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`issue of standing.
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`3. Defendant Porsche Cars North America, Inc.’s Motion to Dismiss (D.I. 26), Defendant
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`Mercedes-Benz USA, LLC’s Motion to Dismiss (D.I. 29), and Defendant Audi of
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`America, LLC’s Motion to Dismiss (D.I. 32) are DENIED as MOOT without
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`prejudice to renew following the automatic lift of the forty-five (45) day stay.
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`4. Because the Memorandum Order is filed under seal, the parties shall meet and confer
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`and, no later than February 10, 2023, submit a joint proposed redacted version,
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`accompanied by a supporting memorandum, detailing how, under applicable law, the
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`Court may approve any requested redactions. In the absence of a timely, compliant
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`request, the Court will unseal the entire opinion.
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`GREGORY B. WILLIAMS
`UNITED STATES DISTRICT JUDGE
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`6
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