Case 6:21-cv-01287-ADA Document 11 Filed 03/23/22 Page 1 of 15
`
`IN THE UNITED STATES DISTRICT COURT
`
`FOR THE WESTERN DISTRICT OF TEXAS
`
`WACO DIVISION
`
`
`
`
`DECAPOLIS SYSTEMS, LLC,
`
`
`Plaintiff,
`
`
`
`v.
`
`
`
`TEXAS DERMATOLOGY AND LASER
`
`SPECIALISTS, PLLC
`
`
`
`
`
`
`Defendant.
`
`Case No. 6:21-cv-01287-ADA
`
`
`
`JURY TRIAL DEMANDED
`
`DEFENDANT’S MOTION TO DISMISS
`PLAINTIFF’S ORIGINAL COMPLAINT FOR PATENT INFRINGEMENT
`
`Defendant Texas Dermatology and Laser Specialists, PLLC, by and through its
`
`undersigned counsel, hereby timely files its motion to dismiss Plaintiff Decapolis System, LLC’s
`
`Original Complaint for Patent Infringement pursuant to FED. R. CIV. P. 12(b)(1) and (6).
`
`FACTUAL BACKGROUND
`
`Plaintiff filed suit against Defendant on Dec. 10, 2021 asserting infringement of U.S.
`
`Patents 7,464,040 (’040 Patent), filed Dec. 15, 2000 and 7,490,048 (’048 Patent), filed Nov. 14,
`
`2001. Regarding the infringement Plaintiff’s Patents, Plaintiff asserts:
`
`31. Upon information and belief, Defendant makes, sells, advertises, offers for sale,
`uses, or otherwise provides a plurality of electronic healthcare systems, platforms and
`services, including but not limited to Kareo Inc.’s (“Kareo”) cloud-based electronic health
`records (“EHR”) and practice management system and software for patients, payers, health
`registries, and insurers. Defendant offers, among other things, a cloud database and
`framework to receive and send data and messages, fill orders, manage patient care,
`referrals, admissions, scheduling, check-in, e-prescriptions, discharge, billing, accounting,
`collections, security, payroll, materials management, practice analytics, revenue
`management, and reporting. On information and belief, the Kareo EHR or EMR solution
`and platform provide electronic health or medical records which is a patient care platform
`that offers customization at the point of care and on the go. Defendant’s infringement
`
`Page 1 of 15
`
`

`

`Case 6:21-cv-01287-ADA Document 11 Filed 03/23/22 Page 2 of 15
`
`includes features as shown below in Figures 2-4, including all augmentations to these
`platforms or descriptions of platforms. Collectively, all the foregoing is referred to herein
`as the “Accused instrumentalities.”
`
`As stated in the Complaint, Defendant runs its dermatology offices with medical doctors,
`
`that supply dermatological medical services to its patients in and around San Antonio, Texas.
`
`Kareo is a cloud-based medical records system, https://www.kareo.com/, that is used by many
`
`other doctor’s offices. Beginning in 2013 and ending in December 2014, Defendant input patient
`
`data into the Kareo’s cloud-based electronic health records system. Kareo, or someone else,
`
`somehow used this information to bill healthcare insurers.
`
`Defendant has not used Kareo software since December 2014, over seven years ago.
`
`Plaintiff bases its allegations of patent infringement on a statement by Dr. John Browning in a
`
`press release on Kareo’s website dated March 2015 relating to an acquisition and two screenshots
`
`of a the initial pages of a patient and provider portal for Defendant’s dermatology practice. See
`
`Complaint, ¶ 31, Figs. 2–4. First, based on the discontinuation of use of Kareo software over seven
`
`years ago, there is no redressable injury to Plaintiff due to the six-year statute of limitations on
`
`recovery and the Complaint should be dismissed for lack of standing under FED. R. CIV. P.
`
`12(b)(1). Second, there are no factual allegations to support Plaintiff’s patent claims beyond bare
`
`recitations and the Complaint should be dismissed for failure to state a claim under FED. R. CIV.
`
`P. 12(b)(6). It is apparent this lawsuit is unsubstantiated, unspecific, and seemingly seeks to impose
`
`unlimited liability on doctors’ offices for using any electronic health records platforms (which is
`
`all of them in this day and age).
`
`MOTION TO DISMISS PURSUANT TO FED. R. CIV. P. 12(B)(1)
`
`To have standing in litigation, “(1) the plaintiff must have suffered an injury in fact; (2)
`
`there must be a causal connection between the injury and the conduct complained of; and (3) it
`
`must be likely that the injury will be redressed by a favorable decision.” MHL Tek, LLC v. Nissan
`
`Page 2 of 15
`
`

`

`Case 6:21-cv-01287-ADA Document 11 Filed 03/23/22 Page 3 of 15
`
`Motor Co., 655 F.3d 1266, 1273–74 (Fed. Cir. 2011) (internal quotations and ellipses omitted)
`
`(citing Morrow v. Microsoft Corp., 499 F.3d 1332, 1339 (Fed. Cir. 2007)). A plaintiff alleging
`
`infringement bears the burden of establishing that it has standing to bring suit. Spine Sols., Inc. v.
`
`Medtronic Sofomar Danek USA, Inc., 620 F.3d 1305, 1317 (Fed. Cir. 2010). The determination of
`
`whether the plaintiff has carried that burden is an issue of law for the court. MHL Tek, 655 F.3d at
`
`1273. If the court determines that the plaintiff lacked standing at the time it filed suit, the court
`
`lacks subject-matter jurisdiction and must dismiss the case or cause of action under Rule 12(b)(1).
`
`See, e.g., Ballentine v. United States, 486 F.3d 806, 810 (3d Cir. 2007); Rite-Hite Corp. v. Kelley
`
`Co., 56 F.3d 1538, 1551 (Fed. Cir. 1995). Here, the only accused product specified in this patent
`
`infringement case is Defendant’s use of Kareo software in its dermatology practice. It does not
`
`make, sell, or offer for sale any electronic health/medical records (EHR/EMR) and practice
`
`management (PM) software. However, Defendant does not use the specific Kareo software for its
`
`electronic health records and practice management system any longer. Annexed to this Motion is
`
`the Declaration of Marissa Calderon, who is the Practice Administrator for Defendant, which states
`
`Defendant opened its medical office in 2013. At the time, Defendant used Kareo to do its
`
`EHR/EMR, PM, and medical billing. Defendant discontinued using Kareo seven years prior to
`
`December 21, 2021 when this suit was filed. Defendant did not conceal its use of Kareo and anyone
`
`could have readily found this out as is apparent by the filing of this lawsuit. Decl., ¶¶ 7–10.
`
`The statute of limitations for a civil action for patent infringement is six years. 35 U.S.C.
`
`§ 286 which states “Except as otherwise provided by law, no recovery shall be had for any
`
`infringement committed more than six years prior to the filing of the complaint or counterclaim
`
`for infringement in the action.” (emphasis added). Defendant ceased all use of Kareo more than
`
`six years prior to this suit being filed. As Defendant ceased all use of this allegedly infringing
`
`Page 3 of 15
`
`

`

`Case 6:21-cv-01287-ADA Document 11 Filed 03/23/22 Page 4 of 15
`
`software over seven years ago in 2014, Plaintiff does not have standing to bring this suit under has
`
`not suffered an injury in fact as there exist no recoverable damages, and there is no likelihood the
`
`injury will be redressed by a favorable decision. See MHL Tek, 655 F.3d at 1273-74.
`
`In simple terms, Plaintiff has sued a customer of the alleged direct infringer, Kareo, that
`
`provides the cloud-based services. Kareo was also improperly sued in this court, Case No. 6:21-
`
`cv-00574-ADA, and the case was dismissed December 16, 2021. Defendant doctor’s offices log
`
`into the Kareo cloud-based services with a web-based browser and supply Kareo with data on
`
`medical services performed. Kareo stores and processes the data. A bill is apparently somehow
`
`created by a third-party clearinghouse company from this information and transmitted to the health
`
`insurance providers. The patents include apparatus and method claims, but both of these reside in
`
`the Kareo cloud-based computers and the separate third-party clearinghouse company cloud-based
`
`computers.
`
`Plaintiff’s Complaint is generic and used against vendors like Kareo and doctors’ offices
`
`who are users of the platform to assert direct infringement, which is addressed below in Plaintiff’s
`
`Motion for failure to state a claim under Rule 12(b)(6). Plaintiff also alleges that Defendant:
`
`44. In addition or in the alternative, Defendant now has knowledge and continues
`these actions and it indirectly infringes by way of inducing direct infringement by others
`and/or contributing to the infringement by others of the ’048 Patent in the State of Texas,
`in this judicial district, and elsewhere in the United States, by, among other things, making,
`using, importing, offering for sale, and/or selling, without license or authority, infringing
`services for use in systems that fall within the scope of at least Claims 1, 2, 10, 20, 22, 23,
`24, 25, 26, 27, 28, 29, 30, 31, 32, 33, 34, 35, 36, 37, 38, 39, and 40 of the ’048 Patent.
`45. Now with knowledge of the Decapolis Patents, Defendant induces infringement
`under Title 35 U.S.C. § 271(b). Defendant will have performed actions that induced
`infringing acts that Defendant knew or should have known would induce actual
`infringements. See Manville Sales Corp. v. Paramount Sys., Inc., 917 F.2d 544, 553
`(Fed.Cir.1990), quoted in DSU Med. Corp. v. JMS Co., 471 F.3d 1293, 1306
`(Fed.Cir.2006) (en banc in relevant part). “[A] finding of inducement requires a threshold
`finding of direct infringement—either a finding of specific instances of direct infringement
`or a finding that the accused products necessarily infringe.” Ricoh, 550 F.3d at 1341 (citing
`ACCO Brands, Inc. v. ABA Locks Manufacturer Co., 501 F.3d 1307, 1313, (Fed. Cir.
`
`Page 4 of 15
`
`

`

`Case 6:21-cv-01287-ADA Document 11 Filed 03/23/22 Page 5 of 15
`
`2007).
`
`As acknowledged by Plaintiff, it must all allege “specific instances of direct infringement”
`
`of the ’040 Patent and ’048 Patent as a prerequisite of the claim against Defendant of inducing
`
`infringement. Defendant has no knowledge regarding the alleged direct infringement and no way
`
`of obtaining that knowledge.
`
`Plaintiff’s Complaint should be dismissed under Rule 12(b)(1) for lack of subject matter
`
`jurisdiction because there is no justiciable case or controversy alleged in the Original Complaint.
`
`No case or controversy exists because Plaintiff is not entitled to any redress for the alleged injury
`
`under 35 U.S.C. §§ 281, 283, 284, and 286. 35 U.S.C. § 286, entitled “Time limitation on
`
`damages,” provides that “no recovery shall be had for any infringement committed more than six
`
`years prior to the filing of the complaint or counterclaim for infringement in the action.” Section
`
`286 is not a statute of limitations in the sense of barring a suit for infringement; rather, it limits
`
`recovery to damages for infringing acts committed within six years of the date of the filing of the
`
`infringement action. A.C. Aukerman Co. v. R.L. Chaides Const. Co., 960 F.2d 1020, 1030
`
`(Fed.Cir.1992).
`
`The burden of proving that an act of infringement has occurred within the six years set
`
`out in 35 U.S.C. § 286 is currently allocated to the Plaintiff. See e.g., Genentech, Inc. v. Insmed
`
`Inc., 436 F. Supp. 2d 1080 (N.D. Cal. 2006). Thus, where the record contains insufficient
`
`evidence of the date on which the alleged acts of infringement occur, it is the patent owner's case
`
`that fails for lack of proof, not the alleged infringer’s effort to set up the defense.
`
`Under United States patent law, indirect infringement can occur via either inducement to
`
`infringe, or contributory infringement, as set out in Sections 271(b)(3) and (c)(4) respectively.
`
`Both types of indirect infringement involve the wrongdoer engaging in conduct that occurs prior
`
`to a later instance of infringement that is direct. See 35 U.S.C. § 271(b). These parameters make
`
`Page 5 of 15
`
`

`

`Case 6:21-cv-01287-ADA Document 11 Filed 03/23/22 Page 6 of 15
`
`it possible for the ensuing suit for indirect patent infringement to be filed more than six years
`
`after the acts by the indirect infringer but less than six years after the acts by the infringer who
`
`was direct. When this occurs, it becomes necessary to decide which of the two dates will control
`
`in calculating whether the action for indirect infringement is timely, or whether it is barred. Stated
`
`in terms of statutory construction, the issue is when an act of indirect infringement has been
`
`“committed,” as that term is used in Section 286.
`
`The matter is made more complex because applicable case law insists that no action for
`
`indirect infringement will lie until the direct infringement has taken place. Moba, B.V. v. Diamond
`
`Automation, Inc., 325 F.3d 1306, 1318, 66 U.S.P.Q.2d 1429 (Fed. Cir. 2003). Federal Circuit
`
`case law answers this question rigidly, with strict enforcement of section 286's six-year period.
`
`That is, the rule is that recovery cannot be had for acts that occurred more than six years before
`
`the commencement of the action for infringement. See, e.g., Standard Oil Co. v. Nippon Shokubai
`
`Kagaku Kogyo Co., Ltd., 754 F.2d 345, 224 U.S.P.Q. 863 (Fed. Cir. 1985).
`
`Thus, where all the acts alleged to constitute indirect infringement occurred more than six
`
`years prior, no determination of indirect infringement is possible, and an offending action will be
`
`dismissed. Id. This is so even if all the acts of direct infringement occurred within six years of
`
`the complaint. Id. According to the Federal Circuit, the contrary view, that compliance should be
`
`measured from date of the direct infringement,
`
`is like saying that the laying of an egg takes place when the egg hatches or that a sale takes
`place when the buyer uses the purchased product. The theory is without legal validity. If
`[the accused indirect infringer's] acts ever gave rise to a liability, the liability arose as of
`the time the acts were committed, not at some future date determined by the acts of others.
`On the record before us, [the accused indirect infringer] committed no act within the period
`of six years preceding the filing of the complaint and therefore no recovery can be had
`against it for infringement.
`
`Id. It does not matter in this case because any direct infringement by Kareo involving Defendant
`
`occurred more than six years before the suit was filed.
`
`Page 6 of 15
`
`

`

`Case 6:21-cv-01287-ADA Document 11 Filed 03/23/22 Page 7 of 15
`
`Here, any damages Plaintiff would otherwise have the right to recover against Defendant
`
`for patent infringement under 35 U.S.C. § 284 based on use of the Kareo cloud-based EHR
`
`software, are time-barred under Section 286. Further, there are no allegations by Plaintiff that
`
`there is any ongoing infringement by Kareo involving Defendant that would otherwise entitle
`
`Decapolis to injunctive relief under 35 U.S.C. § 283. As such, Plaintiff is not entitled to statutory
`
`relief from Defendant under Title 35, and there is no case or controversy between the parties.
`
`Plaintiff’s Original Complaint is subject to dismissal under Rule 12(6)(1) for lack of subject
`
`matter jurisdiction.
`
`I. MOTION TO DISMISS PURSUANT TO FED. R. CIV. P. 12(B)(6)
`
`Plaintiff filed this case on December 10, 2021 with no previous notice or communications
`
`to Defendant. See Complaint (DE. 1). Plaintiff’s Complaint asserts alleged infringement of the
`
`’048 and ’040 Patents, for the apparent purpose of engaging in a litigation campaign against other
`
`companies shortly before the expiration of the patents, but before the six-year statute of limitations
`
`for damages ends. Plaintiff seeks to plead direct and induced patent infringement against
`
`Defendant based solely on boilerplate assertions with no meaningful factual content. Plaintiff’s
`
`approach fails to meet the minimum threshold requirement for pleading “factual content that
`
`allows the court to draw the reasonable inference that the defendant is liable for the misconduct
`
`alleged.” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009). To survive a motion to dismiss under Rule
`
`12(b)(6), a plaintiff must plead “factual content that allows the court to draw the reasonable
`
`inference that the defendant is liable for the misconduct alleged.” Iqbal, 556 U.S. at 678. A
`
`pleading that offers “labels and conclusions” or “a formulaic recitation of the elements of a cause
`
`of action will not do.” Nor does a complaint suffice if it tenders “naked assertion[s]” devoid of
`
`“further factual enhancement.” Id. “Threadbare recitals of the elements of a cause of action,
`
`Page 7 of 15
`
`

`

`Case 6:21-cv-01287-ADA Document 11 Filed 03/23/22 Page 8 of 15
`
`supported by mere conclusory statements, do not suffice” to satisfy this standard. Id. “Federal
`
`Rule of Civil Procedure 8(a)(2) requires only ‘a short and plain statement of the claim showing
`
`that the pleader is entitled to relief,’ in order to ‘give the defendant fair notice of what the…claim
`
`is and the grounds upon which it rests.’” Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 555 (2007).
`
`With respect to direct infringement of the ’048 and ’040 Patents, Plaintiff fails to
`
`sufficiently plead a claim for the asserted patents because it fails to plausibly allege that Defendant
`
`practices each and every limitation of at least one claim of the patents. Plaintiff’s failure to plead
`
`with specificity how Defendant’s use of another’s software product infringes on its patents is
`
`grounds for dismissal. It only recites a litany of claims allegedly infringed, falling way short of the
`
`heightened pleading requirements of FED. R. CIV. P. 8(a)(2). See Complaint, ¶¶ 36, 56. This is not
`
`to say Plaintiff must provide Infringement Contentions at this initial stage, but there is literally
`
`nothing showing how Defendant practices every limitation of at least one claim of each of the ’048
`
`and ’040 Patents. It only recites that Defendant do things every other medical facility in America
`
`do. See Complaint, ¶¶ 36, 56. Because Plaintiff has not met the standard for pleading direct
`
`infringement, Defendant respectfully asks the Court to dismiss Plaintiff’s direct infringement
`
`claim for failure to state a claim under FED. R. CIV. P. 12(b)(6).
`
`With respect to indirect and willful infringement of the ’048 and ’040 Patents, Plaintiff
`
`asserts inducing infringement based purely on service of the Complaint, with no allegation of pre-
`
`suit notice of the patent or that Defendant was aware of the alleged infringement. This Court has
`
`previously rejected inducing and willful infringement claims based on that theory. Moreover,
`
`Plaintiff’s assertions regarding the fact-specific requirement that the alleged inducer must commit
`
`affirmative acts to encourage infringement and have an intent to encourage infringement are
`
`conclusory and devoid of meaningful factual allegations. Indeed, the conclusory nature of these
`
`Page 8 of 15
`
`

`

`Case 6:21-cv-01287-ADA Document 11 Filed 03/23/22 Page 9 of 15
`
`assertions is underscored by the fact that Defendant has cut-and-pasted, essentially verbatim, its
`
`assertions of indirect infringement of against about 18 different companies. Because Plaintiff has
`
`not met the standard for pleading induced infringement, Defendant respectfully asks the Court to
`
`dismiss Plaintiff’s induced and willful infringement claims for failure to state a claim under FED.
`
`R. CIV. P. 12(b)(6).
`
`A. Plaintiff’s Claims for Direct Patent Infringement Should Be Dismissed
`
`To state a claim for direct infringement, a plaintiff must adequately allege: (i) ownership
`
`of a valid patent; (ii) the identity of every alleged infringer; (iii) the infringing act; and (iv) the
`
`means by which defendant’s accused invention or product infringes every element of at least one
`
`claim of the patent. Hall v. Bed Bath & Beyond, Inc., 705 F.3d 1357, 1362 (Fed. Cir. 2013) (citing
`
`Phonometrics, Inc. v. Hospitality Franchise Sys., Inc., 203 F.3d 790, 794 (Fed. Cir. 2000)); see
`
`also . The failure of an accused product to meet a single claim limitation negates infringement of
`
`that claim. Laitram Corp. v. Rexnord, Inc., 939 F.2d 1533, 1535 (Fed. Cir. 1991). Therefore, a
`
`plaintiff must plausibly plead facts showing that a defendant’s products meet each and every
`
`limitation of at least one patent claim.
`
`Here, Plaintiff’s Complaint fails to fully articulate its theory for direct infringement.
`
`Simply reciting the patent claims allegedly infringed—without specific factual allegations as to
`
`how the accused product used by Defendant practices every element of at least one exemplary
`
`claim of each patent—is not enough to put Defendant on fair notice of the claim. See Twombly,
`
`550 U.S. at 555. See also, e.g., Chapterhouse, LLC v. Shopify, Inc., No. 2:18-CV-00300-JRG,
`
`2018 WL 6981828, at *2 (E.D. Tex. Dec. 11, 2018) (dismissing a complaint where the plaintiff
`
`failed to provide factual allegations to support its conclusory statements that the products met the
`
`claim limitations); Stragent, LLC v. BMW of N. Am., LLC, No. 6:16-CV-446-RWS-KNM, 2017
`
`Page 9 of 15
`
`

`

`Case 6:21-cv-01287-ADA Document 11 Filed 03/23/22 Page 10 of 15
`
`WL 2821697, at *6 (E.D. Tex. Mar. 3, 2017), report and recommendation adopted, 2017 WL
`
`2832613 (E.D. Tex. Mar. 27, 2017) (finding that plaintiff failed to plausibly plead direct
`
`infringement because it did not “adduce evidence showing the elements” of the patent claims were
`
`met). Conclusory statements are not sufficient. See Chapterhouse, 2018 WL 6981828, at *2
`
`(holding that conclusory statements without accompanying factual allegations are insufficient to
`
`pass the Iqbal/Twombly standard).
`
`B. Plaintiff’s Claims for Indirect and Willful Patent Infringement Should Be Dismissed
`
`To state a claim for induced infringement under 35 U.S.C. § 271(b), a plaintiff must
`
`adequately allege that: (i) the defendant knew of the asserted patents; (ii) the defendant knowingly
`
`induced a third party to infringe the patents; (iii) the defendant had specific intent to induce a third
`
`party to infringe the patents; and (iv) the third party directly infringed the patents as a result of the
`
`alleged inducement. See, e.g., Parity Networks, LLC v. Cisco Systems, Inc., No. 6:19-CV-00207-
`
`ADA, 2019 WL 3940952, at *2 (W.D. Tex., July 26, 2019); DSU Med. Corp. v. JMS Co. Ltd., 471
`
`F.3d 1293, 1305 (Fed. Cir. 2006) (en banc). “[T]here can be no inducement or contributory
`
`infringement without an underlying act of direct infringement.” Joao Control & Monitoring Sys.,
`
`LLC v. Protect Am., Inc., No. 1:14-cv-00134-LY, 2015 WL 3513151, at *3 (W.D. Tex. Mar. 24,
`
`2015). “To state a claim for indirect infringement . . . a plaintiff need not identify a specific direct
`
`infringer if it pleads facts sufficient to allow an inference that at least one direct infringer exists.”
`
`In re Bill of Lading Transmission & Processing Sys. Pat. Litig., 681 F.3d 1323, 1336 (Fed. Cir.
`
`2012). There are multiple reasons why Plaintiff’s assertions fail to meet the minimum pleading
`
`standards for alleging induced infringement, such that its induced infringement claim should be
`
`dismissed.
`
`First, Plaintiff fails to allege pre-suit awareness by Defendant of the patent-in-suit or of the
`
`Page 10 of 15
`
`

`

`Case 6:21-cv-01287-ADA Document 11 Filed 03/23/22 Page 11 of 15
`
`alleged infringement. See Complaint, ¶¶ 33, 52 (“Defendant has been on actual notice of the ’048
`
`[/’040] Patent at least as early as the date it received service of the Original Complaint in this
`
`litigation.”). This bare allegation can only be reasonably understood in context to mean Defendant
`
`only learned of the patents as a result of receiving the Complaint itself. This Court has repeatedly
`
`held that a claim for indirect infringement fails when the complaint “does not plead any facts that
`
`would support an allegation of pre-suit knowledge.” Castlemorton Wireless, LLC v. Bose Corp.,
`
`No. 6:20-CV-00029-ADA, 2020 WL 6578418, at *5 (W.D. Tex. July 22, 2020) (Albright J.)
`
`(emphasis added); see also Commil USA, LLC v. Cisco Sys., Inc., 575 U.S. 632, 639 (2015)
`
`(“liability for inducing infringement attaches only if the defendant knew of the patent and the
`
`induced acts constitute patent infringement”) (internal citation and quotation omitted). Plaintiff’s
`
`induced infringement claim can and should be dismissed on this basis alone. Even if post-suit
`
`knowledge could support a claim for indirect infringement, “[r]ecovery on an induced
`
`infringement claim is limited to the time period that begins when defendant learns of the patent’s
`
`existence.” Parity Networks, 2019 WL 3940952, at *2. If any post-suit inducement claim is
`
`permitted, it should be raised in a supplemental pleading under Federal Rule 15(d).
`
`Second, Plaintiff provides only conclusory, boilerplate allegations regarding the
`
`requirement that the defendant must have committed affirmative acts to encourage known
`
`infringement. See, e.g., Microsoft Corp. v. DataTern, Inc., 755 F.3d 899, 904 (Fed. Cir. 2014)
`
`(“[T]he patentee must show that the accused inducer took an affirmative act to encourage
`
`infringement with the knowledge that the induced acts constitute patent infringement.”). As noted
`
`above, Plaintiff relies on the conclusory assertion that “Defendant has taken active steps to induce
`
`infringement, such as advertising an infringing use, which supports a finding of an intention for
`
`the accused product to be used in an infringing manner.” Complaint, ¶ 47. Plaintiff’s pleadings are
`
`Page 11 of 15
`
`

`

`Case 6:21-cv-01287-ADA Document 11 Filed 03/23/22 Page 12 of 15
`
`devoid of any allegations regarding Defendant’s use of electronic health records and practice
`
`management software that could support any reasonable inference that Defendant committed
`
`affirmative acts knowingly directed at encouraging infringement.
`
`
`
`Third, Plaintiff’s inducement claim fails for the additional reason that Plaintiff has not
`
`adequately pled specific intent. “[A] claim of induced infringement ‘must contain facts plausibly
`
`showing that [the defendants] specifically intended their customers to infringe the [asserted] patent
`
`and knew that the customer’s acts constituted infringement.’” Affinity Labs of Texas,. LLC v.
`
`Toyota Motor N. Am., No. W:13-CV-365, 2014 WL 2892285, at *3 (W.D.. Tex. May 12, 2014)
`
`(quoting In re Bill of Lading, 681 F.3d at 1339). The standard for pleading specific intent is
`
`“demanding.” Id. at *7. Here, Plaintiff offers the assertion that “Plaintiff will rely on direct and/or
`
`circumstantial evidence to prove the intent element.” Complaint, ¶ 46. This is not even an
`
`allegation against Defendant. It is well-established that an inducement claim such as this, which
`
`“simply recites the legal conclusion that Defendants acted with specific intent” or generically
`
`alleges that a defendant acted to “urge, instruct, [or] encourage” infringement, is insufficient.
`
`Addiction & Detoxification Inst. L.L.C. v. Carpenter, 620 F. App’x 934, 938 (Fed. Cir. 2015).
`
`To get around the glaring deficiencies in alleging the elements of an inducement claim,
`
`Plaintiff offers another threadbare recitation that Defendant was willfully blind to the patent rights
`
`of Plaintiff by “not performing a review of the patent rights of others first for clearance or to assess
`
`infringement thereof prior to launching products and services.” This does not meet the standard
`
`for the doctrine of willful blindness to establish an exception to the pre-suit knowledge requirement
`
`for an inducement claim, wherein “(1) the defendant must subjectively believe that there is a high
`
`probability that a fact exists and (2) the defendant must take deliberate actions to avoid learning of
`
`that fact.” It is clear to see Defendant is a doctor’s office that uses electronic health record and
`
`Page 12 of 15
`
`

`

`Case 6:21-cv-01287-ADA Document 11 Filed 03/23/22 Page 13 of 15
`
`practice management software just like every other doctor’s office—not some nefarious infringer
`
`who knows anything about patents. Plaintiff’s Complaint seemingly applies to every doctor’s
`
`office that uses similar software. Defendant did not deliberately avoid learning about Plaintiff’s
`
`patents. Plaintiff has not properly alleged willful blindness by stating Defendant failed to look up
`
`patents for software that nearly all doctor’s offices use. Plaintiff’s induced infringement claim fails
`
`to meet the minimum requirements for pleading facts to support a reasonable inference that
`
`Plaintiff is entitled to relief. Plaintiff’s cut-and-paste inducement pleading fails to set forth
`
`appropriate factual allegations against Defendant, and its inducement claim should be dismissed.
`
`
`
`Similarly, allegations pertaining to willful infringement also fail to state a claim. See
`
`Complaint, ¶¶ 43, 62 (“On information and belief, the infringement of the Decapolis Patents by
`
`Defendant will now be willful through the filing and service of this Complaint.”). Under 35 U.S.C.
`
`§ 284, courts “may increase the damages [awarded in a patent infringement case] up to three times
`
`the amount found or assessed.” The Supreme Court has explained that enhanced damages “are not
`
`to be meted out in a typical infringement case, but are instead designed as a ‘punitive’ or
`
`‘vindictive’ sanction for egregious infringement behavior,” i.e., conduct that is “willful, wanton,
`
`malicious, bad-faith, deliberate, consciously wrongful, flagrant, or—indeed—characteristic of a
`
`pirate.” Halo, 136 S. Ct. at 1932. Merely pleading that a defendant gained knowledge of a patent
`
`and alleged infringement based on the filing of a complaint, and continued its conduct thereafter,
`
`is insufficient to state a claim. See M&C Innovations, LLC v. Igloo Prod. Corp., No. 4:17-CV-
`
`2372, 2018 WL 4620713 (S.D. Tex. July 31, 2018). As a threshold matter, Plaintiff has pled no
`
`facts in order to satisfy the pre-suit knowledge prong of willful infringement, and therefore, merit-
`
`enhanced damages. Global-Tech Appliances, Inc. v. SEB SA, 563 U.S. 754, 766, 769 (2011).
`
`Plaintiff has failed to allege facts to even establish a “garden variety” patent case described in
`
`Page 13 of 15
`
`

`

`Case 6:21-cv-01287-ADA Document 11 Filed 03/23/22 Page 14 of 15
`
`M&C Innovations. Cf. Complaint, ¶¶ 43, 62. Accordingly, the claim for enhanced damages based
`
`on willful infringement should be dismissed for this reason as well.
`
`In conclusion, while it is clear Plaintiffs is not entitled to recovery and Plaintiff’s patent
`
`infringement allegations against Defendant are insufficient on their face, the purely conclusory
`
`nature of the Complaint is confirmed by Plaintiff’s near-verbatim repetition of the same “factual”
`
`allegations against about 18 different parties. Defendant respectfully requests the Court GRANT
`
`this Motion in all things and dismiss the Complaint with prejudice for the foregoing reasons.
`
`
`
`Dated: March 23, 2022.
`
`
`
`Respectfully submitted,
`/s/ Charles W. Hanor
`Charles W. Hanor
`Texas Bar No. 08928800
`chanor@hanor.com
`
`Ayesha M. Malik
`Texas Bar No. 24119449
`Ayesha.Malik@hanor.com
`
`HANOR LAW FIRM PC
`750 Rittiman Road
`San Antonio, TX 78209
`(210) 829-2002 Phone
`(210) 829-2001 Fax
`
`Counsel For Defendant Texas Dermatology
`and Laser Specialists, PLLC
`
`
`
`
`
`Page 14 of 15
`
`

`

`Case 6:21-cv-01287-ADA Document 11 Filed 03/23/22 Page 15 of 15
`
`CERTIFICATE OF SERVICE
`
`The undersigned hereby certifies that a true and correct copy of the above and foregoing
`document has been served on March 23, 2022, to all counsel of record who are deemed to have
`consented to electronic service via the Court’s CM/ECF system.
`
`
`/s/ Charles W. Hanor
`Charles W. Hanor
`
`Page 15 of 15
`
`