Case 6:22-cv-00149-ADA Document 54 Filed 11/10/22 Page 1 of 8
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`IN THE UNITED STATES DISTRICT COURT
`FOR THE WESTERN DISTRICT OF TEXAS
`WACO DIVISION
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`6-22-CV-00149-ADA
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`SPACETIME3D, INC.,
` Plaintiff
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`-vs-
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`APPLE INC.,
` Defendant
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`MEMORANDUM OPINION AND ORDER
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`Before the Court is Defendant Apple Inc.’s (“Apple”) Motion to Dismiss Plaintiff
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`SpaceTime3D, Inc.’s (“SpaceTime”) indirect infringement and willful infringement claims pursuant
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`to Federal Rule of Civil Procedure 12(b)(6). ECF No. 24 (the “Motion”). After careful consideration
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`of the briefs and applicable law, the Court is of the opinion that Apple’s Motion should be
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`GRANTED-IN-PART and DENIED-IN-PART.
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`BACKGROUND
`I.
`On February 10, 2022, SpaceTime sued Apple by alleging infringement of three patents:
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`U.S. Patent Nos. 8,881,048 (the “’048 Patent”), 9,304,654 (the “’654 Patent”), and 9,696,868 (the
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`“’868 Patent”) (collectively “the Asserted Patents”). See ECF No. 1 ¶¶ 16–19 (the “Complaint”).
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`The Asserted Patents are alleged to cover “improvements to then-existing computer graphical user
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`interfaces (‘GUIs’), by providing an interactive computing interface and sorting interface
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`comprising information from real-time and static sources.” Id. ¶ 21. SpaceTime alleges that Apple
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`both indirectly and willfully infringed the Asserted Patents. Id. ¶¶ 57, 82, 109, 135.
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`Notwithstanding the Complaint, Apple requested that SpaceTime dismiss its willfulness and
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`inducement claims without prejudice, provided that Plaintiff would have the opportunity to take
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`discovery to support the claims at the appropriate time. ECF No. 24. at 2. SpaceTime refused to
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`agree to dismiss its entire willful and indirect claims without prejudice, but SpaceTime did agree to
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`dismiss its pre-suit willful and indirect claims without prejudice “under terms consistent with
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`Section VII of the April 14, 2022 Standing Order Governing Proceedings (OGP) 4.1 – Patent
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`Cases.” ECF No. 28 at 5. Apple filed its Motion to dismiss it on April 21, 2022. ECF No. 24.
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`Apple’s Motion seeks to dismiss SpaceTime’s indirect and willful infringement claims for the
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`Asserted Patents. Id. at 3–11. Since the parties agree to dismiss SpaceTime’s pre-suit claims for
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`indirect and willful infringement, the remaining portion of the Motion that the Court will address is
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`the post-suit claims for willful and indirect infringement. The Motion is now ripe for judgment.
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`II.
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`LEGAL STANDARDS
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`Rule 12(b)(6) requires that a complaint contain sufficient factual matter, if accepted as true,
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`to “‘state a claim to relief that is plausible on its face.’” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009)
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`(quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007)). To meet this factual plausibility
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`standard, the plaintiff must plead “factual content that allows the court to draw the reasonable
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`inference that the defendant is liable for the misconduct alleged,” based on “more than a sheer
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`possibility that a defendant has acted unlawfully.” Id. “Threadbare recitals of the elements of a
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`cause of action, supported by mere conclusory statements, do not suffice.” Id. However, in
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`resolving a motion to dismiss for failure to state a claim, the question is “not whether [the plaintiff]
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`will ultimately prevail, . . . but whether [the] complaint was sufficient to cross the federal court’s
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`threshold.” Skinner v. Switzer, 562 U.S. 521, 530 (2011). “The court’s task is to determine whether
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`the plaintiff has stated a legally cognizable claim that is plausible, not to evaluate the plaintiff's
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`likelihood of success.” Lone Star Fund V (U.S.), L.P. v. Barclays Bank PLC, 594 F.3d 383, 387 (5th
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`Cir. 2010) (citing Iqbal, 556 U.S. at 678).
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`Section 271(b) of the Patent Act provides that “[w]hoever actively induces infringement of a
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`patent shall be liable as an infringer.” 35 U.S.C. § 271(b). To succeed on such a claim, the patentee
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`must show that the accused infringer (1) knowingly induced direct infringement and (2) possessed
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`“specific intent” to induce that infringement. See MEMC Electr. Materials, Inc. v. Mitsubishi
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`Materials Silicon Corp., 420 F.3d 1369, 1378 (Fed. Cir. 2005). To state a claim for relief for
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`induced patent infringement, “a complaint must plead facts plausibly showing that the accused
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`infringer ‘specifically intended [another party] to infringe [the patent] and knew that the [other
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`party]’s acts constituted infringement.’” Lifetime Indus., Inc. v. Trim-Lok, Inc., 869 F.3d 1372,
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`1376–77 (Fed. Cir. 2017) (quoting In re Bill of Lading Transmission & Processing Sys. Pat. Litig.,
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`681 F.3d 1323, 1336 (Fed. Cir. 2012)). To allege indirect infringement, the plaintiff must plead
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`specific facts sufficient to show that the accused infringer had actual knowledge of the patents-in-
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`suit, or was willfully blind to the existence of the patents-in-suit. Glob.-Tech Appliances, Inc. v.
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`SEB S.A., 563 U.S. 754, 766, 769 (2011) (“[I]nduced infringement under § 271(b) requires
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`knowledge that the induced acts constitute patent infringement” or at least “willful blindness” to the
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`likelihood of infringement.); Commil USA, LLC v. Cisco Sys., Inc., 575 U.S. 632, 639 (2015) (“Like
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`induced infringement, contributory infringement requires knowledge of the patent in suit and
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`knowledge of patent infringement.”). A showing of willful blindness requires that “(1) the
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`defendant must subjectively believe that there is a high probability that a fact exists and (2) the
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`defendant must take deliberate actions to avoid learning of that fact.” Global-Tech, 563 U.S. at 769.
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`Similarly, to allege willful infringement, the plaintiff must plausibly allege the “subjective
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`willfulness of a patent infringer, intentional or knowing.” Halo Electronics, Inc. v. Pulse
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`Electronics, Inc., 136 S.Ct. 1923, 1933 (2016). This requires a plaintiff to allege facts plausibly
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`showing that the accused infringer: “(1) knew of the patent-in-suit; (2) after acquiring that
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`knowledge, it infringed the patent; and (3) in doing so, it knew, or should have known, that its
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`conduct amounted to infringement of the patent.” Parity Networks, LLC v. Cisco Sys., Inc., No.
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`6:19-CV-00207-ADA, 2019 WL 3940952, at *3 (W.D. Tex. July 26, 2019).
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`III. ANALYSIS
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`Since the parties jointly agree that SpaceTime’s pre-suit indirect and willful claims should
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`be dismissed without prejudice, the Court will now analyze whether SpaceTime has sufficiently
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`pleaded post-suit indirect and willful infringement.
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`A. Post-Suit Willful Infringement
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`Apple insists that SpaceTime must allege “facts making it plausible that Apple engaged in
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`the type of egregious conduct required to support a willfulness claim.” ECF No. 24 at 7. This Court
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`does not require such a showing at the pleading stage. The Federal Circuit has clarified that “under
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`Halo, the concept of ‘willfulness’ requires a jury to find no more than deliberate or intentional
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`infringement.” SRI Int’l, Inc. v. Cisco Sys., Inc., 14 F.4th 1323 (Fed. Cir. 2021). Instead,
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`“egregiousness” is something for the court to consider in exercising its discretion to enhance
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`damages after the jury finds willfulness. See SRI Int’l, Inc, 14 F.4th at 1329–30 (“To eliminate the
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`confusion created by our reference to the language ‘wanton, malicious, and bad-faith’ in Halo, we
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`clarify that it was not our intent to create a heightened requirement for willful infringement. Indeed,
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`that sentence from Halo refers to ‘conduct warranting enhanced damages,’ not conduct warranting a
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`finding of willfulness.”).
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`As for Apple’s argument that SpaceTime failed to allege that Apple “was aware of any of
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`the asserted patents, let alone that Apple knew or should have known that its conduct amounted to
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`infringement of those patents,” the Court disagrees. ECF No. 24 at 4. Instead, the Court finds, when
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`viewing the allegations in a light most favorable to SpaceTime, that the filing of the Complaint
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`establishes the notice required for a plausible inference of willfulness. BillJCo, LLC v. Apple Inc.,
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`583 F. Supp. 3d 769, 778 (W.D. Tex. 2022) (“Serving a complaint will, in most circumstances,
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`notify the defendant of the asserted patent and the accused conduct. So long as the complaint also
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`adequately alleges that the defendant is continuing its purportedly infringing conduct, it will satisfy
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`all three Parity elements and sufficiently plead a post-filing/post-suit willful infringement claim.”).
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`Apple’s motion to dismiss SpaceTime’s post-suit willful infringement claims is therefore denied.
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`B. Post-Suit Indirect Infringement
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`Just as with willful infringement, Apple insists that SpaceTime “has not plausibly alleged
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`that Apple had pre-suit knowledge of the asserted patents, let alone had an intent to infringe those
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`patents.” ECF No. 24 at 9. Specifically, Apple is again arguing pre-suit knowledge of the asserted
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`patents is a requirement of an indirect infringement claim. See id. As it did in BillJCo, the Court
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`rejects this argument and finds that Apple’s arguments that require pleading pre-suit knowledge for
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`post-suit indirect infringement claims unpersuasive. See 583 F. Supp. 3d at 779 (“Apple argues that
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`‘[p]re-suit knowledge of the asserted patents is a requirement of an indirect infringement claim.’ . . .
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`. This Court rejects this proposition in the induced infringement context as it did elsewhere.”).
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`Apple then argues that SpaceTime has not adequately pleaded indirect infringement because
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`“a claim for induced infringement requires, among other things, factual allegations that the
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`defendant ‘knowingly induced a third-party to infringe the patent [and] had specific intent to induce
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`the patent infringement.’” ECF No. 24 at 9 (citing Affinity Labs of Tex. LLC v. Toyota Motor N.
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`Am., Inc., No. W:13-cv-365, 2014 WL 2892285, at *2 (W.D. Tex. May 12, 2014)). Apple contends
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`that SpaceTime’s “inducement claims for each Count boil down generically to reciting the legal
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`standard.” Id. at 10. Apple quotes SpaceTime’s Complaint at paragraph 79 which states the
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`following:
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`Apple took active steps, directly and/or through contractual relationships with
`others, with the specific intent to cause them to use the Accused Products in a
`manner that infringes claims of the ’048 patent. Such steps by Apple include but
`is not limited to advising and directing customers and/or end users to use the
`Accused Products in an infringing manner; advertising and promoting the use of
`the Accused Products in an infringing manner; and/or distributing instructions that
`guide end users to use the Accused Products in an infringing manner.
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`Id. (quoting Complaint ¶ 79). Apple contends that this paragraph contains no facts making plausible
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`that Apple knew the actions of its end-user customers would infringe the asserted patents. Id. Apple
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`further argues that SpaceTime “does not make any factual allegation that Apple induced end users
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`to use the Accused Products in an infringing manner.” Id. Specifically, Apple argues that
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`SpaceTime’s reliance “on generic recitations of ‘advising and directing’ and ‘advertising and
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`promoting’ the use of the Accused Products” is insufficient.” Id.
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`In response, SpaceTime argues that Apple’s assertions in its Motion “ignor[e] numerous
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`allegations in the Complaint that sets forth exactly what Apple says is missing.” ECF No. 28 at 11.
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`Specifically, Spacetime asserts that Apple “overlooks” Paragraph 52 of SpaceTime’s Complaint,
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`which alleges that “Apple provides instructions on how users can use the three-dimensional viewer
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`for both open webpages (in Safari) and open applications for the Accused Products” and includes
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`screenshots of and a citation to “Apple’s iPhone User Guide” that contains such instructions on
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`navigating between multiple open webpages in Safari. Id. at 12 (citing Complaint ¶ 52). Similarly,
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`SpaceTime points to Paragraph 54, which alleges that “on its support website, Apple instructs users
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`of iPhones, iPads, and iPod touch how to ‘quickly switch from one app to another’” and provides a
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`screenshot and a citation to the exact webpage where Apple provides such instructions teaching
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`infringing uses. Id. Likewise, SpaceTime points to Paragraph 55. Id. According to SpaceTime, it is
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`these factual allegations that further distinguish SpaceTime’s Complaint from the “generalized
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`allegations” found insufficient in the cases cited by Apple. Id.
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`In reply, Apple contends that in order to plead intent, SpaceTime “relies solely on
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`documents created before Apple allegedly had knowledge of the asserted patents from the
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`Complaint.” ECF No. 29 at 10. Thus, Apple argues that it “cannot have had the requisite intent to
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`induce infringement before it even knew about the asserted patents.” Id. In support of this argument,
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`Apple cites a Central District of California decision and a Federal Circuit decision from 1998. See
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`id. (citing Proxyconn Inc. v. Microsoft Corp., No. SACV 11-1681 DOC ANX, 2012 WL 1835680,
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`at *5 (C.D. Cal. May 16, 2012); Insituform Techs., Inc. v. Cat Contracting, Inc., 161 F.3d 688, 695
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`(Fed. Cir. 1998)).
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`In Insituform, the Federal Circuit reversed a district court’s finding of induced infringement
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`because liability could not be predicated upon acts that occurred prior to defendant having notice of
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`the patent. 161 F.3d at 695. Insituform, however, was not decided at the motion to dismiss stage.
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`See id. Unlike in Insituform, this Court is not tasked with deciding the merits of SpaceTime’s claim
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`of induced infringement. Instead, this Court is tasked with deciding whether SpaceTime 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.” Iqbal, 556 U.S. at 678. Here, SpaceTime has pleaded in several places
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`in its Complaint sufficient factual content that allows this Court to draw the reasonable inference
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`that Apple knowingly induced a third-party to infringe the patent and had specific intent to induce
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`the patent infringement. See, e.g., Complaint ¶¶ 52, 54, 55. That the screenshots SpaceTime relies
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`on were made a few days before SpaceTime filed its Complaint is of no moment at the motion to
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`dismiss stage. See, e.g., id. ¶ 52 & Fig. 7 (citing https://support.apple.com/guide/iphone/use-tabs-in-
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`safari-iph3028ebf68/15.0/ios/15.0 (accessed Feb. 9, 2022)). Based on this factual content that
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`SpaceTime pleaded in its Complaint, the Court finds that it is reasonable to make an inference that
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`Apple still induces its customers to infringe in the manner that SpaceTime alleges in its Complaint.
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`Accordingly, the Court finds that SpaceTime has sufficiently plead indirect infringement.
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`Apple’s Motion to dismiss SpaceTime’s post-suit indirect infringement claims are therefore denied.
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`IV. CONCLUSION
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`For the foregoing reasons, the Court DENIES Apple’s Motion to dismiss SpaceTime’s post-
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`suit indirect and willful infringement claims. Given that the parties agree that SpaceTime’s pre-suit
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`willful and indirect infringement claims should be dismissed without prejudice, the Court GRANTS
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`Apple’s Motion as to those claims. However, SpaceTime is allowed to amend its Complaint and re-
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`plead pre-suit indirect and willful infringement claims if it is able to elicit sufficient facts during
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`fact discovery to support such allegations.
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`SIGNED this 10th day of November, 2022.
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`ALAN D ALBRIGHT
`UNITED STATES DISTRICT JUDGE
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