Case: 20-2218 Document: 44 Page: 1 Filed: 07/13/2021
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`United States Court of Appeals
`for the Federal Circuit
`______________________
`
`BOT M8 LLC,
`Plaintiff-Appellant
`
`v.
`
`SONY CORPORATION OF AMERICA, SONY
`CORPORATION, SONY INTERACTIVE
`ENTERTAINMENT LLC,
`Defendants-Appellees
`______________________
`
`2020-2218
`______________________
`
`Appeal from the United States District Court for the
`Northern District of California in No. 3:19-cv-07027-WHA,
`Judge William H. Alsup.
`______________________
`
`Decided: July 13, 2021
`______________________
`
`PAUL J. ANDRE, Kramer Levin Naftalis & Frankel LLP,
`Menlo Park, CA, argued for plaintiff-appellant. Also rep-
`resented by JAMES R. HANNAH, LISA KOBIALKA; AARON M.
`FRANKEL, CRISTINA MARTINEZ, New York, NY.
`
` JOHN C. O'QUINN, Kirkland & Ellis LLP, Washington,
`DC, argued for defendants-appellees. Also represented by
`CALVIN ALEXANDER SHANK; GREG AROVAS, New York, NY;
`DAVID ROKACH, Chicago, IL.
` ______________________
`
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`BOT M8 LLC v. SONY CORPORATION OF AMERICA
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`
`Before DYK, LINN, and O’MALLEY, Circuit Judges.
`O’MALLEY, Circuit Judge.
`Once more, we address the stringency of pleading re-
`quirements in cases alleging patent infringement. Once
`more, we explain that patentees need not prove their case
`at the pleading stage. See In re Bill of Lading Transmis-
`sion & Processing Sys. Patent Litig., 681 F.3d 1323, 1339
`(Fed. Cir. 2012) (citing Skinner v. Switzer, 562 U.S. 521,
`529–30 (2011));1 Nalco Co. v. Chem-Mod, LLC, 883 F.3d
`1337, 1350 (Fed. Cir. 2018). And we, once more, explain
`that, while a patentee’s pleading obligations are not insur-
`mountable, a patentee may subject its claims to early dis-
`missal by pleading facts that are inconsistent with the
`requirements of its claims. See Nalco, 883 F.3d at 1348–
`50.
`
`Bot M8 LLC (“Bot M8”) filed suit against Sony Corpo-
`ration of America, et al. (“Sony”) in the United States Dis-
`trict Court for the Southern District of New York, alleging
`infringement of six patents, five of which remain at issue
`on appeal: U.S. Patent Nos. 8,078,540 (“the ’540 patent”);
`8,095,990 (“the ’990 patent”); 7,664,988 (“the ’988 patent”);
`8,112,670 (“the ’670 patent”); and 7,338,363 (“the ’363 pa-
`tent”) (collectively, “the asserted patents”).
`After the case was transferred to the United States Dis-
`trict Court for the Northern District of California, the dis-
`trict court held a case management conference, during
`which Bot M8 agreed to file an amended complaint. Bot
`
`1 Although one portion of the decision in Bill of Lad-
`ing dealt with Federal Rule of Civil Procedure 84 and its
`attendant Form 18, both of which have been eliminated
`from the Federal Rules, the portion of the decision address-
`ing pleading obligations not governed by Form 18 remains
`governing precedent.
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`BOT M8 LLC v. SONY CORPORATION OF AMERICA
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`M8 filed a first amended complaint and Sony moved to dis-
`miss for failure to state a claim. The district court granted
`dismissal as to the ’540, ’990, ’988, and ’670 patents. The
`court subsequently denied Bot M8’s motion for leave to file
`a second amended complaint. Bot M8 moved for reconsid-
`eration, which the district court also denied.
`As to the ’363 patent, Sony moved for summary judg-
`ment, arguing that claim 1 is invalid under 35 U.S.C. § 101.
`The district court agreed, and granted Sony’s motion for
`summary judgment. The parties entered into a joint stip-
`ulation dismissing the remaining claims and the district
`court entered final judgment.
`Bot M8 appeals from the district court’s final judgment
`and from several underlying orders and decisions. In par-
`ticular, Bot M8 appeals the district court’s orders: (1) “di-
`recting” Bot M8 to file a first amended complaint;
`(2) dismissing Bot M8’s claims of infringement of the ’540,
`’990, ’988, and ’670 patents; (3) denying Bot M8’s motion to
`file a second amended complaint, as well as the subsequent
`order denying leave to move for reconsideration; and
`(4) granting summary judgment as to the ’363 patent. See
`Bot M8 LLC v. Sony Corp., No. C19-07027, 2020 WL
`418938 (N.D. Cal. Jan. 27, 2020) (“Order on Mot. to Dis-
`miss”); Bot M8 LLC v. Sony Corp., No. C19-07027, 2020
`WL 1643692 (N.D. Cal. Apr. 2, 2020) (“Order Den. Mot. to
`Amend”); Bot M8 LLC v. Sony Corp., No. C19-07027, 2020
`WL 1904102 (N.D. Cal. Apr. 16, 2020) (“Order Den. Leave
`to Move for Recons.”); Bot M8 LLC v. Sony Corp., No. C19-
`07027, 465 F.Supp.3d 1013 (N.D. Cal. 2020) (“Order on
`Summ. J.”).
`To the extent the district court characterized its collo-
`quy with counsel during the case management conference
`as “directing” Bot M8 to file a first amended complaint, we
`find no abuse of discretion in that decision. Nor do we find
`any error in the district court’s decision dismissing Bot
`M8’s claims as to the ’540 and ’990 patents for failure to
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`BOT M8 LLC v. SONY CORPORATION OF AMERICA
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`state a plausible claim of infringement. With respect to the
`’988 and ’670 patents, however, we conclude that the dis-
`trict court erred in finding Bot M8’s infringement allega-
`tions insufficient.
`On this record, we find that the district court acted
`within its discretion in denying Bot M8 leave to file a sec-
`ond amended complaint and in denying reconsideration of
`that decision. Finally, we agree with the district court that
`claim 1 of the ’363 patent is invalid under § 101.
`We therefore affirm in part, reverse in part, and re-
`mand to the district court for further proceedings as to the
`’988 and ’670 patents.
`I. BACKGROUND
`A. The Asserted Patents
`Bot M8 is the assignee on all five of the asserted pa-
`tents. The asserted patents relate to gaming machines and
`are directed to casino, arcade, and video games generally.
`The ’540 patent relates to an authentication mecha-
`nism to verify that a game program has not been manipu-
`lated. In relevant part, the ’540 patent requires that a
`“game program for executing a game” and an “authentica-
`tion program for authenticating the game program” are
`stored on the same “board including a memory,” which is
`separate from the motherboard and its memory. ’540 pa-
`tent, col. 12, ll. 64–col. 13, ll. 5.
`The ’990 patent likewise relates to a gaming machine
`and requires storing gaming information and a mutual au-
`thentication program on the same medium. Specifically,
`the ’990 patent claims an “authentication unit” that au-
`thenticates “gaming information,” and a separate “mutual
`authentication unit” that authenticates the “authentica-
`tion program.” ’990 patent, col. 17, ll. 23–31. The claims
`require “a removable storage medium storing therein gam-
`ing
`information
`including a mutual authentication
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`BOT M8 LLC v. SONY CORPORATION OF AMERICA
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`program,” with “the mutual authentication program [be-
`ing] included in the gaming information authenticated by
`the authentication unit.” Id. at col. 17, ll. 6–8, 29–31.
`The ’988 and ’670 patents generally relate to a gaming
`device with a fault inspection program. In both patents,
`execution of the “fault inspection program” must be com-
`pleted “before the game is started.” See ’988 patent, col. 5,
`ll. 1–5; ’670 patent, col. 5, ll. 4–7.
`Finally, the ’363 patent describes a gaming machine
`that changes future game conditions based on players’
`prior game results. Generally, claim 1 recites a machine
`that sets an initial “specification value,” which is a value
`that controls game conditions, and then “renew[s]” that
`value based on “a total game result” achieved by the
`claimed machine and a second recited machine. See ’363
`patent, col. 23, l. 61–col. 24, l. 15. These machines have
`various components that locate other players, set a “speci-
`fication value,” transmit game results to a server, receive
`total game results, which aggregate game results from the
`players, and then update the game conditions by setting a
`new specification value based on the aggregate game re-
`sults. See id. The claimed machines can send game results
`to a server over “a public phone line network, a cellular
`phone line network, a local area network (LAN), or the
`like.” Id. at col. 10, ll. 30–36.
`B. Sony’s Products
`Bot M8 accused Sony’s PlayStation 4 (“PS4”) video
`game consoles and aspects of Sony’s PlayStation network
`of infringing the ’540, ’990, ’988, and ’670 patents. Bot M8
`also accused certain PS4 videogames of infringing the ’363
`patent. Sony relies on a variety of authentication and cop-
`yright protection technologies to prevent unauthorized use
`of the PS4 and copying of PS4 games.
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`BOT M8 LLC v. SONY CORPORATION OF AMERICA
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`C. Procedural History
`As noted, Bot M8 initially sued Sony in the Southern
`District of New York. Sony filed an answer, asserting non-
`infringement of the asserted patents and arguing that “the
`Complaint fails to identify legitimate theories for how the
`claim limitations of the patents-in-suit are allegedly satis-
`fied.” J.A. 504. Sony also moved to transfer the case to the
`Northern District of California. The New York district
`court granted Sony’s motion and transferred the case to
`California. Sony did not move to dismiss the complaint for
`failure to state a claim and did not seek a more definite
`statement of the claims.
`After the case was transferred, the district court held a
`case management conference on November 21, 2019. Dur-
`ing that conference, the court sua sponte directed Bot M8
`to file an amended complaint specifying “every element of
`every claim that you say is infringed and/or explain why it
`can’t be done.” Order on Mot. to Dismiss, 2020 WL 418938,
`at *1. The court instructed Bot M8 that, “if this is a product
`you can buy on the market and reverse engineer, you have
`got to do that.” Id. Counsel for Bot M8 responded that they
`“would be happy to put in an Amended Complaint with
`claim charts” and “element-by-element” allegations. J.A.
`533 at 3:10–18. Bot M8 further explained that reverse en-
`gineering would not be a problem because it had already
`“torn down the Sony PlayStation.” Order on Mot. to Dis-
`miss, 2020 WL 418938, at *1. Pursuant to Rule 16 of the
`Federal Rules of Civil Procedure, the court set a deadline
`of December 5, 2019 for Bot M8 to file its amended com-
`plaint.
`
`1. First Amended Complaint
`On December 5, 2019, Bot M8 timely filed a 223-page
`first amended complaint (“FAC”). This time, Sony did
`move to dismiss. The district court held oral argument on
`Sony’s motion on January 23, 2020. At the hearing, the
`court questioned why Bot M8 had not cited to Sony’s source
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`code in the FAC, a failing Sony did not identify in its mo-
`tion to dismiss. J.A. 1541 at 20:16–17 (“Why can’t you buy
`one of these products and take whatever code is on there
`off and analyze it?”). In response, Bot M8 indicated that
`the PS4 source code is not publicly available and that the
`software on the PS4 is encrypted and protected by Sony’s
`access control technology.
`In a decision dated January 27, 2020, the district court
`granted Sony’s motion to dismiss as to the ’540, ’990, ’988
`and ’670 patents.2 For the ’540 patent—which describes an
`authentication mechanism for video games—the district
`court found that “the complaint fails to allege when or
`where the game program and authentication program are
`stored together on the same memory board.” Order on Mot.
`to Dismiss, 2020 WL 418938, at *2.
`Likewise, for the ’990 patent—which describes a mu-
`tual authentication mechanism for video games—the court
`found that “the complaint fails to allege when or where the
`game program and mutual authentication program are
`stored together.” Id. at *3. Although Bot M8 pointed to an
`assertion in the complaint that the “game program on the
`hard drive or disc contains a mutual authentication pro-
`cess,” the court explained that “allegations that track the
`claim language that closely are conclusory and require sup-
`port not found in the substantive allegations.” Id. Because
`the allegations “do not address where the game program is
`stored,” the court found them insufficient. Id.
`For the ’988 and ’670 patents—which describe com-
`puter program fault inspection—the court found that “the
`complaint provides no basis to infer the proper timing of
`the inspection”—i.e., whether a “fault inspection program”
`is “completed before the game starts.” Id. at *4. The court
`
`
`2 The court denied Sony’s motion to dismiss as to the
`’363 patent, however.
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`BOT M8 LLC v. SONY CORPORATION OF AMERICA
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`explained that Bot M8’s “allegation too closely tracks the
`claim language to be entitled to the presumption of truth,”
`and “[n]o underlying allegations of fact are offered.” Id.
`At the end of its decision, the district court explained
`that Bot M8 “already enjoyed its one free amendment un-
`der the rules” and was instructed to “plead well, element-
`by-element.” Order on Mot. to Dismiss, 2020 WL 418938,
`at *6. Although the court stated that Bot M8 “does not de-
`serve yet another chance to re-plead,” the court neverthe-
`less gave Bot M8 until February 13, 2020 to do so. Id. The
`court added that, if Bot M8 “move[d] for leave to file yet
`another amended complaint, it should be sure to plead its
`best case.” Id.
`Two days after the district court issued its order on the
`motion to dismiss, it held a discovery hearing where
`Bot M8 raised, for the first time, concerns about the legal-
`ity of reverse engineering the PS4’s software, otherwise
`known as “jailbreaking.” During the hearing, counsel for
`Bot M8 explained that they had not previously reverse en-
`gineered the PS4 to support the prior pleadings because
`“jailbreaking” the PS4 is illegal under the Digital Millen-
`nium Copyright Act (“DMCA”) and other anti-hacking stat-
`utes. In response, the district court asked Sony to give Bot
`M8 “permission, for whatever good it is” to reverse engineer
`the PS4, which Sony agreed to do. J.A. 1561–63.
`2. Motion for Leave to Amend
`On February 13, 2020, Bot M8 filed a motion for leave
`to amend its complaint and attached a redlined version of
`its proposed Second Amended Complaint (“SAC”). Bot M8
`explained that the SAC was based on new evidence ob-
`tained only after it was authorized to “jailbreak” the PS4.
`Though Bot M8 moved for leave to file the SAC within
`the time frame authorized by the district court, the court
`still denied Bot M8’s motion for lack of diligence. The dis-
`trict court found that Bot M8 should have done the
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`“jailbreak” of the PS4 and included that evidence in the
`FAC. At the outset, the court explained that Bot M8’s mo-
`tion was governed by Rule 16 of the Federal Rules of Civil
`Procedure, which permits modification “only for good
`cause.” Order Den. Mot. to Am., 2020 WL 1643692, at *2.
`The court found that, “[f]or nine weeks” after the November
`21 case management conference, Bot M8 “raised no con-
`cerns about its ability to reverse engineer the [PS4]” and
`said “not a word about the DMCA or anti-hacking stat-
`utes.” Id. Indeed, at that initial conference, Bot M8 repre-
`sented that it already had reverse engineered the PS4.
`Further, Bot M8 never cited any authority supporting its
`“professed fear of the DMCA or other anti-hacking stat-
`utes.” Id. at *3 (“[T]here remains no basis for either patent
`owner’s fears or its failure to timely raise them.”). Because
`Bot M8’s amendments “could have, and should have, been
`included in the December 5 amended complaint,” the court
`found the proposed amendments untimely. Id.
`3. Motion for Reconsideration
`Bot M8 sought leave to move for reconsideration of the
`court’s order denying leave to amend. In doing so, Bot M8
`reiterated its position that it could not have reverse engi-
`neered the PS4 before obtaining permission to disable the
`PS4’s access control technology in light of the DMCA, other
`anti-hacking statutes, and the Sony customer license
`agreement.
`The district court denied the motion, finding that Bot
`M8’s “theory of the [DMCA] crossing paths with patent
`rights remain[ed] unsupported by caselaw,” and Bot M8
`“offer[ed] no binding decision directing a different pleading
`or amendment standard.” Order Den. Leave to Move for
`Recons., 2020 WL 1904102, at *1. The court also reminded
`Bot M8 that it was directed to reverse engineer the PS4 at
`the initial case management conference and that Bot M8
`had agreed to do so. Given the record, the court found that
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`consideration. Id.
`
`Bot M8 was not entitled to the “extraordinary relief” of re-
`
`4. Summary Judgment under 35 U.S.C. § 101
`Both parties filed motions for summary judgment as to
`claim 1 of the ’363 patent. Bot M8 moved for summary
`judgment of infringement and Sony moved for summary
`judgment of non-infringement and patent ineligibility un-
`der 35 U.S.C. § 101. Applying the two-part test set forth in
`Alice Corp. v. CLS Bank International, 573 U.S. 208, 217–
`18 (2014), the district court found claim 1 of the ’363 patent
`ineligible.
`At Alice step one, the court found that claim 1 recites
`“the abstract idea of increasing or decreasing the risk-to-
`reward ratio, or more broadly the difficulty, of a multi-
`player game based upon previous aggregate results.” Or-
`der on Summ. J., 465 F. Supp. 3d at 1020. The court
`explained that updating future “game conditions based on
`past results to keep players engaged” is “a result, not a
`means to achieve it[,]” and the ’363 patent provides “no ex-
`planation how to accomplish the result.” Id. at 1021.
`At Alice step two, the court concluded that “claim 1 of-
`fers no inventive concept.” Id. at 1024. The court held that
`each claim element “invoke[s] no more than ‘generic and
`functional hardware’ to accomplish their abstract tasks.”
`Id. at 1025. And, “[t]hough given special names, each part
`remains a generic computer part invoked to effect the con-
`ventional computer task of gathering, manipulating, trans-
`mitting, and using data.” Id. The court further held that,
`“[e]ven taken as an ordered combination, the elements fail
`to transform the claimed abstract concept” because “the
`functionally described parts do only conventional computer
`tasks” without “offer[ing] something more.” Id. at 1025–
`26.
`Bot M8 submitted two expert declarations to prove in-
`ventive concept. The first expert, Dr. Stacy Friedman,
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`“admitted the video game field knew well how to connect
`multiple game machines, aggregate results, and change
`game parameters before the ’363 patent.” Id. at 1027. The
`second expert, Dr. Ian Cullimore, “could articulate no spe-
`cific inventive concept in claim 1 of the ’363 patent other
`than [a generic reference to] ‘the totality’ based on his ex-
`pert report” and “effectively admitted that he could not ar-
`ticulate anything unconventional about the ’363 patent’s
`disclosure of changing the game parameters during play.”
`Id. The court concluded that Bot M8’s expert testimony
`was thus insufficient “to forestall summary judgment.” Id.
`Given the district court’s decisions, the parties entered
`into a Joint Stipulation Regarding Case Management and
`Dismissal, dismissing the remaining claims without preju-
`dice, with Bot M8 reserving the right to appeal the district
`court’s various orders. The district court entered final
`judgment in favor of Sony on August 19, 2020. Bot M8
`timely appealed. We have jurisdiction under 28 U.S.C.
`§ 1295(a)(1).
`
`II. DISCUSSION
`A. The ’540, ’990, ’988, and ’670 Patents
`As noted, the district court dismissed Bot M8’s allega-
`tions related to the ’540, ’990, ’988, and ’670 patents for
`failure to sufficiently state a claim of infringement. On ap-
`peal, Bot M8 alleges that the district court erred in sua
`sponte requiring an amended complaint. Bot M8 also ar-
`gues that the district court erred in dismissing its FAC and
`abused its discretion by denying Bot M8 leave to amend the
`FAC. We address each issue in turn.
`1. Amending the Original Complaint
`At the outset, Bot M8 argues that “the district court
`erred in sua sponte forcing Bot M8 to replead” its original
`complaint. Appellant’s Br. 23. We find Bot M8’s argu-
`ments unpersuasive.
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`First, while the district court made its impression of
`Bot M8’s original complaint clear, it did not force Bot M8
`to replead. The record reveals that, during the November
`21, 2019 case management conference, the court told coun-
`sel for Bot M8 that it would give Bot M8 “another chance
`to plead if [it] want[ed] to try again; but, otherwise, [the
`court was] going to let [Sony] bring a Motion to Dismiss.”
`J.A. 533 at 3:7–9. Counsel indicated that Bot M8 “would
`be happy to put in an Amended Complaint with claim
`charts”—particularly given that it had already “torn down
`the Sony PlayStation.” Id. at 3:10–12. Bot M8 therefore
`chose to file an amended complaint rather than defend its
`original complaint; it was not forced to do so.
`Second, Ninth Circuit law is clear that “[a] trial court
`may act on its own initiative to note the inadequacy of a
`complaint and dismiss it for failure to state a claim” if it
`“give[s] notice of its intention to dismiss and give[s] the
`plaintiff some opportunity to respond unless the ‘plaintiffs
`cannot possibly win relief.’” Sparling v. Hoffman Constr.
`Co., 864 F.2d 635, 638 (9th Cir. 1988) (quoting Wong v. Bell,
`642 F.2d 359, 361 (9th Cir. 1981)). Accordingly, the district
`court had the authority to request an amended complaint,
`and the court’s procedure here was fair—it gave Bot M8 the
`option to re-plead or respond to any motion from Sony.
`That Bot M8 agreed to put together the requested claim
`chart at the case management conference weighs against
`Bot M8’s objections on appeal. We therefore find no error
`in the court’s decision directing Bot M8 to file the FAC.
`2. Dismissal of the FAC
`Federal Rule of Civil Procedure 8(a)(2) “generally re-
`quires only a plausible ‘short and plain’ statement of the
`plaintiff’s claim,” showing that the plaintiff is entitled to
`relief. Skinner, 562 U.S. at 530. To survive a motion to
`dismiss under Rule 12(b)(6), a complaint must “contain suf-
`ficient factual matter, accepted as true, to ‘state a claim to
`relief that is plausible on its face.’” Ashcroft v. Iqbal, 556
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`U.S. 662, 678 (2009) (quoting Bell v. Twombly, 550 U.S.
`544, 570 (2007)). “A claim has facial plausibility when the
`plaintiff pleads factual content that allows the court to
`draw the reasonable inference that the defendant is liable
`for the misconduct alleged.” Id. “Threadbare recitals of the
`elements of a cause of action, supported by mere conclusory
`statements, do not suffice.” Id. (citing Twombly, 550 U.S.
`at 555). “Determining whether a complaint states a plau-
`sible claim for relief [is] a context-specific task that re-
`quires the reviewing court to draw on its judicial
`experience and common sense.” Id. at 679.
`Here, the district court instructed counsel for Bot M8
`that it must “explain in [the] complaint every element of
`every claim that you say is infringed and/or explain why it
`can’t be done.” J.A. 532 at 2:21–24. We disagree with the
`district court’s approach and reiterate that a plaintiff “need
`not ‘prove its case at the pleading stage.’” Nalco, 883 F.3d
`at 1350 (quoting Bill of Lading, 681 F.3d at 1339). A plain-
`tiff is not required to plead infringement on an element-by-
`element basis. Id. (“[T]he Federal Rules of Civil Procedure
`do not require a plaintiff to plead facts establishing that
`each element of an asserted claim is met.”); see Disc Disease
`Sols. Inc. v. VGH Sols., Inc., 888 F.3d 1256, 1260 (Fed. Cir.
`2018) (finding that a plaintiff need not plead every ele-
`ment, but must only give the alleged infringer fair notice of
`infringement). Instead, it is enough “that a complaint
`place the alleged infringer ‘on notice of what activity . . . is
`being accused of infringement.’” Lifetime Indus., Inc. v.
`Trim-Lok, Inc., 869 F.3d 1372, 1379 (Fed. Cir. 2017) (quot-
`ing K-Tech Telecomms., Inc. v. Time Warner Cable, Inc.,
`714 F.3d 1277, 1284 (Fed. Cir. 2013)). To the extent this
`district court and others have adopted a blanket element-
`by-element pleading standard for patent infringement,
`that approach is unsupported and goes beyond the stand-
`ard the Supreme Court articulated in Iqbal and Twombly.
`See Twombly, 550 U.S. at 556 (“[A] well-pleaded complaint
`may proceed even if it strikes a savvy judge that actual
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`proof of those facts is improbable, and that a recovery is
`very remote and unlikely.”) (internal quotation marks and
`citation omitted).
`The relevant inquiry under Iqbal/Twombly is whether
`the factual allegations in the complaint are sufficient to
`show that the plaintiff has a plausible claim for relief. Iq-
`bal, 556 U.S. at 679. “The plausibility standard is not akin
`to a ‘probability requirement,’ but it asks for more than a
`sheer possibility that a defendant has acted unlawfully.”
`Id. at 678. In other words, a plausible claim must do more
`than merely allege entitlement to relief; it must support
`the grounds for that entitlement with sufficient factual
`content. Id. “[A] plaintiff’s obligation to provide the
`‘grounds’ of his ‘entitle[ment] to relief’ requires more than
`labels and conclusions, and a formulaic recitation of the el-
`ements of a cause of action will not do.” Twombly, 550 U.S.
`at 555. The level of detail required in any given case will
`vary depending upon a number of factors, including the
`complexity of the technology, the materiality of any given
`element to practicing the asserted claim(s), and the nature
`of the allegedly infringing device.
`Accordingly, a plaintiff cannot assert a plausible claim
`for infringement under the Iqbal/Twombly standard by re-
`citing the claim elements and merely concluding that the
`accused product has those elements. There must be some
`factual allegations that, when taken as true, articulate why
`it is plausible that the accused product infringes the patent
`claim. While the Supreme Court has said that “[f]actual
`allegations must be enough to raise a right to relief above
`the speculative level,” Twombly, 550 U.S. at 555, it has
`also indicated that “[s]pecific facts are not necessary; the
`statement need only ‘give the defendant fair notice of what
`the . . . claim is and the grounds upon which it rests,’” Er-
`ickson v. Pardus, 551 U.S. 89, 93 (2007) (quoting Twombly,
`550 U.S. at 555).
`
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`Case: 20-2218 Document: 44 Page: 15 Filed: 07/13/2021
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`BOT M8 LLC v. SONY CORPORATION OF AMERICA
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`15
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`Having clarified the appropriate standard, we turn to
`the district court’s decision on Sony’s motion to dismiss.
`The district court dismissed Bot M8’s claims as to the ’540,
`’990, ’988, and ’670 patents for lack of sufficient factual al-
`legations. We review a district court’s Rule 12(b)(6) dismis-
`sal under the law of the regional circuit. Juniper Networks,
`Inc. v. Shipley, 643 F.3d 1346, 1350 (Fed. Cir. 2011). Ap-
`plying Ninth Circuit law, we review “dismissals for failure
`to state a claim without deference.” Id. In doing so, “we
`accept all factual allegations in the complaint as true and
`construe the pleadings in the light most favorable to”
`Bot M8. Knievel v. ESPN, 393 F.3d 1068, 1072 (9th Cir.
`2005); see also Bill of Lading, 681 F.3d at 1340.
`As explained below, while we agree with the district
`court that Bot M8’s allegations as to the ’540 and ’990 pa-
`tents were conclusory and at times contradictory, we find
`that the court erred in dismissing the allegations as to the
`’988 and ’670 patents. With respect to the ’988 and ’670
`patents, the court simply required too much.
`a. The ’540 Patent
`Claim 1 of the ’540 patent requires “a board including
`a memory in which a game program . . . and an authenti-
`cation program . . . are stored” separate from “a mother-
`board” (“the board limitation”). ’540 patent, col. 12, l. 65–
`col. 13, l. 5. The district court found Bot M8’s allegations
`insufficient because the FAC “fails to plausibly plead the
`shared location of the game and authentication programs
`according to claim 1 of the ’540 patent.” Order on Mot. to
`Dismiss, 2020 WL 418938, at *3.
`On appeal, Bot M8 contends that the FAC describes
`how the PS4 meets all elements of the ’540 patent with
`“fourteen pages of factual allegations” and “fifteen pages of
`claim charts applying the publicly available evidence to the
`claim elements.” Appellant’s Br. 29. Specifically, Bot M8
`argues that its FAC identified three different components
`that independently satisfy the board limitation: (1) the
`
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`Case: 20-2218 Document: 44 Page: 16 Filed: 07/13/2021
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`16
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`BOT M8 LLC v. SONY CORPORATION OF AMERICA
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`(2) PS4 Blu-ray discs;
`internal hard drive;
`PS4’s
`and (3) PlayStation Network Servers.
` According to
`Bot M8, these allegations alone provide Sony with the req-
`uisite fair notice of its infringement claim with respect to
`the ’540 patent.
`Sony responds that Bot M8’s FAC failed to plausibly
`plead that the shared location of the game and authentica-
`tion programs is any of the three components that Bot M8
`identified. Sony further submits that the FAC actually al-
`leges away from infringement by asserting that the pur-
`ported “authentication program” is stored on the PS4
`motherboard—an allegation that is inconsistent with Bot
`M8’s infringement theory. As explained below, because we
`agree with Sony on its second point, we need not address
`the first in any detail, except to reiterate that conclusory
`allegations are insufficient.
`While a plaintiff need not prove infringement at the
`pleading stage, here, the FAC contains too much rather
`than too little, to the point that Bot M8 has essentially
`pleaded itself out of court. While Bot M8 repeatedly em-
`phasizes the number of pages in its FAC, it is the quality
`of the allegations, not the quantity, that matters. And un-
`fortunately for Bot M8, its allegations, which take a
`“kitchen sink” approach to pleading, reveal an incon-
`sistency that is fatal to its infringement case with respect
`to the ’540 patent.
`Claim 1 of the ’540 patent requires that a “game pro-
`gram for executing a game” and an “authentication pro-
`gram for authenticating the game program” are stored on
`the same “board including a memory,” separate from the
`“motherboard” and its memory. ’540 patent, col. 12, l. 65–
`col. 13, l. 5. In the FAC, however, Bot M8 asserts that
`“[t]he authentication program for the PlayStation 4 hard
`drive, Operating System, and games
`is stored on
`PlayStation 4 MX25L25635FMI 256Mb Serial Flash
`Memory,” which is allegedly in the PS4 “motherboard.”
`
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`Case: 20-2218 Document: 44 Page: 17 Filed: 07/13/2021
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`BOT M8 LLC v. SONY CORPORATION OF AMERICA
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`J.A. 633; see J.A. 630 (“The PlayStation 4 motherboard con-
`tains flash memory. The CMOS Serial Flash Memory . . .
`is a Macronix MX25L25635FMI 256Mb Serial Flash
`Memory chip.”). That allegation renders Bot M8’s infringe-
`ment claim not even possible, much less plausible. While
`claim 1 requires that the game program and authentication
`program be stored together, separately from the mother-
`board, the FAC alleges that the authentication program is
`located on the PS4 motherboard itself.
`Under Iqbal/Twom