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Midwest Athletics and Sports Alliance LLC v. Xerox Corp.

United States District Court, D. Nebraska

March 20, 2018

MIDWEST ATHLETICS AND SPORTS ALLIANCE LLC, Plaintiff,
v.
XEROX CORPORATION, Defendant.

          MEMORANDUM AND ORDER

          Robert F. Rossiter, Jr. United States District Judge.

         This matter is before the Court on defendant Xerox Corporation's (“Xerox”) Motion to Dismiss (Filing No. 31) plaintiff Midwest Athletics and Sports Alliance LLC's (“MASA”) Complaint (“Complaint”) “for failing to meet the required pleading standard for alleging patent infringement.” See Fed. R. Civ. P. 8(a)(2) and 12(b)(6). MASA maintains the Complaint “provides facts and allegations that state a plausible claim for relief and provides sufficient notice to Xerox of its claims of infringement.” Should the Court disagree, “MASA requests leave to amend its Complaint to include additional allegations or, in the alternative for leave to file a motion to amend the Complaint.” For the reasons stated below, the Court will grant Xerox's Motion to Dismiss with leave for MASA to amend.

         I. BACKGROUND

         Xerox manufactures and sells office-technology products, including photocopiers, computers, scanners, and printers. On December 13, 2017, MASA filed suit in this Court, alleging many of Xerox's products (the “accused products”) directly infringe on twenty MASA patents in violation of 35 U.S.C. § 271(a).[1] MASA seeks injunctive relief, damages, attorney fees and costs, and “[a]n accounting of all infringing sales and revenues, together with post judgment and prejudgment interest from the first date of infringement.” See 35 U.S.C. §§ 283-285.

         On February 15, 2018, Xerox moved to dismiss the Complaint for failure to state a claim. Xerox contends the Complaint “fails to make any factual allegations supporting its patent infringement assertions as required by U.S. Supreme Court precedent in view of the 2015 Amendments to the Federal Rules of Civil Procedure.” In Xerox's view, MASA's allegations are insufficient under Bell Atlantic Corporation v. Twombly, 550 U.S. 544 (2007), and Ashcroft v. Iqbal, 556 U.S. 662 (2009), “to infer that the accused products infringe each element of at least one claim of” MASA's patents. MASA responds that the allegations in the Complaint “more than satisfy the liberal pleading standard applicable to patent infringement causes of action.”

         II. DISCUSSION

         A. Legal Standard

         Despite some argument to the contrary, Xerox and MASA generally agree as to the governing legal standard, even if they disagree as to whether MASA's Complaint meets that standard. Both agree that, following the abrogation of Federal Rule of Civil Procedure 84 and Form 18 for direct-infringement claims on December 1, 2015, a complaint alleging patent infringement must satisfy the facial-plausibility standard from Twombly and Iqbal. See Battle Sports Sci., LLC v. Shock Doctor, Inc., 225 F.Supp.3d 824, 835 (D. Neb. 2016).

         “To survive a motion to dismiss” under that standard, MASA's Complaint “must contain sufficient factual matter, accepted as true, to ‘state a claim to relief that is plausible on its face.'” Iqbal, 556 U.S. at 678 (quoting Twombly, 550 U.S. at 570); accord Addiction & Detoxification Inst. L.L.C. v. Carpenter, 620 Fed.Appx. 934, 936 (Fed. Cir. 2015) (unpublished) (“Twombly and Iqbal require that a complaint for patent infringement contain sufficient factual allegations such that a reasonable court could, assuming the allegations were true, conclude that the defendant infringed.”). In evaluating Xerox's motion to dismiss, “[t]he court accepts as true all factual allegations, but is ‘not bound to accept as true a legal conclusion couched as a factual allegation.'” McAdams v. McCord, 584 F.3d 1111, 1113 (8th Cir. 2009) (quoting Iqbal, 556 U.S. at 678). “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.” Iqbal, 556 U.S. at 678.

         A plaintiff need not provide “‘detailed factual allegations, '” to meet the requirements of Federal Rule of Civil Procedure 8(a)(2), but the rule “demands more than an unadorned, the-defendant-unlawfully-harmed-me accusation.” Iqbal, 556 U.S. at 678 (quoting Twombly, 550 U.S. at 555). A complaint that alleges facts that are “merely consistent with” a defendant's liability “stops short of the line between possibility and plausibility.” Twombly, 550 U.S. at 557. The plaintiff must provide “sufficient factual information to provide” a basis for their claims “and to raise a right to relief above a speculative level.” Schaaf v. Residential Funding Corp., 517 F.3d 544, 549 (8th Cir. 2008). A complaint composed of “labels and conclusions, and a formulaic recitation of the elements of the cause of action will not do.” Twombly, 550 U.S. at 555.

         B. Patent Infringement

         Under 35 U.S.C. § 271(a), “whoever without authority makes, uses, offers to sell, or sells any patented invention, within the United States or imports into the United States any patented invention during the term of the patent therefor, infringes the patent.” “To prove infringement, a plaintiff must prove the presence of each and every claim element or its equivalent in the accused method or device.” Star Sci., Inc. v. R.J. Reynolds Tobacco Co., 655 F.3d 1364, 1378 (Fed. Cir. 2011).

         MASA alleges in twenty separate counts that various Xerox products violate twenty different patents MASA owns. MASA explicitly identifies the patents-in-suit and generally describes the accused products, including some external photographs and links to websites where additional information can purportedly be obtained. MASA alleges “[u]pon information and belief, ” that various models of Xerox's products “use one or more of the MASA Patents.”

         In each count, MASA alleges Xerox “has infringed and continues to infringe one or more claims of [each patent], including at least claim 1, in violation of 35 U.S.C. § 271(a).” According to MASA, Xerox's “infringement is based upon literal infringement or infringement under the doctrine of equivalents, or both.”[2] For each count, MASA ...


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