Case 2:14-cv JRG-RSP Document 63 Filed 05/08/14 Page 1 of 10 PageID #: 353

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1 Case 2:14-cv JRG-RSP Document 63 Filed 05/08/14 Page 1 of 10 PageID #: 353 IN THE UNITED STATES DISTRICT COURT FOR THE EASTERN DISTRICT OF TEXAS MARSHALL DIVISION C-CATION TECHNOLOGIES, LLC, v. Plaintiff, Case No. 2:14-CV-59-JRG-RSP TIME WARNER CABLE, INC., ET AL. Defendants. PLAINTIFF C-CATION TECHNOLOGIES, LLC S SUR-REPLY IN OPPOSITION TO DEFENDANT CASA SYSTEMS, INC. S MOTION TO DISMISS PURSUANT TO FED. R. CIV. P. 12(b)(6)

2 Case 2:14-cv JRG-RSP Document 63 Filed 05/08/14 Page 2 of 10 PageID #: 354 TABLE OF CONTENTS Page INTRODUCTION... 1 ARGUMENT... 2 I. C-Cation Tech Has Properly Pled Direct Infringement Against Casa... 2 II. C-Cation Tech Has Properly Pled Indirect Infringement Against Casa... 4 CONCLUSION... 5 i

3 Case 2:14-cv JRG-RSP Document 63 Filed 05/08/14 Page 3 of 10 PageID #: 355 TABLE OF AUTHORITIES Page(s) Cases Achates Reference Publ g, Inc. v. Symantec Corp., No. 2:11-cv-294-JRG-RSP, 2013 U.S. Dist. LEXIS (E.D. Tex. Jan. 10, 2013)... 5 Bell Atl. Corp. v. Twombly, 550 U.S. 544 (2007)... 1 Global-Tech Appliances, Inc. v. SEB S.A., 131 S. Ct (2011)... 4, 5 In re Bill of Lading Transmission & Processing Sys. Patent Litigation, 681 F.3d 1323 (Fed. Cir. 2012)... 1, 3, 5 K-Tech Telecomms., Inc. v. Time Warner Cable, Inc., 714 F.3d 1277 (Fed. Cir. 2013), cert. denied, 2014 U.S. LEXIS 993 (Jan. 27, 2014)... 1 LML Patent Corp. v. Nat l Bank of Daingerfield, No. 2:09-cv-00180, 2011 WL (E.D. Tex. Mar. 24, 2011)... 3 Lodsys, LLC v. Brother Int l Corp., No. 2:11-cv-90-JRG, 2012 WL (E.D. Tex. Mar. 8, 2012)... 2, 3 McZeal v. Sprint Nextel Corp., 501 F.3d 1354 (Fed. Cir. 2007)... 2 OLA, LLC v. Builder Homesite, Inc., 661 F. Supp. 2d 668 (E.D. Tex. 2009)... 4 ii

4 Case 2:14-cv JRG-RSP Document 63 Filed 05/08/14 Page 4 of 10 PageID #: 356 INTRODUCTION Casa s reply in support of its motion to dismiss Count Four of C-Cation Tech s Complaint seeks to have the Court prematurely engage in claim construction, and again misstates the applicable law regarding pleading requirements for both direct and indirect infringement. With respect to direct infringement, as set forth in C-Cation Tech s opposition, Count Four of the Complaint satisfies the requirements of Form 18 of the Federal Rules of Civil Procedure. See D.I. 50 at 4-5. Casa nevertheless argues that the Supreme Court s decision in Bell Atl. Corp. v. Twombly, 550 U.S. 544 (2007), requires more than compliance with Form 18 (see D.I. 58 at 1). However, such argument has already been rejected. See, e.g., K-Tech Telecomms., Inc. v. Time Warner Cable, Inc., 714 F.3d 1277, 1283 (Fed. Cir. 2013), cert. denied, 2014 U.S. LEXIS 993 (Jan. 27, 2014) ( [T]o the extent any conflict exists between Twombly (and its progeny) and the Forms regarding pleadings requirements, the Forms control. ). Casa further argues that C-Cation Tech must plead facts establishing that Casa sells complete cable systems, including remote terminals, for all of the asserted method and apparatus claims. See D.I. 58 at 1. This argument, however, relies on Casa s assumptions about claim construction (which C-Cation Tech disputes), and should not be resolved by the Court at the pleading stage. See, e.g., In re Bill of Lading Transmission & Processing Sys. Patent Litigation, 681 F.3d 1323, 1343 n.13 (Fed. Cir. 2012) ( [T]o the extent the district court based its assessment of the reasonableness of a given inference of infringement on a narrow construction of the patent s claims, claim construction at the pleading stage with no claim construction processes undertaken was inappropriate. ). As for indirect infringement, Casa s reply fails to adequately address the relevant decisions from the Eastern District of Texas cited by C-Cation Tech in its opposition, which hold 1

5 Case 2:14-cv JRG-RSP Document 63 Filed 05/08/14 Page 5 of 10 PageID #: 357 that a plaintiff need not allege pre-suit knowledge of a patent-in-suit in order to state a claim for indirect infringement. See D.I. 50 at 5-6. Casa attempts to distinguish these cases by asserting that it does not make ongoing sales of the accused products on a daily or even a monthly basis (see D.I. 58 at 5), but there is no pleading requirement regarding the frequency of infringing sales. Here, C-Cation Tech s Complaint sufficiently identifies (i) Casa s accused products that are the subject of the allegations of indirect infringement (see D.I. 1 at 15-16, 38-39); (ii) Casa s accused activities directed to unlicensed cable providers such as Time Warner Cable, which include, in addition to actual sales, making, offering for sale, marketing, advertising and providing instructions for the use and implementation of cable systems and components (see id. at 38-40); and (iii) the requisite knowledge at least as early as the filing of the Complaint (see id. at 41). No more is required at the pleading stage. ARGUMENT I. C-Cation Tech Has Properly Pled Direct Infringement Against Casa To state a claim for patent infringement, a patentee need only plead facts sufficient to place the alleged infringer on notice as to what he must defend. See Lodsys, LLC v. Brother Int l Corp., No. 2:11-cv-90-JRG, 2012 WL , at *2 (E.D. Tex. Mar. 8, 2012) (quoting McZeal v. Sprint Nextel Corp., 501 F.3d 1354, 1357 (Fed. Cir. 2007)). In arguing that C-Cation Tech s Complaint does not properly plead a claim of direct infringement against Casa, Casa relies on the Supreme Court s holding in Twombly that a complaint must allege enough facts to state a claim to relief that is plausible on its face. See D.I. 58 at 1. Casa then argues that all of the asserted claims of the 883 patent require a multiple access communication system, that the Complaint does not plead that Casa sells complete cable systems, and that C-Cation Tech s 2

6 Case 2:14-cv JRG-RSP Document 63 Filed 05/08/14 Page 6 of 10 PageID #: 358 claim for direct infringement against Casa is therefore deficient. See D.I. 58 at 1-2. Casa s argument is both factually and legally incorrect. As noted above, the sufficiency of a claim for direct infringement is measured against the requirements of Form 18. See Bill of Lading, 681 F.3d at C-Cation Tech s Complaint states that Casa is and has been making, using, testing, and/or implementing cable systems and/or components thereof that fall within and whose use falls within the scope of at least one claim of the 883 patent. See D.I. 1 at 37. The Complaint further identifies certain channel management functions that Casa s accused products either perform or are capable of performing. See D.I. 1 at 15-16, 37. Thus, similar to the electric motor example provided in Form 18, the Complaint properly identifies a general category of accused products and meets the requirements for pleading a claim of direct infringement. See LML Patent Corp. v. Nat l Bank of Daingerfield, No. 2:09-cv-00180, 2011 WL , at *2 (E.D. Tex. Mar. 24, 2011); Lodsys, 2012 WL at *4 ( Here, the Complaint sufficiently pleads direct infringement of the 078 patent because it alleges that Canon makes, sells, offers to sell, and/or uses infringing computer server(s).... These allegations comply with the requirements of Form 18 and are sufficient at the pleading stage. ). Furthermore, Casa s allegation that the asserted claims of the 883 patent require a complete cable system is incorrect. Rather, the claims of the 883 patent are directed to, e.g., a method of allocating signalling data channels and a central controller. See D.I. 1, Exhibit A at 25, 27 (claims 1 & 14). In asserting that all claims of the 883 patent require a complete cable system, Casa is improperly asking this Court to engage in premature claim construction. See Bill of Lading, 681 F.3d at 1343 n.13 ( [T]o the extent the district court based its assessment of the reasonableness of a given inference of infringement on a narrow construction of the 3

7 Case 2:14-cv JRG-RSP Document 63 Filed 05/08/14 Page 7 of 10 PageID #: 359 patent s claims, claim construction at the pleading stage with no claim construction processes undertaken was inappropriate. ); OLA, LLC v. Builder Homesite, Inc., 661 F. Supp. 2d 668, 673 (E.D. Tex. 2009) (denying motion to dismiss infringement claim). Casa s motion to dismiss C-Cation Tech s direct infringement claim should be denied as premature for this reason alone. II. C-Cation Tech Has Properly Pled Indirect Infringement Against Casa Casa persists in asserting that pleading a claim for indirect infringement requires alleging facts establishing pre-suit knowledge of the asserted patent. 1 However, Casa fails to cite any controlling precedent or decisions from the Eastern District of Texas to support its position. Instead, Casa argues that its proposed requirement is derived from the Supreme Court s holding in Global-Tech Appliances, Inc. v. SEB S.A., 131 S. Ct (2011). However, the Court in Global-Tech ruled only on the requirements for ultimately succeeding on a claim for indirect infringement, not on the requirements for pleading such a claim. See id. at , The Court did not hold that pre-suit knowledge of a patent is required to succeed on a claim for indirect infringement. Id. As such, Casa s argument that Global-Tech mandates allegations of pre-suit knowledge in order to plead a claim for indirect infringement lacks merit. As set forth in C-Cation Tech s opposition, courts in the Eastern District of Texas have consistently and repeatedly rejected the exact pleading requirement now advanced by Casa. See D.I. 50 at 5. Casa s assertion that the position adopted by courts in the Eastern District of Texas rejecting the requirement of pre-suit knowledge of the patent vitiates Global-Tech s requirement that an indirect infringer have actual knowledge of the patent is unfounded. In order to ultimately succeed on a claim for indirect infringement, the patentee still must prove the accused infringer s 1 Casa also asserts that C-Cation Tech should be precluded from seeking pre-complaint damages for this reason (see D.I. 58 at 2), but this ignores the pending allegations of direct infringement against Casa. Casa has provided no rationale for its attempt to preclude pre-complaint damages entirely. 4

8 Case 2:14-cv JRG-RSP Document 63 Filed 05/08/14 Page 8 of 10 PageID #: 360 knowledge of the patent (or its willful blindness to the existence thereof) for some period of time during the infringing period. See Global-Tech, 131 S. Ct. at ; Achates Reference Publ g, Inc. v. Symantec Corp., No. 2:11-cv-294-JRG-RSP, 2013 U.S. Dist. LEXIS 27143, at *7- *8 (E.D. Tex. Jan. 10, 2013). Apparently recognizing the weakness in its position, Casa argues that even if an allegation of pre-suit knowledge of the patent is not required, C-Cation Tech has failed to adequately plead indirect infringement by Casa subsequent to the filing of C-Cation Tech s Complaint. Specifically, Casa argues that C-Cation Tech has not alleged facts demonstrating that Casa has sold any infringing products after February 4, Here, Casa seeks to impose a pleading burden beyond that required by the Federal Rules, and cites no legal authority requiring such a level of specificity in pleading indirect infringement. As noted in C-Cation Tech s opposition, a plaintiff is not required to prove its case at the pleading stage. Bill of Lading, 681 F.3d at C-Cation Tech has alleged that Casa is making, offering for sale, selling, advertising and/or marketing to cable providers such as TWC. See D.I. 1 at 31. This is sufficient at the pleading stage. See Achates, 2013 U.S. Dist. LEXIS 27143, at *11 ( Because the Complaint alleges that the infringement is ongoing, it is plausible that some induced infringement has occurred during the pendency of this case. Therefore, the Court finds that Complaint alleges sufficient facts to show a plausible claim for induced infringement. ). CONCLUSION For the foregoing reasons, as well as the reasons set forth in C-Cation Tech s opposition, C-Cation Tech respectfully requests that the Court deny Casa s motion to dismiss Count Four of C-Cation Tech s Complaint. 2 Notably, Casa does not contend that it has ceased sales of infringing products. 5

9 Case 2:14-cv JRG-RSP Document 63 Filed 05/08/14 Page 9 of 10 PageID #: 361 Respectfully submitted, /s/ Sam Baxter Samuel F. Baxter Texas State Bar No MCKOOL SMITH, P.C. 104 East Houston, Suite 300 Marshall, Texas Telephone: (903) Facsimile: (903) John F. Garvish, II Texas State Bar No MCKOOL SMITH, P.C. 300 West Sixth Street, Suite 1700 Austin, Texas Telephone: (512) Facsimile: (512) Lewis V. Popovski Jeffrey S. Ginsberg Sheila Mortazavi Merri C. Moken David J. Kaplan KENYON & KENYON LLP One Broadway New York, NY Tel.: (212) Fax: (212) Attorneys for C-Cation Technologies, LLC 6

10 Case 2:14-cv JRG-RSP Document 63 Filed 05/08/14 Page 10 of 10 PageID #: 362 CERTIFICATE OF SERVICE I hereby certify that all counsel of record who have consented to electronic service are being served with a copy of this document via the Court s CM/ECF system per Local Rule CV- 5(a)(3) on this 8th day of May, 2014 /s/ Sam Baxter 7

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