Bell Semiconductor, LLC v. NXP USA, Inc.

Opinion

1 2 3 4

8 UNITED STATES DISTRICT COURT 9 SOUTHERN DISTRICT OF CALIFORNIA 10

11 BELL SEMICONDUCTOR, LLC, Case No.: 22-cv-01794-H-KSC 12 Consolidated for Pretrial Purposes with Plaintiff, 13 Lead Case No.: 22-cv-00594-H-KSC v. 14 ORDER DENYING DEFENDANT NXP USA, INC., 15 NXP’S RULE 12(b)(6) MOTION TO Defendant. DISMISS 16

17 [Doc. No. 15.]1

18 On December 29, 2022, Defendant NXP USA, Inc. (“NXP”) filed a motion to 19 dismiss Plaintiff Bell Semiconductor, LLC (“Bell Semic”)’s complaint pursuant to Federal 20 Rule of Civil Procedure 12(b)(6) for failure to state a claim. (Doc. No. 15.) On January 21 13, 2023, Bell Semic filed a response in opposition to NXP’s motion to dismiss. (Case No. 22 22-cv-594, Doc. No. 93.) On January 23, 2023, NXP filed a reply. (Case No. 22-cv-594, 23 Doc. No. 99.) On January 25, 2023, the Court took the matter under submission. (Doc. 24 No. 24.) For the reasons below, the Court denies NXP’s motion to dismiss. 25 / / / 26

27 1 All citations in this order are to the docket in Bell Semiconductor, LLC v. NXP USA, 28 1 Background 2 Bell Semic alleges that it is the owner by assignment of U.S. Patent No. 7,396,760 3 (“the ’760 Patent”). (Doc. No. 1, Compl. ¶ 24.) In the present action, Bell Semic alleges 4 that NXP directly infringes, either literally or under the doctrine of equivalents, the ’760 5 Patent by using the circuit design methodologies claimed in the patent to design one or 6 more semiconductor devices, including for example its NXP LS1043A Quad-Core 7 Networking Processor devices. (Id. ¶¶ 1, 38-43.) 8 The ’760 Patent generally relates to features of semiconductor design and 9 manufacturing. The ’760 Patent is entitled “method and system for reducing inter-layer 10 capacitance in integrated circuits” and was issued on July 8, 2008. U.S. Patent No. 11 7,396,760, at [45], [54] (issued Jul. 8, 2008). The invention disclosed in the ’760 Patent 12 “provides a method and system for reducing inter-layer capacitance utilizing an intelligent 13 dummy filling placement in integrated circuits.” Id. col. 2 ll. 17-19. 14 Independent claim 1 of the ’760 Patent claims: 15 A method for placing dummy fill patterns in an integrated circuit fabrication process, comprising: 16 obtaining layout information of the integrated circuit, the integrated 17 circuit including a plurality of layers; 18 obtaining a first dummy fill space for a first layer based on the layout 19 information; 20 obtaining a second dummy fill space for a second layer, the second layer being placed successively to the first layer; 21 determining an overlap between the first dummy fill space and the 22 second dummy fill space; and 23 minimizing the overlap by re-arranging a plurality of first dummy fill features and a plurality of second dummy fill features, 24 wherein the first dummy fill space includes non-signal carrying lines 25 on the first layer and the second dummy fill space includes non-signal 26 carrying lines on the second layer. 27 Id. col. 6 ll. 8-24. 28 1 On November 15, 2022, Bell Semic filed a complaint against NXP, alleging a claim 2 for infringement of the ’760 Patent. (Doc. No. 1, Compl. ¶¶ 34-46.) On January 12, 2023, 3 the Court denied NXP’s motion to stay this action. (Doc. No. 20 at 10.) On January 12, 4 2023, the Court consolidated this action with Bell Semiconductor v. NXP USA, Inc., No. 5 22-cv-594 (S.D. Cal, filed Apr. 27, 2022), and several other related actions for pretrial 6 purposes. (Doc. No. 21 at 5.) By the present motion, NXP moves pursuant to Federal Rule 7 of Civil Procedure 12(b)(6) to dismiss Bell Semic’s complaint for failure to state a claim. 8 (Doc. No. 15-1 at 1.) 9 Discussion 10 I. Legal Standards for a Rule 12(b)(6) Motion to Dismiss 11 A motion to dismiss under Federal Rule of Civil Procedure 12(b)(6) tests the legal 12 sufficiency of the pleadings and allows a court to dismiss a complaint if the plaintiff has 13 failed to state a claim upon which relief can be granted. See Conservation Force v. Salazar, 14 646 F.3d 1240, 1241 (9th Cir. 2011) (citing Navarro v. Block, 250 F.3d 729, 732 (9th Cir. 15 2001)). Federal Rule of Civil Procedure 8(a)(2) requires that a pleading that states a claim 16 for relief contain “a short and plain statement of the claim showing that the pleader is 17 entitled to relief.” The function of this pleading requirement is to “‘give the defendant fair 18 notice of what the . . . claim is and the grounds upon which it rests.’” Bell Atl. Corp. v. 19 Twombly, 550 U.S. 544, 555 (2007) (quoting Conley v. Gibson, 355 U.S. 41, 47 (1957)). 20 A complaint will survive a Rule 12(b)(6) motion to dismiss if it contains “enough 21 facts to state a claim to relief that is plausible on its face.” Id. at 570. “A claim has facial 22 plausibility when the plaintiff pleads factual content that allows the court to draw the 23 reasonable inference that the defendant is liable for the misconduct alleged.” Ashcroft v. 24 Iqbal, 556 U.S. 662, 678 (2009). “A pleading that offers ‘labels and conclusions’ or ‘a 25 formulaic recitation of the elements of a cause of action will not do.’” Id. (quoting 26 Twombly, 550 U.S. at 555). “Threadbare recitals of the elements of a cause of action, 27 supported by mere conclusory statements, do not suffice.” Id. “While legal conclusions 28 can provide the framework of a complaint, they must be supported by factual allegations.” 1 Id. at 679. Accordingly, dismissal for failure to state a claim is proper where the claim 2 “lacks a cognizable legal theory or sufficient facts to support a cognizable legal theory.” 3 Mendiondo v. Centinela Hosp. Med. Ctr., 521 F.3d 1097, 1104 (9th Cir. 2008); see Los 4 Angeles Lakers, Inc. v. Fed. Ins. Co., 869 F.3d 795, 800 (9th Cir. 2017). 5 In reviewing a Rule 12(b)(6) motion to dismiss, a district court must “‘accept the 6 factual allegations of the complaint as true and construe them in the light most favorable 7 to the plaintiff.’” Los Angeles Lakers, 869 F.3d at 800 (quoting AE ex rel. Hernandez v. 8 Cty. of Tulare, 666 F.3d 631, 636 (9th Cir. 2012)). But a court need not accept “legal 9 conclusions” as true. Iqbal, 556 U.S. at 678. Further, it is improper for a court to assume 10 the claimant “can prove facts which it has not alleged or that the defendants have violated 11 the . . . laws in ways that have not been alleged.” Associated Gen. Contractors of Cal., Inc. 12 v. Cal. State Council of Carpenters, 459 U.S. 519, 526 (1983). 13 In addition, a court may consider documents incorporated into the complaint by 14 reference and items that are proper subjects of judicial notice. See Coto Settlement v. 15 Eisenberg, 593 F.3d 1031, 1038 (9th Cir. 2010). If the court dismisses a complaint for 16 failure to state a claim, it must then determine whether to grant leave to amend. See Doe 17 v. United States, 58 F.3d 494, 497 (9th Cir. 1995); Telesaurus VPC, LLC v. Power, 623 18 F.3d 998, 1003 (9th Cir. 2010). 19 II. Analysis of Plaintiff’s Claim for Infringement of the ’760 Patent 20 In the complaint, Bell Semic alleges against NXP a claim for infringement of the 21 ’760 Patent. (Doc. No. 1, Compl. ¶¶ 34-46.) NXP argues that Bell Semic’s claim for 22 infringement of the ’760 Patent should be dismissed for two reasons. First, NXP argues 23 that the claim should be dismissed because the asserted claims of ’760 Patent are invalid 24 under 35 U.S.C. § 101. (Doc. No. 15-1 at 3-16.) Second, NXP argues that the claim should 25 be dismissed because Bell Semic has failed to allege sufficient facts to state a plausible 26 claim for infringement of the ’760 Patent. (Id. at 16-20.) The Court addresses these two 27 grounds for dismissal in turn below. 28 / / / 1 A. NXP’s § 101 Challenge to the Validity of the ’760 Patent 2 i. Legal Standards Governing Patent Eligibility Under 35 U.S.C. § 101 3 Section 101 of the Patent Act defines patent-eligible subject matter as “any new and 4 useful process, machine, manufacture, or composition of matter, or any new and useful 5 improvement thereof.” 35 U.S.C. § 101. The Supreme Court has “‘long held that this 6 provision contains an important implicit exception[:] Laws of nature, natural phenomena, 7 and abstract ideas are not patentable.’” Ass’n for Molecular Pathology v. Myriad Genetics, 8 Inc., 569 U.S. 576, 589 (2013) (quoting Mayo Collaborative Servs. v. Prometheus Lab’ys, 9 Inc., 566 U.S. 66, 70 (2012)). “This exception reflects the concern that patent law not 10 inhibit further discovery by improperly tying up the future use of these building blocks of 11 human ingenuity.” PersonalWeb Techs. LLC v. Google LLC, 8 F.4th 1310, 1314 (Fed. 12 Cir. 2021) (internal quotation marks omitted) (quoting Alice Corp. v. CLS Bank Int’l, 573 13 U.S. 208, 216 (2014)); see also CareDx, Inc. v. Natera, Inc., 40 F.4th 1371, 1376 (Fed. Cir. 14 2022) (“These exceptions exist because monopolizing the basic tools of scientific work 15 ‘might tend to impede innovation more than it would tend to promote it.’” (quoting Mayo, 16 566 U.S. at 71)). 17 “The Supreme Court has established a two-step framework for evaluating patent 18 eligibility under § 101.” Int’l Bus. Machines Corp. v. Zillow Grp., Inc., 50 F.4th 1371, 19 1377 (Fed. Cir. 2022) (citing Alice, 573 U.S. at 217). Under step one, the court 20 “determine[s] whether the claim is ‘directed to’ a ‘patent-ineligible concept,’ such as an 21 abstract idea.” Coop. Ent., Inc. v. Kollective Tech., Inc., 50 F.4th 127, 130 (Fed. Cir. 2022) 22 (quoting Alice, 573 U.S. at 217). If so, the court proceeds to step two and “examine[s] ‘the 23 elements of the claim to determine whether it contains an “inventive concept” sufficient to 24 “transform” the claimed abstract idea into a patent-eligible application.’” Id. (quoting 25 Alice, 573 U.S. at 221). Specifically, the court determines “whether the claim elements, 26 individually and as an ordered combination, contain an inventive concept, which is more 27 than merely implementing an abstract idea using ‘well-understood, routine, [and] 28 conventional activities previously known to the industry.’” Id. (quoting Content Extraction 1 & Transmission LLC v. Wells Fargo Bank, Nat’l Ass’n, 776 F.3d 1343, 1347–48 (Fed. 2 Cir. 2014)). 3 “Patent eligibility is a question of law that may involve underlying questions of fact. 4 PersonalWeb, 8 F.4th at 1314; see Berkheimer v. HP Inc., 881 F.3d 1360, 1365 (Fed. Cir. 5 2018). “Thus, patent eligibility may be resolved at the Rule 12 stage only if there are no 6 plausible factual disputes after drawing all reasonable inferences from the intrinsic and 7 Rule 12 record in favor of the non-movant.” Coop. Ent., 50 F.4th at 130 (collecting cases). 8 “But ‘not every § 101 determination contains genuine disputes over the underlying facts 9 material to the § 101 inquiry.’ Indeed, that inquiry ‘may be, and frequently has been, 10 resolved on a Rule 12(b)(6) or (c) motion where the undisputed facts, considered under the 11 standards required by that Rule, require a holding of ineligibility under the substantive 12 standards of law.’” PersonalWeb, 8 F.4th at 1314 (citations omitted). 13 The party challenging the validity of the patents-in-suit bears the burden of proof 14 under the § 101 two-step framework. See Illumina, Inc. v. Ariosa Diagnostics, Inc., 967 15 F.3d 1319, 1328 (Fed. Cir. 2020); Vaporstream, Inc. v. Snap Inc., No. 16 217CV00220MLHKSX, 2020 WL 136591, at *7 (C.D. Cal. Jan. 13, 2020) (“‘The accused 17 infringer bears the burden of proof on both steps’ of the Alice inquiry.”); see also Microsoft 18 Corp. v. i4i Ltd. P’ship, 564 U.S. 91, 95 (2011) (“‘[T]he burden of establishing invalidity 19 of a patent or any claim thereof shall rest on the party asserting such invalidity.’” (quoting 20 35 U.S.C. § 282)). Further, any fact pertinent to the § 101 eligibility analysis must be 21 proven by clear and convincing evidence. See Berkheimer, 881 F.3d at 1368; see also 22 Microsoft, 564 U.S. at 95 (holding that § 282 requires that an invalidity defense “be proved 23 by clear and convincing evidence”). 24 ii. Step One of the § 101 Eligibility Analysis 25 Under step one, the court “determine[s] whether the claim is ‘directed to’ a ‘patent- 26 ineligible concept,’ such as an abstract idea.” Coop. Ent., 50 F.4th at 130 (quoting Alice, 27 573 U.S. at 217). The Federal Circuit has “‘approached the Step 1 directed to inquiry by 28 asking what the patent asserts to be the focus of the claimed advance over the prior art. In 1 conducting that inquiry, [courts] must focus on the language of the asserted claims 2 themselves, considered in light of the specification.’” Yu v. Apple Inc., 1 F.4th 1040, 1043 3 (Fed. Cir. 2021) (cleaned up) (quoting TecSec, Inc. v. Adobe Inc., 978 F.3d 1278, 1292 4 (Fed. Cir. 2020)); see also CardioNet, LLC v. InfoBionic, Inc, 955 F.3d 1358, 137273 (Fed. 5 Cir. 2020) (“In determining what the claims are directed to and whether they are directed 6 to an abstract idea, a court may well consult the plain claim language, written description, 7 and prosecution history.”). The step one inquiry “presents a legal question that can be 8 answered based on the intrinsic evidence.” CardioNet, 955 F.3d at 1372. 9 Under step one, “[i]f the focus of the claim is a specific and concrete technological 10 advance, for example an improvement to a technological process or in the underlying 11 operation of a machine, [the court’s] inquiry ends and the claim is eligible.” Adasa Inc. v. 12 Avery Dennison Corp., 55 F.4th 900, 908 (Fed. Cir. 2022). “‘In cases involving software 13 innovations, the step-one inquiry often turns on whether the claims focus on specific 14 asserted improvements in computer capabilities or instead on a process or system that 15 qualifies as an abstract idea for which computers are invoked merely as a tool.’” Int’l Bus. 16 Machines, 50 F.4th at 1377 (cleaned up) (quoting TecSec, 978 F.3d at 1292); see also In 17 re Killian, 45 F.4th 1373, 1380 (Fed. Cir. 2022) (“We have distinguished between claims 18 ‘directed to an improvement in the functioning of a computer,’ versus those . . . that simply 19 recite ‘generalized steps to be performed on a computer using conventional computer 20 activity.’” (quoting In re TLI Commc’ns LLC Pat. Litig., 823 F.3d 607, 612 (Fed. Cir. 21 2016))). The Federal Circuit “ha[s] routinely held software claims patent eligible under 22 Alice step one when they are directed to improvements to the functionality of a computer 23 or network platform itself.” Uniloc USA, Inc. v. LG Elecs. USA, Inc., 957 F.3d 1303, 24 1307 (Fed. Cir. 2020); see also Enfish, LLC v. Microsoft Corp., 822 F.3d 1327, 1335 (Fed. 25 Cir. 2016) (“The Supreme Court has suggested that claims ‘purport[ing] to improve the 26 functioning of the computer itself,’ or ‘improv[ing] an existing technological process’ 27 might not succumb to the abstract idea exception.”). In contrast, the Federal Circuit has 28 “held claims ineligible as directed to an abstract idea when they merely collect electronic 1 information, display information, or embody mental processes that could be performed by 2 humans.” Thales Visionix Inc. v. United States, 850 F.3d 1343, 1346–47 (Fed. Cir. 2017) 3 (citing Elec. Power Grp., LLC v. Alstom S.A., 830 F.3d 1350, 1353–54 (Fed. Cir. 2016) 4 (collecting cases)); see Killian, 45 F.4th at 1380 (“We have found . . . claims pertaining to 5 data gathering, analysis, and notification on generic computers to be directed to abstract 6 ideas at Alice/Mayo step one.”). 7 The Federal Circuit has cautioned that the step one directed to inquiry does not 8 “simply ask whether the claims involve a patent-ineligible concept, because essentially 9 every routinely patent-eligible claim involving physical products and actions involves a 10 law of nature and/or natural phenomenon—after all, they take place in the physical world.” 11 Enfish, 822 F.3d at 1335. Thus, courts must “be careful to avoid oversimplifying the claims 12 by looking at them generally and failing to account for the specific requirements of the 13 claims.” CardioNet, 955 F.3d at 1371; see TLI Commc’ns, 823 F.3d at 611 (“[I]n 14 determining whether the claims are directed to an abstract idea, we must be careful to avoid 15 oversimplifying the claims because ‘[a]t some level, “all inventions . . . embody, use, 16 reflect, rest upon, or apply laws of nature, natural phenomena, or abstract ideas.”’” (quoting 17 Alice, 573 U.S. at 217)). 18 NXP contends that the asserted claims of the ’760 Patent are directed to the abstract 19 idea of “rearranging objects in a design to minimize overlap between layers.” (Doc. No. 20 15-1 at 4.) As part of this argument, NXP contends that the asserted claims of the ’760 21 Patent do not recite a computer or any computer components. (Id. at 10.) In response, Bell 22 Semic argues that the asserted claims are not directed to an abstract idea because they are 23 directed to improving computer functionality. (Case No. 22-cv-594, Doc. No. 93 at 5-7.) 24 To support this argument, Bell Semic relies on several passages from the specifications of 25 the ’760 Patent. (See id. at 6-7.) Further, as part of this argument, Bell Semic contends 26 that the asserted claims of the ’760 Patent are performed on a computer and are 27 implemented in software, and Bell Semic notes that until the Court conducts a claim 28 construction in this action, the Court must adopt Bell Semic’s constructions. (Id. at 5 1 (citing Coop. Ent., 50 F.4th at 134).) On reply, NXP argues that Bell Semic’s arguments 2 fail because there is nothing in the claim language of the asserted claims that calls for any 3 form of computer implementation, and Bell Semic improperly imports details from the 4 specification of the ’760 Patent. (Case No. 22-cv-594, Doc. No. 99 at 1-4.) 5 In light of the above arguments and after reviewing the claim language and the 6 specification of the ’760 Patent, the Court concludes that resolution of the § 101 eligibility 7 of the asserted claims of the ’760 Patent would be inappropriate at this stage in the 8 proceedings. “Determining patent eligibility requires a full understanding of the basic 9 character of the claimed subject matter.” MyMail, Ltd. v. ooVoo, LLC, 934 F.3d 1373, 10 1379 (Fed. Cir. 2019); see also Intell. Ventures I LLC v. Cap. One Bank (USA), 792 F.3d 11 1363, 1369 (Fed. Cir. 2015) (“At step one of the Alice framework, it is often useful to 12 determine the breadth of the claims . . . .”). In light of this, “resolution of a patent’s section 13 101 eligibility is not always appropriate at the Rule 12(b) motion to dismiss stage without 14 the benefit of claim construction.” Mirror Imaging, LLC v. PNC Bank, N.A., No. W-21- 15 CV-00518-ADA, 2022 WL 229363, at *2 (W.D. Tex. Jan. 26, 2022); see Glob. Locating 16 Sys., LLC v. ShadowTrack 247, LLC, No. 1:19-CV-00225-MR, 2020 WL 3513535, at *3 17 (W.D.N.C. June 29, 2020) (“[A] court may require claim construction before ruling a 18 motion to dismiss based on patent eligibility under § 101.” (collecting cases)); see also 19 MyMail, 934 F.3d at 1379 (explaining “if the parties raise a claim construction dispute at 20 the Rule 12[] stage, the district court must either adopt the non-moving party’s 21 constructions or resolve the dispute to whatever extent is needed to conduct the § 101 22 analysis” (citing Aatrix, 882 F.3d at 1125)). Indeed, “[c]ourts routinely deny § 101 motions 23 as premature where claim construction disputes exist[].” Celgene Corp. v. Lotus Pharm. 24 Co., No. CV 17-6842-SDW-LDW, 2018 WL 6584888, at *2 (D.N.J. Dec. 14, 2018); see, 25 e.g., R2 Sols. LLC v. Am. Airlines, Inc., No. 4:22-CV-00353, 2022 WL 17477543, at *2 26 (E.D. Tex. Dec. 6, 2022) (denying motion to dismiss without prejudice and deferring the 27 issue of patent eligibility under § 101 until after claim construction); AML IP, LLC v. Am. 28 Eagle Outfitters, Inc., No. 6:21-CV-00823-ADA, 2022 WL 11456095, at *7–8 (W.D. Tex. 1 Oct. 19, 2022) (same); Enserion, LLC v. Orthofix, Inc., No. 4:20-CV-108, 2020 WL 2 5544614, at *2 (E.D. Tex. Sept. 16, 2020) (same); Teradyne, Inc. v. Astronics Test Sys., 3 Inc., No. CV 20-2713-GW-SHKX, 2020 WL 13593156, at *6–7, 12 (C.D. Cal. Aug. 7, 4 2020) (same); Glob. Locating, 2020 WL 3513535, at *4 (same). 5 Here, the parties present a clear claim construction dispute in their briefing on the § 6 101 eligibility issues as to the ’760 Patent – i.e., whether the asserted claims of the ’760 7 Patent require the use of a computer. (Compare Case No. 22-cv-594, Doc. No. 93 at 5 with 8 Case No. 22-cv-594, Doc. No. 99 at 2-4; Doc. No. 15-1 at 10.) In light of this claim 9 construction dispute between the parties, the Court concludes that the appropriate course 10 is to defer the issue of the § 101 eligibility of the asserted claims of the ’760 Patent until 11 after claim construction in this action.2 As such, the Court declines to dismiss Bell Semic’s 12

13 2 The Court acknowledges that the Federal Circuit has explained that “[i]n many 14 cases,” evaluation of a patent claim’s subject matter eligibility under § 101 can proceed before a formal claim construction. Genetic Techs. Ltd. v. Merial L.L.C., 818 F.3d 1369, 15 1374 (Fed. Cir. 2016); see also Content Extraction & Transmission, 776 F.3d at 1349 16 (“Although the determination of patent eligibility requires a full understanding of the basic character of the claimed subject matter, claim construction is not an inviolable prerequisite 17 to a validity determination under § 101.”). But this is generally when there is no claim 18 construction dispute between the parties relevant to the § 101 eligibility issues. See, e.g., Genetic Techs., 818 F.3d at 1374; Simio, LLC v. FlexSim Software Prod., Inc., 983 F.3d 19 1353, 1365 (Fed. Cir. 2020); Elec. Commc’n Techs., LLC v. ShoppersChoice.com, LLC, 20 958 F.3d 1178, 1184 (Fed. Cir. 2020). In contrast, here, there is a clear claim construction dispute between the parties that is relevant to the § 101 eligibility issues as to the asserted 21 claims of the ’760 Patent. Cf. Int’l Bus. Machines, 50 F.4th at 1377 (“‘In cases involving 22 software innovations, the step-one inquiry often turns on whether the claims focus on specific asserted improvements in computer capabilities or instead on a process or system 23 that qualifies as an abstract idea for which computers are invoked merely as a tool.’” 24 (cleaned up)); Killian, 45 F.4th at 1380 (“We have distinguished between claims ‘directed to an improvement in the functioning of a computer,’ versus those . . . that simply recite 25 ‘generalized steps to be performed on a computer using conventional computer activity.’”). 26 In its reply brief, NXP argues that the Court need not wait until claim construction 27 to determine the subject matter eligibility of the asserted claims because even if the Court credits Bell Semic’s proposed claim construction, the asserted claims are directed to patent- 28 1 claim for infringement of the ’760 Patent on the grounds that the asserted claims of the 2 ’760 Patent are invalid under 35 U.S.C. § 101.3 3 B. The Sufficiency of Plaintiff’s Infringement Allegations 4 In the complaint, Bell Semic alleges against NXP a claim for infringement of the 5 ’760 Patent. (Doc. No. 1, Compl. ¶¶ 34-46.) NXP argues that Bell Semic’s claim for 6 infringement of the ’760 Patent should be dismissed because the FAC fails to set forth 7 sufficient factual allegations showing that it is plausible that NXP infringes the ’760 Patent. 8 (Doc. No. 15-1 at 16-20.) 9 To establish infringement of a method claim, “a patentee must prove that each and 10 every step of the method or process was performed.” Aristocrat Techs. Australia Pty Ltd. 11 v. Int’l Game Tech., 709 F.3d 1348, 1362 (Fed. Cir. 2013); see Akamai Techs., Inc. v. 12 Limelight Networks, Inc., 797 F.3d 1020, 1022 (Fed. Cir. 2015) (en banc) (“Direct 13 infringement under § 271(a) occurs where all steps of a claimed method are performed by 14 or attributable to a single entity.”); Star Sci., Inc. v. R.J. Reynolds Tobacco Co., 655 F.3d 15 1364, 1378 (Fed. Cir. 2011) (“To prove infringement, a plaintiff must prove the presence 16 of each and every claim element or its equivalent in the accused method or device.”). The 17 Federal Circuit has explained that in order to assert a plausible claim for patent 18 infringement under the Iqbal/Twombly standard, the complaint must “place the alleged 19 infringer on notice of what activity is being accused of infringement.” Bot M8 LLC v. 20 Sony Corp. of Am., 4 F.4th 1342, 1352 (Fed. Cir. 2021) (cleaned up) (quoting Lifetime 21 22 acknowledges that when parties present a district court with a claim construction dispute at the Rule 12 stage, a district court may either: (1) adopt the non-moving party’s 23 constructions; or (2) resolve the parties’ dispute. See MyMail, 934 F.3d at 1379; Aatrix, 24 882 F.3d at 1125. The Court concludes that based on the specific claim construction dispute presented by the parties and its relevancy to the § 101 issues in this case, the 25 appropriate course is to resolve the parties’ dispute through a formal claim construction 26 hearing and order prior to resolution of the § 101 issues in this case. 27 3 The Court’s denial of this portion of NXP’s motion to dismiss is without prejudice to NXP re-raising its § 101 challenge to the asserted claims of the ’760 Patent through an 28 1 Indus., Inc. v. Trim-Lok, Inc., 869 F.3d 1372, 1379 (Fed. Cir. 2017)). A plausible claim 2 for patent infringement “must do more than merely allege entitlement to relief; it must 3 support the grounds for that entitlement with sufficient factual content.” Id. Thus, a 4 plaintiff cannot simply recite the claim elements and merely conclude that the accused 5 product has those elements. Id. at 1353. Rather, “[t]here must be some factual allegations 6 that, when taken as true, articulate why it is plausible that the accused product infringes the 7 patent claim.” Id. “The level of detail required in any given case will vary depending upon 8 a number of factors, including the complexity of the technology, the materiality of any 9 given element to practicing the asserted claim(s), and the nature of the allegedly infringing 10 device.” Id. 11 Nevertheless, the Federal Circuit has explained that the standard for pleading patent 12 infringement is “not onerous” and “a plaintiff need not prove its case at the pleading stage.” 13 Id. at 1352, 1354 (internal quotation marks omitted); see also WiTricity Corp. v. 14 Momentum Dynamics Corp., 563 F. Supp. 3d 309, 327 (D. Del. 2021) (“‘[V]ery little is 15 required in order to plead a claim of patent infringement.’”). In addition, the Federal 16 Circuit has specifically held that “[a] plaintiff is not required to plead infringement on an 17 element-by-element basis.” Bot M8, 4 F.4th at 1352; see Nalco Co. v. Chem-Mod, LLC, 18 883 F.3d 1337, 1350 (Fed. Cir. 2018). 19 Bell Semic argues that it has adequately stated a claim for infringement of the ’760 20 Patent because the element-by-element analysis provided in its complaint “‘clearly 21 exceeds’” what is required under Rule 8(a). (Case No. 22-cv-594, Doc. No. 93 at 9-10 22 (quoting Nalco, 883 F.3d at 1350).) The Court agrees with Bell Semic. The Federal Circuit 23 has explained that in order to state a claim for patent infringement, a plaintiff “is not 24 required to plead infringement on an element-by-element basis.” Bot M8, 4 F.4th at 1352; 25 see Nalco, 883 F.3d at 1350. Nevertheless, Bell Semic has provided such element-by- 26 element allegations in the complaint. 27 In the complaint, Bell Semic alleges that NXP has directly infringed at least 28 independent claim 1 of the ’760 Patent. (Doc. No. 1, Compl. ¶ 39.) To support this 1 allegation, the complaint sets forth the claim language for claim 1 and then provides factual 2 allegations explaining how NXP performs each element of the claimed method through its 3 use of design tools by Cadence Design Systems, Inc. (“Cadence”), Synopsys, Inc. 4 (“Synopsys”), and/or Siemens Digital Industries Software (“Siemens”) to design its 5 LS1043A Quad-Core Networking Processor devices. (Id. ¶¶ 31, 39-40.) In addition to 6 these factual allegations in the complaint, Bell Semic has attached a claim chart to the 7 complaint containing further element-by-element analysis with citations to supporting 8 evidence of how NXP allegedly performs the claimed method through its use of the design 9 tools at issue. (See id. ¶ 41; Doc. No. 1-3, Compl. Ex. B at 3-11.) These factual allegations 10 in the complaint along with the supporting claim chart are more than sufficient to “place 11 [NXP] on notice of what activity is being accused of infringement.” Bot M8, 4 F.4th at 12 1352; see, e.g., Disc Disease Sols. Inc. v. VGH Sols., Inc., 888 F.3d 1256, 1260 (Fed. Cir. 13 2018) (finding allegations sufficient to state claims for direct infringement of the patents- 14 in-suit where the patentee specifically identified the infringing products and alleged those 15 products included each and every element of at least one claim of the patents-in-suit); Bell 16 Semiconductor, LLC v. Western Digital Techs., Inc., No. 22-cv-01127-JAK-MRW, ECF 17 No. 74 at 4 (C.D. Cal. Jan. 3, 2023) (finding similar allegations in a complaint by Bell 18 Semic sufficient to state claims for direct infringement of the patents-in-suit in that case). 19 NXP argues that Bell Semic’s allegations are insufficient because the complaint 20 “contains no description of NXP’s Product or the process used to design it. . . . Indeed, the 21 complaint contains almost no allegations about NXP at all.” (Doc. No. 15-1 at 16-17; see 22 Case No. 22-cv-594, Doc. No. 99 at 7.) The Court rejects this argument as it is plainly 23 incorrect and is a gross mischaracterization of Bell Semic’s allegations. To support its 24 allegation that NXP directly infringes independent claim 1 of the ’760 Patent, Bell Semic 25 alleges that “NXP employs a variety of design tools . . . to make a layout for an interconnect 26 layer of a semiconductor device (the ‘Accused Processes’) as recited in the ’[760] patent 27 claims.” (Doc. No. 1, Compl. ¶ 39.) Bell Semic further alleges: 28 NXP’s Accused Processes allow arrangement and rearrangement of 1 dduummmmyy ffilill li ni na tismucincegs aswivaer el afaysehrsio ns,o i nacsl utdoin gm winiitmh itzhee atbhiel itiyn tteor slataygegr erb uthlke 2 capacitance after determining their overlap as required by claim 1 of the ’760 3 patent. NXP does so by employing a design tool . . . [to] rearrange the dummy fill features in successive layers of its [NXP LS1043A Quad-Core Networking 4 Processor devices]. 5 [] NXP’s Accused Processes also form the dummy fill features in a grid 6 within one or more of the successive layers, provide square-shaped dummy fill features in one or more of the successive layers, determine the dummy fill 7 space based on a local pattern density in one or more of the successive layers, 8 and minimize the total bulk capacitance and/or certain of its components. NXP does so by employing a design tool . . . to implement dummy fill 9 functionality in a timing-aware fashion and with consideration of interlayer 10 capacitive effects in creation and design of its [NXP LS1043A Quad-Core Networking Processor devices]. 11 (Id. ¶¶ 39-40.) These allegations are further supported by the attached claim chart 12 explaining how the software design tools at issue can be used to perform the claimed 13 method and asserting that NXP has used the design tools in this manner to create the circuit 14 design for its LS1043A Quad-Core Networking Processor chips. (Doc. No. 1-3, Compl. 15 Ex. B at 3-11.) Here, Bell Semic provides specific factual allegations regarding NXP’s 16 actions during the circuit design process for at least its LS1043A Quad-Core Networking 17 Processor chip to support its claim for infringement of the ’760 Patent. These factual 18 allegations are sufficient to state a claim for patent infringement. See Bot M8, 4 F.4th at 19 1353; Disc Disease, 888 F.3d at 1260; Bell Semiconductor, No. 22-cv-01127-JAK-MRW, 20 ECF No. 74 at 4. 21 NXP contends that Bell Semic’s allegations regarding the design tools at issue are 22 insufficient because they are nothing more than speculation based “on information and 23 belief.” (Doc. No. 15-1 at 1, 17; see Case No. 22-cv-594, No. 99 at 8-9.) The Court also 24 rejects this argument. In the complaint, Bell Semic alleges: “On information and belief, 25 MaxLinear employs a variety of design tools, for example, Cadence, Synopsys, and/or 26 Siemens tools, to make a layout for an interconnect layer of a semiconductor device . . . as 27 recited in the ’[760] patent claims.” (Doc. No. 1, Compl. ¶ 39.) In its attached claim charts, 28 1 Bell Semic further asserts that NXP is a customer of at least Synopsys and cites to evidence 2 to support this assertion.4 (Doc. No. 1-3, Compl. Ex. B at 1 n.1.) The Ninth Circuit has 3 explained that “‘[t]he Twombly plausibility standard . . . does not prevent a plaintiff from 4 pleading facts alleged upon information and belief where the facts are peculiarly within the 5 possession and control of the defendant or where the belief is based on factual information 6 that makes the inference of culpability plausible.’” Soo Park v. Thompson, 851 F.3d 910, 7 928 (9th Cir. 2017) (quoting Arista Records, LLC v. Doe 3, 604 F.3d 110, 120 (2d Cir. 8 2010)); see also Concha v. London, 62 F.3d 1493, 1503 (9th Cir. 1995) (“[W]e relax 9 pleading requirements where the relevant facts are known only to the defendant.”); Exergen 10 Corp. v. Wal-Mart Stores, Inc., 575 F.3d 1312, 1330 (Fed. Cir. 2009) (“Pleading on 11 ‘information and belief’ is permitted under Rule 9(b) when essential information lies 12 uniquely within another party’s control.”). As such, Bell Semic’s allegations made on 13 information and belief regarding the design tools are sufficient to support its claim for 14 infringement of the ’760 Patent. See Soo Park, 851 F.3d at 928; see, e.g., WiTricity, 563 15 F. Supp. 3d at 328 (“Although some of the allegations regarding the accused product are 16 plead on information and belief, more detailed allegations are not required at this stage. 17 Indeed, ‘it may not be possible for a plaintiff to describe its case-in-chief with particularity 18 at the outset of litigation, without access to the accused method, the accused apparatus for 19 reverse engineering, or confidential data such as source code.’”). 20 Finally, NXP asserts that the FAC fails to include any facts describing what, if 21 anything, Bell Semic did to investigate or understand whether the LS1043A Quad-Core 22 Networking Processor chip was designed using a particular method. (Doc. No. 15-1 at 17.) 23 But “reverse engineering or review of non-public information is not necessary to put 24 Defendant on notice of the infringement allegations.” Bell Semiconductor, No. 22-cv- 25

26 4 The Court notes that in a related action, Bell Semic has asserted that NXP is a 27 customer of at least Cadence and Synopsys and cites to evidence to support that assertion. (Case No. 22-cv-1267, Doc. No. 22-4, FAC Ex. D at 2; see also Case No. 22-cv-594, Doc. 28 1 }}01127-JAK-MRW, ECF No. 74 at 4. 2 In sum, Bell Semic has adequately stated a claim against NXP for direct 3 infringement of the *760 Patent. As such, the Court denies NXP’s motion to dismiss Bell 4 || Semic’s claim for infringement of the ’760 Patent for failure to state a claim.> 5 Conclusion 6 For the reasons above, the Court denies Defendant NXP’s Rule 12(b)(6) motion to 7 ||dismiss. NXP must file an answer to Plaintiff Bell Semic’s complaint within fourteen 8 ||(14) days from the date this order is filed. See Fed. R. Civ. P. 12(a)(4)(A). The answer 9 || must be filed in both the original case (Case No. 22-cv-1794) and the lead case (Case No. 10 22-cv-594). All other future filings must be made only tn the lead case (Case No. 22-cv- 11 absent further order of the Court. 12 IT IS SO ORDERED. 13 || DATED: January 27, 2023 | | | ul |. | | MARILYN ®. HUFF, Distri ge 15 UNITED STATES DISTRICT COURT 16 17 18 19 20 21 22 23 24 || oo 25 In its briefing, NXP raises various challenges to the declaration from Bell Semic’s %6 technical expert, Dr. Brahmbhatt, attached as Exhibit C to the complaint. (Doc. No. 15-1 at 19-20; Case No. 22-cv-594, Doc. No. 99 at 10.) Because the Court does not cite to or 27 in any way on the Brahmbhatt declaration in deciding NXP’s Rule 12(b)(6) motion to 28 dismiss, NXP’s challenges to the Brahmbhatt declaration for purposes of its Rule 12(b)(6) motion to dismiss are moot, and the Court declines to address them.