Dali Wireless, Inc. v. Corning Optical Communications LLC

CourtDistrict Court, N.D. California
DecidedMay 5, 2022
Docket3:20-cv-06469
StatusUnknown

This text of Dali Wireless, Inc. v. Corning Optical Communications LLC (Dali Wireless, Inc. v. Corning Optical Communications LLC) is published on Counsel Stack Legal Research, covering District Court, N.D. California primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Dali Wireless, Inc. v. Corning Optical Communications LLC, (N.D. Cal. 2022).

Opinion

1 2 3 4 UNITED STATES DISTRICT COURT 5 NORTHERN DISTRICT OF CALIFORNIA 6 7 DALI WIRELESS, INC., Case No. 20-cv-06469-EMC

8 Plaintiff, ORDER GRANTING DEFENDANT’S 9 v. MOTION FOR JUDGMENT ON THE PLEADINGS 10 CORNING OPTICAL COMMUNICATIONS LLC, Docket No. 124 11 Defendant. 12 13 14 I. INTRODUCTION 15 Plaintiff Dali Wireless, Inc. (“Dali”) filed this lawsuit against Defendant Corning Optical 16 Communications LLC (“Corning”) for patent infringement. There are three patents at issue: the 17 ‘261 patent, the ‘358 patent, and the ‘454 patent. The Court GRANTS Corning’s motion for 18 judgment on the pleadings for reasons stated below. 19 II. FACTUAL & PROCEDURAL BACKGROUND 20 Dali initiated this lawsuit against Corning on December 30, 2019. In its original 21 complaint, it asserted infringement of two different patents – i.e., the ‘074 and ‘766 patents. See 22 Docket No. 1 (Complaint). In its first amended complaint (“FAC”) filed on April 30, 2020, Dali 23 asserted infringement of three new patents currently at issue – i.e., the ‘261, ‘358, and ‘454 24 patents.1 See Docket No. 7 (FAC). Dali alleged that Corning has willfully infringed all three 25 patents at issue because Corning had “extensively examined Dali’s patent portfolio and proprietary 26 technology” between 2010 and 2014, during which Corning became well aware of the nature and 27 1 scope of Dali’s extensive patent portfolio. 2 Corning moved to dismiss the FAC, arguing that Dali’s allegations were insufficient to 3 support a claim of willful infringement because none of the three patents were issued until after 4 2014 – thus, Corning had no knowledge of the patents at issue. See Docket No. 84 at 2. On 5 August 19, 2021, the Court granted Corning’s motion for judgment on the pleadings of no 6 willfulness for failure to allege knowledge of the patents, with leave to amend. See Docket No. 7 96. 8 In its Second Amended Complaint (“SAC”), Dali now alleges that Corning had actual 9 notice of the patents-in-suit prior to the filing of the FAC – i.e., when the patents-at-suit were first 10 alleged on April 30, 2020. According to Dali, Corning’s in-house counsel learned of the ‘358 11 Patent on October 14, 2016, the ‘261 Patent on April 8, 2020, and the ‘454 Patent on April 15, 12 2020. See Docket No. 109 (SAC) at 8. Dali also alleges that Corning learned of the application of 13 the ‘454 Patent as early as August 8, 2016. Id. at 10. Dali does not allege with any particularity 14 how Corning learned of these patents. It does not allege, for instance, that Dali specifically 15 warned Corning or presented infringement claims or contentions. According to Dali, Corning 16 monitored its patent portfolio between 2010 and 2014 as follows: 17 • In late 2010, Corning executives were introduced to Dali. Id. at 8. 18 • In March 2011, Corning entered into an NDA to discuss purchasing radio 19 distribution system components from Dali. Id. 20 • In October 2011, Corning executives visited Dali’s research and development 21 headquarters in Canada and discussed a framework for cooperating on a project. 22 Corning also expressed interest in making a strategic investment in Dali. Id. 23 • In May 2012, Corning and Dali signed a letter of intent for Dali to develop, and 24 Corning to purchase, portions of a radio distribution system. Id. 25 • Between May and July of 2012, Corning performed extensive due diligence on 26 Dali’s portfolio, and the two entered into a License and Purchase Agreement. Id. at 27 9. 1 • In April 2013, Dali and Corning discussed broader cooperation between the two 2 companies. 3 • In October-November 2013, Corning informed Dali that it was reevaluating its 4 business case relating to radio distribution system, but suggested that other projects 5 and opportunities for collaboration with Dali would arise. Id. 6 • In March 2014, Corning reached out to Dali to discuss completing the radio project 7 as well as beginning a new project. Id. 8 • On June 3, 2014, Corning’s corporate development team met with Dali to discuss 9 Corning acquiring Dali, during which Dali presented an overview of its strategy, 10 product roadmap, and IP positioning. Id. Corning offered Dali up to $100 million 11 for its business and IP holdings; however, it lost interest in acquiring Dali 12 sometime between 2015 and 2016. Id. at 9-10. 13 • In 2017, Corning acquired SpiderCloud, obtaining the products accused of 14 infringement in this lawsuit. Id. 15 • On information and belief, Corning continued to monitor Dali’s patent portfolio, 16 and the parties again discussed licensing Dali’s portfolio in 2019. Id. at 10-11. 17 These allegations, however, are not specific to the ‘358, ‘261, or ‘454 Patents. From these 18 facts, Dali alleges that Corning examined and continued to monitor Dali’s patent portfolio, yet did 19 nothing to ensure its products acquired as part of the 2017 SpiderCloud acquisition did not 20 infringe Dali’s patents until April 2020. Id. at 7, 10, 11. Dali further alleges that Corning 21 continues to sell the accused SpiderCloud products. Id. 22 III. LEGAL STANDARD 23 Federal Rule of Civil Procedure 12(c) provides that “[a]fter the pleadings are closed—but 24 early enough not to delay trial—a party may move for judgment on the pleadings.” “[T]he same 25 standard of review applicable to a Rule 12(b) motion applies to its Rules 12(c) analog” because the 26 motions are “functionally identical.” Dworkin v. Hustler Magazine, Inc., 867 F.2d 1188, 1192 27 (9th Cir. 1989). Thus, when considering a Rule 12(c) motion, a district court “must accept the 1 1047, 1053 (9th Cir. 2011). The district court then must apply the Iqbal standard to determine 2 “whether the complaint's factual allegations, together with all reasonable inferences, state a 3 plausible claim for relief.” Id. at 1054 & n.4 (citing Iqbal, 556 U.S. at 662). 4 A. Willful Infringement – Elements 5 This Court recently addressed the elements of a claim for willful infringement:

6 Section 284 of the Patent Act directs courts to award a prevailing claimant "damages adequate to compensate for the infringement" 7 and "may increase the damages up to three times the amount found or assessed." 35 U.S.C. § 284. The Supreme Court has held that 8 while district courts should "take into account the particular circumstances of each case in deciding whether to award [enhanced] 9 damages," "such punishment should generally be reserved for egregious cases typified by willful misconduct." See Halo Elecs., 10 Inc. v. Pulse Elecs., Inc., 136 S. Ct. 1923, 1934 (2016). Enhanced damages, that is, "are not to be meted out in a typical infringement 11 case, but are instead designed as a 'punitive' or 'vindictive' sanction for egregious infringement behavior," i.e., behavior that is "willful, 12 wanton, malicious, bad-faith, deliberate, consciously wrongful, flagrant, or . . . characteristic of a pirate." Id. at 1932. "Since Halo, 13 courts in this District have required willful infringement claims to show both knowledge of the . . . [p]atents and egregious' conduct in 14 order to survive a motion to dismiss." Google, 2020 U.S. Dist. LEXIS 52753 (emphasis in original) (internal quotation omitted). 15 16 Fortinet, Inc. v. Forescout Techs., Inc., No. 20-cv-03343-EMC, 2021 U.S. Dist. LEXIS 111314, at 17 *58-59 (N.D. Cal. June 14, 2021). 18 The Federal Circuit has clarified that enhanced damages require a high standard of 19 “wanton, malicious, and bad-faith behavior,” but a finding of willfulness requires “deliberate or 20 intentional infringement.” SRI Int'l, Inc. v. Cisco Sys., Inc., 14 F.4th 1323, 1330 (Fed. Cir. 2021).

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Dali Wireless, Inc. v. Corning Optical Communications LLC, Counsel Stack Legal Research, https://law.counselstack.com/opinion/dali-wireless-inc-v-corning-optical-communications-llc-cand-2022.