Rembrandt Social Media, LP v. Facebook, Inc.

950 F. Supp. 2d 876, 2013 WL 2950342, 2013 U.S. Dist. LEXIS 84245
CourtDistrict Court, E.D. Virginia
DecidedJune 12, 2013
DocketCase No. 1:13cv158
StatusPublished
Cited by15 cases

This text of 950 F. Supp. 2d 876 (Rembrandt Social Media, LP v. Facebook, Inc.) is published on Counsel Stack Legal Research, covering District Court, E.D. Virginia primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Rembrandt Social Media, LP v. Facebook, Inc., 950 F. Supp. 2d 876, 2013 WL 2950342, 2013 U.S. Dist. LEXIS 84245 (E.D. Va. 2013).

Opinion

[878]*878 MEMORANDUM OPINION

T.S. ELLIS, III, District Judge.

In this patent infringement suit, defendants seek threshold dismissal, arguing (i) that there is no indirect or willful infringement, as defendants lacked the requisite pre-suit knowledge of the patents in issue, and (ii) that because of the nature of the '362 patent’s claimed system, only the end computer user — here the consumer — can directly infringe this system claim. Plaintiff opposes this motion, arguing (i) that defendants had the requisite pre-suit knowledge of the patents in issue and, even if they did not, post-suit knowledge satisfies the knowledge requirement for willful and indirect infringement of the patents, and (ii) that defendants directly infringe the system claim by controlling each step of the system, including the first step. Accordingly, the motion to dismiss presents the following questions:

(i) Whether the pre-suit knowledge required for indirect and willful infringement is satisfied as a pleading matter, where, as here, (a) the patentee and the putative infringer used the same law firm, (b) the putative infringer was sued on a patent that cited the patent in issue as prior art, and (c) the putative infringer purchased a patent that cited the patent in issue as prior art;
(ii) Whether knowledge of the patents derived from the service or filing of the lawsuit provides the knowledge of the patents required for either indirect or willful patent infringement claims; and,
(iii) Whether the facts pled in the complaint are sufficient, if proved, to establish direct infringement of the system claim in issue.

For the reasons that follow, the motion to dismiss must be granted in part and denied in part, as follows:

(i) The complaint fails to allege sufficient facts concerning pre-suit knowledge to state a claim for indirect infringement that is plausible on its face;
(ii) The complaint adequately alleges sufficient facts concerning post-filing knowledge to state a claim for indirect infringement, as the service or filing of a law suit provides the knowledge of the patents required for indirect infringement with damages limited to the post-filing period;
(iii) The complaint fails to allege sufficient facts concerning pre-suit knowledge of the patents to state a claim for willful infringement that is plausible on its face, and willful infringement cannot be based solely on knowledge that arises from the service or filing of the lawsuit; and,
(iv) The complaint adequately alleges sufficient facts to establish that defendants directly infringe the system claim in the '362 patent.

I.1

A.

Plaintiff Rembrandt Social Media. LP (“Rembrandt”), a Virginia limited partnership with a principal place of business in Bala Cynwyd, Pennsylvania, brings this patent infringement suit against defendants Facebook. Inc. (“Facebook”) and AddThis, Inc. (“AddThis”). Facebook is a Delaware Corporation with a principal place of business in Menlo Park, California and AddThis is a Delaware Corporation [879]*879with a principal place of business in Vienna, Virginia.

Rembrandt is the owner of the two patents in issue. U.S. Patent No. '6,415,316 (the '316 Patent), entitled “Method and Apparatus for Implementing a Web Page Diary,” describes an invention that allows persons to create a personal diary on the World Wide Web wherein users are able to create a collection of personal information and third party content that is displayed on a personal webpage that can be shared with an authorized group of people. U.S. Patent No. 6,289,362 (the '362 Patent), entitled “System and Method for Generation. Transferring, and Using an Annotated Universal Address.” describes a system that permits users to transfer third party content automatically from a third party content provider’s website to the user’s personal diary.

The claim at issue in this motion to dismiss is claim 7 of the '362 patent. Claim 7 is a “system” claim,2 which provides as follows:

A computer system comprising:

third party memory storing a transfer script that generates a request for a transfer applet from server memory;
server memory storing an AUA [annotated universal address] database from which personalized web pages are construed and a transfer applet for establishing a communications link between a client browser and the server memory; and
a client browser coupled to the third party memory and to the server memory for executing the transfer script and the transfer applet to transfer an AUA to an AUA database stored in the server memory, the AUA identifying a location of a content object and including an annotation authored by a content provider for controlling an aspect of a presentation of the object.

'362 Patent, Claim 7.

The '316 patent issued on July 2, 2002 and the '362 patent issued on September 11, 2001 to inventor Joannes Jozef Everardus Van Der Meer (“Van Der Meer”). Van Der Meer assigned his patents to his company, Administrator Nederland B.V. (“Aduna”), and following Van Der Meer’s death in June 2004, his family assigned the patents to Rembrandt, a non-practicing entity.

Rembrandt now brings this suit against Facebook and AddThis, alleging that (i) Facebook has willfully directly and indirectly infringed the '316 patent, (ii) Face-book and AddThis have jointly and willfully, directly and indirectly infringed the '362 patent, and (iii) Facebook has willfully directly and -indirectly infringed the -'362 patent. More specifically, Rembrandt alleges that Facebook directly infringes the '316 patent by operating the www. facebook.com website, and indirectly infringes the '316 patent by inducing and contributing to infringement of the '316 patent by encouraging Facebook members to use what Rembrandt alleges is the ‘web-based diary feature’ of the wwwiacebook. com website. In addition, Rembrandt alleges that AddThis directly infringes the '362 patent by both making and using the system described in claim 7. Likewise, Rembrandt alleges that Facebook directly infringes the '362 patent by using the system described in claim 7.

In support of its indirect and willful infringement claims, Rembrandt alleges [880]*880that Facebook had prior knowledge of the '316 and '362 patents from four separate sources. First, Rembrandt alleges that Aduna hired the law firm Fenwick & West to prosecute and maintain the '316 and '362 patents. Aduna maintained this relationship through July 2012. From 2008 until 2012, Fenwick & West also represented Facebook in patent prosecutions. Thus, Rembrandt alleges that it is plausible that a Fenwick & West attorney informed Facebook about the '316 and '362 patents. Second, Rembrandt alleges that on May 20.2011, Facebook was served with a complaint alleging infringement of U.S. Patent No. 7,933,893, which cited the '362 patent as prior art. Third, Rembrandt alleges that in June 2012. Facebook acquired two patents that listed the '362 patent as prior art. Finally, Rembrandt argues that-the original complaint in the instant case provides defendants with the requisite knowledge of the '316 and '362 patents for both indirect and willful infringement.

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950 F. Supp. 2d 876, 2013 WL 2950342, 2013 U.S. Dist. LEXIS 84245, Counsel Stack Legal Research, https://law.counselstack.com/opinion/rembrandt-social-media-lp-v-facebook-inc-vaed-2013.