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Oy Ajat, Ltd v. Vatech America

April 14, 2011

OY AJAT, LTD.,
PLAINTIFF,
v.
VATECH AMERICA, INC., ET AL. DEFENDANTS.



The opinion of the court was delivered by: Peter G. Sheridan, U.S.D.J.

NOT FOR PUBLICATION

MEMORANDUM AND ORDER

This matter comes before the Court on Defendant Vatech America, Inc.'s ("Vatech America Inc.") motion to dismiss ("Vatech America Inc.'s Motion to Dismiss"). On September 23, 2010, Plaintiff Oy Ajat, Ltd. ("Plaintiff") filed a complaint for patent infringement ("Plaintiff's Complaint"). On January 14, 2011, Vatech America Inc.'s Motion to Dismiss was filed, seeking the dismissal of Plaintiff's "induced infringement" claims against it. On the same day, Vatech America Inc. filed an answer ("Vatech America Inc.'s Answer").*fn1 For the reasons set forth below, this Court grants in part and denies in part Vatech America Inc.'s Motion to Dismiss.

I

Plaintiff is a Finnish corporation. The defendants are four related corporations. Two of the defendants are located in Korea and two are located in the United States and carrying out business for the Korean corporations here. Defendant Vatech Co., Ltd. ("Vatech Co.") is a Korean corporation, and serves as the parent of Vatech America Inc. Defendant Vatech America Inc. maintains its principal place of business in New Jersey. Defendant E-Woo Technology Co., Ltd. ("E-Woo Co.") is a Korean company which serves as a subsidiary of or is controlled in some manner by Vatech Co. Defendant E-Woo Technology U.S.A., Inc. ("E-Woo U.S.A. Inc.") is a New Jersey corporation, which has the same address as Vatech America Inc. Plaintiff is the assignee of U.S. Patent No. 7,336,763 B2 and U.S. Patent No. 7,676,022 B2 (collectively, the "Patents"). Plaintiff contends that "[t]he claims of [the Patents] cover an extra oral digital pancramic dental x-ray imaging system."

Plaintiff contends that the Vatech Defendants have "been selling, offering to sell and/or importing into the United States apparati that infringe literally and through the doctrine of equivalents, one or more claims of the Patents-in-suit and [have] induced infringement of one or more claims of the Patents-in-suit." (emphasis added). Plaintiff alleges that Defendants' dental x-ray imaging system is an infringing apparatus. Plaintiff additionally maintains that Vatech Co. was notified of its infringement of the Patents on March 23, 2010. Plaintiff claims that the Vatech Defendants "have persisted in selling, offering to sell, or importing the infringing products into the United States and have induced purchases and use of the accused products to infringe one or more claims of [the Patents]." In particular, Plaintiff alleges that Vatech America Inc. and/or E-Woo U.S.A. Inc. "sell or offer to sell the accused infringing products to [primarily American] customers who use the equipment."

II

When evaluating a motion to dismiss for failure to state a claim, the court must accept as true all allegations in the pleading and all reasonable inferences that can be drawn therefrom, and must view such allegations and inferences in the light most favorable to the non-moving party. See Ashcroft v. Iqbal, 129 S. Ct. 1937, 1949-50 (2009); Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555 (2007); Oshiver v. Levin, Fishbein, Sedran & Berman, 38 F.3d 1380, 1384 (3d Cir. 1994). A cause of action should be dismissed only if the alleged facts, taken as true, fail to state a claim. See Iqbal, 129 S. Ct. at 1950.

While a court will accept well-pled allegations as true for the purposes of the motion to dismiss for failure to state a claim, a court will not accept bald assertions, unsupported conclusions, unwarranted inferences, or sweeping legal conclusions cast in the form of factual allegations. See Iqbal, 129 S. Ct. at 1949; Morse v. Lower Merion Sch. Dist., 132 F.3d 902, 906 (3d Cir. 1997). To the contrary, "[t]he pleader is required to 'set forth sufficient information to outline the elements of [its] claim or to permit inferences to be drawn that these elements exist.'" Kost v. Kozakiewicz, 1 F.3d 176, 183 (3d Cir. 1993) (citation omitted). A party must set forth "more than an unadorned, the-defendant-unlawfully-harmed-me accusation." Iqbal, 129 S. Ct. at 1949 (citation omitted). A party must present facts that "show" an entitlement to relief. Fowler v. UPMC Shadyside, 578 F.3d 203, 211 (3d Cir. 2009) (citation omitted).

III

Vatech America Inc. seeks the dismissal of Plaintiff's induced infringement claims against it. "Whoever actively induces infringement of a patent shall be liable as an infringer." 35 U.S.C. § 271(b). A claim of induced patent infringement arises where "the alleged infringer knowingly induced infringement and possessed specific intent to encourage another's infringement." AstraZeneca LP v. Apotex, Inc., 2010 WL 4286284, at *12 (Fed. Cir. Nov. 1, 2010) (quoting DSU Med. Corp. v. JMS Co., 471 F.3d 1293, 1306 (Fed. Cir. 2006)); see also C.R. Bard, Inc. v. Advanced Cardiovascular Syss., Inc., 911 F.2d 670, 675 (Fed. Cir.1990) ("A person induces infringement under § 271(b) by actively and knowingly aiding and abetting another's direct infringement.") (citation omitted).

"Intent can be shown by circumstantial evidence, but the mere knowledge of possible infringement will not suffice." Vita-Mix Corp. v. Basic Holding, Inc., 581 F.3d 1317, 1328 (Fed. Cir. 2009) (citation omitted). As such, a plaintiff alleging induced infringement must satisfy the "rigorous" standard of demonstrating that the defendant had a specific intent to encourage infringement. Best Med. Intern., Inc. v. Accuray, Inc., 2010 WL 5053919, at * 6 (W.D. Pa. Dec. 2, 2010) (citing Broadcom Corp. v. Qualcomm Inc., 543 F.3d 683, 697-98 (Fed. Cir. 2008)).

Plaintiff failed to adequately plead that Vatech America Inc. had a specific intent to induce patent infringement. Plaintiff contends that it satisfactorily pled this element in two particular paragraphs of Plaintiff's Complaint: (1) "[Vatech Co.] which is the ultimate parent or controlling entity of [Vatech America Inc.] . . . was notified of its infringement of [the Patents] on March 23, 2010;" and (2) "Notwithstanding such notification [Defendants] have persisted in selling, offering to sell, or importing the infringing products into the United States and have induced purchases and use of the accused products to infringe one or more claims of [the Patents]."

This logic does not persuade this Court that Plaintiff adequately pled that Vatech America Inc. possessed a specific intent to induce patent infringement. In fact, Plaintiff specifically pled that it was Vatech Co. -- not Vatech America Inc. -- who received notice of the alleged patent infringement. Plaintiff tries to circumvent this critical flaw in Plaintiff's argument by emphasizing that Vatech Co. "is the ultimate parent or controlling entity" of Vatech America Inc. According to Plaintiff, such pleadings signify that "[Vatech America Inc.'s] ...


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