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Cywee Group Ltd. v. HTC Corp.

United States District Court, W.D. Washington, Seattle

March 1, 2018

CYWEE GROUP LTD, Plaintiff,
v.
HTC CORPORATION, et al, Defendants.

          ORDER GRANTING DEFENDANTS' MOTION TO DISMISS WITH LEAVE TO AMEND

          JAMES L. ROBART, UNITED STATES DISTRICT JUDGE.

         I. INTRODUCTION

         Before the court is Defendants HTC Corporation and HTC America, Inc.'s (collectively, "HTC") motion to dismiss Plaintiff CyWee Group Ltd.'s ("CyWee") claims for induced infringement. (MTD (Dkt. #35).) The court has considered the motion, the parties' submissions in support of and in opposition to the motion to dismiss, the relevant portions of the record, and the applicable law. No party has requested oral argument. Being fully advised, the court GRANTS HTC's motion to dismiss Cy Wee's induced infringement claims with leave to amend.

         II. BACKGROUND

         This case concerns allegations of patent infringement. CyWee provides products and services in the areas of "motion processing, wireless high definition video delivery, and facial tracking technology." (Am. Compl. (Dkt. # 20) ¶ 2.) CyWee owns two patents protecting its technology that detects, measures, and calculates the movements and rotations of machines: United States Patent No. 8, 441, 438 ("the '438 Patent") and United States Patent No. 8, 552, 978 ("the '978 Patent") (collectively, "the Patents-in-suit"). (Id. ¶¶ 22, 120.)

         The Patents-in-suit "disclose devices and methods for tracking the motion of a device in 3D space and compensating for accumulated errors." (Gans Decl. (Dkt. # 20-3) ¶ 8.)[1] In other words, the protected inventions "teach how to determine a device's current orientation based on motion data detected by its motion sensors." (Id.) Specifically, CyWee protected its "sensor fusion technology, " which "incorporate[s] the data from multiple sensors and compensate[s] for [any] errors." (Id. ¶ 10.) The '438 Patent "discloses an enhanced sensor fusion technology and application for calculating orientation ... by using measurements from both a 3-axis accelerometer and a 3-axis gyroscope." (Id.) The '978 Patent protects a similar sensor fusion technology but uses a third sensor-a magnetometer-in addition to an accelerometer and a gyroscope. (Id. ¶ 11.) This sensor fusion technology is useful for games that incorporate the motion of the device into play, augmented reality applications, and virtual reality applications. (See id.¶¶ 18, 21-22.)

         CyWee initially sued HTC on June 16, 2017, and amended its complaint on July 6, 2017, alleging direct infringement of the Patents-in-suit as well as indirect infringement through inducement. (See generally Compl. (Dkt. #1); Am. Compl.) As relevant here, CyWee asserts that HTC indirectly infringes the Patents-in-suit by:

[i]nducing others to infringe on one or more claims of the [Patents-in-suit] through sale and/or use of the [Patents-in-suit] Accused Products. On information and belief, at least as a result of the filing of this action, HTC is aware of the [Patents-in-suit]; is aware that its actions with regards to distributors, resellers, and/or end users of the [Patents-in-suit] Accused Products would induce infringement; and despite such awareness will continue to take active steps-such as, creating and disseminating the [Patents-in-suit] Accused Products, and product manuals, instructions promotional and marketing materials, and/or technical materials to distributors, resellers, and end users-encouraging other's infringement of the [Patents-in-suit] with the specific intent to induce such infringement.[2]

(Am. Compl. ¶ 28.) CyWee also attaches two claim charts to its amended complaint illustrating how the HTC products infringe upon the Patents-in-suit. (See '438 Claim Chart (Dkt. # 20-1); '978 Claim Chart (Dkt. # 20-2).) Both claim charts include several screenshots-the majority of which do not derive from HTC-depicting the computing code that presumably is used by the accused products and how that code allows the accused products to perform the protected methods. (See, e.g., , '978 Claim Chart at 4-9.) HTC moves to dismiss only these induced infringement claims for failure to state a claim. (MTD at 1.)

         III. ANALYSIS

         A. Legal Standard

         Dismissal for failure to state a claim "is proper if there is a lack of a cognizable legal theory or the absence of sufficient facts alleged under a cognizable legal theory." Conservation Force v. Salazar, 646 F.3d 1240, 1242 (9th Cir. 2011) (internal quotation marks omitted). "To survive a motion to dismiss, a complaint must contain sufficient factual matter, accepted as true, to 'state a claim to relief that is plausible on its face.'" Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (quoting Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 570 (2007)). "A claim has facial plausibility when the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged." Id. Although the standard "asks for more than sheer possibility that a defendant has acted unlawfully, " it is not "akin to a probability requirement." Id. Thus, the plausibility requirement "simply calls for enough fact[s] to raise a reasonable expectation that discovery will reveal" liability for the alleged misconduct. Twombly, 550 U.S. at 556.

         When considering a motion to dismiss under Federal Rule of Civil Procedure 12(b)(6), the court construes the complaint in the light most favorable to the nonmoving party. Livid Holdings Ltd. v. Salomon Smith Barney, Inc., 416 F.3d 940, 946 (9th Cir. 2005). The court must accept all well-pleaded facts as true and draw all reasonable inferences in favor of the plaintiff. Wyler Summit P'ship v. Turner Broad. Sys., Inc., 135 F.3d 658, 661 (9th Cir. 1998). "Mere conclusory statements" or "formulaic recitation[s] of the elements of a cause of action, " however, "are not entitled to the presumption of truth." Chavez v. United States, 683 F.3d 1102, 1108 (9th Cir. 2012) (citing Twombly, 550 U.S. at 555). On a motion to dismiss, the court may consider the pleadings, documents attached to the pleadings, documents incorporated therein, or matters of judicial notice. Ritchie, 342 F.3d at 908 (citing Van Buskirk v. Cable News Network, Inc., 284 F.3d 977, 980 (9th Cir. 2002)).

         B. CyWee's Induced ...


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