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Lyda v. CBS Corporation

United States District Court, S.D. New York

July 16, 2015

EDWIN LYDA, Plaintiff,
v.
CBS CORPORATION and CBS INTERACTIVE, INC., Defendants.

OPINION AND ORDER

VALERIE CAPRONI, District Judge.

Plaintiff Edwin Lyda brings this action against Defendants CBS Corporation ("CBS") and CBS Interactive, Inc. ("CBS Interactive") alleging patent infringement. After receiving correspondence from Defendants' counsel regarding various pleading deficiencies in the initial Complaint, Plaintiff filed an Amended Complaint ("Am. Compl."). Defendants now move to dismiss the Amended Complaint for failure to state a claim under Fed.R.Civ.P. 12(b)(6), and, in the alternative, for a more definite statement under Fed.R.Civ.P. 12(e). For the reasons stated herein, Defendants' Motion to Dismiss is GRANTED, and their Motion for a More Definite Statement is DENIED as moot.

BACKGROUND[1]

Plaintiff is the owner of two patents, United States Patent No. 7, 434, 243, entitled "Response Apparatus Method and System" (the "243 Patent"), and United States Patent No. 7, 730, 506, entitled "Method and Apparatus for Response System" (the "506 Patent"). Am. Compl. ¶¶ 4, 10-11. Plaintiff's patents contain both method and system claims relating to the transmission of wireless signals from a "user input device" to a central receiver for use in television audience voting and polling. Id. ¶ 9; Defs.' Mem. at 6-7.

Plaintiff asserts that Defendants CBS and CBS Interactive, which is a premium content provider and a wholly-owned subsidiary of CBS, operate the television show "BIG BROTHER." Am. Compl. ¶ 6. BIG BROTHER allows the television audience to influence aspects of the show by voting over the telephone, online, through a cell phone application, or by text messaging. Id. ¶ 7. The text messages are only accepted during specific periods of time and contain an identifying code for the sender and the sender's vote selection. Id. ¶ 7. Plaintiff alleges that Defendants receive text message votes using a "typical cell phone receiver" and that Defendants use "additional electronic equipment" to process the text messages they receive and to classify votes. Id. ¶ 7.

According to Plaintiff, Defendants test their equipment and operations for receiving text messages before using the system during live broadcasts. Id. ¶ 8. Plaintiff claims that during these tests CBS Interactive utilizes an independent contractor, which operates "under the control" of CBS Interactive, to test the text message vote receiving system. Id. ¶ 8. These tests are conducted using "well known cell phones"[2] that are either borrowed[3] or that belong to individuals acting "under the control or direction" of the independent contractor. Id. ¶¶ 17, 24. 31, 38, 47, 54, 61, 68. Plaintiff alleges that "[a]s a result of [their] activities in connection with the television show BIG BROTHER, " Defendants are infringing on method claim 8 and system claim 9 of the 243 Patent, and method claim 1 and method claim 7 of the 506 Patent "by having Defendant CBS Interactive operate the show BIG BROTHER and use an independent contractor in conjunction with testing the system under the control of Defendant CBS Interactive." Id. ¶¶ 18, 25, 32, 39, 69.

DISCUSSION

I. Legal Standard

"To survive a motion to dismiss under Fed.R.Civ.P. 12(b)(6), a complaint must allege sufficient facts, taken as true, to state a plausible claim for relief." Johnson v. Priceline.com, Inc., 711 F.3d 271, 275 (2d Cir. 2013) (citing Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555-56 (2007)); see also Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009). Courts must "accept all allegations in the complaint as true and draw all inferences in the non-moving party's favor." L.C. v. LeFrak Org., Inc., 987 F.Supp.2d 391, 398 (S.D.N.Y. 2013) (quoting LaFaro v. N.Y. Cardiothoracic Grp., PLLC, 570 F.3d 471, 475 (2d Cir. 2009)).

With respect to claims for direct patent infringement, some courts have recognized that the more liberal pleading standard established by Form 18 of the Appendix of Forms to the Federal Rules of Civil Procedure applies. See Smartwater, Ltd. v. Applied DNA Scis., Inc., No. 12-CV-5731(JS)(AKT), 2013 WL 5440599, at *3 (E.D.N.Y. Sept. 27, 2013) ("[C]laims for direct patent infringement are governed by Form 18 of the Appendix to the Federal Rules." (citing In re Bill of Lading Transmission & Processing Sys. Patent Litig., 681 F.3d 1323, 1336-37 (Fed. Cir. 2012))). Form 18 requires:

(1) an allegation of jurisdiction; (2) a statement that the plaintiff owns the patent; (3) a statement that the defendant has been infringing the patent by making, selling, and using the device embodying the patent; (4) a statement that the plaintiff has given the defendant notice of its infringement; and (5) a demand for an injunction and damages.

Id. (quoting Gradient Enters., Inc. v. Skype Techs. S.A., 848 F.Supp.2d 404, 407 (W.D.N.Y. 2012)).

The district courts in this Circuit have not been entirely consistent regarding whether Iqbal/Twombly or Form 18 controls the pleading standard for direct infringement cases. Compare Regeneron Pharm., Inc. v. Merus B.V., No. 14-CV-1650(KBF), 2014 WL 2795461 (S.D.N.Y. June 19, 2014) (applying both standards and noting that the higher Iqbal/Twombly standard should apply because Second Circuit precedent suggests that the Iqbal/Twombly plausibility standard applies to all civil cases), with Joao Control & Monitoring Sys., LLC v. Slomin's, Inc., No. 14-CV-2598(JG), 2015 WL 77516, at *1 (E.D.N.Y. Jan. 6, 2015) (the Form 18 standard applies because "[t]he Federal Circuit has found that the adequacy of a pleading of direct infringement is measured by the specificity required in Form 18 of the Federal Rules of Civil Procedure."). Although "the Federal Circuit has informed [the courts] that whether [a complaint] adequately plead[s] direct infringement is to be measured by the specificity required by Form 18, '" Smartwater, 2013 WL 5440599, at *3 (quoting In re Bill of Lading, 681 F.3d at 1334), the Second Circuit has not addressed this issue directly. See Joao Control & Monitoring Sys., 2015 WL 77516, at *1; Regeneron Pharm., 2014 WL 2795461, at *1.

Direct patent infringement occurs when an accused infringer "without authority makes [or] uses... any patented invention... during the term of the [asserted] patent." See 35 U.S.C. § 271(a). Among the various theories of patent infringement, [4] "the courts that have applied Form 18 over Iqbal/Twombly have made it clear that Form 18 should be strictly construed as measuring only the sufficiency of allegations of direct infringement, and not indirect infringement.'" Smartwater, 2013 WL 5440599, at *4 (quoting In re Bill of Lading, 681 F.3d at 1336) (emphasis added). The courts that have examined the pleading standard for joint infringement have held that Form 18 does not apply to joint infringement claims. See, e.g., Nu Flow Techs. (2000) Inc. v. A.O. Reed & Co., No. 13-CV-1818(BEN)(JMA), 2014 WL 1400127, at *2-3 (S.D. Cal. Apr. 8, 2014) ("Form 18... does not address joint infringement."). Courts instead apply the Iqbal/Twombly ...


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