In Bell Semiconductor, LLC v. Omnivision Technologies, Inc., 8-22-cv-01979 (CDCA Mar. 1, 2023)( John A. Kronstadt), the Court granted the Defendant’s motion to dismiss Plaintiff’s indirect patent infringement claims for failure to sufficiently allege Defendant “made” the accused product. Plaintiff had argued that using the patented methods in the design process, which guides the subsequent manufacturing process, is sufficient to state a claim. However, the Court held the Plaintiff provides no authority supporting the contention that the use of a method to design a product is the same as the use of a method to manufacture the product, as contemplated by the statute.
The Court found Plaintiff’s allegations sufficient to allege direct infringement of a method claim because they are based on the theory that Defendant infringes the method when using the Accused Processes to design the exemplary devices and not that the devices themselves later infringe the method claim. However, in contrast, the Court also found the allegations do not meet the standard for pleading indirect infringement.
Under Federal Rule of Civil Procedure rule 12(b)(6), a party may bring a motion to dismiss a cause of action that fails to state a claim. A court can grant such a motion when the complaint lacks a cognizable legal theory or sufficient facts to support one. In considering a motion to dismiss, the allegations in the challenged complaint are deemed true and must be construed in the light most favorable to the non-moving party. However, a court need not accept as true allegations that contradict matters properly subject to judicial notice or by exhibit. Nor is a court required to accept as true allegations that are merely conclusory, unwarranted deductions of fact, or unreasonable inferences.
In moving to dismiss Plaintiff’s patent infringement complaint, Defendant argued that the asserted patents are directed to methods of performing an engineering change order and making a layout, which relate to purported improvements in the design process. In other words, no physical product is made when performing any of the claimed methods. Thus, Defendant argues that the patent infringement allegations go “legally awry” where they extend to claimed infringement by “making, selling, or offering to sell in the United States, or importing into the United States products manufactured or otherwise produced using the Accused Process.”
Defendant further argued that because indirect patent infringement requires the making, selling, offering to sell, using, or importing of the patented invention, it cannot extend to products manufactured or otherwise produced using a claimed design method. In other words, Defendant argued that alleging a method is used in the design of a product is distinct from alleging that the method is used in the manufacture of the product.
Plaintiff alleged importation of products made using the claimed methods in that the methods are used during the design process. Plaintiff conceded that the claimed methods are not used to manufacture physical semiconductors. Instead, Plaintiff argued that using the patented methods in the design process, which guides the subsequent manufacturing process, is sufficient to state a claim. The basis for this position is the contention that Plaintiff alleges importation of products made using the claimed methods in that the methods are used during the design process.
However, the Court reasoned this theory is contrary to the language of § 271(g), even considering that the imported “product” can be intangible. First, the Court considered whether “made” in § 271(g) encompasses using the claimed method in designing the product to be manufactured, as is alleged here, or whether “made” refers to the manufacturing step only. The Court reasoned the statute clearly contemplates that “made” means “manufactured.” Thus, the production of information is not within the scope of processes of “manufacture” because “the statute is concerned exclusively with products that are physical goods produced by a manufacturing process.” Therefore, “in order for a product to have been ‘made by a process patented in the United States, ‘ it must have been a physical article that was ‘manufactured’ and [] the production of information is not covered.”
In short, the Court found no authority supporting the contention that use of a method to design a product is the same as use of a method to manufacture the product, as contemplated by the statute. Therefore, because Plaintiff fails to allege importation of a product made by a patented process, the Court granted Defendants’ motion to dismiss as to the indirect infringement allegations.
