Judge Hellerstein Finds “Substantial Sales Activity” in U.S. Defeats MTD

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United States District Judge Alvin K. Hellerstein (S.D.N.Y.) recently denied Defendant R-PAC International LLC’s motion to dismiss Plaintiff Adasa Inc.’s patent infringement complaint. Slip Op. at 1. Defendant moved under Fed. R. Civ. P. 12(b)(6) contending that “Plaintiff has not stated a claim upon which relief may be granted.” Id. The court held that “Plaintiff has properly pleaded direct infringement” and explained that “even if an infringing product is made or used abroad, it is nonetheless covered under the statute’s ambit if ‘a substantial level of sales activity’ occurred ‘within the United States.’” Id. (quoting Carnegie Mellon Univ. v. Marvell Tech. Grp., 807 F.3d 1283, 1309-10 (Fed. Cir. 2015))

As the court explained, allegations that: “Defendant operates more than a dozen sales offices across the U.S. . . . its infringing products are sold and offered for sale in the U.S. irrespective of where they are physically produced or encoded . . . orders are routed to Defendant’s domestic offices and servers to generate and transmit encoding data . . . order information is directed to U.S.-based offices for invoicing. . . and [] Defendant’s employees negotiate agreements with customers—including product specifications—in the U.S. . . . is sufficient, at this stage, to properly plead direct infringement.” Id., at 1-2.

The court also held that “Plaintiff ha[d] properly pleaded inducement and contributory infringement” by “properly plead[ing] direct infringement” and “satisfactorily alleg[ing] Defendant’s knowledge.” Id., at 2. It further explained that “Plaintiff ha[d] . . . adequately pleaded how ‘the combination for which its components were especially made was both patented and infringing’” and “how Defendant’s components lack a substantial non-infringing use.” Id.

The case is Adasa Inc. v. R-Pac Int’l LLC, No. 24-cv-6102 (AKH) (S.D.N.Y. Dec. 3, 2024).

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