Bell Semiconductor, LLC v. NXP USA, Inc.

Opinion

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8 UNITED STATES DISTRICT COURT 9 SOUTHERN DISTRICT OF CALIFORNIA 10

11 BELL SEMICONDUCTOR, LLC, Case No.: 22-cv-01267-H-KSC 12 Consolidated for Pretrial Purposes with Plaintiff, 13 Lead Case No.: 22-cv-00594-H-KSC v. 14 ORDER DENYING DEFENDANT NXP USA, INC., 15 NXP’S RULE 12(b)(6) MOTION TO Defendant. DISMISS 16 17 [Doc. No. 24.]1 18 On December 6, 2022, Defendant NXP USA, Inc. (“NXP”) filed a motion to dismiss 19 Plaintiff Bell Semiconductor, LLC (“Bell Semic”)’s first amended complaint pursuant to 20 Federal Rule of Civil Procedure 12(b)(6) for failure to state a claim. (Doc. No. 24.) On 21 December 27, 2022, Bell Semic filed a response in opposition to NXP’s motion to dismiss. 22 (Doc. No. 29.) On January 3, 2023, NXP filed a reply. (Doc. No. 30.) The Court, pursuant 23 to its discretion under Civil Local Rule 7.1(d)(1), determines the matter is appropriate for 24 resolution without oral argument and decides the motion on the parties’ papers. For the 25 reasons below, the Court denies NXP’s motion to dismiss. 26 27 1 All citations in this order are to the docket in Bell Semiconductor, LLC v. NXP USA, 28 1 Background 2 Bell Semic alleges that it is the owner by assignment of U.S. Patent Nos. 7,149,989 3 (“the ’989 Patent”) and 7,260,803 (“the ’803 Patent”) (collectively “the patents-in-suit”). 4 (Doc. No. 22, FAC ¶¶ 21, 30.) In the present action, Bell Semic alleges that NXP directly 5 infringes, either literally or under the doctrine of equivalents, the patents-in-suit by using 6 the circuit design methodologies claimed in the patents-in-suit to design one or more 7 semiconductor devices, including for example its NXP LS1043A Quad-Core Networking 8 Processor. (Id. ¶¶ 1, 43-48, 56-61.) 9 The patents-in-suit generally relate to improvements in semiconductor production. 10 The ’989 Patent is entitled “method of early physical design validation and identification 11 of texted metal short circuits in an integrated circuit design” and was issued on December 12 12, 2006. U.S. Patent No. 7,149,989, at [45], [54] (issued Dec. 12, 2006). The invention 13 disclosed in the ’989 Patent “relates to methods of verifying an integrated circuit design to 14 ensure adherence to process rules and overall manufacturability of the integrated circuit 15 design for a specific technology.” Id. col. 1 ll. 11-15. 16 Independent claim 1 of the ’989 Patent claims: 17 A method comprising steps of: 18 (a) receiving as input a representation of an integrated circuit design; 19 (b) receiving as input a physical design rule deck that specifies rule checks to be performed on the integrated circuit design; 20 (c) generating a specific rule deck from the physical design rule deck wherein 21 the specific rule deck includes only physical design rules that are specific to 22 texted metal short circuits between different signal sources in addition to power and ground in the integrated circuit design; and 23 (d) performing a physical design validation on the integrated circuit design 24 from the specific rule deck to identify texted metal short circuits between 25 different signal sources in addition to power and ground in the integrated circuit design. 26 Id. col. 7 ll. 9-25. 27 28 1 The ’803 Patent is entitled “incremental dummy metal insertions” and was issued on 2 August 21, 2007. U.S. Patent No. 7,260,803, at [45], [54] (issued Aug. 21, 2007). The 3 invention disclosed in the ’803 Patent “provides a method and system for performing 4 dummy metal insertion in design data for an integrated circuit, wherein the design data 5 includes dummy metal objects inserted by a dummy fill tool. After a portion of the design 6 data is changed, a check is performed to determine whether any dummy metal objects 7 intersect with any other objects in the design data. If so, the intersecting dummy metal 8 objects are deleted from the design data, thereby avoiding having to rerun the dummy fill 9 tool.” Id. at col. 2 ll. 6-14. 10 Independent claim 1 of the ’803 Patent claims: 11 1. A method for performing dummy metal insertion in design data for an integrated circuit, which includes dummy metal objects inserted by a dummy 12 fill tool, comprising: 13 (a) after a portion of the design data is changed, performing a check to 14 determine whether any dummy metal objects intersect with any other objects in the design data; and 15 (b) deleting the intersecting dummy metal objects from the design data, 16 thereby avoiding having to rerun the dummy fill tool. 17 Id. col. 5 ll. 5-14. 18 On August 26, 2022, Bell Semic filed a complaint against NXP, alleging claims for 19 infringement of the patents-in-suit. (Doc. No. 1, Compl. ¶¶ 39-64.) On November 15, 20 2022, Bell Semic filed a first amended complaint (“FAC”) against NXP. (Doc. No. 11, 21 FAC.) 22 On January 12, 2023, the Court granted NXP’s unopposed motion to stay pursuant 23 to 28 U.S.C. § 1659(a) in light of proceedings before the International Trade Commission 24 (“ITC”) and partially stayed this action to the extent Bell Semic asserts a claim for 25 infringement of the ’803 Patent, and the Court denied NXP’s motion to stay Bell Semic’s 26 claim for infringement of the ’989 Patent. (Doc. No. 34 at 9-10.) On January 12, 2023, 27 the Court consolidated this action with Bell Semiconductor v. NXP USA, Inc., No. 22-cv- 28 594 (S.D. Cal, filed Apr. 27, 2022), and several other related actions for pretrial purposes. 1 (Doc. No. 35.) By the present motion, NXP moves pursuant to Federal Rule of Civil 2 Procedure 12(b)(6) to dismiss Bell Semic’s FAC for failure to state a claim. (Doc. No. 24- 3 1 at 1.) 4 Discussion 5 I. Legal Standards for a Rule 12(b)(6) Motion to Dismiss 6 A motion to dismiss under Federal Rule of Civil Procedure 12(b)(6) tests the legal 7 sufficiency of the pleadings and allows a court to dismiss a complaint if the plaintiff has 8 failed to state a claim upon which relief can be granted. See Conservation Force v. Salazar, 9 646 F.3d 1240, 1241 (9th Cir. 2011) (citing Navarro v. Block, 250 F.3d 729, 732 (9th Cir. 10 2001)). Federal Rule of Civil Procedure 8(a)(2) requires that a pleading that states a claim 11 for relief contain “a short and plain statement of the claim showing that the pleader is 12 entitled to relief.” The function of this pleading requirement is to “‘give the defendant fair 13 notice of what the . . . claim is and the grounds upon which it rests.’” Bell Atl. Corp. v. 14 Twombly, 550 U.S. 544, 555 (2007) (quoting Conley v. Gibson, 355 U.S. 41, 47 (1957)). 15 A complaint will survive a Rule 12(b)(6) motion to dismiss if it contains “enough 16 facts to state a claim to relief that is plausible on its face.” Id. at 570. “A claim has facial 17 plausibility when the plaintiff pleads factual content that allows the court to draw the 18 reasonable inference that the defendant is liable for the misconduct alleged.” Ashcroft v. 19 Iqbal, 556 U.S. 662, 678 (2009). “A pleading that offers ‘labels and conclusions’ or ‘a 20 formulaic recitation of the elements of a cause of action will not do.’” Id. (quoting 21 Twombly, 550 U.S. at 555). “Threadbare recitals of the elements of a cause of action, 22 supported by mere conclusory statements, do not suffice.” Id. “While legal conclusions 23 can provide the framework of a complaint, they must be supported by factual allegations.” 24 Id. at 679. Accordingly, dismissal for failure to state a claim is proper where the claim 25 “lacks a cognizable legal theory or sufficient facts to support a cognizable legal theory.” 26 Mendiondo v. Centinela Hosp. Med. Ctr., 521 F.3d 1097, 1104 (9th Cir. 2008); see Los 27 Angeles Lakers, Inc. v. Fed. Ins. Co., 869 F.3d 795, 800 (9th Cir. 2017). 28 In reviewing a Rule 12(b)(6) motion to dismiss, a district court must “‘accept the 1 factual allegations of the complaint as true and construe them in the light most favorable 2 to the plaintiff.’” Los Angeles Lakers, 869 F.3d at 800 (quoting AE ex rel. Hernandez v. 3 Cty. of Tulare, 666 F.3d 631, 636 (9th Cir. 2012)). But a court need not accept “legal 4 conclusions” as true. Iqbal, 556 U.S. at 678. “Further, it is improper for a court to assume 5 the claimant “can prove facts which it has not alleged or that the defendants have violated 6 the . . . laws in ways that have not been alleged.” Associated Gen. Contractors of Cal., Inc. 7 v. Cal. State Council of Carpenters, 459 U.S. 519, 526 (1983). 8 In addition, a court may consider documents incorporated into the complaint by 9 reference and items that are proper subjects of judicial notice. See Coto Settlement v. 10 Eisenberg, 593 F.3d 1031, 1038 (9th Cir. 2010). If the court dismisses a complaint for 11 failure to state a claim, it must then determine whether to grant leave to amend. See Doe 12 v. United States, 58 F.3d 494, 497 (9th Cir. 1995); Telesaurus VPC, LLC v. Power, 623 13 F.3d 998, 1003 (9th Cir. 2010). 14 II. Plaintiff’s Claim for Infringement of the ’989 Patent 15 In the FAC, Bell Semic alleges against NXP a claim for infringement of the ’989 16 Patent. (Doc. No. 22, FAC ¶¶ 39-51.) NXP argues that Bell Semic’s claim for 17 infringement of the ’989 Patent should be dismissed for two reasons. First, NXP argues 18 that the claim should be dismissed because the asserted claims of ’989 Patent are invalid 19 under 35 U.S.C. § 101. (Doc. No. 24-1 at 3-13.) Second, NXP argues that the claim should 20 be dismissed because Bell Semic has failed to allege sufficient facts to state a plausible 21 claim for infringement of the ’989 Patent. (Id. at 18-21.) The Court addresses these two 22 grounds for dismissal in turn below. 23 A. NXP’s § 101 Challenge to the Validity of the ’989 Patent 24 i. Legal Standards Governing Patent Eligibility Under 35 U.S.C. § 101 25 Section 101 of the Patent Act defines patent-eligible subject matter as “any new and 26 useful process, machine, manufacture, or composition of matter, or any new and useful 27 improvement thereof.” 35 U.S.C. § 101. The Supreme Court has “‘long held that this 28 provision contains an important implicit exception[:] Laws of nature, natural phenomena, 1 and abstract ideas are not patentable.’” Ass’n for Molecular Pathology v. Myriad Genetics, 2 Inc., 569 U.S. 576, 589 (2013) (quoting Mayo Collaborative Servs. v. Prometheus Lab’ys, 3 Inc., 566 U.S. 66, 70 (2012)). “This exception reflects the concern that patent law not 4 inhibit further discovery by improperly tying up the future use of these building blocks of 5 human ingenuity.” PersonalWeb Techs. LLC v. Google LLC, 8 F.4th 1310, 1314 (Fed. 6 Cir. 2021) (internal quotation marks omitted) (quoting Alice Corp. v. CLS Bank Int’l, 573 7 U.S. 208, 216 (2014)); see also CareDx, Inc. v. Natera, Inc., 40 F.4th 1371, 1376 (Fed. Cir. 8 2022) (“These exceptions exist because monopolizing the basic tools of scientific work 9 ‘might tend to impede innovation more than it would tend to promote it.’” (quoting Mayo, 10 566 U.S. at 71)). 11 “The Supreme Court has established a two-step framework for evaluating patent 12 eligibility under § 101.” Int’l Bus. Machines Corp. v. Zillow Grp., Inc., 50 F.4th 1371, 13 1377 (Fed. Cir. 2022) (citing Alice, 573 U.S. at 217). Under step one, the court 14 “determine[s] whether the claim is ‘directed to’ a ‘patent-ineligible concept,’ such as an 15 abstract idea.” Coop. Ent., Inc. v. Kollective Tech., Inc., 50 F.4th 127, 130 (Fed. Cir. 2022) 16 (quoting Alice, 573 U.S. at 217). If so, the court proceeds to step two and “examine[s] ‘the 17 elements of the claim to determine whether it contains an “inventive concept” sufficient to 18 “transform” the claimed abstract idea into a patent-eligible application.’” Id. (quoting 19 Alice, 573 U.S. at 221). Specifically, the court determines “whether the claim elements, 20 individually and as an ordered combination, contain an inventive concept, which is more 21 than merely implementing an abstract idea using ‘well-understood, routine, [and] 22 conventional activities previously known to the industry.’” Id. (quoting Content Extraction 23 & Transmission LLC v. Wells Fargo Bank, Nat’l Ass’n, 776 F.3d 1343, 1347–48 (Fed. 24 Cir. 2014)). 25 “Patent eligibility is a question of law that may involve underlying questions of fact. 26 PersonalWeb, 8 F.4th at 1314; see Berkheimer v. HP Inc., 881 F.3d 1360, 1365 (Fed. Cir. 27 2018). “Thus, patent eligibility may be resolved at the Rule 12 stage only if there are no 28 plausible factual disputes after drawing all reasonable inferences from the intrinsic and 1 Rule 12 record in favor of the non-movant.” Coop. Ent., 50 F.4th at 130 (collecting cases). 2 “But ‘not every § 101 determination contains genuine disputes over the underlying facts 3 material to the § 101 inquiry.’ Indeed, that inquiry ‘may be, and frequently has been, 4 resolved on a Rule 12(b)(6) or (c) motion where the undisputed facts, considered under the 5 standards required by that Rule, require a holding of ineligibility under the substantive 6 standards of law.’” PersonalWeb, 8 F.4th at 1314 (citations omitted). 7 The party challenging the validity of the patents-in-suit bears the burden of proof 8 under the § 101 two-step framework. See Illumina, Inc. v. Ariosa Diagnostics, Inc., 967 9 F.3d 1319, 1328 (Fed. Cir. 2020); Vaporstream, Inc. v. Snap Inc., No. 10 217CV00220MLHKSX, 2020 WL 136591, at *7 (C.D. Cal. Jan. 13, 2020) (“‘The accused 11 infringer bears the burden of proof on both steps’ of the Alice inquiry.”); see also Microsoft 12 Corp. v. i4i Ltd. P’ship, 564 U.S. 91, 95 (2011) (“‘[T]he burden of establishing invalidity 13 of a patent or any claim thereof shall rest on the party asserting such invalidity.’” (quoting 14 35 U.S.C. § 282)). Further, any fact pertinent to the § 101 eligibility analysis must be 15 proven by clear and convincing evidence. See Berkheimer, 881 F.3d at 1368; see also 16 Microsoft, 564 U.S. at 95 (holding that § 282 requires that an invalidity defense “be proved 17 by clear and convincing evidence”). 18 ii. Step One Analysis 19 Under step one, the court “determine[s] whether the claim is ‘directed to’ a ‘patent- 20 ineligible concept,’ such as an abstract idea.” Coop. Ent., 50 F.4th at 130 (quoting Alice, 21 573 U.S. at 217). The Federal Circuit has “‘approached the Step 1 directed to inquiry by 22 asking what the patent asserts to be the focus of the claimed advance over the prior art. In 23 conducting that inquiry, [courts] must focus on the language of the asserted claims 24 themselves, considered in light of the specification.’” Yu v. Apple Inc., 1 F.4th 1040, 1043 25 (Fed. Cir. 2021) (cleaned up) (quoting TecSec, Inc. v. Adobe Inc., 978 F.3d 1278, 1292 26 (Fed. Cir. 2020)); see also CardioNet, LLC v. InfoBionic, Inc, 955 F.3d 1358, 137273 (Fed. 27 Cir. 2020) (“In determining what the claims are directed to and whether they are directed 28 to an abstract idea, a court may well consult the plain claim language, written description, 1 and prosecution history.”). The step one inquiry “presents a legal question that can be 2 answered based on the intrinsic evidence.” CardioNet, 955 F.3d at 1372. 3 Under step one, “[i]f the focus of the claim is a specific and concrete technological 4 advance, for example an improvement to a technological process or in the underlying 5 operation of a machine, [the court’s] inquiry ends and the claim is eligible.” Adasa Inc. v. 6 Avery Dennison Corp., 55 F.4th 900, 908 (Fed. Cir. 2022). “‘In cases involving software 7 innovations, the step-one inquiry often turns on whether the claims focus on specific 8 asserted improvements in computer capabilities or instead on a process or system that 9 qualifies as an abstract idea for which computers are invoked merely as a tool.’” Int’l Bus. 10 Machines, 50 F.4th at 1377 (cleaned up) (quoting TecSec, 978 F.3d at 1292); see also In 11 re Killian, 45 F.4th 1373, 1380 (Fed. Cir. 2022) (“We have distinguished between claims 12 ‘directed to an improvement in the functioning of a computer,’ versus those . . . that simply 13 recite ‘generalized steps to be performed on a computer using conventional computer 14 activity.’” (quoting In re TLI Commc’ns LLC Pat. Litig., 823 F.3d 607, 612 (Fed. Cir. 15 2016))). The Federal Circuit “ha[s] routinely held software claims patent eligible under 16 Alice step one when they are directed to improvements to the functionality of a computer 17 or network platform itself.” Uniloc USA, Inc. v. LG Elecs. USA, Inc., 957 F.3d 1303, 18 1307 (Fed. Cir. 2020); see also Enfish, LLC v. Microsoft Corp., 822 F.3d 1327, 1335 (Fed. 19 Cir. 2016) (“The Supreme Court has suggested that claims ‘purport[ing] to improve the 20 functioning of the computer itself,’ or ‘improv[ing] an existing technological process’ 21 might not succumb to the abstract idea exception.”). In contrast, the Federal Circuit has 22 “held claims ineligible as directed to an abstract idea when they merely collect electronic 23 information, display information, or embody mental processes that could be performed by 24 humans.” Thales Visionix Inc. v. United States, 850 F.3d 1343, 1346–47 (Fed. Cir. 2017) 25 (citing Elec. Power Grp., LLC v. Alstom S.A., 830 F.3d 1350, 1353–54 (Fed. Cir. 2016) 26 (collecting cases)); see Killian, 45 F.4th at 1380 (“We have found . . . claims pertaining to 27 data gathering, analysis, and notification on generic computers to be directed to abstract 28 ideas at Alice/Mayo step one.”). 1 The Federal Circuit has cautioned that the step one directed to inquiry does not 2 “simply ask whether the claims involve a patent-ineligible concept, because essentially 3 every routinely patent-eligible claim involving physical products and actions involves a 4 law of nature and/or natural phenomenon—after all, they take place in the physical world.” 5 Enfish, 822 F.3d at 1335. Thus, courts must “be careful to avoid oversimplifying the claims 6 by looking at them generally and failing to account for the specific requirements of the 7 claims.” CardioNet, 955 F.3d at 1371; see TLI Commc’ns, 823 F.3d at 611 (“[I]n 8 determining whether the claims are directed to an abstract idea, we must be careful to avoid 9 oversimplifying the claims because ‘[a]t some level, “all inventions . . . embody, use, 10 reflect, rest upon, or apply laws of nature, natural phenomena, or abstract ideas.”’” (quoting 11 Alice, 573 U.S. at 217)). 12 NXP contends that the asserted claims of the ’989 Patent are directed to the abstract 13 idea of “using only the subset of rules that are applicable to check a design.” (Doc. No. 14 24-1 at 5.) As part of this argument, NXP contends that the asserted claims do not recite a 15 computer or software program. (Id. at 8; see also id. at 11.) In response, Bell Semic argues 16 that the asserted claims are not directed to an abstract idea because they are directed to 17 solving a computer-specific problem and are directed to improving computer functionality. 18 (Doc. No. 29 at 6-9.) To support this argument, Bell Semic relies on several passages from 19 the ’989 Patent’s specification. (See id. at 6, 8-9.) Further, as part of this argument, Bell 20 Semic contends that the asserted claims require the use of a computer, and Bell Semic notes 21 that until the Court conducts a claim construction, the Court must adopt Bell Semic’s 22 constructions. (Id. at 10 (citing Coop. Ent., 50 F.4th at 134).) On reply, NXP argues that 23 Bell Semic’s arguments fail because there is nothing in claim language of the asserted 24 claims that calls for any form of computer implementation, and Bell Semic improperly 25 imports details from the specification. (Doc. No. 30 at 1-3.) 26 In light of the above arguments and after reviewing the claim language and the 27 specification of the ’989 Patent, the Court concludes that resolution of the § 101 eligibility 28 of the asserted claims of the ’989 Patent would be inappropriate at this stage in the 1 proceedings. “Determining patent eligibility requires a full understanding of the basic 2 character of the claimed subject matter.” MyMail, Ltd. v. ooVoo, LLC, 934 F.3d 1373, 3 1379 (Fed. Cir. 2019); see also Intell. Ventures I LLC v. Cap. One Bank (USA), 792 F.3d 4 1363, 1369 (Fed. Cir. 2015) (“At step one of the Alice framework, it is often useful to 5 determine the breadth of the claims . . . .”). In light of this, “resolution of a patent’s section 6 101 eligibility is not always appropriate at the Rule 12(b) motion to dismiss stage without 7 the benefit of claim construction.” Mirror Imaging, LLC v. PNC Bank, N.A., No. W-21- 8 CV-00518-ADA, 2022 WL 229363, at *2 (W.D. Tex. Jan. 26, 2022); see Glob. Locating 9 Sys., LLC v. ShadowTrack 247, LLC, No. 1:19-CV-00225-MR, 2020 WL 3513535, at *3 10 (W.D.N.C. June 29, 2020) (“[A] court may require claim construction before ruling a 11 motion to dismiss based on patent eligibility under § 101.” (collecting cases)); see also 12 MyMail, 934 F.3d at 1379 (explaining “if the parties raise a claim construction dispute at 13 the Rule 12[] stage, the district court must either adopt the non-moving party’s 14 constructions or resolve the dispute to whatever extent is needed to conduct the § 101 15 analysis” (citing Aatrix, 882 F.3d at 1125)). Indeed, “[c]ourts routinely deny § 101 motions 16 as premature where claim construction disputes exists.” Celgene Corp. v. Lotus Pharm. 17 Co., No. CV 17-6842-SDW-LDW, 2018 WL 6584888, at *2 (D.N.J. Dec. 14, 2018); see, 18 e.g., R2 Sols. LLC v. Am. Airlines, Inc., No. 4:22-CV-00353, 2022 WL 17477543, at *2 19 (E.D. Tex. Dec. 6, 2022) (denying motion to dismiss without prejudice and deferring the 20 issue of patent eligibility under § 101 until after claim construction); AML IP, LLC v. Am. 21 Eagle Outfitters, Inc., No. 6:21-CV-00823-ADA, 2022 WL 11456095, at *7–8 (W.D. Tex. 22 Oct. 19, 2022) (same); Enserion, LLC v. Orthofix, Inc., No. 4:20-CV-108, 2020 WL 23 5544614, at *2 (E.D. Tex. Sept. 16, 2020) (same); Teradyne, Inc. v. Astronics Test Sys., 24 Inc., No. CV 20-2713-GW-SHKX, 2020 WL 13593156, at *6–7, 12 (C.D. Cal. Aug. 7, 25 2020) (same); Glob. Locating, 2020 WL 3513535, at *4 (same). 26 Here, the parties present a clear claim construction dispute in their briefing on the § 27 101 eligibility issues as to the ’989 Patent – i.e., whether the asserted claims of the ’989 28 Patent require the use of a computer. (Compare Doc. No. 29 at 10 with Doc. No. 30 at 1- 1 3; Doc. No. 24-1 at 8.) In light of this claim construction dispute between the parties, the 2 Court concludes that the appropriate course is to defer the issue of the § 101 eligibility of 3 the asserted claims of the ’989 Patent until after claim construction in this action.2 As such, 4 the Court declines to dismiss Bell Semic’s claim for infringement of the ’989 Patent on the 5 grounds that the asserted claims of the ’989 Patent are invalid under 35 U.S.C. § 101.3 6 B. Sufficiency of Plaintiff’s Infringement Allegations as to the ’989 Patent 7 In the FAC, Bell Semic alleges against NXP a claim for infringement of the ’989 8 Patent. (Doc. No. 22, FAC ¶¶ 39-51.) NXP argues that Bell Semic’s claim for 9 infringement of the ’989 Patent should be dismissed because the FAC fails to set forth 10 sufficient factual allegations showing that it is plausible that NXP infringes the ’989 Patent. 11 (Doc. No. 24-1 at 18-21; Doc. No. 30 at 8-10.) 12 To establish infringement of a method claim, “a patentee must prove that each and 13 14 2 The Court acknowledges that the Federal Circuit has explained that “[i]n many cases,” evaluation of a patent claim’s subject matter eligibility under § 101 can proceed 15 before a formal claim construction. Genetic Techs. Ltd. v. Merial L.L.C., 818 F.3d 1369, 16 1374 (Fed. Cir. 2016); see also Content Extraction & Transmission, 776 F.3d at 1349 (“Although the determination of patent eligibility requires a full understanding of the basic 17 character of the claimed subject matter, claim construction is not an inviolable prerequisite 18 to a validity determination under § 101.”). But this is generally when there is no claim construction dispute between the parties relevant to the § 101 eligibility issue. See, e.g., 19 Genetic Techs., 818 F.3d at 1374; Simio, LLC v. FlexSim Software Prod., Inc., 983 F.3d 20 1353, 1365 (Fed. Cir. 2020); Elec. Commc’n Techs., LLC v. ShoppersChoice.com, LLC, 958 F.3d 1178, 1184 (Fed. Cir. 2020). In contrast, here, there is a clear claim construction 21 dispute between the parties that is relevant to the § 101 eligibility issues as to the asserted 22 claims of the ’989 Patent. Cf. Int’l Bus. Machines, 50 F.4th at 1377 (“‘In cases involving software innovations, the step-one inquiry often turns on whether the claims focus on 23 specific asserted improvements in computer capabilities or instead on a process or system 24 that qualifies as an abstract idea for which computers are invoked merely as a tool.’” (cleaned up)); Killian, 45 F.4th at 1380 (“We have distinguished between claims ‘directed 25 to an improvement in the functioning of a computer,’ versus those . . . that simply recite 26 ‘generalized steps to be performed on a computer using conventional computer activity.’”). 27 3 The Court’s denial of this portion of NXP’s motion to dismiss is without prejudice to NXP re-raising its § 101 challenge to the asserted claims of the ’989 Patent through an 28 1 every step of the method or process was performed.” Aristocrat Techs. Australia Pty Ltd. 2 v. Int’l Game Tech., 709 F.3d 1348, 1362 (Fed. Cir. 2013); see Akamai Techs., Inc. v. 3 Limelight Networks, Inc., 797 F.3d 1020, 1022 (Fed. Cir. 2015) (en banc) (“Direct 4 infringement under § 271(a) occurs where all steps of a claimed method are performed by 5 or attributable to a single entity.”); Star Sci., Inc. v. R.J. Reynolds Tobacco Co., 655 F.3d 6 1364, 1378 (Fed. Cir. 2011) (“To prove infringement, a plaintiff must prove the presence 7 of each and every claim element or its equivalent in the accused method or device.”). The 8 Federal Circuit has explained in order to assert a plausible claim for patent infringement 9 under the Iqbal/Twombly standard, the complaint must “place the alleged infringer on 10 notice of what activity is being accused of infringement.” Bot M8 LLC v. Sony Corp. of 11 Am., 4 F.4th 1342, 1352 (Fed. Cir. 2021) (cleaned up) (quoting Lifetime Indus., Inc. v. 12 Trim-Lok, Inc., 869 F.3d 1372, 1379 (Fed. Cir. 2017)). A plausible claim for patent 13 infringement “must do more than merely allege entitlement to relief; it must support the 14 grounds for that entitlement with sufficient factual content.” Id. Thus, a plaintiff cannot 15 simply recite the claim elements and merely conclude that the accused product has those 16 elements. Id. at 1353. Rather, “[t]here must be some factual allegations that, when taken 17 as true, articulate why it is plausible that the accused product infringes the patent claim.” 18 Id. “The level of detail required in any given case will vary depending upon a number of 19 factors, including the complexity of the technology, the materiality of any given element 20 to practicing the asserted claim(s), and the nature of the allegedly infringing device.” Id. 21 Nevertheless, the Federal Circuit has explained that the standard for pleading patent 22 infringement is “not onerous” and “a plaintiff need not prove its case at the pleading stage.” 23 Id. at 1352, 1354 (internal quotation marks omitted); see also WiTricity Corp. v. 24 Momentum Dynamics Corp., 563 F. Supp. 3d 309, 327 (D. Del. 2021) (“‘[V]ery little is 25 required in order to plead a claim of patent infringement.’”). In addition, the Federal 26 Circuit has specifically held that “[a] plaintiff is not required to plead infringement on an 27 element-by-element basis.” Bot M8, 4 F.4th at 1352; see Nalco Co. v. Chem-Mod, LLC, 28 883 F.3d 1337, 1350 (Fed. Cir. 2018). 1 Bell Semic argues that it has adequately stated a claim for infringement of the ’989 2 Patent because the element-by-element analysis provided in its FAC “‘clearly exceeds’” 3 what is required under Rule 8(a). (Doc. No. 29 at 13-14 (quoting Nalco, 883 F.3d at 1350).) 4 The Court agrees with Bell Semic. The Federal Circuit has explained that in order to state 5 a claim for patent infringement, a plaintiff “is not required to plead infringement on an 6 element-by-element basis.” Bot M8, 4 F.4th at 1352; see Nalco, 883 F.3d at 1350. 7 Nevertheless, Bell Semic has provided such element-by-element allegations in the FAC. 8 In the FAC, Bell Semic alleges that NXP has directly infringed at least independent 9 claim 1 of the ’989 Patent. (Doc. No. 22, FAC ¶ 44.) To support this allegation, the FAC 10 sets forth the claim language for claim 1 and then provides factual allegations explaining 11 how NXP performs each element of the claimed method through its use of design tools by 12 Cadence Design Systems, Inc. (“Cadence”), Synopsys, Inc. (“Synopsys”), and/or Siemens 13 Digital Industries Software (“Siemens”) to design its LS1043A Quad-Core Networking 14 Processor chips. (Id. ¶¶ 27, 44-46.) In addition to these factual allegations in the FAC, 15 Bell Semic has attached a claim chart to the FAC containing further element-by-element 16 analysis with citations to supporting evidence of how NXP allegedly performs the claimed 17 method through its use of the design tools at issue. (See id. ¶ 46; Doc. No. 22-4, FAC Ex. 18 D.) These factual allegations in the FAC along with the supporting claim chart are more 19 than sufficient to “place [NXP] on notice of what activity is being accused of 20 infringement.” Bot M8, 4 F.4th at 1352; see, e.g., Disc Disease Sols. Inc. v. VGH Sols., 21 Inc., 888 F.3d 1256, 1260 (Fed. Cir. 2018) (finding allegations sufficient to state claims for 22 direct infringement of the patents-in-suit where the patentee specifically identified the 23 infringing products and alleged those products included each and every element of at least 24 one claim of the patents-in-suit); Bell Semiconductor, LLC v. Western Digital Techs., Inc., 25 No. 22-cv-01127-JAK-MRW, ECF No. 74 at 4 (C.D. Cal. Jan. 3, 2023) (finding similar 26 allegations in a complaint by Bell Semic sufficient to state claims for direct infringement 27 of the patents-in-suit in that case). 28 NXP argues that Bell Semic’s allegations are insufficient because the FAC “contains 1 no description of the NXP’s 1043A Processor or the process used to design it. . . . Indeed, 2 the FAC contains almost no allegations about NXP at all.” (Doc. No. 24-1 at 18; see Doc 3 No. 30 at 9.) The Court rejects this argument as it is plainly incorrect and is a gross 4 mischaracterization of Bell Semic’s allegations. To support its allegation that NXP directly 5 infringes independent claim 1 of the ’989 Patent, Bell Semic alleges that “NXP employs a 6 variety of design tools . . . to valid its circuit designs” for one or more devices, including 7 its LS1043A Quad-Core Networking Processor. (Doc. No. 22, FAC ¶¶ 43-44.) Bell Semic 8 further alleges: 9 [] NXP’s Accused Processes also receive as input a physical design rule deck that specifies rule checks to be performed on the integrated circuit 10 design. NXP does so by employing a design tool . . . that receives various in- 11 design verification processes for concurrent physical design and verification of the NXP LS 1043A Quad-Core Networking Processor’s circuit designs. 12 [] NXP’s Accused Processes also generate a specific rule deck from the 13 physical design rule deck wherein the specific rule deck includes only 14 physical design rules that are specific to texted metal short circuits between different signal sources in addition to power and ground in the integrated 15 circuit design. NXP does so by employing a design tool . . . that includes a 16 “short finder,” “short locator,” or similar functionality that identifies texted metal short circuits. 17 (Id. ¶¶ 45-46.) These allegations are further supported by the attached claim chart 18 explaining how the software design tools at issue can be used to perform the claimed 19 method and asserting that NXP has used the design tools in this manner to create design 20 data for its LS1043A Quad-Core Networking Processor chip. (Doc. No. 22-4, FAC Ex. D 21 at 3-10.) Here, Bell Semic provides specific factual allegations regarding NXP’s actions 22 during the circuit design verification process for at least its LS1043A Quad-Core 23 Networking Processor chip to support its claim for infringement of the ’989 Patent. These 24 factual allegations are sufficient to state a claim for patent infringement. See Bot M8, 4 25 F.4th at 1353; Disc Disease, 888 F.3d at 1260; Bell Semiconductor, No. 22-cv-01127-JAK- 26 MRW, ECF No. 74 at 4. 27 NXP contends that Bell Semic’s allegations regarding the design tools at issue are 28 1 insufficient because they are nothing more than speculation based “on information and 2 belief.” (Doc. No. 24-1 at 1, 18-19; see Doc No. 30 at 8.) The Court also rejects this 3 argument. In the FAC, Bell Semic alleges: “On information and belief, MaxLinear 4 employs a variety of design tools, for example, Cadence, Synopsys, and/or Siemens tools” 5 to perform the method claimed in independent claim 1 of the ’989 Patent. (Doc. No. 22, 6 FAC ¶¶ 43-44.) In its attached claim chart, Bell Semic further asserts that NXP is a 7 customer of at least Cadence and Synopsys and cites to evidence from NXP’s website to 8 support this assertion. (Doc. No. 22-4, FAC Ex. D at 2.) The Ninth Circuit has explained 9 that “‘[t]he Twombly plausibility standard . . . does not prevent a plaintiff from pleading 10 facts alleged upon information and belief where the facts are peculiarly within the 11 possession and control of the defendant or where the belief is based on factual information 12 that makes the inference of culpability plausible.’” Soo Park v. Thompson, 851 F.3d 910, 13 928 (9th Cir. 2017) (quoting Arista Records, LLC v. Doe 3, 604 F.3d 110, 120 (2d Cir. 14 2010)); see also Concha v. London, 62 F.3d 1493, 1503 (9th Cir. 1995) (“[W]e relax 15 pleading requirements where the relevant facts are known only to the defendant.”); Exergen 16 Corp. v. Wal-Mart Stores, Inc., 575 F.3d 1312, 1330 (Fed. Cir. 2009) (“Pleading on 17 ‘information and belief’ is permitted under Rule 9(b) when essential information lies 18 uniquely within another party’s control.”). Bell Semic contends that information regarding 19 which specific design tools NXP employs to design its semiconductor devices lies within 20 the possession and control of NXP, (Doc. No. 29 at 16), and NXP does not dispute that 21 assertion. As such, Bell Semic’s allegations made on information and belief regarding the 22 design tools are sufficient to support its claim for infringement of the ’989 Patent. See Soo 23 Park, 851 F.3d at 928; see, e.g., WiTricity, 563 F. Supp. 3d at 328 (“Although some of the 24 allegations regarding the accused product are plead on information and belief, more 25 detailed allegations are not required at this stage. Indeed, ‘it may not be possible for a 26 plaintiff to describe its case-in-chief with particularity at the outset of litigation, without 27 access to the accused method, the accused apparatus for reverse engineering, or 28 confidential data such as source code.’”). 1 In sum, Bell Semic has adequately stated a claim against NXP for direct 2 infringement of the ’989 Patent. As such, the Court denies NXP’s motion to dismiss Bell 3 |) Semic’s claim for infringement of the ’989 Patent for failure to state a claim.* 4 Plaintiff's Claim for Infringement of the ’803 Patent 5 In the FAC, Bell Semic alleges against NXP a claim for infringement of the ’803 6 Patent. (Doc. No. 22, FAC □□ 52-64.) NXP moves to dismiss Bell Semic’s claim for 7 |) infringement of the ’803 Patent. (Doc. No. 24-1 at 13-21.) 8 On January 12, 2023, the Court partially stayed this action pursuant to 28 U.S.C. § 9 || 1659(a) to the extent Bell Semic asserts a claim for infringement of the ’803 Patent against 10 NXP. (Doc. No. 34 at 3, 9-10.) In light of this, the Court denies NXP’s motion to dismiss 11 || Bell Semic’s claim for infringement of the ’803 Patent without prejudice to NXP refiling 12 || this portion of its motion to dismiss when the stay is lifted. 13 Conclusion 14 For the reasons above, the Court denies Defendant NXP’s Rule 12(b)(6) motion to 15 || dismiss. NXP must file an answer to Plaintiff Bell Semic’s first amended complaint within 16 || fourteen (14) days from the date this order is filed. See Fed. R. Civ. P. 12(a)(4)(A). 17 || The answer should be filed in both the onginal case (Case No. 22-cv-1267) and the lead 18 |) case (Case No. 22-cv-594). All other future filings shall be made in the lead case (Case 19 |) No. 22-cv-594) absent further order of the Court. 20 IT IS SO ORDERED. 21 |) DATED: January 12, 2023 | | | | | | 22 YN W. HUFF, Distri ge 23 UNITED STATES DISTRICT COURT 24 || 25 |\4 In its briefing, NXP raises various challenges to the declaration from Bell Semic’s 6 technical expert, Dr. Linder, attached as Exhibit E to the FAC. (Doc. No. 24-1 at 20-21: Doc. No. 30 at 10.) Because the Court does not cite to or rely in any way on the Linder 27 || declaration in deciding NXP’s Rule 12(b)(6) motion to dismiss, NXP’s challenges to the 38 Linder declaration for purposes of its Rule 12(b)(6) motion to dismiss are moot, and the Court declines to address them.