Cisco moved to dismiss the plaintiff’s patent infringement complaint pre-lawsuit willfulness allegations. As the district court explained, the allegations in the first amended complaint asserted: “(i) that an investor of both the owner of the ‘951 Patent and of OpenDNS informed unspecified employees or agents of OpenDNS that certain OpenDNS technology infringed the ‘951Patent (ii) that defendant acquired OpenDNS in 2015 and (iii) that defendant incorporated the allegedly infringing OpenDNS technology into the Accused Security Products.”

To analyze whether the allegations were sufficient, the district court explained that “[a]t the motion to dismiss stage, courts have concluded that a plaintiff must “plead facts showing willfulness” in order to avoid dismissal of a willful infringement claim. Cont? Circuits LLC v. Intel Corp., No. CV16-2026 PHX DGC, 2017 WL 2651709, at *7 (D. Ariz. June 19, 2017) (collecting cases). In this respect, the complaint must allege, as a “prerequisite” to a willfulness claim, that the defendant had “[k]nowledge of the patent alleged to be willfully infringed.” See WBIP, LLC v. Kohler Co., 829 F.3d 1317, 1341 (Fed. Cir. 2016). Yet, a plaintiff has not plausibly alleged willful infringement if he alleges only that “the evidence shows that the infringer knew about the patent and nothing more.” Halo Elecs., Inc. v. Pulse Elecs., Inc., 136 S. Ct. 1923, 1936 (2016) (Breyer, J., concurring). As courts have sensibly concluded, the complaint must also allege facts that support a plausible inference that the defendant’s behavior was “egregious,” such as facts showing that defendant was put on notice or was otherwise subjectively aware of the risk that its conduct constituted infringement. See, e.g., Puget Bioventures, LLC v. Biomet Orthopedics LLC, 325 F. Supp. 3d 899, 911 (N.D. Ind. 2018); Finjan, Inc. v. Cisco Systems, Inc., No. 17-CV-00072-BLF, 2018 WL 7131650, at *4-5 (N.D. Cal. Feb. 6, 2018) (collecting cases).”

After reviewing the relevant case law, the district court noted that “[i]t is a close call whether the facts alleged in the First Amended Complaint are sufficient to support a plausible inference that, prior to the initiation of the instant infringement suit, defendant (i) knew of the ‘951 Patent and (ii) was subjectively aware of the risk that its conduct infringed the ‘951 Patent. In its response to defendant’s motion, plaintiff argues that OpenDNS’s knowledge of the ‘951 Patent and awareness of the infringing nature of its technology are attributable to defendant by virtue of defendant’s acquisition of OpenDNS in 2015.”

The district court then concluded that plaintiff’s willfulness allegations “do not make it plausible here that defendant knew of the ‘951 Patent and was subjectively aware of the risk that its conduct infringed the ‘951 Patent. Too much speculation is required to support plaintiffs argument that OpenDNS’s knowledge on these topics is attributable to defendant. First, it is entirely unclear from the First Amended Complaint whether the unspecified OpcnDNS employees who received notice that the OpenDNS technology infringed the ‘951 Patent continued to work for defendant after defendant acquired OpenDNS. Second, plaintiff alleges no facts to support a reasonable inference that these unspecified OpenDNS employees “had a connection” to defendant’s alleged willful infringement of the ‘951 Patent See id. Put simply, without any facts to identify or describe the OpenDNS agents who were allegedly put on notice about the infringement risks of the OpcnDNS technology, OpenDNS’s knowledge cannot be imputed to defendant. Accordingly, plaintiff has not alleged sufficient facts to show that it is plausible, as opposed to merely conceivable. that defendant knew of plaintiff’s Patent and was aware of the risk that defendant’s conduct infringed that Patent prior to the initiation of the instant action by plaintiff.”

Accordingly, the district court dismiss the willfulness claim based on the pre-filing allegations.

Bushnell Hawthorne, LLC v. CISCO Systems, Inc., Case No. 1:18-cv-760 (E.D. Va. Apr. 30, 2019)