Sentius International, LLC v. Apple Inc.

Background

Sentius alleged that Apple infringed U.S. Patent No. RE43,633 (the ’633 Patent) and U.S. Patent No. 7,672,985 (the ’985 Patent). The accused functionality involved spellcheck features in products such as iPhones and MacBooks and in Apple applications such as Pages and Keynote. Sentius alleged that the patented methods were performed when a user selected a misspelled word to receive spelling suggestions.

The court had previously dismissed allegations that Apple directly infringed the ’633 Patent method claims and jointly infringed method claims of both patents, allowing Sentius to amend its complaint. In its third amended complaint, Sentius alleged that Apple and users separately operated devices executing the relevant software. Sentius also alleged that Apple operated servers, computers, and devices under its control. For the ’985 Patent, Sentius alleged that Apple performed some method steps on its own servers while users performed other steps.

Legal standard

Apple moved under Federal Rule of Civil Procedure 12(b)(6), which allows dismissal when a complaint does not state a legally sufficient claim. At this stage, the court accepts properly pleaded factual allegations and asks whether they plausibly show entitlement to relief.

Direct infringement of the ’633 Patent

For a method patent, direct infringement generally requires that all steps be performed by, or legally attributable to, one entity. Sentius presented two direct-infringement theories.

First, Sentius alleged that Apple itself operated accused devices and performed the claimed methods. The court held that this theory stated a viable claim because it was plausible that Apple tested its products or executed the relevant methods during product development and support.

Second, Sentius alleged that Apple directed or controlled users by conditioning spellcheck benefits on users’ performance of the claimed steps. The court recognized that a defendant may be directly liable when a third party performs all method steps to obtain a benefit conditioned by the defendant and the defendant controls the manner or timing of that performance. But the court found that Sentius did not adequately plead that theory here. It reasoned that the cited cases involved offline or real-world control, while Sentius relied on software functionality. The court also noted that Sentius did not allege that users could obtain spellcheck benefits only by performing the claimed method or that Apple retained the right and ability to control users after selling the devices.

The court therefore granted Apple’s partial motion to dismiss as to direct-infringement allegations based on Apple’s direction and control over users, and denied the motion as to allegations based on Apple’s own operation of the accused devices.

Vicarious infringement of the ’633 Patent

Vicarious infringement is a secondary-liability theory that can hold one party responsible for another party’s infringement under principles such as agency or the right and ability to control infringement. The court distinguished that theory from direct infringement based on attributing method steps performed by another person.

The court held that Sentius could not state a vicarious-infringement claim based on the “conditioned benefit” theory. It also found that Sentius’s other allegations were insufficient because Sentius did not allege an agency relationship between Apple and its users or that Apple had the right and ability to police users’ direct infringement. The court stated that amendment to add vicarious-infringement claims based on those facts would be futile.

Joint infringement of the ’985 Patent

Joint infringement concerns a method whose steps are performed by multiple parties but are legally attributable to one alleged infringer. The court held that Sentius adequately alleged joint infringement because Apple allegedly performed one step on its servers and the ’985 Patent claim required user interaction for another step. The court therefore denied Apple’s motion as to joint infringement of the ’985 Patent.

Disposition

The court granted in part and denied in part Apple’s partial motion to dismiss. Specifically, it granted the motion regarding direct-infringement allegations based on Apple’s direction and control over users, and denied it regarding Apple’s own operation of the accused devices and joint infringement of the ’985 Patent. The court directed Apple to answer within twenty-one days, set a case-management conference for November 23, 2020, and terminated docket number 61.