Sonos, Inc. v. Google LLC

Background

Sonos alleged that Google infringed five patents: U.S. Patent Nos. 9,344,206; 9,967,615; 10,469,966; 10,779,033; and 10,848,885. The parties had stipulated to dismissal of the ’206 patent from the action. Sonos’s remaining patent-infringement allegations included direct infringement, indirect infringement, and willful infringement, for which Sonos sought enhanced damages.

Google moved under the pleading-dismissal rule to dismiss Sonos’s willful-infringement and indirect-infringement claims concerning the ’966, ’033, and ’885 patents. Google did not challenge the allegations concerning the ’615 patent. The order states that Google had filed a separate action seeking a declaration about patent rights, and that Sonos’s action had originally been filed in Texas before being transferred to the Northern District of California.

Enhanced damages and willful infringement

The court held that Sonos had to plausibly allege both that Google knew about the specific patents and that Google knew its conduct infringed them. Alleging knowledge of a patent family or patent portfolio was not enough. The court also held that Sonos did not have to plead additional aggravating circumstances—the conduct’s alleged egregiousness—at the complaint stage. Those circumstances could be evaluated later, after infringement and willfulness were established.

The court generally concluded that a complaint filed by the patent owner would not, by itself, supply the required notice for willful infringement. A detailed pre-suit notice letter identifying the patent claims, accused product, and alleged infringement could do so if the accused infringer had a fair opportunity to respond. The court recognized exceptions, including when the accused infringer had learned about the patent through an earlier lawsuit or had previously held a license.

Sonos gave Google copies of its original and amended complaints less than 24 hours before filing the Texas action. The court found that this did not give Google enough time to evaluate the allegations, stop the alleged infringement, or negotiate a license. Earlier correspondence from Sonos did not specifically identify the ’033, ’966, and ’885 patents, and Sonos had not adequately alleged that Google otherwise knew about those patents and the alleged infringement.

Because Google had initiated its own declaratory-relief action first, the court said Sonos could plead willfulness in a counterclaim in that action or by amending the transferred Texas action. The court also stated that Sonos could pursue discovery about Google’s pre-suit knowledge and could seek permission to amend again if discovery showed that Google had known about the specific patents and infringement before suit.

Indirect infringement

The court applied the same knowledge requirements to induced and contributory infringement. Induced infringement also required a plausible allegation that Google specifically intended to encourage another person’s infringement. For contributory infringement, Sonos additionally had to plausibly allege that the accused products were not staple articles or commodities suitable for substantial noninfringing uses.

The court found that Sonos had not adequately alleged Google’s knowledge of the specific patents and infringement. It also found that Sonos’s allegations about the absence of substantial noninfringing uses were conclusory. Sonos alleged that Google’s applications, including YouTube Music, Google Play Music, and YouTube, were not suitable for substantial noninfringing uses, but the court said the allegations addressed the applications generally rather than a specific infringing component or feature. The contributory-infringement claim therefore failed.

Disposition and appeal certification

The court granted Google’s motion as to Sonos’s willful-infringement and indirect-infringement claims and dismissed those claims without prejudice. Sonos may move for leave to amend, and any such motion must include a redlined proposed complaint showing the changes.

Judge William Alsup certified for interlocutory appeal the legal questions concerning pleading standards for willful and indirect infringement on the knowledge issue, but not the separate issue concerning substantial noninfringing uses. The court found those questions controlling, that substantial disagreement existed about them, and that appellate review could materially advance the litigation.