Western Digital Technologies, Inc. v. Viasat, Inc.

Background

Five plaintiffs—Western Digital Technologies, Inc.; Western Digital Ireland Ltd.; SanDisk 3D IP Holdings Ltd.; SanDisk Technologies LLC; and SanDisk Storage Malaysia Sdn. Bhd.—asserted infringement of U.S. Patent Nos. 9,424,400, 10,447,667, and 8,504,834. The complaint alleged that Viasat develops or sells media-streaming software, systems, and services that infringe those patents.

The complaint alleged that “[o]ne or more” plaintiffs held title to each asserted patent. The plaintiffs later said they were suing as a group that together owned all substantial rights in the patents.

Motion and legal standard

Viasat moved under Federal Rule of Civil Procedure 12(b)(1), which allows dismissal for lack of subject-matter jurisdiction—the court’s legal authority to hear a dispute. Viasat argued that the plaintiffs had not pleaded enough facts to establish standing, meaning a plaintiff’s legal ability to bring the claims, because they did not identify which plaintiff owned the relevant patent rights.

The court explained that only a “patentee,” including a patent owner’s successor in title, may bring a civil action for patent infringement. The plaintiffs had the burden to establish that federal jurisdiction was proper. The court also explained that a jurisdictional defect may be corrected by amendment when amendment could cure the problem.

Court’s analysis

The court held that saying one or more plaintiffs held the rights to the patents was not enough. The complaint did not identify which entity held which rights to which patent or explain the basis for those rights. The court found that the allegation was a conclusion rather than supporting factual information.

The court also rejected the plaintiffs’ argument that suing as a group solved the problem. Although a patent may be owned by a group, the complaint did not allege that the five plaintiffs collectively owned all rights in all three patents or explain how they formed a cohesive unit with joint rights in each patent.

The court noted that the plaintiffs said they had joined all companies with significant patent rights to avoid a possible later dispute about whether all necessary parties had been included. The court stated that this approach instead created uncertainty about whether any plaintiff had standing to enforce each patent. The court also stated that confidentiality concerns did not excuse the plaintiffs from pleading the relevant ownership facts.

Disposition

The court concluded that the plaintiffs had failed to sufficiently plead standing and therefore lacked subject-matter jurisdiction at that stage. It GRANTED Viasat’s motion to dismiss with leave to amend because the court could not say that amendment would be futile. The plaintiffs were ordered to file an amended complaint within 21 days from the order if they could cure the identified pleading deficiencies. The court also stayed discovery until the plaintiffs met their pleading burden.