fare Beas Ned ng 5 JUL 2-3 2020 |

4 5 6 7 8 UNITED STATES DISTRICT COURT 9 SOUTHERN DISTRICT OF CALIFORNIA 10 11 || MRSI SYSTEMS, LLC, . Case No.: 3:19-cv-02344-BEN-JLB : _ Plants) ORDER DENYING MOTION TO 13 || v. DISMISS 14 |} PALOMAR TECHNOLOGIES; INC., [ECF No. 20] 15 Defendant. 16 17 Plaintiff MRSI Systems, LLC (“MRSI”), alleges Defendant Palomar Technologies, 18 || Inc. (“Palomar”), directly and indirectly infringes on four patents it holds in the field of 19 || die-bonding systems. Compl., ECF No. 1, J 1-2, 32, 48, 59, 69. Palomar moves to 20 || dismiss the Complaint for failure to state claims upon which relief can be granted 21 || pursuant to Federal Rule of Civil Procedure 12(b)(6). Mot., ECF No. 20-1. MRSI 22 || opposes the motion. Opp’n., ECF No. 24. For the reasons set forth below, the Court 23 || DENIES the motion to dismiss. 24 25 26 /// 27 || // 28

1 BACKGROUND! 2 MRSI is a manufacturer of automated, precision, high-speed bonding and epoxy- 3 || dispensing systems used in complex microelectronic and optoelectronic devices. Comp., 4 ||ECF No. 1,94. These bonding and epoxy-dispensing systems use mechanical vision and 5 software to establish connections between circuit boards and their “packages,” which are 6 || critical to the assembly and manufacture of electronics in industries such as aerospace 7 |jand telecommunications. Jd. at J] 10-12. Palomar is a competitor of MRSI, and the g parties are also engaged in patent litigation involving the validity of one of Palomar’s 9 || patents in the District of Massachusetts. Mot., ECF No. 20-1, 1. 10 The instant action involves four patents-in-suit: U.S. Patent Nos. 7,324,710 (“the ||‘710 Patent”), 7,109,510 (“the ‘510 Patent”), 9,032,611 (“the ‘611 Patent”), and 12 ||9,648,795 (“the ‘795 Patent”). Compl., ECF. No. 1, Each patent relates to methods, 13 || devices, and software involved in aligning and attaching semiconductor parts on printed 14 || circuit boards. Jd. Ff 19, 23, 26, 29. 15 The ‘710 Patent is entitled “Method and Device for Determining Nominal Data for 16 || Electronic Circuits by Capturing a Digital Image and Compare with Stored Nominal 17 || Data.” Compl. Ex. H, ECF No. 1-10. The ‘710 Patent allows for faster and more 18 accurate mounting of components on printed circuit boards through the use of a priori 19 knowledge of the appearance of electronic devices. Jd. at Col. 2:29-35. The first claim 20 alleges infringement of the ‘710 Patent related to Palomar’s VisionPilot software and its 21. |/integration into Palomar’s accused products. Id. ff 34-38. □□

22 The*510 Patent is entitled “Method and Apparatus for Aligning a Substrate on a 23 Stage.” Compl. Ex. I, ECF No. 1-11. As the name indicates, this patent is directed 24 ||toward an apparatus and method that allows for precision placement and alignment of a 25 . □□□□□□□□□□□□□□□□□□□□□□ 27 ||! The Court here is not making any findings of fact, but rather summarizing the relevant 28 allegations of the Complaint for purposes of evaluating Defendant’s Motion to Dismiss.

|

1 ||“die” on a “stage,” which could be done through the use of a robotic device that uses a 2 |/laser to provide accurate placement. Compl., ECF No. 1, 99 24, 51-52. The second claim 3 || alleges infringement of the ‘510 Patent related to Palomar’s accused Die Bonders. Jd. at 4 49-52. . The ‘611 Patent is entitled “Apparatus for Generating Patterns on Workpieces.” 6 Compl. Ex. J, ECF No. 1-12. The invention includes a pick-and-place tool containing a 7 position determining unit” that helps provide accurate placement of a die. Compl., □ 8 ||27. The third claim alleges infringement of the ‘611 Patent. Id. at § 64. 9 The ‘795 Patent is entitled “Pick-and-Place Tool.” Compl. Ex. K, ECF No. 1-13. □ 10 || The ‘795 Patent is a continuation of the ‘611 Patent, and also concerns a pick-and-place 11 |/tool containing a “die position determining unit.” Jd. At issue here is the ‘795 Patent’s 12 || limitation that the pick-and-place tool be “further configured to output the position 13 }\information to an external patterning tool.” Jd. at Col. 16:56-59. The fourth claim 14 alleges infringement of the ‘795 Patent. Compl., ECF No. 1, { 74. 15 DEFENDANT’S MOTION TO DISMISS 16 A. Legal Standard 17 A motion to dismiss under Federal Rule of Civil Procedure 12(b)(6) must be 18 || granted where the pleadings fail to state a claim upon which relief can be granted. When 19 |\ considering a Rule 12(b)(6) motion, the court must “accept as true facts alleged and draw 20 ||inferences from them in the light most favorable to the plaintiff.” Stacy v. Rederite Otto 21 || Danielsen,

(9th Cir. 2010). A plaintiff must not merely allege 22 conceivably unlawful conduct but must allege “enough facts to state a claim to relief that 23 plausible on its face.” Bell Atl. Corp. v. Twombly,

(2007). “A claim 24 |\is facially plausible ‘when the plaintiff pleads factual content that allows the court to 25 || draw the reasonable inference that the defendant is liable for the misconduct alleged.’” 26 || Zixiang Liv. Kerry,

(9th Cir. 2013) (quoting Ashcroft v. Iqbal, 556 27 || U.S. 662, 678 (2009)). “Threadbare recitals of the elements of a cause of action, supported by mere conclusory statements, do not suffice.” Jgbal, 556 U.S. at 678.

1 The parties disagree about how this standard is applied to patent cases. Compare 2 ||Mot., ECF No. 20-1, 13-16 and Reply, ECF No. 25, 2-3 with Opp’n., ECF No. 24, 11-14. 3 Palomar urges the Court to adopt a pleading standard requiring allegations that “permit a 4 || court to infer that the accused product infringes each element of at least one claim” of the > ||asserted patent. Mot., ECF No. 20-1, 13 (quoting Scripps Research Inst. v. Hlumina, Inc., 6 || 16-cv-661-JLS-BGS,

, at *5 (S.D. Cal. Nov. 21, 2016)). MRSI asks 7 Court to follow the Federal Circuit’s holding in Nalco Company v. ‘Chem-Mod, LIC, 8 || where the court stated “the Federal Rules of Civil Procedure do not require a plaintiff to 9 || plead facts establishing that each element of an asserted claim is met.”

, 10 |] 1350 (Fed. Cir. 2018). 11 Palomar argues that after the abrogation of Federal Rule of Civil Procedure Form 12 || 18 on December 1, 2015, the Federal Circuit’s decision in Nalco is “no longer 13 jJapplicable.” Reply, ECF. No. 25, 2. Nalco was decided on February 27, 2018, mote than 14 ||two years after the abrogation took effect.

(Fed. Cir. 2018). Nonetheless, 15 Palomar argues Nalco is not applicable because the complaint there was filed before the 16 || abrogation of Form 18, and “thus the Federal Circuit applied the earlier Form 18 pleading 17 ||requirement.” Reply, ECF No. 25,n 1. This is simply incorrect. Instead, the Federal 18 || Circuit said in Nalco it “need not resolve” the question of whether Form 18 provides the 19 relevant pleading standard because the complaint at issue was “sufficient under the 20 || current version of the Federal Rules and those cases interpreting those rules.” Nalco, 883 21 ||F. 3d at 1347 n.2. 22 This Court stated in Small Axe Enterprises, Inc. v. Amscan, Inc., “[w]ith the 23 || abrogation of Form 18, the normal plausibility pleading standard of Twombly and Igbal 24 || governs in patent cases.” 16-cv-00981-BEN-WVG,

, *4 n. 3 (Apr. 25, 25 ||2017). This Court, however, declined to adopt an “each element” pleading requirement 26 || because the complaint at issue failed to allege sufficient facts under even the Twombly 27 Iqbal standard. Id. at *3, Noting the Federal Circuit has still not weighed in on this 28 |\issue, this Court again declines to adopt an “each element” pleading requirement. As will

.

1 || be discussed below, however, MRSI’s Complaint plausibly alleges sufficient facts to □ 2 || support infringement of each of the four patents-in-suit under either test. 3 B. Analysis 4 MRSI’s first claim alleges direct and indirect infringement of the ‘710 Patent. 5 ||Compl., Doc. No. 1, (32. The Complaint specifically identifies five of Palomar’s 6 || accused products that allegedly infringe on claims 1 and 26 of the ‘710 Patent. /d. at J 7 ||33. It further provides extensive factual support for its claims. Jd. at 9] 34-40. Palomar 8 argues the Complaint fails to allege “a sufficient factual bases [sic] to support any 9 || contention that the accused products use a prori nominal appearance data as required by 10 ||claims 1 and 26.” Mot., ECF No. 20-1, 17. Palomar’s argument is based on its own 11 |/interpretation of the ‘710 Patent’s claims. Jd. These objections to “infringement read 12 || like classic Markman arguments,” and are best suited for claims construction. Nalco, 883 13 F.3d at 1349. Moreover, it is not appropriate to decide factual disputes on a motion to 14 dismiss. 7d. Accordingly, the motion to dismiss is denied with respect to alleged 15 || infringement of the ‘710 Patent. . 16 MRSI’s second claim alleges direct and indirect infringement of the ‘510 Patent. 17 ||Compl., ECF No. 1, 48. The Complaint specifically identifies two of Palomar’s 18 |) accused products that infringe on claim 17 of the ‘510 Patent. Jd. at 4 48-51. Palomar 19 || argues MRSI has not alleged “that the ‘stages’ are moveable in either the x or y direction 20 ||nor does MRSI allege the workpiece is somehow scraped across the stage in an x or y 21 || direction.” Mot., ECF No. 20-1, 18. MRSI alleges each limitation in claim 17 of the _ 22 |}*510 Patent is infringed in Palomar’s named accused products. Compl., ECF No. 1, 79 23 |/51-54. “Tt is irrelevant at this stage whether Plaintiff's allegations are accurate, as the 24 || Court accepts all of Plaintiff's allegations as true... The Court only requires that Plaintiff 25 || plausibly alleges that a product or products of Defendant infringes on at least one claim 26 || of the [asserted] patent.” Scripps Research Inst.,

, at *6, quoting 27 Telesign Corp. v. Twilio, Inc., No. 16-cv-2106-PSG-SSX,

, at *4 (C.D. 28 Aug. 3, 2016). MRSI has plausibly alleged Palomar’s accused products infringe . 5

1 || each element of claim 17 of the ‘510 Patent. Accordingly, the motion to dismiss is 2 || denied with respect to alleged infringement of the ‘510 Patent. . 3 MRSI’s third claim alleges direct and indirect infringement of the ‘611 Patent. 4 || Compl., ECF No. 1,59. The Complaint specifically identifies that at least Palomar’s 5 3880 Die Bonder, an accused product, infringes on claim 1 of the ‘611 Patent. Id. at 60. 6 further provides extensive factual support for its claims. Jd. at J] 31-46, 60-64. 7 || Palomar argues the Complaint fails to.allege the accused products contain an image 8 || writer or an image write controller that is configured to generate adjusted pattern data. 9 || Mot., ECF No. 20-1, 19. The Court finds the allegations contained in the Complaint 10 plausibly state a claim for infringement. MRSI alleges Palomar’s 3880 Die Bonder has 11 || an image write controller that uses Palomar’s VisionPilot system, which plausibly 12 || generates adjusted pattern data. Compl., ECF No. 1, § 63. The relevant portion □□ the 13 || Complaint specifically references the VisionPilot system and plausibly describes a theory 14 || of infringement. Jd. Palomar’s argument that the Complaint misidentifies an epoxy 15 || dispenser as an image writer is likewise unavailing. Mot., ECF No. 20-1, 19. This isa 16 || factual argument not appropriate for a motion to dismiss. Nalco,

. 17 || Accordingly, the motion to dismiss is denied with respect to alleged infringement of the 18 || ‘611 Patent. 19 MRSI’s fourth claim alleges direct and indirect infringement of the ‘795 Patent. 20 ||Compl., ECF No. 1, 769. The Complaint specifically identifies Palomar’s accused 21 || products, of which there are only six, as.the products that infringe on claim 1 of the ‘795 22 ||Patent, /d. at It further provides extensive factual support for its claims.

at [9 23 || 31-46, 58-67, 70-73. Palomar argues the Complaint fails to allege the accused products 24 || use “an adjusted pattern based upon adjusting original pattern data” and “is devoid of any 25 || allegation that [one accused product] is configured to ‘output’ the position information to 26 an ‘external patterning tool.” Mot., ECF 20-1, 20. As with the ‘611 Patent discussed 27 || above, the Court finds the allegations plausibly state a claim for infringement. MRSI 28 |/ alleges the accused products use Palomar’s VisionPilot system, which plausibly generates

1 adjusted pattern data. Compl., ECF No. 1, 9 63. The relevant portion of the Complaint 2 {| specifically references the VisionPilot system and plausibly describes a theory of . 3 |/infringement. /d. at 72-73. Palomar’s argument regarding the “external patterning 4 || tool” is again not appropriate for a motion to dismiss. Nalco,

. 5 || Accordingly, the motion to dismiss is denied with respect to alleged infringement of the 6 ||‘795 Patent. 7 CONCLUSION 8 For the foregoing reasons, Defendant’s Motion to Dismiss (ECF No. 20) is 9 || DENIED. 10 IT IS SO ORDERED. 11 || Dated: july Z- 22050 Lz 12 Hn. er T. Benitez 13 United States District Judge 14 15 16 17 18

19 20 . : 21 || : □ 22 23 24 25 || 26 27 28