Intel Corporation v. Future Link Systems, LLC, C.A. No. 14-377-LPS, February 12, 2015.

Burke, M.J. Magistrate issues a Report and Recommendation, recommending that defendants’ motion to dismiss for lack of subject matter jurisdiction be granted in part and denied in part. Oral argument was heard on November 20, 2014.

Plaintiff seeks a declaratory judgment that it does not infringe defendant’s patents. Defendant asserts that plaintiff lacks standing, that direct and indirect non-infringement claims fail to state a claim, and the case should be dismissed. Plaintiff asserts subject matter jurisdiction exists based upon due to infringement allegation made against plaintiff’s customers. The court disagrees with defendant’s argument that a supplier plaintiff can never have standing to sue a patentee for direct non-infringement. Plaintiff, by making allegedly infringing computer components and selling them to customers would perform its own independent acts of infringement, assuming infringement.  The court finds no actual controversy however with respect to method claims since there are no allegations how the steps of the method are to be performed.  No actual controversy exists with respect to induced infringement in the absence of allegations that plaintiff encouraged infringement. In addition, The contributory infringement claims are insufficiently pled  in the absence of allegations that its products cannot be used in a non-infringing manner.  No subject matter jurisdiction exists for the remaining patents owned by defendant. Jurisdiction based on an obligation to indemnify the customers is insufficiently plead where the complaint alleges merely that request for indemnification have been made.  The Magistrate recommends that the court grant plaintiff leave to amend.