1 2 3 4 UNITED STATES DISTRICT COURT 5 NORTHERN DISTRICT OF CALIFORNIA 6 7 FORTINET, INC., Case No. 20-cv-03343-EMC

8 Plaintiff,

ORDER GRANTING IN PART AND

9 v. DENYING IN PART DEFENDANT’S

MOTION TO DISMISS

10 FORESCOUT TECHNOLOGIES, INC., Docket No. 24 11 Defendant.

12 13 14 I. INTRODUCTION 15 Plaintiff Fortinet, Inc. (“Fortinet”) brought this action against Defendant Forescout 16 Technologies, Inc. (“Forescout”) for patent infringement. Fortinet owns three patents relating to 17 cybersecurity technology that, it alleges, Forescout has indirectly and willfully infringed. Pending 18 before the Court is Forescout’s motion to dismiss for failure to state a claim on the grounds that 19 (1) Fortinet’s patents claim ineligible subject matter and (2) Fortinet fails adequately to plead 20 indirect or willful infringement. See Docket No. 24 (“Mot.”). For the reasons stated below, the 21 Court DENIES Forescout’s motion to dismiss the asserted patents on subject-matter eligibility 22 grounds. It also DENIES Forescout’s motion as to Fortinet’s claims of inducement. The Court, 23 however, GRANTS the motion as to Fortinet’s claims of contributory and willful infringement 24 with leave to amend. 25 II. BACKGROUND 26 The complaint alleges the following. Fortinet is a company that sells “cybersecurity 27 products, software, and services” to large institutional customers. Docket No. 1 (“Compl.”) ¶ 3. 1 control security technology. Id. ¶¶ 5, 30-32. These include United States Patent Nos. 8,458,314 2 (“the ’314 Patent”), titled “System and method for offloading IT network tasks; 9,369,299 (“the 3 ’299 Patent”), titled “Network access control system and method for devices connecting to 4 network using remote access control methods”; and 9,948,662 (“the ’662 Patent”), titled 5 “Providing security in a communication network.” Id. ¶¶ 2, 30-32. 6 Fortinet describes the ’314 Patent as “a method of delegating control of computer network 7 access from network administrators to sponsors” through the creation of digital “templates and 8 profiles that associate network users with a sponsor.” Id. ¶ 44. The ’299 Patent is characterized as 9 “a system for out-of-band control of network access,” featuring such technological components as 10 “a server device,” a “terminal device,” a “remote access device,” and a “network access filter.” Id. 11 ¶ 58. And the ’662 Patent claims “a method of providing security in a communication network” 12 whereby “a network security device selectively disables application of security features based on a 13 trust level associated with [an] external network.” Id. ¶ 72. 14 Forescout is a competitor of Fortinet, also selling cybersecurity products to businesses. 15 See id. ¶ 6. In February 2020, “Fortinet attempted to initiate licensing discussions with Forescout” 16 on the belief that Forescout’s product offerings infringe the ’314, ’299, and ’662 Patents. Id. ¶ 10. 17 Fortinet continued its attempts throughout March and April of this year, eventually providing 18 Forescout with “identification of specific patents that are infringed by Forescout’s technology.” 19 Id. ¶¶ 11-12. As of the filing of the Complaint, Forescout “ha[d] not indicated a willingness” to 20 engage in licensing negotiations. Id. ¶ 12. 21 Fortinet filed its Complaint on May 15, 2020, alleging three counts of patent infringement 22 on theories of inducement, contributory infringement, and willful infringement. See, e.g., id. 23 ¶¶ 37, 49, 51, 63, 65, 77. Forescout filed its motion for failure to state a claim on July 13, 2020. 24 See Mot. 25 III. LEGAL STANDARD 26 Federal Rule of Civil Procedure 8(a)(2) requires a complaint to include “a short and plain 27 statement of the claim showing that the pleader is entitled to relief.” Fed. R. Civ. P. 8(a)(2). A 1 Civ. P. 12(b)(6). To overcome a Rule 12(b)(6) motion to dismiss after the Supreme Court's 2 decisions in Ashcroft v. Iqbal, 556 U.S. 662 (2009), and Bell Atlantic Corp. v. Twombly, 550 U.S. 3 544 (2007), a plaintiff's “factual allegations [in the complaint] must . . . suggest that the claim has 4 at least a plausible chance of success.” Levitt v. Yelp! Inc., 765 F.3d 1123, 1135 (9th Cir. 2014) 5 (internal quotation omitted). The court “accept[s] factual allegations in the complaint as true and 6 construe[s] the pleadings in the light most favorable to the nonmoving party.” Manzarek v. St. 7 Paul Fire & Marine Ins. Co., 519 F.3d 1025, 1031 (9th Cir. 2008). But “allegations in a 8 complaint . . . may not simply recite the elements of a cause of action [and] must contain sufficient 9 allegations of underlying facts to give fair notice and to enable the opposing party to defend itself 10 effectively.” Levitt, 765 F.3d at 1135 (quoting Starr v. Baca, 652 F.3d 1202, 1216 (9th Cir. 11 2011)). “A claim has facial plausibility when the plaintiff pleads factual content that allows the 12 court to draw the reasonable inference that the defendant is liable for the misconduct alleged.” 13 Iqbal, 556 U.S. at 678. “The plausibility standard is not akin to a ‘probability requirement,’ but it 14 asks for more than a sheer possibility that a defendant has acted unlawfully.” Id. (quoting 15 Twombly, 550 U.S. at 556). 16 Under the Patent Act of 1952, patents are “presumed valid.” 35 U.S.C. § 282(a). “As 17 such, an alleged infringer asserting an invalidity defense pursuant to § 101 bears the burden of 18 proving invalidity by clear and convincing evidence.” Cisco Sys., Inc. v. Uniloc USA, Inc., 386 F. 19 Supp. 3d 1185, 1190 (N.D. Cal. 2019) (citing Microsoft Corp. v. i4i Ltd. P’ship, 564 U.S. 91, 95 20 (2011)). 21 “Patent eligibility under 35 U.S.C. § 101 is ultimately an issue of law” but “may contain 22 underlying issues of fact.” Berkheimer v. HP Inc., 881 F.3d 1360, 1365 (Fed. Cir. 2018). “Like 23 other legal questions based on underlying facts,” patent eligibility “may be, and frequently has 24 been, resolved on a Rule 12(b)(6) or (c) motion where the undisputed facts . . . require a holding of 25 ineligibility under the substantive standards of law.” SAP America, Inc. v. InvestPic, LLC, 898 26 F.3d 1161, 1166 (Fed. Cir. 2018). Thus, “[a]lthough claim construction is often desirable, and 27 may sometimes be necessary, to resolve whether a patent claim is directed to patent-eligible 1 may be eschewed “[w]here the court has a full understanding of the basic character of the claimed 2 subject matter.” Voip-Pal.Com, Inc. v. Apple Inc., 375 F. Supp. 3d 1110, 1124 (N.D. Cal. 2019) 3 (internal quotations omitted). 4 IV. DISCUSSION 5 In moving to dismiss Fortinet’s complaint, Forescout argues that the ’314, ’299, and ’662 6 Patents are all “directed to an abstract idea that lacks any inventive concept, and are therefore 7 patent-ineligible.” Mot. at 1. More specifically, it alleges that the patents focus on “the abstract 8 idea of controlling access” to a computer network “using conventional technology.” Id. at 2. 9 Forescout also contends that the complaint does not “adequately plead indirect infringement” 10 because it “fails to plead any factual allegations regarding the knowledge and intent elements of 11 Fortinet’s claims for contributory and induced infringement.” Id. at 1. Lastly, Forescout asserts 12 that the complaint “fails to adequately plead willful infringement” since it does not allege facts 13 showing “that Forescout’s conduct is egregious.” Id. Fortinet counters that its asserted patents 14 “are directed to patentable subject matter and incorporate inventive concepts—and to the extent 15 Forescout disputes the patents’ advancement over prior art, that fact issue precludes a finding of 16 invalidity at this stage.” Docket No. 27 (“Opp’n”) at 1. Fortinet also argues that the complaint 17 satisfies the pleading requirements for indirect and willful infringement, “provid[ing] ample notice 18 of Fortinet’s allegations.” Id. 19 A. Patent-Eligible Subject Matter 20 Section 101 of the Patent Act defines the scope of patent-eligible subject matter. It 21 provides: “Whoever invents or discovers any new and useful process, machine, manufacture, or 22 composition of matter, or any new and useful improvement thereof, may obtain a patent therefor.” 23 35 U.S.C. § 101. But the Supreme Court has long excluded from patent protection “laws of 24 nature, natural phenomena, and abstract ideas,” Diamond v. Diehr, 450 U.S. 175, 185 (1981), 25 which are “the basic tools of scientific and technological work,” Gottschalk v. Benson, 409 U.S. 26 63, 67 (1972). The Court has “described the concern that drives this exclusionary principle as one 27 of pre-emption,” since granting “a monopoly over an abstract idea” would “pre-empt use of [the 1 Corp. Pty. Ltd. v. CLS Bank Intern., 573 U.S. 208, 216 (2014) (internal citations omitted). The 2 Court has also cautioned, however, that lower courts must “tread carefully in construing this 3 exclusionary principle” since, “[a]t some level, ‘all inventions . . . embody, use, reflect, rest upon, 4 or apply laws of nature, natural phenomena, or abstract ideas.’” Id. at 217 (quoting Mayo 5 Collaborative Servs. v. Prometheus Labs., Inc., 566 U.S. 66, 71 (2012)). 6 In Alice, the Court codified a two-part test, first articulated in Mayo, for “distinguishing 7 patents that claim laws of nature, natural phenomena, and abstract ideas from those that claim 8 patent-eligible applications of those concepts.” 573 U.S. at 217. At step one, a court must 9 “determine whether the claims at issue are directed to a patent-ineligible concept”—i.e., a law of 10 nature, natural phenomenon, or abstract idea. Id. at 218. If so, then the court moves to step two, 11 “consider[ing] the elements of each claim both individually and ‘as an ordered combination’ to 12 determine whether [any] additional elements ‘transform the nature of the claim’ into a patent- 13 eligible application” of the ineligible subject matter. Id. at 217 (quoting Mayo, 566 U.S. at 79, 14 78). The Court has described this second step as “a search for an ‘inventive concept’”: “an 15 element or combination of elements that is ‘sufficient to ensure that the patent in practice amounts 16 to significantly more than a patent upon the [ineligible subject matter] itself.’” Id. at 217-18 17 (quoting Mayo, 566 U.S. at 72-73). 18 Lower courts have conceded that, in the wake of Mayo and Alice, “precision has been 19 elusive in defining an all-purpose boundary between the abstract and the concrete.” Affinity Labs 20 of Tex., LLC v. DirecTV, LLC, 838 F.3d 1253, 1258 (Fed. Cir. 2016) (internal quotation omitted). 21 Nevertheless, the Supreme Court and the Federal Circuit have established certain parameters for 22 conducting the step-one and step-two inquiries. 23 At Alice step one, courts “look at the ‘focus of the claimed advance over the prior art’ to 24 determine if the claim’s ‘character as a whole’ is directed to excluded subject matter,” Affinity 25 Labs, 838 F.3d at 1257-58 (internal quotation omitted), such as an abstract idea. While the 26 “Supreme Court has not established a definitive rule to determine what constitutes an ‘abstract 27 idea,’” Enfish, LLC v. Microsoft Corp., 822 F.3d 1327, 1334 (Fed. Cir. 2016), it has identified 1 system of commerce,” and other “method[s] of organizing human activity” as abstract ideas. See 2 Alice, 573 U.S. at 218-20 (citing Bilski v. Kappos, 561 U.S. 593, 599 (2010)). Courts therefore 3 often begin the step-one analysis by simply “compar[ing] claims at issue to those claims already 4 found to be directed to an abstract idea in previous cases,” Enfish, 822 F.3d at 1334.1 5 The closer question at step one, however, tends to be not “whether the claims involve a 6 patent-ineligible concept,” but whether they are “directed to excluded subject matter.” Enfish, 822 7 F.3d at 1335 (internal quotation omitted) (emphasis added). With computer technology in 8 particular, a typical crux of the step-one analysis is “whether the focus of the claims is on the 9 specific asserted improvement in computer capabilities . . . or, instead, on a process that qualifies 10 as an ‘abstract idea’ for which computers are invoked merely as a tool.” Id. at 1336; see also 11 Ancora Techs., Inc. v. HTC America, Inc., 908 F.3d 1343, 1347 (identifying this passage from 12 Enfish as the key inquiry in cases “involving software innovations”). The Federal Circuit has 13 made clear that merely applying an “abstract idea . . . on a generic computer” does not satisfy step 14 one, BASCOM Global Internet Servs., Inc. v. AT&T Mobility LLC, 827 F.3d 1341, 1348 (Fed. Cir. 15 2016) (internal quotation omitted), nor does “[l]imiting the invention to a technological 16 environment” such as the Internet, Berkheimer, 881 F.3d at 1367 (internal quotation omitted). 17 And “[t]he patent has to describe how to solve the problem in a manner that encompasses 18 something more than the principle in the abstract” to claim eligible subject matter. Dropbox, Inc. 19 v. Synchronoss Techs., Inc., 855 Fed. Appx. 529, 533 (Fed. Cir. 2020) (internal quotation omitted). 20 See Affinity Labs, 838 F.3d at 1258 (holding an invention abstract at step one where there was 21 “nothing in [the patent] that is directed to how to implement” the claimed idea); Ancora, 908 F.3d 22 at 1348 (holding an invention patentable at step one where the claim “specifically identifies how 23 th[e] functional improvement is effectuated in an assertedly unexpected way”). In sum, courts at 24 step one ask whether a patent’s claimed advance represents a concrete “technological solution to a 25 technological problem.” Packet Intelligence LLC v. NetScout Sys., Inc., 965 F.3d 1299, 1309 26 27 1 (Fed. Cir. 2020).2 2 If the patent is directed to a patent-ineligible concept (e.g., an abstract idea), at Alice step 3 two, the essential inquiry is whether “the elements of [a] claim both individually and ‘as an 4 ordered combination’” go beyond “‘well-understood, routine, conventional activit[ies]’ previously 5 known to the industry.” Alice, 573 U.S. at 217, 225 (quoting Mayo, 566 U.S. at 79, 73); see also 6 Berkheimer, 881 F.3d at 1367 (“The second step of the Alice test is satisfied when the claim 7 limitations involve more than performance of ‘well-understood, routine, [and] conventional 8 activities previously known to the industry.’”). The Federal Circuit has thus held that, in the case 9 of a computer-implemented invention, any “concrete, tangible components” (e.g., computer 10 hardware) that claims recite “must involve more than performance of ‘well-understood, routine, 11 conventional activit[ies]’ previously known to the industry” to render an abstract idea patent- 12 eligible. In re TLI Commc’ns LLC, 823 F.3d 607, 613 (Fed. Cir. 2016) (quoting Alice, 573 U.S. at 13 225). The components themselves, however, may supply an inventive concept if they amount to 14 more than “generic computer components.” See Customedia Techs., LLC v. Dish Network Corp., 15 951 F.3d 1359, 1366 (Fed. Cir. 2020). And “an inventive concept can be also found in the non- 16 conventional and non-generic arrangement of known, conventional pieces” of computing 17 components. BASCOM, 827 F.3d at 1350.3 18 With the step-two analysis, “[t]he question of whether a claim element or combination of 19 elements is well-understood, routine and conventional to a skilled artisan in the relevant field is a 20 question of fact,” one that “must be proven by clear and convincing evidence.” Berkheimer, 881 21 F.3d at 1368. As a result, “whether a claim recites patent eligible subject matter is a question of 22 2 See also SRI Int’l, Inc. v. Cisco Sys., Inc., 930 F.3d 1295, 1303 (Fed. Cir. 2019) (upholding 23 patent eligibility at step one because “the claims are directed to a technological solution to a technological problem”); Prism Techs., LLC v. T-Mobile USA, Inc., 696 Fed. Appx. 1014, 1017 24 (Fed. Cir. 2017) (denying eligibility at step one because claims did not “cover a concrete, specific solution to a real-world problem”). 25

3 At times, the Federal Circuit’s decisions have obscured the distinctions between the first and 26 second steps of the Alice test. Thus, in Enfish the court noted that, in computer-related cases, “there may be close calls about how to characterize what the claims are directed to” and that “an 27 analysis of whether there are arguably concrete improvements in the recited computer technology” 1 law which may contain underlying facts,” and it is only “[w]hen there is no genuine issue of 2 material fact regarding whether the claim elements or claimed combination is well-understood, 3 routine, [or] conventional to a skilled artisan in the relevant field” that eligibility “can be decided 4 . . . as a matter of law” on a motion to dismiss or at summary judgment. Id. If there is a genuine 5 dispute as to whether the claimed combination of elements is routine or conventional to a skilled 6 artisan in the field, a motion to dismiss or summary judgment must be denied. 7 As a final matter, “courts sometimes find it helpful to assess claims against the policy 8 rationale for § 101,” i.e., preemption. Voip-Pal.Com, 375 F. Supp. 3d at 1129. The Federal 9 Circuit has explained that “[w]hile preemption may signal patent ineligible subject matter, the 10 absence of complete preemption does not demonstrate patent eligibility.” Intellectual Ventures I 11 LLC v. Symantec Corp., 838 F.3d 1307, 1321 (Fed. Cir. 2016) (internal quotation omitted). 12 Nevertheless, courts upholding eligibility have sometimes justified their decisions by pointing to 13 the lack of a preemption risk. See, e.g., BASCOM, 827 F.3d at 1350 (“Nor do the claims preempt 14 all ways of filtering content on the Internet; rather, they recite a specific, discrete implementation 15 of the abstract idea of filtering content.”). In this regard, the patent’s claim specificity in 16 explaining how the invention works or is performed informs the breadth of any potential 17 preemption reach. 18 1. The ’314 Patent 19 The ’314 Patent “relates to network management, in particular, offloading Administrator 20 information technology (IT) network tasks to people such as business/department heads or 21 automated mechanisms within the system.” ’314 Pat. at 1:12-15. According to Fortinet, “the 22 invention solves problems faced by network administrators . . . tasked with configuring, adding, 23 and granting network permissions to a variety of different endpoint devices.” Opp’n at 3. Claim 24 1—which is “the only claim cited in the Complaint,” Mot. at 9, and is deemed “illustrative” by 25 Fortinet, Opp’n at 4—recites:

26 1. A method for control of computer network resources connected to a computer network supporting network endpoints by delegating 27 control from a network administrator to at least one sponsor creating templates for users and devices of said computer network 1 by said network administrator at an administrator account on a workstation connected to said computer network; 2 creating profiles used to control said resources of said computer 3 network;

4 associating said templates with said profiles;

5 creating at least one said sponsor by said network administrator;

6 associating, by said network administrator, at least one of said profiles with said sponsor; 7 delegating, by said network administrator, network management 8 administrative privileges to said sponsor,

9 transferring responsibility for said users and devices from said network administrator to said sponsor when said template of said 10 users and devices is associated with said profile of said sponsor; and

11 controlling of said computer network resources by said sponsor, using said templates assigned to said sponsor by said network 12 administrator, wherein said sponsor is constrained by said network administrator by said at least one associated profile, said sponsors 13 not having network management administrative privileges over said network administrator. 14 15 Id. at Clm. 1.4 16 a. Step One 17 Forescout argues that Fortinet’s asserted patents all fail step one of Alice because they are 18 directed to “the abstract idea of controlling access to a network.” Mot. at 8. With the ’314 Patent 19 in particular, Forescout contends that it recites the (somewhat more limited) “abstract idea of 20 controlling access . . . by delegating certain responsibility from administrators to sponsors,” which 21 is “a common and well-understood business organization strategy.” Id. at 8-9. Forescout relies 22 primarily on three recent Federal Circuit cases—Prism Technologies LLC v. T-Mobile USA, Inc., 23 Ericsson Inc. v. TCL Communication Technology Holdings Ltd., and Dropbox, Inc. v. Synchronoss 24

25 4 As with the other asserted patents, Fortinet does not classify Claim 1 as “representative” and in fact refers to the patents’ dependent claims in arguing for subject-matter eligibility. In 26 Berkheimer, the Federal Circuit explained that courts may not treat a claim as representative simply because the patentee “only asserted” a particular “independent claim” and “focused all of 27 his primary arguments” on that claim through the summary-judgment phase of litigation. See 881 1 Technologies—holding that “controlling access to, or limiting permission to, resources” is an 2 unpatentable abstract idea. See Ericsson, 955 F.3d 1317, 1326 (Fed. Cir. 2020); Mot. at 6-8.5 3 Forescout also maintains that the ’314 Patent relies on technological processes that are either 4 generic or unexplained to control network access, and so “fail[s] to recite any technological 5 solution” at step one. Mot. at 10. 6 Fortinet counters that the ’314 Patent is not directed to an abstract idea but to specific 7 “technical problems” “faced by network administrators (‘admins’) tasked with configuring, 8 adding, and granting network permissions to a variety of different endpoint devices.” Opp’n at 3- 9 4 (citing ’314 Pat. at 1:19-28). Fortinet also argues that the patent’s use of “profiles and 10 templates” represents “a specific, technical solution” to these administrative problems, rather than 11 generic or functional computing components. Id. at 6-7. Along the way, Fortinet stresses that 12 courts must not oversimplify or overgeneralize the focus of patent claims, id. at 1, 6, and must 13 credit “statements in the specification that the claimed invention purported to solve weaknesses in 14 the prior art” as true on a motion to dismiss, id. at 6 (quoting Packet Intelligence, 965 F.3d at 15 1309).6 16 The Court concludes that the ’314 Patent is directed to an abstract idea and so fails Alice 17 step one. While Forescout mischaracterizes and oversimplifies the patent as simply a method for 18 “controlling access” or “classifying and organizing data,” Mot. at 9, it fairly describes the patent as 19 being directed to “controlling [network] access by delegating authority,” Docket No. 28 (“Reply”) 20

21 5 See also Prism, 696 Fed. Appx. 1014, 1017 (Fed. Cir. 2017) (holding that “providing restricted access to resources” is abstract); Dropbox, 815 Fed. Appx. 529, 532 (Fed. Cir. 2020) (affirming 22 that “controlling access to data” is abstract).

23 6 The Federal Circuit has sent conflicting signals about the role of the specification in the Alice test. In Packet Intelligence the court explained that, in an “eligibility analysis, we consider the 24 claim as a whole . . . and read it in light of the specification.” 965 F.3d at 1309 (citing Data Engine Techs. LLC v. Google LLC, 906 F.3d 999, 1011 (Fed. Cir. 2018)). On the other hand, 25 cases like Ericsson and Dropbox hold that “[w]hile the specification may be ‘helpful in illuminating what a claim is directed to . . . the specification must always yield to the claim 26 language’ when identifying the ‘true focus of a claim.’” Ericsson, 955 F.3d at 1325 (quoting ChargePoint, Inc. v. SemaConnect, Inc., 920 F.3d 759, 766 (Fed. Cir. 2019)). The Court here 27 interprets the focus of the asserted patents “in light of the specification” (especially at the step-one, 1 at 1. This focus, though narrower than mere network access control, remains abstract. As 2 Forescout asserts, “[d]elegating authority from one person to another within a business is exactly 3 the sort of ‘longstanding commercial practice’ and ‘method of organizing human activity’ that the 4 Supreme Court has stated are within the realm of abstract ideas.” Mot. at 10 (citing Alice, 573 5 U.S. at 220). And “‘[m]erely limiting the field of use of th[is] abstract idea to a particular existing 6 technological environment’—e.g., computer networks—‘does not render the claims any less 7 abstract.” Reply at 2 (quoting Affinity Labs, 838 F.3d at 1259). 8 The ’314 Patent’s claims therefore “involve a patent-ineligible concept,” Enfish, 822 F.3d 9 at 1335, and Fortinet’s efforts to cast them as a “technological solution to a technological 10 problem,” Packet Intelligence, 965 F.3d at1309, are unpersuasive. As discussed above, in order to 11 satisfy the solution-to-a-problem standard a patent must bring about “improvement[s] in computer 12 or network functionality.” Affinity Labs, 838 F.3d at 1262. Fortinet argues that the ’314 Patent 13 does so “by, inter alia, enhancing system security, minimizing the risk of errors and abuse, and 14 benefitting from department-specific knowledge.” Opp’n at 5 (citing ’314 Pat. at 6:26-36; Enfish, 15 822 F.3d at 1337). But the Federal Circuit has recently explained that “[t]o be a patent-eligible 16 improvement to computer functionality . . . the claims must be directed to an improvement to the 17 functionality of the computer or network platform itself,” Customedia Techs., 951 F.3d at 1365 18 (emphasis added), and so go beyond mere “incidental improvements to computer functionality” 19 via refinement of the abstract idea, Reply at 2 (emphasis in original).7 Here, the benefits that 20 Fortinet attributes to “[l]imited management” “are inherent to the abstract idea of controlling 21 access and delegating authority, which does not even require a computer.” Id. at 2. The ’314 22 Patent is not directed to a specific improvement to the functionality of the computer or network 23 platform itself. Cf. Enfish, 822 F.3d at 1336-37 (finding claims non-abstract where they achieved 24 “benefits over conventional databases, such as increased flexibility, faster search times, and 25

26 7 See also Ericsson, 955 F.3d at 1330-31 (“Even assuming that this collection of elements led to a more efficient way of controlling resource access, ‘our precedent is clear that merely adding 27 computer functionality to increase the speed or efficiency of the process does not confer patent 1 smaller memory requirements,” and so recited “an improvement to computer functionality itself”). 2 b. Step Two 3 Proceeding to Alice step two,8 the parties dispute whether the ’314 Patent recites an 4 “inventive concept,” and specifically whether its key components—the “templates” and 5 “profiles”—entail more than “well-understood, routine, conventional activit[ies] previously known 6 to the industry,” Alice, 573 U.S. at 217. Forescout argues that the ’314 Patent’s templates and 7 profiles are merely generic or functional abstractions. Forescout characterizes these components 8 as mere “data,” Mot. at 10—a description that Fortinet does not entirely refute when it defines the 9 templates and profiles as “sets of definitions, rules, and patterns that control the manner in which 10 sponsors can manage IT tasks,” Opp’n at 14 n.5. Forescout analogizes the templates and profiles 11 with the claimed advance in Dropbox, “a set of software and hardware components in the 12 computer system” that “analyzed the ‘user’s security level’ to determine whether to allow access” 13 to a network. See 815 Fed. Appx. at 532-33; Mot. at 8. The Federal Circuit disparaged this 14 “access checker” mechanism as a “black box”—a “functional abstraction” that failed “to describe 15 how to solve the problem” it purportedly addressed. Dropbox, 815 Fed. Appx. at 533. 16 Fortinet counters that its “template and profile disclosures are robust and detail various 17 template and profile embodiments.” Opp’n at 7. It also argues that the recited features of 18 “creating sponsor profiles and templates, and establishing an association between them before 19 granting limited sponsor control, . . . were neither well-understood, routine, nor conventional” at 20 the time of invention. Id. at 14.9 Throughout this discussion, Fortinet emphasizes that 21 “[q]uestions relating to whether the claims recite an inventive concept—such as, whether a 22 claimed technical improvement was well-understood, routine, and conventional at the time of 23 invention—are questions of fact that must be proven by clear and convincing evidence.” Id. at 13- 24 8 The parties argue over the profiles and templates at both steps one and two of the Alice inquiry. 25 As discussed above, the step-one and step-two analyses often overlap, and the Court concludes that the components are more appropriately addressed at step two. 26

9 Fortinet points to the specification’s assertion that there was a “need for IT [departments] to be 27 able to automate and/or delegate the process of provisioning guest access” because they frequently 1 14 (citing BASCOM, 827 F.3d at 1352). 2 The Federal Circuit’s caselaw addressing just how much specificity a patent must contain 3 in order to avoid this “black box” problem is ambiguous. In Ericsson, for example, the court 4 rejected eligibility at step one where claims recited “standard components that are put to use via 5 [an] ‘access controller’ limitation” but did not “specify how the claim” achieved its intended 6 result. 955 F.3d at 1326. In Packet Intelligence, however, the court conferred eligibility at step 7 one where the claims recited such seemingly vague components as a “parser subsystem,” “flow- 8 entry memory,” and “lookup engine,” and so adequately “detail[ed] how” its intended result was 9 achieved. 965 F.3d at 1309. The court has not offered clear guidance on how to distinguish the 10 inventive from the uninventive in the context of software components; see infra. 11 Here, Forescout plausibly asserts that the templates and profiles are entirely “abstract— 12 they are merely information, processed on generic computers, and automating paper access 13 credentials.” Reply at 8. And both the patent itself and Fortinet’s opposition brief are not 14 especially satisfactory in explaining just how the templates and profiles actually work. But given 15 the early stage of this litigation, the Court cannot conclude, as a matter of law, that these 16 components’ “ordered combination” was “well-understood, routine, and conventional to a skilled 17 artisan at the time of the patent,” which is indeed “a factual determination.” Berkheimer, 881 F.3d 18 at 1369.10 Moreover, forbearing early adjudication is further warranted by the potential 19 informative value of claim construction and by the patent’s dependent claims, which purportedly 20 recite inventive ways of creating profiles and templates (e.g., by “defin[ing] the sponsors’ limited 21 management by template type, time period, viewing or modifying authority, device type and 22 registration, and deleting or disabling authority”). See Opp’n at 5 (citing ’314 Pat. at Clm. 3). 23 Although a close question, the Court declines to conclude, at this juncture, that the ’314 24 Patent is invalid under § 101 as a matter of law. This ruling is without prejudice to revisiting 25

26 10 In fact, the Federal Circuit in Berkheimer reversed a grant of summary judgment to the defendant where a patent specification’s “claimed improvement increase[d] efficiency and 27 computer functionality over the prior art systems.” Id. This contention created “a genuine issue of 1 § 101 eligibility at a later stage. 2 2. The ’299 Patent 3 According to its specification, the ’299 Patent “relates to computer communications 4 security, in particular, network access control (NAC) and its use for securing networks by 5 controlling the access of electronic devices connecting to those networks using remote access 6 connection methods such as Virtual Private Networks or Dialup services.” ’299 Pat. at 1:14-19. 7 Independent Claim 1 recites:

8 1. A system for out-of-band control of network access supporting multiple connections comprising: 9 a network comprising a server device, at least one terminal device, 10 and a communication link between them;

11 at least one remote access device (RAD) comprising memory, and communicatively coupled to said network; and 12 a Network Access Control Server (NACS) comprising memory, 13 controlling said network access, wherein said network access control is out of band and comprises: 14 identity management of said connections; 15 endpoint compliance of said connections; and usage policy enforcement of said connections; 16 wherein said enforcement is out of band and is accomplished on said 17 RAD, comprising communicating with said RAD to make real-time changes to its running configuration, whereby said enforcement is 18 vendor-independent and said system is RAD-agnostic;

19 said network access control comprising receiving a connect attempt to said network from a user device; 20 said RAD authenticating connecting user to said NACS for said out 21 of band network control;

22 said NACS capturing RAD identification, location;

23 restricting access to said network by said user device with a network access filter (NAF) configured on said RAD; 24 said RAD directing said client device to an agent; 25 on said user device, running said agent; said agent identifying client to said NACS; 26 modifying said NAF based on compliance; and monitoring post- connection of successful connections. 27 1 Forescout argues that the claim is patent-ineligible at Alice step one because it is directed 2 to “the abstract idea of controlling access, in the context of a network using various computing 3 devices . . . and generic software . . . to implement generically-described network control 4 functionalities . . . .” Mot. at 12. Forescout compares the ’299 Patent’s computing devices (e.g., 5 the “Remote Access Device” and “Network Access Control Server”) and network control 6 functionalities (e.g., “identity management,” “compliance,” and “usage policy enforcement”) with 7 the similarly nebulous components recited in Ericsson and Dropbox (e.g., an “access manager,” 8 “access checker,” and “access filter”). Id. It also characterizes the claim’s “network access filter” 9 as the kind of “black box” that was deemed incapable of conferring eligibility in Dropbox. Id. 10 Fortinet describes the ’299 Patent as another technological solution to a technological 11 problem, directed not to the abstract idea of network access control but “to a specific solution for 12 providing out-of-band, RAD-agnostic network access control through use of a NAF.” Opp’n at 13 10.11 The purported benefits of this system include reductions in “network congestion,” 14 “enhance[d] system security,” and “increase[d] access control versatility.” Id. at 9. Fortinet 15 analogizes the ’299 Patent to the claimed advance in Ancora, where the Federal Circuit held that a 16 patent addressing the “vulnerability of license-authorization software to hacking” was not directed 17 to an abstract idea at step one. See 908 F.3d at 1349. Rather, it constituted “a non-abstract 18 computer-functionality improvement,” achieved through “a specific technique that departs from 19 earlier approaches.” Id. at 1348. Importantly, the claim “specifically identifie[d] how that 20 functionality improvement [was] effectuated in an assertedly unexpected way,” i.e., by using an 21 unconventional portion of a computer’s memory to store a license record. Id. at 1348-49. Fortinet 22 also contends that the ’299 Patent’s recitation of a network access filter (“NAF”) is not the “black 23 box” that Forescout makes it out to be, as it adequately “details how the NAF” controls network 24 access by user devices. Opp’n at 10. 25 11 Fortinet explains that computer networks faced the problem of a growing number of 26 “connections methods (e.g., dedicated, directly wired, dial-up, wireless, and virtual private networks (VPN)) that increase the need for complex access control and security.” Id. at 8 (citing 27 ’299 Pat. at 1:23-38). The solution achieved by the ’299 Patent was “a system for providing out- 1 The step-one inquiry again presents a close question. The technical jargon of the ’299 2 Patent is difficult to parse, and both the meaning and structure of the patent’s key components— 3 the NAF, the RAD, the NACS—remain vague.12 As discussed above, the distinction between the 4 uninventive control features in Prism, Ericsson, and Dropbox (an “access manager,” “access 5 checker,” etc.) and the inventive features in Ancora (a “license record”) or Packet Intelligence (a 6 “parser subsystem,” “look-up engine,” etc.) is less than clear. Given these uncertainties, the 7 question of whether the ’299 Patent recites a technological solution to a technological problem 8 with adequate specificity can be answered more confidently with additional facts and claim 9 construction. Forescout argues, that the ’299 Patent merely recites a kind of Trojan horse for 10 claiming the very idea of resource access.13 While the vagueness of the ’299 Patent’s components 11 invites skepticism about its ultimate viability, the Court cannot yet decide on a Rule 12(b)(6) 12 motion to dismiss, that the patent does not represent a technological solution to a technological 13 problem. 14 3. The ’662 Patent 15 According to its specification, the ’662 Patent relates to “methods and systems for 16 providing security in a communication network by selectively enabling various features for 17 scanning user traffic streams.” ’662 Pat. at 1:16-20. “Illustrative” Claim 1 recites, Opp. at 11:

18 1. A method comprising:

19 receiving, by a network security device within an enterprise network, an application protocol request directed to an external 20 network that is originated by a client device associated with the enterprise network; 21 determining, by the network security device, based on the 22 application protocol request whether a network parameter of the external network is associated with a set of trusted networks; and 23

24 12 In this, the ’299 Patent resembles the claimed advance in Prism, where the court held ineligible a four-step process for network access control, that included: “(1) receiving identity data from a 25 device with a request for access to resources; (2) confirming the authenticity of the identity data associated with that device; (3) determining whether the device identified is authorized to access 26 the resources requested; and (4) if authorized, permitting access to the requested resources.” 696 Fed. Appx. at 1017. 27 1 selectively disabling, by the network security device, application of a subset of security features of a plurality of security features to be 2 applied to network traffic exchanged between the client device and the external network while the client device is accessing the external 3 network when a result of said determining is affirmative, wherein the subset of security features are selected based on a trust level 4 associated with the external network. 5 ’662 Pat. at Clm. 1. 6 a. Step One 7 At Alice step one, Forescout again argues that the patent is directed to “the abstract idea of 8 controlling access,” in this case by “using unspecified security features on a network based on 9 simply analyzing data.” Mot. at 13. Once more, it analogizes to Prism and Dropbox: as in the 10 latter case, the claims here “recite the use of a ‘trust level,’” which the court in the earlier case 11 held insufficient to constitute a technological solution. Id. at 14 (citing Dropbox, 815 Fed. Appx. 12 at 533). And as in Dropbox, the claims here fail to explain “how the ‘selectively disabling’ (or 13 any other claim step) is accomplished.” Mot. at 14. Fortinet responds that the ’662 Patent is not 14 abstract because it solves “the technical problem” that occurs when security features are deployed 15 indiscriminately to out-of-network traffic streams. Opp’n at 11 (citing ’662 Pat. at 1:16-51). The 16 patent “solved this problem by selectively disabling and enabling security features on traffic 17 streams based on the trust level of the destination,” with the resulting benefit of “higher system 18 performance” through “optimize[d] utilization of the system resources.” Id. (citing ’662 Pat. at 19 12:55-66). Fortinet analogizes to the claimed advances recently deemed patent-eligible by the 20 Federal Circuit in Packet Intelligence and SRI International v. Cisco Systems, Inc. See id. at 11- 21 12. 22 Fortinet’s analogies here are strained, as Packet Intelligence and SRI are firmly focused on 23 the particularities of computer-network technology.14 With the ’662 Patent, in contrast, it is easy 24 to generalize the claimed advance as a far broader “method of organizing human activity.” See 25 14 In Packet Intelligence, the court held that a claim “solve[d] a technological problem” “unique to 26 computer networks,” i.e., “identifying disjointed connection flows in a network environment” to provide more “granular, nuanced, and useful classifications of network traffic.” 965 F.3d at 1309- 27 10. And in SRI, it held that “using a plurality of network monitors” and “integrating reports from 1 Alice, 573 U.S. at 220. As Forescout notes, “[r]elaxing security measures for trusted users is an 2 abstract and longstanding human activity, no different than waiving x-ray checkpoints for pilots 3 and flight attendants.” Reply at 5; see also Dropbox, 815 Fed. Appx. at 532 (denying eligibility to 4 “a nearly identical system for controlling access that ‘provide[s] the resource only if the trust level 5 for the mode of identification is sufficient for the sensitivity level of the resource’”). Forescout 6 also makes the sensible point that the benefits to system performance claimed by Fortinet are 7 merely incidental to “not limiting access” and do not flow—as they must at step one—from “an 8 improvement in the functionality of the . . . network platform itself.” Reply at 6 (quoting 9 Customedia, 951 F.3d at 1364). The ’662 Patent is therefore directed to “the abstract idea of 10 disabling security for trusted communication,” id., reciting ineligible subject matter at Alice step 11 one. 12 b. Step Two 13 Proceeding to Alice step two, Forescout emphasizes that the patent neither “require[s] any 14 special hardware . . . nor does [it] disclose any novel hardware”; instead, the hardware that it 15 mentions “is conventional and described in highly generic and functional terms.” Mot. at 19. 16 Indeed, Forescout shows that the specification identifies many well-known “network security 17 devices” (e.g., “network firewalling, VPN, antivirus,” etc.), “teaches the use of known client 18 computing devices” (e.g., “fax machines, printers, scanners,” etc.), and “further identifies multiple 19 known network types for use in the invention” (e.g., “direct connect, Ethernet,” etc.). Id. at 19-20 20 (quoting ’662 Pat. at 4:6-12, 5:13-20, 5:24-35). “The patent also admits that security features 21 [recited in the claims] were known in ‘conventional methods and systems.’” Id. at 20 (quoting 22 ’662 Pat. at 1:39-51). 23 As with the ’299 Patent, Fortinet argues that the inventive concept of the ’662 Patent is the 24 very idea to which it was directed at step one, i.e., “selectively disabling a subset of security 25 features upon a determination that an external network is trusted.” Opp’n at 17. But if the focus 26 of the claim is found to be a patent-ineligible abstract idea then that same idea cannot also 27 constitute an inventive concept at step two. See Chamberlain Grp., Inc. v. Techtronic Indus. Co., 1 directed to” “cannot be an inventive concept”). Beyond this contention, Fortinet offers only the 2 conclusory and “boilerplate” statement that “the ordered combination of the recited limitations is 3 not generic and was neither routine nor conventional at the time of invention.” Reply at 9; Opp’n 4 at 17. 5 But Fortinet also contends that dependent claims 7, 9, and 15 “further limit and explain the 6 content and structure of the step of receiving a trust identifier” and that the specification 7 “describes how the specific claimed methods address shortcomings in ‘conventional methods and 8 systems.’” Opp’n at 17 (quoting ’662 Pat. at 1:39-51, 1:55-58). While these allegations are 9 perhaps little more than the boilerplate Fortinet elsewhere offers in arguing for the inventiveness 10 of the ’662 Patent, it again points out that these issues represent “exactly the type of fact question” 11 that cannot be resolved on the pleadings. See id. (citing Berkheimer, 881 F.3d at 1368). Forescout 12 makes the colorable argument that, in this case, the Court need only look “to the specification, 13 which describes the [components] as either performing basic computer functions . . . or 14 performing functions ‘known’ in the art.” In re TLI Commc’ns, 823 F.3d at 613-14. This 15 discussion underscores the potential value of claim construction and development of facts that 16 may inform the § 101 analysis. 17 4. Conclusion 18 As the foregoing indicates, the Court remains skeptical of the subject-matter eligibility of 19 Fortinet’s asserted patents (especially the ’662 Patent). But it cannot, at this juncture, hold that the 20 ’662 Patent invalid under § 101. This decision not to dismiss does not preclude Forescout from 21 re-raising the § 101 issue at a later stage of litigation, such as at summary judgment. In fact, at the 22 hearing on Forescout’s motion to dismiss, counsel for Fortinet agreed that the outcome of claim 23 construction might make it appropriate for the Court to revisit the eligibility questions addressed 24 above. Docket No. 45 (“Tr.”) at 22. 25 Accordingly, for the reasons stated above, Forescout’s motion to dismiss is DENIED on 26 subject-matter eligibility grounds without prejudice. 27 B. Infringement 1 offers to sell, or sells any patented invention . . . during the term of the patent therefor, infringes 2 the patent.” 35 U.S.C. § 271(a). Infringement may be either direct or indirect. “[L]iability for 3 indirect infringement of a patent requires direct infringement.” In re Bill of Lading Transmission 4 & Processing Sys. Patent Litig., 681 F.3d 1323, 1333 (Fed. Cir. 2012). A failure to sufficiently 5 plead direct infringement therefore requires dismissal of indirect infringement claims, as well. See 6 AlterG, Inc. v. Boost Treadmills LLC, 388 F. Supp. 3d 1133, 1143 (N.D. Cal. 2019). 7 1. Direct Infringement 8 To be liable for direct infringement, a device must practice all elements of a claim. See 9 Drone Labs, LLC v. Dedrone Holdings, Inc., No. 19-cv-01281-EMC, 2019 WL 4345955, at *4 10 (N.D. Cal. Sept. 12, 2019) (dismissing complaint where plaintiff failed to allege infringement of 11 all claim limitations). As a result, “[a] direct infringement claim does not satisfy the standards of 12 Twombly and Iqbal where it does not at least contain factual allegations that the accused product 13 practices every element of at least one exemplary claim.” AlterG, Inc., 388 F. Supp. 3d at 1142-43. 14 At the same time, however, “nothing about Twombly and Iqbal suggests that a patent infringement 15 complaint that largely tracks the language of the claims to allege infringement is insufficient per 16 se.” Avago Techs., 2016 WL 1623920, at *4. “[T]his District generally has not required detailed 17 infringement theories until the time that infringement contentions are served, which is typically 18 several months after a complaint has been filed.” Id. (citing Patent L.R. 3-1).15 19 Forescout argues that Fortinet’s complaint fails to plead direct infringement for two 20 reasons. First, “Fortinet fails to clearly identify who is the direct infringer”; second, the 21 “Complaint is almost entirely devoid of factual allegations about the accused products.” Mot. at 22 21. But its arguments here are unavailing under the aforementioned standard for infringement 23 allegations. Forescout acknowledges that the complaint focuses “on ‘customers, purchasers, users 24 and developers’ of the accused products,” even as it “fails to identify by name a single person or 25 entity that allegedly is a direct infringer.” Id. But, as the Federal Circuit has concluded, “[t]o state 26

27 15 In accordance with Patent Local Rule 3-1, Fortinet submitted its infringement contentions to 1 a claim for indirect infringement . . . a plaintiff need not identify a specific direct infringer if it 2 pleads facts sufficient to allow an inference that at least one direct infringer exists.” In re Bill of 3 Lading, 681 F.3d at 1336 (emphasis in original). Forescout also acknowledges that, for each of 4 the asserted patents, “Fortinet identifies the accused products,” maps claim language onto the 5 functionality of the infringing products, and cites two specific user manuals found on Forescout’s 6 website that allegedly enable direct infringement. Mot. at 21-22. In this District, allegations with 7 this amount of detail suffice to survive a motion to dismiss.16 8 Fortinet has therefore established a plausible underlying claim of direct infringement 9 against Forescout’s “customers, purchasers, users and developers.” Id. at 21. The Court therefore 10 proceeds to analyze whether Fortinet has carried its additional burdens of pleading inducement 11 and contributory infringement. 12 2. Inducement 13 Under § 271(b) of the Patent Act, “[w]hoever actively induces infringement of a patent 14 shall be liable as an infringer.” 35 U.S.C. § 271(b). Addressing the intent element of this 15 provision, the Supreme Court has held that induced infringement “requires knowledge that the 16 induced acts constitute patent infringement.” Glob.-Tech Appliances, Inc. v. SEB S.A., 563 U.S. 17 754, 766 (2011). Thus, a plaintiff alleging inducement must show that the defendant “both (1) 18 ‘knew of the patent’ and (2) ‘knew as well that ‘the induced acts constitute patent infringement.’” 19 Google LLC v. Princeps Interface Techs., No. 19-cv-06566-EMC, 2020 WL 1478352, at *3 (N.D. 20 Cal. Mar. 26, 2020) (quoting Commil USA, LLC v. Cisco Sys., Inc., 135 S. Ct. 1920, 1926 (2015)). 21 The Supreme Court has further clarified that a defendant’s “belief regarding validity cannot negate 22 the scienter required under § 271(b).” Commil USA, 135 S. Ct. at 1928. 23 Arguing, again, that Fortinet has failed to adequately allege direct infringement, Forescout 24

25 16 For instance, this Court in Avago Technologies declined to dismiss a plaintiff’s infringement allegations where they contained “sufficient specificity to provide at least some notice” of the 26 basic nature of the claim to the defendant. 2016 WL 1623920, at *4. And in Software Research, Inc. v. Dynatrace LLC, this Court again denied a motion to dismiss where the complaint “(i) 27 sufficiently identified the accused product” and “(ii) sufficiently described the functionality of [the 1 also contends that Fortinet’s inducement claim should fail because the complaint “fails to plead 2 any factual allegations that Forescout knew its products were infringing and instead relies solely 3 on knowledge of the patent by virtue of Fortinet’s Complaint.” Mot. at 24. Fortinet responds (1) 4 that the Complaint adequately alleges direct infringement; (2) that “it is undisputed that Forescout 5 knew of the Asserted Patents at least as of the filing of the Complaint”; and (3) that, “with regard 6 to intent, the Complaint alleges that Forescout ‘instruct[s], direct[s], and/or requir[es] others, 7 including customers, purchasers, users and developers, to perform some of the steps of the method 8 claims” via instructional materials on Forescout’s website. Opp’n at 22 (quoting Compl. ¶¶ 39, 9 53, 67; 40, 54, 68). 10 As Fortinet has adequately pled direct infringement, see supra, and Forescout 11 acknowledges that it had knowledge of the alleged infringement once the complaint was filed, the 12 crux of the inducement question is whether Fortinet has set forth sufficient facts showing a 13 “specific intent to encourage another’s infringement.” Google, 2020 WL 1478352, at *3. This 14 Court has addressed the issue on several occasions. In CAP Co., Ltd. v. McAfee, Inc., it dismissed 15 an inducement action for failing to plead specific intent. The patentee in that case claimed 16 inducement by alleging that the accused products were “sold directly to customers and used by 17 them pursuant to [defendant’s] user manual guides, and support articles,” but made only “passing 18 references” to the documents “without ever saying what those materials contain.” CAP, No. 14- 19 cv-05068-JD, 2015 WL 3945875, at *3, *5 (N.D. Cal. June 26, 2015). Similarly, in Hypermedia 20 Navigation v. Google LLC, the Court reached the same conclusion where the plaintiff “only 21 state[d] bald conclusions that an end user following [defendant’s] instructions results in 22 infringement.” No. 18-cv-06137-HSG, 2019 WL 1455336, at *3 (N.D. Cal. Apr. 2, 2019). And 23 in Google, a patentee alleged that the company had induced infringement by “distributing the 24 Accused Instrumentalities and providing instructional materials and/or services related to the 25 Accused Instrumentalities.” 2020 WL 1478352, at *4. The Court again dismissed the case 26 because, as in CAP, the patentee’s allegations made only “general and imprecise references” to 27 instructional materials without “ever say[ing] what those materials contain.” Id. 1 because the Complaint “provides ‘specific instructional materials or services as examples’ and 2 explains how the public product materials support infringement.” Opp’n at 23 (quoting Google, 3 2020 WL 1478352, at *5). As to the first contention, Hypermedia held that referencing 4 “instructions in the links provided in the complaint,” as Fortinet has done here, is insufficient by 5 itself to survive a motion to dismiss. See 2019 WL 1455336, at *3. The court found that such 6 evidence at most established that “an end user following [the] instructions in the links” commits 7 infringement, but not that the defendant possessed the requisite “specific intent to encourage 8 others’ infringement.” Id. Fortinet’s second contention—that it “explains how the public product 9 materials support infringement”—presents a closer question. Fortinet points to the complaint’s 10 repeated assertion that Forescout “instruct[s], direct[s], and/or requir[es] others . . . to perform 11 some of the steps of the method claims.” Opp’n at 22 (quoting Compl. at ¶¶ 39, 53, 67). But this 12 statement reads more like a “formulaic recitation[] of the relevant legal standard[]” than a properly 13 factual allegation. Mot. at 24. 14 In the section of its opposition devoted to direct infringement, however, Fortinet describes 15 the function of Forescout’s instructional materials. For example, “the Complaint describes how 16 the ’622 Accused Products infringe based on publicly-available product materials, e.g., ‘defin[ing] 17 Legitimate Traffic based on source information such as source or destination address,’ and 18 ‘disab[ling] features such as Threat Protection features based on traffic type,’” and provides URLs 19 for those materials. Opp’n at 20 (quoting Compl. at ¶¶ 72-73). Fortinet analogizes these 20 allegations to those in Firstface Co., Ltd. v. Apple, Inc., which stated that the defendant “actively 21 coached customers to use the accused devices in an infringing manner through online tutorials and 22 similar instructional matters.” No. 18-cv-02245-JD, 2019 WL 1102374, at *1 (N.D. Cal. Mar. 8, 23 2019). It also cites Software Research, Inc. v. Dynatrace LLC, where the Court held that 24 “numerous references to public material on [the defendant’s] website . . . give rise to an inference 25 of specific intent.” 316 F. Supp. 3d 1112, 1135 (N.D. Cal. 2018). 26 While Fortinet’s inducement claim thus presents another close question, the Court 27 concludes that Fortinet has set forth its allegations with enough detail and specificity to survive a 1 theory of infringement. However, since Fortinet is likely to amend its complaint (see below), it 2 should provide greater clarity and specificity in its inducement allegations. 3 3. Contributory Infringement 4 Under § 271(c) of the Patent Act, a plaintiff stating a claim for contributory infringement 5 must show that the defendant sells (or offers to sell) a component of a patent, “knowing the same 6 to be especially made or especially adapted for use in an infringement of such patent, and not a 7 staple article or commodity of commerce suitable for substantial noninfringing use.” 35 U.S.C. 8 § 271(c). A plaintiff pleading contributory infringement must “provide factual underpinnings for 9 its allegations” that the accused products are made or are especially adapted for an infringing use 10 or “that there are no substantial noninfringing uses of the accused devices.” Uniloc USA, Inc. v. 11 Logitech, Inc., No. 18-cv-01304-LHK, 2018 WL 6025597, at *3 (N.D. Cal. Nov. 17, 2018). A 12 complaint that “merely paraphrases the contributory infringement statute and presents no factual 13 underpinnings” fails to satisfy Rule 8 and must be dismissed. Google, 2020 WL 1478352, at *5. 14 The analysis here overlaps somewhat with the inducement inquiry and the parties devote 15 scant space in their briefs specifically to the contributory-infringement issue. See Mot. at 24; 16 Opp’n at 24; Reply at 14-15. The key question is whether Fortinet sufficiently alleged that 17 Forescout’s accused products are, per § 271(c), “especially made or especially adapted” for an 18 infringing use and are not “suitable for substantial noninfringing use.” Forescout identifies a 19 single paragraph in the complaint (repeated for each asserted patent) that expressly deals with 20 contributory infringement. See Mot. at 24. The paragraph states:

21 Forescout further contributes to the infringement of one or more claims of the [asserted] patent . . . by offering to sell, selling, and/or 22 importing into the United States a component of the [ ] Accused Products . . . knowing the same to be especially made or especially 23 adapted for use in an infringement of the [asserted] patent . . . and is not a staple article or commodity of commerce suitable for 24 substantial noninfringing use. 25 Id. (quoting Compl. ¶¶ 42, 56, 70. As Forescout argues, this language “simply parrots the legal 26 test” for contributory infringement. 27 Fortinet counters by quoting from Software Research, which states that a “plaintiff need 1 Opp’n at 24 (quoting 316 F. Supp. 3d at 1316). But that decision still requires a patentee to 2 “alleg[e] one or more infringing uses of the accused products and alleg[e] that the products have 3 no other uses,” and it declined to dismiss only because the complaint “sufficiently suggest[ed] that 4 there are no other substantial uses of [the accused product] that do not infringe.” 316 F. Supp. 3d 5 at 1316 (emphasis added). Here, while the complaint as a whole perhaps implies that the accused 6 products are “especially made or especially adapted for an infringing use,” it fails to allege facts 7 establishing that Forescout’s products are not suitable for a substantial non-infringing use. See 8 Reply at 14. 9 The Court therefore GRANTS Forescout’s motion to dismiss Fortinet’s contributory- 10 infringement claims, but gives Fortinet leave to amend. 11 4. Willful Infringement 12 Section 284 of the Patent Act directs courts to award a prevailing claimant “damages 13 adequate to compensate for the infringement” and “may increase the damages up to three times the 14 amount found or assessed.” 35 U.S.C. § 284. Thus, “a finding of direct infringement is a 15 prerequisite for willful infringement,” AlterG, 388 F. Supp. 3d at 1143, and “willfulness is 16 relevant [only] to damages calculations,” Google, 2020 WL 1478352, at *2. The Supreme Court 17 has explained that “courts should generally only award enhanced damages . . . in ‘egregious cases 18 typified by willful misconduct.’” Id. (quoting Halo Elecs., Inc. v. Pulse Elecs., Inc., 136 S. Ct. 19 1923, 1934 (2016)). Such damages “are not to be meted out in a typical infringement case, but are 20 instead designed as a ‘punitive’ or ‘vindictive’ sanction for egregious infringement behavior,” i.e., 21 behavior that is “‘willful, wanton, malicious, bad-faith, deliberate, consciously wrongful, flagrant, 22 or—indeed—characteristic of a pirate.” Halo, 136 S. Ct. at 1932. “Since Halo, courts in this 23 District have required willful infringement claims to show both knowledge of the ... [p]atents and 24 egregious’ conduct in order to survive a motion to dismiss.” Google, 2020 WL 1478352, at *2 25 (internal quotation omitted). 26 In addition to repeating its argument that Fortinet has failed to plead direct infringement, 27 Forescout asserts that the complaint “contains no factual allegations supporting that Forescout has 1 infringement claim “is pled in a single paragraph, repeated for each patent,” declaring that 2 “Forescout is acting recklessly and continues to willfully, wantonly, and deliberately engage in 3 acts of infringement of the” asserted patents. Id. (quoting Compl. at ¶ 9). Fortinet responds that 4 its allegations concerning “pre-suit outreaches to Forescout concerning its patent portfolio” and 5 the fact that “Forescout continues to sell the Accused Products and services” suffice to survive a 6 motion to dismiss. Opp’n at 24. 7 Based on this District’s precedents, Forescout makes the stronger argument. Fortinet relies 8 primarily on UPF Innovations, LLC v. Intrinsic ID, Inc. for the proposition that (1) notifying an 9 accused infringer of infringement and (2) alleging that the infringer continues to infringe after 10 notification suffices to plead willfulness. See Opp’n at 24 (quoting UPF, No. 19-cv-02711-VC, 11 2019 WL 4729601, at *1 (N.D. Cal. Sept. 17, 2019)). It is true that under the reasoning of UPF 12 Fortinet’s allegations might suffice to survive Rule 12(b)(6). But UPF is a brief, four-paragraph 13 order that cites, in the relevant passage, to out-of-circuit caselaw decided before the Supreme 14 Court’s Halo decision—which clearly requires a showing of “egregious infringement behavior.” 15 See id.; Halo, 136 S. Ct. at 1932. 16 In Finjan, Inc. v. Cisco Systems, on the other hand, the Court dismissed the plaintiff’s 17 claims of willful infringement because it failed to allege facts showing either knowledge or 18 egregious conduct by the defendant. See No. 17-cv-00072-BLF, 2017 WL 2462423, at *12-15 19 (N.D. Cal. June 7, 2017). There, Finjan alleged that Cisco was “willfully, wantonly, and 20 deliberately engag[ing] in acts of infringement” because, “despite knowledge of Finjan’s patent 21 portfolio,” it “ha[d] sold and continue[d] to sell the accused products.” Id. at *7. The Court held 22 that such “conclusory allegations of knowledge and infringement” could not satisfy the 23 requirement of “specific factual allegations about Cisco’s subjective intent, or any other aspects of 24 Cisco’s behavior that would suggest its behavior was ‘egregious.’” Id. at *15. Similarly, in 25 Google the Court dismissed the defendant’s willful infringement claim for failing to “plead 26 specific factual allegations of egregious conduct.” 2020 WL 1478352, at *3. Even though the 27 patentee satisfied the knowledge requirement by “specifically nam[ing] the . . . patent at issue in 1 implemented a design-around in response to the suit did “not establish egregious conduct.” Id. 2 Fortinet’s allegations here do not differ meaningfully from those found insufficient in 3 either Finjan or Google. While Forescout had knowledge of its infringement once the complaint 4 was filed, Fortinet does not adequately allege that Forescout’s conduct was “egregious” under 5 Halo. As a result, Forescout’s motion to dismiss Fortinet’s claim for willful infringement is 6 GRANTED with leave to amend. 7 V. CONCLUSION 8 For the foregoing reasons, the Court DENIES Forescout’s motion to dismiss on the 9 grounds of subject-matter eligibility. It also DENIES Forescout’s motion as to Fortinet’s induced 10 infringement claims. It GRANTS Forescout’s motion as to Fortinet’s contributory and willful 11 infringement claims without prejudice, with leave to amend within thirty (30) days of the date of 12 this order. 13 This order disposes of Docket No. 24. 14 15 IT IS SO ORDERED. 16 17 Dated: November 2, 2020 18 19 ______________________________________

EDWARD M. CHEN

20 United States District Judge 21 22 23 24 25 26 27