January/February 2017
IP Litigator
Authored by Jonathan J. Fagan and Jason E. Stach
Form 18 provided a simple way to plead direct patent infringement. It required a party to provide little more than the asserted patent number and a general statement that a class of the defendant’s products embodied the patented invention. But on December 1, 2015, the Supreme Court did away with Form 18, leaving patent litigators to wonder how district courts would assess the sufficiency of direct infringement complaints. About a year has passed, and courts are taking different approaches to assessing whether a complaint is sufficiently detailed to survive a motion to dismiss or a motion for a more definite statement. Litigators, whether writing an ironclad complaint or an incisive Rule 12(b)(6) motion to dismiss, should learn from these recent decisions.
The Federal Rules of Civil Procedure require a complaint to contain "a short and plain statement of the claim showing that the pleader is entitled to relief."1 A defendant may challenge either the legal or factual sufficiency of a complaint by filing a motion to dismiss or a motion for a more definite statement. The Supreme Court, in the Twombly-Iqbal2 line of cases, made it easier to prevail on these types of motions by requiring that a complaint allege only "plausible," as opposed to "possible," claims.3 The Twombly Court held that a complaint need not contain "detailed factual allegations," but it must contain more than "a formulaic recitation of the elements of a cause of action."4 The Iqbal Court reiterated that when "a complaint pleads facts that are 'merely consistent with' a defendant’s liability, it 'stops short of the line between possibility and plausibility.'"5
Before Twombly-Iqbal, patent practitioners could file direct infringement complaints in compliance with Form 18, as authorized by former Federal Rule of Civil Procedure 84. Form 18 arguably required less detail than the Twombly-Iqbal line of cases, providing the following sample allegations for direct infringement:
On <Date>, United States Letters Patent No.<_____________> were issued to the plaintiff for an invention in an electric motor. The plaintiff owned the patent throughout the period of the defendant’s infringing acts and still owns the patent. The defendant has infringed and is still infringing the Letters Patent by making, selling, and using electric motors that embody the patented invention, and the defendant will continue to do so unless enjoined by this court.
Form 18 did not require a plaintiff to identify any asserted patent claims or even a specific accused product.
Despite Form 18’s resemblance to the "formulaic recitation" described by the Twombly Court, the Federal Circuit reassured the patent bar that Form 18 created a safe harbor from the increased pleading standard of Twombly-Iqbal.6 In September 2014, however, the Judicial Conference of the United States voted to abrogate Rule 84 and the accompanying appendix of forms, including Form 18. The abrogation took effect on December 1, 2015, and patent litigators began testing the waters of the federal district courts by submitting complaints outside the safe harbor of Form 18.
Courts have looked to different factors when assessing the sufficiency of direct infringement complaints. Some require a plaintiff only to identify a representative claim while others require a more detailed, element-by-element claim analysis. Some courts permit a plaintiff to identify a representative accused product while others demand more specificity regarding each accused product. These differences and the others discussed below require plaintiffs to know, and in some cases to anticipate, the requirements of their jurisdiction.
A key question patent litigators faced after the demise of Form 18 was whether courts would require an element-by-element analysis of the asserted claims. After all, many district courts already have local patent rules that specify separate deadlines for serving detailed infringement contentions. Would the courts effectively require this same analysis in the complaint? Courts are split on this issue. While most generally have required less detail than a set of infringement contentions, many still require an element-by-element analysis of each asserted claim to demonstrate a plausible infringement claim. Other courts, however, do not require a complaint to contain an element-by-element analysis as long as it provides sufficient notice for the defendant to respond to the complaint.
In the camp requiring an element-by-element analysis, the Northern District of California in Atlas IP v. Pacific Gas & Electric Co.7 agreed with the defendant’s argument that "simply reciting some of the elements of a representative claim and then describing generally how an accused product operates, without specifically tying the operation to any asserted claim or addressing all of the claim requirements, is insufficient."8 In that case, the court found that the "complaint recites only some of the elements of the sole asserted claim, and provides only a threadbare description of the alleged abilities of the accused device. While [Plaintiff] need not provide all of the details that [Defendant] contends are required, the Court concludes that the current complaint fails to state a plausible claim for direct infringement."9
In another case from the Northern District of California, however, the court held that a complaint "largely track[ing] the language of the claims" could suffice under the Twombly-Iqbal standard.10 The court noted that "nothing about Twombly and Iqbal suggests that a patent infringement complaint that largely tracks the language of the claims to allege infringement is insufficient per se," and that the allegations were sufficiently specific to provide notice to the defendant.11 According to the court, the Northern District of California "generally has not required detailed infringement theories until the time that infringement contentions are served, which is typically several months after a complaint has been filed."12 Some may view this decision as conflicting with the Northern District of California (the same jurisdiction’s) decision in Atlas IP v. Pacific Gas & Electric Co., discussed above. To the extent the decisions conflict, it highlights the need for practitioners to know not only the tendencies of their jurisdiction, but also to learn the tendencies of their particular judge within that jurisdiction.
The Eastern District of Texas similarly has refused to require an element-by-element analysis in a complaint, instead relying on a party’s infringement contentions to provide this detailed analysis. In Uniloc USA v. Avaya, Inc.,13 the court denied a motion to dismiss when the complaint (1) identified the asserted patent claims; (2) identified specific accused products; and (3) identified functionality within those products that allegedly infringed the asserted claims.14 This information was sufficient to satisfy Twombly-Iqbal, as the court found that "[r]equiring more would improperly and unfairly elevate the plausibility standard to a probability standard."15
Courts requiring an element-by-element analysis generally also require this analysis for every asserted claim. But what about jurisdictions that do not require an element-by-element analysis, does one need to identify every asserted claim, or is it sufficient to identify a representative claim? It turns out that some courts do not even require a plaintiff to identify a single asserted claim. For example, in Incom Corp. v. Walt Disney Co.,16 the Central District of California declined to dismiss a complaint that attached the asserted patent, identified the accused products by name, and generally compared the technology disclosed in the patents to the accused products. The complaint did not identify any specific asserted claim, but the court found that: "Plaintiff has stated a plausible claim for direct infringement by specifically identifying Defendants’ products and alleging that they perform the same unique function as Plaintiff ’s patented system."17
Although some courts permit pleading a representative set of claims, or not identifying specific claims at all, doing so may limit the scope of discovery. The Northern District of California considered the defendant’s argument that the complaint did not give fair notice because it only pled one claim as a "representative claim."18 The court held that Twombly-Iqbal did not require a plaintiff to identify each asserted claim at the pleading stage, but that a failure to do so would limit the scope of the plaintiff’s discovery to the identified claims.19 The court stated that any "concern about discovery should be alleviated by the requirement of amended Rule 26(b)(1) that it be relevant, not to the subject matter generally, but to the claims in suit specifically, and proportional to the needs of the case … . Currently, only claim 1 of the [asserted patent] is actually asserted, so the scope of discovery would be limited accordingly."20
Courts require different levels of detail when mapping the asserted claims (or general technology, in jurisdictions that do not require identifying specific claims) to the accused products. At least one court has found that the required level of specificity depends on the complexity of the technology. In Uniloc USA v. Avaya, Inc.,21 the Eastern District of Texas stated that "[c]ases involving tangible inventions and relatively straightforward claims may require less detail to state a claim and provide fair notice to the accused infringer. In contrast, 'cases involving more nebulous, less tangible inventions such as computer software methods may require a higher degree of specificity to provide proper notice to the defendant.'"22 In that case, the court found it sufficient that the plaintiff had "identified by name the accused products, described the accused functionality within these products, and provided descriptive illustrations of these products and the accused functionality."23
Other courts, however, have required a more rigorous approach, focusing on mapping each claimed feature to the accused products. For example, in Atlas IP v. Pacific Gas & Electric Co.,24 the Northern District of California dismissed a complaint where one of the asserted claims required that an apparatus "power off" by "using cycle establishing information transmitted from [a] hub."25 While the complaint alleged that the accused device had the ability to power off, it did not allege that the accused device would power off "by using cycle establishing information."26 The court stated that "simply reciting some of the elements of a representative claim and then describing generally how an accused product operates, without specifically tying the operation to any asserted claim or addressing all of the claim requirements, is insufficient."27
Some courts have suggested applying a more lenient pleading standard when infringement information may not be publicly accessible. In DermaFocus LLC v. Ulthera, Inc.,28 the District of Delaware denied a motion to dismiss a direct infringement claim involving a claimed method that the court was not certain was practiced in public. Quoting the Federal Circuit, the court explained that "[a] defendant cannot shield itself from a complaint … by operating in such secrecy that the filing of a complaint itself is impossible."29 Although the court recognized that the pleading standard had changed, the court declined "to front-load the litigation process by requiring a detailed complaint in every instance."30
As these cases demonstrate, the standard for pleading direct infringement evades concrete definition, and there is a wide range of what courts will deem acceptable. Over time a more cohesive standard may emerge. For now, practitioners should learn the standard(s) applied in their jurisdiction. Because judges in a single jurisdiction may apply different standards, and because a plaintiff will not always know which judge within a jurisdiction will receive a complaint, practitioners may wish to craft their complaints according to the most stringent standards applied in their jurisdiction.
1 Fed. R. Civ. P. 8(a)(2).
2 Bell Atl. Corp. v. Twombly, 550 U.S. 544 (2007); Ashcroft v. Iqbal, 556 U.S. 662 (2009).
3 Twombly, 550 U.S. at 555-557.
4 Id. at 555.
5 Iqbal, 556 U.S. at 678 (quoting Twombly, 550 U.S. at 557) (emphasis added).
6 In re Bill of Lading, 681 F.3d 1323, 1334 (Fed. Cir. 2012) (applying Sixth Circuit law; stating that "whether [plaintiff’s] amended complaints adequately plead direct infringement is to be measured by the specificity required by Form 18").
7 Atlas IP LLC v. Pac. Gas & Elec. Co., No. 15-cv-05469-EDL, 2016 WL 1719545 (N.D. Cal. Mar. 9, 2016).
8 Id. at *2.
9 Id. at *3. In another case involving Atlas IP, the Northern District of Illinois similarly granted a motion to dismiss where the complaint did not allege infringement of each element of the asserted patent. Atlas IP, LLC v. Exelon Corp., 2016 WL 2866134 (N.D. Ill. May 17, 2016). Echoing Twombly, the court noted that "factual allegations that do not permit a court to infer that the accused product infringes each element of at least one claim are not suggestive of infringement—they are merely compatible with infringement." Id. at *5 (emphasis added).
10 Avago Techs. Gen. IP (Singapore) PTE Ltd. v. Asustek Computer, Inc., 2016 WL 1623920, at *4 (N.D. Cal. Apr. 25, 2016).
11 Id.
12 Id.
13 Uniloc USA, Inc. v. Avaya, Inc., No. 6:15-cv-1168-JRG, Dkt. 48, at *5 (E.D. Tex. May 13, 2016).
14 Id. For another Eastern District of Texas opinion applying a similar approach, see Ruby Sands LLC v. Am. Nat’l Bank of Tex., 2016 WL 3542430 (E.D. Tex. June 28, 2016).
15 Uniloc, No. 6:15-cv-1168-JRG, Dkt. 48 at *7.
16 Incom Corp. v. Walt Disney Co., No. 2:15-cv-03011-PSG-MRW, Dkt. 39, at *4 (C.D. Cal. Feb. 4, 2016).
17 Id.; see also id. at Dkt. 26 (Nov. 23, 2015).
18 Atlas IP LLC v. Pac. Gas & Elec. Co., No. 15-cv-05469-EDL, 2016 WL 1719545, at *2 (N.D. Cal. Mar. 9, 2016).
19 Id. at *5.
20 Id.
21 Uniloc, at *7.
22 Id. (quoting Patent Harbor, LLC v. DreamWorks Animation SKG, Inc., No. 6:11-cv-229, 2012 U.S. Dist. LEXIS 114199, at *13 (E.D. Tex. July 27, 2012)).
23 Id.
24 Atlas, No. 15-CV-05469-EDL, 2016 WL 1719545.
25 Id. at *4.
26 Id.
27 Id. at *2 (emphasis added).
28 DermaFocus LLC v. Ulthera, Inc., 2016 WL 4263122 (D. Del. Aug. 11, 2016).
29 Id. at *3 (quoting K–Tech Telecommunications, Inc. v. Time Warner Cable, Inc., 714 F.3d 1277, 1286 (Fed. Cir. 2013)).
30 Id. at *2.
Reprinted with permission from the IP Litigator, published by Wolters Kluwer. This article is for informational purposes, is not intended to constitute legal advice, and may be considered advertising under applicable state laws. This article is only the opinion of the authors and is not attributable to Finnegan, Henderson, Farabow, Garrett & Dunner, LLP, or the firm's clients.
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