Stating A Claim for Patent Infringement

Since 2007 when the Supreme Court decided Bell Atlantic v. Twombly, 550 U.S. 544 (2007), there has been debate (and motion practice) over what is required in a complaint to adequately plead a cause of action for patent infringement.  The debate centers on the tension between recent Supreme Court decisions (Twombly and Iqbal) which require pleading enough facts to “state a claim to relief that is plausible on its face” and Form 18 that is found in the Federal Rules of Civil Procedure, which requires only bare notice pleading.  This issue was squarely presented in R &L Carriers v. Drivertech LLC et al.,  2010-1493, Fed. Cir. June 7, 2012.

In R & L Carriers, the complaint alleged counts of contributory infringement and inducement against a number of defendants.  In pleading these counts of indirect infringement, the complaint alleged that certain of defendant’s customers were directly infringing the asserted patent.  The district court found that the allegations of direct infringement did not contain sufficient factual allegations to plausibly establish that any actor performed all steps of the asserted method claim and therefore did not satisfy the pleading requirements of Iqbal and Twombly.  Further, the district court found that the facts set forth in the complaint demonstrated that the accused systems actually had numerous non-infringing uses and, therefore, found that the allegations of contributory infringement could not be sustained.  Finally, the court held that the complaint failed to plausibly plead that the defendants had the requisite specific intent to induce infringement.  The amended complaint was dismissed.

With respect to direct infringement, the Federal Circuit reversed and held that “as long as the complaint in question contains specific factual allegations to meet the requirements of Form 18, the complaint has sufficiently pled direct infringement.”  Opinion at 19.  In discussing the pleading requirements for direct infringement, the Court pointed out that “Form 18 and the Federal Rules of Civil Procedure do not require a plaintiff to plead facts establishing that each element of an asserted claim is met…Indeed, a plaintiff need not even identify which claims it asserts are being infringed.” Opinion at 17.  Addressing the interplay between recent Supreme Court precedent and Form 18, the majority opinion states that “to the extent the parties argue that Twombly and its progeny conflict with the Forms and create differing pleadings requirements, the Forms control..”  Opinion at 15.

In addressing the counts of indirect infringement, the Court found that “[t]he Forms are only controlling for causes of action for which there are sample pleadings.”  Opinion at 20.  “[B]ecause Form 18 addresses only direct infringement, we must look to Supreme Court precedent for guidance regarding the pleading requirements for claims of indirect infringement.” Id.  In other words, to adequately plead indirect infringement, the complaint must plead facts sufficient to plausibly establish each element of the cause of action.  With respect to contributory infringement, this includes, inter alia, facts sufficient to establish that the accused components have no substantial non-infringing uses.  For inducement, this requires facts sufficient to reasonably infer that the defendant had the specific intent to induce infringement.  Merely reciting the elements without a factual pleading to support those elements will not suffice.

The Court found that the detailed factual allegations set forth in the complaint actually undermined the allegation of contributory infringement by establishing that the accused products have substantial non-infringing uses. “Where a product is equally capable of, and interchangeably capable of, both infringing and substantial non-infringing uses a claim for contributory infringement does not lie.”  Opinion at 23.  In this case, the Federal Circuit found that plaintiff’s complaint “supplies the very facts which defeat its claims of contributory infringement.”

Turning to inducement, with its specific intent element, the complaint included allegations that defendants’ employees had made statements touting the benefits of the patented method and that these statements were made after the defendant had received a cease and desist letter making it aware of the asserted patent.  Under these facts, the Federal Circuit agreed that sufficient facts were pled to make a plausible allegation that defendants “intended to induce its customers to use its products to practice the patented method and did so with knowledge of the patent.”  Opinion at 29.  At the pleading stage, the  “’plausibility requirement…simply calls for enough facts to raise a reasonable expectation that discovery will reveal’ that the defendant is liable for the misconduct alleged.”  Opinion at 30, citing Twombly.  Here, the Federal Circuit found that the complaint was sufficient to meet this standard.

In summary:  for direct infringement, Form 18 is sufficient.  For Indirect infringement (or other cause of action not covered by a specific Form),  Twombly and its progency control and the complaint must set forth a factual basis to support a reasonable inference that each element of the cause of action is satisfied.  For contributory infringement, use caution in pleading facts that may establish non-infringing uses for an accused product.

Federal Circuit Issues Writ of Mandamus in In Re BP Lubricants

Applies Heightened Pleading Requirements

to False Marking Cases

The Federal Circuit issued an Opinion and Order in In Re BP Lubricants USA Inc. today ( Misc. Docket No. 960) granting in part BP Lubricant’s petition for a writ of mandamus.

The issue before the Court was whether the district court properly denied BP’s motion to dismiss a false marking case where the allegations of intent to deceive were no more than general statements that BP "new or should have known" about its patents having expired.  BP argued that a complaint alleging false marking must satisfy the heightened pleading requirement of Fed. R. Civ. P. 9(b) as interpreted by the Federal Circuit in Exergen Corp. v. Wal-Mart Stores, Inc., 575 F.3d 1312 (Fed. Cir. 2009).

Recognizing that the case presented a question of first impression, and that district courts have been split on the issue, the Federal Circuit granted review and issued a writ of mandamus. The Court agreed with BP that false marking cases must be plead with particularity under Rule 9(b) and that “Excergen’s pleading requirements apply to all claims under Rule 9(b), not just inequitable conduct cases.” Opinion at 7. In those cases where false marking allegations are based on an expired patent, “a complaint must in the § 292 context provide some objective indication to reasonably infer that the defendant was aware that the patent expired.” A statement that the patent owner “knew or should have known that the patent expired” is not sufficient.


The plaintiff in BP Lubricant’s will be given leave to amend its complaint. It remains to be seen, however, whether the plaintiff will be able to meet the heightened pleading requirement it now faces.

The guidance provided by the Federal Circuit in In re BP Lubricants significantly raises the bar for pleading alleged violations under § 292 and should provide defendants facing these claims with a more solid foundation on which to base a motion to dismiss.

The 5 W’s (and How) – Not Just for Journalism Anymore

The Federal Circuit Heightens the Pleading Requirement for Inequitable Conduct

Sometime during grade school we learned that good journalistic writing needed to address “the five Ws”- who, what, when, where and why – and sometimes how. This is still true for good journalism. It is now also true for pleading the defense of inequitable conduct.

In Excergen Corp. v. Wal-Mart Stores, Inc. et al. the Federal Circuit recently addressed the requirements for pleading inequitable conduct under the heightened specificity requirements of Fed. R. Civ. P. 9(b). (2006-1491, 2007-1180, August 4, 2009, http://www.cafc.uscourts.gov/opinions/06-1491.pdf). The two elements of inequitable conduct are that (1) an actor within the duty of candor committed a material omission or made a materially false statement to the patent office, and (2) the omission or false statement was made with the specific intent to deceive the patent office. With respect to the first element, materiality, the Excergen court held “that in pleading inequitable conduct in patent cases, Rule 9(b) requires identification of the specific who, what, when, where and how of the material misrepresentation or omission committed before the PTO.” In addition, the Excergen court held that “a pleading of inequitable conduct under Rule 9(b), must include sufficient allegations of underlying facts from which a court may reasonably infer that a specific individual (1) knew of the withheld material information or of the falsity of the material misrepresentation , and (2) withheld or misrepresented this information with a specific intent to deceive the PTO” (emphasis added).

Under this heightened pleading standard, a general allegation against all individuals within the scope of the duty of candor, such as “Excergen, its agents and/or attorneys,” fails to address the “who” element with sufficient specificity and was deemed inadequate. In short, the court wants names (but also noted that these may be redacted from the public filing, if appropriate). For the “what” and “where” requirements, the pleading must now specifically identify not just a withheld reference, but those specific portions of the withheld reference that are considered material. General averments of “materiality” or that a reference is “not cumulative to the information already of record,” are insufficient. For materiality, the pleading now must “identify the particular claims limitations, or combination of claim limitations, that are supposedly absent from the information of record.” This, the court says, is “necessary to explain both ‘why’ the withheld information is material and not cumulative, and ‘how’ an examiner would have used this information in assessing the patentability of the claims.” Finally, the pleading must allege that the specific individual(s) identified “knew of [the] specific information that is alleged to be material [to the asserted patent] and then decided to deliberately withhold it from the relevant examiner.”

It is not news that inequitable conduct is a defense that requires pleading with specificity. Nonetheless, the heightened pleading requirements outlined in Excergen that provide a framework for meeting this requirement will be welcomed by many who view inequitable conduct as a defense that is raised too often, too early, and many times too vaguely. In practice, however, rather than significantly limiting the number of inequitable conduct allegations being made, Excergen is more likely to impact the timing and scope of these allegations. To address the five W’s (and “how”), defendants will require additional fact discovery before filing the amended pleading with the inequitable conduct defense. The allegations will still come, they will likely come later in the case and should be more thoroughly defined.