On December 1, 2015, as part of a sweeping set of amendments to the Federal Rules of Civil Procedure, Rule 84 and its Appendix of Forms were abrogated. Patent litigators are no doubt well acquainted with Form 18, which set forth a generic complaint for patent infringement. Under the guise of notice pleading, the Form 18 complaint recited only the most basic factual allegations: it did not identify any asserted patent claims or any specific accused product models, nor provide an explanation of how those products allegedly infringe. Nevertheless, a direct infringement claim could survive a motion to dismiss simply by complying with Form 18.[ii]
As the effective date for the new amendments approached, practitioners began to consider how Form 18’s elimination might affect the pleading of direct infringement. In particular, they questioned whether newly filed claims would be analyzed under the “plausibility” standard established by the Supreme Court in Twombly and Iqbal[iii] and thus would require “enough facts to state a claim to relief that is plausible on its face.”[iv] The possibility of a heightened pleading standard caused a considerable spike in the filing of complaints in the days leading up to December 2015: more than 250 patent infringement complaints were filed on November 30 alone.[v]
Early indications from the few issued district court decisions interpreting the amended Rules confirm that the pleading standard for direct infringement claims may indeed have changed. In this article, we look at two decisions applying the amended Rules—one from the District of Delaware and the other from the Central District of California—that provide an interesting glimpse of what may or may not suffice when pleading direct infringement today.
Case 1: RainDance Techs. Inc. v. 10x Genomics, Inc., No. 15-cv-00152, Dkt. 28 (D. Del. Mar. 4, 2016). [RainDance Decision]
In RainDance Techs., Inc. v. 10x Genomics, Inc., Judge Andrews of the District of Delaware granted 10x Genomics’ motion to dismiss RainDance’s and the University of Chicago’s claims for direct infringement of seven patents, finding that “Plaintiffs have not plausibly alleged any infringement.”[vi] RainDance and the University of Chicago (collectively, the RainDance Plaintiffs) filed their original complaint against 10x Genomics in February 2015, and then filed an amended complaint in April 2015. 10x Genomics filed its motion to dismiss in May 2015, arguing (among other things) that the direct infringement claim fell short of the plausibility standard of Twombly and Iqbal.[vii]
The level of detail in the RainDance Plaintiffs’ complaint, which clocked in at 35 pages, almost certainly would have passed muster under Form 18. For each of the seven asserted patents, the RainDance Plaintiffs identified a representative claim that they alleged had been directly infringed.[viii] They also identified 10x Genomics’ accused product—a microfluidic DNA and RNA analysis platform—as well as the specific platform components implicated by the alleged infringement. As support for their allegations, the RainDance Plaintiffs included figures from 10x Genomics’ conference presentations describing the accused platform’s structure and its chemical workflow, as well as excerpts from 10x Genomics’ website.[ix]
Judge Andrews, however, found the RainDance Plaintiffs’ amended complaint lacking. He first noted that, despite the complaint’s length, the “essential factual allegations d[id] not take up much space.”[x] He took issue in particular with the RainDance Plaintiffs’ reliance on 10x Genomics’ promotional materials, adding that it did not appear the plaintiffs had “purchased one of [10x Genomics’] products to see how it actually works.”[xi] Judge Andrews also noted that the RainDance Plaintiffs filed the complaint “less than a month” after first learning about the 10x Genomics platform, suggesting they might have benefited from spending more time investigating the accused product before filing suit.
In assessing the adequacy of the direct infringement allegations, Judge Andrews also performed his own analysis of the exemplary patent claims identified in the complaint. He appeared to be searching for express factual allegations tying each asserted claim limitation to the accused products in a way that bridged the gap between technical claim language and the accused features.[xii] For example, Judge Andrews concluded that the complaint failed to address the “adjusting pressure” limitation of one asserted method claim: “[t]here is nothing in the complaint (at least so far as I can see) that hints at the role of pressure in Defendant’s products.”[xiii] In reference to a different asserted claim, he likewise noted that “[i]t is not obvious to me that what Plaintiffs described is an ‘autocatalytic reaction.’”[xiv] He ultimately determined that the RainDance Plaintiffs “ma[d]e no attempt to relate any of their factual assertions with any of the asserted claims” and dismissed the direct infringement claim as not plausibly alleged.[xv]
It is noteworthy that although the RainDance Plaintiffs filed their amended complaint in April 2015—nearly eight months before the new amendments went into effect—Judge Andrews chose “to apply the post-December 1, 2015, direct infringement pleading standard to the amended complaint” because “it would be in the interest of justice” to do so.[xvi] He did not, however, explain his reasoning for this conclusion or give an indication of whether he would come to the same conclusion in other already pending cases.
Case 2: InCom Corp. v. The Walt Disney Co., No. 15-cv-3011, Dkt. 26 (C.D. Cal. Feb. 4, 2016). [InCom Decision]
In contrast to Judge Andrews’ decision in RainDance, Judge Gutierrez’s decision in Incom Corp. v. The Walt Disney Co. provides an example of what at least one court considers to be sufficient to plead direct infringement under the amended Rules.[xvii] InCom filed its original complaint on April 22, 2015, and an amended complaint seven months later on Nov. 23, 2015, alleging infringement of three patents related to tracking systems using Radio Frequency Identification. Like the RainDance plaintiffs, InCom identified specific accused products in the complaint—namely, Disney’s attendance tracking device, “MagicBand,” and the “MyMagic+” attendance monitoring system. On December 10, 2015, not long after the new amended Rules went into effect, Disney moved to dismiss InCom’s amended complaint, arguing that it did not plausibly allege a claim for direct or indirect infringement.
Judge Gutierrez denied Disney’s motion to dismiss to the extent it sought to dismiss InCom’s direct infringement claims. As in RainDance, he first rejected InCom’s argument that the amended Rules should not apply because it filed the complaint before their effective date, December 1, 2015.[xviii] Citing the Supreme Court’s order adopting the amended Rules, which stated that the amendments should apply “insofar as just and practicable [in] all proceedings then pending,” Judge Gutierrez held that it was appropriate to require InCom to meet the “plausibility” standard in its amended complaint.[xix]
Even under the heightened pleading standard, however, Judge Gutierrez held that InCom’s amended complaint sufficiently pleaded a direct infringement claim. While acknowledging that “merely naming a product and providing a conclusory statement that it infringes a patent is insufficient to meet the ‘plausibility’ standard set forth in Twombly and Iqbal,” he found that InCom had done enough “by specifically identifying Defendants’ products and alleging that they perform the same unique function as Plaintiff’s patented system.”[xx] In particular, Judge Gutierrez emphasized that InCom “describe[d] how its Attendance Tracking System uses RFID technology and ID badges to track human presence in large volumes,” and “name[d] specific products developed, manufactured and used by Defendants which, like Plaintiff’s system, track human presence in large volumes.”[xxi]
Notably, in contrast with Judge Andrews, Judge Gutierrez did not require InCom to identify any exemplary asserted claims in its complaint, much less conduct any element-by-element analysis. Despite these missing details, he concluded that “[a]t this stage, it is sufficient that Plaintiff has made plausible allegations that each Defendant is responsible for direct infringement.”[xxii] In comparison with the RainDance decision, the InCom decision therefore appears to establish a lower threshold for “plausibly” alleging direct infringement under the amended Rules.
These two early decisions, while by no means definitive of the pleading standards under the amended Rules, suggest that patent plaintiffs were right to be concerned about a heightened requirement for pleading direct infringement. Because the amendments only went into effect fairly recently, however, only time will tell whether other district courts will apply the “plausibility” standard to direct infringement claims as well. It also remains possible that, despite the abrogation of Rule 84 and the Appendix of Forms, some courts may find that compliance with Form 18 is still enough to survive a motion to dismiss.[xxiii]
Yet even under the heightened “plausibility” standard, we would not be surprised to see meaningful differences emerge in the ways different districts—and even individual judges within districts—apply that standard to direct infringement claims. The decisions discussed in this article suggest such a trend: one seems to demand allegations that directly tie the claim language to the accused product, whereas the other accepts general discussion of the patented invention without the identification of any asserted claims.
Before filing suit, litigants should be mindful of these differences, lest they be faced with the prospect of having to amend and re-file their complaint—or perhaps worse. Indeed, it would be prudent for would-be plaintiffs to closely follow this area of law in the year to come, as it appears Form 18’s elimination is already changing how patents are litigated. Finally, existing plaintiffs should be aware that merely filing a complaint prior to December 1, 2015—even many months before that date—does not guarantee application of the Form 18 pleading standard.
= = = = =
[i] Leeron Morad is an associate and Andrew Bramhall is a partner in Quinn Emanuel’s Silicon Valley office. The opinions expressed are those of the author(s) and do not necessarily reflect the views of the firm or its clients. This article is for general information purposes and is not intended to be and should not be taken as legal advice.
[iv] Twombly, 550 U.S. at 554-55, 570.
[v] Based on a Docket Navigator search of cases filed on November 30, 2015. By comparison, in the entirety of 2015, plaintiffs filed approximately 5,500 new patent cases. The filing of 250 cases represents almost 5% of the total for the year. http://www.law360.com/articles/755311/how-2015-s-crush-of-patent-lawsuits-kept-ip-attys-busy.
[vi] Case No. 15-cv-00152, Dkt. 28, at 5 (D. Del. Mar. 4, 2016).
[vii] According to 10x Genomics, the “plausibility” pleading standard should apply to the RainDance Plaintiffs’ direct infringement claim because pleading is governed by regional circuit law in the Third Circuit. Id., Dkt. 16, at 14-17. 10x Genomics also argued that the “plausibility” standard should apply because Form 18 was expected to be abrogated “during the early stages of this case.” Id. at 17.
[viii] E.g., id., Dkt. 12 ¶ 26.
[ix] Id. ¶¶ 16-20.
[x] Id., Dkt. 28, at 1.
[xi] Id. at 3.
[xii] See id. at 4 (“The requirements of the next to last element might be met, but involves quite a bit of supposition. I think, but am not sure, that partitioning samples is the same as amplification. . . .”).
[xiii] Id. at 3.
[xiv] Id. at 4.
[xv] Id. Judge Andrews dismissed the complaint without prejudice, however, because “Plaintiffs might very well be able to [plausibly allege infringement],” and gave the RainDance Plaintiffs three weeks to re-file. Id. at 5.
[xvi] Id. at 4-5.
[xvii] Case No. 15-cv-3011, Dkt. 39 (C.D. Cal. Feb. 4, 2016).
[xviii] Id. at 3.
[xix] Id. at 3-4 (quoting Supreme Court of the United States, Order Regarding Amendments to the Federal Rules of Civil Procedure (Apr. 29, 2015)).
[xx] Id. at 4.
[xxii] Id. at 5.
[xxiii] According to the Committee Notes to the amended Rules, “[t]he abrogation of Rule 84 does not alter existing pleading standards or otherwise change the requirements of Civil Rule 8.” It seems possible that a court could interpret this as intending to maintain the notice pleading standard for direct infringement claims.