Did the Abrogation of Form 18 Raise Pleading Standards?

by Dennis Crouch

Lifetime Indus v. Trim-Lok (Fed. Cir. 2017)

The district court dismissed Lifetime’s infringement complaint for failure to state a claim. Fed. R. Civ. Pro. 12(b)(6).  On appeal, the Federal Circuit reversed – holding that the inducement and contributory infringement claims were sufficiently pled.

The most interesting aspect of the decision is actually a bit of dicta regarding the now abrogated Form 18. Prior to December 2015, the Federal Rules of Civil Procedure included a set of Form complaints – the patent complaint (Form 18) was truly bare-bones.  Following Iqbal and Twombly, many of us saw a real tension between the permissible forms and the plausibility requirements of Twiqbal. Thus, when the forms were eliminated in 2015, I assumed that pleading standards had been effectively raised. Here, the Federal Circuit pushes back against that assumption:

The parties assume that there is a difference between the requirements of Form 18 and Iqbal / Twombly; however, we have never recognized such a distinction. See KTech (“That Form 18 would control in the event of a conflict between the form and Twombly and Iqbal does not suggest, however, that we should seek to create a conflict where none exists.”). In any event, we need not resolve the question whether there is a difference between the two standards here because, as we explain, the SAC met the Iqbal / Twombly standard for pleading direct infringement.

When they think you are wrong, double-down.

Lifetime’s U.S. Patent 6,966,590 claims a two-part seal used in RV slide-out rooms.  In 2013, two of Lifetime’s seal-designers left the company and joined Trim-Lok.  Although neither were named inventors on the asserted patent, Lifetime alleged that both had knowledge of the patent.  Although the accused infringer only manufactured only one of two components of the claimed invention, the Federal Circuit ruled that the patentee pled facts sufficient to reasonably infer that an infringing combination was created once installed in a Forest River RV. (Two components: a seal installed on an RV).

US06966590-20051122-D00000

Holdings:

  • Direct Infringement Properly Pled: Lifetime did allege that TrimLok installed the seal onto the RV; that is, Lifetime alleged that Trim-Lok made an infringing seal-RV combination.”
  • Inducement Properly Pled: Alleged prior knowledge of the patent by the two former employees which allows us to presume intent.
  • Contributory Infringement Properly Pled: Knowledge of patent sufficiently alleged.

To be clear, the patentee did not simply allege these conclusively but went well beyond a typical Form-18 complaint to specify:

  • where the alleged infringement occurred (the Forest River plant);
  • when it occurred (in or around June 2013);
  • who performed the allegedly infringing act (an agent or employee of Trim-Lok); and
  • why (to test fit the seal onto the RV and to solicit sales).

These particular factual allegations – according to the court – easily push the complaint over the plausibility threshold.

Dismissal Reversed and remanded – the district court should now pick-up the case again and give the patentee a chance.

 

 

8 thoughts on “Did the Abrogation of Form 18 Raise Pleading Standards?

  1. It appeared to me that the panel was only looking to see if the complaint gave “notice of what activity … is being accused of infringement.” Relying heavily on the notion that a plaintiff does not have to “prove its case at the pleading stage,” the panel appeared to not require any factual allegations to show that the identified activity would be infringing, i.e., the panel did not require factual allegations to show why any of the specific claim limitations were met.

    From the opinion: Trim-Lok’s complaints concerning lack of detail ask for too much. There is no requirement for Lifetime to ‘prove its case at the pleading stage.’ … Our precedent requires that a complaint place the alleged infringer ‘on notice of what activity … is being accused of infringement.’ K-Tech, 714 F.3d at 1284. The SAC meets that requirement. Lifetime identified
    [1] where the alleged infringement occurred (the Forest River plant);
    [2] when it occurred (in or around June 2013);
    [3] who performed the allegedly infringing act (an agent or employee of Trim-Lok); and
    [4] why (to test fit the seal onto the RV and to solicit sales). …
    Drawing reasonable inferences in Lifetime’s favor, these facts make it plausible that a Trim-Lok agent installed the seal onto the Forest River RV. … Taken together, however, they render Lifetime’s pleadings sufficiently plausible to survive a motion to dismiss.” 2017 WL 3908174, at *5.

    All four factors identified by the panel, even the “why,” only go to the aspect of what activity was done. There did not appear to be any factual allegation as to how/why that activity met the claims and therefore infringed.

    It seems debatable that a complaint that alleges factual details as to what activity the patentee asserts is infringement will, without more, also provide sufficient allegations as to the GROUNDS (as arguably required by Twombly) for why that activity constitutes infringement of the patent and renders the accused infringer liable. Without some discussion of the claims of the patent in the complaint and how they are met by the accused product it seems questionable that such a complaint “plead[s] facts sufficient to show that [the] claim has SUBSTANTIVE plausibility,” Johnson v. City of Shelby, Miss., 135 S. Ct. 346, 347 (2014) (emphasis added), and “allows the court to draw the reasonable inference that the defendant IS LIABLE for the misconduct alleged.’ ABB Turbo Sys. AG v. TurboUSA, Inc., 774 F.3d 979, 984, 113 USPQ2d 1248 (Fed. Cir. 2014) (emphasis added, reversing a Rule 12(b)(6) dismissal of a claim for misappropriation of trade secrets because the district court erred in demanding too much detailed facts in the pleading as the facts that were pled showed a plausible claim). Arguably, without some discussion in a complaint as to the claims of the patent and how they are met by the accused product, no showing is made that the infringement claim is substantively plausible as there is no showing why the claims likely are infringed.

    Presently, it seems that some district courts are requiring a patentee to plead facts to show that all of the limitations of at least one claim of the patent are met by the accused product. See e.g., Raptor, LLC v. Odebrecht Construction, Inc., 2017 WL 3503399 (S.D. Fla. Jun. 22, 2017) (dismissing with leave to amend direct infringement claim since patentee failed to plead any facts to show the accused infringers were practicing each and every recited step of at least one of the asserted method claims, the court rejecting the patentee’s contention that photographs of the construction site showing the accused infringers’ equipment was sufficient to plead facts showing how the claimed methods were being practiced); Novitaz, Inc. v. inMarket Media, LLC, 2017 WL 2311407, *3-*5 (N.D. Cal. May 26, 2017) (ruling that a complaint must plead enough facts to show how that all the limitations of at least one claim of the patent are met by the accused product, but the complaint need not always set forth a detailed claim chart in doing so, but finding that the patentee’s factual allegations did not meet this standard since it failed to address some of the claim limitations and for others merely parroted claim language).

    However, not all district courts require factual allegations to address all limitations of at least one of asserted patent claim. See e.g., Prowire LLC v. Apple, Inc., No. 17-223, 2017 WL 3444689, *1-*6 (D. Del. Aug. 9, 2017) (refusing to rule on whether a patentee must plead facts to show that each and every limitation of at least one asserted claim is met by the accused product to sufficiently state a plausible infringement claim under Twombly).

    The Federal Circuit’s decision in LifeTime, will probably spark a retreat from requiring that factual allegations are pled to plausibly show or infer that all the limitations for at least one of the patent claims are met. Likely, patentee’s will argue in the future that in view of LifeTime they are not required to plead any facts to show how the limitations of the claim are met by the accused product since that would be requiring the patentee to “prove its case” at the pleading stage. My guess, the courts will find this position goes too far, and will eventually gravitate towards a middle ground where some minimal amount of facts must be pled that describe some of the characteristics of the accused product or process and then allege why that characteristic meets an aspect of the patent claims. See e.g. John Keeler & Co. v. Heron Point Seafood, Inc., No. 1:14 CV 1652, 2017 WL 3705863, *3-*5 (N.D. Ohio Aug. 28, 2017) (“Here, the patents-in-suit cover methods of making sealed, pasteurized flexible pouches of crabmeat. The court takes this relative simplicity into account when deciding the sufficiency of Keeler’s pleadings. Thus, Keeler’s allegations that Heron Point is distributing or has distributed in the United States a crabmeat product packed in ‘flexible, airtight containers’ that contain a volume of air to reduce anaerobic bacteria growth creates a reasonable inference that it directly infringed on Keeler’s patent.”).

    Indeed, that seemed to be what happened in the LifeTime patentee’s second suit on the same patent, filed in the same court, which survived a motion to dismiss, where this time the patentee discussed some unique aspects of the patent claims and provided allegations and photographs that the accused product had characteristics similar to what was claimed in the patent. Lifetime Indus., Inc. v. Trim-Lok, Inc., No. 3:16-CV-559 JD, 2017 WL 3130995, *1 & *3-*5 (N.D. Ind. Jul. 24, 2017) (denying motion to dismiss infringement claims since accused infringer was seeking a substantive determination on the infringement question and the court would not consider claim construction or evaluate specific witnesses or evidence on a motion to dismiss, and finding that the complaint adequately alleged direct infringement of apparatus and method claim, the court noting that photographs of the accused product attached to the complaint were sufficient to allege that some of the method steps and other limitations of the apparatus claims were met, the court relying on a witness declaration submitted by a patentee that the accused product had a certain characteristic since the declaration was consistent with a photograph of the accused product that the declarant had taken and that the patentee had attached to the complaint).

  2. After reading this case, it is quite apparent that the patent system was royally scr$wed by Aro’s interpetation of the new 271(c) that knowledge of the patent (an of infringement (Commil)). So much for Rich’s ideas of making things better by codification.

    Prior to ’52, contributory infringement was strict liability just as much as was direct infringement. If anything, we should think about repealling 217(a)-(a) with a note that Congress intends to repeal not only these statutes, but those Supreme Court cases that require knowledge of “infringement” to include knowledge of the patent.

  3. An amazing indirect denial of the widely publicly expressed reasons for the elimination of FRCP Form 18.

    1. [But the D.C. should have given the patent owner an opportunity to amend its complaint not just dismiss the case.]

        1. The portion of the opinion you quoted did indicate that it was the SAC that met the pleading standard.

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