by Dennis Crouch
Once a patent issues, it is presumed valid. “A patent shall be presumed valid.” 35 U.S.C. 282(a). In patent litigation, this has traditionally meant that a complaint for infringement need not re-establish the patent’s validity. Rather, validity challenges arise as affirmative defenses as part of the answer.
That traditional approach is no longer followed by the courts in the Post-Alice patent eligibility era. Courts now regularly dismiss patent cases upon finding that the patentee failed to state a claim because the patent is invalid under Section 101. In response to that potential, patentees are have begun preemptively bulking-up their complaints with factual allegations to support the patent’s validity.
A new petition for writ of certiorari in Whitserve LLC v. Donuts Inc. (2020) highlights this issue. Back in 2018, Whitserve sued Donuts for infringing the claims of its two patents covering a method for managing due-date reminders for clients of professional-services. U.S. Patent Nos. 5,895,468 and 6,182,078. On a R. 12(b)(6) motion, the district court dismissed the complaint – finding that the patent was invalid as a matter of law and that – therefore – the complaint failed to state a legally cognizable claim for relief. On appeal, the Federal Circuit affirmed – explaining again that “patent eligibility can be determined at the Rule 12(b)(6) stage if there are no plausible factual allegations to impede such a resolution.” (Quoting Aatrix). The suggestion here is that plaintiffs really do need to be making their validity case within the pleadings.
Now, the case is up before the Supreme Court on Whitserve’s recently filed petition. Question presented:
If a patentee makes factual assertions that its claimed invention is directed to patent eligible subject matter under 35 U.S.C. § 101, including assertions that the claimed invention does not consist of well understood, routine, or conventional activity and that the claimed invention is supported by evidence of commercial success, is a district court permitted to overlook the patentee’s assertions, find that the claimed invention is directed to patent ineligible subject matter, and dismiss the patentee’s complaint under Rule 12(b)(6) given the requirements of Rule 12(b)(6) analyses and the statutory presumption of § 282(a)?
When I read the question presented, I instantly wanted to make some amendments — in particular, I wanted to focus not on bar “factual assertions that” but rather on “non-conclusory factual assertions showing that patent is plausibly eligible.” My transformation focuses on the plausibility standard from Iqbal and Twombly. In those cases, the Supreme Court raised the standard for “showing that the pleader is entitled to relief” under R.8(a). On my second time through, however, I began to really question this approach.
We are talking here about a pleading that attempts to preempt a potential affirmative defense — normally the plaintiff does not even need to plead a response to an affirmative defense.
[E]ven after the defendant has pleaded an affirmative defense, the federal rules impose on the plaintiff no obligation to file a responsive pleading.
Fernandez v. Clean House LLC, 883 F.3d 1296 (10th Cir. 2018). And, when a Reply to an affirmative defense is ordered, it is sufficient to simply deny the allegations of the defense rather than explain or offer competing factual allegations. In that situation, the non-conclusory / plausibility standard of Iqbal does not apply.
All this leads me to say that – for 12(b)(6) purposes, even conclusory factual allegations regarding eligibility may be sufficient to overcome a motion to dismiss. Of course, at that point, the court can jump quickly to a R.56 Summary Judgment question — allowing special early discovery on the eligibility issue to see whether there is any evidence to support the allegations.
* Note, the image above comes from a design patent owned by Krispy Kreme parent company HDN Development.