Reform of Federal Civil Procedure Rules May Lead to Heightened Pleading Standard in Patent Suits

patentsCross-posted by Forbes.com at WLF’s contributor page

As the process of amending the Federal Rules of Civil Procedure (FRCP) enters a critical juncture, most discussion and attention (including here at The Legal Pulse) have deservedly focused on proposed changes to rules governing the pre-trial discovery process. However, one particular proposed change, overlooked for the most part, would require plaintiffs alleging patent infringement to provide more information in their initial complaints. The Advisory Committee on Civil Rules proposes to abrogate Rule 84 and along with it, the sample complaint forms to which the rule refers, including one relating to patent suits: Form 18.

What Is Form 18? This form has become well-known to patent litigants, especially accused infringers. The judiciary created Form 18 in 1938. It permits plaintiffs to provide a bare minimum of information: a jurisdictional statement, general assertion of patent ownership, a claim of infringement, and a request for relief. A complaint crafted in compliance with Form 18 would thus be in accord with another Federal Rule of Civil Procedure, Rule 8, which dictates pleading standards. In its 2007 Bell Atlantic v. Twombly and 2009 Ashcroft v. Iqbal rulings, the Supreme Court found that the then-existing interpretation of Rule 8—that some relief is “possible”—was incorrect and ruled that plaintiffs must demonstrate that its version of the events is “plausible.” The Court pointedly said that Rule 8 “demands more that an unadorned, the-defendant-unlawfully-harmed-me accusation.”

Form 18 Trumps Rule 8. Patent infringement complaints drafted in minimal conformance with Form 18 are decidedly “unadorned.” Defendants are denied fair notice of their alleged violation, a fault which is magnified exponentially in some patent litigation, such as suits brought by “patent-assertion entities.” As stated in a 2011 letter urging the Administrative Office of the U.S. Courts to address Form 18’s flaws:

[Its] limitations are immediately apparent when the template is used—as is frequently the case—to accuse an entire website or channel of commerce of infringing, in some unspecified manner, a method or software patent.

The de facto court of last resort for patent defendants—the U.S. Court of Appeals for the Federal Circuit—has in each of the past two years ruled that pleadings based on Form 18 suffice, even if they fail to meet the Twombly and Iqbal plausibility standard. A 2012 WLF Legal Backgrounder described the In re Bill of Lading case, and an April Legal Pulse post discussed K-Tech Telecommunications v. Time-Warner Cable.  The court in those cases did limit the acceptability of Form 18-compliant pleadings to claims of direct infringement; induced or contributory infringement claims are to be judged under Twombly and Iqbal.

Attention from the Judiciary and Congress. The Advisory Committee on Federal Rules has been discussing the conflict between the Twombly– and Iqbal-fortified Rule 8 pleading standards and Form 18 for at least four years. Minutes from an October 2009 Committee meeting reflect that “The Chief Judge of the Federal Circuit, for example, has called Form 18 . . . an embarrassment.”

Interestingly, the conflict involving Form 18 has even attracted the attention of some in Congress. A proposal introduced by Senator John Cornyn, the “Patent Abuse Reduction Act,” calls on the Supreme Court to review and revise Form 18 within a year after the Act becomes law. A second discussion draft of a proposal from House Judiciary Committee Chairman Robert Goodlatte requires the Supreme Court to eliminate Form 18 and that it “may prescribe a new form or forms.”

Our View. WLF supports the Advisory Committee’s proposal to abrogate Rule 84. Our comments to the Advisory Committee explain the connection abrogating Rule 84 has to the discovery process:

The Court’s ‘plausibility’ requirement emphasizes the importance of district courts applying their ‘judicial experience’—along with their ‘common sense’—in disposing of baseless complaints at the proper time: before a plaintiff launches intrusive and burdensome discovery. In this context, the Court has noted that Rule 8 ‘does not unlock the doors of discovery for a plaintiff armed with nothing more than conclusions.’ (citations omitted)

WLF’s submission also suggests that the Advisory Committee take the extra, clarifying step of adding a “Committee Note” to Rule 8 which acknowledges Twombly and Iqbal and explains their relationship to Rule 8.

2 thoughts on “Reform of Federal Civil Procedure Rules May Lead to Heightened Pleading Standard in Patent Suits

  1. Pingback: Trolls and Trial Lawyers Should Curb Their Enthusiasm Over Patent Reform Timeout | The Legal Pulse

  2. Pingback: FTC Commissioner Looks Back, and Ahead, on Patent Litigation Reform Efforts | The WLF Legal Pulse

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