Will Federal Circuit Finally Bring an End to “Form 18” Minimal Pleading for Direct Patent Infringement in 2017?

jhighGuest Commentary

By J High, Sidley Austin LLP*

In Bell Atlantic Corp. v. Twombly and Ashcroft v. Iqbal, the US Supreme Court tightened the pleading standard for civil cases.  Because of a quirk of the exemplary forms formerly included with the Federal Rules of Civil Procedure (specifically, Form 18), the US Court of Appeals for the Federal Circuit held that Twombly and Iqbal did not apply to claims of direct infringement of a patent (In re Bill of Lading Transmission & Processing Sys. Pat. Litig.).  I discussed this state of affairs in two 2012 Washington Legal Foundation Legal Backgrounders (3/23/12 and 10/5/12).

This past fall, the Federal Circuit issued another decision on the pleading standard in patent cases, Lyda v. CBS Corp., 838 F.3d 1331 (Fed. Cir. 2016).  However, Lyda did not address the question many have been waiting for the Federal Circuit to answer—how to implement the pleading standard of Iqbal and Twombly for claims of garden-variety direct infringement after the abrogation of Form 18.  The district court proceedings in Lyda all occurred while Form 18 was part of the Federal Rules of Civil Procedure, and on appeal the Federal Circuit stated “that the repeal of Form 18 does not apply to this case.”  Id. at 1337 n.2.

The Federal Circuit did establish some precedent in Lyda.  The complaint at issue alleged infringement only under a joint infringement theory, which requires that the actors who collectively take steps to infringe the patent do so by directing or controlling each other, or via a joint enterprise.  The Federal Circuit held that, even before the repeal of Form 18, a plaintiff could not rely on Form 18 to establish the sufficiency of a complaint pleading joint infringement—rather, the plausibility standard of Twombly and Iqbal must be met.

And the plaintiff in Lyda failed to show that joint infringement was plausible.  He had stated in his complaint that the defendant directed or controlled contractors, which in turn directed or controlled other third parties to perform all the steps required for infringement.  Id. at 1339.  But the Federal Circuit noted that this was insufficient because the plaintiff did “not set forth any factual allegations” supporting the allegations of direction or control, or even explained what the relationship among these actors was.  Id. at 1340.

The Federal Circuit has not yet indicated that the abolition of Form 18 means that Form 18 no longer has any bearing on pleading standards.  The district courts have, for the most part, not judged the sufficiency of a complaint by reference to Form 18 after its repeal.1 However, the Rules Advisory Committee introduced mischief into the repeal of Form 18 by stating that its repeal “does not alter existing pleading standards or otherwise change the requirements of Civil Rule 8.”  Fed. R. Civ. P. 84, 2015 Advisory Committee Note.  This statement by the Rules Advisory Committee has lead at least one district court to conclude that the repeal of Form 18 did not change the standard for pleading patent infringement, thus leaving the pleading requirements for patent infringement cases uncertain.2

The repeal of Form 18 should have brought the pleading standards for all patent cases in line with Twombly and Iqbal.  Until the Federal Circuit addresses the repeal of Form 18, district courts will apply Twombly and Iqbal in diverse manners—not all of which comport with Twombly and Iqbal.  District courts may require a complaint to provide an element-by-element analysis of the alleged infringement;3 then again, they may not.4  One district court explained that “the old Form 18 approach is still generally sufficient to articulate a plausible claim for direct infringement,”5 even though the Federal Circuit has acknowledged that Form 18 set a different pleading standard than do Twombly and Iqbal.6 Perhaps the Federal Circuit will have an opportunity in 2017 to clear this up and create a uniform pleading standard.  Keep an eye on the WLF Legal Pulse for further developments.

Notes

  1. See, e.g., Cannarella v. Volvo Car USA LLC, Case No. CV 16-6195-RSWL-JEMx, dkt. no. 37, slip op. at 11 (C.D. Cal. Dec. 12, 2016) (“direct patent infringement claims in a Motion to Dismiss are now governed by the Twombly/Iqbal pleading standards, and must recite at least a facially plausible claim to relief”); Sunrise Techs. v. Cimcon Lighting, 2016 WL 6902395, *2 (D. Mass. Nov. 23, 2016) (“the pleading requirements of Form 18 no longer apply to direct infringement claims”).
  2. Hologram USA v. Pulse Evolution Corp., 2016 WL 199417, *2 n.1 (D. Nev. Jan. 15, 2016).
  3. Atlas IP, LLC v. Exelon Corp., 2016 WL 2866134, *5 (N.D. Ill. May 17, 2016) (“[F]actual allegations that do not permit a court to infer that the accused product infringes each element of at least one claim are not suggestive of infringement—they are merely compatible with infringement.”); Global Tech Led, LLC v. Every Watt Matters, LLC, 2016 WL 6682015, *3 (S.D. Fla. May 19, 2016) (“The Amended Complaint simply does not plead the elements of any representative claim or specify any claim requirements.”).
  4. Blitzsafe Texas, LLC v. Volkswagen Group of Am., 2016 WL 4778699, *4 (E.D. Tex. Aug. 19, 2016), aff’d, 2016 WL 4771291 (E.D. Tex. Sept. 13, 2016); Robern, Inc. v. Glasscrafters, Inc., 2016 WL 3951726, *5 (D.N.J. July 22, 2016).
  5. Palmer Hamilton, LLC v. AmTab Mfg. Corp., 2016 WL 6775458, *1 (W.D. Wis. Nov. 15, 2016).
  6. Bill of Lading, 681 F.3d at 1334 (citing McZeal v. Sprint Nextel Corp., 501 F.3d 1354, 1360 (Fed. Cir. 2007) (Dyk, J., concurring-in-part and dissenting-in-part)).

*Mr. High is Counsel to the firm in its San Francisco, CA office.  Prior to joining the firm, he served as a law clerk to Judge Paul R. Michel of the US Court of Appeals for the Federal Circuit, as well as to US District Court for the Northern District of California Judge Ronald M. Whyte.

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s