Federal Judiciary

Complaint Contained Inadequate Allegations of Patent Infringement - Repleading Ordered

By Michael C. Smith

Bedrock Computer Technologies, LLC v. Softlayer Technologies, Inc. et al., 6:09cv269 (March 29, 2010)

Judge: Leonard Davis

Holding: Defendant's Motion to Dismiss GRANTED; Plaintiff ordered to replead in 15 days

Barney and Fred, at it again... 

A recurring issue in federal practice recently is what level of factual pleadings are sufficient to survive a motion to dismiss under the Supreme Court's decisions in Twombly and Iqbal.  In this case Judge Davis granted the defendants' motion to dismiss the plaintiff's infringement claims for failure to state a claim, but with leave to amend.  Notably, Judge Davis held that the plaintiff's allegations of direct infringement did not meet FRCP Form 18's requirement because "it does not identify any accused products, services, or methods or other infringing acts for the patent-in-suit."   (The opinion does reaffirm that even after Twombly, Form 18 controls as to when allegations are adequate, but notes that courts are, if not split, at least somewhat grouchy about the whole question of reconciling the form with the new caselaw.)  It does appear to me that the plaintiff's allegations in this case were somewhat unique in that they did need describe even in general terms the accused products - rather, they argued that they were not required to identify any accused products because they were not alleging direct infringement for the sale of a product, but rather that Defendants? support or use of products gives rise to liability for direct and [indirect] infringement.  (bracketed language mine - I'm not sure whether the court meant to say "indirect" or "induced" here.

Interestingly, for those of you who see these sorts of things in levels and layers of pleading and proof requirements (or is it just me?), Judge Davis notes that "a complaint that does not perfectly comply with Form 18 may still suffice to state a claim that is plausible on its face" thus indicating that his excavations into pleading requirements indicate that the plausibility standard enunciated in Twombly and Iqbal lies somewhere beneath the requirements of Rule 18, at least in the vicinity of Tyler.  Or perhaps this is dicta and the court is simply speculating as to what would be down there if he did dig, or reporting back what the judicial equivalent of ground-penetrating radar is or might show in other cases. (Ed note: whether the relative relationships between legal standards can be analogized to vary from location to location in the way that, say, oil and gas formations do is an open question.  I think the answer might be whether the standard in question includes judicial discretion or not would have something to do with it - although I'd argue that the facts of the case are what cause the legal formation to buck and rear, and not the location of the court.  But hey, that's just me.  I probably need to switch to decaf in the mornings). 

As to its indirect infringement claims, the plaintiff did not identify any accused products or services, nor did it expressly identify a direct infringer. While Form 18 does not address indirect infringement claims, and Judge Davis noted that courts are split on whether a direct infringer must be at least generically identified (citing judges Folsom and Everingham on this point, since this issue is one that confronts judges with a heavy patent docket regularly since Twombly), he concluded that "[t]aken as whole [plaintiff's] complaint does not state a claim for relief that is plausible on its face. The complaint simply fails to inform Defendants as to what they must defend. While Form 18 does not set a high bar for what must be alleged, [plaintiff] has not met that bar. The Court has high expectations of a plaintiff's preparedness before it brings suit"  (Emphasis added).  "The Court does not require in a complaint the specificity that P.R. 3-1 requires, as that would go far beyond Rule 8's and Form 18's requirements, but some greater specificity is required here" Judge Davis concluded (again emphasis added, as that caffeine kicks in once again, urging me to emphasis that this is a case-specific ruling, and the most important word here is "here".  Hear?)

But the holding was anticlimatic in this case for one key reason, which earned a rebuke from the court, and which is more important the the entire substantive holding.

"The Court notes that Bedrock served its Patent Rule 3-1 disclosures while this motion was being briefed. Rule 3-1 disclosures are far more detailed than Rule 8's pleading requirements. Thus, before this motion was fully briefed, Defendants had already received greater specificity than what they sought in this motion, rendering this motion superfluous for all practical purposes. The Court strongly encourages the parties to try this case on the merits and not unnecessarily burden the Court with technical issues that lack practical substance."

(Emphasis added).  Ouch.

From Docket Navigator.

Full post as published by Eastern District of Texas Federal Court Practice on March 30, 2010 (boomark / email).