Addiction and Detoxification Institute LLC v. Carpenter et al.

Addressing pleading requirements for direct and indirect infringement, the U.S. Court of Appeals for the Federal Circuit affirmed a district court’s determination that although pre-filing notice is not required to bring suit for direct infringement, an identification of the infringing product is necessary. For indirect infringement, allegations of intent and specific acts caused by the defendant must be pled. Addiction and Detoxification Institute LLC v. Carpenter et al., Case No. 14-1797 (Fed. Cir., July 21, 2015) (Moore, J.) (non-precedential).

Addiction and Detoxification Institute (Addiction) filed a complaint alleging both direct and indirect infringement of one patent. Addiction’s complaint contained a single allegation of direct infringement, reciting only that “Defendants’, each of them, have directly infringed the Patents [sic] by making, using, selling, offering for sale in the United States activities, methods and procedures claimed in the Patent, Exhibit 1.” Similarly, Addiction’s allegation for indirect infringement amounted to a single statement that “Defendants’ have induced infringement of and/or contributorily infringed the Patent.” The district court granted the defendants’ motion to dismiss, finding that in order to satisfy Form 18, a complaint must allege that defendants were notified of the direct infringement before the complaint was filed. The claims for indirect infringement were dismissed because the complaint did not contain any allegations of pre-filing notice or facts supporting the intent requirement of indirect infringement. Addiction appealed.

The Federal Circuit affirmed the dismissal of the direct infringement claim, but for reasons different than those provided by the district court. The Court explained that the district court erred in reasoning that Form 18 creates a pre-filing written notice requirement. Rather, the Court affirmed the dismissal of direct infringement claims based on Addiction’s failure to identify the particular device that infringes, as required by Form 18. The Court agreed that the district court properly dismissed the indirect infringement claim because the complaint contained no allegations of substantial non-infringing uses which would allow the court to infer defendants’ are liable for the alleged misconduct.

Practice Note: Both the Federal Circuit and the district court were guided by Rule 84 of the FRCP and Appendix Form 18, which sets forth the pleading standard for direct infringement. Rule 84 provides that the forms “suffice under these rules and illustrate the simplicity and brevity that these rules contemplate.” However, effective December 1, 2015, Rule 84 and the Appendix of Forms (including Form 18) will be abrogated. This means patent litigators will no longer be able to rely on the notice pleading standard of Form 18, which is arguably less strict than the standard set forth by the Supreme Court in Twombly and Iqbal. For now, under the Federal Circuit’s decision in K-Tech (IP Update, Vol. 16, No. 5), if a conflict exists between Twombly and Form 18, Form 18 would control. After December, however, in order to meet the stricter pleading requirements imposed by Twombly, a complaint will need to contain sufficient factual matter to state a claim for relief that is plausible on its face. This plausibility requirement is met when a plaintiff pleads factual content that allows a court to draw the reasonable inference that the defendant is liable for the misconduct alleged.