Under the Twombly/Iqbal pleading standard, infringement allegations must provide for a reasonable inference that each claim step was performed by or attributed to the defendant
Lyda v. CBS Corporation, No. 2015-1923 (Fed. Cir. Sept. 30, 2016)
The patentee alleged infringement of two patents concerning obtaining real-time responses from viewers of broadcast video content without a personal computer. The Federal Circuit upheld a district court’s determination that the amended complaint failed to state a claim for patent infringement under the Twombly/Iqbal pleading standard. The district court held that the amended complaint implicated a theory of joint infringement, and dismissed the complaint because its “bare allegations” made it “simply impossible to discern what actions, activities, services, or products are infringing the plaintiff's patents.” Specifically, the court confirmed that the Twombly/Iqbal pleading standard applies to allegations of joint infringement. (Note: the district court action preceded the changes to the Federal Rules of Civil Procedure that eliminated infringement pleading using Form 18.)
While Lyda is a case about joint infringement, it also firmly establishes that to satisfy the Twombly/Iqbal pleading, the “factual allegations” must form the basis of a reasonable inference that “each claim step was performed by or should be attributed to the defendants.” In the case of joint infringement under the standard set in Akamai Techs., Inc. v. Limelight Networks, Inc., 797 F.3d 1020, 1022 (Fed. Cir. 2015), “the amended complaint must plausibly allege that the defendants exercise the requisite ‘direction or control’ over the performance of the claim steps, such that performance of every step is attributable to the defendants.” The amended complaint alleged that the defendants controlled “certain independent contractors” who in turn directed and controlled the “‘participation’ of unnamed third persons to send votes on either their own or borrowed cell phones.” The Federal Circuit held that this was not a sufficient “factual allegation” to support: (a) that the defendants directed or controlled the independent contractors; (b) how the independent contractors directed or controlled the unnamed third parties; and (c) why the actions of unnamed third parties should be attributed to defendants.