Radiation Stabilization Solutions ("RSS") filed a patent infringement action against Varian Medical Systems, Inc. ("Varian") and several hospitals. The hospitals moved to dismiss the complaint on the ground that the allegations were inadequate under Bell Atlantic Corp. v. Twombly, 550 U.S. 544 (2007) and Ashcroft v. Iqbal, 556 U.S. 662 (2009).

RSS is the exclusive licensee of the patent-in-suit, which is entitled "Systems to Stabilize an Irradiated Internal Target." The Hospital Defendants are each health care facilities operating in the Chicago area. According to the district court, "RSS alleges, with no factual support or context, that each of the Defendants directly and/or indirectly infringes the [patent-in-suit] because the Defendants either use, offer for sale, sell, import, or induce others to use, offer, sell, or import systems that use Image Guided Radiation Therapy (IGRT)."

Turning to the issue of direct infringement, the district court found the allegations insufficient. "Form 18 may provide limited requirements for satisfaction of pleading standards under Rule 8 and In re Bill of Lading, but RSS' complaint fails even to meet those minimum standards. RSS asserts (in its opposition to the Motion to Dismiss, not in the Complaint) that the mention of products on the Defendants' websites in the context of its direct infringement allegations against the Hospital Defendants (and its induced infringement allegations against Varian, addressed below) constitutes sufficient pleading under Form 18 and puts Defendants on notice that IGRT products, including but not limited to Trilogy and Novalis Tx are the infringing products at issue. But it is far from obvious from the Complaint that Trilogy and Novalis are the sole products at issue, given RSS' continued use of the "at least" qualifier before every mention of one of the two specific products. It is also unclear from the Complaint that RSS gave the Defendants any notice of infringement; to the contrary, the Complaint asserts that infringement has been occurring since "at least as of the date of filing" of this Complaint. Such deliberately vague language provides absolutely no context for the Defendants and cannot constitute notice to the Defendants of the conduct they are alleged to have committed. It is entirely possible, however, that amendment of the Complaint would cure these deficiencies. Therefore, RSS' claims for direct infringement against the Hospital Defendants are dismissed with leave to amend the Complaint to limit the allegedly infringing products to those RSS can specify with clarity."

The district court next addressed the issue of indirect infringement and also found that RSS' allegations were insufficient. "RSS' complaint of indirect infringement fails as to the Hospital Defendants and as to Varian because RSS does not allege any third party direct infringer aided by any of the Defendants. As shown by the brevity of Section I above, RSS' Complaint is exceptionally sparse in terms of factual context for the allegations. The Complaint contains no allegation of any third party who may have been aided or induced to infringe by any of the Defendants. While it may be the case that Varian supplies the Hospital Defendants, thereby making Varian the alleged indirect infringer and the Hospital Defendants the alleged direct infringers, the Complaint is so brief that it makes no such statement. In fact, but for Varian's name, the Complaint is so cursory that RSS failed to include any allegation that Varian is even in the field of medical devices. "Where the well-pleaded facts do not permit the court to infer more than the mere possibility of misconduct, the complaint has alleged, but it has not shown, that the pleader is entitled to relief." Iqbal, 556 U.S. at 679. With so little information provided in the Complaint, the Defendants cannot be considered to be on notice of what they are alleged to have done, and with whom, in order to be indirectly infringing the '848 Patent. For that reason alone, RSS' allegations of indirect infringement are dismissed with leave to amend."

The district court also concluded that the allegations of indirect infringement failed because such a claim requires a pleading of knowledge or specific intent and there was no such allegation in the complaint. "RSS' allegations of indirect infringement against each of the Defendants fail for another reason. Both induced infringement and contributory infringement require a pleading of knowledge and/or specific intent. See DSU Med. Corp. v. JMS Co., 471 F.3d 1293, 1034 (Fed. Cir. 2006) (defendants must possess specific intent to encourage infringement); Lucent Techs., Inc. v. Gateway, Inc., 480 F.3d 1301, 1320 (Fed. Cir. 2009) (contributory infringement requires knowledge that its components had no substantial non-infringing uses). The Complaint provides absolutely no factual detail about how (or even if) the Defendants had knowledge of the '848 Patent, let alone knowledge that infringement was ongoing. RSS improperly relies solely on the conclusory allegation that each Defendant "had specific intent" to infringe with no facts, even contextual facts, to support that allegation. See Iqbal, 556 U.S. at 679 ("While legal conclusions can provide the framework of a complaint, they must be supported by factual allegations.") Alleging the legal conclusions with no supporting factual basis whatsoever does not pass the bar of Iqbal and Twombly."