LIFETIME INDUS. V. TRIM-LOK: Sep. 7, 2017. Before Lourie, Moore, and O’Malley.
- The CAFC held that assembling the components of a patented invention is a form of direct infringement, and that because Lifetime alleged that Trim-Lok’s agent installed a seal onto an RV, and that the resulting seal-RV combination infringed the patent-in-suit, Lifetime properly alleged direct infringement.
- The CAFC held that Lifetime adequately pleaded induced infringement because Lifetime alleged that two of its former employees had knowledge of the patent-in-suit and its scope when they joined Trim-Lok; Trim-Lok had knowledge of the patent-in-suit, its scope, and the products covered thereby; and because Lifetime alleged that after Trim-Lok gained that knowledge, it then assisted in or directed the installation of a seal onto an RV at the Forest River plant.
Lifetime appealed N.D. Ind.’s judgment granting Trim-Lok’s motion to dismiss Lifetime’s complaint for failing to adequately allege infringement of patent claims relating to a two-part seal for use in a mobile living quarters with a slide-out room. CAFC reversed.
- Pleading Standard: The CAFC stated that, to survive a motion to dismiss under Rule 12(b)(6) of the Federal Rules of Civil Procedure, a complaint must contain sufficient factual matter, accepted as true, to state a claim to relief that is plausible on its face. The CAFC further stated that a plaintiff meets this requirement if it pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged. To meet this requirement, the CAFC explained that a plaintiff must do more than plead facts that are merely consistent with a defendant’s liability.
- Form 18 Pleading Standard: In the past, Form 18 of the Appendix of Forms to the Federal Rules of Civil Procedure was titled “Complaint for Patent Infringement” and provided a sample allegation of direct infringement. However, the U.S. Supreme Court issued an order abrogating Form 18 effective December 1, 2015, and the CAFC explained that, until that date, complaints that complied with Form 18 were effectively immunized from challenges to the adequacy of their pleading.
- Pleading Standard—Direct Infringement: According to the CAFC, while the parties assume there is a difference between the requirements of Form 18 and Iqbal / Twombly pleading standards, the CAFC has never recognized such a distinction. The CAFC stated that it need not resolve the question whether there is a difference between the two standards in this case because the CAFC holds that Lifetime’s complaint meets the Iqbal / Twombly standard for pleading direct infringement. The CAFC also stated that the Iqbal / Twombly standard unquestionably applies to allegations of induced and contributory infringement.
- Direct Infringement: The CAFC agreed with Lifetime that the district court erred in dismissing Lifetime’s direct infringement count. The CAFC explained that direct infringement is a strict-liability offense that does not require knowledge of the patent or intent to infringe. However, the district court stated that, to plead direct infringement, Lifetime had to establish that Trim-Lok knew about the ’590 patent in June 2013, and that Trim-Lok knew it was infringing that patent. Despite the error, the CAFC concluded that because the district court’s statement did not affect its analysis or lead to its dismissal of Lifetime’s allegations of direct infringement, the error does not require reversal.
- Direct Infringement: The district court’s decision relating to direct infringement turned on the fact that the claims of the ’590 patent require both a seal and an RV, but Trim-Lok only manufactures seals. Lifetime argued that it properly pleaded direct infringement because it alleged that a Trim-Lok employee or representative directly installed Trim-Lok’s two-part seal on an RV having a slide-out room, and the CAFC agreed with Lifetime. The CAFC explained that assembling the components of an invention is a form of direct infringement. The CAFC further explained that because Lifetime alleged that an agent of Trim-Lok installed the seal onto the RV, and that the resulting seal-RV combination infringed the ’590 patent, Lifetime properly alleged that Trim-Lok directly infringed.
- Pleading Standard—Direct Infringement: Trim-Lok argued that Lifetime’s complaint lacked sufficient detail, but the CAFC disagreed and stated that there is no requirement for Lifetime to prove its case at the pleading stage. The CAFC explained that precedent requires that a complaint place the alleged infringer on notice of what activity is being accused of infringement, and that Lifetime’s complaint meets that requirement. According to the CAFC, Lifetime identified where the alleged infringement occurred (the Forest River plant); when it occurred (in or around June 2013); who performed the allegedly infringing act (an agent or employee of Trim-Lok); and why (to test fit the seal onto the RV and to solicit sales), in addition to other facts supporting Lifetime’s allegations. The CAFC concluded that, when all reasonable inferences are drawn in Lifetime’s favor, these facts make it plausible that a Trim-Lok agent installed the seal onto the Forest River RV, and as a result, Lifetime’s pleadings are sufficiently plausible to survive a motion to dismiss.
- Iqbal / Twombly Pleading Standard—Induced Infringement: The CAFC stated that the Iqbal / Twombly standard applies to allegations of induced infringement. The CAFC further stated that, for an allegation of induced infringement to survive a motion to dismiss, a complaint must plead facts plausibly showing that the accused infringer knew that another party’s acts constituted infringement and specifically intended for the other party to infringe. The CAFC agreed with Lifetime that it adequately pleaded that Trim-Lok had knowledge of the patent before the allegedly infringing act because Lifetime specifically alleged that two of its former employees had knowledge of the patent and its scope when they joined Trim-Lok in the months before June 2013. The CAFC also agreed with Lifetime that it plausibly pleaded that Trim-Lok had the intent to infringe. This is because Lifetime pleaded, inter alia, that Trim-Lok had knowledge of the ’590 patent, its scope, and the products covered thereby, and because Lifetime alleged that after Trim-Lok gained that knowledge, it then assisted in or directed the installation of the accused seal onto an RV at the Forest River plant. The CAFC concluded that this evidence gives rise to a reasonable inference that Trim-Lok intended to induce Forest River to infringe, and that Lifetime adequately pleaded induced infringement.
- Contributory Infringement: The CAFC explained that contributory infringement occurs, inter alia, when a party sells a component of a patented combination constituting a material part of the invention, knowing the same to be especially made or especially adapted for use in an infringement of such patent, and not a staple article or commodity of commerce suitable for substantial non-infringing use. The CAFC also noted that contributory infringement requires only proof of a defendant’s knowledge, not intent, that his activity caused infringement. Because the district court dismissed Lifetime’s contributory infringement count for failing to plausibly allege intent to infringe, the CAFC concluded that the district court erred.
- Pleading Standard—Patent Infringement: Trim-Lok generally contended that Lifetime failed to plausibly plead that the seal was installed by others with the assistance or under the direction of Trim-Lok employees because Lifetime’s direct infringement count alleges that Trim-Lok employees installed the seal themselves. However, the Federal Circuit disagreed and noted that the Federal Rules permit a party to plead in the alternative, and that the accused seal was plausibly installed by either Trim-Lok employees or Forest River employees. The CAFC explained that if the installers were Trim-Lok employees, then Trim-Lok may be liable for direct infringement, and if the installers were Forest River employees, Trim-Lok may be liable for indirect infringement. The CAFC concluded that Lifetime adequately pleaded both direct and indirect infringement.