In its recent decision in Bill of Lading,1 a panel of the Federal Circuit clarified that the standard for pleading indirect infringement (i.e., inducement and contributory infringement) is different than the standard for pleading direct infringement. A pleading for a claim of direct infringement need not allege a specific claim of the patent that is infringed or how or why the accused products infringe, and in some cases may identify the accused products categorically, rather than specifically (e.g., by name or model number). In contrast, a pleading for a claim of indirect infringement must adhere to a more rigorous standard, and allege enough facts to plausibly support liability.2

Background

Under the notice pleading standard embodied in the Federal Rules of Civil Procedure (FRCP), a claim for relief must contain “a short and plain statement of the claim showing that the pleader is entitled to relief.”3 In recent years, however, the Supreme Court has explained that “showing” an entitlement to relief requires a complaint to allege enough factual matter to “raise a right to relief above the speculative level” such that the claim “is plausible on its face.”4 “[W]here 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.’”5 Under this standard, “[t]hreadbare recitals of the elements of a cause of action, supported by mere conclusory statements” will not survive a motion to dismiss.6

Yet the model pleading for patent infringement found in the Appendix of Forms attached to the FRCP, appears to contain little more than conclusory assertions.7 In particular, the form (Form 18) contains only four numbered paragraphs spanning just over a page. Regarding the defendant’s acts of infringement, Form 18 alleges simply that “[t]he defendant has infringed and is still infringing the Letters Patent by making, selling, and using electric motors that embody the patented invention, and the defendant will continue to do so unless enjoined by this court.”8 Nevertheless, the Bill of Lading court held that the allegations of Form 18 would withstand a motion to dismiss, at least as to claims for direct patent infringement.9 The court reasoned that Rule 84 expressly provides that the forms in the Appendix comply with the Rules, and thus, even if Form 18 might appear lacking under Supreme Court precedent, Rule 84 controls.10 On the other hand, the court found Form 18 irrelevant as to claims of indirect infringement because Form 18 alleges only a cause of action for direct infringement.11

Pleading Direct Infringement

Under Bill of Lading, a patentee alleging direct infringement may model its complaint after Form 18, which includes “(1) an allegation of jurisdiction; (2) a statement that the plaintiff owns the patent; (3) a statement that defendant has been infringing the patent ‘by making, selling, and using [the device] embodying the patent’; (4) a statement that the plaintiff has given the defendant notice of its infringement; and (5) a demand for an injunction and damages.”12 The patentee does not have to “plead facts establishing that each element of an asserted claim is met.”13 In fact, a patentee does not even have to “identify which claims it asserts are being infringed.”14

Some uncertainty remains as to how specifically the patentee must identify the accused products. As discussed above, Form 18 does not identify specific products by model number or otherwise; rather, it refers only categorically to “electric motors.” Thus, if a patentee identifies particular products, that identification should be sufficient. If, however, a patentee chooses to identify products by a category, the question becomes how specific must the definition of the category be. After all, how specific is “electric motors?” On the one hand, it is more specific than merely “motors"; on the other hand, it is less specific than “alternating current (AC) electric motors.” Districts courts applying this test have reached different conclusions on similar facts. For example, one court found “computers” analogous to “electric motors,” and therefore sufficient,15 while another court rejected “the broad descriptor of ‘computer’” as insufficient.16 One court has even approved the use of claim language as a sufficient identification of a category of accused product.17 Ultimately, the outcome of an attempt to identify products categorically in connection with a pleading for direct patent infringement is likely to be fact-specific. Generally, however, many courts appear willing to find reasonably tailored categories to be sufficient under Form 18, especially where the category is accompanied by specific examples.18

Pleading Indirect Infringement

As to indirect infringement, the Federal Circuit clarified that a Form 18-style pleading does not sufficiently state a claim.19 Such claims are governed by the pleading standards set forth in Twombly and Iqbal, which require the pleading to show a plausible entitlement to relief.20 Thus, to state a claim for contributory infringement, a patentee should allege enough facts to permit a reasonable inference that the alleged infringer “sells or offers to sell, a material or apparatus for use in practicing a patented process, and that material or apparatus is material to practicing the invention, has no substantial non-infringing uses, and is known by the party to be especially made or especially adapted for use in an infringement of such patent.”21 To state a claim for induced infringement, a pleading should “contain facts plausibly showing that [the alleged infringer] specifically intended [its] customers to infringe the [asserted] patent and knew that the customer’s acts constituted infringement.”22

The Federal Circuit repeatedly emphasized that in assessing plausibility, the facts alleged and reasonable inferences from those facts must be “considered as a whole” and “in the context of the technology disclosed in the [asserted patents] and the industry to which [the alleged infringers] sell and tout their products.”23 Therefore, in analyzing the complaint, the court devoted much of its attention to allegations regarding the defendants’ interactions with its customers, such as “strategic partnerships,” “involvement in trade shows,” and “quotations from [defendants’] websites, advertising, and industry publications.”24 The Court attached significance to the benefits touted by the defendants in their marketing materials,25 and compared those benefits to the advantages of practicing the invention described in the patent.26

In view of the Bill of Lading decision, a “formulaic recitation” of the elements of indirect infringement may not suffice.27 While a patentee need not “prove its case at the pleading stage,” the pleading should “contain sufficient factual allegations to enable [a] court to reasonably conclude” that the alleged infringer is liable for indirect infringement.28 How much additional factual matter must be alleged “is, of course, case specific.”29 In view of Bill of Lading, however, it appears that patentees asserting indirect infringement should consider including specific allegations regarding marketing materials and customer interactions that relate to the context and technology of the asserted patents.30