A federal court in Virginia has dismissed with leave to amend the direct patent-infringement claims asserted in litigation involving non-volatile memory semiconductors. Macronix Int’l Co., Ltd. v. Spansion Inc., No. 13-0679 (U.S. Dist. Ct., E.D. Va., Richmond Div., order entered March 10, 2014). The court’s application of the u.s. supreme Court’s plausibility pleading standard is contrary to Federal Circuit Court of Appeals decisions that allow the standard’s application to induced infringement, but not to direct infringement, allegations.
In Bell Atlantic Corp. v. Twombly, 550 u.s. 544 (2007) and Ashcroft v. Iqbal, 556 u.s. 662 (2009), the u.s. supreme Court adopted a new pleading standard under Federal Rule of Civil Procedure 8(a) requiring a plaintiff to plead factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged, that is, “plausibility requires a complaint to place the legal conclusions it makes in context of facts that render the asserted claim plausible.”The Federal Circuit Court of Appeals has determined that a complaint satisfying Form 18, which is used for direct infringement, is legally sufficient to state a claim, regardless of Twombly and Iqbal.
Finding the Federal Circuit’s reasoning faulty, the Virginia court stated, “to exempt patent complaints from the requirements of Twombly and Iqbal is to ignore a fundamental rationale that underpins those decisions,” i.e.,“that the more rigorous application of Rule 8(a) was needed to assure that the parties would not embark on expensive litigation unless the plaintiff had made in the complaint a plausible case.”The court compared the claims in Twombly, an antitrust case—“well-known for extensive discovery and high litigation costs,” to those in patent lawsuits which “generallyare among the most expensive kinds of cases in federal court. It is not logical to exempt them from the reach of Twombly and Iqbal, whose prime purpose was to assure that such expense was not incurred unless the plaintiff had posited a plausible claim in the complaint.”