The plaintiff sued the defendant for patent infringement based on the defendant’s sale of two-part seals for use on recreational vehicles (RVs) that included a slide-out room. The district court ultimately dismissed the plaintiff’s second amended complaint (SAC) for failure to state a claim for both direct and indirect infringement based on the fact that the defendant only sold the seals and that the patent claims required the combination of the seals applied on the slide-out room of the RV. The plaintiff appealed.

The Federal Circuit reversed on both dismissed charges. It decided that the SAC adequately pled direct infringement, even under the more rigorous Twombly/Iqbal standard, because it alleged that the defendant applied its seals on RVs that were made by others in an effort to encourage the RV manufacturer to purchase the seals. The Federal Circuit explained that limited internal manufacture or use is also an act of infringement.

Moving on to indirect infringement, the Federal Circuit applied the Twombly/Iqbal standard and found that the plaintiff’s pleadings were adequate. The panel stated that the SAC plausibly alleged induced infringement because it specifically alleged that two of the plaintiff’s engineers, who knew of the patent-insuit, left and began working for the defendant, months before the allegedly infringing act occurred, and because the defendant’s employees were believed to have installed the seals on certain RVs. The Federal Circuit thus concluded that such facts make it plausible that the defendant knew of the patent-in-suit and induced or contributed to infringement by their actions.