By Dabney Carr
As we discussed here, one Eastern District of Virginia court has set a low bar for pleading claims of indirect infringement under the Supreme Court's "Twiqbal" decisions. In a ruling last week, the Federal Circuit weighed in on the issue, making clear that the low pleading standard for direct infringement does not apply to claims of indirect infringement. In re Bill of Lading Transmission and Processing System Patent Litigation (R+L Carriers), 2012 U.S. App. LEXIS 11519 (Fed. Cir. June 7, 2012) (found here).
R+L Carriers involves a claim of indirect infringement of a patent relating to the freight industry. The patented method allows shipping documents to be scanned and sent directly from a truck driver so that billing and load planning can occur while freight is on route. The patentee, R+L Carriers, sent cease and desist letters to several companies selling allegedly infringing products. Several of the target companies filed declaratory judgment actions, and R+L responded by asserting claims that the defendants had indirectly infringed the patent through their customers. The District Court dismissed all of R+L's claims with prejudice for failure to state a claim under Bell Atlantic Corp. v. Twombly, 550 U.S. 544 (2007) [enhanced version available to lexis.com subscribers] and Ashcroft v. Iqbal, 556 U.S. 662 (2009) [enhanced version available to lexis.com subscribers]. The Federal Circuit affirmed in part and reversed in part and remanded.
In McZeal v. Sprint Nextel Corp., 501 F.3d 1354, 1360 (Fed. Cir. 2007) [enhanced version available to lexis.com subscribers], the Court held that a claim of direct infringement must only meet the bare-bones pleading requirements set forth in Form 18 of the Federal Rules of Civil Procedure. Our earlier posts on the EDVA's application of McZeal can be found here and here. In R+L, the Court reiterated its holding in McZeal but held that Form 18 does not apply to claims of indirect infringement.
The highlights of the Court's decision are as follows:
While Form 18 sets a bar for pleading direct infringement that is easy to meet, the Federal Circuit's application of Twombly and Iqubal to indirect infringement claims may prove to be a substantial hurdle. Contributory infringement claims, for example, will require allegation of specific facts showing the lack of a substantial non-infringing use. Likewise, claims for inducement of infringement will require facts which allow an inference of specific intent. In R+L Carriers, the inducement claims survived because of the broad scope of the claimed method. For narrower claims, it will likely be far more difficult to establish the plausibility of allegations of specific intent based on a defendant's advertising and public statements. Thus, accused infringers can be expected to use R+L Carriers to continue to attack the specificity of claims of indirect infringement, particularly the specificity of allegations of the elements of indirect infringement other than direct infringement.
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