United States: Lumping Parent-Subsidiary Defendants Together Is Fatal To Patent Infringement Claims Against Foreign Parent


A Delaware federal district court recently ruled that the pleading requirements were not met in a patent infringement action where the patentee's complaint lumped its allegations of infringing acts against co-defendants, a foreign parent and its U.S. subsidiary. To adequately state its claim against the foreign parent based on an alleged parent-subsidiary relationship, the patentee should have provided facts demonstrating the parent's effective control over the subsidiary. The court also ruled that induced infringement claims were inadequately pled because the patentee failed to provide any factual support showing knowledge by the foreign parent of direct infringement by third parties.

In M2M Solutions LLC v. Telit Communications PLC,1 a patent infringement case against a U.S. subsidiary and its United Kingdom-based parent, the UK parent won a dismissal of the claims against it for failure to state a claim under Rule 12(b)(6). The District of Delaware court faulted the complaint for lumping together the UK parent and its U.S. subsidiary in setting forth the alleged acts of infringement. The court also held that induced infringement was inadequately pled because no plausible facts were alleged to demonstrate knowledge by the UK parent of direct patent infringement by a third party.

Under the foundational standards of Twombly and Iqbal, in order to survive a 12(b)(6) motion to dismiss, a complaint must contain enough facts to state a claim for relief that is plausible on its face such that, accepting all factual allegations as true, a court may draw the reasonable inference that that the defendant is liable for the misconduct alleged. For claims of direct patent infringement, the Federal Circuit has held that compliance with Form 18 of the Federal Rules of Civil Procedure is sufficient. With respect to enumerated acts of infringement, Form 18 merely requires a statement that the defendant has been infringing the patent by "making, selling, and using the device embodying the patent."

Applying the standards of Form 18, the court held that M2M's complaint adequately enumerated acts that constitute direct infringement by alleging that "Telit has and continues to directly infringe" by "making, using, offering for sale, and/or selling within the United States" various "M2M module products" that are "designed and promoted for use in M2M communications applications, and that embody and/or practice the inventions of one or more claims of the . . . patent-in-suit." The court, however, found a pleading defect not explicitly raised by Telit UK—that lumping the two defendants together, simply referred to under the umbrella term "Telit," cannot pass muster under Form 18, which requires the identification of the accused product, process or method for each defendant.

M2M's explanation that it decided to group Telit UK and its U.S. subsidiary together because there is little distinction between them based on Telit UK's control over the U.S. subsidiary was unavailing. To adequately plead that a foreign parent is responsible for the alleged infringement by its domestic subsidiary, the court explained, a complaint must allege the existence of a parent-subsidiary relationship along with facts that justify piercing the corporate veil, such as facts showing the existence of an agency relationship where the parent effective controls the subsidiary. Although M2M's complaint alleged the existence of a parent-subsidiary relationship, it failed to provide facts supporting the assertion that Telit UK controls its U.S. subsidiary. The court rejected M2M's attempt to raise supporting facts of Telit UK's effective control over the U.S. subsidiary in its opposition to the motion to dismiss as an improper attempt to amend a complaint through motion to dismiss briefing.

M2M's lumping of two defendants together was also fatal to its claims of induced and contributory infringement. Pleading induced infringement requires that the patentee show direct infringement by another, and that the alleged infringer knowingly induced infringement and possessed specific intent to encourage another's infringement. Notwithstanding its fusing of the two defendants together, M2M's complaint failed to adequately plead knowledge of direct infringement by a third party through its conclusory assertion that "Telit has performed the acts that constitute inducement of infringement with the knowledge or willful blindness that the acts induced thereby would constitute direct infringement by its customers." This assertion, the court reasoned, was "based on no factual allegations and cannot pass muster under the plausibility standards."

With respect to specific intent to encourage another's infringement, the court looked to M2M's general allegations that Telit published manuals and promotional materials instructing customers on how to configure and operate its products in an infringing manner. The court held that although these allegations would be sufficient to plead specific intent to infringe, fusing together the alleged acts of two defendants rendered the pleading defective. In articulating its specific inducement allegations, the court explained that M2M should have identified which defendant or defendants are said to have disseminated the manuals and promotional materials at issue. Treating the defendants as a single group undermined the plausibility as to what either of them might have done and therefore M2M did not plead a plausible inducement claim.

The court similarly found that M2M's claims of contributory infringement—along with being factually too conclusory to state a claim—were insufficiently stated because it lumped together the two defendants. Because the acts of each defendant were not addressed separately, M2M's claim failed to provide evidence demonstrating that Telit UK offers to sell, sells or imports any products or components in or to the United States, as required to state a contributory infringement claim.

Strategy and Conclusion

This case demonstrates the importance of distinguishing between defendants and the acts of each specific defendant in presenting claims in a complaint. When including a foreign parent entity in a claim for patent infringement by the subsidiary, adequate points should be presented for such claim, such as justifying piercing the corporate veil and facts demonstrating the parent's effective control over the subsidiary.


1. The District of Delaware's decision can be found at http://www.finnegan.com/files/upload/LES_Insights_Column/2015/M2M Solutions v. Telit Wireless.pdf.

Previously published by LES Insights

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on Mondaq.com.

Click to Login as an existing user or Register so you can print this article.

Events from this Firm
26 Sep 2018, Webinar, Washington, DC, United States

This latest series of webinars will explore emerging trends in the changing intellectual property (IP) legal environment in Europe and the United States.

26 Sep 2018, Webinar, Washington, DC, United States

This latest series of webinars will explore emerging trends in the changing intellectual property (IP) legal environment in Europe and the United States.

1 Oct 2018, Seminar, New York, United States

Finnegan partner Doug Rettew will consider recent Internet Corporation for Assigned Names and Numbers (ICANN) developments during Practicing Law Institute’s Intellectual Property Institute.

Similar Articles
Relevancy Powered by MondaqAI
Jeffer Mangels Butler & Mitchell LLP
In association with
Related Topics
Similar Articles
Relevancy Powered by MondaqAI
Jeffer Mangels Butler & Mitchell LLP
Related Articles
Related Video
Up-coming Events Search
Font Size:
Mondaq on Twitter
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
Email Address
Company Name
Confirm Password
Mondaq Topics -- Select your Interests
 Law Performance
 Law Practice
 Media & IT
 Real Estate
 Wealth Mgt
Asia Pacific
European Union
Latin America
Middle East
United States
Worldwide Updates
Registration (you must scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions

Mondaq.com (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of www.mondaq.com

To Use Mondaq.com you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these Terms or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.


The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use of the Content or performance of Mondaq’s Services.


Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions