Plaintiffs bringing patent infringement complaints under the
Iqbal/Twombly pleading standard should take notice.
On September 30, 2016, a panel of the Federal
Circuit affirmed a district court's dismissal of a
deficient complaint under Rule 12(b)(6). The panel agreed
held that a complaint for joint infringement of a patent must show
which alleged actor performed each of the required claim
elements. The plaintiff's amended complaint failed to
plausibly allege that the defendants exercised the required
"direction or control" such that the performance of every
claim step could be attributable to them.
The plaintiff, Edwin Lyda, brought a complaint against CBS
Corporation and its subsidiary CBS Interactive, Inc.
("CBS") for infringement of claims of U.S. Patent Nos.
7,434,243 and 7,730,506. The patents cover methods and
systems for "obtaining real time responses to remote
programming by allowing persons viewing or listening to a broadcast
to respond to the broadcast in real time without requiring a
personal computer." Lyda alleged that CBS infringed
claims of the patents for producing and operating the television
show "Big Brother." After CBS informed Mr. Lyda of
alleged deficiencies in the original complaint, Mr. Lyda filed an
amended complaint alleging that CBS infringed Mr. Lyda's
patents by allowing television audience members to provide feedback
about the show by voting via text message on their cellular
phones. The district court for the Southern District of New
York granted CBS' motion to dismiss and denied Mr. Lyda's
motion for leave to file a second amended complaint.
The Federal Circuit affirmed and rejected Mr. Lyda's
position that the amended complaint should be measured against the
Form 18 pleading standard. While the panel agreed that the
repeal of Form 18 did not apply based on the filing date of the
amended complaint, it nevertheless applied the Iqbal/Twombly
pleading standard because of the nature of the joint infringement
counts. The panel agreed with previous district court
holdings concluding that allegations of joint infringement cannot
be satisfied by Form 18. Citing to its prior decision in
Akamai Techs., Inc. v. Limelight Networks, Inc., 797 F.3d
1020, 1022 (Fed. Cir. 2015) (en banc) and applying
Iqbal/Twombly, the panel held that to survive a motion to dismiss
the Amended Complaint needed to plausibly allege that the
Defendants exercised the requisite "direction or control"
over the performance of the claim steps, such that performance of
every step is attributable to Defendants. The plaintiff
failed to do so:
Rather, the Amended Complaint alleges
conclusively and without factual support that CBS directed or
controlled the independent contractors who then directed or
controlled the unnamed third parties. There are thus no allegations
in the Amended Complaint that can form the basis of a reasonable
inference that each claim step was performed by or should be
attributed to Defendants.
In its decision, the panel noted that even "a typical claim
of direct infringement requires proof that a defendant performs
each step of the claimed method." Given that Form 18 is
no longer in use, the case suggests that plaintiffs in any patent
infringement action will need to provide facts showing that every
claim element has been met.
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.
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