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Volume XI, Number 267

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A Reminder to Patentees Suing for Infringement: Your Allegations Must be Sufficient to Show Plausibility that the Accused Product Infringes

A recent Federal Circuit decision has re-affirmed prior guidance on the pleading requirements for a plaintiff alleging patent infringement. The decision was issued in Bot M8 LLC v. Sony Corp. of Am., Case No. 2020-2218, on July 13, 2021. In short, while a plaintiff need not prove its case at the pleading stage, a plaintiff must plead facts sufficient to show it is plausible that an accused product infringes the patent claim. A plaintiff may not just recite the claim elements and conclude that the accused product has infringed those elements.

In this case, the Federal Circuit heard the patentee’s appeals from the Northern District of California’s final judgment and several underlying decisions and orders. Most pertinent to the present post is the appeal from the order granting defendant’s motion to dismiss plaintiff’s claims of infringement of multiple patents “related to gaming machines” and “directed to casino, arcade, and video games generally.” Plaintiff had claimed that aspects of the defendant’s Play Station 4 video game consoles and network infringed on its patents.

The Federal Circuit affirmed in part and reversed in part the District Court’s decision granting the defendant’s motion to dismiss the first amended complaint. In doing so, the court walked through the appropriate pleading standard for patent infringement, stating that, “To the extent this district court and others have adopted a blanket element-by-element pleading standard for patent infringement, that approach is unsupported and goes beyond the standard the Supreme Court articulated in Iqbal and Twombly.”

Rather, the inquiry under that precedent is “whether the factual allegations in the complaint are sufficient to show that the plaintiff has a plausible claim for relief.” When it comes to a patent infringement claim, it is not enough for a patentee to simply recite the claim elements and conclude that the accused product has those elements, but rather, “[t]here must be some factual allegations that, when taken as true, articulate why it is plausible that the accused product infringes the patent claim.”

Applying this standard to the case at hand, the Federal Circuit affirmed the dismissal of two of the claims. As to one of the patents (the ’540 patent), the court found that plaintiff’s allegations were “inconsistent” with its infringement theory, and actually stated that the complaint “contains too much rather than too little, to the point that [plaintiff] has essentially pleaded itself out of court.” And as to the ’990 patent, the court similarly affirmed the dismissal where the allegations supporting the claim were “conclusory” and “merely track[ed] the claim language.”

As to the ’988 and ’670 patents, however, the Federal Circuit reversed the dismissal of the claims because it disagreed with the lower court’s conclusion that the plaintiff’s allegations too closely tracked the claim language to be deemed plausible. The court walked through various allegations made in the first amended complaint about the fault inspection program at issue, and highlighted allegations that gave a “reasonable inference” that the fault inspection program would be completed before a game starts. Simply stated, the court found that these allegations were enough at the pleading stage and that plaintiff “need not ‘prove its case at the pleading stage.’”

In sum, this decision provides useful guidance for patent infringement plaintiffs on avoiding dismissal at the pleading stage. As the Federal Circuit aptly said: “we, once more, explain that, while a patentee’s pleading obligations are not insurmountable, a patentee may subject its claims to early dismissal by pleading facts that are inconsistent with the requirements of its claims.”

© Copyright 2021 Squire Patton Boggs (US) LLPNational Law Review, Volume XI, Number 210
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About this Author

Nicholas Zalany Commercial Litigation Attorney
Associate

Nicholas P. Zalany focuses his practice on general and complex commercial litigation matters, including in the areas of commercial contract disputes, business torts and insurance coverage disputes. Nick also provides legal counsel to insurance companies, trade associations and healthcare systems in matters involving insurance law and regulatory compliance.

Prior to joining the firm, Nick worked in both the private and public sectors, including as an associate in the Columbus office of a national boutique litigation firm and as a staff attorney for two Ohio state court judges. Before...

614-365-2755
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