IP Law Essentials

The Patent Litigation Process: The Complaint


Like all litigation, patent litigation begins when a plaintiff files a complaint against a defendant. Typically, a patentee or a licensee files a complaint for patent infringement. When drafting a complaint, the plaintiff must pay attention to certain essential elements of the complaint: the Parties, the Jurisdiction, the Venue, and the Facts.

Get the Parties Right

It is important to name the correct parties on both sides of the "v." This means naming all of the correct plaintiffs, i.e., those with rights to enforce the patent, and naming the correct defendants.

Not naming the correct plaintiffs or defendants can mean that a judge will dismiss the complaint. Not naming the correct defendants can also mean the plaintiff will have trouble establishing venue and personal jurisdiction, or recovering the full extent of the damages.[1]

Establish Personal and Subject Matter Jurisdiction

A court must have personal jurisdiction over the defendant to hear a case.[2] Patent cases do not have special rules on personal jurisdiction; like other cases, the defendant must have "minimum contacts" with the forum state.[3] But since patent cases often involve the sale of accused products, the "stream of commerce" theory of personal jurisdiction is especially important. Under a "stream of commerce" theory, minimum contacts exist if the defendant delivers products into the stream of commerce with the expectation that they will be purchased by customers in the forum state. That said, changes to patent venue rules described below often resolve the personal jurisdiction issue by requiring that a suit be filed where a defendant is incorporated or has a regular and established place of business.

For foreign defendants for whom the changes to the venue rules do not simplify personal jurisdiction Fed. R. Civ. P. 4(k)(2) controls.[4] This rule provides a forum for federal causes of action in situations where a foreign defendant has no United States presence, but has sufficient contacts with the United States as a whole to satisfy due process standards and justify the application of federal law.

In addition to personal jurisdiction over the defendant, a court must have subject matter jurisdiction over the type of case or controversy described in the complaint. Because patent infringement is a federal cause of action, federal courts have the jurisdiction to hear patent disputes.[5] When a patent owner files a complaint for patent infringement in a federal district court under 35 U.S.C. 271 (a) – (c), subject matter jurisdiction automatically arises when pled.

Get the Venue Right

For most federal causes of action, a case can be tried in any judicial district in which the defendant is subject to the court's personal jurisdiction. Patent cases, however, are governed by their own venue rule: 28 U.S.C. 1400(b). In the past, courts interpreted section 1400(b) to make venue in patent cases operate just like any other federal case. That changed when the Supreme Court, in TC Heartland, held that an accused infringer can be sued only in its state of incorporation, or where the defendant has committed acts of infringement and has a regular and established place of business.[6],[7] After TC Heartland, many defendants are no longer subject to suit in forums where they lack a regular and established "place of business."

The Federal Circuit recently clarified venue requirements for foreign companies: venue for a foreign defendant is proper in any judicial district.[8] The court explained that the section 1400(b) patent venue statute does not apply to foreign defendants, as "alien defendants are outside the operation of the federal venue laws." In short, foreign defendants cannot challenge venue. They can, however, seek to transfer venue based on the traditional convenience factors.

Allege Sufficient Factual Bases for Your Claims

When drafting a patent infringement complaint, it is not enough to simply say "Defendant's conduct infringes on my patent." The complaint must include more facts and details but how much more? The Supreme Court's Twombly standard requires "enough facts to state a claim to relief that is plausible on its face."[9] In other words, the complaint must contain enough details to show that a plaintiff is "entitled to relief." To meet the Twombly standard, a patent infringement complaint must also contain enough facts to notify a defendant what activity is accused of infringement.

But depending on where the complaint is filed, courts have taken varying approaches in sufficiency of pleadings. Some courts have taken the view that their patent local rules, which require detailed claim mapping charts, effectively resolve Twombly requirements (e.g., Eastern District of Texas). [10],[11],[12] Other courts take the perspective that a court cannot modify Supreme Court precedent by local rules (e.g., Southern District of New York).[13] The lesson? Know the local rules before file suit. Before Twombly, claim charts detailing alleged infringement were rarely part of a complaint; now, they are common.

Indirect infringement[14] is often pled in patent cases, and defendants often seek dismissal under Twombly based on insufficient disclosure. A defendant may be able to force a plaintiff to give more details or obtain dismissal of the case by filing a motion to dismiss. To survive a defendant's motion to dismiss indirect infringement, a plaintiff's complaint must contain facts plausibly showing that a defendant specifically intended that their customers infringe the asserted claims and knew that the customer’s acts constituted infringement.[15] Willfulness allegations are often dismissed for the same lack of detail. A party cannot "willfully infringe" when they had no knowledge of the patent.[16]

Drafting a complaint carefully as a plaintiff, and watching out for these potential vulnerabilities as a defendant, are important first steps in patent litigation. In upcoming blog posts, Fish's IP Law Essentials will dive deeper into the pleadings stage of patent litigation.

More questions? Contact the authors or visit Fish's Intellectual Property Law Essentials.

[1] See, also, Fish's IP Law Essentials blog post on "I'm Ready to Sue for Patent Infringement But First, Do I Have the Right Plaintiffs?"

[2]The Federal Circuit set forth a three-prong test for determining whether the exercise of specific personal jurisdiction comports with due process: (1) did the defendant purposefully direct its activities at residents of the forum state; (2) does the claim arise out of or relate to the defendant’s activities within the forum state; and (3) is the assertion of personal jurisdiction reasonable and fair. The plaintiff bears the burden of proving that minimum contacts exist via the first two factors; the defendant bears the burden of proving that the exercise of jurisdiction would be unreasonable. Akro Corp. v. Luker, 45 F.3d 1541 (Fed. Cir. 1995).

[3] Goodyear Dunlop Tires Ops., S.A. v. Brown, 131 S. Ct. 2846, 2851 (2011).

[4] To establish personal jurisdiction under Rule 4(k)(2): (i) the claim must arise "under federal law," (ii) a summons must be served, (iii) the defendant must not be "subject to jurisdiction in any state's court of general jurisdiction," and (iv) an exercise of jurisdiction must be "consistent with the United States Constitution and laws."

[5] 28 U.S. Code  1338.

[6] TC Heartland LLC v. Kraft Foods Group Brands LLC, 137 S.Ct. 1514 (2017).

[7] See, also, Fish's Webinar: Venue Decisions and Trends Post-TC Heartland.

[8] In re: HTC Corp., 889 F.3d 1349 (Fed. Cir. 2018).

[9] Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007).

[10] See Fish's IP Law Essentials blog post "Patent Local Rules: Knowing Them Well Can Make Litigating Your Case Smoother."

[11] In E.D. Tex., tangible inventions with "straightforward claims" may require less detail, while less tangible inventions require "a higher degree of specificity." Uniloc USA, Inc. v. Avaya, Inc., No. 6:15-cv-1168-JRG, Dkt. 48, at *7 (E.D. Tex. May 13, 2016) (quotingPatent Harbor, LLC v. DreamWorks Animation SKG, Inc., No. 6:11-CV-229, 2012 WL 10978964, at *4 (E.D. Tex. July 27, 2012)).

[12] See, also, E.D. Tex. Appendix B: Patent Rules, P.R. 1-2 (last visited May 4, 2020).

[13] Holotouch, Inc. v. Microsoft Corp., No. 17 CIV. 8717 (AKH), 2018 WL 2290701, at *3 (S.D.N.Y. May 18, 2018) (finding that local rules cannot "abrogate Federal Rules of Civil Procedure or cases of the Supreme Court").

[14] Indirect infringement includes induced or contributory infringement. Plaintiffs must plead direct infringement, induced infringement, and contributory infringement separately. Each are considered distinct concepts with distinct standards. See R+L Carriers, Inc. v. Drivertech LLC (In re Bill of Lading Transmission & Processing Sys. Patent Litig.), 681 F.3d 1323 (Fed. Cir. 2012).

[15] Id. at 1339.

[16] "As with indirect infringement, ‘a party cannot be found to have ‘willfully’ infringed a patent of which the party had no knowledge.’" Gustafson, Inc. v. Intersystems Indus. Prods., Inc., 897 F.2d 508, 511 (Fed. Cir. 1990). The Federal Circuit has held that the notice requirement for willful infringement operates more stringently than it does for indirect infringement. See In re Seagate Tech., LLC, 497 F.3d 1360, 1374 (Fed. Cir. 2007).