The question of specificity in patent pleadings heats up

Senior District Judge Payne recently took issue with a Federal Circuit Court decision holding that Complaint Form 18 in the Federal Rules of Civil Procedure will suffice as a pleading of direct patent infringement. The issue that both decisions addressed was whether the provision in Rule 84, saying that the forms in the Appendix "suffice under these rules" was trumped by the Supreme Court's requirements for greater specificity in pleadings in its Twombly and Iqbal decisions.

In an opinion by Judge O'Malley for the majority in In re Bill of Lading Transmission & Processing Sys. Patent Lit., the Federal Circuit somewhat reluctantly had held that Rule 84 permits a simple pleading in accordance with Form 18, but that pleading of indirect infringement must be in accordance with the Twombly and Iqbal decisions. Judge Newman dissented from the use of two different standards, and from the deviation from the Twombly and Iqbal standards, but concurred in finding sufficient specificity in the specific pleading under consideration.

Judge Payne's decision is of particular interest not only because of the split with the Bill of Lading decision, but also because (1) Judge Payne's decision followed 4th Circuit, rather than Federal Circuit authority, raising questions about the Federal Circuit's policy of following regional circuit authority in matter not unique to patent litigation, and (2) the Advisory Committee on Rules and Congress are currently considering abrogation or amendment of Form 18.

In Macronix, Int'l Co. v. Spansion Inc., 3:13-cv-00679-REP, Document 52 (E.D. Va. March 10, 2014), Judge Payne had previously sua sponte ordered Macronix to file an Amended Complaint, ruling that the original Complaint "failed to satisfy the fundamental requirements of Bell Atlantic v. Twombly, 550 U.S. 544 (2007) and Ashcroft v. Iqbal, 556 U.S. 662 (2009).” The recent opinion, on a Rule 12(b)(6) motion by Spansion, ruled that the Amended Complaint failed to satisfy those requirements in several respects. Judge Payne applied 4th Circuit law, noting that the Federal Circuit had held, in C&F Packing Co., Inc. v. IBP, Inc., that question of whether a Rule 12(b)(6) motion was properly granted is purely a procedural question not pertaining to patent law to which [courts apply] the rule of the regional circuit.” (The broad issue of Federal Circuit deference to regional circuit authority will be addressed in a future blog item.) The Micronix opinion said that the Fourth Circuit had made clear that the assessment of the pleadings for sufficiency after Twombly and Iqbal was quite a different proposition than it previously had been. "The threshold problem with McZeal and Bill of Lading is that they accord no force to either the text or teaching of Twombly and Iqbal which require more to plead a legally sufficient claim than is set out in Form 18."

Meanwhile, the Advisory Committee on Rules of the Judicial Conference has proposed total abrogation of Rule 84 and the Appendix of Forms, largely in response to complaints about Form 18 and the apparent lack of reliance on the forms generally. If approved at all stages, that change would take effect in December 2015. The form of patent infringement pleadings has come to the attention of Congress in the context of concern over patent trolls. Several, more detailed forms have been proposed, as well as abrogation of Form 18. Section 3 of H.R. 3309, passed by the House in 2013 and now before the Senate Judiciary Committee, would impose specific requirements for pleading patent infringement. Section 6 of that bill would direct the Supreme Court and Judicial Conference to take various steps, including paragraph (c), directing the Supreme Court to eliminate Form 18 "effective on the date of the enactment of this Act," and authorizing the Court to prescribe a new form or forms setting out model allegations of patent infringement, with certain minimum requirements similar to those in Section 3. The bill is silent regarding the applicability of the existing of Twombly and Iqbal standards.