On December 1, 2015, changes recommended by the Judicial Conference Advisory Committee on the Federal Rules of Civil Procedure and adopted by the Supreme Court will take effect. Among these changes is elimination of the Appendix of Forms and related Rule 84, which states that the forms “suffice under these rules.” Eliminating the Appendix of Forms will abrogate Form 18. This rule change will affect patent litigators by leading to a heightened standard of pleading for direct infringement.
Form 18 of the Appendix of Forms
In McZeal v. Sprint Nextel Corp., the Federal Circuit held that Form 18 satisfied the minimal pleading requirements for direct infringement. Form 18 set forth a bare bones sample complaint:
<Statement of Jurisdiction>
On <Date>, United States Letters Patent No. <__________________> were issued to the plaintiff for an invention in an electric motor. The plaintiff owned the patent throughout the period of the defendant’s infringing acts and still owns the patent. The defendant has infringed and is still infringing the Letters Patent by making, selling, and using electric motors that embody the patented invention, and the defendant will continue to do so unless enjoined by this court.
The plaintiff has complied with the statutory requirement of placing a notice of the Letters Patent on all electric motors it manufactures and sells and has given the defendant written notice of the infringement.
Therefore, the plaintiff demands: a preliminary and final injunction against the continuing infringement; an accounting for damages; and interest and costs.
This simple pleading is exemplary of the permissive notice pleading requirement of Rule 8(a) of the Federal Rules of Procedure. And it probably worked well when it was adopted in 1938. Allegations of infringement at that time were more likely to involve mechanical apparatuses (like “electric motors”) or industrial processes, where simple allegations of infringement could be clearly understood and identified.
Today, many patent lawsuits involve electronic devices with thousands of distinct features that reside in intangible software. Because of this, concern about the sufficiency of Form 18 eventually became the subject of litigation at the pleading stage, leading to McZeal.
The question before the Federal Circuit in McZeal was whether the Supreme Court had effectively abrogated Form 18 (then numbered as Form 16) in Bell Atlantic Corp. v. Twombly In Twombly, the Supreme Court held that an antitrust complaint satisfies Rule 8(a) only if it states “enough facts to state a claim to relief that is plausible on its face.” Relying on Form 18, McZeal court held that a complaint need only notify the defendant of what it must defend. “[A] plaintiff in a patent infringement suit,” the Court wrote, “is not required to specifically include each element of the claims of the asserted patent.”
Subsequent to McZeal, the Supreme Court issued Ashcroft v. Iqbal, which held that Twombly was not limited to the antitrust context, and emphasized that a conclusory pleading does not satisfy the notice pleading standard. “A pleading that offers labels and conclusions or a formulaic recitation of the elements of a cause of action will not do. Nor does a complaint suffice if it tenders ‘naked assertion[s]’ devoid of ‘further factual enhancement.'”
After Iwbal, it was still an open question in the public commentary as to whether Twombly and Iqbal truly was an abrogation of the bare bones pleading permitted by Form 18. The Federal Circuit answered that question in K-Tech Telecommunications, Inc. v. Time Warner Cable, Inc. The new Supreme Court rulings did not change the status quo. Proper use of Form 18 still “effectively immunizes a claimant from attack regarding the sufficiency of the pleading.”
The Effect of the Abrogating Form 18
The Supreme Court’s abrogation of Form 18 on December 1, 2015, eliminates the reasoning behind McZeal and K-Tech. There should be no question now that a higher standard of pleading should apply to allegations of direct infringement. The Advisory Committee on the Federal Rules remarked that the Appendix of Forms “illustrate[d] a simplicity of pleading that has not been used in many years…. [T]he increased complexity of most modern cases have resulted in a detailed level of pleading that is far beyond that illustrated in the forms.” Many would argue that most patent infringement cases today exhibit this “increased complexity.”
But the question presents itself: what is this higher standard? Until more clarity arrives, practitioners are likely see more litigation at the pleading stage through increased filings of pre-answer motions. An accused infringer may move to dismiss the complaint if it does not set forth factual allegations that make infringement plausible, as required by Twombly and Iqbal. For example, a defendant may move to dismiss for failure to state a claim under Rule 12(b)(6). Alternatively, under Rule 12(e), the defendant may move for a more definite statement if the allegations are simply unclear. There will be some uncertainty for a while as to what a sufficient pleading would look like. Existing case law, however, offers some suggestions.
In a separate opinion in McZeal, Judge Dyk discussed possible pleading requirements beyond what Form 18 suggested, in the hopes that the rulemaking process will eliminate use of the from. In his view, a bare allegation of literal infringement using the form would be inadequate to provide sufficient notice to an accused infringer. Judge Dyk suggested that the plaintiff must also allege which claims of the patent are asserted to be infringed and which features of the accused device are alleged to infringe the limitations of those claims. Merely stating that a product “embodies the patented invention” is not enough. While Judge Dyk stopped short of calling for an element-by-element claim chart, he did suggest that an explanation of how the accused instrumentality practices the invention may be necessary to provide notice.
It is certain that a plaintiff should also clearly identify the accused instrumentality, which was unquestionably a requirement of Form 18. But due to the complexity of modern computing systems, however, Twombly and Iqbal may require more fine-grained specificity of what is accused in order to provide the requisite notice. Judge Dyk recognized this by the need to call out which “features” infringe.
A common situation where specificity may be required is when a patentee alleges that an accused website, hardware, or software product practices a patented process. Modern, commercial websites, mobile phones, or software applications may be gargantuan systems, with thousands of independent and unrelated features. Unfortunately, due to the intangible, ubiquitous, and oftentimes invisible nature of software, an accused infringer may not be able to compare the asserted claims to the accused product and immediately see how infringement could be alleged. Thus, in some cases a plaintiff may need to provide more detail than merely identifying the address where the website can be accessed or naming the accused product. Exemplary and marked up screenshots, while not strictly necessary, would help provide the requisite notice without rising to the level of infringement contentions typically provided once discovery begins.
Finally, when describing the factual nature of how the accused instrumentality infringes, a plaintiff should not rely on a verbatim recitation of the claim language to describe the infringement allegation. This has unfortunately been a common practice among patentees. Oftentimes, such a pleading is nonsensical at first glance, because inventors are not required to use well-understood terms of art when claiming the invention. An accused infringer is often left guessing as to what is at issue in the case. Under Tombly and Iqbal, such allegations may be deemed legal conclusions rather than factual allegations that support the claim for relief. The Supreme Court held that a complaint “requires more than labels and conclusions, and a formulaic recitation of the elements of a cause of action will not do.”
The abrogation of Form 18 and Judge Mayer’s opinion in McZeal are not the final word on the sufficiency of pleading, and demonstrates that there is not yet a consensus on how to proceed.
The American Intellectual Property Law Association (AIPLA) agrees with the decision to abrogate Form 18 because it “is now an anachronism,” and even without further action by the courts or Congress “elimination of the form would produce greater certainty and eliminate confusion.”
The Intellectual Property Owner’s Association (IPO) takes a more conservative approach. It argues that it should not be necessary for plaintiffs to plead the evidence that supports their claim, or detailed contentions, as these are typically developed through discovery as verified factual information is obtained.  As long as the defendant can prepare a proper answer from the notice provided in the complaint, courts should not create a barrier that restricts access to the judicial system. It proposes that a complaint need only include the elements of Form 18 as well as:
an identification of at least one claim that is infringed,
a statement explaining such infringement, and
a statement addressing indirect infringement, if alleged.
Judge Robert Payne of the Eastern District of Virginia recently remarked that patentees should have an even higher burden than the IPO proposal. He would require that, “before filing a complaint, counsel must ascertain exactly what claims should alleged to be infringed and how they are infringed.” The current practice of alleging one or more claims are infringed, he writes, and then paring claims that ought not to have been brought or that cannot withstand careful scrutiny, is an “increasingly expensive proposition.” Under this framework, a patentee would later need to seek leave to amend its complaint to add additional claims found to be infringed during discovery.
But Congress may ultimately step in to dictate the minimum requirements. Pending legislative proposals are much stricter than the notice pleading standard afforded case law. Representative Bob Goodlatte introduced the Innovation Act in 2013. The proposed legislation would require patent infringement complaints to, in effect, provide the level of element-by-element detail typically seen in infringement contention claim charts exchanged during discovery. Specifically, the bill would require identification of:
each patent allegedly infringed;
each claim of each patent allegedly infringed;
each process, machine, manufacture, or composition of matter (“accused instrumentalities”) alleged to infringe the claim;
the name or model number (or a representative model number) of each accused instrumentality, or if there is no name or model number, a description of each accused instrumentality;
for each identified claim, a description of the elements alleged to be infringed by the accused instrumentality and how the accused instrumentality is alleged to infringe those elements; and
for each claim of indirect infringement, the acts of the alleged infringer that contribute to or induce direct infringement.
The Innovation Act passed the House, but failed to find support in the Senate. Representative Goodlatte recently re-introduced the bill in the 114th Congress. Senator Chuck Grassley has introduced in the Senate the PATENT Act, S. 1137, which contains a similar proposal.
On December 1, 2015, the amendment to the Federal Rules of Civil Procedure will abrogate Form 18 and open up patent lawsuits to the heightened pleading implications of Twombly and Iqbal.
Litigators need to be aware of this fundamental change in preparing and defending complaints for patent infringement. For some time, district courts will be struggling with the abrogation of Form 18. Some may view it as an opportunity to address frivolous patent lawsuits on non-infringement grounds at the pleading stage. Others may conclude that accused infringers deserve some better notice than a complaint that parrots the language of the claims. And some courts may conclude that the status quo (along with local patent rules) provides the right balance for such complex issues, and no greater barriers should be placed in front of the courthouse doors.
In re Paulsen, 30 F.3d 1475, 1480 (Fed. Cir. 1994) (a patentee may choose to be his own lexicographer).
Twombly, 550 U.S. at 1964-1965. Courts “are not bound to accept as true a legal conclusion couched as a factual allegation.” Papasan v. Allain, 478 U.S. 265, 286 (1986).
American Intellectual Property Law Association (AIPLA), “Comments of the American Intellectual Property Law Association on the Proposed Amendments to the Federal Rules of Civil Procedure,” at 9 (Feb. 18, 2014).
The current way many districts administer cases do not adequately account for this scenario. Infringement contentions are due almost immediately after a scheduling conference. And a Markman hearing to construe claim terms is typically held shortly thereafter, months before the close of fact and expert discovery. To adopt Judge Payne’s proposal, expensive discovery that often is deferred to after the Markman hearing would need to occur prior to service of these infringement contentions.
The opinions expressed are those of the authors on the date noted above and do not necessarily reflect the views of Fish & Richardson P.C., any other of its lawyers, its clients, or any of its or their respective affiliates. This post is for general information purposes only and is not intended to be and should not be taken as legal advice. No attorney-client relationship is formed.
David Conrad is a Principal attorney in the Dallas office of Fish & Richardson. In state and federal courts in Texas and across the country, Mr. Conrad represents clients as lead counsel in commercial and intellectual property disputes. He represents companies and individuals accused of wrongdoing as well as those seeking to enforce their...