Federal Circuit addressed the pleading standards for patent infringement in Lifetime Indus., Inc. v. Trim-Lok, Inc., No. 3:13-cv-00819-RLM-MGG (N.D. Indiana September 7, 2017). Reversing and remanding a decision of the district court, the CAFC held that Lifetime Industries adequately pled facts sufficient to support claims of direct, indirect, and contributory patent infringement.
Patentee Lifetime makes seals for slide-out rooms in recreational vehicles (RVs) as shown in FIGS. 1-2 of the patent at issue (U.S. Pat. 6,966,590). Among other things, the claims of the ‘590 patent require a resilient seal (having two portions—a mounting portion and a separate bulb portion), wherein the seal is used in combination with a mobile living quarters having a slide-out room. Lifetime’s pleadings included the following allegations:
- Two Lifetime engineers—with knowledge of the ‘590 patent—left Lifetime and began working for Defendant Trim-Lok.
- Soon after these two engineers began working for Trim-Lok, Trim-Lok began offering for sale a two-part seal for an RV with a slide-out room.
- A Lifetime representative discovered the two-part Trim-Lok seal installed on an RV with a slide-out room at an RV manufacturer (Forest River, Inc.).
- That Trim-Lok caused the installation at Forest River for purposes of testing and/or soliciting sales.
- That Trim-Lok either directly or indirectly infringed the ‘590 patent by causing the two-part seal to be installed on the Forest River RV.
The CAFC reviews a district court’s dismissal for failure to state a claim under the law of the regional circuit; in the U.S. Court of Appeals for the Seventh Circuit, the standard of review is de novo. To survive a motion to dismiss under FRCP 12(b)(6), the complaint must contain sufficient factual matter, accepted as true, to state a claim to relief that is plausible on its face. This requirement is met if it pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged. The plaintiff is not required to prove its case at the pleading stage (Bill of Lading Transmission & Processing Sys. Patent Litig., 681 F.3d 1323 (Fed. Cir. 2012)). Nor is the plausibility requirement akin to a probability requirement at the pleading stage—it simply calls for enough facts to raise a reasonable expectation that discovery will reveal that the defendant is liable for the misconduct alleged (Bill of Lading quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544 (2007)).
While the district court dismissed the claim of direct patent infringement, the CAFC reversed on the basis that Lifetime had alleged facts sufficient that Trim-Lok installed the seal onto an RV (i.e., made an infringing seal-RV combination). The CAFC noted that Lifetime pled the who, what, when, where, why—e.g., who (an agent or employee of Trim-Lok), what (the installation), when (in or around June 2013), where (at a Forest River facility), and why (to test the seal onto the RV and to solicit sales).
The CAFC also reversed the dismissal of the claim of indirect patent infringement. For an allegation of induced patent infringement to survive a motion to dismiss, a complaint must plead facts plausibly showing that the accused infringer specifically intended [another party; e.g., Trim-Lok] to infringe the patent and knew that [Trim-Lok’s] acts constituted patent infringement. The CAFC reversed because Lifetime’s complaint alleged the knowledge element (that the two engineers had knowledge of the patent and its scope when they joined Trim-Lok) and also alleged the intent element (Trim-Lok’s conduct regarding the installation of the exactly same type of seal at the Forest River facility). The CAFC noted that Trim-Lok required too much—reiterating that plausibility, not proofs or probabilities, are required at the pleading stage.
And the CAFC reversed the dismissal of the claim of contributory patent infringement stating that contributory infringement occurs, inter alia, when a party sells a component of a patented combination constituting a material part of the invention, knowing the same to be especially made or especially adapted for use in an infringement of such patent, and not a staple article or commodity of commerce suitable for substantial noninfringing use. Contrary to Trim-Lok’s assertions, the CAFC also noted that contributory infringement requires only proof of a defendant’s knowledge, not intent, that his activity cause infringement. For the reasons stated above—as well as that Lifetime alleged that a Trim-Lok employee assisted with or directed the installation—the CAFC held that Lifetime’s pleadings were sufficient.
Lessons for Practice
Draft winning pleadings by including the who, what, when, where, why facts sufficient to be plausible to support an alleged infringement and be sure to address each element of the respective infringement test.
For patent drafters, avoid drafting claims which raise issues of indirect patent infringement. While not discussed above, it is noteworthy that Trim-Lok convinced the district court to dismiss the claim of direct infringement on the basis that the Trim-Lok did not make both the RV and the seal (recall the claim recites: a combination of the resilient seal to an RV). Furthermore, if drafting a claim which will require indirect infringement is necessary, before proceeding, advise your client of the limitations and/or pitfalls of such claims.