Pleading Requirements for Standard-Based Patent Infringement

To “simply identify a technical standard without further explanation” is not sufficient to survive a motion to dismiss a complaint for patent infringement, says a magistrate judge in the Eastern District of Texas.  Stragent, LLC v. BMW of North America, Civil Action Nos.  6:16-cv-446-448-RSW-KNM (E.D. Texas March 3, 2017).  The court recommended dismissal of claims for both direct and induced infringement.

This case was brought based on plaintiff’s contention that “each Defendant makes and sells software that complies with the Automotive Open System Architecture (“AUTOSAR”) Standard,” compliance with which “necessarily entails infringement of U.S. Pat. Nos. 8,029,705 . . . and 8,566,843.”  Reviewing Eastern District of Texas cases on the pleading standard for direct infringement, the court noted that “cases involving more nebulous, less tangible inventions such as computer software methods may require a higher degree of specificity to provide proper notice to the defendant.”  Induced infringement requires another party’s direct infringement, and a showing that the accused infringer knew or should have known that the infringement would result.

The plaintiff relied on Fujitsu Ltd. v. Netgear Inc., 620 F.3d 1321, 1327 (Fed. Cir. 2010), in which the Federal Circuit stated that “if an accused product operates in accordance with a standard, then comparing the claims to that standard is the same as comparing the claims to the accused product.” But the Fujitsu court had noted that sometimes pleading  infringement based on a standard was insufficient, because the standard could be optional, or the standards document might not have enough specificity to establish infringement.  For example, one plaintiff with an adequate pleading “not only alleged that the defendant’s products infringed the asserted claims because they complied with a relevant industry standard, it also identified a common element between the standard and the patent claims.”

Here, in sum, the plaintiff “must connect either the accused products to the asserted claims, or the AUTOSAR Standard to the asserted claims.”  Its “allegation that ‘the patents in suit address [AUTOSAR-compliant] systems’ does not do either.” Courts both within and without the Eastern District of Texas had held that “a patentee may rely on standard compliance to show infringement only if the patent covers every possible implementation of the standard) to cases at different procedural postures.”  The court made clear it was not requiring anything like infringement claim charts – which some courts require and others don't following the abrogation of Form 18 - but the plaintiff must “plausibly plead a nexus between the AUTOSAR Standard and the asserted claims.”

Concerning induced infringement, the plaintiff’s allegations failed at least because direct infringement was not adequately plead.  But moreover, the knowledge element of induced infringement was not met: regarding some defendants, “it is unclear whether Stragent seeks relief for acts of induced infringement that occurred before the Complaint was filed, after the Complaint was filed, or both.”  If before, the plaintiff had not plead facts relating to prior to the complaint.  However, in the Eastern District of Texas, unlike some other jurisdictions, an initial complaint was enough to give notice to satisfy the pleading requirement for induced infringement.

Moreover, the plaintiff had not plead the specific intent element of induced infringement.  The court noted that the plaintiff had not cited any “case law supporting its argument that by merely selling a standard-compliant product, a defendant has plausibly demonstrated the specific intent element of induced infringement.”

The magistrate accordingly recommended that the complaint be dismissed without prejudice to file an amended complaint.

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