California Court: Allegations That Defendant Used Product Is Sufficient To Plead Claim for Direct Infringement of Method Claims

January 15, 2013

In a patent case pending before Judge Koh in the Northern District of California, Defendant Pinnaclife Inc. ("Pinnaclife") moved pursuant to Rule 12(b)(6) to dismiss Plaintiff CreAgri, Inc. ("CreAgri") infringement claims under Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 570 (2007) and Ashcroft v. Iqbal, 129 S.Ct. 1937, 1949 (2009). The Court denied in part and granted in part CreaGri's motion finding that Pinnaclife's amended complaint alleged facts sufficient to plausibly state a claim for direct infringement, but failed to meet the pleading requirements for indirect infringement.

First, the Court held that the pleading standards for direct infringement are governed by Form 18, even though the patent claims at issue were method claims:

[A] claim for direct infringement of a method patent is still a claim for direct infringement, and is therefore governed by the Form 18 pleading standard. Nothing in Form 18 suggests that its applicability is limited to device patents, nor did the Federal Circuit, in confirming that pleading requirements for direct infringement claims are governed by Form 18, suggest that this holding should be limited to device patents.

Plaintiff Pinnaclife argued that "CreAgri has not alleged the actual performance of the steps of the patent method." The Court disagreed and stated that "using a product...would certainly entail the performance of the patented method." In so holding, the Court stated:

Form 18 does not require a plaintiff to identify all of the claim limitations and how they are infringed for a device patent, nor does it require a plaintiff to list all of the steps for a method patent. Instead, Form 18 requires a simple allegation that the defendant has infringed "by making, selling, and using" the patented article.

On the indirect infringement claims, the Court granted the motion to dismiss (with leave to amend) because the Plaintiff failed to allege that anyone other than the Defendant has directly infringed the patent:

Here, CreAgri has not alleged that anyone other than Pinnaclife has directly infringed the '599 Patent, nor has CreAgri alleged that any Pinnaclife product necessarily infringes the '599 Patent. CreAgri does allege that "Pinnaclife publishes and provides documents intending that persons including the manufacturers, sellers, resellers, distributors, users and customers engage direct infringement by their use of Pinnaclife's 'miracle Olivamine10 Essential,'" FAC at ΒΆ 33, but there is no allegation that any of these third parties has actually directly infringed, nor that use of any Pinnaclife product necessarily infringes. Rule 8 requires that a complaint, including one alleging claims for indirect infringement, "must contain sufficient factual matter, accepted as true, to 'state a claim to relief that is plausible on its face.'" Iqbal, 556 U.S. at 678 (quoting Twombly, 550 U.S. at 570). Thus, to satisfy Rule 8 in the context of a claim for indirect infringement, a plaintiff would, at a minimum, have to identify who allegedly directly infringed and how, or would have to allege that use of some particular product necessarily infringed.

The Court also held that another deficiency with the inducement infringement allegations was that the Plaintiff failed to identify enough information about the unidentified documents that allegedly induced the direct infringement.

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This case illustrates that a claim for direct infringement of a method claim can be based on allegations that the defendant used a product because using a product could entail the performance of a patented method. It also illustrates the trend in the district courts of closely scrutinizing claims for indirect infringement.

CreaAgri, Inc. v. Pinnaclife Inc., Case No. 5:11-06635 LHK, Document No. 46 (N.D. Cal. January 1, 2013).

The authors of www.PatentLawyerBlog.com are patent trial lawyers at Jeffer Mangels Butler & Mitchell LLP. We represent inventors, patent owners and technology companies in patent licensing and litigation. Whether pursuing patent violations or defending infringement claims, we are aggressive and effective advocates for our clients. For more information contact Greg Cordrey at 949.623.7236 or GCordrey@jmbm.com.