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Direct and Indirect Infringement Contentions Survive Motion to Dismiss Where Defendants’ Customers Are Identified as Direct Infringers

Plaintiff filed a patent infringement action based on patents for wireless communications networks and a system and method for monitoring and controlling remote devices. Defendants moved to dismiss the plaintiff’s claims for direct infringement and for inducing and contributory infringement based on the argument that plaintiff failed to identify a specific system or product in its complaint. Defendants also asserted that plaintiff failed to adequately plead indirect infringement because the complaint did not identify the underlying infringing product, the direct infringer, or the alleged infringing claims. One of the defendants also asserted that the indirect infringement contentions should be dismissed because the identification of customers as the direct infringers is insufficient and the plaintiff failed to plead any facts to show that defendants knew of the patent and intended to encourage infringement.

The Magistrate Judge recommended denying the motion. After discussing the pleading standards under Fed.R.Civ.P. 8(a)(2), the Supreme Court’s recent decisions in Twombly (Bell Atl. Corp v. Twombly, 550 U.S. 555-56, 570 (2007))and Iqbal (Ashcroft v. Iqbal, 129 S. Ct. 1937, 1949-50, 1953 (2009)), and Fed.R.Civ.P. 84, Form 18, the court concluded that plaintiff’s allegations of direct and indirect infringement were sufficient.

With respect to direct infringement, the court found that in this case the plaintiff had identified infringing products and services as wireless network systems similar to defendant’s wireless industrial remote systems. The court also noted that the plaintiff had not simply asserted generic allegations across all defendants. The court also found that given the nature of the patents in suit the identification was sufficient.

Turning to indirect infringement, the court noted that Form 18 does not address claims for indirect infringement and there is a split among the courts for what is sufficient to satisfy the pleading requirements for indirect infringement. The court then concluded that plaintiff’s allegations of indirect infringement were sufficient. “Taken as a whole, however, [plaintiff’s] indirect infringement allegations state a claim plausible on its face. As explained above, [plaintiff] adequately identified the underlying infringing product. Moreover, [plaintiff] properly identified a direct infringer, ‘defendant’s customers.'” The court also noted that failure to specifically plead each individual element of its indirect infringement claim was not fatal, concluding that there is no form for pleading indirect infringement and that the Federal Circuit has not interpreted Twombly/Iqbal to require specific pleading requirements for indirect infringement.

Finally, the court stated that it has high expectations of a plaintiff’s preparedness before it brings suit and therefore, it expected that any ambiguity in the pleadings would be resolved when defendant served its preliminary infringement contentions, which would render the motion superfluous for practical purposes.

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There continues to be a split of authority on how much is required for purposes of pleading indirect infringement claims. As these issues almost always arise on a motion to dismiss, it is not likely that there will be guidance coming from the Federal Circuit in the near future. Accordingly, it will be important to continue to watch how the district courts resolve these issues on a case by case basis.

Sipco, LLC v. ABB Inc, Case No. 6:11-CV-48-LED-JDL (E.D. Tex. Sept. 12, 2011)

The authors of 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 Stan Gibson at 310.201.3548 or