PLEADING PATENT INFRINGEMENT: RES IPSA LOQUITUR AS A GUIDE.

• Author: Milam, Andrew L.
• Position: NOTES

TABLE OF CONTENTS INTRODUCTION 303 I. PLEADING REQUIREMENTS AND THEIR IMPACT ON PATENT INFRINGEMENT LITIGATION 306 A. Background on Patents and Infringement Litigation. 306 B. Background on Pleadins Reauirements 308 C. The Problems Created by Traditional Pleading Requirements in Patent Infringement Litigation 310 II. CONGRESSIONAL BILLS, LOCAL PATENT RULES, AND THE ABROGATION OF RULE 84 AND FORM 18 314 A. Proposed Congressional Changes for Pleading Requirements in Patent Cases 316 1. The Innovation Act as an Example 317 B. Local Patent Rules 320 1. Background on Local Patent Rules 320 2. The Advantages of Local Rules Requiring Infringement Contentions 322 3. Infringement Contentions and How a Lack of Uniformity in Procedure Substantively Impacts Patent Litigation 323 C. Abrogation of Rule 84 and the Federal Appendix of Forms 329 III. FEDERAL RULES OF PATENT PROCEDURE AND THE PROPOSED RULE 332 A. Plausibility Pleading with a Res Ipsa Loquitur-Like Exception 334 B. The Pleading Requirements' Interaction with the Infringement Contentions 339 CONCLUSION: HOW THE PROPOSED RULE STRIKES A BETTER BALANCE 341 INTRODUCTION

The nature of the modern patent system has allowed for abusive litigation tactics. In particular, because the cost of early settlement is often much lower than defending a patent suit on its merits, "nuisance-value patent suits" have become popular. (1) Often such suits are filed by "non-practicing entities" (NPEs) or "patent assertion entities" (PAEs), which, because of their abusive litigation strategies, are commonly known as "patent trolls." (2) And while numerous causes are attributed to encouraging such practices, including the high costs of patent litigation, the large number of patents issued, and the uncertainty surrounding a patent's claims, (3) the traditionally low pleading standards have often been key in facilitating patent trolls' abusive litigation tactics. (4)

Patent litigation and the problem of patent trolls has been a hot topic for the past several years. (5) Many nationwide reforms have been discussed, (6) but few have been implemented. Perhaps in response to the lack of nationwide solutions, many district courts have adopted local procedural rules for patent cases. (7) Most, if not all, of these reforms have been, at least in part, aimed at raising the pleading standards for patent infringement cases. Such reform is a worthy cause. Stricter pleading standards, especially in patent cases, would likely be a worthwhile solution to the patent troll problem. However, regardless of whether stricter standards are implemented directly through legislation or amendments to the Federal Rules of Civil Procedure, or indirectly through local procedural rules that control the early stages of a case, the standards cannot become so strict as to preclude worthy claimants. If the standards are raised too high, there is a real risk that infringement that occurs in secret--for example, a manufacturing process or proprietary software that the patent holder cannot access--will escape court enforcement because the patent holder will never get the benefit of discovery.

This Note advocates for a specific approach--or rather implementation of a rule (8)--for dealing with the beginning of patent infringement cases. The Proposed Rule calls for a "heightened" pleading standard paired with specific rules for infringement contentions. (9) Its goal is to address one aspect of direct patent infringement cases that has enabled patent trolls to bring vague and meritless suits, (10) without going so far as to prevent certain meritorious plaintiffs from enforcing their patent rights." The Proposed Rule is envisioned as being most useful as part of what several scholars have already advocated for: a set of Federal Rules of Patent Procedure. (12) A uniform set of rules would serve to reinstate uniformity across all districts--an important principle of U.S. patent law and procedure in federal courts, and something that has been eroded by the various local procedural rules that substantively affect patent cases. (13) Ultimately, the Proposed Rule, as part of a comprehensive set of federal rules, would preserve uniformity by superseding the various local patent rules that require early disclosures of patent infringement contentions. (14)

Part I of this Note gives a big-picture view of patent infringement litigation and discusses issues related to the pleading requirements in modern patent infringement litigation. Part II explores some of the proposed and enacted solutions--including congressional bills, local patent rules, and the abrogation of the Federal Appendix of Forms and Rule 84. Part III explains and advocates for a solution to the pleading requirements and infringement contentions in patent cases by using, among other things, the tort doctrine of res ipsa loquitur as a guide to interpreting infringement pleadings. Lastly, this Note discusses how the Proposed Rule strikes a balance that would serve both defendants--by helping protect them from meritless claims--and plaintiffs, by keeping the courts open to meritorious claims.

1. PLEADING REQUIREMENTS AND THEIR IMPACT ON PATENT INFRINGEMENT LITIGATION

   The following discussion proceeds in three parts. First, it gives a brief background on patent infringement litigation. Second, it discusses how the pleading requirements for complaints in civil cases have been altered by recent Supreme Court decisions. And lastly, it discusses how the traditionally low pleading requirements in patent infringement cases have invited abuse in that field.

   1. Background on Patents and Infringement Litigation

      The goal of the patent system is to promote science and the useful arts for society's benefit. (15) The inventor of a novel, useful, and nonobvious invention, which is both definite and directed towards patentable subject matter, can apply to the U.S. Patent and Trademark Office for a utility patent. (16) A patent application, and any resulting patent, must describe the invention with enough detail that a person of ordinary skill in the art could make and use the invention. (17) And though by its nature a patent discloses the invention to the public, the inventor or patentee (18) is given an exclusive twenty-year monopoly on the invention. (19)

      The monopoly granted by a patent is a right to exclude. (20) A patentee is given "the right to exclude others from making, using, offering for sale, or selling" devices, apparatuses, processes, and/or methods covered by their patent. (21) And the primary means of enforcing these rights is through litigation: a patentee files a complaint alleging patent infringement. (22)

      The courts look to the claims of a patent when determining whether a certain product infringes. (23) At the end of every patent is at least one claim (although often there are several), and each claim has a set of "limitations" or "elements." (24) The claims dictate the scope of, or describe what is covered by, the patent. (25) And while there are different ways a patent can be infringed--for example, directly versus indirectly, or literally versus under the doctrine of equivalents (26)--this Note focuses on complaints and pleadings of direct infringement for simplicity. (27) Direct infringement occurs when a single individual or entity, without the patentee's permission, "makes, uses, offers to sell, or sells any patented invention, within the United States or imports into the United States any patented invention during the term of the patent." (28) To succeed on a direct infringement claim, the patentee must show that the accused infringer (or accused instrumentality (29)) practiced, or read on, every element of at least one valid patent claim. (30)

   2. Background on Pleading Requirements

      From the 1930s until sometime between 2007 and 2009, the pleadings in nearly every civil action under the Federal Rules of Civil Procedure were governed by a "notice pleading" standard." This standard was liberal and in accordance with the principle of giving broad access to justice for plaintiffs in federal court. (32) Under notice pleading, courts were prohibited--at least so far as the Supreme Court had been concerned--from dismissing a claim unless it was clear that there was "no set of facts" that the plaintiff could prove to establish the claim. (33)

      The Supreme Court, in two recent decisions, clarified that complaints must state a plausible claim for relief, (34) overruling the notice pleading standard and "no set of facts" test from Conley v. Gibson, a 1957 decision. (35) In Bell Atlantic Corp. v. Twombly, the Court explained that Rule 8(a) requires a complaint to be "plausible on its face." (36) In Ashcroft v. Iqbal, the Court reaffirmed Twombly, explaining that it applies to all civil actions." Moreover, the Court held that a complaint is plausible "when the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged." (38)

      Determining whether a complaint states a plausible claim is "a context-specific task." (39) First, a court considering a motion to dismiss begins by identifying pleadings that are legal conclusions: legal conclusions "are not entitled to the assumption of truth." (40) Second, the court considers whether the remaining factual allegations "plausibly give rise to an entitlement to relief." (41)

      After these two cases, it was unclear whether the notice pleading standard still existed. (42) Many scholars and practitioners felt that it did not, suggesting that these decisions created a "heightened pleading" standard. (43) After Twombly, some lower courts flatly indicated that heightened pleading requirements were now required, while others continued to employ the old "no set of facts" test to scrutinize complaints. (44) After Iqbal, however, it was clear that the "plausibility" standard applied in all civil cases, and Form 18, along with the several others, were likely in...