Restoring Equilibrium: Why Twombly and Iqbal Should Apply to All Pleadings in Patent Cases

• Author: Sarah E. Jack
• Position: J.D. Candidate, The University of Iowa College of Law, 2018; B.S., Wichita State University, 2015
• Pages: 1301-1327

1301

Restoring Equilibrium: Why Twombly and

Iqbal Should Apply to All Pleadings in

Patent Cases

Sarah E. Jack*

ABSTRACT: The Supreme Court’s decisions in Twombly and Iqbal have

caused a major shift in the pleading requirement for complaints and, in most

district courts, counterclaims. By requiring that a claim be accompanied by

“plausible” facts, the Court gave district courts a great deal more latitude to

dismiss poorly pled cases. However, the full application of Twombly and

Iqbal to pleadings filed by the defendant has not occurred. Courts only

inconsistently apply plausible pleading to counterclaims and affirmative

defenses. The effect of the higher pleading standard on patent litigation is

generally positive, decreasing the amount of abusive patent litigation that

gains access to full discovery. But, the imbalance between plaintiffs’ and

defendants’ pleading burdens exacerbates what is already a heavily

imbalanced high rate of success for defendants in patent litigation. This Note

argues that the Federal Circuit should combat the already skewed defendant

success rate in patent litigation by requiring defendants to plausibly plead

affirmative defenses and counterclaims.

I.INTRODUCTION ........................................................................... 1302

II.BACKGROUND ............................................................................. 1303

A.THE FEDERAL RULES OF CIVIL PROCEDURE ............................. 1303

B.THE PLEADING RULES IN PRACTICE ........................................ 1304

C.PLEADING PLAUSIBLY AND PATENT LITIGATION ...................... 1308

D.PATENTS: POLICY AND PROBLEMS .......................................... 1309

III.PROTECTING THE RIGHTS OF HONEST INVENTORS AND

TROLLS ....................................................................................... 1312

*

J.D. Candidate, The University of Iowa College of Law, 2018; B.S., Wichita State

University, 2015. Thank you to Professor Jason Rantanen for cultivating my interest in patent law

and for support during the Note-writing process; to my Note Editors, Logan Eliasen and Evelyn

Anderson; and to the editors and student writers of Volumes 102 & 103 of the Iowa Law Review.

Finally, thank you to my father, Kenneth Jack, for unending support and for sparking my interest

in patent law.

1302 IOWA LAW REVIEW [Vol. 103:1301

A.PLAUSIBLE PLEADING: IMPEDING ACCESS WHILE

INCREASING EFFICIENCY ......................................................... 1312

B.HOW PLAUSIBILITY HAS PLAYED OUT THUS FAR .................... 1316

1.Application of Twiqbal to Indirect Infringement ...... 1316

2.Application of Twiqbal to Counterclaims ................... 1317

3.Inconsistent Application of Twiqbal to

Affirmative Defenses ................................................... 1319

IV. APPLICATION OF TWIQBAL TO ALL PATENT PLEADINGS .............. 1321

A.PLAUSIBLE PLEADING RESTORES EQUILIBRIUM ....................... 1322

B.IMPLEMENTING THE STANDARD ............................................. 1324

C.ADDRESSING THE CRITICS ...................................................... 1325

V.CONCLUSION .............................................................................. 1326

I. INTRODUCTION

Courts have evaluated pleadings under a uniform standard for centuries.

In 2007, the Supreme Court announced a “plausible pleading” standard

(alternatively referred to as the “Twiqbal”1 standard), demanding that

plaintiffs allege more facts than were previously required under the notice-

pleading standard.2 Until the elimination of Form 18 in December 2015,

district courts evaluated direct patent infringement complaints under a lower

standard set out in the form.3 Following the elimination of Form 18, the

plausible-pleading standard applies to all civil complaints.4 This higher

pleading standard increases the burden on plaintiffs, but leaves defendants

able to plead affirmative defenses or counterclaims under the less strict

standards of notice pleading. The result is a pleading standard that is out of

equilibrium, favoring defendants at the pleading phase of litigation.

Although courts and policymakers are seeking a solution to the problem

of “patent trolls,”5 the ultimate solution should not decrease a legitimate

plaintiff’s ability to recover for infringement, as uneven pleading burdens do.

1. “Twiqbal” is derived from the two Supreme Court cases that resulted in a higher pleading

standard. See Ashcroft v. Iqbal, 556 U.S. 662 (2009); Bell Atl. Corp. v. Twombly, 550 U.S. 544 (2007).

2. The Court’s notice-pleading rule establishe d that “all the Rules require is ‘a short and

plain statement of the claim’ that will give the defendant fair notice of what the plaintiff’s claim

is and the grounds upon which it rests.” Conley v. Gibson, 355 U.S. 41, 47 (1957) (footnote

omitted) (quoting FED. R. CIV. P. 8(a)(2)).

3. See FED. R. CIV. P. Form 18 (abrogat ed Dec. 1, 2015) (providing a simple form for patent

plaintiffs to plead patent infringement).

4. See generally Brandon L. Garrett, Applause for the Plausible, 162 U. PA. L. REV. ONLINE 221

(2014), https://www.pennlawreview.com/online/162-U- Pa-L-Rev-Online-221.pdf (discussing the

difficulty of pinning down a definition of “plausible” pleading).

5. See infra Part II.D (discussing how the Court and legislatures have attempted to curb the

activity of patent trolls).