23 Dec 2017 in Newsletter
Pleading Standards Revisited
By: Califf Cooper
The U.S. Federal Circuit provided some additional insight into the pleading standard for direct and indirect patent infringement claims in a recent decision, Lifetime Industries, Inc. v. Trim-Lok, Inc., 2017-1096, (Fed. Cir. Sept 7, 2017).
Lifetime sued Trim-Lok in the Northern District of Indiana for direct and indirect patent infringement of U.S. Pat. No. 6,966,590 (the ’590 patent). The ’590 patent relates to a seal used for the slide-out rooms of RV’s.
In district court, Trim-Lok filed a motion to dismiss because Lifetime’s complaint was insufficient in that it did not correctly identify the accused product and did not adequately plead direct or indirect infringement. The district court agreed and determined that Lifetime had not adequately plead its case. Lifetime appealed.
On appeal, the Federal Circuit held the direct infringement claims were properly plead. The claims of the ’590 patent require both a seal and an RV. Even where Trim-Lok manufactures only the seal, Lifetime plead a Trim-Lok agent directly infringed when it installed a seal on a Forest River RV to test fit the seal to solicit sales. The Federal Circuit pointed out that commercial manufacture is not the only way that a combination can infringe and that limited internal manufacture and use can also infringe. Because Lifetime alleged that an agent of Trim-Lok installed the seal onto the RV, and that the resulting seal-RV combination infringed the ’590 patent, it alleged that Trim-Lok directly infringed in a manner consistent with the case law holding that assembling the components of an invention is an infringing act of making the invention.
The Federal Circuit also held the indirect infringement claims were properly plead. The district court dismissed Lifetime’s indirect infringement counts on the basis that they failed to plead “any facts from which intent could be inferred,” and instead had only supplied conclusory allegations. But the Federal Circuit found that Lifetime alleged knowledge of the patent where it specifically alleged that two former Lifetime employees had knowledge of the patent and its scope when they joined Trim-Lok. The Federal Circuit also agreed that Lifetime plausibly plead that Trim-Lok had the intent to infringe where Trim-Lok never made or sold these particular seals prior to gaining that knowledge, and that the seals have no noninfringing use. On contributory infringement, the Federal Circuit reiterated that only proof of a defendant’s knowledge is required, not intent. Ultimately, the Federal Circuit reversed the district court’s dismissal and held that Lifetime’s pleading was adequate.
In practice, the Lifetime opinion offers a good refresher on the pleading requirements and what is needed to prove infringement when the assembly of components from multiple parties is at issue. When drafting a pleading, parties should clearly identify the accused products. If indirect infringement claims are being plead, pay particular attention to defendant’s knowledge of the patent, and if multiple parties assemble the final component, who the direct infringer is, and the roles of each party.