Judge Smith Dismisses Patent Suit Based on Twombley/Iqbal
On January 27, Judge Rebecca Beach Smith dismissed a patent infringement action on the grounds that the Complaint failed to meet the pleading requirements in Bell Atlantic Corp. v. Twombly, 550 U.S. 544 (2007) and Ashcroft v. Iqbal, 129 S.Ct. 1937 (2009). Adiscov, LLC v. Autonomy Corp., Case No. 2:10CV218 (E.D.Va. Jan. 27, 2011) (Smith, J.). The decision can be found here.
Adiscov LLC brought suit against three defendants alleging infringement of its patent covering methods for conducting electronic discovery on computer systems. Adiscov’s allegation of infringement was brief and simple: it alleged that each defendant manufactured, used and sold products and services including “legal discovery software and services . . . acting or capable of acting in the manner described and claimed in the ‘760 patent.” Adiscov did not identify any specific infringing product or class of products nor did the Complaint identify how the defendants’ products infringe its patent.
Judge Smith’s opinion concisely summarizes Twombly’s and Iqbal’s two basic requirements of sufficient factual allegations and plausibility of those allegations:
- First, while detailed factual allegations are not required, a Complaint “requires more than labels and conclusions.” “An unadorned, the-defendant-unlawfully-harmed-me accusation” is not enough.
- Second, a Complaint must contain sufficient factual matter, accepted as true, to state a plausible claim for relief. The Court must be able to draw the reasonable inference that a defendant is liable for the misconduct alleged, i.e., more than a “sheer possibility that a defendant has acted unlawfully.”
Regional Circuit law, not Federal Circuit law, applies to a motion to dismiss under Rule 8. Adiscov is the second E.D. Va. case addressing Twombly in the patent context. We blogged here about the first case, Judge Payne’s 2007 decision in Taltwell, LLC v. Zonet Corp., 2007 U.S. Dist. LEXIS 93465 (E.D.Va. Dec. 20, 2007).
As in Taltwell, Judge Smith looked to the Federal Circuit’s decision in McZeal v. Sprint Nextel Corp., 501 F.3d 1354 (Fed. Cir. 2007). In McZeal, the Federal Circuit held that a complaint must include:
- an assertion that the plaintiff owns the patent at issue;
- the names of the defendants;
- an assertion that the defendant infringed the patent;
- a general description of the means by which the patent was infringed;
- the specific parts of the patent law that are implicated.
As other cases, including Taltwell have found, Judge Smith held that merely reciting “legal discovery software and services” as the accused products did not describe a category or specific products and services as Rule 8 required.
Judge Smith went on to rule that Adiscov’s allegations failed the plausibility requirement because they failed to describe how the products at issue infringed the patent. That holding goes a step beyond Taltwell and other cases by implying that a patentee must not only identify the accused products, it must also set forth how the claims of the patent at issue apply to the accused products. Without such allegations, Judge Smith holds, all that “the court is left with is ‘a sheer possibility’ that one of [defendants’] numerous products or services infringe the ‘760 patent in one way or another.”
Judge Smith dismissed Adiscov's complaint without prejudice. Adiscov quickly re-filed its suit on February 2, and the new Complaint can be found here. Interestingly, Adiscov’s re-filed Compalint has been assigned to Judge Lee in the Alexandria Division even though Adiscov listed the Norfolk case before Judge Smith as a related case. Adiscov’s re-filed Complaint identifies specific accused products and, in response to Judge Smith’s ruling on the plausibility of its allegations, also includes representative claim charts in the Complaint itself.
