Court Upholds Sufficiency of Patent Infringement Complaint Under Iqbal

In a March 16, 2016 ruling, Judge Shira A. Scheindlin denied the defendant's motion to dismiss a complaint alleging willful direct, induced and contributory infringement. Applying the Iqbal standard for all three types of infringement, Judge Scheindlin found the allegations of direct infringement adequate, writing:

Allegations that plead that “a specific product [] allegedly infringes [the] patent by virtue of certain specific characteristics” meet the Iqbal plausibility standard. A plaintiff is not required to list which of the claims in the patent have been infringed in its pleading; as the Federal Circuit has recently reiterated, “a plaintiff need not even identify which claims are being infringed.”

With regard to the induced infringement claim, the Court found:

The Complaint also contains details regarding the printed instructional material and website instructions provided by [the defendant] instructing its customers as to how to use the [accused system] in a manner that allegedly directly violates the ‘641 Patent. This level of detail is sufficient to survive a motion to dismiss.

Judge Scheindlin also upheld the pleading of the contributory infringement claim, noting:

As explained above, [the plaintiff] has sufficiently pled direct infringement and that [the defendant} was aware of the ‘641 Patent. [The plaintiff] also alleges that the [accused system] and its various components have no substantial noninfringing use. While [the defendant] argues that [the plaintiff's] general allegation to that effect is insufficiently particular to satisfy Iqbal, “numerous post-Iqbal cases have not required detailed factual allegations in support of a plaintiff’s claim that a defendant’s product lacks substantial noninfringing uses.”

The Court did, however, find the claim for willful infringement to be inadequately pled, ruling:

The facts pled here offer a plausible risk that [the defendant] was infringing the ‘641 Patent by selling the [accused system] — and this is why [the plaintiff's] other claims survive [the defendant's] motion to dismiss. But these allegations do not rise to the much higher level of objectively reckless risk of infringement. Without additional facts to support a conclusion that the risk of infringement was highly likely, [the plaintiff] has failed to meet its burden.

Judge Scheindlin did all the plaintiff to file an amended complaint bolstering the willful infringement facts, if possible.

Court Refuses to Dismiss Trademark Infringement Claims, But Notes They Are Close to Line of Improper Copyright Claims

In a September 23, 2013 ruling, Judge Andrew L. Carter denied plaintiff Expressway Music, Inc.'s motion to dismiss defendant Slep-Tone Entertainment Corp.'s trademark infringement and unfair competition counterclaims.  Slep-Tone alleged that Expressway "acquired or made unauthorized duplicates of Slep-Tone's karoke accompaniment tracks.  These unauthorized media- and format-shifted duplicates were marked with Slep-Tone's 'SoundChoice' trademark and distinctive trade dress."  The Court found that these allegations were sufficient to meet the Iqbal standard and state trademark and unfair competition claims.

Expressway argued that the real thrust of Slep-Tone's complaint was to challenge the copying of the media- and format-shifted recordings, which is in the nature of copyright infringement, not trademark infringement.  Judge Carter noted that the "case may toe the line between a trademark claim attempting an 'end run around the copyright laws' and a viable trademark claim," but that "regardless of the copyright status of these videos, Slep-Tone alleges facts about the misuse of its trademark on products it did not create, namely because Slep-Tone's registered trade dress and trademark appear on Expressway's media- and format-shifted tracks.  These are cognizable claims under the Lanham Act."

Heightened Pleading Standard Applies to Patent Invalidity Counterclaims

In an August 7, 2013 ruling, Judge Paul A. Engelmayer granted-in-part the motion to strike certain affirmative defenses and to dismiss counterclaims of non-infringement and invalidity in plaintiff Orientview Technologies LLC's patent infringement action against Seven for All Mankind, LLC ("7FAM").  Most notably, the Court ruled that an invalidity counterclaim must meet the heightened pleading standards under Twombly  and Iqbal.  In dismissing the invalidity counterclaim under Fed. R. Civ. P. 12(b)(6), Judge Engelmayer noted the split in the cases about whether the relaxed pleading standard for patent infringement cases or the more rigorous Twombly and Iqbal standards applied, and held that "in the absence of any directive that claims of invalidity, like claims of direct infringement, should be measured under a different standard than almost all other claims in this Circuit are, the Court declines to do so." 

Regarding the affirmative defenses, while the motion was pending the parties agreed that two of the defenses at issue, concerning indirect infringement which was not alleged by plaintiff and injunctive relief which plaintiff had not sought, are not relevant to the case, and the Court struck them as "immaterial" under Fed. R. Civ. P. 12(f).  Plaintiff challenged a third affirmative defense, that the scope of the patent-in-suit was not broad enough to encompass the defendant's conduct, on the ground that it was duplicative of another defense that the defendant has not infringed any claim.  In denying the motion, Judge Engelmayer noted that courts have broad discretion in deciding motions to strike and that such motions are generally disfavored.  The Court found that to "the extent Overview argues that the defense is redundant, its retention poses no risk of prejudice to Overview which is already obligated to defend itself against" the supposedly duplicative defense and the non-infringement counterclaim.