The Software IP Report

Defendant Controlled Information Not Required in Pleadings

Does the fact that relevant information is “arguably within [the defendant’s] sole possession” affect the plaintiff’s burden in pleading a claim for patent infringement?  In Prowire, LLC v. Apple, Inc. , the United States District Court for the District of Delaware denied Apple’s motion to dismiss for failure to state a claim. Noting that defendant’s arguments focused on information “arguably within [the defendant’s] sole possession,” the court held Prowire’s allegations plausible to state a claim for direct infringement.

Prowire filed a complaint accusing Apple of infringing U.S. Patent No. 6,137,390 (“390 patent”) by making, using, importing, selling and offering for sale products, such as the iPad 4 tablet, which contain an inductor incorporating claims 1 and 11 of the ‘390 patent.

Representative claim 1 of the ‘390 patent recites:

[a]n inductor with enhanced inductance comprising:

(a) a magnetic core;

(b) an electrically conducting coil wound about said magnetic core;

(c) a magnetic resin layer compression-molded to embed at least a portion of an outer periphery of said electrically conducting core;

(d) wherein said magnetic resin layer contains a magnetic power dispersed in a polymer resin.

Apple argued that Prowire’s claims are not plausible under the Supreme Courts decisions setting out notice pleading requirements under the Federal Rules of Civil Procedure in the Twombly and Iqbal cases. Specifically, Apple challenged the factual sufficiency of Prowire’s allegations that the accused inductors meet the “compression-mold[ed]” and “enhanced inductance” limitations.

Compression-molded Limitation

Prowire alleged the accused inductors met clause (c) of the ‘390 patent’s above claim because the electrically conducting coil has embedded in part a “magnetic resin layer compression-molded” and “on information and belief, the resin layer is compression-molded.”

As evidence, Prowire provided x-ray images of the accused inductors showing the physical form, and spectrum tests showing the composition of the magnetic core. Prowire further provided a cross-sectional photograph depicting the copper coil embedded in the magnetic resin.

Apple took the position that Prowire’s allegation “based on information and belief” was factually insufficient. The accused inductors were contained in publically available consumer electronics; Apple contended that Prowire could have reversed engineered the inductor.

The court disagreed, stating “[i]t is possible whether the magnetic resin layer is compression-molded is only something the manufacturer would know.”

Enhanced Inductance

Similarly, Prowire alleged “on information and belief the accused inductors exhibit an enhanced inductance through adjusting the thickness of the magnetic-resin layer.” Based on the detailed description of the ‘390 patent, “enhanced inductance” is achieved by “adjusting the thickness of the magnetic-resin layer and/or the magnetic permeability of the magnetic -resin.”

Apple argued that Prowire provided no supporting factual allegations. The court once again disagreed, stating “it is arguably improbable Prowire could plead facts showing how Apple or its manufacturers adjusted the thickness of the magnetic-resin layer to achieve maximum enhanced inductance . . . “

Lessons for Practice

When pleading infringement, allegations based “on information and belief” may be sufficient when the information required to prove the allegation is in the sole possession of the defendant.