The Software IP Report

Few Factual Allegations Enough to Allege Patent Infringement

Only a few factual allegations are required to survive a Motion to Dismiss a complaint alleging patent infringement, held the Southern District of Florida in Raptor, LLC. and Concrete Services, LLC. v. Odebrecht Construction, Inc. and Barreiro Construction Corp., NO. 17-21509-CIV-ALTONAGA (S.D. Fla. Feb. 13, 2018).

Plaintiffs own U.S. Patents 8,920,068, 8,956,075, and 9,435,085, directed to concrete structure formation. Defendant Odebrecht is a prime contractor and Defendant Barreiro is their hired subcontractor. Plaintiffs allege direct infringement of the asserted patents and that Odebrecht induced Barreiro’s infringement. Defendants filed a Motion to Dismiss the patent infringement charges under F.R.C.P. 12(b)(6). Plaintiffs had already lost a Motion to Dismiss on their original Amended Complaint, and this Motion to Dismiss was for Plaintiff’s Second Amended Complaint.

To survive a motion to dismiss under 12(b)(6) the complaint must include facts that, accepted as true, state a plausible claim of relief. The facts must allow the court to draw the reasonable inference that the defendant is liable for the misconduct alleged. The court construes the facts most favorably to the plaintiff.

On direct infringement, Plaintiffs alleged a joint enterprise between the Defendants. Akamai Techs., Inc. v. Limelight Networks, Inc., 797 F.3d 1020, 1022 (Fed. Cir. 2015) sets a four element test for a joint enterprise: (1) an agreement among the members of the group; (2) a common purpose to be carried out by the group; (3) a community of pecuniary interest in that purpose; and (4) an equal right to a voice in the direction of the enterprise, which gives an equal right of control.

Plaintiffs alleged an agreement between the Defendants, which the Court accepted as true to satisfy the first element. The Court then held that the allegation that building a bridge railing was a “common purpose” satisfying the second element, even though the alleged “purpose” of Odebrecht was, as a prime contractor, broader than building the bridge railing. The Court rejected Defendants’ arguments that a “pecuniary interest” had to be equal among the members, and held that Barreiro being hired by Odebrecht satisfied the third element.

For the ‘068 and the ‘085 patents, the Court assumed that Plaintiff’s assertion that Odebrecht and Barreiro had equal right of control was true, over Defendants’ assertions that prime contractors typically do not have control over subcontractors, satisfying the fourth element. However, because Plaintiffs did not allege Odebrecht’s control over Barreiro for the ‘075 patent, the Court dismissed that count of direct infringement.

On indirect infringement, Defendants argued that Odebrecht did not have the specific intent to encourage Barreiro’s infringing actions. The Court agreed that Plaintiffs’ general accusations of Odebrecht’s employees stealing Plaintiffs’ patented ideas did not satisfy the pleading standard. However, the Court held that Plaintiffs’ allegations that Odebrecht contracted with Barreiro to replicate Plaintiffs’ patented inventions lead to a reasonable inference that the agreement was made with the knowledge of those patented inventions. With that specific intent, the indirect infringement counts survived.

Lessons for Practice

This case reminds us that, while notice pleading is no longer allowed, a complaint for patent infringement requires only a few allegations of fact to survive a motion to dismiss. Indeed, the only count that the Court dismissed was one on which Plaintiffs simply alleged no facts to support every element of direct infringement. Where Plaintiffs had previously failed to allege patent infringement, the addition of facts that could lead the Court to a plausible claim of patent infringement allowed the complaint to survive.