The Software IP Report

Must Willful Infringement Pleading Allege Egregious Acts?

By Charles Bieneman

Categories: Patent Infringement, The Software IP Report

Much of a plaintiff’s complaint adequately plead patent infringement, but a portion of the complaint alleging willful infringement was dismissed where the plaintiffs “failed to allege any facts suggesting that Defendant’s conduct is ‘egregious . . . beyond typical infringement.’” CG Technology Development, LLC v. Zynga, Inc., 2:16-cv-00859-RCJ-VCF (D. Nev. Feb 17, 2017).

The court’s decision relied heavily on the recent shift in the law of willfulness following Halo Elecs., Inc. v. Pulse Elecs., Inc., 136 S. Ct. 1923 (2016).  Under Halo, it was insufficient that plaintiffs

simply made the conclusory allegations that Defendant was aware of the ‘818 Patent and that the “continued offer, use, and promotion of its infringing social casino products . . . constitutes willful and egregious infringement behavior.”

Therefore, the court dismissed the plaintiff’s willfulness allegations, albeit with leave to amend.  The court further denied the motion to dismiss with respect to the plaintiff’s allegations of direct infringement, and some of its allegations of indirect infringement (both inducement and contributory infringement).  However, allegations of indirect infringement prior to the date on which the plaintiff plead that the defendants actually knew about the patent-in-suit were dismissed.

Lessons for Practice

Another decision the same day from a New York court, in which Halo was not mentioned, and in which a conclusory willfulness pleading was allowed, highlights the inconsistencies in various courts’ requirements for pleading willful infringement; and other courts have similarly held that willful infringement can be pled without an allegation of egregious conduct.  Nonetheless, the present court has a point in requiring an allegation of egregious misconduct to support willfulness.  As this court notes, Halo obviates the old Seagate “objective recklessness” standard.  Under Halo, specific facts and circumstances matter as they did not under Seagate.