The Software IP Report

Patent Pleadings Standards and Divided Infringement

When a plaintiff accuses multiple defendants of cooperating to infringe a patent, a well-pled complaint must make clear which defendant controls an accused system, and how defendants cooperate to practice a claimed method.  On this basis, where a plaintiff’s complaint alleged that multiple parties conspired to infringe US Patent Nos. 8,920,068 and 8,956,075, directed to systems and methods for making “tunnel molds” for reinforced concrete structures, the court dismissed the complaint for failure to state a claim pursuant to FRCP 12(b)(6). Raptor, LLC v. Odebrecht Construction Inc. (S.D. Fla. Aug 31, 2017).

The plaintiff had alleged that defendant #1 had listened to a presentation about the plaintiff’s patented technique, and had then shared the technique with defendant #2, the latter having allegedly actually carried out the unauthorized use. The plaintiff had also attempted to pierce the corporate veil with respect to individual defendants. After the court dismissed the plaintiff’s initial complaint, the plaintiff provided what it said were detailed claim charts laying out which party did what.

The court agreed with the defendants that the plaintiff’s renewed pleading failed “to allege each corporate Defendant infringed each limitation of the Patents’ Claims,” and “lack sufficient to infer joint infringement.” (Emphasis in original.)  Under Akamai Techs., Inc. v. Limelight Networks, Inc., 797 F.3d 1020, 1022 (Fed. Cir. 2015), a method claim is infringed by multiple entities “where all steps of the claimed method are performed by or attributable to a single entity,” i.e., where one entity “directs or controls others” performance,” or “where the actors form a joint enterprise.”  To infringe a system claim, a party must ““put[ the invention into service, i.e., control the system as a whole and obtain benefit from it.”  Centillion Data Sys., LLC v. Qwest Commc’ns Int’l, Inc., 631 F.3d 1279, 1284 (Fed. Cir. 2011).

In the present case, there were only allegations “upon information and belief” that the defendants had conspired to infringe. Even the newly-provided claim charts did “not specify which Defendant is responsible for the infringing conduct,” but rather stated “only that it occurred on ‘Defendants’ [j]ob [s]ite.’”  Moreover, the plaintiffs had not “pled any facts allowing the Court to conclude any of the Corporate Defendants directs or controls the actions of the others.”

The plaintiffs also failed in their attempt to pierce the corporate veil: “[a]s Plaintiffs fail to state a claim against the Corporate Defendants, their action cannot continue against the Individual Defendants.”