K-Tech v. Time Warner: Interplay of FRCP Form 18 and Pleading Standards

Category: Civil Procedure
By: Christian Hannon, Contributor   
TitleK-Tech Telecommunications, Inc. v. Time Warner Cable Inc., No. 2012-1425 (Fed. Cir. Apr. 18, 2013).
[1] “K-Tech contends that its First Amended Complaints comply with Form 18 and that the district court applied the incorrect standard in analyzing the sufficiency of each complaint.” K-Tech, at *8.
[2] “The defendants [...] assert that the respective First Amended Complaints fail to meet either the plain language of Form 18 or the form interpreted through the lens of Twombly and Iqbal.” Id.
[1] [I]t is clear the district court applied the wrong standard to K-Tech’s complaints in requiring that a plaintiff preemptively identify and rebut potential non-infringing alternatives to practicing the claims of an asserted patent. […] Form 18 includes no indication that a patent holder must prospectively anticipate such noninfringement arguments. For this reason alone, it is clear the rationale employed by the district court when dismissing K-Tech’s actions was erroneous.
K-tech at *13 (internal citations omitted).
[2] [W]e find that K-Tech’s amended complaints in both actions satisfy [the Form 18] standards. DirecTV and TWC know what K-Tech’s patents claim, and they know what K-Tech asserts their systems do, and why. K-Tech has alleged that DirecTV and TWC must and do modify or “translate” digital signals they receive, and it has alleged that they do so using K-Tech’s patented methods and systems. We find these allegations adequate to satisfy Form 18 and, thus, to satisfy the pleading standards that govern these actions [because K-tech is not required to identify specific infringing devices by name if they are not discernible prior to discovery].
Id. at *17 (text added).

Procedural History“K-Tech appeals the district court’s orders… dismissing K-Tech’s First Amended Complaints for patent infringement against TWC and DirecTV for failure to state a claim upon which relief can be granted.” K-Tech at *2.
Legal Reasoning (O’Malley, Moore and Wallach)
Background: Adequacy of Patent Infringement Pleadings (Generally)
Federal Rules of Civil ProcedureFederal Rule of Civil Procedure 8(a)(2) “generally requires only a plausible ‘short and plain’ statement of the plaintiff’s claim,” showing that the plaintiff is entitled to relief. Skinner v. Switzer, 131 S. Ct. 1289, 1296 (2011). “Because it raises a purely procedural issue, an appeal from an order granting a motion to dismiss for failure to state a claim upon which relief can be granted is reviewed under the applicable law of the regional circuit.” […] The Ninth Circuit reviews de novo challenges to a dismissal for failure to state a claim under Federal Rule of Civil Procedure 12(b)(6). […] The court’s review is generally limited to the face of the complaint, materials incorporated into the com- plaint by reference, and matters of judicial notice. […]
K-tech at *9 (some internal citations omitted).
Case Law
The plausibility standard set forth in Twombly is met when “the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged.” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) […] “Determining whether a complaint states a plausible claim for relief will . . . be a context-specific task that requires the reviewing court to draw on its judicial experience and common sense.” Iqbal, 556 U.S. at 679 (cita- tion omitted).
Id. at *9-10 (some internal citations omitted).
Form 18 Compliance
Form 18 Defined[As part of the Appendix of the Federal Rules of Civil Procedure] Form 18 sets forth a sample complaint for direct patent infringement and requires: (1) an allegation of jurisdiction; (2) a statement that the plaintiff owns the patent; (3) a statement that defendant has been infringing the patent ‘by making, selling, and using [the device] embodying the patent’; (4) a statement that the plaintiff has given the defendant notice of its infringement; and (5) a demand for an injunction and damages. McZeal v. Sprint Nextel Corp., 501 F.3d 1354, 1357 (Fed. Cir. 2007).
K-tech at *10 (text added).
Form 18 and General Pleading StandardsWe recently had occasion to address the interaction between Form 18 and general pleading standards in R+L Carriers. 681 F.3d 1323. As we explained there, Federal Rule of Civil Procedure 84 states that “‘the forms in the Appendix suffice under these rules and illustrate the simplicity and brevity that these rules contemplate.’” Id. at 1334 (quoting Fed. R. Civ. P. 84). Rule 84, combined with guidance from the Advisory Committee Notes to the 1946 amendment of Rule 84, makes clear that a proper use of a form contained in the Appendix of Forms effectively immunizes a claimant from attack regarding the sufficiency of the pleading. Id. at 1334.
Id. at *10-11.
Form 18 does not Alter Basic Notice RequirementForm 18 in no way relaxes the clear principle of Rule 8, that a potential infringer be placed on notice of what activity or device is being accused of infringement. As we stated in McZeal: ['] It logically follows that a patentee need only plead facts sufficient to place the alleged infringer on notice as to what he must defend. […] Thus, a plaintiff in a patent infringement suit is not required to specifically include each element of the claims of the asserted patent. […]
Id. at *12-13 (internal citations omitted).
Satisfaction of Form 18
Requirements under Form 18Paragraph 3 of Form 18 requires, by way of an exemplary invention, a statement that “[t]he defendant has infringed and is still infringing the Letters Patent by making, selling, and using electric motors that embody the patented invention, and the defendant will continue to do so unless enjoined by this court.”
K-tech at *14.

Content of

K-Tech's Pleading

[K-Tech's Complaint states:] On information and belief, Plaintiff believes that [DirecTV and TWC are] utilizing the methods and systems protected by the K-Tech patents to up- date the digital signals it receives, rather than us- ing other non-infringing methods and systems, because this receiving of digital television signals and channel reassignment appears to be covered by the K-Tech patents, raising an inference of infringement, which constitutes probable cause for the case, even though [DirecTV and TWC hold] in confidence the details of its channel reassignment methods/systems.
Id. at *14 (text added).
No Obligation to Identify Name of Infringing Product if Not Discernible Prior to DiscoveryWe do not read Form 18 […] to require that a plaintiff identify an accused device by name. That K-Tech cannot point to the specific device or product within TWC’s or DirecTV’s systems that translates the digital television signals each receives—especially when the operation of those systems is not ascertainable without discovery—should not bar K-Tech’s filing of a com- plaint. A defendant cannot shield itself from a complaint for direct infringement by operating in such secrecy that the filing of a complaint itself is impossible. Nor is a defendant immune from a direct infringement claim because he does not make a “device” but, rather, infringes through a system or method.
Id. at *17 (text added).
“We reverse the district court’s judgments… dismissing K-Tech’s First Amended Complaints and remand for further proceedings in these cases. REVESED AND REMANDED.” K-Tech at *18.
WALLACH, Circuit Judge, Concurring. K-tech, Wallach Op., *2.
I disagree with the dictum that “the Forms control” over the Supreme Court’s plausibility standard set forth in Iqbal and Twombly. Majority Op. at 10. Rather, plausibility is always required to survive a Rule 12(b)(6) motion. The significance of Form 18 is that, pursuant to Rule 84, it illustrates the “simplicity and brevity” adequate to state a plausible claim for relief in cases alleging direct patent infringement.
K-tech, Wallach Op., *2-3.
Image Attribution Statement: Piotr Siedleck, "twisted contour," available under Public Domain license, http://www.publicdomainpictures.net/view-image.php?image=59264&picture=twisted-contour (last visited Nov. 8, 2013). 
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