Lyda v. CBS Corp., No. 2015-1923
On September 30, 2016, the Federal Circuit decided Lyda v. CBS Corp., holding that Form 18, the standard “Complaint for Patent Infringement” found in the Appendix to the Federal Rules of Civil Procedure, is insufficient for alleging a case of joint infringement.
Mr. Lyda filed a complaint in the Southern District of New York using the standard direct-infringement complaint format: Form 18. Mr. Lyda is the holder of two patents claiming methods that allow at-home audience members of game shows or reality programs to interact with the program in real-time by sending response data, which includes a vote and an “identifier code.” Mr. Lyda’s Complaint alleged that an independent contractor engaged by CBS Corp. directed at-home viewers of Big Brother to send votes using text messages, which included a vote and an identifying code. Defendants moved to dismiss the Complaint under Fed. R. Civ. P. 12(b)(6). The District Court granted Defendants’ motion, holding that “Plaintiff’s allegations are simply too vague, even under the Form 18 standard.”
The Federal Circuit upheld the District Court’s dismissal, reasoning that Form 18 does not satisfy the pleading standard for a joint-infringement claim. Under Federal Circuit precedent, Form 18 “effectively immunizes a claimant from attack regarding the sufficiency of the pleading.” K-Tech Telecomms., Inc. v. Time Warner Cable, Inc., 714 F.3d 1277, 1283 (Fed. Cir.2013). To the extent there is a conflict between the Iqbal/Twombly standard and Form 18, theForm controls. Id. Allegations of induced and contributory infringement are not governed by Form 18, however, because those causes of action require additional elements not found indirect-infringement claims. In re Bill of Lading Transmission & Processing Sys. Patent Litig.,681 F.3d 1323, 1334 (Fed. Cir. 2012). For example, induced and contributory infringement,unlike direct infringement, require intent on the part of the infringer. Thus, the Federal Circuit held that joint infringement claims, which also require additional elements beyond those found indirect infringement claims, are not sufficiently plead by Form 18.
Because Form 18 does not apply to claims of joint infringement, the Twombly/Iqbal standard
applies in assessing the adequacy of Mr. Lyda’s complaint. The Federal Circuit found that there were no allegations in the Complaint that could form the basis of a “reasonable inference” that each claim step was performed by or should be attributed to the Defendants. Thus, under theIqbal/Twombly standard, the district court’s dismissal was proper. Moreover, the Federal Circuit found no abuse of discretion in the District Court’s refusal to allow Mr. Lyda to amend his complaint, because the district judge’s individual practices limit the rights of a party who elects to oppose a motion to dismiss instead of repleading.