Federal Circuit Reverses and Remands Dismissal of Direct and Indirect Infringement Claims

Lifetime Indus., Inc. v. Trim-Lok, Inc., No. 2017-1096, 2017 U.S. App. LEXIS 17257 (Fed. Cir. Sep. 7, 2017) (Before Lourie, Moore, and O’Malley, J.) (Opinion for the court, Lourie, J.).

Lifetime owns the ’590 patent, which generally describes a two-part seal for use in a recreational vehicle with a slide-out room. Lifetime sued Trim-Lok for direct and indirect infringement of the ’590 patent. Trim-Lok moved to dismiss the original and first amended complaints, for failure to adequately identify the products accused of infringement. The district allowed Lifetime to file a second amended complaint. There, Lifetime alleged that in the two months before the original complaint, two of its engineers left Lifetime and began working for Trim-Lok. Lifetime further alleged that it learned for the first time that Trim-Lok was offering for sale a two-part seal for an RV with a slide-out room. The district court concluded that Lifetime did not adequately plead direct infringement, because the patent claims require both a two-part seal and an RV, but Trim-Lok only manufactures seals. Regarding indirect infringement, the court concluded that Lifetime only made conclusory allegations that Trim-Lok acted knowingly and intentionally. The district court entered judgment against Lifetime, and Lifetime appealed.

On appeal, Lifetime argued that it properly pleaded direct infringement because it alleged that a Trim-Lok employee or representative “directly installed” Trim-Lok’s two-part seal on “an RV having a slide-out room” at a plant run by Forest River, an RV manufacturer. Trim-Lok argued that this was a speculative allegation, and implausible, because Lifetime did not identify a person controlled by Trim-Lok who took an action that would directly infringe. The Federal Circuit agreed with Lifetime. Commercial manufacture is not the only way that a combination can infringe. Limited internal manufacture and use can also infringe. Because Lifetime alleged that an agent of Trim-Lok installed the seal onto the RV, and that the resulting seal-RV combination infringed the ’590 patent, it alleged that Trim-Lok directly infringed in a manner consistent with precedent: assembling the components of an invention is an infringing act of making the invention. Trim-Lok’s objections concerning lack of detail asked for too much, as there was no requirement for Lifetime to “prove its case at the pleadings stage.” Lifetime identified where the alleged infringement occurred, when it occurred, who performed the allegedly infringing act, and why. This was sufficient at the pleadings stage.

Next, a complaint for induced infringement must plead facts plausibly showing that the accused infringer “specifically intended [another party] to infringe [the patent] and knew that the [other party’s] acts constituted infringement.” Lifetime argued that because it alleged that the employees hired by Trim-Lok had knowledge of seal design and manufacturing relating to products covered by the ’590 patent, that knowledge could be imputed to the Trim-Lok employees that assisted or directed the allegedly infringing installation. Trim-Lok responded that Lifetime’s allegations, at best, only alleged that it knew of the ’590 patent, not that it had the intent to infringe. The Court agreed that Lifetime adequately pleaded that Trim-Lok had knowledge of the patent, and plausibly had the intent to infringe. Trim-Lok assisted in or directed the installation of exactly the same type of seal as the one described in the patent onto an RV. Furthermore, Trim-Lok never made or sold these particular seals prior to gaining that knowledge, and the seals have no noninfringing use. The Court’s precedent did not require Lifetime to do more in its pleadings.

Finally, contributory infringement occurs when a party sells “a component of a patented… combination… constituting a material part of the invention, knowing the same to be especially made or especially adapted for use in an infringement of such patent, and not a staple article or commodity of commerce suitable for substantial noninfringing use.” Lifetime argued that the district court erred in dismissing its contributory infringement claims, because it adequately pleaded the elements of contributory infringement, which does not require intent. The Court agreed with Lifetime. Contributory infringement requires “only proof of a defendant’s knowledge, not intent, that his activity cause infringement.”

A party need not prove its infringement case with detailed facts at the pleadings stage. For direct infringement, it is sufficient to identify where the alleged infringement occurred, when it occurred, who performed the allegedly infringing act, and why. For induced infringement, the pleadings must also allege an intent to infringe. For contributory infringement, it is sufficient to plead that the alleged infringer had knowledge, not necessarily intent, that its activities would lead to infringement.

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