On Wednesday, October 6, 2010, Motorola, Inc. announced that its subsidiary, Motorola Mobility, Inc., filed a complaint with the U.S. International Trade Commission (ITC) alleging that Apple’s iPhone, iPad, iTouch and certain Mac computers infringe Motorola patents. Motorola Mobility also filed concurrent patent infringement complaints against Apple (NASDAQ: AAPL) in the Northern District of Illinois (see complaint 1:10-cv-06381 and complaint 1:10-cv-06385) and the Southern District of Florida (see complaint 1:10-cv-23580-UU). The complaints filed in the two federal district courts do little other than identify the patents owned by Motorola that are believed to be infringed by Apple, specifically identifying the following Apple products that might be infringed: Apple iPhone, the Apple iPhone 3G, the Apple iPhone 3GS, the Apple iPhone 4, the Apple iPad, the Apple iPad with 3G, each generation of the Apple iPod Touch, the Apple MacBook, the Apple MacBook Pro, the Apple MacBook Air, the Apple iMac, the Apple Mac mini and the Apple Mac Pro. This type of naked patent infringement complaint has become the standard and seems to directly contradict the requirements set forth by the Supreme Court in Bell Atlantic Corp. v. Twombly, which required the recitation of specific facts and prohibited mere speculation.
Overall, Motorola Mobility’s three complaints include 18 patents, which relate to early-stage innovations developed by Motorola in what the company describes as “key technology areas found on many of Apple’s core products and associated services, including MobileMe and the App Store.” The Motorola patents include wireless communication technologies, such as WCDMA (3G), GPRS, 802.11 and antenna design, and a variety of smartphone technologies including wireless email, proximity sensing, software application management, location-based services and multi-device synchronization.
Motorola Mobility has requested that the ITC commence an investigation into Apple’s use of Motorola’s patents and, among other things, issue an Exclusion Order barring Apple’s importation of infringing products, prohibiting further sales of infringing products that have already been imported, and halting the marketing, advertising, demonstration and warehousing of inventory for distribution and use of such imported products in the United States. In the District Court actions, Motorola Mobility has requested that Apple cease using Motorola’s patented technology and provide compensation for Apple’s past infringement. The duality of the approach is necessary because the ITC can only award injunctive relief, not damages. Damages can only be awarded in the federal district court. Another benefit of the ITC dual approach is that the ITC proceedings almost universally move much quicker than district court proceedings and can play at least some role in the district court proceedings given that validity, enforceability and infringement will have already been resolved in a concurrent federal jurisdiction.
Kirk Dailey, corporate vice president of intellectual property at Motorola Mobility, said, “Motorola has innovated and patented throughout every cycle of the telecommunications industry evolution, from Motorola’s invention of the cell phone to its development of premier smartphone products. We have extensively licensed our industry-leading intellectual property portfolio, consisting of tens of thousands of patents in the U.S. and worldwide. After Apple’s late entry into the telecommunications market, we engaged in lengthy negotiations, but Apple has refused to take a license. We had no choice but to file these complaints to halt Apple’s continued infringement. Motorola will continue to take all necessary steps to protect its R&D and intellectual property, which are critical to the company’s business.”
Just last week Motorola was on the receiving end of a similar approach from Microsoft, when Microsoft sued Motorola for patent infringement in both the ITC and in the United States Federal District Court for the Western District of Washington, alleging that various Microsoft owned patents are being infringed by the Droid 2.
I have written in the past that it really bothers me that patent infringement complaints are so non-informing that they are completely useless to let the defendant know the plaintiff’s theory of the case. Perhaps having been sued myself on a number of occasions over my professional career I have become more sensitive to the need to actually follow the dictates of Federal Rule of Civil Procedure 8, which requires enough information for the defendant to be placed on notice.
It was recently brought to my attention that the patent infringement form complaint that accompanies the FRCP authorizes little or no information and that FRCP 84 states that the complaints accompanying the rules are sufficient and illustrative of the brevity that is required. Excuse me for believing that stating the Patent at issue and the unsupported belief that one or more products infringes one or more specified claims is not enough to satisfy FRCP 8 regardless of the fact that FRCP 84 states that identification of a Patent and a product is enough. I think that is ridiculous given how we know patent trolls operate, and I think it is legally incorrect and I think it violates the Supreme Court’s ruling in Bell Atlantic Corp. v. Twombly.
First, we know that patent trolls file lawsuits for the express purpose of attempting to force marginal defendants without resources into settling for nuisance value and taking a license. Parallel Networks is a perfect example. They are suing 150 (or so) defendants in the Eastern District of Texas. Never mind for the moment that the Eastern District misinterprets the joinder requirement, that is another story for another day. What is going on in this and many other lawsuits is that patent trolls sue everyone, including small companies who can’t hope to mount a defense. These companies then settle and take a license, never getting to the “liberal discovery rules” that Justice Thomas discussed in Swierkiewicz v. Sorema N.A. So for those defendants forced to settle against dubious patents and with more than dubious infringement claims, it is no solace that there are liberal discovery rules. These plaintiffs were allowed to start the lawsuit with little more than buying a patent that is in the same field that the defendants find themselves operating in. That is hardly in compliance with notions of substantial fair play, is it?
Regardless of what FRCP 84 says, and regardless of the fact that the Supreme Court in 2002 Swierkiewicz said that naked complaints without factual support are sufficient under FRCP 8, the Supreme Court in 2007 held otherwise in Twombly. The Supreme Court specifically said:
Federal Rule of Civil Procedure 8(a)(2) requires only “a short and plain statement of the claim showing that the pleader is entitled to relief,” in order to “give the defendant fair notice of what the … claim is and the grounds upon which it rests,” Conley v. Gibson, 355 U. S. 41, 47 (1957) . While a complaint attacked by a Rule 12(b)(6) motion to dismiss does not need detailed factual allegations, ibid.; Sanjuan v. American Bd. of Psychiatry and Neurology, Inc., 40 F. 3d 247, 251 (CA7 1994), a plaintiff’s obligation to provide the “grounds” of his “entitle[ment] to relief” requires more than labels and conclusions, and a formulaic recitation of the elements of a cause of action will not do, see Papasan v. Allain, 478 U. S. 265, 286 (1986) (on a motion to dismiss, courts “are not bound to accept as true a legal conclusion couched as a factual allegation”). Factual allegations must be enough to raise a right to relief above the speculative level, see 5 C. Wright & A. Miller, Federal Practice and Procedure §1216, pp. 235–236 (3d ed. 2004) (hereinafter Wright & Miller) (“[T]he pleading must contain something more … than … a statement of facts that merely creates a suspicion [of] a legally cognizable right of action”), on the assumption that all the allegations in the complaint are true…
So in a post-Twombly era it is required that complaints have factual allegations above a mere speculative level and for there to be enough facts in the complaint, if taken to be true, that the the plaintiff will prevail. Simply stated, it is IMPOSSIBLE for a patent infringement complaint to rise above a speculative level and have enough facts to justify recovery without identifying a single claim that has been infringed. Complaints that do not identify at least a specific claim and at least a plausible basis to believe that said claim is infringed are deficient under the Supreme Court’s Twombly ruling. For crying out loud, if the defendants never appeared there wouldn’t even be enough for a default judgment since patents are NOT infringed, claims are infringed! How then can a complaint that wouldn’t even support a default judgment be sufficient?
Admittedly, the Supreme Court has created one fine mess. The Twombly ruling seems to contract its earlier decisions on FRCP 8, and it seems to contradict FRCP 84. Of course, Twombly was an antitrust case dealing with the Sherman Antitrust Act, and there is no sample antitrust complaint attached to the Federal Rules of Civil Procedure. So does that explain why a sensible pleading requirement is required in antitrust cases while a non-informing complaint is tolerated in patent infringement actions? Just because there is a sample patent infringement complaint attached to the Federal Rules of Civil Procedure? That seems like a terribly unsatisfying distinction really.
I think Twombly certainly offers enough to support raising the issue of these types of naked patent infringement complaints being violative of FRCP 8, thereby preserving the issue for appeal. I think the dissatisfaction that the Federal Circuit has shown with respect to how patent infringement cases are handled, and the fact that Chief Judge Rader has sat by designation in the Eastern District of Texas suggest that there may be more than a passing likelihood that the time is ripe to do something about nuisance patent infringement lawsuits that allege no facts sufficient to support a verdict for the plaintiff.