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Discflo Corporation v. American Process Equipment

December 29, 2011

DISCFLO CORPORATION,
PLAINTIFF,
v.
AMERICAN PROCESS EQUIPMENT, INC., AND ROBERT T. WARRENDER, DEFENDANTS.



The opinion of the court was delivered by: Honorable Barry Ted Moskowitz United States District Judge

ORDER RE MOTION TO DISMISS

I. Introduction

On March 9, 2011, Plaintiff Discflo Corporation filed a Complaint for Patent Infringement against Defendants American Process Equipment, Inc., and Robert T. Warrender, alleging infringement of U.S. Patent 7,097,416 (the '416 Patent). Specifically, Plaintiff's Complaint raises against both defendants claims of direct infringement under 35 U.S.C. § 271(a) and claims of indirect infringement under 35 U.S.C. § 271(b) (induced infringement) and 35 U.S.C. § 271(c) (contributory infringement).

On April 21, 2011, Defendants moved to dismiss the Complaint pursuant to Federal Rule of Civil Procedure 12(b)(6), contending that the facts alleged on the face of the Complaint and the exhibits attached thereto*fn1 preclude Plaintiff from establishing direct infringement under § 271(a). Defendants also contend that the Complaint insufficiently pleads indirect infringement under §§ 271(b) & (c) because it contains no allegations of fact supporting specific intent to induce or contribute to another's infringement. Lastly, Defendants argue that the Complaint insufficiently pleads contributory infringement under § 271(c) because it fails to allege Defendants' knowledge of any component manufactured by Defendants that is specifically made or adapted for an infringing use. Defendants ask the Court to dismiss Plaintiff's Complaint with prejudice.

For the reasons set forth below, the Court DENIES Defendants' motion with respect to Plaintiff's claims of direct patent infringement and GRANTS the motion to dismiss Plaintiff's claims of indirect infringement and constructive infringement as to both Defendants.

II. Pleading Standards

Under Federal Rule of Civil Procedure 12(b)(6), dismissal is appropriate if the complaint fails to state a claim upon which relief may be granted. Rule 8(a)(2), which governs pleading requirements, states that a complaint must contain "a short and plain statement of the claim showing that the pleader is entitled to relief." In Ashcroft v. Iqbal, 556 U.S. 662 (2009), the Supreme Court interpreted Rule 8 to require a showing of "facial plausibility":

A claim has facial plausibility when the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged. . . . Threadbare recitals of the elements of a cause of action, supported by mere conclusory statements, do not suffice. 129 S.Ct. at 1949.

Iqbal's heightened pleading standard does not apply to claims of direct patent infringement under § 271(a), since Form 18 to the Appendix of the Federal Rules of Civil Procedure sets forth an example for pleading direct infringement requiring minimal allegations, and Rule 84 clarifies that "[t]he forms in the Appendix suffice[.]" But while Form 18 shields direct infringement claims from Iqbal's heightened pleading standard, it is "silent as to any other theory of patent infringement besides direct infringement" and therefore does not apply to claims of indirect infringement raised under §§ 271(b) & (c). Halton Co. v. Streivor, Inc., No. C 10-00655, 2010 WL 2077203, at *3 (N.D. Cal. May 21, 2010); see also DR Systems, Inc. v. Avreo, Inc., No. 11cv00932, 2011 WL 4850171, at *1 (S.D. Cal. Oct. 12, 2011) ("[B]ecause Form 18 does not address induced infringement or contributory infringement, the heightened pleading standard of Twombly and Iqbal apply to allegations of induced infringement and contributory infringement.").

III. Discussion

A. Direct Infringement

Plaintiff alleges direct infringement under § 271(a).*fn2 In light of Form 18 to the Appendix of the Federal Rules of Civil Procedure, a properly pled complaint for direct infringement needs "only the following elements: 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 Corporation, 501 F.3d 1354, 1356-57 (Fed. Cir. 2007). On its face, Plaintiff's complaint satisfies these five elements.

Defendants' motion, however, does not argue that Plaintiff's complaint is missing necessary content. Rather, Defendants argue that dismissal is warranted at this stage because there is no way, as a matter of law, that the products described in Exhibit B to Plaintiff's Complaint could infringe on the '416 Patent. Plaintiff responds that this argument is prematurely raised, and the Court agrees.

Determination of an infringement claim involves a two-step inquiry. "First, the claims are construed, a question of law in which the scope of the asserted claims is defined." Advanced Cardiovascular Systems, Inc. v. Scimed Life Systems, Inc., 261 F.3d 1329, 1336 (Fed. Cir. 2001). The process for claim construction in this Court is governed by Patent Local Rule 4, which sets forth specific procedures not yet performed by the parties in this case. "Second, the claims, as construed, are compared to the accused device. . . . This is a question of fact." Advanced Cardiovascular Systems, 261 F.3d at 1336. The two-step process of "[c]laim ...


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