Federal Circuit: ‘Patentees Need Not Prove Their Case at the Pleading Stage’

An opinion issued by the Federal Circuit Court of Appeals on Tuesday considered the stringency of pleading requirements in patent infringement cases, specifically in the context of Bot M8 LLC’s suit against Sony Corporation of America, et al. (Sony). The opinion partly affirmed and partly reversed the findings of a Northern District of California judge in the video game patent case.

Sony answered allegations of six counts of infringement before the case was transferred from the Southern District of New York to the Northern District of California where Bot M8 filed an amended complaint. Sony moved to dismiss and Judge William H. Alsup agreed as to four of the six asserted patents for lack of sufficient factual allegations.

Bot M8 asked for leave to file a second amended complaint, but the court denied the motion once, then again on reconsideration. Bot M8 appealed several aspects of the decision, including the court’s directive that it file an amended complaint following transfer and the denial of its motion for leave to file an amended complaint.

A panel of Federal Circuit judges found those decisions and two of the dismissals appropriate. As to two of the patents, U.S. Patent Nos. 7,664,988 and 8,112,670, it concluded that the district court erred in finding the plaintiff’s infringement allegations insufficient, as “the court simply required too much.”

The ’988 and ’670 patents generally relate to “a gaming device with a fault inspection program,” the court explained. Both patents reportedly concern the program’s execution, which must be completed before the video game is started.

Bot M8 accused Sony’s PlayStation 4 (PS4) video game console and facets of Sony’s PlayStation network of infringing the patents as the defendant purportedly “relies on a variety of authentication and copyright protection technologies to prevent unauthorized use of the PS4 and copying of PS4 games.”

In its analysis, the Federal Circuit focused on the district court’s instructions to Bot M8 in the case management conference held after the suit was transferred and prior to the filing of the plaintiff’s first amended complaint. During the conference, Judge Alsup reportedly told BotM8 to “‘explain in the complaint every element of every claim that you say is infringed and/or explain why it can’t be done.’”

The Federal Circuit disagreed with this approach, reiterating that a plaintiff need not prove its case at the pleading phase. It found the directive unsupported by law and beyond the standard articulated in a pair of interpretative Supreme Court cases, Ashcroft v. Iqbal and Bell v. Twombly.

The court reiterated that a sufficiently pleaded complaint puts the alleged infringer on notice of the accused activity and supports the grounds for relief “with sufficient factual content.”

Bot M8 is represented by Kramer Levin Naftalis & Frankel LLP and Sony by Kirkland & Ellis LLP.