Last week, the U.S. Court of Appeals for the Federal Circuit issued an opinion in Bot M8 LLC v. Sony Corp., No. 2020-2218 (July 13, 2021), holding that patent infringement need not be pleaded element-by-element but that pleadings inconsistent with patent claims may warrant early dismissal. The decision affirmed in part and reversed in part the district court’s order dismissing four patents for failure to state a claim and affirmed its grant of summary judgment on a fifth patent.
Bot M8 designs features for gaming machines directed to various types of casino, arcade, and video games. Four of the five asserted patents relate to authentication methods and fault detection to increase security; the fifth relates to changing future game conditions based on players’ prior results. Bot M8 asserted all five patents against Sony, claiming its PlayStation 4 infringed them.
After the case was transferred from the Southern District of New York to the Northern District of California, the district court sua sponte directed Bot M8 to file an amended complaint specifying every element of every claim it alleged was infringed. The district court later dismissed four of the five infringement counts under Rule 12(b)(6) and granted summary judgment of invalidity under § 101 on the fifth. It also denied Bot M8’s request to further amend its complaint.
On appeal, the Federal Circuit reiterated the proper pleading standard: “A plaintiff is not required to plead infringement on an element-by-element basis, but instead, it is enough that a complaint place the alleged infringer ‘on notice of what activity . . . is being accused of infringement.’” The Court explained that the blanket element-by-element pleading requirement imposed by the district court exceeded the Twombly/Iqbal standard and required too much specificity. The Court identified several factors relevant to determining the pleading detail required, including “the complexity of the technology, the materiality of any given element to practicing the asserted claim(s), and the nature of the allegedly infringing device.” Affirming the dismissal of two of the infringement counts, the Court held Bot M8 had “pleaded itself out of court” by alleging extraneous facts inconsistent with the patent claims. The Court also affirmed the grant of summary judgment on the fifth patent and the district court’s procedural orders concerning amendment of the complaint. The Court reinstated the other two dismissed infringement counts, however, having concluded that the amended complaint plausibly alleged infringement of those patents.
This blog post was co-authored by John Winemiller and Rhett Sexton