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IP: “Form” over substance

Federal Circuit finds that Form 18 supercedes Twombly

Form 18 in the Appendix to the Federal Rules of Civil Procedure should not be viewed as a special patent exemption from the pleading requirements of Bell Atlantic Corp. v. Twombly and Ashcroft v. Iqbal, particularly when plaintiffs make multiple complex method-of-use claims against multiple defendants. More fundamentally, there is no logical basis for concluding that all other types of cases are subject to the pleading requirements of Twombly and Iqbal, but not patent cases.

In June 2012, the Federal Circuit reversed a district court decision dismissing various patent infringement complaints, and in so doing it opined that Form 18 supercedes Twombly (See In re Bill of Lading Transmission & Processing Sys. Patent Litig.) The complaints’ allegations in that case, however, went far beyond what was set forth in Form 18, and they satisfied Twombly:

“This allegation goes beyond what is required by Form 18. The Qualcomm Amended Complaint states that the patent is being infringed by use of the patented method by specific Qualcomm customers, and it references specific claim elements that R+L asserts are being practiced. As such, the complaint provides Qualcomm with information about which claims of the patent R+L asserts are being infringed, and by whom, and about the activities R+L believes constitute infringement.”

Given the detailed allegations of the Bill of Lading complaints, there was no need for the court to reach the Form 18 issue; and that part of the decision holding that Form 18 displaces Twombly should be viewed as dictum.

The Bill of Lading court began its analysis by expressly stating that it was bound by the pleading requirements of cases decided in the jurisdiction in which the case was pending (there, the 6th Circuit), and repeatedly cited Twombly and Iqbal:

“Because it raises a purely procedural issue, an appeal from an order granting a motion to dismiss for failure to state a claim upon which relief can be granted is reviewed under the applicable law of the regional circuit.”

Nevertheless, after stating that it must follow procedural decisions of the circuit in which the district court sits, the Bill of Lading court went on to reach the Form 18 issue without citing any decisions from the 6th Circuit: “To the extent the parties argue that Twombly and its progeny conflict with the Forms and create differing pleadings requirements, the Forms control.”  

Although Form 18 was adopted in 1938, and last revised in 2007 (three weeks before the Supreme Court’s decision in Twombly), the Bill of Lading court concluded that even a Supreme Court decision could not amend a Federal Rule—or a Form. The dissenting opinion in Twombly, however, essentially made that same argument in pointing to Form 11 (dealing with negligence complaints). But the dissent’s view of the Forms did not carry the day in Twombly; and subsequent negligence decisions, such as Farash v. Continental Airlines Inc. and MLSMK Inv. Co. v. JP Morgan Chase & Co., have been guided by Twombly and Iqbal – not by Form 11. There is no basis in law or logic for patent cases, alone, to be governed by a form pleading in contrast to all other actions that are governed by Twombly and Iqbal.

Numerous district court patent decisions have followed Twombly, or have found a way of reconciling Form 18’s standard with the necessity of providing fair notice to defendants. As the court held in Lyda v. FremantleMedia North America, Inc., a complaint must give each defendant fair notice of what it has supposedly done, particularly where a device may have many varieties and the nature of its use is part of the claim:

“Here, the Court need not determine whether the Twombly/Iqbal or the Form 18 standard governs. . . Form 18 does not require courts or defendants to play guessing games.” 

The Federal Circuit cannot disregard the procedural decisions of the regional circuits by creating its own body of law on the adequacy of a pleading. Ultimately, there is no reason to have a special, relaxed pleading standard for patent cases (which can entail enormous discovery costs) where all other complaints (whether antitrust or negligence) are required to offer more than formulaic and conclusory allegations under Twombly and Iqbal

Contributing Author

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Thomas Rohback

Thomas Rohback is an experienced trial and appellate lawyer, and a partner at Axinn, Veltrop & Harkrider LLP. During one year, he tried three federal...

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