May 14, 2014
One of the solutions proposed to curb perceived patent litigation abuse is to heighten the pleading standards. The idea being that higher pleading standards would enable defendants to seek early dismissal of complaints at the pleading stage. The assumption being that these types of patent plaintiffs cannot meet heightened pleading standards. But how effective would this really be?
In most of the popular patent districts around the country, courts have already adopted the practice of setting relatively early deadlines for patent plaintiffs to serve their infringement contentions. These infringement contentions typically require the kinds of infringement details that, for example, the Innovation Act (H.R. 3300) proposes to make a requirement for complaints: identifying asserted claims and accused products; element by element charting, and possibly early claim construction positions. Since early disclosure of infringement contentions often means pre-discovery, existing court practice and the proposed Innovation Act are not that different. That is, if a patent plaintiff can provide adequate infringement contentions at an early pre-discovery stage, then it won’t have any trouble providing those infringement contentions at the pleading stage. Either way, the contentions will be based on pre-discovery, public information.
Consequently, heightening pleading standards do not really change the bar to the merits of a patent case. A patent case that is unmeritorious at the pleading stage will remain unmeritorious when early infringement contentions are due. Rather, heightening pleading standards would impose a front-loading of the amount of work that a patent plaintiff must do to file a case, where the case would have been deemed meritorious based on early infringement contentions.
This would still be potentially useful to weed out those cases where a patent plaintiff seeks only to leverage the uncertainty in a complaint to obtain early “nuisance” settlements and has no intention of ever serving adequate infringement contentions. But frankly, such “nuisance” suits likely represent a very small part of the problem (from an overall dollar perspective). Moreover, any benefit would be accompanied by the undesirable effect of potentially precluding the filing of meritorious cases by those patent plaintiffs without the resources to prepare such detailed pleadings.
The reality is that, in most of the cases that would represent a true threat, where the patent and infringement read is not entirely unreasonable in view of publicly available information, the patent plaintiff will be able to prepare a complaint that would meet the proposed heightened pleading standards. Thus, in this sense, the real issue is the more fundamental question of what is the appropriate level of requirement for establishing a prima facie case of infringement, in the absence of discovery. For example, whether at the pleading stage or in infringement contentions, should a patent plaintiff be permitted to assert where and how a claim element is met based on just “information and belief”? This is a much harder question.