When it comes to pleading indirect and willful infringement, complaints short on facts can be short-lived. In Protegrity Corporation v. Paymetric, Inc., District Judge Vanessa L. Bryant granted Paymetric’s motion to dismiss Protegrity’s claims for contributory infringement, inducement of infringement, and willful infringement. Paymetric did not challenge the sufficiency of Protegrity’s pleading for direct infringement.
Protegrity accused Paymetric of infringing two patents (the ’281 Patent and the ’201 Patent) related to database security systems. In its count for infringement of the ’281 Patent, Protegrity’s complaint alleges:
“[Paymetric] has directly or contributorily infringed or induced the infringement of the claims of ‘281 Patent by having made, used or sold database security systems that duly embody the invention as claimed therein; such infringement was willful and deliberate; the infringement by Defendant of said Plaintiff’s ‘281 Patent has deprived Plaintiff of sales which it otherwise would have made and has in other respects injured Plaintiff and will cause Plaintiff added injury and loss of profits unless enjoined by this Court.”
The infringement count for the ’201 Patent contains essentially the same allegations.
The Court began its analysis with the Second Circuit pleading standards case Sarmiento v. U.S., 678 F.3d 147 (2d Cir. 2012) (applying the Supreme Court pleading standards cases Ashcroft v. Iqbal, 556 U.S. 662 (2009), and Bell Atl. Corp. v. Twombly, 550 U.S. 544 (2007)), which provides a complaint must contain sufficient factual matter to state a claim to relief that is plausible on its face. This requires that the plaintiff pleads facts that allow the court to draw the reasonable inference that the defendant is liable.
For Protegrity’s contributory infringement claim, the Court stated the complaint must plead facts that allow an inference that the components sold or offered for sale have no substantial non-infringing uses. However, the Court found “Plaintiff’s scant three page complaint” did not allege facts showing that the accused components are material to practicing the invention, that the accused components have no substantial non-infringing uses; or that Paymetric knew of the patents or that its “database security systems” were made or adapted for infringement of the patents. The Court concluded that “Protegrity’s contributory infringement claim does not even offer a ‘formulaic recitation of the elements of a cause of action,’ which itself would fail under the pleading requirements enumerated in Iqbal and Twombly.”
With respect to the claim for inducement, the Court noted “to survive a motion to dismiss, Protegrity’s complaint ‘must contain facts plausibly showing that [the alleged infringer] specifically intended their customers to infringe the [patent-insuit] and knew that the customer’s acts constituted infringement.’” Here, the Court concluded, the “Complaint fails to allege any facts regarding the customers, clients, or suppliers who Paymetric allegedly induced to infringe Protegrity’s patents, and is devoid of a single fact to raise the reasonable inference that the Defendant knowingly induced infringement and possessed specific intent to encourage another’s infringement.”
Finally, based on a review of several district court cases, the Court found, “to have successfully pled a claim for willful infringement, Protegrity’s complaint must allege facts sufficient to support an inference that Paymetric possessed actual knowledge of the 201 and 281 Patents.” However, the Court concluded the complaint alleges only that the infringement was “willful and deliberate,” and not that Paymetric had knowledge of the patents.
The ball is now in Protegrity’s court. The Court’s order gives Protegrity 21 days to file an amended complaint.