Form 18: much ado about nothing?

Before we look too deeply into our crystal ball we should take a step back to see why anybody even cared about Form 18. Since 1938, the Federal Rules of Civil Procedure (specifically rule 84 and the appendix of forms) have included sample forms that were supposed to be “sufficient” to satisfy all of the requirements in the federal rules. For those of us who practise patent litigation, that meant developing a close relationship with Form 18, the federal rules’ very simple patent infringement complaint. Indeed, the form complaint was so simple that the plaintiff did not even need to identify which claims were infringed or the name of the accused products.

This incredibly lax standard greatly favoured plaintiffs, particularly the infamous non-practising entities (NPEs). With very little work before filing suit, plaintiffs could file dozens or even hundreds of lawsuits against a broad range of defendants. All that was needed was simply to change the name and address of the defendant. This simplicity may have been part of the undoing of the Form 18 complaint.

The problem was that Form 18 became increasingly divorced from the reality of patent litigation. Decision after decision by the US Court of Appeals for the Federal Circuit required more specific pleading standards, particularly for wilful and indirect infringement. This issue was brought front and centre after the Supreme Court’s Ashcroft v Iqbal and Bell Atlantic v Twombly rulings. The Supreme Court made clear that the federal rules require that every complaint must state a “plausible” cause of action. Form 18, on its face, did not seem to meet this standard.

How could a cause of action be “plausible” when we did not know what product was allegedly infringing or what claims were infringed? After Iqbal and Twombly,patent litigators, district court judges and the federal circuit complained even more bitterly about Form 18. Congress even went so far as to introduce a number of bills to abolish it. The Supreme Court answered these calls for change when it enacted a number of major changes to the federal rules this year.

No more Form 18

The rule changes were not directed to Form 18 specifically, or even patent litigation generally. Instead they abolished rule 84 in its entirety and the whole appendix of forms. That means that beginning on December 1, 2015, the date the changes take effect unless Congress takes action, complaints in patent infringement litigation, like other civil litigation, will need to include sufficient details to prove that the claims are “plausible”.

Of course, what constitutes a “plausible” claim in patent litigation is unclear at this point and will likely require many months of motion practice at the district and appellate levels before we see a consensus forming. However, many people believe that it at least requires specifically identifying the accused products and asserted claims. A significant percentage of complaints on file today—with their bare-bones allegations—will not satisfy the new standard. So what will this mean for the future?

Short-term impact

It has been widely reported that patent litigation filings have been up in 2015, bucking the post-Alice v CLS Bank crash in the second half of 2014. However, given the impending rules changes, November 2015 was expected to bring an even bigger spike in patent litigation filings.

Many plaintiffs, particularly NPEs, will not want to deal with the uncertainty of the new standard or the added cost and time of defending against a motion to dismiss. They had only a few short weeks to file before the new rules take effect and may be working to get their complaints on file as soon as possible.

But is it already too late? Possibly. Some courts may apply the heightened standards retroactively. So even those bare-bones complaints that come in before December 1 may still be at risk. Therefore, whether you are a plaintiff or defendant it is best to operate as if the new rules are already in place.

Long-term impact

In the long term, the change in the federal rules will have a more significant impact on the early days of a case. Plaintiffs will need to do some homework before filing their cases, identifying what products and claims are infringed and then specifically identifying those in their complaints. Although it’s unclear at this time, district courts may make plaintiffs go further and provide additional detail about how the claim is infringed, in order to demonstrate that the claim is “plausible”.

“Plaintiffs will need to do some homework before filing their cases, identifying what products and claims are infringed and then specifically identifying those in their complaints.”

In terms of a defensive strategy, until your jurisdiction has settled on a clearly articulated pleading standard it may make sense to file a motion to dismiss. While some courts may allow the plaintiff to amend, some may not and the defendant may earn a quick victory and dismissal. But defendants will benefit even if the plaintiff does include detailed allegations.

More information in the complaint will also help early assessment of invalidity defences, particularly whether to file an inter partes review (IPR). By statute, defendants must file a petition for an IPR within one year of being served with the complaint. However, with bare-bones Form 18 complaints and infringement contentions months away (if they are even required), defendants lost precious months of preparation while they tried to determine how the plaintiff is interpreting the claims. More detailed pleadings will ensure that this information is available right out of the gate.

Beware the black box claims

The rules may prove to be a bigger challenge for certain industries and courts should be sensitive to those differences. Depending on the nature of the claims, for example for computer science or methods, it might not be clear from publicly available information exactly how the defendant’s accused product meets all of the limitations of the claim. Plaintiffs should not take this as a free licence to fall back to Form 18. Instead, plaintiffs should demonstrate that based on the publicly available information the claims are “plausibly” infringed by pointing to whatever it can to support a reasonable inference that the limitation must be met.

Defendants should be cautious here as well. Courts may respond to a motion to dismiss by ordering limited discovery for the purposes of determining if the limitations of the claim are met. This could push case determinative dates, such as claim construction and summary judgment, even further into the future and after potentially expensive discovery.

So, what of the future can we see in our crystal ball? Short term uncertainty and more detailed complaints but, ultimately, we will probably be back to business as usual.

Aaron Charfoos is a member of the intellectual property group in  Dykema’s Chicago office. He can be contacted at: acharfoos@dykema.com