Intellectual Property Law

Headless Calvaryman Unseated by Iqbal.

By thomason

In the old days - what, like five years ago -  an infringement defendant sued by a competitor was likely to counterclaim based on patents possibly applicable to both parties? product lines.  Such counterclaims served a zero-sum strategy, and often was a gambit toward settlement by cross-licensing.  The practice persists, but is of no use when defending against patent holding companies that have no product lines.

Saddling a competitor?s suit with a routine counterclaim for infringement now may require a change of riders.  Like the rider encountered by Ichabod Crane, an infringement counterclaim may be deemed a ?headless? soldier when it chases down Iqbal.  A ?formulaic? counterclaim for infringement, devoid of factual underpinning, can cause heads to roll.

In Elan Micro. v. Apple, 5:09-CV-1531 (N.D. Cal. 9/14/09), some counterclaims were dismissed, with leave to amend, because there was ?nothing more than a bare assertion? of patent infringement.  The counterclaims identified the patents, and alleged ?upon information and belief,? infringement by Elan?s ?touch sensitive input devices or touchpads, including but not limited to the Smart-Pad.?  This pruning exercise, especially is surprising in the N.D. Calif., because of its rules requiring initial disclosure of infringement contentions.  The counterclaims might have pleaded with more detail, but Apple would soon have had to present a claim chart.  Just having another round of pleading amendments was what the Iqbal justices would want, but getting on with the case is too a worthwhile judicial act.

The recency and frequency of decisions dismissing claims based on Twombly and Iqbal may be all the rage, but those perhaps are false efficiencies.  My procedure professor explained that in a perfect justice system, a dispute ensues, full disclosure is made, and a judicial officer decides promptly a just result ? all at once.  But not so in a reality-TV universe.  A a formbook pleading is followed by incomplete disclosures, which provokes supplemental discovery and extended deadlines, then late-made amended pleadings plus revisions to initial contentions, and when the case gets its semiannual one-hour perusal by a judicial officer, the result is a partial Rule 12 dismissal with leave to amend, and maybe an extension to the CMO dates.  Does that help move the case to just and efficient conclusion, or is that about as effective as throwing a pumpkin across a bridge?
Note too that the Elan decision departs from the belief that use of the FRCP Form 18 complaint to plead infringement will suffice.  Further, it rejects the argument that Rule 11(b)(3) enables a party to obtain discovery about matters pleaded in good faith ?upon information and belief.?

Full post as published by ISinIP on September 17, 2009 (boomark / email).