RAH COLOR TECHNOLOGIES LLC v. RICOH AMERICAS CORPORATION

Filing 52

MEMORANDUM AND/OR OPINION. SIGNED BY HONORABLE J. CURTIS JOYNER ON 7/6/2016. 7/7/2016 ENTERED AND COPIES E-MAILED.(kp, )

IN THE UNITED STATES DISTRICT COURT
FOR THE EASTERN DISTRICT OF PENNSYLVANIA
RAH COLOR TECHNOLOGIES LLC,

:
:

Plaintiff,
v.
RICOH USA INC.,
Defendant.

:

CIVIL ACTION

:
:
:
:

NO. 2:15-cv-05203-JCJ

MEMORANDUM AND ORDER
JOYNER, J.

July 6, 2016

Before this Court are Plaintiff’s Motion to Dismiss Counterclaims
Nos. 1-14 in Defendant’s Answer to Plaintiff’s First Amended Complaint
(Doc. No. 42), Defendant’s Response in Opposition thereto (Doc. No.
48), Plaintiff’s Reply to Defendant’s Response in Opposition (Doc. No.
49), and Defendant’s Sur-Reply thereto (Doc. No. 50). For the reasons
outlined in this memorandum, we grant Plaintiff’s Motion in full. We
also grant Defendant leave to amend its counterclaims pursuant to Rule
15(a).
Background Facts

Plaintiff RAH Color Technologies LLC (“Plaintiff”) brings this
patent infringement suit against Defendant RICOH USA, INC.
(“Defendant”). Plaintiff’s original complaint, filed on September 17,
2015, alleged infringement of eight U.S. patents owned by Plaintiff.
(Doc. No. 1). Plaintiff filed their Amended Complaint on April 19,
1

2016. (Doc. No. 33). Defendant responded on May 6, 2016, with an
answer asserting fourteen counterclaims. (Doc. No. 39). Seven of
Defendant’s counterclaims seek a declaration of noninfringement and
the other seven seek a declaration of Plaintiff’s patent invalidity.
Id.
Plaintiff filed a Motion to Dismiss Defendant’s fourteen
counterclaims pursuant to Federal Rule of Civil Procedure 12(b)(6) on
May 23, 2016. (Doc No. 42). Plaintiff argues that the plausibility
pleading standard set forth in the Supreme Court’s Twombly and Iqbal
opinions applies to these counterclaims, and that Defendant’s
counterclaims failed to meet that standard. Doc. No. 43 at 3-5.
Defendant argues that its counterclaims are properly pled, and
that it is still entitled to plead its claims minimally,
notwithstanding the recent amendments to the Federal Rules of Civil
Procedure. Doc. No. 48 at 9-11 of 30.
I. Legal Standard

Federal Rule of Civil Procedure 12(b)(6) provides a defense that
may be asserted by motion when an opposing party’s claim or
counterclaim fails “to state a claim for which relief can be granted.”
Fed. R. Civ. P. 12(b)(6). Pleadings in civil cases require more than
the possibility of relief but “do not require heightened fact pleading
of specifics . . . only enough facts to state a claim to relief that

2

is plausible on its face.” Bell Atlantic Corp. v. Twombly, 550 U.S.
544, 570 (2007). A claim is plausible “when the plaintiff pleads
factual content that allows the court to draw the reasonable inference
that the defendant is liable for the misconduct alleged.” Ashcroft v.
Iqbal, 556 U.S. 662, 678 (2009) (citing Twombly, 550 U.S. at 556).
Federal Rule of Civil Procedure 8(a) sets out general pleading
standards and requires “a short and plain statement of the claim
showing that the pleader is entitled to relief[.]” Fed. R. Civ. P.
8(a)(2). “[A] plaintiff’s obligation to provide the grounds of his
entitlement to relief requires more than labels and conclusions[.]”.
Twombly, 550 U.S. at 555 (citation, internal brackets, and quotation
marks omitted). Allegations in counterclaims are held to the same
pleading standards as allegations in complaints. Tyco Fire Prods. LP
v. Victaulic Co., 777 F. Supp. 2d 893, 898 (E.D. Pa. 2011)(internal
quotation and citation omitted).
II. Discussion

In order to understand the issues at play, it is helpful to
consider context. After Twombly/Iqbal, courts require pleadings to
provide fair notice to defendants and to assert more than “labels and
conclusions” or “a formulaic recitation of the elements of a cause of
action.” Iqbal, 556 U.S. at 678 (quoting Twombly, 550 U.S. at 555).
“Threadbare recitals . . . supported by mere conclusory statements, do
not suffice.” Id.
3

Form 18, formerly appended to the Federal Rules of Civil
Procedure, provided a sample pleading for direct patent infringement
that permitted threadbare infringement allegations. The Federal
Circuit noted in 2007 that, “a bare allegation of [direct]
infringement using the form is inadequate to provide sufficient notice
to an accused infringer[,]” but ultimately concluded that Rule 84
would require them “to find . . . a bare allegation of [direct]
infringement in accordance with Form 161

. . . sufficient under Rule

8(a) to state a claim.” McZeal v. Sprint Nextel Corp., 501 F.3d 1354,
1360 (Fed. Cir. 2012); see also Moore’s Federal Practice (Matthew
Bender 3d ed.), ch 84, Forms § 84.02 (“[A] pleading, motion, or other
paper that follows one of the Official Forms cannot be successfully
attacked.”).
In 2012, the Federal Circuit acknowledged that the “forms in the
Appendix suffice under [the Federal Rules of Civil Procedure] and
illustrate the simplicity and brevity that these rules contemplate.”
In re Bill of Lading Trans’mn & Processing Sys. Patent Litig., 681
F.3d 1323, 1334 (Fed. Cir. 2012) (quoting Fed. R. Civ. P. 84). The
Federal Circuit held that allegations of direct infringement are
sufficient if they follow Form 18, but allegations of indirect
infringement are sufficient only if they meet Twombly/Iqbal’s
plausibility standard. Id. at 1336-37 (internal quotation and citation

1

What became Form 18 was Form 16 when McZeal was decided.

4

omitted). The reasons for having different standards for claims of
direct and indirect infringement were twofold. First, the Appendix of
Forms in the Federal Rules of Civil Procedure only provided a sample
pleading for direct infringement, and “the Forms are only controlling
for causes of action for which there are sample pleadings.” Id. at
1336 (citation omitted). Second, indirect infringement claims
contained additional elements not found in direct infringement claims.
Id. (internal quotation and citation omitted). The Federal Circuit
explained that when “parties argue that Twombly and its progeny
conflict with the Forms and create differing pleading requirements,
the Forms control[,]” because “any changes to the Federal Rules of
Civil Procedure must be obtained by the process of amending the
Federal Rules and not by judicial interpretation[.]” Id. at 1334
(internal citations and quotation marks omitted).
The Supreme Court, pursuant to 28 U.S.C. §2072, submitted to
Congress their amendments to the Federal Rules of Civil Procedure in
April 2015, and ordered that these amendments would be applicable to
all proceedings commenced on or after December 1, 2015, and all
proceedings then pending " insofar as just and practicable." Supreme
Court of the United States, Order regarding Amendments to the Federal
Rules of Civil Procedure, 3 (Apr. 29, 2015), available at
http://www.supremecourt.gov/orders/courtorders/frcv15/(update)1823.pdf
(last visited Jun. 20, 2016). These amendments abrogated Rule 84 and

5

Form 18, explaining that they were “no longer necessary.” Fed. R. Civ.
P. 84 advisory committee’s note to 2015 amendment.
In general, “when amended procedural rules take effect during the
pendency of a case, the amended rules will be given retroactive
application to the maximum extent possible, unless doing so would work
injustice.” Paluch v. Sec’y Pennsylvania Dep’t Corrs., 442 Fed. Appx.
690, 693 (3d Cir. 2011); see also, Accurso v. Infra-Red Servs., Inc.,
No. CV 13-7509, 2016 WL 930686, at *3, n.6 (E.D. Pa. Mar. 11, 2016).
Plaintiff argues that in light of the 2015 Federal Rules’
Amendment, the heightened standard of pleading set forth by Twombly
and Iqbal should apply to all of Defendant’s counterclaims, and that,
under that standard, Defendant’s counterclaims should be dismissed.
Defendant argues that the Rules as amended have not altered the
pleading standard for patent claims and that its counterclaims are
pled sufficiently. We will consider the arguments as they apply to
invalidity claims and noninfringement claims separately.
A. Defendant’s Invalidity Counterclaims

Defendant argues that it would be unfair to hold counterclaims of
patent invalidity to a higher standard. See, Graphic Packaging Int’l.
Inc. v. C.W. Zumbiel Co., No. 1:10-cv-3008-AT, 2011 WL 5829674, at *4
(N.D. Ga. Aug. 1, 2011) (“To require [Defendant] to meet a higher
pleading standard on its invalidity counterclaims . . . than

6

[Plaintiff] must meet in pleading its infringement claims would be
illogical and inequitable.”). District courts in our circuit, however,
have followed the Federal Circuit in In re Bill of Lading and have
applied Twombly/Iqbal’s plausibility standard to patent invalidity
allegations in a counterclaim. See Senju Pharm. Co. v. Apotex, Inc.,
921 F. Supp. 2d 297, 302-03 (D. Del. 2013)(“[T]he court concludes that
the pleading standards set forth in Twombly and Iqbal apply to
counterclaims of invalidity.”); see also Idenix Pharmaceuticals, Inc.
v. Gilead Sciences, Inc., No. 13–1987–LPS, 2014 WL 4222902, at *5 (D.
Del. Aug. 25, 2014)("Defendants' invalidity-related counterclaims are
subject to the requirements of Twombly and Iqbal.").2
To the extent that courts not applying Twombly and Iqbal relied
on the principle of equitable pleading, they did so before the Federal
Circuit decided that Form 18 applies only to claims of direct
infringement. See In re Bill of Lading, 681 F.3d at 1336. Following
the reasoning of In re Bill of Lading, it appears the Federal Rules’
amendment abrogating both Rule 84 and the Appendix of Forms means that

2

Even before the Federal Circuit’s holding in In re Bill of Lading
regarding the applicability of Form 18 in patent cases, Judge Robreno in this
Court held that “[d]etermining whether Defendant's counterclaim on the same
grounds suffices requires the Court to consider whether Defendant's claim of
invalidity or unenforceability is ‘plausible’ under Twombly and Iqbal.” See
Tyco, 777 F. Supp. 2d at 903-04.

7

claims of direct infringement are now also subject to the
Twombly/Iqbal pleading standard.3
Defendant here argues that the Amendments’ Advisory Committee’s
Note stating “[t]he abrogation of Rule 84 does not alter existing
pleading standards or otherwise change the requirements of Civil Rule
8” means that Form 18 is still sufficient for some patent claims. Fed.
R. Civ. P. 84 advisory committee’s note to 2015 amendment. District
courts, however, have identified Twombly and Iqbal as those “existing
pleading standards.” See Atlas IP, LLC v. Exelon Corp., No. 15 C
10746, 2016 WL 2866134, at *5 (N.D. Ill. May 17, 2016); AsghariKamrani v. United Servs. Auto. Ass'n, No 2:15CV478, 2016 WL 1253533,
at *3 (E.D. Va. Mar. 22, 2016); Raindance Techs., Inc. v. 10x
Genomics, Inc., No. CV 15-152-RGA, 2016 WL 927143, at *2 (D. Del. Mar.
4, 2016).
Although these cases do not deal with claims of patent
invalidity, the same principle applies; that is, the abrogation of
Rule 84 and Form 18 eliminated any reason to deviate from
Twombly/Iqbal in pleading patent claims. We will follow the federal

3

Defendant also argues that it should be allowed to plead minimally
because Plaintiff’s complaint is deficient. The Eastern District of
Pennsylvania has already rejected the "principle of permitting the defendant
to plead less to survive a motion to dismiss based on apparent deficiencies in
the plaintiff's pleading[.]” Tyco, 777 F. Supp. 2d at 904. Here, as in Tyco,
the Court repeats, “two wrongs do not make a right.” Id. “If the plaintiff
does not plead a plausible claim for relief . . . the defendant is entitled to
seek, and obtain, dismissal of the complaint.” Id. Defendant is not entitled
to proceed on this theory and to plead insufficiently simply because it has
neglected to exhaust its procedural rights.

8

district courts in our circuit that have applied Twombly/Iqbal’s
pleading standard to counterclaims of invalidity.4

Defendant’s invalidity counterclaims here are substantively
indistinguishable from those that were deemed insufficient under
Twombly/Iqbal in Tyco, Idenix, and Senju. They read:
The claims of the [Asserted Patent] are invalid for failure
to satisfy one or more of the conditions for patentability
specified in Title 35 of the United States Code, including
but not limited to §§101, 102, 103, 112, and 132.
See Doc. No. 39 at 15-18 of 20.
Defendant has pled no facts to support its claim for relief, and
has neglected to identify a distinct legal basis for its claims,
choosing instead to assert that five sections of Title 35 of the
United States Code (§101, §102, §103, §112, and §132) may make
Plaintiff’s asserted patents invalid. We find this fails to meet the
Twombly/Iqbal pleading standard.
Therefore, we GRANT Plaintiff’s Motion to Dismiss as to

4

We acknowledge Defendant’s argument that the detail Plaintiff seeks
will be revealed through discovery, and that the parties modeled their Joint
Discovery Plan and deadlines for service of Defendant’s invalidity contentions
after the Local Patent Rules in the Eastern District of Texas and the Northern
District of California, but the Eastern District of Pennsylvania has not
adopted any local patent rules and we agree with Judge Robreno who stated in
Tyco that “[u]sing local patent rules to alter a defendant's pleading
obligations, while perhaps practical given the very unique nature of federal
patent litigation, offends the trans-substantive character of federal
procedure.” Tyco, 777 F. Supp. 2d at 904 (citing Fed. R. Civ. P. 1). Judge
Robreno noted further that even when local patent rules are adopted, “they
[cannot] modify a defendant’s pleading standard for counterclaims under the
national rules.” Id. (citing Fed. R. Civ. P. 83(a)(1))

9

counterclaims Nos 8-14. We will GRANT Defendant LEAVE TO AMEND these
claims pursuant to Rule 15(a).
B. Defendant’s Noninfringement Counterclaims
Plaintiff and Defendant disagree about whether Form 18 still
applies for noninfringement claims. We address their arguments
below.
It appears Form 18 was never applicable to claims of indirect
infringement, and that the recent amendments to the Federal Rules
are therefore irrelevant to indirect infringement claims. See In
re Bill of Lading, 681 F.3d at 1335-36; Gradient Enters., Inc., v.
Skype Techs. S.A., 932 F. Supp. 2d 447, 453 (W.D.N.Y. 2013); TSMC
Tech., Inc. v. Zond, LLC, No. CV 14-721-LPS-CJB, 2015 WL 661364,
at *7 (D. Del. Feb. 13, 2015); Goade v. Parker Compound Bows,
Inc., No. 3:15-1067, 2016 WL 2986349, at *2 (M.D. Tenn. May 24,
2016)(citing Superior Indus., LLC v. Thor Global Ents. Ltd, 700
F.3d 1287, 1295 (Fed. Cir. 2012). Accordingly, we apply the
Twombly/Iqbal standard to those claims.
In Gradient, the counterclaim that was deemed insufficient under
Twombly/Iqbal alleged “[defendants] have not infringed and are not
infringing any valid claim of the '207 Patent directly,
contributorily, by way of inducement, literally or under the doctrine
of equivalents.” Gradient, 932 F. Supp. 2d 447, 453 (W.D.N.Y. 2013).
In TSMC, a plaintiff’s “extremely sparse” indirect noninfringement
10

counterclaims stating only that “[Plaintiff] has not infringed and
does not infringe . . . contributorily, or by inducement . . . any
claim of the [patents-in-suit]” were similarly insufficient. TSMC,
2015 WL 661364, at *7. (internal quotation marks omitted).
Defendant’s noninfringement counterclaims are almost identical to
those in Gradient and TSMC. They read: “Ricoh has not infringed and
does not infringe, either directly, indirectly, contributory [sic], or
by inducement, any valid and enforceable claims of the [asserted]
patent either literally or under the doctrine of equivalents,
willfully, or otherwise.” Doc. No. 39 at 12-15 of 20. Because we are
applying the Twombly/Iqbal standard, we find Defendant has not
plausibly alleged a counterclaim for indirect noninfringement.
Therefore, to the extent that Defendant’s counterclaims (Nos. 1-7)
seek a declaration of indirect noninfringement, we GRANT Plaintiff’s
Motion to Dismiss. We also GRANT Defendant LEAVE TO AMEND those
counterclaims pursuant to Rule 15(a).
To the extent Defendant’s noninfringement counterclaims seek
judgments declaring that they have not directly infringed Plaintiff’s
patents, the December 2015 amendments to the Federal Rules are
relevant. District courts have found that Form 18's paradigm for
pleading direct infringement claims “no longer provides the proper
measure for the sufficiency of a complaint and that the Twombly and

11

Iqbal pleading standards apply.”5 Windy City Innovations, LLC v.
Microsoft Corp., No. 16-CV-01729-YGR, 2016 WL 3361858, at *4-5 (N.D.
Cal. June 17, 2016); see also Goade v. Parker Compound Bows, Inc., No.
3:15-1067, 2016 WL 2986349, at *2 (M.D. Tenn. May 24, 2016)(citation
omitted); Mayne Pharma Int’l PTY Ltd. V. Merck & Co., No. CV 15-438LPS-CJB, 2015 WL 7833206, at *2 (D. Del. Dec. 3, 2015); Tannerite
Sports, LLC v. Jerent Enterprises, LLC, No. 6:15-CV-00180-AA, 2016 WL
1737740, at *3 (D. Or. May 2, 2016); Richtek Tech. Corp. v. uPi
Semiconductor Corp., No. C 09-05659 WHA, 2016 WL 1718135, at *2 (N.D.
Cal. Apr. 29, 2016); Ruby Sands LLC v. American National Bank of TX,
No. 2:15-CV-1955-JRG, 2016 WL 3542430, at *4 (E.D. Tex. June 28,
2016); Raindance Techs., Inc. v. 10x Genomics, Inc., No. CV
15-152-RGA, 2016 WL 927143, at *2 (D. Del. Mar. 4, 2016).
Nevada’s District Court, an outlier, referred to the Advisory
Committee’s Note relied on by Defendant here and interpreted it to
mean that Form 18 still provides the standard for pleading claims of
direct patent infringement. Hologram USA, Inc. v. Pulse Evolution
Corp., No. 2:14-cv-0772-GMN-NJK, 2016 WL 199417, at *2 n.1 (D. Nev.
Jan. 15, 2016). The District Court in Oregon declined to follow
Hologram USA for policy reasons. See Tannerite, 2016 WL 1737740, at

5

Before the amendment, this Court noted that the "inconsistency between
the Supreme Court's interpretation of Rule 8(a) (i.e. Twombly/Iqbal) and the
forms Rule 84 validates should be remedied[.]" Tyco, 777 F. Supp. 2d at 905.
Other federal courts have made similar recommendations. See, e.g., Ingeniador,
LLC v. Interwoven, 874 F. Supp. 2d 56, 67 (D.P.R. 2012). ("[T]he forms
accompanying the Federal Rules . . . should be updated to include the
specificity required by Twombly and Iqbal.").

12

*4. The court remarked:
Consistent adjudication is a primary concern not only in
applying the law in a uniform manner, but also in accurately
apprising parties to patent suits of the relevant legal
standards . . . [i]f the Court were to follow Hologram USA
as defendant requests, there would be scant legal
justification for the ruling, as invoking a nonexistent form
is tenuous jurisprudence at best. After all, if the Court
follows Form 18 now, should the court then continue to apply
it in future patent cases? If not, when should a line be
drawn?
Tannerite, 2016 WL 1737740, at *4.
We share the Tannerite Court’s concerns and do not find it unjust
to abandon the Form 18 pleading standard at this juncture. We also
find, pursuant to the Supreme Court’s Order regarding the Federal
Rules of Civil Procedure’s recent amendments, see Supreme Court’s
Order, supra, that abandoning the Form 18 pleading standard and
applying Twombly/Iqbal’s standard to an pleading filed after the
amendments took effect is “practicable” and necessary for the
resolution of inconsistent case law. See Tannerite, 2016 WL 1737740,
at *5.
Applying Twombly and Iqbal to Defendant’s noninfringement
counterclaims, to the extent they seek declarations of direct
noninfringement, we find those counterclaims lack the plausibility and
particularized facts required to sufficiently state a claim for
relief. We therefore GRANT Plaintiff’s Motion to Dismiss and further
GRANT Defendant LEAVE TO AMEND those Counterclaims pursuant to Rule
15(a).
13

Conclusion
For the foregoing reasons, we GRANT Plaintiff’s Motion to
Dismiss Defendant’s Fourteen Counterclaims in full. We further GRANT
Defendant LEAVE TO AMEND its fourteen counterclaims.

14