Palmer Hamilton, LLC v. AmTab Manufacturing Corporation

Filing 23

ORDER denying 7 Motion to Dismiss by Defendant AmTab Manufacturing Corporation. Signed by District Judge James D. Peterson on 11/14/2016. (voc)

IN THE UNITED STATES DISTRICT COURT
FOR THE WESTERN DISTRICT OF WISCONSIN

PALMER HAMILTON, LLC,
Plaintiff,
v.
AMTAB MANUFACTURING CORPORATION,

ORDER
16-cv-522-jdp

Defendant.
Plaintiff Palmer Hamilton, LLC, brings this patent suit against a competitor,
defendant AmTab Manufacturing Corporation, for manufacturing and selling a collapsible
booth that allegedly infringes Palmer Hamilton’s patent, U.S. Patent No. 9,270,265 (the
’265 patent). AmTab has moved to dismiss Palmer Hamilton’s complaint, pursuant to
Federal Rule of Civil Procedure 12(b)(6). Dkt. 7. AmTab contends that the complaint fails to
plausibly allege that AmTab has infringed the ’265 patent, either directly or indirectly.
Palmer Hamilton’s allegation of direct infringement would easily pass muster under
the pleading standard modeled in Form 18 of the Federal Rules of Civil Procedure. But as of
December 1, 2015, the forms are no longer part of the federal rules, so the familiar
Twombly/Iqbal pleading standard now applies. Exactly how that standard applies in patent
cases is an open question in the Federal Circuit and the regional courts of appeals.1 AmTab
thinks that Twombly/Iqbal should require a plaintiff to lay out its infringement allegations
element-by-element in the complaint, which is a lot more than old Form 18 required.

1

The law of the regional circuit, rather than the Federal Circuit, governs Rule 12(b)(6)
motions in patent cases. See In re Bill of Lading Transmission & Processing Sys. Patent Litig., 681
F.3d 1323, 1331 (Fed. Cir. 2012).

This court will not require plaintiffs to plead direct infringement element-by-element
for two reasons. First, the old Form 18 approach is still generally sufficient to articulate a
plausible claim for direct infringement. Twombly/Iqbal does not require a plaintiff to prove its
case in the complaint, or even convince anyone that it has a good case. The allegations in the
complaint just have to get over the low hurdle of plausibility. In most patent cases, especially
those like this one involving mechanical devices, identifying the claims asserted and the
devices accused will be enough to do the job (assuming, of course, that the complaint
includes the other necessities, such as allegations of patent ownership and jurisdiction). Here,
the complaint identifies the patent at issue; it alleges that the ’265 patent discloses and
claims a “collapsible booth”; and it alleges that AmTab’s collapsible booths—as depicted in
the marketing flyer—infringe claims 1, 11, and 14 of the ’265 patent. Unlike most of the
cases that AmTab cites in its briefing, the patent-in-suit discloses a relatively simple,
mechanical product. The complaint plausibly alleges direct infringement.
Second, and more important, this court requires standardized pretrial disclosures that
force both sides to lay out their core contentions element-by-element early in the case. Given
that both sides will have to put their cards on the table relatively early in the case, motions
attacking the pleadings are generally a waste of resources for the parties and the court.
Make no mistake: a patent plaintiff has to have a good faith basis for bringing suit in
the first place, and that means the plaintiff has to have conducted an element-by-element
analysis of the accused instrumentality before filing the complaint. But there are too many
fair reasons why a plaintiff might be unable or justifiably reluctant to put that level of detail
in the complaint, so this court will not require it. But the court sets a schedule by which both
sides have to make early element-by-element disclosures of their infringement and invalidity

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cases. In a more complex, unusual case, the minimal approach might not establish a plausible
allegation of direct infringement. But such cases will be rare, and this is not one of them.
AmTab complains that Palmer Hamilton has not identified where each claim element is
present in the accused product; AmTab does not contend that an element is conspicuously
absent or that infringement is actually implausible.
Allegations of indirect infringement require a plaintiff to do more than identify the
asserted claims and accused devices. “To state a claim for inducement of infringement, the
patentee must establish ‘first that there has been direct infringement, and second that the
alleged infringer knowingly induced infringement and possessed specific intent to encourage
another’s infringement.’” Nalco Co. v. Chem-Mod, LLC, No. 14-cv-2510, 2015 WL 507921, at
*3 (N.D. Ill. Feb. 4, 2015) (quoting Broadcom Corp. v. Qualcomm, Inc., 543 F.3d 683, 697-98
(Fed. Cir. 2008)). To state a claim for contributory infringement, “in addition to proving an
act of direct infringement, plaintiff must show that defendant ‘knew that the combination for
which its components were especially made was both patented and infringing’ and that
defendant’s components have ‘no substantial non-infringing uses.’” Lucent Techs., Inc. v.
Gateway, Inc., 580 F.3d 1301, 1320 (Fed. Cir. 2009) (quoting Cross Med. Prods., Inc. v.
Medtronic Sofamor Danek, Inc., 424 F.3d 1293, 1312 (Fed. Cir. 2005)). “Both induced
infringement and contributory infringement require a pleading of knowledge and/or specific
intent.” Radiation Stabilization Sols., Inc. v. Varian Med. Sys., Inc., No. 11-cv-7701, 2012 WL
3757489, at *4 (N.D. Ill. Aug. 28, 2012).
Of course the factual support for the additional allegations of indirect infringement
are typically in the control of the defendant, so these facts will often have to be alleged on
information and belief. Palmer Hamilton’s complaint includes those requisite allegations of

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knowledge and intent. The allegations are sparse, but plausible. They need not be persuasive
or supported by greater factual detail at this point.
This court’s preliminary pretrial conference order requires Palmer Hamilton to
disclose soon precisely what AmTab is looking for, without the need for motion practice over
the form of the complaint.

ORDER
IT IS ORDERED that defendant AmTab Manufacturing Corporation’s motion to
dismiss, Dkt. 7, is DENIED.
Entered November 14, 2016.
BY THE COURT:
/s/
________________________________________
JAMES D. PETERSON
District Judge

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