Richards Layton & Finger
 

Judge Andrews Grants Motion to Dismiss for Failure to State a Claim but Permits Leave to Amend

February 9, 2017

In SIPCO, LLC v. Streetline, Inc., C.A. No. 16-830-RGA (D. Del. January 20, 2017), Judge Andrews granted a motion to dismiss for failure to state a claim filed by the defendants, Streetline, Inc. and Kapsch TrafficCom Holding Corp. (together, “Streetline”). Streetline argued that the complaint, which alleged infringement of ten patents against the two defendants, failed to allege sufficient facts to state a claim.

According to the Court, most of the ten counts in the complaint contained nothing more than the identification of patents and bare allegations of infringement and damages. Judge Andrews found that “[t]he complaint contains no attempt to connect anything in the patent claims to anything about any of the accused products.” Relying on the Federal Circuit’s decision in Lyda v. CBS Corp., 838 F.3d 1331 (Fed. Cir. 2016), Judge Andrews found the complaint failed to state a claim, holding that alleging patent ownership, a defendant’s sale of products, and an unsupported legal conclusion of infringement is not enough. Judge Andrews dismissed the complaint but granted leave to amend.

Key Points:  This decision provides some guidance as to the factual allegations needed to state a claim for infringement after the elimination of Form 18. On the one hand, Judge Andrews would not “consider at this juncture exactly how much Plaintiff must allege in order to withstand a motion to dismiss. . . . Plaintiff does not have to allege everything it has, but it does have to write a complaint (construing the allegations in the light most favorable to the plaintiff) that makes it plausible to think a defendant has infringed at least one claim of any asserted patent.” On the other, Judge Andrews found Streetline’s requests for infringement contentions and claim-by-claim facts went “too far” and that “a motion to dismiss for failure to state a claim in a patent case is not the place for claim construction or the judge learning the technology that is being asserted.”