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First published in Westlaw

A judge can increase damages for patent infringement up to three times the assessed amount if the court finds willful infringement. The patent statute does not define willful infringement, so the jury or the court must determine willfulness based on the totality of the circumstances.

Until last year, some courts held that willfulness required a showing of egregious behavior, which effectively elevated the willfulness requirement to the level the law set for enhanced damages.1

Late last year, the Federal Circuit explained in SRI International, Inc. v. Cisco Systems, Inc.2 that willfulness only requires a showing of intentional or deliberate infringement, a lower standard than “egregiousness,” the standard for awarding enhanced damages.

The court had changed the standard for willfulness in Eko Brands, LLC v. Adrian Rivera Maynez Enterprises, Inc.3 because of the Supreme Court decision in Halo Electronics, Inc. v. Pulse Electronics, Inc.,4 but some confusion had remained in the district courts.

One repercussion of Eko and SRI is what a plaintiff must plead for a claim of willful infringement, which has other areas of disagreement between the district courts. This article explains some of the issues and suggests a safe approach to survive a motion to dismiss for failure to state a claim of willfulness.

A “complaint must contain sufficient factual matter, accepted as true, to ‘state a claim to relief that is plausible on its face,‘” which means the complaint must contain “factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged.“5 “Where a complaint pleads facts that are ‘merely consistent with’ a defendant’s liability, it ‘stops short of the line between possibility and plausibility of entitlement to relief.’“6

Inconsistent Willfulness Pleading Requirements in the District Courts

Some courts, such as the Northern District of California, required factual allegations of egregious conduct to plead willful infringement. Others, such as the District of Delaware, did not. Some courts allow claims of willfulness based on activities after the filing of the complaint, while others do not. The inconsistencies sometimes extend to judges on the same court.

Courts That Did Not Require Pleading of Egregiousness before Eko

Even before Eko, the Delaware District Court allowed a party to plead willfulness without asserting acts of egregious conduct.7 In APS Technology, Inc. v. Vertex Downhole, Inc.8 the complaint alleged the defendants continued to infringe after receiving a pre-suit letter explaining why defendants’ actions were infringing. The court found such allegations sufficient to support a willful infringement claim at the pleading stage because it saw no need to plead egregious conduct.

Acknowledging the absence of clear guidance from the Federal Circuit or the Supreme Court, the Delaware court in Dynamic Data Technologies, LLC v. Brightcove Inc.9 noted that “the safest course is to allow an enhanced damages claim to proceed beyond the pleadings stage,” if the pleading alleged facts from which knowledge of the asserted patents and infringement can be plausibly inferred.

The Eastern District Court of Texas also did not require pleading of egregious conduct before Eko for a willfulness claim, and even held that allegations in the complaint of knowledge of the asserted patent through the service of the complaint were sufficient to plead willfulness.10

In Kirsch Research & Development, LLC v. Atlas Roofing Corp.11 the court held that the totality of the pled allegations — that plaintiff was a pioneer in the relevant market, had marked its product and product literature with the patent number, and the competitor-defendant had seen the plaintiff’s product literature several times — was sufficient for the willfulness claim to proceed.

The District Courts of Massachusetts, New Hampshire, and New Jersey, shared this view.12

Courts That Required Pleading Egregiousness after Eko

Courts in the Northern District of California, Eastern District of New York, Eastern District Court of Michigan, and Western District of Virginia required a plaintiff to plead egregious conduct to state a viable willful infringement claim, even after Eko.13 Even after SRI, in Autronic Plastics, Inc. v. Apogee Lighting, Inc.,14 the Eastern District of New York continued to require inferences of egregiousness to survive a motion to dismiss. The Western District of Virginia held the same in Cellcontrol, Inc., v. Mill Mountain Capital, LLC.15

In Fortinet, Inc. v. Forescout Technologies, Inc.16 the Northern District of California dismissed the plaintiff’s willfulness claims because it failed to allege egregious behavior. The plaintiff argued that, despite notice, the defendant refused to discuss licensing for months while continuing to sell the accused products and services, but the court held that the allegations of the defendant’s delay in engaging in licensing negotiations did not plausibly show that the defendant “knew its conduct to be egregious” or had “culpable knowledge of likely infringement.“17

Judge Chhabria in the Northern District of California, though, challenged his court’s approach in view of Eko. In Core Optical Technologies, LLC v. Juniper Networks Inc.18 the defendant, citing the court’s prior decisions, requested dismissal of the plaintiff’s willfulness claim for failing to plead egregiousness.

Judge Chhabria rejected that argument because Eko removed egregiousness as an element of willfulness, so the complaint alleging the defendant deliberately infringed the patent was enough to allow the claim of willfulness to proceed.

In a recent post-SRI case, MasterObjects, Inc. v. Amazon.com, Inc.,19 Judge Alsup did not refer to egregiousness in analyzing the sufficiency of a plea of willfulness because he explained, “Willfulness requires both knowledge of the infringed patent and knowledge of infringement.”

Judge Preka of the Southern District of New York similarly noted that since Eko removed egregiousness from the requirements for willfulness, the complaint only needed to “allege that the accused infringer deliberately or intentionally infringed a patent-in-suit after obtaining knowledge.“20

According to Judge Preka, the plaintiff did so by alleging the defendants knew about the patent and alleged infringement before selling the accused products. Citing APS, a post-Eko case from the District of Delaware, Judge Preka rejected defendants’ reliance on preEko cases as misplaced.21

Following SRI, the district courts are aligning on accepting willfulness pleadings that do not recite egregious conduct. That trend, however, does not mean bare-bones assertions could pass muster. To survive a motion to dismiss, a plaintiff must still plead sufficient facts to show knowledge of the patent and infringement. Courts may reject pleadings of willfulness that leave “too many dots to connect.“22

To plead knowledge of the patent, a plaintiff needs to supply facts supporting reasonable inferences that a defendant knew the patent. A mere assertion that the defendant was aware of the patent without more may not suffice.

In Michigan Motor, the court found the plaintiff’s allegation of the defendant’s presuit knowledge conclusory and insufficient because the plaintiff “did not attach a copy of the referenced letter, never specified what the letter stated, did not mention who sent the letter, and did not mention to whom the letter actually was sent.“23 Further, allegations of general knowledge of an entire portfolio is also likely insufficient to support a pleading of knowledge of a particular patent.24

Courts have also scrutinized factual allegations for knowledge of the infringement, rejecting boilerplate assertions. And as one court noted, “Knowledge of infringement does not arise from knowledge of the asserted patent as a matter of course; it must be the subject of discrete, albeit related, allegations.“25 General assertions of competitor monitoring are probably insufficient to support inferences of knowledge of infringement, even if it supported inferences of knowledge of the patent.26

In Schwendimann v. Stahls, Inc.,27 the Eastern District of Michigan court dismissed the willfulness claim, finding the plaintiffs’ allegations provided a reasonable inference that the defendant knew of the patentsinsuit, but not of the alleged infringement.

For the latter, the plaintiffs alleged they had requested the defendant take an unspecified license and indicated their belief that certain unspecified patents cover the accused products, but the court found these allegations failed to set forth discussions about how defendant infringed the patents-in-suit and “amounted to nothing more than an unexplained belief.“28

Courts Differ on Whether Plaintiff Can Plead Knowledge of Infringement Based Only on The Filing of a Complaint

Courts disagree whether the filing of complaint can supply the knowledge required for a claim of post-suit willful infringement.29 The Eastern and Western Districts of Texas have answered that question affirmatively.30

In BillJco LLC v. Cisco Systems, Inc.31 the plaintiff alleged the defendants knew of the patents at least as of the filing or service of the lawsuit and continued their infringing activities, which the Eastern District Court of Texas found sufficiently stated a plausible willfulness claim.

Similarly, in BillJCo, LLC v. Apple Inc.32 the Western District Court of Texas found the plaintiff sufficiently stated a post-filing willfulness claim on similar facts.

Other courts agree.33 In Longhorn Vaccines & Diagnostics, LLC v. Spectrum Solutions LLC34 the Utah court found “no apparent reason defendants categorically should be immunized from claims that infringement in the post-filing period is willful just because they gained knowledge of the asserted patents from the complaint rather than before it was filed.” The Northern District of Georgia agreed.35

The District Court of Delaware is split on this issue. One magistrate judge explained:

As many have acknowledged, courts, including courts within this district, disagree as to whether a pleading alleging post-suit willfulness must allege additional facts, beyond post-suit knowledge of the patent and continuing infringement despite that knowledge, from which a finder of fact could conclude that the accused infringer’s post-suit conduct was sufficiently egregious to support a willfulness finding. The parties in this case agree, and I concur, that there is currently no binding authority from the Federal Circuit or the Supreme Court on this point.36

In IOENGINE, LLC v. PayPal Holdings, Inc.37 Judge Bryson of the Federal Circuit, sitting by designation, found that with respect to allegations of post-suit willfulness, knowledge is a given, eliminating the need to plead additional facts. Magistrate Judge Hall agreed with that approach.38

On the other hand, Judge Connolly in Zapfraud, Inc. v. Barracuda Networks39 held that “the operative complaint in a lawsuit fails to state a claim for willfulness-based enhanced damages” where a defendant’s alleged knowledge comes solely from the complaint or a prior version of the complaint.40

Judge Andrews agreed in Wrinkl, Inc. v. Facebook, Inc.41 explaining that, “if all that is required is the filing of a complaint and a plausible allegation of infringement, then every case would be a willful infringement case.” Judge Andrews also rejected willfulness allegations in an amended complaint that relied solely on a prior version of the complaint to show knowledge.42

Because of the different standards of pleadings, the safest approach for a patentee alleging willful infringement is to include in the complaint facts showing actual knowledge of the patents and of infringement despite that knowledge. Under the Federal Circuit’s holding in Eko and SRI, there is no need to allege egregiousness or to include facts of such egregiousness. Courts, however, may not entertain conclusory prayers without specific allegations supporting reasonable inferences of knowledge.

Whether or not pre-suit knowledge is required to support a claim of willfulness depends on the court, at least until the Federal Circuit or Supreme Court addresses the issue.

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