Judge Albright Holds Willful Infringement Pleading Does Not Require Allegations of Egregious Infringing Behavior

On July 12, 2022, U.S. District Judge Alan D. Albright of the Western District of Texas denied alleged infringer Lenovo’s motion to dismiss ACQIS’s willful and indirect infringement and enhanced damages claims, holding that patent owners need not allege egregious infringing behavior to assert a claim of willful infringement.

What Can You Do Today?

We provide additional context regarding Judge Albright’s decision below and will continue to cover the issue across the district courts should the Court of Appeals for the Federal Circuit (“CAFC”) provide additional guidance. In the meantime:

• Practitioners before Judge Albright in the Western District of Texas likely need not plead “egregious” acts of infringement to survive a motion to dismiss directed to allegations of willful infringement and enhanced damages.
• The pleading standard in other jurisdictions may vary, and practitioners should consider the state of the case law in the particular jurisdiction, as district courts remain unsettled on the issue of willful infringement pleading requirements and the CAFC has declined to consider at least one recent request to opine on the subject from Judge Alsup in the Northern District of California. (See “Potential for Division Among the District Courts Continues” section, below.)

Judge Albright’s Willful and Secondary Infringement Rulings

On October 15, 2020, ACQIS sued Lenovo for patent infringement and on May 28, 2021, filed a First Amended Complaint alleging that Lenovo’s computer products infringe nine ACQIS patents. Lenovo moved to dismiss various aspects of the amended complaint, including its allegations of willful infringement. In its decision, the court initially observed that a willfulness claim requires defendant’s knowledge of the asserted patent, infringement after acquiring that knowledge, and that the defendant knew or should have known its conduct amounted to infringement. Here, the court found ACQIS sufficiently plead Lenovo’s knowledge of the patents and infringement thereof in the form of a notice letter from ACQIS to Lenovo’s CEO dated May 15, 2018, two years prior to the original complaint. The letter listed each of the asserted patents along with a detailed explanation of their validity and successful litigation history. The court also held that this letter satisfied the knowledge requirement at the pleading stage as to all related Lenovo defendants due to their alleged operation as a “multinational conglomerate” and the letter being addressed to the Lenovo Group CEO.

Judge Albright then concluded without additional analysis and based on the court’s prior holdings on the issue that it will continue to side with those courts that do not require allegations of egregious behavior to plead willful infringement claims.

Finally, the court held that ACQIS sufficiently plead its secondary claims of induced and contributory infringement. In so holding, the court largely relied on the same facts that led it to conclude that ACQIS had sufficiently plead Lenovo’s knowledge in the context of alleged willful infringement, while noting that those claims only need meet a plausibility standard at the pleading stage.

Potential for Division Among the District Courts Continues

As we previously reported, in March of 2022 in a case involving Sonos, Inc. and Google LLC, Judge Alsup of the Northern District of California certified the issues of whether patentees need to allege egregious infringing behavior to assert a willful infringement claim and whether the complaint itself may provide requisite knowledge of the asserted patents and alleged infringement in an interlocutory appeal to the CAFC under 28 U.S.C. § 1292(b). The Federal Circuit summarily denied that petition, declining to provide additional clarity at the time.

Thus, the CAFC’s latest pronouncement on the subject appears to be its orders in SRI Int’l, Inc. v. Cisco Systems, Inc., 14 F.4th 1323 (Fed. Cir. 2021), cert. denied, 142 S. Ct. 2732 (2022) (the subject of our prior coverage, here) and Eko Brands, LLC v. Adrian Rivera Maynez Enters., Inc., 946 F.3d 1367, 1378 (Fed. Cir. 2020). While these opinions appear to hold that willful infringement does not require an allegation of egregious infringing conduct, Judge Alsup’s subsequent certification for interlocutory appeal and observation that the issue has “consumed” a “vast amount of judicial resources” indicate that further appellate clarification may yet be in order. Stay tuned for additional coverage as these issues continue to make their way through the courts.

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