Southern District Magistrate Judge Holds That Pleading Willful Patent Infringement Does Not Require Allegations of “Egregious” Infringing Activity and That Requisite Knowledge May Be Provided by a Prior Complaint in the Same Action

On December 19, 2022, U.S. Magistrate Judge Robert W. Lehrburger of the Southern District of New York recommended denying a motion to dismiss claims of willful infringement of eight patents asserted in a Second Amended Complaint (“SAC”). The recommendation finds (1) that pleading willful infringement does not require allegations of egregious infringing conduct and (2) that requisite knowledge of the asserted patents and alleged infringement could be satisfied by the filing of the Original Complaint along with plaintiff’s email (“pre-SAC email”) informing the defendants of additional alleged infringement of two patents prior to filing the SAC.

What Can You Do Today?

We provide additional context regarding Magistrate Judge Lehrburger’s decision below and will continue to cover the issue across the district courts and the Court of Appeals for the Federal Circuit, should it provide additional guidance. In the meantime:

• Practitioners in the Southern District of New York may not allege “egregious” infringing conduct in order to satisfy the willful infringement and enhanced damages pleading requirements.
• Practitioners in the Southern District of New York likely satisfy the requirements of knowledge of the asserted patent and its alleged infringement underlying a claim of willful infringement, if the alleged infringer is notified of the patent and infringement in a prior complaint in the same action.
• The pleading standard in other jurisdictions may vary, as may the standard before other judges in the Southern District, 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. See, for example, our prior coverage of a contrary holding earlier this year from the Central District of California, here.

Procedural History of the Dispute

Plaintiff, Therabody, Inc. (“Therabody”), and defendants, Tzumi Electronics, LLC, Tzumi Inc. (“Tzumi”), are competitors in the percussive massage device industry. On April 12, 2021, Therabody sent a cease and desist letter to Tzumi claiming that several Tzumi products infringed six Therabody patents. Tzumi did not respond and on September 17, 2021, Therabody filed the Original Complaint alleging that Tzumi infringed these six patents and two additional patents. On November 23, 2021, Therabody filed a First Amended Complaint, asserting four more patents. On March 29, 2022, Therabody’s counsel sent an email to Tzumi’s counsel, alleging infringement of two more patents. On May 9, 2022, Therabody filed the SAC asserting the two additional patents identified in the March email and alleging that Tzumi’s infringement of all asserted patents is willful.

On June 13, 2022, Tzumi moved to dismiss the willful infringement claims to eight of the fourteen asserted patents – the two identified for the first time in the Original Complaint, the four patents added in the First Amended Complaint, and two additional patents asserted in the SAC, but not the patents asserted in the April 2021 letter.

Pleading Willful Infringement Does Not Require Allegations of “Egregious” Infringing Behavior

The court first acknowledged that courts in the Southern District of New York have previously required plaintiffs to plead facts that plausibly support an inference that the accused infringement is “egregious,” i.e. more than “garden-variety” patent infringement. However, the court reassessed the standard after the Federal Circuit’s opinion in Eko Brands, LLC v. Adrian Rivera Maynez Enterprises, Inc., 946 F.3d 1367, 1378 (Fed. Cir. 2020). As a result, the court held that egregiousness is only relevant when determining enhanced damages after a finding of willful infringement. Thus, the court held that pleading willful infringement now only requires allegations of intentional infringement of an asserted patent after the defendant is on notice of the patent and the alleged infringement, and not that the infringing acts be egregious.

Knowledge of the Asserted Patent and Its Alleged Infringement May Be Provided by a Prior Complaint in the Same Action

Turning next to the issue of whether Therabody sufficiently plead the requisite infringer’s knowledge, the court first concluded that Therabody failed to do so before the Original Complaint. Specifically, the court found Therabody’s allegations that Tzumi had pre-suit knowledge insufficient based on the April 2021 Letter (which did not specifically identify any of the patents subject to Tzumi’s motion to dismiss), Tzumi’s status as a competitor, industry acclaim for Therabody’s devices, and Therabody’s website page listing its patents. While each of these factors could in other circumstances provide the requisite knowledge, the court found Therabody’s allegations too general and insufficiently related to the specific patents at issue to plausibly demonstrate that they provided Tzumi with requisite knowledge of the patents and infringement.

The court then considered the Original Complaint and pre-SAC email and reached the opposite result by concluding that these had provided sufficient knowledge of the eight challenged patents and their infringement to satisfy the pleading requirements for willful infringement. The court sided with what it termed “most” courts while acknowledging that, like the egregiousness issue, district courts remain divided as to whether a prior pleading can provide the requisite knowledge to support willful infringement allegations in a subsequent pleading in the same action, and that the Federal Circuit has yet to directly resolve this issue.

In support, the magistrate judge pointed to the parallel context of induced infringement, in which an earlier complaint can provide the requisite knowledge of the asserted patent in an amended complaint. It also pointed to “little practical difference” between a pre-complaint notice letter informing a defendant of the asserted patent and its infringement, and an earlier complaint providing essentially the same information.

Subscribe To Viewpoints