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Full Opinion
Opinion for the court filed by Circuit Judge OâMALLEY.
Dissenting in part and concurring in part opinion filed by Circuit Judge NEWMAN.
In this patent infringement action, R + L Carriers, Inc. (âR + Lâ) appeals the district courtâs dismissal with prejudice of its amended complaints and counterclaims against DriverTech LLC (âDriverTechâ), Affiliated Computer Services, Inc. (âACSâ), PeopleNet Communications Corp. (âPeopleNetâ), Intermec Technologies Corp. (âIntermecâ), Microdea, Inc. (âMicrodeaâ), and Qualcomm, Inc. (âQual-commâ).
I. Background
A. Factual Background
The '078 patent relates to the less-than-a-load trucking industry. R+L, the owner of the '078 patent, is a major less-than-a-load carrier that utilizes the '078âs patented method in its business. Order Granting Joint Mot. to Dismiss at 2, In Re Bill of Lading Transmission & Processing Sys. Patent Litig., No. 1:09-md-2050 (S.D.Ohio July 15, 2010), ECF No. 162 (âJuly 15, 2010 Orderâ). As explained by the patent, carriers in this industry pick up freight from several different customers,
To more efficiently enable delivery in the less-than-a-load trucking industry, the '078 patent claims a method that âautomates the process of receiving transportation documentation and producing advance loading manifests therefrom to optimize load planning and dynamic product shipment and delivery control.â Id. at abstract. The patented method enables shipping documents to be sent directly from the truck driver to a common point, such as a terminal, so billing and load planning can occur while the driver is en route with the freight. Id. at co1.l 11.15-20. Claim 1, the patentâs only independent claim, recites seven steps:
A method for transferring shipping documentation data for a package from a transporting vehicle to a remote processing center:
placing a package on the transporting vehicle;
using a portable document scanner to scan an image of the documentation data for the package, said image including shipping details of the package;
providing a portable image processor capable of wirelessly transferring the image from the transporting vehicle;
wirelessly sending the image to a remote processing center;
receiving the image at said remote processing center; and
prior to the package being removed from the transporting vehicle, utilizing said documentation data at said remote processing center to prepare a loading manifest which includes said package for further transport of the package on another transporting vehicle.
Id. at col. 13 1.40-col.141.12.
B. Procedural History Prior to Dismissal of the Amended Complaints
In 2008, R + L learned that several of the Appellees and their customers were likely infringing the '078 patent. In response, R + L sent cease-and-desist letters to DriverTech, PeopleNet, and several companies R + L suspected of direct infringement. July 15, 2010 Order at 2. After receiving the letters, DriverTech and PeopleNet filed declaratory judgment actions in their home districts, seeking judgments of invalidity and non-infringement. R + L answered and filed counterclaims in those courts. In addition, R + L initiated lawsuits in the Southern District of Ohio against the remaining Appellees and several alleged direct infringers.
Because these lawsuits were spread throughout three federal district courts, R + L moved to have the cases consolidated and transferred to the Southern District of Ohio. Joint Appendix (âJ.A.â) 229-30. Granting the motion, the Judicial Panel on Multidistrict Litigation transferred the cases
After the cases were consolidated, ten of the alleged indirect infringers filed motions to dismiss or motions for judgment on the pleadings. July 15, 2010 Order at 3. After reviewing the briefing and conducting oral argument, the district court granted all of those motions. Id. The district court granted R + L leave to amend its claims, however. Id. R + L elected to file amended complaints against each of the six Appellees. Id.
While each of the amended complaints contains the same allegations with respect to the ânature of action,â âjurisdiction and venue,â and âinfringed patent sections,â they contain unique allegations as to the actions that allegedly give rise to the individual complaints. In the discussion section of this opinion, we discuss these factual differences and the sufficiency of each individual amended complaint. Here, we briefly summarize the general nature of R + Lâs allegations, providing greater detail in Section II, as appropriate.
The amended complaints contain detailed factual allegations and, including attached exhibits, are each over one-hundred pages in length. Each outlines various products sold by the individual Appel-lees for use in the trucking industry. On the basis of quotations from Appelleesâ websites, advertising, and industry publications, R + L alleges facts about these products. The amended complaints also contain allegations about Appelleesâ strategic partnerships with other companies, their advertising, and their involvement at trade shows. Following these factual allegations, R + L asserts a series of âreasonable inferences,â which it alleges can be drawn from the facts pled. Based on these inferences and factual allegations, R + L asserts that each Appellee is liable for inducing infringement and contributory infringement of the '078 patent.
C. Procedural History Culminating in Dismissal of the Amended Complaints
In response to the amended complaints, Appellees filed a joint motion to dismiss under Federal Rule of Civil Procedure 12(b)(6) for failure to state a claim, arguing that the amended complaints failed to plausibly allege either direct infringement or indirect infringement. After briefly summarizing the contents of the amended complaints, the district court addressed the merits of the joint motion to dismiss. With respect to direct infringement, the district court concluded that the Intermec Amended Complaint failed to state a claim because it did not identify a specific Inter-mec customer who directly infringed the '078 patent. Id. at 27. The district court then concluded that the other five amended complaints also failed to state a claim of direct infringement. Id. at 31. Although these complaints named specific customers that R + L asserted were directly infringing the '078 patent, the district court concluded that the âreasonable inferencesâ contained in the complaints regarding direct infringement by those customers were not, in fact, reasonable. Id. at 31.
Though a claim of indirect infringement can only arise where there is direct infringement and the district court concluded that no adequate claim of direct infringement had been pled, the court alternatively addressed whether the amended complaints adequately pled indirect infringement. Id. at 31 (âAssuming, however, that a more generous standard of indulging such ultimate inferences should be applied after Twombly/Iqbal, the Court will review Defendantsâ challenges to R & Lâs [sic] indirect infringement claims.â). Because the district
With respect to R+Lâs contributory infringement allegations, the district court first noted that, to plead contributory infringement plausibly, R + L must allege facts supporting the conclusion that the accused products are not staple articles of commerce suitable for substantial nonin-fringing uses. Id. at 37. The district court concluded that, because the amended complaints explain that the accused products can be used to speed bill payment, track a truckâs locations, or monitor truck conditions, R + L failed to plausibly plead that the accused products were not capable of substantial noninfringing uses. Id. at 39-42, 44.
Finally, because the district court dismissed R + Lâs claims of indirect infringement against the six Appellees, it concluded that any justiciable controversies giving rise to R + Lâs declaratory judgment claims were moot. Id. at 48. The district court, therefore, declined to exercise its discretionary jurisdiction over these claims and dismissed those as well. Id.
R + L filed a timely appeal to this court, and we have jurisdiction pursuant to 28 U.S.C. § 1295(a)(1).
II. Discussion
Federal Rule of Civil Procedure 8(a)(2), âgenerally requires only a plausible âshort plainâ statement of the plaintiffs claim,â showing that the plaintiff is entitled to relief. Skinner v. Switzer, â U.S. -, 131 S.Ct. 1289, 1296, 179 L.Ed.2d 233 (2011). Because it raises a purely procedural issue, an appeal from an order granting a motion to dismiss for failure to state a claim upon which relief can be granted is reviewed under the applicable law of the regional circuit. McZeal v. Sprint Nextel Corp., 501 F.3d 1354, 1355-56 (Fed.Cir.2007) (citing C & F Packing Co. v. IBP, Inc., 224 F.3d 1296, 1306 (Fed.Cir.2000)). In the United States Court of Appeals for the Sixth Circuit, a district courtâs grant of a motion to dismiss under Federal Rule of Civil Procedure 12(b)(6) is reviewed de novo. Watson Carpet & Floor Covering, Inc. v. Mohawk Indus., Inc., 648 F.3d 452, 456 (6th Cir.2011) (citing In re Travel Agent Commân Antitrust Litig., 583 F.3d 896, 902 (6th Cir.2009)). While we generally construe the complaint in the light most favorable to the plaintiff, accept its allegations as true, and draw all reasonable inferences in favor of the plaintiff, we are not required to âaccept as true legal conclusions or unwarranted factual inferences.â Jones v. City of Cincinnati, 521 F.3d 555, 559 (6th Cir.2008) (quoting Directo, Inc. v. Treesh, 487 F.3d 471, 476 (6th Cir.2007)); see also Ashcroft v. Iqbal, 556 U.S. 662, 678, 129 S.Ct. 1937, 173 L.Ed.2d 868 (2009) (â[W]e are not bound to accept as true a legal conclusion couched as a factual allegation.â) (internal quotation marks omitted).
To survive Appelleesâ motion to dismiss, R + Lâs complaint must plead âenough factual matterâ that, when taken as true, âstate[s] a claim to relief that is plausible on its face.â Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007); see also Fabian v. Fulmer Helmets, Inc., 628 F.3d 278, 280 (6th Cir.2010). This plausibility standard is met when âthe plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged.â Iqbal, 556 U.S. at 678, 129 S.Ct. 1937 (citing Twombly, 550 U.S. at 556, 127 S.Ct. 1955). Although the standard âasks for more than a sheer possibility that a defendant has acted unlawfully,â it is not âakin to a probability requirement.â Id. (internal quota
R + L argues that the district court erred by: (1) holding that âoffer to sellâ liability does not exist under 35 U.S.C. § 271(c) for a method patent; (2) holding that a complaint must identify a specific direct infringer to assert a claim for indirect infringement; (3) concluding that its claims for contributory infringement failed to plausibly state a claim for relief; (4) dismissing R + Lâs claims for induced infringement against the Appellees; and (5) refusing to exercise jurisdiction over R + Lâs claims for declaratory judgment. Appellantâs Br. 2. Each of R + Lâs arguments are addressed in turn.
A.
In its order dismissing R + Lâs amended complaints, the district court stated:
[i]n dismissing R & Lâs [sic] original claims, the Court held that R & L [sic] must plead specific facts plausibly establishing that direct infringement has occurred or is occurring in order to proceed on its indirect infringement claims. Direct infringement of a method patent requires evidence that some entity is performing each and every step of the method. An âoffer to sellâ a product, without any factual allegations that the product was or is actually being used by someone to practice the patented method, is insufficient.
July 15, 2010 Order at 25. The district court concluded that â âoffer to sellâ liability does not apply to claims of infringement of a method patent.â Order Granting Mots, to Dismiss at 13, In Re Bill of Lading Transmission & Processing Sys. Patent Litig., No. l:09-md-2050 (S.D.Ohio Feb. 23, 2010), EOF No. 113 (âFeb. 23, 2010 Orderâ). R + L asserts that this conclusion was erroneous and asks that we reverse it. We need not decide whether a method patent can be directly infringed by offering to sell the patented method in order to resolve this appeal, however.
In an effort to establish that it did not need to plead that a specific customer of the Appellees directly infringed the '078 patent, R + L argued to the district court that, because § 271(c)
It is axiomatic that â[t]here can be no inducement or contributory infringement without an underlying act of direct infringement.â Linear Tech. Corp. v. Impala Linear Corp., 379 F.3d 1311, 1326 (Fed.Cir.2004) (citation omitted); see also Dynacore Holdings Corp. v. U.S. Philips Corp., 363 F.3d 1263, 1272 (Fed.Cir.2004) (âIndirect infringement, whether inducement to infringe or contributory infringement, can only arise in the presence of direct infringement....â); Joy Techs., Inc. v. Flakt, Inc., 6 F.3d 770, 774 (Fed.Cir.1993) (âLiability for either active inducement of infringement or for contributory infringement is dependent upon the existence of direct infringement.â). In light of this case law, R + L is incorrect that a party could be liable for contributory infringement even if no one has yet directly infringed the patent in question.
R + L appears to confuse liability for direct infringement based upon an offer to sell a patented method with contributory infringement liability based upon offers to sell a component, material, or apparatus. These are distinct concepts, with distinct standards. Because R + L alleges only claims for indirect infringement against the Appellees and there are no allegations that either Appellees or their customers offered to sell the patented method, there is no need to address whether an offer to sell a patented method gives rise to liability under § 271(a), i.e., direct infringement. The only relevant questions before the district court were whether contributory infringement can be based on an offer to sell a product for use in practicing a patented method â by § 271(c)âs plain terms, it can â and whether direct infringement is a prerequisite for a finding of contributory infringement based on such an offer to sell â it is.
B.
Because liability for indirect infringement of a patent requires direct infringement, R + Lâs amended complaints must plausibly allege that the '078 patent was directly infringed to survive Appelleesâ motion to dismiss. As noted above, the district court concluded that none of the amended complaints adequately pled direct infringement. July 15, 2010 Order at 31. On appeal, R + L argues that its amended complaints âadequately plead the existence of a direct infringer to support its indirect infringement claimsâ against the Appellees. Appellantâs Br. 49. In response, Appellees argue that R + L failed to plead direct infringement sufficiently because the amended complaints make only conclusory allegations of direct infringement based upon unreasonable inferences. In addition, Intermec argues that the Intermec Amended Complaint is deficient because it fails to identify one of its customers as a direct infringer. Intermec Br. 28. For the reasons explained below, we conclude that the district court erred in finding R + Lâs allegations of direct infringement deficient.
Recent Supreme Court precedent has defined the contours of the plausibility requirement. E.g., Matrixx Initiatives, Inc. v. Siracusano, â U.S. -, 131 S.Ct. 1309, 1323, 179 L.Ed.2d 398 (2011); Iqbal, 556 U.S. at 678, 129 S.Ct. 1937; Twombly, 550 U.S. at 570, 127 S.Ct. 1955. These
(1) an allegation of jurisdiction; (2) a statement that the plaintiff owns the patent; (3) a statement that defendant has been infringing the patent âby making, selling, and using [the device] embodying the patentâ; (4) a statement that the plaintiff has given the defendant notice of its infringement; and (5) a demand for an injunction and damages.
McZeal, 501 F.3d at 1357.
The sample complaint in the Appendix of Forms is relevant because Federal Rule of Civil Procedure 84 states that âthe forms in the Appendix suffice under these rules and illustrate the simplicity and brevity that these rules contemplate.â Fed.R.Civ.P. 84. The Advisory Committee Notes to the 1946 amendment of Rule 84 states that â[t]he amendment serves to emphasize that the forms contained in the Appendix of Forms are sufficient to withstand attack under the rules under which they are drawn, and that the practitioner using them may rely on them to that extent.â Id. The language of Rule 84 and the Advisory Committee Notes make âclear that a pleading, motion, or other paper that follows one of the Official Forms cannot be successfully attacked.â 12 Charles Alan Wright, Arthur R. Miller & Richard L. Marcus, Federal Practice and Procedure § 3162 (2d ed. 1997). As the Supreme Court has noted, moreover, any changes to the Federal Rules of Civil Procedure âmust be obtained by the process of amending the Federal Rules, and not by judicial interpretation.â Leatherman v. Tarrant Cnty. Narcotics Intelligence & Coordination Unit, 507 U.S. 163, 168, 113 S.Ct. 1160, 122 L.Ed.2d 517 (1993); see also Twombly, 550 U.S. at 569 n. 14, 127 S.Ct. 1955 (acknowledging that altering the Federal Rules of Civil Procedure cannot be accomplished by judicial interpretation). Accordingly, to the extent the parties argue that Twombly and its progeny conflict with the Forms and create differing pleadings requirements, the Forms control. See McZeal, 501 F.3d at 1360 (Dyk, J., coneurring-in-part and dissenting-in-part) (acknowledging that, while the bare allegations contemplated by Form 18 appear deficient under Twombly, we are ârequired to find that a bare allegation of literal infringement in accordance with Form [18] would be sufficient under Rule 8 to state a claim.â). Thus, whether R + Lâs amended complaints adequately plead direct infringement is to be measured by the specificity required by Form 18.
As we held in McZeal, Form 18 and the Federal Rules of Civil Procedure do not require a plaintiff to plead facts establishing that each element of an asserted claim is met. McZeal, 501 F.3d at 1357. Indeed, a plaintiff need not even identify which claims it asserts are being infringed. Id.
As it relates to direct infringement, the Qualcomm, Microdea, PeopleNet, Driver-Tech, and ACS Amended Complaints are sufficient when measured against this standard. These amended complaints each assert that a specific customer or customers are infringing the '078 patent by using the patented method. For example, the Qualcomm Amended Complaint alleges that, in light of the facts pled, it is reasonable to infer that Cargo Transporters uses âIn-Cab Scanning, the Mobile Computer Platform, and other services and devices to scan and wirelessly transmit bills-of-lading from inside the truck cab to the back office where advance loading manifests are prepared. Those actions constitute direct infringement of the '078 Patent.â R + L Carriers, Inc.âs First Am. Compl. for Patent Infringement & Declaratory J. at 15, In Re Bill of Lading Transmission & Processing Sys. Patent Litig., No. 1:09-md-2050 (S.D.Ohio April 6, 2010), ECF No. 123 (âQualcomm Am. Compl.â). This allegation goes beyond what is required by Form 18. The Qualcomm Amended Complaint states that the patent is being infringed by use of the patented method by specific Qualcomm customers, and it references specific claim elements that R + L asserts are being practiced. As such, the complaint provides Qualcomm with information about which claims of the patent R + L asserts are being infringed, and by whom, and about the activities R + L believes constitute infringement. The Microdea, PeopleNet, DriverTech, and ACS Amended Complaints contain similar allegations.
Turning to the Intermec Amended Complaint, although it contains allegations similar to those cited above, it does not allege that a specific Intermec customer is infringing the '078 patent. Instead, it alleges that âIntermecâs trucking customers use its Fixed Vehicle Computers, Mobile Scanners and Transportation and Logistics Solutions to scan bills-of-lading from inside the truck cab, wirelessly transmit those scanned bills-of-lading to their back offices, and prepare advance loading manifests.â R + L Carriers, Inc.âs First Am. Compl. for Patent Infringement & Declaratory J. at 14, In Re Bill of Lading Transmission & Processing Sys. Patent Litig., No. 1:09-md-2050 (S.D. Ohio April 6, 2010), ECF No. 126 (âIntermec Am. Compl.â). Accordingly, R + L asserts only that âthose customers are in fact practicing the '078 Patent.â Id. Because of this distinction, we must determine whether a plaintiff alleging indirect infringement must name a specific customer to adequately plead the predicate direct infringement.
This court has upheld claims of indirect infringement premised on circumstantial evidence of direct infringement by unknown parties. E.g., Lucent Techs., Inc. v. Gateway, Inc., 580 F.3d 1301, 1318 (Fed.Cir.2009) (â[T]he jury in the present case could have reasonably concluded that, sometime during the relevant period from 2003 to 2006, more likely than not one person somewhere in the United States had performed the claimed method using the Microsoft products.â). Given that a plaintiffs indirect infringement claims can succeed at trial absent direct evidence of a specific direct infringer, we cannot establish a pleading standard that requires something more. To state a claim for indirect infringement, therefore, a plaintiff need not identify a specific direct infringer if it pleads facts sufficient to allow an inference that at least one direct infringer exists. E.g., Atwater Partners of Tex. LLC v. AT & T, Inc., No. 2:10-cv-175, 2011 WL 1004880, at *3 (E.D.Tex. Mar. 18, 2011) (holding that plaintiffs complaint does not need to identify a specific third-party direct infringer to state a claim for indirect infringement); Oy Ajat, Ltd. v. Vatech Am., Inc., No. 10-4875, 2011 WL 1458052, at *4 (D.N.J. Apr. 14, 2011) (same). As long as the complaint in question contains sufficient factual allegations to meet the requirements of Form 18, the complaint has sufficiently pled direct infringement. The allegations in the Inter-mec Amended Complaint satisfy those requirements.
C.
Having determined that all six of the amended complaints adequately plead direct infringement, we next consider R + Lâs argument that the district court erred by holding in the alternative that the amended complaints fail to state a claim for indirect infringement. Form 18 does not aid R + L in this inquiry. The Forms are controlling only for causes of action for which there are sample pleadings. Cf. Twombly, 550 U.S. at 564 n. 10, 127 S.Ct. 1955 (discussing the requirements of model Form 9 for pleading negligence). We agree with several district courts that have addressed this issue that Form 18 should be strictly construed as measuring only the sufficiency of allegations of direct infringement, and not indirect infringement. E.g., Tech. Licensing Corp. v. Technicolor USA Inc., 03-ev-1329, 2010 WL 4070208, at *2 (E.D.Cal. Oct. 18, 2010) (âNo adequate justification exists for holding indirect infringement claims, which contain additional elements not found in direct infringement claims, to the standard of McZeal and Form 18.
1. Contributory Infringement
Determining whether a complaint states a plausible claim for relief is a very âcontext-specific task.â Iqbal, 556 U.S. at 679, 129 S.Ct. 1937. Thus, the district court was required to analyze the facts plead in the amended complaints and all documents attached thereto with reference to the elements of a cause of action for contributory infringement to determine whether R + Lâs claims of contributory infringement were in fact plausible. Contributory infringement occurs if a party sells or offers to sell, a material or apparatus for use in practicing a patented process, and that âmaterial or apparatusâ is material to practicing the invention, has no substantial non-infringing uses, and is known by the party âto be especially made or especially adapted for use in an infringement of such patent.â 35 U.S.C. § 271(c); see also Cross Med. Prods., Inc. v. Medtronic Sofamor Danek, Inc., 424 F.3d 1293, 1312 (Fed.Cir.2005). To state a claim for contributory infringement, therefore, a plaintiff must, among other things, plead facts that allow an inference that the components sold or offered for sale have no substantial non-infringing uses. See Cross Med. Prods., 424 F.3d at 1312 (quoting Golden Blount, Inc. v. Robert H. Peterson Co., 365 F.3d 1054, 1061 (Fed.Cir.2004)).
The district court focused on this âno substantial noninfringing usesâ prong of a cause of action for contributory infringement and concluded that the amended complaints failed to state a claim for contributory infringement because the facts alleged demonstrated that the Appelleesâ products do have substantial non-infringing uses. Importantly, the district court did not conclude that the allegations of contributory infringement lacked sufficient detail to satisfy the specificity requirement of Twombly and Iqbal; the district court found that affirmative allegations of fact in the amended complaints defeated any claim of contributory infringement.
R + L argues that the district court erred in granting Appelleesâ motion because: (1) Appelleesâ products as combined and adapted have no substantial non-infringing uses; and (2) claim construction is a necessary predicate to determining whether a product has substantial noninfringing uses.
In the context of a claim of contributory infringement under § 271(c), a substantial non-infringing use is any use that is ânot unusual, far-fetched, illusory, impractical, occasional, aberrant, or experimental.â Vita-Mix Corp. v. Basic Holdings, Inc., 581 F.3d 1317, 1327-29 (Fed.Cir.2009). R + L argues that its contributory infringement claims are adequate because all of the amended complaints state that, as customized by the relevant Appel-lee âfor their trucking customers, the process for scanning and wirelessly transmitting bills-of-lading from the truck cab to the back office for the preparation of loading manifests has no other substantial non-
These allegations are tailored too narrowly; they say nothing more than âif you use this device to perform the patented method, the device will infringe and has no noninfringing uses.â But that is not the relevant inquiry. For purposes of contributory infringement, the inquiry focuses on whether the accused products can be used for purposes other than infringement. Explaining the seminal Supreme Court contribut