Conley, Twombly, and Iqbal

Conley, Twombly, and Iqbal are different standards of proof to successfully initiate patent litigation. This varies between the states.  Consider this when incorporating your company.

From the standpoint of patent litigation, “Conley, Twombly, and Iqbal” are attorney speak for how much “meat” a patent infringement complaint must have in order to not get quickly tossed out of court under a motion to dismiss [rule 12(b)(6)]. If you are ever involved with patent infringement complaints, these names will become important to you.

Historically, it was very difficult for the average person to initiate litigation. In earlier centuries, pleading had to follow strict “code pleading” rules. Judges could use minor defects to toss otherwise good cases out of court.  In rebellion to this, in the 1930’s, when the modern Federal Rules for Civil Procedure were first established, the thinking was that everyone should be able to have their day in court. These rules set the standards for the initial pleading at a low “short plain statement” level (1957 Conley v. Gibson case).  So it didn’t take much to start a Federal lawsuit. The idea was that subsequent discovery motions could easily fix any deficiencies in the initial filing. Justice for the masses – this would be great!

Fast forward to 2007 and the legal situation was actually not so great. Cases clogged the Federal courts. Discovery motions notoriously chewed up large amounts of time and money, sometimes on the basis of initial pleadings that were a bit “thin”.

Raising the standards

In the 2007 Bell Atlantic Corp. v Twombly case, the US Supreme Court (SCOTUS) took it upon itself to raise the standards for pleading.  As rephrased by SCOTUS in the later (2009) Ascroft v. Iqbal case: “…only a complaint that states a plausible claim for relief survives a motion to dismiss… While legal conclusions can provide the framework of a complaint, they must be supported by factual allegations. When there are well-pleaded factual allegations, a court should assume their veracity and then determine whether they plausibly give rise to an entitlement to relief.  Note the term “plausible”. It means “reasonable” or “believable”. This how SCOTUS tightened the standards, because the old standard was “possible”.

In practice, the court will initially assume that the complaint facts are correct, but then examine various alternative scenarios to see if there are plausible alternatives that are legally OK. Consider the original Twombly case. Here the plaintiffs alleged that there was collusion between telecommunications carriers. They gave facts showing that different carriers behaved in a similar manner. But, they never presented evidence of actual collusion.  Here the “plausible” alternative scenario was that each was just independently protecting their own tuff without improper collusion. As a result, the court upheld the defendant’s 12(b)(6) motion to dismiss.

Similarly, prior to Twombly, it did not take much to start a patent infringement lawsuit.  Just fill out a “Form 18” giving the patent number, an assertion of infringement, and a few other minor details and this was good enough.  In theory, after Twombly, standards should now be higher, but…

Maybe not. In a recent development, the Federal Circuit is now allowing patents to be invalidated under “Alice” at the motion to dismiss level.

Patent litigation standards still kept varying between states

Ten years later, and due to intervening Federal Circuit rulings that encouraged continued use of “Form 18”, this higher standard is only now slowly trickling down to patent litigation. There are still significant inconsistencies between different states and different Federal District Courts. This didn’t matter much before 2017. You could sue a company for patent infringement anywhere. But you can’t do this the 2017 TC Heartland case. These days, a company is usually sued in its state of incorporation.

So at present, we have a new and interesting situation where a company can apparently lower the risk of patent infringement lawsuits by incorporating in a state where the Federal Courts have higher standards.