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Lyda v. CBS

September 30, 2016

Federal Circuit No. 2015-1923
Author: L. Roman Rachuba

In Lyda v. CBS, the Federal Circuit upheld a district court’s dismissal of a complaint on the basis that the claim of joint infringement did not satisfy the Twombly/Iqbal pleading standard.  The Court further held that complying with the now removed Form 18 standard was insufficient for allegations of joint infringement.

Edwin Lyda is the sole owner of U.S. Pat. Nos. 7,434,243 and 7,730,506. The patents are for audience remote voting methods and apparatuses for use on reality and game television shows.

In 2014, Mr. Lyda sued CBS Corp. and its wholly owned subsidiary CBS Interactive Inc. (together, “CBS”) in district court for infringement of the above-mentioned patents regarding the show Big Brother. Specifically, Mr. Lyda alleged that CBS infringed by engaging an independent contractor who then directed and controlled unnamed third parties to send votes using text messages during the show and for testing prior to filming.

After Mr. Lyda amended the complaint once, CBS moved under Rule 12(b)(6) to dismiss. The court gave Mr. Lyda the option to either further amend or oppose the motion and lose subsequent amendment opportunities. Mr. Lyda elected to oppose the motion, and argue that his complaint was sufficient in light of Form 18.1

The court held that although Mr. Lyda did not specifically plead a claim of joint infringement, Mr. Lyda’s allegations implicated one, and further that although the CAFC had yet to rule on whether Form 18 was sufficient for a claim of joint infringement, the majority of district courts had held that it was not. Thus, the court dismissed Mr. Lyda’s complaint. Mr. Lyda summarily appealed.

The CAFC affirmed and held that Form 18 was not sufficient for claims of joint infringement, and more importantly that a complaint’s allegations must provide a “reasonable inference that each claim step was performed or should be attributed to Defendants”.

While Lyda may seem inconsequential in light of the rule changes, the impact of the reasonable inference standard with respect to “each claim step” is yet to be understood. Accordingly, practitioners should plead with specificity moving forward.

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1 The case was filed in 2014, before Form 18 was removed from the Federal Rules of Civil Procedure in December 2015. Prior to the removal of the form, Form 18 provided minimal requirements sufficient to withstand a 12(b)(6) dismissal. These requirements would otherwise not be sufficient in light of the Court’s holdings in Iqbal and Twombly. (Note: Federal Rule 84, also removed in December, provided that forms shall “suffice under these rules”.)