On Fri., January 25, 2013, in Hall v. Bed Bath & Beyond, No. 2011-1165, the Federal Circuit (Newman, Lourie (dissenting-in-part), and Linn) held that a towel design patent owner properly pled claims of patent infringement, false advertising, misappropriation, and unfair competition.  The Court also held that certain inventor statements on whether the towel was covered by his patent did not create liability for false advertising or false marking.  This case indicates that the pleading requirements for design and utility patents are fairly similar.

The district court had dismissed the plaintiff’s design patent infringement because he did not identify what is “new, original, and ornamental” about his design.  The Federal Circuit reversed, explaining that the Federal Rules and Iqbal/Twombly do not require this information.  To properly allege direct infringement of a patent (whether a utility or a design patent), the complaint need only include five elements:

(i)             an allegation of ownership of the patent;

(ii)            the name of the defendant;

(iii)           a citation of the patent;

(iv)           a statement of the means by which the defendant allegedly infringes; and

(v)            an identification of the relevant sections of the patent laws.

The Federal Circuit also reversed the district court’s dismissal of the plaintiff’s Lanham Act unfair competition/false advertising claim, noting that the district court erroneously required that the complaint allege the existence of a trademark.  The plaintiff properly pled a Lanham Act violation by alleging that the defendants made a false and misleading statement about the durability of their towel product, the Federal Circuit held that he properly plead a Lanham Act violation.  The Court also reversed the district court’s prior dismissal of the plaintiff’s New York state law-based misappropriation and unfair competition claims.

Finally, the Federal Circuit affirmed the district court’s dismissal of the defendants’ counterclaims, including those for false advertising and false marking.  Defendants alleged that the plaintiff violated the Lanham Act by stating that his product was “protected by my patent” while the patent was still pending; the Federal Circuit, however, held that this statement “cannot be viewed as even plausibly misleading.”  Similarly, the defendants’ claim that the plaintiff falsely marked his product by labeling it as “patent pending” even after the patent had issued failed.  The Federal Circuit explained that this is not the type of falsity the patent marking statute is concerned with, and in any event, the defendants failed to plead competitive harm (a requirement added by the America Invents Act of 2011).

In dissent, Judge Lourie stated that he would have affirmed the district court’s dismissal of the plaintiff’s patent infringement and Lanham Act claims.  He took issue with the plaintiff’s failure to replead his infringement claim when invited to do so by the district court, finding it tantamount to a waiver of any flaws in the district court’s decision to dismiss the claim.  He also viewed the defendants’ statement regarding the durability of their towel product as “mere puffery” – a subjective claim – and therefore not actionable under the Lanham Act.