Disc Disease Solutions Inc. v. Vgh Solutions, Inc.

United States Court of Appeals

for the Federal Circuit

______________________

DISC DISEASE SOLUTIONS INC.,

Plaintiff-Appellant

v.

VGH SOLUTIONS, INC., DR-HO’S, INC., HOI MING

MICHAEL HO,

Defendants-Appellees

______________________

2017-1483

______________________

Appeal from the United States District Court for the

Middle District of Georgia in No. 1:15-cv-00188-LJA.

______________________

Decided: May 1, 2018

______________________

CHRISTOPHER NACE, Paulson & Nace PLLC, Washing-

ton, DC, argued for plaintiff-appellant.

MEAGHAN KENT, Venable LLP, Washington, DC,

argued for defendants-appellees. Also represented by

STEVEN JAMES SCHWARZ, CLAIRE MARIE WHEELER.

______________________

Before REYNA, WALLACH, and STOLL, Circuit Judges.

REYNA, Circuit Judge.

2 DISC DISEASE SOLUTIONS INC. v. VGH SOLUTIONS, INC.

Disc Disease Solutions Inc. appeals an order from the

United States District Court for the Middle District of

Georgia that dismissed with prejudice its complaint for

failure to state a claim and denied its request to file a first

amended complaint. The district court erred when it

dismissed the complaint for failure to state a claim. We

reverse the district court’s grant of the motion to dismiss

and remand for further proceedings.

BACKGROUND

This appeal involves U.S. Patent No. 8,012,113 (“’113

patent”), entitled “Spinal Brace,” and U.S. Patent No.

7,618,509 (“’509 patent”), entitled “Wrinkled Band With-

out Air Expansion Tube and its Manufacturing Method.”

The ’113 patent is directed to an air injectable band with

a rigid panel worn around the waist. When the band is

inflated it expands vertically to provide traction to the

spine of the user to relieve back pain. The ’113 patent

consists of three independent claims. Claim 1 recites:

1. A spinal brace comprising:

a flexible air injectable band configured to be dis-

posed about a torso of a user and to provide trac-

tion to a spine of the user;

a support panel configured to provide support by

compression to at least a region of said torso, said

support panel being less flexible than said air in-

jectable band; and

means of associating said support panel with said

flexible air injectable band;

wherein the air injectable band is configured to

expand in an axis generally parallel to the spine

when inflated so as to apply a force at a rib area of

the user via an upper edge and a force at a hip ar-

ea via a lower edge to provide said traction com-

DISC DISEASE SOLUTIONS INC. v. VGH SOLUTIONS, INC. 3

prising a decompression of vertebrae within the

spinal column of the user; and

wherein said means of associating comprise two

association openings formed through the support

panel, one association opening disposed at each of

substantially opposite ends of said support panel,

the air injectable band extending through the as-

sociation openings, wherein the association open-

ings traverse across the support panel in a

direction generally parallel to the spine and

wherein said association openings have a dimen-

sion in said direction that is greater than a corre-

sponding dimension of the flexible air injectable

band.

’113 patent, col. 5 ll. 12–36.

The ’509 patent is directed to a method of manufac-

turing a wrinkled band by adhering an overlapped sheet

creating an inner space and adhering a stretched elastic

band above and below the inner space. The ’509 patent

consists of one independent claim, which recites:

1. A method of manufacturing a wrinkled band,

wherein the outer peripheral rim of an overlapped

adhesion sheet is adhered and simultaneously an

adhesion line having an air passage is formed

with certain regularity in the inner side face

thereof, another adhesion line forms a respective

vent hole and secures an inner space in-between,

and above and below the secured inner space a

connection adhesion band 5 with an elastic

band 6 connected thereto is adhered by an outer

peripheral line, with the elastic band being

stretched.

’509 patent, col. 4 ll. 59–67.

Appellees, VGH Solutions, Inc., Dr-Ho’s, Inc., and Dr.

Hoi Ming Michael Ho (collectively “VGH Solutions”)

4 DISC DISEASE SOLUTIONS INC. v. VGH SOLUTIONS, INC.

manufacture and sell three inflatable spinal brace prod-

ucts: DBB 3500, 2-in-1 Back Relief Belt, and DBB 3000.

On November 30, 2015, Disc Disease Solutions Inc.

(“Disc Disease”) filed a complaint for patent infringement

alleging that VGH Solutions’ products infringe the ’113

and ’509 patents. The complaint specifically identified

VGH Solutions’ products and alleged that the products

meet “each and every element of at least one claim of the

’113 [or ’509] Patent, either literally or equivalently.” J.A.

54–55. Disc Disease attached to the complaint the assert-

ed patents and photographs of the accused products.

The following day, on December 1, 2015, amendments

to the Federal Rules of Civil Procedure took effect, abro-

gating Rule 84 and Form 18. Supreme Court of the

United States, Order Regarding Amendments to the

Federal Rules of Civil Procedure (U.S. Apr. 29, 2015). 1

The Supreme Court’s abrogation order states that the

amendments “shall govern in all proceedings in civil cases

thereafter commenced and, insofar as just and practica-

ble, all proceedings then pending.” Id. Rule 84 provided

that “[t]he Forms in the Appendix suffice under these

rules and illustrate the simplicity and brevity that these

rules contemplate.” Fed. R. Civ. P. 84 (2007) (abrogated,

eff. Dec. 1, 2015). Form 18 in the Appendix of Forms

provided a form adequate to plead a direct infringement

patent claim. See In re Bill of Lading Transmission &

Processing Sys. Patent Litig., 681 F.3d 1323, 1334 (Fed.

Cir. 2012).

On March 31, 2016, VGH Solutions filed a motion to

dismiss Disc Disease’s complaint pursuant to Federal

Rules of Civil Procedure 12(b)(2) and 12(b)(6). On No-

1 The order can be found at

https://www.supremecourt.gov/orders/courtorders/frcv15(u

pdate)_1823.pdf.

DISC DISEASE SOLUTIONS INC. v. VGH SOLUTIONS, INC. 5

vember 2, 2016, the district court granted VGH Solutions’

12(b)(6) motion to dismiss with prejudice. 2 The district

court concluded that the December 1, 2015 abrogation of

Rule 84 and Form 18 applied to Disc Disease’s complaint

and that the “Iqbal/Twombly” standard articulated by

Bell Atlantic Corp. v. Twombly, 550 U.S. 544 (2007), and

Ashcroft v. Iqbal, 556 U.S. 662 (2009), now applied. Disc

Disease Sols., Inc. v. VGH Sols., Inc., No. 1:15-CV-188

(LJA), 2016 WL 6561566, at *2 (M.D. Ga. Nov. 2, 2016).

The district court reasoned that the complaint did not

satisfy the Iqbal/Twombly plausibility pleading standard

and entered final judgment against Disc Disease.

On November 16, 2016, Disc Disease filed a motion for

reconsideration on the basis that the abrogation of Form

18 constituted an intervening change in law. For relief,

Disc Disease requested that the district court allow it to

file a first amended complaint. Disc Disease attached to

its motion for reconsideration an amended complaint that

included a detailed infringement analysis. Subsequently,

Disc Disease filed a timely Rule 59(e) motion requesting

that the district court alter or amend its judgment to

allow Disc Disease to file a first amended complaint.

On December 12, 2016, the district court denied Disc

Disease’s motion for reconsideration and motion to alter

or amend the judgment. The district court concluded that

the fact that the abrogation of Form 18 took effect one day

after the complaint was filed, does not constitute grounds

2 The district court’s Rule 12(b)(6) dismissal order

was unclear whether the dismissal was with prejudice.

The district court later clarified that the dismissal was

with prejudice in its order denying Disc Disease’s motion

for reconsideration and motion to alter or amend the

judgment. Disc Disease Sols., Inc. v. VGH Sols., Inc.,

No. 1:15-CV-188 (LJA), 2016 WL 9240616, at *2 (M.D. Ga.

Dec. 12, 2016).

6 DISC DISEASE SOLUTIONS INC. v. VGH SOLUTIONS, INC.

for reconsideration as an intervening change in law. Disc

Disease, 2016 WL 9240616, at *1. The district court held

that its dismissal with prejudice without allowing Disc

Disease to amend its complaint did not create a manifest

injustice sufficient to warrant reconsideration. Id. at *3.

The district court explained that because Disc Disease

requested leave to amend in a footnote in its opposition to

VGH Solutions’ motion to dismiss, instead of in a separate

motion compliant with the local rules and governing

precedent, the district court had discretion to deny the

request sub silentio. Id. at *2. Relying on Wagner v.

Daewoo Heavy Indus. Am. Corp., 314 F.3d 541, 542–43

(11th Cir. 2002) (en banc), the district court reasoned that

it “is not required to grant a plaintiff leave to amend his

complaint sua sponte when the plaintiff, who is repre-

sented by counsel, never filed a motion to amend nor

requested leave to amend before the district court.” Disc

Disease, 2016 WL 9240616, at *2 (quoting Wagner, 314

F.3d at 542).

Disc Disease appeals. We have jurisdiction under

28 U.S.C. § 1295(a).

DISCUSSION

We review procedural issues, including the grant of a

motion to dismiss, according to the law of the respective

regional circuit, in this case the Eleventh Circuit. Cleve-

land Clinic Found. v. True Health Diagnostics LLC, 859

F.3d 1352, 1359 (Fed. Cir. 2017). In the Eleventh Circuit,

a district court’s dismissal for failure to state a claim is

reviewed de novo. Mitchell v. Farcass, 112 F.3d 1483,

1490 (11th Cir. 1997).

Disc Disease argues that the district court improperly

applied the Iqbal/Twombly pleading standard because

Form 18 was in effect on the date the original complaint

DISC DISEASE SOLUTIONS INC. v. VGH SOLUTIONS, INC. 7

was filed. 3 Disc Disease contends that Iqbal/Twombly is

a “heightened” pleading standard compared to the re-

quirements of Form 18, and that its complaint was suffi-

cient to comply with Form 18.

Under Iqbal/Twombly, Disc Disease was required to

“state a claim to relief that is plausible on its face.”

Twombly, 550 U.S. at 570. This plausibility standard is

met when “the plaintiff pleads factual content that allows

the court to draw the reasonable inference that the de-

fendant is liable for the misconduct alleged.” Iqbal, 556

U.S. at 678 (citing Twombly, 550 U.S. at 556). “Specific

facts are not necessary; the statement need only ‘give the

defendant fair notice of what the . . . claim is and the

ground upon which it rests.’” Erickson v. Pardus, 551

U.S. 89, 93 (2007) (alteration in original) (internal quota-

tion marks omitted) (quoting Twombly, 550 U.S. at 555).

The district court determined that Disc Disease failed

to “explain how Defendants’ products infringe on any of

Plaintiff’s claims” because it “merely alleges that certain

of Defendants’ products ‘meet each and every element of

at least one claim’ of Plaintiff’s patents.” Disc Disease,

2016 WL 6561566, at *3. We disagree. Disc Disease’s

3 We do not address the question of whether the

Form 18 or the Iqbal/Twombly pleading standard applies

in this case as we conclude that Disc Disease’s claims of

patent infringement were sufficiently pleaded under the

latter. See Lifetime Indus., Inc. v. Trim-Lok, Inc., 869

F.3d 1372, 1377 (Fed. Cir. 2017) (“The parties assume

that there is a difference between the requirements of

Form 18 and Iqbal/Twombly; however, we have never

recognized such a distinction. In any event, we need not

resolve the question whether there is a difference between

the two standards here because, as we explain, the [com-

plaint] met the Iqbal/Twombly standard.” (citation omit-

ted).

8 DISC DISEASE SOLUTIONS INC. v. VGH SOLUTIONS, INC.

allegations are sufficient under the plausibility standard

of Iqbal/Twombly. This case involves a simple technolo-

gy. The asserted patents, which were attached to the

complaint, consist of only four independent claims. The

complaint specifically identified the three accused prod-

ucts—by name and by attaching photos of the product

packaging as exhibits—and alleged that the accused

products meet “each and every element of at least one

claim of the ’113 [or ’509] Patent, either literally or equiv-

alently.” J.A. 54–55. These disclosures and allegations

are enough to provide VGH Solutions fair notice of in-

fringement of the asserted patents. The district court,

therefore, erred in dismissing Disc Disease’s complaint for

failure to state a claim.

CONCLUSION

We reverse the district court’s dismissal under Rule

12(b)(6) and remand for further proceedings consistent

with this opinion. Accordingly, we do not reach the re-

maining issues raised by the parties.

REVERSED AND REMANDED

COSTS

No costs.