K-Tech Telecommunications, Inc. v. Time Warner Cable, Inc.

United States Court of Appeals

for the Federal Circuit

______________________

K-TECH TELECOMMUNICATIONS, INC.,

Plaintiff-Appellant,

v.

TIME WARNER CABLE, INC.,

Defendant-Appellee.

______________________

2012-1425

______________________

Appeal from the United States District Court for the

Central District of California in No. 11-CV-9373, Judge R.

Gary Klausner.

------------------

K-TECH TELECOMMUNICATIONS, INC.,

Plaintiff-Appellant,

v.

DIRECTV,

Defendant-Appellee.

______________________

2012-1446

______________________

2 K-TECH TELECOMMUNICATIONS v. TIME WARNER CABLE

Appeal from the United States District Court for the

Central District of California in No. 11-CV-9370, Judge R.

Gary Klausner.

______________________

Decided: April 18, 2013

______________________

PATRICK F. BRIGHT, Wagner, Anderson & Bright, P.C.,

of Glendale, California, argued for plaintiff-appellant.

DAVID S. BENYACAR, Kaye Scholer, LLP, of New York,

New York, argued for defendant-appellee, Time Warner

Cable, Inc. With him on the brief was DANIEL L. REISNER.

DARIN W. SNYDER, O’Melveny & Myers, LLP, of San

Francisco, California, argued for the defendant-appellee,

DirecTV. With him on the brief was RYAN K. YAGURA, of

Los Angeles, California.

______________________

Before MOORE, O'MALLEY, and WALLACH, Circuit Judges.

Opinion for the court filed by Circuit Judge O’MALLEY.

Concurring opinion filed by Circuit Judge WALLACH.

O’MALLEY, Circuit Judge.

K-Tech Telecommunications, Inc. (“K-Tech”) appeals

the district court’s orders in K Tech Telecommunications,

Inc. v. Time Warner Cable, Inc., CV11-09373 (May 9, 2012

C.D. Cal) and K Tech Telecommunications, Inc. v. Di-

recTV, CV11-09370 (May 9, 2012 C.D. Cal) dismissing K-

Tech’s First Amended Complaints for patent infringement

against Time Warner Cable, Inc. (“TWC”) and DirecTV for

failure to state a claim upon which relief can be granted.

Given the substantial factual overlap between the two

actions, we consolidated the appeals for the purposes of

K-TECH TELECOMMUNICATIONS v. TIME WARNER CABLE 3

oral argument and issue our ruling in a single opinion.

We find that the district court applied the incorrect

standard in evaluating the adequacy of K-Tech’s com-

plaints. District courts must evaluate complaints alleging

direct infringement by reference to Form 18 of the Appen-

dix of Forms to the Federal Rules of Civil Procedure

(“Form 18”). Applying that standard to the amended

complaints at issue in these appeals, we reverse the

judgments dismissing these actions with prejudice and

remand for further proceedings.

BACKGROUND

A. Procedural History

On November 9, 2011, K-Tech filed a complaint for

patent infringement against DirecTV in the United States

District Court for the Central District of California. On

the same day, K-Tech filed a similar action against TWC.

These complaints named four patents, U.S. Patent

6,785,903 (the “’903 patent”); U.S. Patent 7,487,533 (the

“’533 patent”); U.S. Patent 7,761,893 (the “’893 patent”);

and U.S. Patent 7,984,469 (the “’469 patent”) (collectively,

the “K-Tech patents”) and charged DirecTV and TWC

with direct infringement of each. On November 28, 2011,

following K-Tech’s request, the action against TWC was

transferred to Judge R. Gary Klausner, the judge as-

signed to the lower numbered DirecTV action.

On January 5, 2012, DirecTV and TWC each moved to

dismiss the original complaints under Federal Rule of

Civil Procedure 12(b)(6), alleging that the respective

complaints lacked sufficient factual specificity to state a

cause of action for direct patent infringement. At K-

Tech’s request, the district court consolidated briefing

with respect to the defendants’ motions to dismiss. On

February 21, 2012, the district court dismissed both

complaints in substantially similar orders and granted K-

Tech leave to amend, stating in pertinent part as follows:

4 K-TECH TELECOMMUNICATIONS v. TIME WARNER CABLE

Based solely on this evidence and without any ad-

ditional factual allegations, Plaintiff seems to

suggest that Defendant must operate some prod-

uct or process in a manner that infringes some of

the Asserted Patents, because Defendant is able

to achieve the same end-result as that contem-

plated by the Asserted Patents. Although Plain-

tiff strongly believes that Defendant “must” be

infringing the Asserted Patents, Plaintiff fails to

explain the basis of this belief. Plaintiff does not

explain why it believes that Defendant is utilizing

the methods and products protected by the As-

serted Patents to update the digital signals it re-

ceives rather than using other noninfringing

methods and products.

TWC J.A. 4; DirecTV J.A. 3-4.

On February 28, 2012, K-Tech filed First Amended

Complaints against TWC and DirecTV. On March 30,

2012, both TWC and DirecTV moved to dismiss the re-

spective First Amended Complaints, again under Rule

12(b)(6). On May 9, 2012, the District Court dismissed

each of the First Amended Complaints, ruling as follows:

On February 21, 2012, the Court granted Defend-

ant’s Motion to Dismiss Plaintiff’s Complaint for

patent infringement on the grounds that Plaintiff

failed to allege sufficient factual detail regarding

Defendant’s accused product and the manner in

which it is infringing Plaintiff’s patents. The

First Amended Complaint (“FAC”) Plaintiff filed

on February 28, 2012 does not cure the deficien-

cies identified in the Court’s prior order. Plaintiff

has failed to allege facts sufficient to state a plau-

sible claim for patent infringement under the

standards articulated in Bell Atl. Corp. v.

Twombly, 550 U.S. 544 (2007) and Ashcroft v. Iq-

bal, 129 S. Ct. 1937 (2009). Therefore, for the rea-

K-TECH TELECOMMUNICATIONS v. TIME WARNER CABLE 5

sons stated in the Court’s February 21st Order,

the Court GRANTS Defendant’s Motion to Dis-

miss Plaintiff’s FAC.

TWC J.A. 1; DirecTV J.A. 1.

K-Tech timely filed its Notice of Appeal on May 25,

2012. We issued our decision in R+L Carriers, Inc. v.

DriverTech LLC (In re Bill of Lading Transmission &

Processing System Patent Litigation), 681 F.3d 1323 (Fed.

Cir. 2012), on June 7, 2012.

B. Patented Technology

K-Tech describes its patents as identifying systems

and methods for modifying a major channel number, a

minor channel number, and/or a carrier frequency to

identify a television program. The following claims were

specifically identified in each of the First Amended Com-

plaints:

Claim 24 of the ’903 patent:

A method of translating a digital television signal,

comprising the steps of:

receiving a first digital television signal

and generating a digital transport stream

from the first digital television signal, the

digital transport stream including original

PSIP data having RX channel data;

updating the original PSIP data in the

digital transport stream by replacing the

RX channel data with TX channel data;

and

converting the digital transport stream

having the updated PSIP data into a sec-

ond digital television signal,

wherein the RX channel data is associated

with the first digital television signal and

6 K-TECH TELECOMMUNICATIONS v. TIME WARNER CABLE

includes at least one of a major channel

number, a minor channel number, and a

carrier frequency, and the TX channel da-

ta is associated with the second digital

television signal and includes at least one

of an updated major channel number, an

updated minor channel number, and an

updated carrier frequency.

Claim 13 of the ’533 patent:

A method of translating, comprising

separating a first program information ta-

ble from video data and audio data con-

tained in a first digital transport stream,

the first program information table con-

taining one or more attributes for a virtual

channel of a digital television signal car-

ried in the first digital transport stream;

forming a second program information ta-

ble having one or both of a new carrier

frequency and new virtual channel num-

ber;

combining the second program infor-

mation table with the separated video and

audio data to form a second digital

transport stream;

modulating data from the second digital

transport stream; and

generating a second digital television RF

signal using the modulated data from the

second digital transport stream.

Claim 1 of the ’893 patent:

A system for translating a first digital transport

stream containing one or more digital television

K-TECH TELECOMMUNICATIONS v. TIME WARNER CABLE 7

programs carried in the first digital transport

stream, comprising:

a program information update unit, the

program information update unit supple-

menting one or more attributes for a vir-

tual channel of a digital television

program carried in the first digital

transport stream; and

a multiplexor, the multiplexor combining

the one or more attributes supplemented

by the program information update unit

and the first digital television program

carried on the first digital transport

stream to form a second digital transport

stream.

Claim 5 of the ’469 patent:

A method of translating, comprising:

receiving an ATSC digital television signal

over cable;

converting the ATSC digital television

signal into a first digital transport stream,

the first digital transport stream contain-

ing video and audio data of a program and

a program information table, the program

information table having a major channel

number and a minor channel number;

generating a new program information ta-

ble containing a new channel number, the

new channel number identifying the pro-

gram represented by the major channel

number and the minor channel number;

and combining the video and audio data

with the new program information table.

8 K-TECH TELECOMMUNICATIONS v. TIME WARNER CABLE

In its complaints, K-Tech alleges that TWC and Di-

recTV infringe the K-Tech patents by “making, selling,

and offering to sell, in this judicial district, systems and

methods for modifying a major channel number, a minor

channel number, and/or a carrier frequency to identify a

television program . . . .” DirecTV J.A. 55; TWC J.A. 55-

56. According to K-Tech, the Federal Communications

Commission requires that all digital television signals in

the U.S. follow the Advanced Television Systems Commit-

tee (“ATSC”) specifications, which in turn require compli-

ance with Program and System Information Protocol

(“PSIP”) specifications that define the information includ-

ed in a digital television signal (e.g., major channel num-

ber, minor channel number, and a carrier frequency). K-

Tech identifies broadcast networks, such as CBS, ABC,

NBC, and FOX, that transmit digital television signals in

accordance with these protocols. Because TWC and

DirecTV identify programs broadcast over their cable or

satellite systems with a channel number, K-Tech con-

tends that TWC and DirecTV utilize the methods and

systems protected by the K-Tech patents to update the

digital signals they receive.

DISCUSSION

On appeal, K-Tech contends that its First Amended

Complaints comply with Form 18 and that the district

court applied the incorrect standard in analyzing the

sufficiency of each complaint. DirecTV and TWC argue in

response that the sufficiency of a complaint with respect

to Form 18 must be interpreted consistently with the

Supreme Court’s decisions in Iqbal and Twombly, as well

as Ninth Circuit law. The defendants also assert that the

respective First Amended Complaints fail to meet either

the plain language of Form 18 or the form interpreted

through the lens of Twombly and Iqbal.

K-TECH TELECOMMUNICATIONS v. TIME WARNER CABLE 9

A. Standard of Review

Federal Rule of Civil Procedure 8(a)(2) “generally re-

quires only a plausible ‘short and plain’ statement of the

plaintiff’s claim,” showing that the plaintiff is entitled to

relief. Skinner v. Switzer, 131 S. Ct. 1289, 1296 (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.” R+L

Carriers, 681 F.3d at 1331 (citing McZeal v. Sprint Nextel

Corp., 501 F.3d 1354, 1355-56 (Fed. Cir. 2007); C&F

Packing Co. v. IBP, Inc., 224 F.3d 1296, 1306 (Fed. Cir.

2000)). The Ninth Circuit reviews de novo challenges to a

dismissal for failure to state a claim under Federal Rule

of Civil Procedure 12(b)(6). Livid Holdings Ltd. v. Salo-

man Smith Barney, Inc., 403 F.3d 1050, 1055 (9th Cir.

2005). The court’s review is generally limited to the face

of the complaint, materials incorporated into the com-

plaint by reference, and matters of judicial notice. Metzler

Inv. GMBH v. Corinthian Colleges, Inc., 540 F.3d 1049,

1061 (9th Cir. 2008) (citing Tellabs, Inc. v. Makor Issues &

Rights, Ltd., 551 U.S. 308, 322 (2007)).

In undertaking this review, the court “accept[s] the

plaintiffs’ allegations as true and construe[s] them in the

light most favorable to plaintiffs.” Gompper v. VISX, Inc.,

298 F.3d 893, 895 (9th Cir. 2002). “[O]nly pleaded facts,

as opposed to legal conclusions, are entitled to assumption

of the truth,” however. United States v. Corinthian Col-

leges, 655 F.3d 984, 991 (9th Cir. 2011). In addition,

“conclusory statements . . . are not entitled to the pre-

sumption of truth.” Chavez v. United States, 683 F.3d

1102, 1108 (9th Cir. 2012). The court will hold a dismis-

sal inappropriate unless the complaint fails to “state a

claim to relief that is plausible on its face.” Bell Atl. Corp.

v. Twombly, 550 U.S. 544, 570 (2007). The plausibility

standard set forth in Twombly is met when “the plaintiff

pleads factual content that allows the court to draw the

10 K-TECH TELECOMMUNICATIONS v. TIME WARNER CABLE

reasonable inference that the defendant is liable for the

misconduct alleged.” Ashcroft v. Iqbal, 556 U.S. 662, 678

(2009) (citing Twombly, 550 U.S. at 556); see also Erickson

v. Pardus, 551 U.S. 89, 93 (2007) (per curiam) (“Specific

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

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

grounds upon which it rests.’” (quoting Twombly, 550 U.S.

at 555 (citation and internal quotation marks omitted)).

“Determining whether a complaint states a plausible

claim for relief will . . . be a context-specific task that

requires the reviewing court to draw on its judicial expe-

rience and common sense.” Iqbal, 556 U.S. at 679 (cita-

tion omitted).

B. Application of Form 18 to the K-Tech Complaints

Form 18 sets forth a sample complaint for direct pa-

tent infringement and requires:

(1) an allegation of jurisdiction; (2) a statement

that the plaintiff owns the patent; (3) a statement

that defendant has been infringing the patent ‘by

making, selling, and using [the device] embodying

the patent’; (4) a statement that the plaintiff has

given the defendant notice of its infringement;

and (5) a demand for an injunction and damages.

McZeal v. Sprint Nextel Corp., 501 F.3d 1354, 1357 (Fed.

Cir. 2007). We recently had occasion to address the

interaction between Form 18 and general pleading stand-

ards in R+L Carriers. 681 F.3d 1323. As we explained

there, Federal Rule of Civil Procedure 84 states that “‘the

forms in the Appendix suffice under these rules and

illustrate the simplicity and brevity that these rules

contemplate.’” Id. at 1334 (quoting Fed. R. Civ. P. 84).

Rule 84, combined with guidance from the Advisory

Committee Notes to the 1946 amendment of Rule 84,

makes clear that a proper use of a form contained in the

Appendix of Forms effectively immunizes a claimant from

K-TECH TELECOMMUNICATIONS v. TIME WARNER CABLE 11

attack regarding the sufficiency of the pleading. Id. at

1334.

Any criticism we may have regarding the sufficiency

of the forms themselves is strictly proscribed by Supreme

Court precedent. See Leatherman v. Tarrant Cnty. Nar-

cotics Intelligence & Coordination Unit, 507 U.S. 163, 168

(1993) (Any changes to the Federal Rules of Civil Proce-

dure “must be obtained by the process of amending the

Federal Rules, and not by judicial interpretation.”); see

also Twombly, 550 U.S. at 569 n.14 (acknowledging that

altering the Federal Rules of Civil Procedure cannot be

accomplished by judicial interpretation). And, as we

made clear in R+L Carriers, to the extent any conflict

exists between Twombly (and its progeny) and the Forms

regarding pleadings requirements, the Forms control. 1

R+L Carriers, 681 F.3d at 1334 (citing McZeal, 501 F.3d

at 1360 (Dyk, J., concurring in part and dissenting in

part) (acknowledging that, while the bare allegations

contemplated by Form 18 appear deficient under

Twombly, we are “required to find that a bare allegation

of literal infringement in accordance with Form [18]

would be sufficient under Rule 8 to state a claim”)); see

1 TWC and DirecTV suggest that our analysis of

what Form 18 requires should differ depending on the

regional circuit from which a case arises. We disagree.

While we reviewed the district court's decision to dismiss

the complaint in R+L Carriers under Sixth Circuit law,

our decision regarding the requirements of Form 18 and

its relationship to the pleading standards set forth in

Twombly and Iqbal was dictated by Supreme Court

precedent. R+L Carriers, 681 F.3d 1323. Our analysis is

no different where the case comes to us from the Ninth

Circuit. Form 18 is a national form, and any argument

that we should interpret it differently here than we did in

R+L Carriers is without merit.

12 K-TECH TELECOMMUNICATIONS v. TIME WARNER CABLE

also Superior Indus., LLC v. Thor Global Enters., 700

F.3d 1287, 1295 (Fed. Cir. 2012) (“In a complaint for

patent infringement under § 271(a), Form 18 of the Fed-

eral Rules of Civil Procedure provides the pleading stand-

ard. . . . Although the parties do not discuss the Form 18

pleading standard, this court acknowledges that standard

to review the dismissal.”).

That Form 18 would control in the event of a conflict

between the form and Twombly and Iqbal does not sug-

gest, however, that we should seek to create conflict

where none exists. A complaint containing just enough

information to satisfy a governing form may well be

sufficient under Twombly and Iqbal. R+L Carriers, 681

F.3d at 1334 n.6. “Resolution of that question will depend

upon the level of specificity required by the particular

form, the element of the cause of action as to which the

facts plead are allegedly inadequate, and the phrasing of

the complaint being challenged.” Id. (citing Twombly, 550

U.S. at 564 n.10 (noting that forms governing claims for

negligence require sufficient detail to permit a defendant

to “know what to answer”)). And we think it clear that an

implausible claim for patent infringement rightly should

be dismissed.

Form 18 in no way relaxes the clear principle of Rule

8, that a potential infringer be placed on notice of what

activity or device is being accused of infringement. As we

stated in McZeal:

It logically follows that a patentee need only plead

facts sufficient to place the alleged infringer on

notice as to what he must defend. See Bell Atlan-

tic, 127 S. Ct. at 1971 n. 10 (stating “[a] defendant

wishing to prepare an answer in the simple fact

pattern laid out in Form 9 [in the Federal Rules of

Civil Procedure] would know what to answer; a

defendant seeking to respond to plaintiffs’ conclu-

sory allegations . . . would have little idea where

K-TECH TELECOMMUNICATIONS v. TIME WARNER CABLE 13

to begin.”). Thus, a plaintiff in a patent infringe-

ment suit is not required to specifically include

each element of the claims of the asserted patent.

See, e.g., Phonometrics, Inc. v. Hospitality Fran-

chise Sys., Inc., 203 F.3d 790, 794 (Fed. Cir. 2000).

501 F.3d 1354, 1357 (Fed. Cir. 2007) (alterations in origi-

nal). That said, however, it is clear the district court

applied the wrong standard to K-Tech’s complaints in

requiring that a plaintiff preemptively identify and rebut

potential non-infringing alternatives to practicing the

claims of an asserted patent. See, e.g., TWC J.A. 4

(“Plaintiff does not explain why it believes that Defendant

is utilizing the methods and products protected by the

Asserted Patents to update the digital signals it receives,

rather than using other non-infringing methods and

products.”). Form 18 includes no indication that a patent

holder must prospectively anticipate such noninfringe-

ment arguments. 2 For this reason alone, it is clear the

rationale employed by the district court when dismissing

K-Tech’s actions was erroneous. We thus turn to the

question of whether, under an alternate, appropriate

rationale, we may otherwise affirm the district court’s

judgments. See Hydril Co. LP v. Grant Prideco LP, 474

F.3d 1344, 1351 (Fed. Cir. 2007) (noting that it is within

this court’s discretion to “affirm a district court judgment

2 TWC and DirecTV each challenge the sufficiency

of K-Tech's pre-suit investigation and K-Tech’s knowledge

of the accused systems. Satisfaction of Form 18 does not

guarantee compliance with Rule 11 of the Federal Rules

of Civil Procedure. That a complaint alleges a plausible

claim for patent infringement on its face and satisfies

Form 18 does not immunize a plaintiff who fails to identi-

fy easily ascertainable evidence of noninfringement

through appropriate pre-suit investigation. See, e.g., R+L

Carriers, Inc. v. Pitt Ohio Express, Inc., 2013 U.S. App.

LEXIS 2541 (Fed. Cir. Feb. 6, 2013).

14 K-TECH TELECOMMUNICATIONS v. TIME WARNER CABLE

on any ground shown by the record, even though that was

not the basis of the district court’s decision”). We cannot.

C. Satisfaction of Form 18

DirecTV and TWC argue that, even assuming Form

18 is the governing standard by which K-Tech’s com-

plaints are to be judged and the trial court did not employ

that talisman, K-Tech failed in its obligations under Form

18 by not identifying an infringing device or adequately

connecting any alleged activity to the asserted patents. 3

K-Tech responds, in pertinent part, that it included in

each of the First Amended Complaints a statement that

the defendants have been infringing by making, selling,

and using methods or systems embodying the patent. To

determine who is correct on this point, we turn to the

specificity required by Form 18. R+L Carriers, 681 F.3d

at 1334.

Paragraph 3 of Form 18 requires, by way of an exem-

plary invention, a statement that “[t]he defendant has

infringed and is still infringing the Letters Patent by

making, selling, and using electric motors that embody

the patented invention, and the defendant will continue to

do so unless enjoined by this court.” On appeal, K-Tech

argues that the statements addressed below satisfy Form

18 and are sufficient to allege direct infringement of the

K-Tech patents.

3 Neither party contests—and we find no ques-

tion—that K-Tech’s First Amended Complaints contain

an allegation of jurisdiction, an assertion of ownership, a

demand for an injunction and damages, and written

notice of infringement by way of the complaints (except to

the extent that the defendants contend that the com-

plaints insufficiently describe the allegedly infringing

activity).

K-TECH TELECOMMUNICATIONS v. TIME WARNER CABLE 15

In paragraph 7 of each of the First Amended Com-

plaints, K-Tech describes its patents as “identify[ing]

systems and methods for modifying a major channel

number, a minor channel number and/or a carrier fre-

quency to identify a television program” and states that

TWC and DirecTV infringe the K-Tech patents by doing

the same. DirecTV J.A. 57; TWC J.A. 57. The First

Amended Complaints describe a regulatory scheme in

which networks are required to broadcast digital televi-

sion signals in compliance with ATSC specifications,

which in turn require compliance with PSIP specifications

that define what information must be included in a digital

television signal (including, e.g., major channel number,

minor channel number, and a carrier frequency). DirecTV

J.A. 57; TWC J.A. 57. K-Tech then references a DirecTV

patent that allegedly describes how DirecTV receives its

local broadcast signals. DirecTV J.A. 58-59. And, K-Tech

references pre-suit communications with DirecTV in

which K-Tech allegedly explained its infringement allega-

tions and DirecTV rejected them. DirecTV J.A. 57-58.

With respect to TWC, K-Tech provides an allegedly in-

fringing example of a television program which shows one

channel assignment when received via an over-the-air

digital signal and another—i.e., modified—channel as-

signment when received via TWC broadcast. TWC J.A.

57-58. Based on these facts, K-Tech claims:

In order to broadcast programs in a cable or satel-

lite system, companies, such as [DirecTV and

TWC], must identify television programs with a

channel number so that users can select the pro-

grams. These companies may also be using the

carrier frequency to identify the programs. On in-

formation and belief, this infringement will con-

tinue unless enjoined by this court.

Id. Thus:

16 K-TECH TELECOMMUNICATIONS v. TIME WARNER CABLE

On information and belief, Plaintiff believes that

[DirecTV and TWC are] utilizing the methods and

systems protected by the K-Tech patents to up-

date the digital signals it receives, rather than us-

ing other non-infringing methods and systems,

because this receiving of digital television signals

and channel reassignment appears to be covered

by the K-Tech patents, raising an inference of in-

fringement, which constitutes probable cause for

the case, even though [DirecTV and TWC hold] in

confidence the details of its channel reassignment

methods/systems.

DirecTV J.A. 59; TWC J.A. 58.

DirecTV and TWC contend that these types of allega-

tions are insufficient under Form 18. They argue that

R+L Carriers reads Form 18 to require identification of

the allegedly infringing device. According to the defend-

ants, K-Tech’s failure to identify—by name, model num-

ber, or otherwise—specific devices or products that

infringe the K-Tech patents is fatal to its complaints.

Both TWC and DirecTV point to a complaint filed by K-

Tech against Blonder Tongue Laboratories, Inc., in which

K-Tech listed accused products by model number and tied

each to elements of the claimed inventions as evidence.

Appellees argue that the Blonder Tongue complaint

evidences that K-Tech was aware that its obligations

under Form 18 require that level of detail.

K-Tech responds by arguing that both DirecTV and

TWC operate in secrecy and that K-Tech is unable to

ascertain exactly where the infringement is occurring or

what devices are used to infringe. K-Tech contends that

fair inferences can be drawn from allegations in the

complaints regarding the nature of defendants’ business-

es, the industry standards to which they are required to

adhere, and the output signals produced. This, K-Tech

argues, is enough to withstand dismissal.

K-TECH TELECOMMUNICATIONS v. TIME WARNER CABLE 17

We do not read Form 18—or R+L Carriers—to require

that a plaintiff identify an accused device by name. That

K-Tech cannot point to the specific device or product

within TWC’s or DirecTV’s systems that translates the

digital television signals each receives—especially when

the operation of those systems is not ascertainable with-

out discovery—should not bar K-Tech’s filing of a com-

plaint. A defendant cannot shield itself from a complaint

for direct infringement by operating in such secrecy that

the filing of a complaint itself is impossible. Nor is a

defendant immune from a direct infringement claim

because he does not make a “device” but, rather, infringes

through a system or method.

The touchstones of an appropriate analysis under

Form 18 are notice and facial plausibility. See R+L

Carriers, 681 F.3d at 1334; McZeal, 501 F.3d at 1357.

While these requirements serve as a bar against frivolous

pleading, it is not an extraordinarily high one. The ade-

quacy of the facts pled depends on the breadth and com-

plexity of both the asserted patent and the accused

product or system and on the nature of the defendant’s

business activities. Compare Patent Harbor, LLC v.

DreamWorks Animation SKG, Inc., 2012 U.S. Dist. LEXIS

114199, at *13-15 (E.D. Tex. July 27, 2012) (stating that

“[t]he required detail level of the description is dictated by

the facts and circumstances surrounding the action” and

finding that an identification of a general category of

products as well as specific features is sufficient to satisfy

Form 18), and Select Retrieval, LLC v. L. L. Bean, Inc.,

2012 U.S. Dist. LEXIS 156004 (D. Me. Oct. 31, 2012)

(finding the identification of an accused website sufficient

to provide notice under Form 18), with Prism Techs., LLC

v. AT&T Mobility, LLC, 2012 U.S. Dist. LEXIS 126630 (D.

Neb. Sept. 6, 2012) (finding that allegation of infringe-

ment by AT&T against “various wireless products and

data services” was too broad to satisfy the requirements of

Form 18).

18 K-TECH TELECOMMUNICATIONS v. TIME WARNER CABLE

Here, we find that K-Tech’s amended complaints in

both actions satisfy these standards. DirecTV and TWC

know what K-Tech’s patents claim, and they know what

K-Tech asserts their systems do, and why. K-Tech has

alleged that DirecTV and TWC must and do modify or

“translate” digital signals they receive, and it has alleged

that they do so using K-Tech’s patented methods and

systems. We find these allegations adequate to satisfy

Form 18 and, thus, to satisfy the pleading standards that

govern these actions.

CONCLUSION

We reverse the district court’s judgments in K Tech

Telecommunications, Inc. v. Time Warner Cable, Inc.,

CV11-09373 (May 9, 2012 C.D. Cal) and K Tech Telecom-

munications, Inc. v. DirecTV, CV11-09370 (May 9, 2012

C.D. Cal) dismissing K-Tech’s First Amended Complaints

and remand for further proceedings in these cases.

REVERSED AND REMANDED

United States Court of Appeals

for the Federal Circuit

______________________

K-TECH TELECOMMUNICATIONS, INC.,

Plaintiff-Appellant,

v.

TIME WARNER CABLE, INC.,

Defendant-Appellee.

______________________

2012-1425

______________________

Appeal from the United States District Court for the

Central District of California in No. 11-CV-9373, Judge R.

Gary Klausner.

------------------

K-TECH TELECOMMUNICATIONS, INC.,

Plaintiff-Appellant,

v.

DIRECTV,

Defendant-Appellee.

______________________

2012-1446

______________________

2 K-TECH TELECOMMUNICATIONS v. TIME WARNER CABLE

Appeal from the United States District Court for the

Central District of California in No. 11-CV-9370, Judge R.

Gary Klausner.

______________________

WALLACH, Circuit Judge, Concurring.

I agree with the outcome reached by the majority, and

with its context-driven analysis of Form 18 compliance.

However, I disagree with the dictum that “the Forms

control” over the Supreme Court’s plausibility standard

set forth in Iqbal and Twombly. 1 Majority Op. at 10.

Rather, plausibility is always required to survive a Rule

12(b)(6) motion. The significance of Form 18 is that,

pursuant to Rule 84, it illustrates the “simplicity and

1 This case does not present a conflict between Form

18 and plausibility. See Majority Op. at 16–17 (holding K-

Tech’s complaints satisfy the standards of notice and

facial plausibility). R+L Carriers, from which “the Forms

control” language was drawn, similarly did not involve

any such conflict. Compare R+L Carriers, 681 F.3d at

1335 (the allegations of direct infringement satisfy Form

18), with id. at 1351 (Newman, J. dissenting in part,

concurring in part) (the same allegations satisfy the

Twombly and Iqbal standard); see also McZeal, 501 F.3d

at 1358 (“McZeal met the low bar for pro se litigants to

avoid dismissal on the basis of [Rule] 12(b)(6)”). Thus,

stating that “the Forms control” in the event of a conflict

between Form 18 and plausibility is dictum. In re

McGrew, 120 F.3d 1236, 1238 (Fed. Cir. 1997) (“[D]ictum

consists, inter alia, of statements in judicial opinions upon

a point or points not necessary to the decision of the

case.”) Such dictum “‘is not authoritative,’” but rather “‘is

the part of an opinion that a later court . . . is free to

reject.’” Id. (quoting United States v. Crawley, 837 F.2d

291, 292 (7th Cir. 1988)).

K-TECH TELECOMMUNICATIONS v. TIME WARNER CABLE 3

brevity” adequate to state a plausible claim for relief in

cases alleging direct patent infringement.

The question presented in this case is whether K-

Tech’s allegations are adequate under Rule 8(a). If so,

they survive a Rule 12(b)(6) motion; if not, the complaints

must be dismissed. The Supreme Court has interpreted

Rule 8(a) to require “sufficient factual matter, accepted as

true, to ‘state a claim to relief that is plausible on its

face.’” Iqbal, 556 U.S. at 678 (quoting Twombly, 550 U.S.

at 570). This standard “governs the pleading standard ‘in

all civil actions and proceedings in the United States

district courts.’” Id. (quoting Rule 1) (emphasis added).

Form 18 provides a sample complaint for patent in-

fringement, and Rule 84 “makes clear that a proper use of

[Form 18] . . . effectively immunizes a claimant from

attack regarding the sufficiency of the pleading.” Majority

Op. at 9–10 (emphasis added). As the majority rightly

points out, Rule 84 is binding on this court to the same

extent as Rule 8(a).

Thus, this court is bound by Iqbal and Twombly (in-

terpreting Rule 8(a)) and by Rule 84. To the extent possi-

ble, these standards must be harmonized. Fortunately,

Twombly suggests a path to reconciliation. Twombly

expressly recognized the adequacy of the allegations in

former Form 9. Twombly, 550 U.S. at 565 n.10 (citing

Form 9, Complaint for Negligence, modified and renum-

bered as Form 11) (hereinafter “Form 9”)); see also Hamil-

ton v. Palm, 621 F.3d 816, 818 (8th Cir. 2010) (considering

Form 13 in determining whether the Iqbal and Twombly

standard had been met). Comparison of Form 9 with

Form 18 shows each alleges as much “factual matter” as

the other. Sample Form 9 provided, in relevant part: “On

June 1, 1936, in a public highway called Boylston Street

in Boston, Massachusetts, defendant negligently drove a

motor vehicle against plaintiff who was then crossing said

highway.” Form 9 alleges some facts, such as “that the

defendant struck the plaintiff with his car while plaintiff

4 K-TECH TELECOMMUNICATIONS v. TIME WARNER CABLE

was crossing a particular highway at a specified date and

time . . . .” Twombly, 550 U.S. at 565 n.10. Nonetheless, it

contains “conclusory allegations” in equal measure, alleg-

ing simply that the defendant’s conduct was negligent.

See id. at 557 (instructing that “a conclusory allegation”

alone is inadequate to state a claim). Similarly, Form 18

contains factual allegations, like the issuance of a valid

patent, plaintiff’s ownership of that patent, and that the

defendant is “making, selling, and using electric motors

that embody the patented invention.” Although the alle-

gation that defendant “is infringing” seems to be a legal

conclusion of the type we are instructed to disregard

under Twombly, it is no more conclusory than Form 9’s

allegation of “negligence.” Following this guidance, the

Iqbal and Twombly standard and Rule 84 may both be

given effect by holding that plausible allegations parallel-

ing Form 18 are adequate to satisfy Rule 8(a).

Because these standards are reconcilable, it is unnec-

essary for the majority to pronounce that “the Forms

control” over plausibility. Indeed, the remainder of the

majority’s opinion suggests the opposite, and expressly

states that plausibility is required for Form 18 compli-

ance. Majority Op. at 11 (holding it “clear that an implau-

sible claim for patent infringement rightly should be

dismissed”); Majority Op. at 16 (listing plausibility as one

of the “touchstones” of an appropriate Form 18 analysis).

Moreover, the majority’s analysis of Form 18 compliance

is just the sort of “context-specific” analysis required by

the plausibility standard. Iqbal, 556 U.S. at 679

(“[D]etermining whether a complaint states a plausible

claim for relief will . . . be a context-specific task that

requires the reviewing court to draw on its judicial expe-

rience and common sense.”). The majority states the

adequacy of facts pled under Form 18 “depends on the

breadth and complexity of both the asserted patent and

the accused product or system and on the nature of the

K-TECH TELECOMMUNICATIONS v. TIME WARNER CABLE 5

defendant’s business activities.” 2 Majority Op. at 16–17

(collecting cases where district courts have applied such a

context-sensitive approach). This analysis does not square

with the dictum that “the Forms control,” but is entirely

consistent with the framework presented by this concur-

ring opinion; that plausible allegations conforming to

Form 18 are adequate to satisfy the requisite Iqbal and

Twombly standard.

2 It is unclear what the majority means when it

says “the Forms control.” Even according to the majority,

strict replication of Form 18 is neither required nor suffi-

cient to satisfy Rule 12(b)(6). For instance, K-Tech’s

complaints are found adequate under Form 18 although

they do not allege a device analogous to “electric motors”

nor that the patentee “owned the patents throughout the

period of the defendant’s infringing acts . . . .” See Form

18 (including such allegations). Moreover, the majority

indicates that a complaint duplicating the allegations in

Form 18 would be inadequate if implausible. See Majority

Op. at 11 (“an implausible claim for patent infringement

rightly should be dismissed.”).