Are the Pleading Standards for Method Claims More Rigorous in the Context of Rule 11?

No.

Micro Processing Technology, Inc. sent a letter to Plasma-Therm alleging that Plasma-Therm was infringing MPT's patent.  Plasma-Therm filed a declaratory judgment action seeking a declaration that it did not infringe.  Six months into the litigation, MPT served preliminary infringement contentions, which were based "[u]pon the information currently available to MPT and its belief."  MPT twice amended its infringement contentions. 

Plasma-Therm then moved to strike MPT's infringement contentions, arguing MPT lacked diligence in their preparation.  The Court denied the motion to strike, noting that while the contentions were "sparce," they gave notice of MPT's preliminary theories.  The Court also noted that the parties would have an opportunity to serve final contentions later in the litigation.

A month later, MPT filed its counterclaims asserting patent infringement (and other claims).    Plasma-Therm moved to dismiss those counterclaims.  Two weeks later (before MPT responded to the motion to dismiss), Plasma-Therm sought sanctions pursuant to Rule 11 for MPT's failure to conduct a proper pre-suit inquiry before asserting its patent infringement counterclaims.

The next day, the Court construed a number of terms the parties has disputed, adopting Plasma-Therm's constructions.  Shortly thereafter, MPT voluntarily dismissed its counterclaims and the case settled in full, but for resolution of the sanctions motion.

MPT offered four defenses to the sanction motion:

1. its counterclaims were compulsory, so it had to file them at an early stage of the litigation;
2. the sanctions motion is better resolved as a motion to dismiss;
3. the standard for pre-suit investigations is different for method patent claims than product claims; and
4. its pre-suit investigation was reasonable in light of its "good faith constructions.

As to the counterclaim being compulsory:

the fact that a counterclaim may be compulsory does not excuse a litigant or counsel from compliance with Rule 11.  See e.g. View Eng'g, Inc. [v. Robotic Vision Sys], 208 F.3d 981, 986 (Fed. Cir. 2000) (affirming Rule 11 sanctions on defendant who filed counterclaims of patent infringement without reasonable inquiry following plaintiff's declaratory action seeking to have defendant's patent declared invalid, or in the alternative, a finding of no infringement).

As to the sanctions motion being better resolved as a motion to dismiss:

The Court disagrees.  With respect to patent infringement claims, Rule 11 asks whether there was, at a minimum, a reasonable basis for a finding of infringement.  Thought not the only factor, the content of the pleadings is relevant to that analysis.

As to the legal standard for sanctions in connection with method claims:

None of the cases MPT cites support its theory that a different pre-filing standard exists with respect to patent infringement claims involving a method. Q-Pharma, Inc. [v. Andrew Jergens Co.], 360 F.3d 1295, 1300-01 (Fed. Cir. 2004) (analyzing a patent “directed to a method” and stating that “[i]n the context of patent infringement actions, we have interpreted Rule 11 to require, at a minimum, that an attorney interpret the asserted patent claims and compare the accused device with those claims before filing a claim alleging infringement”); PPS Data, LLC [v. Athenahealth, Inc], 2012 WL 601208, at *1 (describing pre-filing analysis). Other case law on the topic of Rule 11 sanctions does not support MPT’s assertion, either. See, e.g., Judin v. U.S., 110 F.3d 780, 784 (Fed. Cir. 1997) (analyzing whether claimant and attorney adequately compared accused devices with patent claims involving a method). Therefore, the Court finds no basis to adopt MPT’s contention that it did not need to conduct a factual inquiry prior to filing suit.

As to the reasonableness of its pre-suit analysis:

Here, MPT has not shown why, prior to filing suit, MPT believed its claim of infringement was meritorious. MPT has not compared any product, process, or method utilized by Plasma Therm to the patents-in-suit. Nor has MPT even identified any such product, process, or method utilized by Plasma-Therm against which the patents-in-suit could have been compared. See Judin, 110 F.3d at 784 (Viewing an alleged infringing device “may have been sufficient to put Judin on inquiry about whether the Government was using a device that infringed his patent. But Rule 11 requires more. It requires that the inquiry be undertaken before the suit is filed, not after.”). 

The only explanation MPT gives as to why it believed it had a reasonable chance of proving infringement is provided in a footnote, in which MPT states that “if Plasma-Therm practiced the disputed claims in the way Plasma-Therm implies it did in its claims constructions it would infringe the claims as construed by MPT.” Doc. 111 at p. 2, n. 3. But Plasma-Therm’s claim construction brief does not explain its own products, processes, or methods. Rather, PlasmaTherm’s claim construction brief describes only the patents-in-suit, including the specification and prosecution, to explain why the disputed claim terms should be construed as Plasma-Therm suggests. To the extent MPT draws inferences about Plasma-Therm’s product, processes, or method from Plasma-Therm’s advocacy of certain claim constructions, this is not explained. Nor would such inferences have necessarily been reasonable and sufficient for MPT to meet its burden under Rule 11 given the Court’s rejection of MPT’s claim constructions. See Source Vagabond Sys. Ltd. [v. Hydrapack, Inc.], 753 F.3d 1291, 1302 (Fed. Cir. 2014).

Summarizing its analysis, the Court noted that "neither MPT nor its counsel even suggest that they attempted to apply the claims of the patents-in-suit to any accused device, method, process, or product of Plasma-Therm.  The failure of MPT and its attorneys to make a reasonable inquiry before filing the frivolous infringement counterclaims warrants Rule 11 sanctions."

Motion for sanctions granted.
Plasma-Therm, LLC v. Micro Processing Technology, Inc., Case No. 8:15-CV-2785-T-36TBM (M.D. Fla. Oct. 23, 2018) (J. Honeywell)

Are "Nationwide" Sales on Amazon Sufficient to Show Injury in M.D.Fla. for Venue Purposes?

Yes.

Thursday, LLC and Klhip, Inc. are both retailers that use Amazon to sell nail clippers online.  Klhip filed a number of claims with Amazon about Thursday.  In response, Amazon would take Thursday down and investigate.  Each time, Klhip's allegations have been found baseless (and Thursday's Amazon presence has been restored). 

Thursday, a Florida corporation located in Clearwater, sued Klhip for unfair competition, tortious interference, and violations of Florida's Deceptive and Unfair Trade Practices Act (FDUPTA) (among other claims).  Klhip, whose CEO lives in Idaho, sought to transfer the case there pursuant to either 28 U.S.C. 1391(b) (arguing that venue in M.D. Fla. was entirely improper) or 28 U.S.C. 1404(b) (arguing that it would be more convenient to litigate in Idaho).

Concerning the propriety of venue (28 U.S.C. 1391(b)), the Court quickly disposed of Klhip's challenge.  Thursday notes that it sells thousands of its nail clippers in this district, and Klhip's statements about Thursday (to Amazon) have hurt Thursday in this district, thus supporting jurisdiction  The Court agreed.

Concerning transfer for convenience of the parties, the Court rejected Klhip's argument that Idaho would be more convenient.  The analysis followed the typical analysis in a 1404 decision, but notably noticed the importance of the FDUPTA claim, explaining that: "[a] district judge in Florida indisputably has the advantage in an action based on Florida law and is most adept at applying Florida law.  As a result [familiarity with the governing law] distinctly disfavors transfer."

Motion to transfer, denied.
Thursday, LLC v. Klhip, Inc., Case No. 8:17-cv-1587-T-36AEP (M.D. Fla. July 11, 2018) (J. Honeywell)

If you sell airplane parts in South Carolina to a customer who advertises and flies in Florida, are you subjected to personal jurisdiction in Florida for patent infringement?

No.

William Fondriest sued Chippewa Aerospace and Icore International for infringement of U.S. Pat. No. 7,135,790 related to jet aircraft landing gear.  Icore was dismissed earlier with the Plaintiff's consent.  

Plaintiff alleged both general jurisdiction and specific jurisdiction.  As to general jurisdiction, which requires "continuous and systematic general business contacts between the defendant and the forum state," Plaintiff relied on Chippewa's long standing and ongoing relationships with multiple companies that maintain significant operations in Florida.  Chippewa's customers's significant connections to Florida did not carry over to justify suing Chippewa here:

The fact that Chippewa allegedly provides Harness Products to airlines that advertise in Florida and fly throughout Florida does not demonstrate the continuous and systematic contacts that warrant the exercise of jurisdiction over Chippewa.

Plaintiff next tried specific jurisdiction, which involves a three-prong test: (1) defendant purposefully directed its activities at the residents of Florida; (2) the claim arises out of or is related to those activities; and (3) asserting personal jurisdiction is reasonable and fair.  Plaintiff argued that the regional airlines Chippewa sells to use Chippewa's allegedly infringing product in flights to and from Florida (and thus commit infringement in Florida). Chippewa responded that it manufactures the products in South Carolina, has never sold one in Florida or to a customer in Florida, has never received any payment from anyone in Florida, and has never delivered the allegedly infringing product to Florida.  Instead, Chippewa has sold the product to a customer in North Carolina and another in Utah and those sold to the North Carolina entity were installed on landing gear for companies in Wisconsin and Canada.

There is no evidence before this court to indicate that Chippewa purposefully directed its activities at residents of Florida.  Thus, Plaintiff's claim does not arise out of tor relate to activities that Chippewa purposefully directed at residents of Florida.  Assertion of personal jurisdiction over Chippewa would be unreasonable and unfair, as there are no contacts between Chippewa and Florida that give rise to the claims asserted by Plaintiff in this case.

Motion to dismiss for lack of personal jurisdiction granted.

Fondriest v. Chippewa Aerospace, Inc., Case No. 6:11-cv-1206 (M.D. Fla. Mar. 16, 2012) (J. Honeywell)