Yeti Coolers, LLC v. RTIC Coolers, LLC
1:16-cv-00264
W.D. Tex.Jul 19, 2016Background
- YETI sued RTIC and related entities and individuals alleging copying of YETI’s insulated drinkware and asserting, among other claims, infringement of YETI’s design patent (the ‘397 patent) for the YETI Rambler™ Colster®.
- YETI’s first amended complaint added John and James Jacobsen (the Jacobsens) and asserted direct infringement under 35 U.S.C. § 271(a) and induced infringement under § 271(b) against them.
- The Jacobsens moved to dismiss the patent claim under Rule 12(b)(6), arguing YETI failed to plead facts sufficient to hold them personally liable for either direct or induced infringement.
- The Jacobsens contended personal liability for direct infringement requires pleading facts adequate to pierce the corporate veil; they also argued YETI failed to plead the requisite knowledge and intent for inducement.
- YETI argued veil piercing is not required to hold corporate officers directly liable and, alternatively, that its pleading sufficiently alleged both direct participation and knowledge/willful blindness supporting inducement.
- The Court evaluated Federal Circuit precedent on veil piercing for direct infringement and the sufficiency of YETI’s allegations of knowledge and intent for inducement.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether corporate officers can be held personally liable for direct patent infringement under § 271(a) without pleading veil piercing | YETI: veil piercing not required; officers may be liable for torts they personally commit on behalf of the corporation | Jacobsens: Federal Circuit requires veil piercing to impose personal liability for direct infringement by officers | Court: Dismissed § 271(a) claim as YETI did not plead facts to pierce the corporate veil; veil piercing required under controlling Federal Circuit authority |
| Whether YETI pleaded induced infringement under § 271(b) against the Jacobsens | YETI: alleged the Jacobsens oversaw/design/market/sell the infringing product, had knowledge (or were willfully blind), and induced corporate defendants to infringe | Jacobsens: allegations are conclusory and insufficient to show knowledge/intent to induce infringement | Court: Denied dismissal on § 271(b); allegations (including involvement, copied product images, and prior related suit) made inducement plausible |
Key Cases Cited
- Manville Sales Corp. v. Paramount Sys., Inc., 917 F.2d 544 (Fed. Cir. 1990) (holding evidence to pierce the corporate veil is required to impose personal liability for direct infringement under § 271(a))
- Al‑Site Corp. v. VSI Int’l, Inc., 174 F.3d 1308 (Fed. Cir. 1999) (same rule on veil piercing for officer liability for direct infringement)
- Wordtech Sys., Inc. v. Integrated Network Sols., 609 F.3d 1308 (Fed. Cir. 2010) (corporate veil shields officers from personal liability for direct infringement absent alter‑ego)
- Orthokinetics, Inc. v. Safety Travel Chairs, Inc., 806 F.2d 1565 (Fed. Cir. 1986) (earlier Federal Circuit decision discussed in relation to veil‑piercing analysis)
- Bell Atlantic Corp. v. Twombly, 550 U.S. 544 (2007) (plausibility pleading standard under Rule 8)
- Ashcroft v. Iqbal, 556 U.S. 662 (2009) (application of plausibility and evaluation of legal conclusions in complaints)
- Commil USA, LLC v. Cisco Sys., Inc., 135 S. Ct. 1920 (2015) (knowledge requirement for induced infringement)