Inequitable Conduct

Failure to Disclose Sales Before Critical Date is Inequitable Conduct

Failure to disclose “material information of prior sales” resulted in a holding that U.S. Patent No. 8,146,428 “is unenforceable due to inequitable conduct” based on a finding of a “specific intent to deceive the PTO into granting the patent.” Total Rebuild, Inc. v. PHC Fluid Power, LLC, No. 6:15-CV-1855 (W.D. La. Sept. 13, 2019). The ‘428 patent is directed to “systems and methods for safely testing devices and components under high-pressure.” Total Rebuild alleged PHC Fluid Power infringed the claims of the ‘428 patent. PHC Fluid Power challenged the enforcement of the ‘428 patent due inequitable conduct of the sole inventor regarding the on-sale and public-use bars of 35 USC § 102(b). The critical date for the ‘428 patent under 35 USC § 102(b) is August 8, 2007. The court noted that “[t]o prevail on inequitable conduct, the accused infringer must prove by clear and convincing evidence that the applicant knew of the reference or prior commercial sale, knew that it was material, and made a deliberate decision to withhold it.” Therasense, Inc. v. Becton, Dickinson & Co., 649 F.3d 1276, 1292 (Fed. Cir. 2011) (en banc). Further, the court noted that “[i]ntent and materiality are separate requirements for a finding… Read More »Failure to Disclose Sales Before Critical Date is Inequitable Conduct

No Inequitable Conduct: Duty to Disclose Only Goes So Far

A patent prosecutor did not have a duty to disclose that a cited prior art reference inherently disclosed a claimed feature where the examiner misunderstood the reference as failing to disclose the feature. On this basis, a motion to strike in inequitable conduct defense relating to the reference was granted.  Nevro Corp. v. Boston Scientific Corporation, No. 16-cv-06830-VC (N.D. Cal. Oct. 4, 2017). During prosecution, the patent examiner had made obviousness rejections of claim 58 under 35 USC § 103 based on the “Fang” reference, which the inventor both owned and had disclosed. After the patent prosecutor pointed out the subject patent application’s common ownership with the Fang reference, the examiner withdrew the obviousness rejection and allowed claim 58. The defendant here alleged that Fang inherently disclosed “pulse width,” the recited feature of claim 58 that the Examiner had said was missing from Fang. According to defendant, this would have transformed Fang into a 35 USC § 102 anticipation reference, which could not have been disqualified based on the common ownership. Moreover, argued the defendant although disclosure of prior art is usually enough to avoid a charge of inequitable conduct, when the patent examiner made clear that he misunderstood the scope… Read More »No Inequitable Conduct: Duty to Disclose Only Goes So Far

Inequitable Conduct: Prior Device Material to Method Claim?

A court has struck an inequitable conduct defense as inadequately pled because, said the court, the allegedly withheld prior art directed to a device was not material to a patent claim directed to a method for manufacturing a similar device. International Test Solutions, Inc. v. Mipox International Corporation, NO. 16-cv-00791-RS (N.D. Cal. May 16, 2017).  International Test Solutions (“ITS”) owns U.S. Patent No. 7,202,683 (‘683 patent), directed to manufacturing a cleaning device. Mipox alleged that ITS committed inequitable conduct during prosecution of the ‘683 patent. The substantive elements of inequitable conduct are (1) “an affirmative misrepresentation of a material fact, [failure] to disclose material information, or [submission of] false material information” and (2) “specific intent to deceive the” Patent and Trademark Office (“PTO”). Exergen Corp. v. Wal-Mart Stores, Inc., 575 F.3d 1312, 1327, n.3 (Fed. Cir. 2009). A reference is material if the PTO would not have allowed a patent claim had it been aware of the reference. Mipox identified ITS data sheets that disclosed cleaning devices composed of a cleaning pad layer attached to a polyester substrate, which is attached to an adhesive layer. Mipox argued that the ITS data sheets alone anticipate claim 1 of the ‘683 patent.… Read More »Inequitable Conduct: Prior Device Material to Method Claim?

What Facts Support Inequitable Conduct at the Patent Office?

Here is an interesting case addressing whether the affirmative defense of inequitable conduct was adequately plead as an affirmative defense in answer to a complaint for patent infringement.  In Music Choice v. Stingray Digital Group Inc., 2-16-cv-00586 (E.D. Texas May 2, 2017), Magistrate Judge Payne recommended denying a motion to dismiss affirmative defenses and counterclaims of inequitable conduct, finding that the defendant had provided “sufficient indirect and circumstantial evidence to support the intent element of inequitable conduct at the pleading stage” by alleging that the applicant for the patent had deceived the USPTO with respect to inventorship, and that “the PTO would not have granted the patents had it known” who the true inventors were. The opinion further commented that the “inequitable conduct claim may prove deficient” after discovery.  I suspect so; I may be biased by my experience as a patent examiner, but how often does the PTO pay attention to the inventors are (rarely), and if it does how often does it base its decision to allow claims based on who the inventors are (almost never)? Should a deception as to inventorship be inequitable conduct?  I’ve been involved in defending cases where I sure thought so.  But under… Read More »What Facts Support Inequitable Conduct at the Patent Office?

Don’t-Ask-Don’t-Tell Approach Meets Intent Requirement for Inequitable Conduct

The filer of a petition to revive an expired patent met the intent prong of the test for inequitable conduct by acting with at best willful ignorance; the filer certified that a failure to pay a maintenance fee was unintentional when he not only had not investigated, but had no knowledge, as to why the maintenance fee in fact had not been paid.  3D Medical Imaging Systems, LLC v. Visage Imaging, Inc., 2:14-CV-267-RWS (N.D. Ga. Jan 11, 2017).  Because the unsupported certification was material to the United States Patent and Trademark Office’s decision to revive the patent, the court granted a motion for summary judgment seeking a declaratory judgment that U.S. Patent No. 6,175,655 was unenforceable for inequitable conduct. The ’655 patent’s prior owner was a bankrupt company that made a conscious decision not to pay the final maintenance fee for the ’655 patent.  The current owner, the plaintiff in this case, knew that the patent was expired when he acquired it, and that the prior owner “had filed for bankruptcy roughly two months after the 11.5-year maintenance fee was due.”  Nonetheless, without, by his own admission, any knowledge or investigation, the plaintiff certified to the USPTO that the failure… Read More »Don’t-Ask-Don’t-Tell Approach Meets Intent Requirement for Inequitable Conduct

No Intent to Deceive, No Inequitable Conduct

The Federal Circuit has reversed a finding of inequitable conduct where “the record contains no evidence of a deliberate decision to withhold those references from the PTO as required under Therasense, Inc. v. Becton, Dickinson & Co.”  1st Media, LLC v. Electronic Arts, Inc., No. 2010-1435 (Fed. Cir. Dec; 13, 2012).  The opinion was authored by Judge Linn, and joined by Chief Judge Rader and Judge Wallach. The patent-in-suit, U.S. Patent No. 5,464,946, was directed to “an entertainment system for use in purchasing and storing songs, videos, and multimedia karaoke information.”  Attorney Joseph Sawyer prosecuted the application for the ‘946 patent and certain related applications, including a PCT application and two U.S. applications that later issued as U.S. Patent No. 5,325,423 and U.S. Patent No. 5,564,001.  The ‘423 patent application was filed the same day as the ‘946 patent application.  The ‘001 patent application was a continuation-in-part of the ‘423 patent application. The ‘946 applicant failed to cite three references cited in the related applications.  The trial court, ruling prior to the Federal Circuit’s decision in Therasense, held that the failure to cite these references was inequitable conduct rendering ‘946 patent unenforceable.  At trial, the inventor and the prosecuting attorney… Read More »No Intent to Deceive, No Inequitable Conduct

Inequitable Conduct After Therasense: Definitely Harder to Prove

Specific intent to deceive the USPTO did not exist where an inventor removed mention of a reference from his patent application, and then testified that the “reference was cumulative or merely provided background information.”  Imura International U.S.A., Inc. v. HR Technology, Inc., No. 08-2220 (D. Kans. April 24, 2012).  The party asserting inequitable conduct also failed to show materiality under the but-for standard of Therasense.  This case is worth noting as yet another example of how Therasense has had a tangible, limiting impact on assertions of inequitable conduct.  Asserting inequitable conduct is unquestionably a harder defense to succeed upon than it used to be.

Impact of Therasense: Defendant Denied Motion to Plead Inequitable Conduct

In Pixion, Inc. v. Citrix Systems, Inc., No. C 09-03496 (N.D. Cal. April 16, 2012), the court denied Citrix’s motion for leave to amend its Answer to plead the affirmative defense of inequitable conduct because Citrix could not “show that the USPTO would have rejected the” patents-in-suit even if the allegedly withheld reference had been disclosed. Pixion’s patents allegedly covered “online conferencing and collaboration systems.”  Citrix alleged “that Pixion failed to disclose references to software named ‘CU-SeeMe’ in any patent applications to which the Patents-in-Suit claim priority or in the prosecutions of” two of the four patents-in-suit.  According to Citrix, deposition testimony of an inventor established that the CU-SeeMe software “incorporated all the claims in the patents-in-suit,” and “was material” and “not cumulative.”  Pixion responded that Citrix’s motion was futile because CU-SeeMe was disclosed to the USPTO in two of the patents-in-suit, and the same examiner had handled all four of the patents-in-suit. The court agreed with Pixion.  Under Therasense, Inc. v. Becton, Dickinson and Co., 649 F.3d 1276 (Fed. Cir. 2011) (en banc), “Citrix would have to prove that “submission of the withheld item would have led to a rejection.’”  Here, Citrix could not make that proof with respect… Read More »Impact of Therasense: Defendant Denied Motion to Plead Inequitable Conduct

Inequitable Conduct After Therasense Does Not Always Require “But-for” Materiality

Even under the heightened “but-for” materiality standard for proving inequitable conduct in patent prosecution set forth by the Federal Circuit in Therasense, Inc. v. Becton, Dickinson & Co., 649 F.3d 1276, 1287 (Fed. Cir. 2011) (en banc), a pleading would be sufficient that set forth “affirmative egregious misconduct, such as the filing of an unmistakably false affidavit.”  Based on allegations that the patent applicant lied to the examiner about certain prior art, the court in Touchtunes Music Corp. v. Rowe International Corp., No. 07 Civ. 11450 (S.D.N.Y. March 13, 2012), allowed the counterclaim-defendant (i.e., for present purposes, the defendant) to amend its complaint to allege inequitable conduct. The Touchtunes Music court first noted that the defendant had satisfied the notice pleading standard, even under the heightened requirements for pleading fraud under Federal Rule of Civil Procedure 9(b), by setting forth sufficient detail of the patent applicant’s alleged false statements.  Specifically, the defendant plead that the patent applicant “intentionally made false statements to the PTO regarding the scope and content of karaoke prior art and concealed the relevance of prior art karaoke references,” including a false declaration “that prior art karaoke machines were not capable of coin operation and did not… Read More »Inequitable Conduct After Therasense Does Not Always Require “But-for” Materiality