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					   CENTER FOR ADVANCED STUDY & RESEARCH ON
            INTELLECTUAL PROPERTY
    2002 HIGH TECHNOLOGY PROTECTION SUMMIT
                  Ethical Issues In Patent Law
Inequitable Conduct – Intent to Deceive in Recent Federal Circuit
                           Decisions
                   Discussion of Practice Tips
              UNIVERSITY OF WASHINGTON
                   SCHOOL OF LAW

                       Presented by: Timothy L. Boller

                 SEED Intellectual Property Law Group, PLLC
                        701 Fifth Avenue, Suite 6300
                         Seattle, Washington 98104
                                206-622-4900
Tim Boller is an associate with the Seed Intellectual Property Law
Group PLLC in Seattle, Washington. He graduated from the
University of Kansas with a B.S. in Electrical Engineering (1986) and
went on to receive a J.D. from Georgetown University Law Center
(1994). After receiving his J.D., Tim was a judicial clerk to U.S.
District Court Judge J. Thomas Marten and was a research attorney for
the Kansas Court of Appeals. He has had extensive research and
legislative assistant experience including a five year period with U.S.
Representative Jim Slattery. Tim is admitted to the bar in the states of
Kansas (1995), New York (1998), and Washington (1999) and is
registered to practice before the U.S. Patent and Trademark Office.
     Catalina Lighting, Inc. v. Lamps Plus, Inc.,
            – F.3d –, 2002 WL 1401697
              (Fed. Cir., June 28, 2002)
   Lamps Plus owned U.S. Patent No 5,221,141 for a stand-
    alone electric lamp
   Catalina contended the patent was invalid for failing to cite
    a prior art reference
   Jury found no inequitable conduct
   Catalina sought JMOL
   Issue – Were findings supported by substantial evidence
    and legal conclusions supported by those findings?
     Catalina Lighting, Inc. v. Lamps Plus, Inc.,
            – F.3d –, 2002 WL 1401697
         (Fed. Cir., June 28, 2002) (cont’d)
   Held:
      Intent to deceive cannot be inferred from failure to
       disclose alone.
      Evidence of why art was not cited (prior art was
       considered cumulative) supported verdict
   PRACTICE POINTS:
      Issue may be considered by Jury – which changes
       standard of review
      Intent to deceive must be shown, in addition to non-
       disclosure and materiality.
Juicy Whip, Inc. v. Orange Bang Inc., 292 F.3d 728
              (Fed. Cir. June 7, 2002)

   Juicy Whip owned U.S. Patent No. 5,575,405 for a “post-
    mix” beverage dispenser that looks like a “pre-mix” drink
    dispenser, which issued after a series of applications
   The claims required “positioning a transparent display
    bowl relative to the dispenser outlet to create the visual
    impression that said bowl” is the source of the dispensed
    beverage
   During prosecution, the Examiner rejected the invention as
    obvious over the prior art
Juicy Whip, Inc. v. Orange Bang Inc., 292 F.3d 728
        (Fed. Cir. June 7, 2002) (Cont’d)

   Juicy Whip submitted two declarations, one from Greg Boulahanis that
    said that “he worked for a distributor of Orange Bang” and described
    the difficulties with the prior art which were solved by the invention
   The Examiner interpreted the Boulahanis declaration as meaning that
    Boulahanis worked for a competitor of Juicy Whip. In reality, the
    Orange Bang distributor was owned by the principals of Juicy Whip
   Juicy Whip never corrected the Examiner’s misinterpretation and
    subsequently resubmitted the Boulahanis declaration to the PTO
   Juicy Whip also submitted a declaration from Joe Bowers, a Coca-
    Cola employee, describing how the Juicy Whip dispenser solved
    problems with the prior art that Coca-Cola had been unable to solve,
    especially cleaning problems with pre-mix dispensers
Juicy Whip, Inc. v. Orange Bang Inc., 292 F.3d 728
        (Fed. Cir. June 7, 2002) (Cont’d)

   Coca-Cola subsequently filed a protest that included a declaration from
    another employee that Coca-Cola technical personnel had not been
    asked to solve the cleaning problem, and would have solved it if asked
    to do so.
   The Examiner rejected Coca-Cola’s protest
   Prior to the critical date, one of the inventors drafted a letter to the
    California Department of Health Services regarding a “Fountain type
    beverage dispenser with a clear bowl display above.” There was a
    factual issue of whether the letter was mailed. The letter was not
    disclosed to the PTO
   The case was tried to a jury, which found the patent was unenforceable
    based on inequitable conduct before the PTO
Juicy Whip, Inc. v. Orange Bang Inc., 292 F.3d 728
        (Fed. Cir. June 7, 2002) (Cont’d)

   The Federal Circuit reversed denial of JMOL motion
   Every statement in Boulahanis declaration was true. Thus,
    its original submission was not inequitable conduct
    because there was no intent to deceive
   To the extent subsequent resubmissions without correction
    of the Examiner’s misunderstanding were misleading,
    whether Boulahanis worked for a competitor was not
    material
   Orange Bang failed to identify specific statements in the
    Bowers declaration that were false, but there was some
    evidence the statements were false
Juicy Whip, Inc. v. Orange Bang Inc., 292 F.3d 728
        (Fed. Cir. June 7, 2002) (Cont’d)

   In the absence of evidence the patentees knew the Bowers
    declaration contained false statements, there was no
    evidence the patentees had any intent to mislead the
    Examiner
   Letter to Health Service is immaterial. It is not a complete
    description of the invention and whether an invention’s
    purpose is to deceive is not material to patentability
   Judge Mayer dissented because he believed there was
    substantial evidence to support the Jury’s verdict that the
    invention was invalid as anticipated
Juicy Whip, Inc. v. Orange Bang Inc., 292 F.3d 728
        (Fed. Cir. June 7, 2002) (Cont’d)

   PRACTICE POINTS
      Trial by Jury changes standard of Review – losing party
       must show lack of substantial evidence to support
       verdict
      Must show intent to deceive as well as deception
Frank’s Casing Crew & Rental Tools, Inc. v. PMR
        Technologies, Ltd., 292 F.3d 1363
            (Fed. Cir., June 4, 2002)
   PMR was assigned the rights to U.S. Patent RE No. 34,063 (“the
    ’063 patent”), a reissue of U.S. Patent No. 4,738,145 (“the ’145
    patent”)
   Patentees failed to disclose Peter Weiner as an inventor
   District Court held patent unenforceable.
   Abuse of Discretion Test applied, clear error review for factual
    findings
   Patentees hired attorney who spoke with Weiner, then
    transferred case to new attorneys who did not contact Weiner
   Evidence that Patentees had worked with Weiner in coming up
    with the invention and were in a dispute with him at the time
    they filed the application was sufficient to establish intent to
    deceive.
Frank’s Casing Crew & Rental Tools, Inc. v. PMR
        Technologies, Ltd., 292 F.3d 1363
        (Fed. Cir., June 4, 2002) (Cont’d)
   Further evidence of intent to deceive was presented (the
    patentees had falsely stated to the PTO that another
    inventor refused to sign the application), but was not
    necessary to support the findings.
   Weiner’s assignee of his rights sought to have the patent
    declared enforceable by it. Federal Circuit held that “One
    bad apply spoils the entire barrel”, thus an innocent
    inventor may not enforce a patent obtained as a result of
    inequitable conduct by another.
   District Court properly distinguished between conduct of
    patentees and conduct of assignees in declining to award
    attorney’s fees
Frank’s Casing Crew & Rental Tools, Inc. v. PMR
        Technologies, Ltd., 292 F.3d 1363
        (Fed. Cir., June 4, 2002) (Cont’d)
   PRACTICE POINTS
      If you are in a dispute over
       inventorship/assignment, timely file a separate
       application to preserve your rights
      Inequitable conduct by anyone involved in
       obtaining the patent renders it unenforceable
      Inequitable conduct before the PTO does not
       automatically make a case exceptional under 35
       U.S.C. § 385
    Semiconductor Energy Laboratory Co., Ltd. v.
          Samsung Electronics Co., Ltd.,
           204 F.3d 1368 (Fed. Cir. 2000)
   SEL owned U.S. Patent No. 5,543,636 (“the ’636 patent”)
    directed to active matrix displays
   SEL sued Samsung for infringement
   SEL submitted an IDS that was 29 pages long
   SEL submitted a complete Japanese patent (“Canon”) in
    Japanese, together with an accurate, but incomplete
    explanation of its relevance and a partial translation from a
    prior unrelated patent application
   SEL also characterized a reference (an article by C.C. Tsai)
    as directed to solar cells rather than thin-field transistors
    during prosecution of a related application, to minimize its
    significance
    Semiconductor Energy Laboratory Co., Ltd. v.
           Samsung Electronics Co., Ltd.,
       204 F.3d 1368 (Fed. Cir. 2000) (Cont’d)
   District Court held this constituted inequitable conduct
    rendering patent unenforceable
   District Court rejected arguments that the patentee
    misunderstood the Tsai article and cited other evidence
    that intent to deceive was present:
      In-house patent agent could not explain a mis-
       description of another patent during the prosecution of
       a related application
      Inventor had previously discussed Tsai’s work, called it
       spectacular and expressly stated the benefits of low
       levels of impurities applied to TFTs as well as solar
       cells
      Tsai was disclosed only after a licensee brought it to
       patentee’s attention
    Semiconductor Energy Laboratory Co., Ltd. v.
           Samsung Electronics Co., Ltd.,
       204 F.3d 1368 (Fed. Cir. 2000) (Cont’d)
   Affirmed
   Standard of review – Clear error for factual
    findings, abuse of discretion for holding
   District Court’s finding that Canon reference was
    material because un-translated portion came closer
    to claimed invention than anything else before
    PTO was not clearly erroneous
   Finding that Canon together with Tsai would have
    rendered claims obvious not clearly erroneous
    Semiconductor Energy Laboratory Co., Ltd. v.
           Samsung Electronics Co., Ltd.,
       204 F.3d 1368 (Fed. Cir. 2000) (Cont’d)
    “Proof of high materiality and that the applicant knew or
    should have known of that materiality makes it difficult to
    show good faith to overcome an inference of intent to
    deceive,” noting that District Court also found SEL’s
    witnesses were not credible
    “The duty of candor does not require that the applicant
    translate every foreign reference, but only that the
    applicant refrain from submitting partial translations and
    concise explanations that it knows will misdirect the
    examiner’s attention”
   Federal Circuit declined to reach issue of whether
    misconduct in related applications rendered patent
    unenforceable

				
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