Pharmacia Corporation et al. v. PAR Pharmaceutical, Inc.
Decided August 10, 2005  pdf copy
Judge Rader with Judges Schall and Linn

*               A declaration filed at the PTO that contradicts a withheld publication by the declarant may evince inequitable conduct.

PAR filed an Abbreviated New Drug Application at the FDA, seeking approval to market a generic version of Pharmacia's Xalatan medication for glaucoma. In response, Pharmacia sued PAR at the U.S. District Court for the District of New Jersey for alleged infringement of two patents. PAR admitted infringement but asserted that inequitable conduct rendered both patents unenforceable. In particular, claims of one patent had been allowed only after Pharmacia submitted a declaration arguing a different clinical effect between two compounds. However, the declarant withheld contradictory information from his own research publication, which would have mooted his declaration. Judge Stanley Chesler found the first patent unenforceable for inequitable conduct but would not declare the second patent unforceable on the theory that both patents were terminally disclaimed over a common parent. Both sides appealed to the Federal Circuit.

The Federal Circuit affirmed the inequitable conduct holdings because the "misleading declarations go to the very point of novelty," making them highly material, and the declarations were known to the declarant, which evinces intent. The Federal Circuit agreed that the "district court correctly rejected" the assertion that "a terminal disclaimer can bind two related patents together" to allow cross-infection of inequitable conduct from one patent to the other.

The Federal Circuit sua sponte brought up "a general unclean hands theory" that might be used to show infection of one patent via inequitable conduct that affects both. The defendant surprisingly did not argue this theory.

James A. Frazier et al. v. Roessel Cine Photo Tech. Inc. et al.
Decided August 2, 2005   pdf copy
Judge Linn with Judges Bryson and Dyk, Bryson dissenting in part

*           "In contrast to cases where allegations of fraud are based on the withholding of prior art, there is no room to argue that submission of false affidavits is not material."

Frazier licensed a trick photography invention to Panavision and helped obtain a patent. During prosecution at the patent office, Panavision's patent attorney submitted a video of demonstrative scenes using the invention, in response to rejections. Later, Frazier and his licensee sued Roessel at the U.S. District Court for the Central District of California for alleged infringement. However, judge Gary Feess held the patent unenforceable for inequitable conduct because 1. Panavision failed to submit an advertisement that revealed a related prior art technology and 2. the video submitted to the patent office misleadingly had been made with a different (prior art) camera technique. Both sides appealed various issues to the Federal Circuit.

The Federal Circuit held that Panavisions's withholding of the advertisement was not inequitable conduct because the advertisement "would not have been covered by the claims of Frazier's application." The court pointed out, however that "[t]he materiality of intentional false statements may be independent of the claims of the patent" and affirmed inequitable conduct based on the misleading video submission. Judge Bryson dissented from the holding that the withheld advertisement was not material because "a difference in a single element, however important to the patented invention, is not automatically dispositive of the issue of materiality."

Affirmatively lying to the patent office by submitting false information is much more serious than withholding a reference that possibly might be cumulative of other prior art, or which lacks one or more claim elements.

Schreiber Foods, Inc. v. Beatrice Cheese, Inc. et al.
Decided March 22, 2005   pdf copy
Judge Dyk with Judges Rader and Archer

*           An infringement judgment is not voided by a temporary transfer of a patent in suit to a non-party, which temporarily deprives the court of jurisdiction.

*          "If a lawyer has offered material evidence and comes to know of its falsity, the lawyer shall take reasonable remedial measures."

Schreiber sued Beatrice at the U.S. District Court for the Eastern District of Wisconsin for alleged infringement of patent claims to methods and devices for hermetically sealing food. During the litigation, Schreiber assigned the litigated patent to a subsidiary, apparently for tax purposes, but did not inform Beatrice or the court. Furthermore, Schreiber responded to a subsequent discovery request that it "is not aware of any" documents concerning assignments or security interests in the patent. Later, while the case was pending, Schreiber's counsel learned of the assignment. The counsel "concluded that there was no legal or ethical obligation to disclose the assignment" or the falsity of the statements made during discovery, but instructed Schreiber to quietly reacquire the patent.

Beatrice learned of the assignments from another case. After relay of this information to the court, Judge Lynn Adelman vacated the judgment and dismissed the case for lack of jurisdiction as a sanction. Schreiber appealed, waiving its claim for damages but otherwise seeking reinstatement of the judgment that the patent is enforceable and infringed.

The Federal Circuit reversed the dismissal and remanded for a new trial, which among other things would allow the district court "to first consider lesser sanctions." The Federal Circuit noted that "Schreiber had constitutional standing at the time the suit was commenced" and "the temporary loss of standing during patent litigation can be cured before judgment."

The plaintiff initially got into trouble by assigning its patent (including the right to sue for past actions!) during litigation without informing the litigation team. This mistake was compounded by the plaintiff's failure to amend its earlier false discovery statement, which the Federal Circuit found to be "plainly sanctionable."

Bruno Independent Living Aids, Inc. v. Acorn Mobility Services Ltd. and Acorn Stairlifts, Inc.
Decided January 11, 2005   pdf copy
Judge Lourie with Judges Gajarsa and Linn

*                "[I]n the absence of a credible explanation, intent to deceive is generally inferred from the facts and circumstances."

Bruno sued a competitor for alleged infringement of Bruno's stairlift patent at the U.S. District Court for the Western District of Wisconsin. During discovery, Bruno admitted that the patent claims were invalid and filed a reissue application at the PTO. Judge Barbara Crabb then granted Acorn summary judgment of invalidity and awarded attorney fees to Acorn. Bruno appealed to the Court of Appeals for Federal Circuit ("Federal Circuit") and Acorn cross appealed.

The Federal Circuit affirmed the award of attorney's fees because the record supported "the district court's finding that Bruno possessed actual knowledge of the (prior art)--and that it knew or should have known of its materiality." An influential fact was that Bruno admitted the "substantial equivalence" of its technology to the FDA during patent prosecution but never informed the PTO of that anticipating prior art. The Federal Circuit pointed out that "an applicant who knew of the art or information cannot intentionally avoid learning of its materiality."

Determination of intent often is dispositive in proving inequitable conduct. The Federal Circuit pointed out in this regard that when materiality of the deception is high, and the patentee "has not proffered a credible explanation for the nondisclosure, …an inference of deceptive intent may fairly be drawn in the absence of such an explanation."