Judge Lee applies Therasense and Global-Tech in Summary Judgment Ruling

Posted on August 24, 2011 by Dabney Carr

Among his eleven summary judgment rulings in MeadWestvaco’s (“MWV”) patent infringement suit against Rexam and Valois, Judge Lee dismissed claims of inequitable conduct  under Therasense but allowed claims of inducement of infringement to survive under the Supreme Court’s new standard of “willful blindness.” 

Judge Lee’s rulings heavily favored MWV, which prevailed on its motions for summary judgment on anticipation, obviousness and inequitable conduct and defeated Rexam’s and Valois’ motions on indefiniteness, infringement and willfulness. MWV lost only on the defendants’ motion for summary judgment on infringement under the doctrine of equivalents.

Judge Lee’s opinion can be found here and at MeadWestvaco Corp. v. Rexam PLC, Case No. 1:10CV511, 2011 U.S. Dist. LEXIS 92947 (E.D.Va. Aug. 18, 2011). Our earlier post on this case can be found here, and a summary of Judge Lee’s rulings follows:

Inequitable Conduct

Applying the heightened standard for inequitable conduct set forth in Therasense v. Becton, Dickinson & Co., 2011 U.S. App. LEXIS 10590 (Fed. Cir. May 25, 2011), Judge Lee held that the information allegedly withheld from the PTO was neither material nor established the requisite intent. MeadWestvaco had disclosed other references on the same subject of the withheld information, and so that information was cumulative. Further, the defendants “cannot provide any evidence of a specific intent to deliberately withhold information to the PTO.” “‘[N]on-disclosure, by itself, cannot satisfy the deceptive intent element.’”

For more information on the Therasense decision, see our earlier post here.

Willful Blindness

Judge Lee found sufficient evidence to send the issue of “willful blindness” under Global-Tech Appliances, Inc. v. SEB S.A., 131 S.Ct. 2060, 2069-72 (2011) based on:

  • Valois’ attempts to design around the MWV patents before the patents issued;
  • Valois’ complete lack of knowledge of its supplier’s manufacturing process could support an inference that it deliberately avoided learning whether its supplier’s process infringed;
  • Valois’ assertion that it has not provided any parameters or instructions to its suppliers lacked credibility.

For more detail on the "willful blindness" standard for inducement of infringement and the Global-Tech decision, see our earlier posts here and here.

Willful Infringement

Judge Lee also allowed MWV’s willful infringement to go to trial even though MWV did not move for a preliminary injunction. Judge Lee found evidence of objective recklessness based on evidence that:

  • Valois copied MWV’s design;
  • Valois lacked any good faith belief that its product did not infringe;
  • Valois had a pure pecuniary motive
  • Valois attempted to conceal its infringement;
  • Valois failed to investigate its own conduct

The failure to move for a preliminary injunction, the Court held, was not dispositive but was merely a single factor in the willfulness analysis.

Other rulings

In addition, Judge Lee:

  • Granted MWV’s motions for summary judgment on the defenses of anticipation and obviousness;
  • Denied Rexam’s and Valois’ motions for summary judgment on indefiniteness because the claim terms at issue were amenable to construction;
  • Denied Valois motion for summary judgment on infringement under 35 U.S.C. 271(a) based on its claim that its products were made outside the United States;
  • Granted Valois’ motion for summary judgment on infringement under the doctrine of equivalents because MWV had added the key limitation during prosecution of the patent to overcome prior art.
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Judge Jackson Issues a Slew of Rulings in FiOS Patent Suit

Posted on August 19, 2011 by Dabney Carr

Following up on the jury’s $115 million verdict in favor of ActiveVideo in its patent infringement suit against Verizon, Judge Jackson has issued three separate written opinions relating to invalidity and inequitable conduct claims made at trial, including:

  • Granting ActiveVideo’s Motion for Judgment as a Matter of Law on the validity of its four patents on the grounds that Verizon’s expert failed to give a detailed explanation of how the elements of the asserted claims were described in the prior art.  ActiveVideo Networks, Inc. v. Verizon Comm's., Inc., Case No. 2:10CV248, 2011 U.S. Dist. LEXIS 91722 (E.D.Va. Aug. 17, 2011).
  • Denying both parties’ Motions for Judgment under Fed. R. Civ. P. 52(c) on their respective claims of inequitable conduct. Judge Jackson ruled that Verizon had not show materiality because none of the prior art that ActiveVideo failed to disclose would have anticipated any of the asserted claims. Judge Jackson also declined to infer an intent to deceive based merely on ActiveVideo’s awareness of the prior art, stating that an intent to withhold prior art was not enough to show an intent to deceive.  ActiveVideo Networks, Inc. v. Verizon Comm's., Inc., Case No. 2:10CV248 (E.D.Va. Aug. 17, 2011) 
  • Granting Verizon’s Motion for Judgment as a Matter of Law on the validity of its two asserted patents on the grounds that ActiveVideo’s expert failed to opine whether the asserted prior art would enable one of skill in the art to practice the invention.   ActiveVideo Networks, Inc. v. Verizon Comm's., Inc., Case No. 2:10CV248, 2011 U.S. Dist. LEXIS 91658 (E.D. Va. Aug. 17, 2011).
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Federal Circuit Announces Heightened Materiality Standard for Inequitable Conduct Claims

Posted on June 1, 2011 by Dabney Carr

Our colleagues, Dan Ladow, Jeff Morgan, Trenton Ward and Dustin Weeks have authored a Troutman Sanders Advisory discussing the Federal Circuit’s new, heightened standard for materiality for inequitable conduct claims announced last week in Therasense, Inc. v. Becton Dickson and Company. In Therasense, the en banc Federal Circuit held that when an applicant for a patent fails to disclose prior art to the PTO, such prior art will be material for purposes of inequitable conduct only if the PTO would not have allowed one of the claims in the application if it had been aware of the undisclosed prior art. The full advisory, which analyzes the decision and how it might limit future claims of inequitable conduct, can be found here.

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Judge Brinkema Allows Inequitable Conduct Claims to Go to Trial

Posted on April 13, 2011 by Dabney Carr

After Exergen v. Wal-Mart Stores, Inc., 575 F.3d 1312 (Fed. Cir. 2009) (summarized here), it appeared that claims of inequitable conduct would fail at the pleading stage because of the requirements of a specific “who, what, when, where and how” of the alleged misrepresentation and specific facts that permitted an inference of an intent to deceive.

A recent case before Judge Brinkema, though, breathes some new life into inequitable conduct claims in the EDVA. Rolls-Royce PLC v. United Tech’s. Corp., 1:10CV457, 2011 U.S. Dist. LEXIS 20679 (E.D.Va. March 2, 2011) (Brinkema, J.) (found here). The key is the specificity of the allegations. If a defendant's allegations state a plausible claim of inequitable conduct, Judge Brinkema concluded, questions of materiality and intent are merely issues of disputed fact unsuitable for resolution on either a motion to dismiss or a motion for summary judgment. 

In her decision on the motion to dismiss in Rolls-Royce, Judge Brinkema addressed four theories of inequitable conduct:

  • First, the defendant claimed the inventor had filed a false inventor declaration. Judge Brinkema held that the inventor’s deposition testimony presented a plausible claim of a false statement and “would lead to a reasonable inference that Rolls-Royce intended to deceive the PTO by filing the declaration.”
  • Second, the defendant alleged that Rolls-Royce had falsely claimed a priority date in a continuation-in-part application in order to avoid disclosure of material prior art. Judge Brinkema held that the defendant’s specific identification of material prior art and its explanation of Rolls-Royce's reasons for its conduct date were sufficient. Whether the application contained new subject matter, the Court held, was a question of fact.
     
  • Third, the defendant asserted that Rolls-Royce failed to disclose several pieces of prior art and proffered reasons why the art was material, not cumulative and might have impacted the examiner’s review. Rolls-Royce claimed that the art was cumulative, but Judge Brinkema held that it could not make that determination on a motion to dismiss.
  • Finally, the defendant claimed that Rolls-Royce misrepresented the defendant’s patent during prosecution. Rolls-Royce conceded that it had mischaracterized the patent but claimed its statements were immaterial. Again, Judge Brinkema held that the allegations satisfied Rule 9(b)’s standard of specificity and that whether Rolls-Royce’s statement was material required evidence beyond the scope of a motion to dismiss.

In essence, Judge Brinkema concluded at the motion to dismiss stage that the defendant had established a prima facie case of inequitable conduct, particularly on issue of intent to deceive.  Indeed, Judge Brinkema denied Rolls-Royce’s motion for summary judgment based on a lack of intent to deceive on April 8. Thus, the lesson for litigants may be that if claims of inequitable conduct are sufficiently fact-based to overcome a motion to dismiss, they will also create a genuine issue of fact to defeat summary judgment.

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Will Exergen and Iqbal Lead to More Rigorous Pleading Requirements in Patent Cases?

Posted on August 12, 2009 by Dabney Carr

Last week’s decision by the Federal Circuit regarding the pleading requirements for an inequitable conduct claim, Exergen Corp. v. Wal-Mart Stores, Inc., 2009 U.S. App. LEXIS 17311 (Fed. Cir. Aug. 4, 2009), and the Supreme Court’s decision earlier this summer in Ashcroft v. Iqbal, 129 S.Ct. 1937 (2009) may foreshadow additional enhanced pleading requirements in patent infringement cases. 

Robert Matthews at Mathews Patent-Law Consulting has published a detailed analysis of Exergen that can be found here. In short, under Fed.R.Civ.P. 9, a claim of inequitable conduct must include specific identification of the who, what, when, where and how of the material misrepresentation committed before the PTO. As Matthews states, under Exergen, “an accused infringer must identify the exact information within a withheld prior art reference that it alleges is material, identify where that information can be found in the reference, identify the particular claim limitations or combination of claim limitations for which the withheld information is material, and then show how the prosecution record lacked that information.” 

An accused infringer must also identify by name the specific individual who allegedly knew of the allegedly material information and withheld or misrepresented that information to the PTO. A party may plead “on information and belief” but only if essential information lies within another party’s control and only if the pleading sets forth specific facts upon which the belief is reasonably based. Thus, the mere fact that an applicant disclosed a reference while prosecuting one application but did not disclose the same reference while prosecuting a second application is insufficient to plead the requirement of deceptive intent. 

Exergen echoes the Supreme Court’s decisions in Iqbal and Bell Atlantic Corp. v. Twombly, 550 U.S. 544 (2007) that under Fed.R.Civ. P. 8, a pleading offering “labels and conclusions” or a “formulaic recitation of a cause of action will not do.” As the Court stated in Iqbal, “While legal conclusions can provide the framework of a complaint, they must be supported by factual allegations.” Thus, a plaintiff must make “well-pleaded factual allegations” that “plausibly give rise to an entitlement to relief.” 

Exergen takes Iqbal and Twombly a step further, requiring allegation of facts with a high degree of specificity and detail, and Exergen may presage stricter pleading requirements for other types of patent claims and defenses. 

So far, though, the Federal Circuit has not required stricter pleading of patent infringement claims. Applying Twombly, the Federal Circuit has held that a claim for patent infringement must only assert that the plaintiff owns the patent and that the defendant infringed the patent, must describe, in general terms, “the means by which the patent was infringed” and must identify the specific parts of patent law that are implicated. McZeal v. Sprint Nextel Corp., 501 F.3d 1354, 1357 (Fed. Cir. 2007). A patentee “is not required to specifically include each element of the claims of the asserted patent." Thus, here in Virginia, Judge Payne has held that a plaintiff satisfies McZeal by identifying the infringing devices at issue. Taltwell, LLC v. Zonet USA Corp., 2007 U.S. Dist. LEXIS 93465 at *40 (E.D.Va. Dec. 20, 2007).  Judge Dyk dissented in McZeal, arguing that a patentee should be required to specify which claims are infringed and the features of the accused device that correspond to the claim limitations, and Iqbal arguably supports Judge Dyk’s position. At this point, though, it appears that the Federal Circuit will not impose stricter requirements for pleading patent infringement, even though a plaintiff’s Rule 11 obligations requires a detailed infringement analysis before suit is filed and such information often must be provided in a claim chart filed early in the case. 

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