CAFC Reverses Inequitable Conduct Finding: Outside The Box Innovations v. Travel Caddy
By Charles H. Chevalier and Ralph A. Dengler, Gibbons
The Federal Circuit recently reversed the Northern District of Georgia's judgment of unenforceability based on inequitable conduct, in Outside The Box Innovations, LLC v. Travel Caddy, Inc Other aspects of the decision are outside the scope of this blog.
In reversing, and citing last year's en banc decision in Therasense, Inc. v. Becton, Dickinson & Co., 649 F.3d 1276 (Fed. Cir. 2011), the CAFC reiterated that to establish unenforceability based on inequitable conduct before the United States Patent and Trademark Office ("PTO"), a party must prove by clear and convincing evidence that (1) information material to patentability was withheld from the PTO, or material misinformation was provided to the PTO, and that such act was done (2) with the intent to deceive or mislead.
The District Court had determined that Travel Caddy's U.S. Patent No. 6,823,992 ("the '992 patent") and its continuation U.S. Patent No. 6,991,104 ("the '104 patent") are unenforceable for inequitable conduct because, inter alia, Travel Caddy did not disclose to the PTO information regarding the litigation involving the '992 patent (parent) during prosecution of the '104 application (child). Citing the Manual of Patent Examining Procedure §2001.06(c), which requires disclosure to the PTO "[w]here the subject matter for which a patent is being sought is or has been involved in litigation," the lower court held that the '992 patent litigation was material information and that Travel Caddy had the obligation to inform the examiner overseeing the prosecution of the '104 patent application. The District Court found that even though only infringement of the '992 patent was at issue, Travel Caddy should have known (or expected or anticipated) that validity would arise in the litigation and therefore, the litigation should have been disclosed to the PTO. Furthermore, the lower court inferred deceptive intent on the part of Travel Caddy because no other reasonable inference could be drawn for failing to disclose the current litigation during the pendency of the '104 patent.
Travel Caddy countered that because the validity of the '992 patent had not been included in the complaint involving the '992 parent patent, and no prior art or other information had been presented, there was nothing material in the litigation to disclose to the PTO. The CAFC agreed, concluding that the District Court's ruling was in error. The CAFC held that there was not clear and convincing evidence that information material to patentability of the claims in the '104 patent application was withheld, regardless of what might have been asserted as "relevant" to the application. Similarly, the CAFC ruled there was no clear and convincing evidence of any deceptive intent by Travel Caddy.
This decision further establishes that materiality and deceptive intent are separate requirements for which the burden for each must be met to prove inequitable conduct in a post-Therasense world. However, this heightened standard should not give practitioners a false sense of believing that inequitable conduct is dead. Rather, a fact specific inquiry regarding materiality, by omission or commission, is required.
Charles H. Chevalier, Associate
Gibbons P.C., One Gateway Center Newark, NJ 07102-5310
T: 973-596-4611; F: 973-639-6263
Ralph A. Dengler, Counsel
Gibbons P.C., One Gateway Center, Newark, NJ 07102-5310
T: 973-596-4825, F: 973-639-6381