MVS Filewrapper® Blog: Lost Profit Damages Require Actual Sales by Patentee

Post by Jonathan Kennedy

 

The award of damages in patent infringement cases is governed by 35 U.S.C. § 284.  The statute provides "[u]pon finding for the [patent owner] the court shall award the claimant damages adequate to compensate for the infringement, but in no event less than a reasonable royalty for the use made of the invention by the infringer, together with interest and costs as fixed by the court."  The statute does not define what "adequate" damages are, but two main theories of damages have been applied in making this assessment—a reasonable royalty, representing the floor for what is adequate, and lost profits.  Lost profits are awarded to make a party whole based on profits that were lost as a result of the infringement.  In contrast, a reasonable royalty is intended to compensate the patentee for the value of what was taken. 

 

In the recent case of Warsaw Orthopedic v. NuVasive, the Federal Circuit affirmed the finding for both patent owners, but reversed the lost profits award to Warsaw—and vacated pre- and post-verdict royalties—on the basis that Warsaw does not practice the patented technologies. 

 

Warsaw owns two patents which it licenses to a third party, Medtronic.  Warsaw and Medtronic sued NuVasive for infringement of the Warsaw patents.  NuVasive counterclaimed for infringement of its own patent.  A jury in the Southern District of California found all patents valid, and awarded damages for infringement to both parties, including lost profits to Warsaw.  Both parties appealed.

 

The Federal Circuit affirmed the district court's findings of validity and infringement, but reversed the lost profits award and vacated the pre- and post-verdict royalties to Warsaw and ordered a new trial on damages, holding that none of Warsaw's activities warranted an award of lost profits. 

 

Warsaw does not practice the patented technologies.  Instead Warsaw licenses the technologies to two related Medtronic entities, which manufacture and sell the patented products to a third related Medtronic entity for a profit.  The two related Medtronic entities that manufacture and sell products pay Warsaw a royalty on those sales.  Warsaw also manufactures fixations, such as surgical rods and screws, used in conjunction with the patented devices during surgery.  The fixations are also sold to the third Medtronic entity.  The third Medtronic entity combines the patented products and fixations, which are sold together in medical kits to hospitals and surgeons.   Warsaw argued that it has three sources of income derived from the patents:  (1) revenue from the sale of fixations to the third Medtronic entity; (2) royalties from the other two Medtronic entities for their manufacture and sale of the patented products; and (3) a payment from the third Medtronic entity resulting from an inter-company transfer pricing agreement ("true-up payment").  At trial Warsaw argued that all three income sources represent potential lost profits.  The jury awarded $101,196,000 in total damages to Warsaw, $101 million of which was for "Lost Profits Damages (with royalty the remainder)."  The verdict form also provided royalty rates for each patent. 

 

In reversing the award of damages to Warsaw, the Federal Circuit held, "a patentee may not claim, as its own damages, the lost profits of a related company."  Further, "[t]o be entitled to lost profits, . . . the post profits must come from the lost sales of a product or service the patentee itself was selling."  Thus, the court found the lost profits based on the royalty payments received from the related Medtronic companies' sales of products, did not qualify for lost profits damages for the plaintiff.

 

Warsaw argued that its lost profits from the sale of fixations to the related Medtronic company qualified as convoy sales.  The Federal Circuit clarified that to qualify as convoy sales, the related products "must be functionally related to the patented product and losses must be reasonably foreseeable."  The Court distinguished this from the mere sale of items together for convenience of some business advantage.  Thus, if the items for the convoy sales have independent use apart from the patented technology, that would indicate that are not functionally related. The Federal Circuit held that the fixations could not qualify as convoy sales because Warsaw failed to prove a functional relationship. Thus, Warsaw was not entitled to lost profits based on the sale of fixations.

 

With respect to the true-up payments, the Court found that Warsaw had failed to establish what percentage of true-up payments received from the related entities was attributable to payments for the patented products to hospitals and surgeons as opposed to unrelated transactions.  The evidence indicated that the true-up payments are valued based on company-by-company basis rather than technology-by-technology or product-by-product basis.  As such, the Federal Circuit held that the true-up payments were also not a recoverable lost profit.

 

The Federal Circuit noted that its holdings denying Warsaw's ability to obtain lost profits does not preclude it from other recovery.  The cjillourt indicated that Warsaw may be entitled to a reasonable royalty and remanded the case for a new trial on damages.

MVS Filewrapper® Blog: Cancelation of Trademarks due to First Actual Use After Application

Post by Dan Lorentzen

 

Federal registration of a trademark provides a number of benefits to the trademark owner, including protection throughout the entire country, advantageous litigation position—for example presumption of validity and enhanced monetary damages—and enlistment of the U.S. Customs Service to stop importation of counterfeit goods. The federal trademark system provides two separate avenues for protecting a mark: (1) registration of a mark that is already used in commerce, and (2) certification of a bona fide intent to use the mark in commerce (ITU application), followed by a later demonstration of actual use.  However, failure to use the correct registration scheme can result in invalidation of the registration, and loss of the benefits of federal protection.

 

In its recent decision in Couture v. Playdom, the Federal Circuit Court of Appeals held that a trademark that was registered under the standard (i.e. non-ITU) system, but was not actually used in commerce until after the registration, was void.  The mark owner filed a registration including, as a specimen showing use of the mark, a screen capture of the mark owner's website.  At the time of filing, the website was a single page that advertised the mark owner's readiness, willingness and ability to render services.  The mark owner did not, however, provide any services under the mark until after the mark had been registered.  The mark was the subject of a cancelation proceeding, and the Trademark Trial and Appeal Board (TTAB) canceled the registration as void from the time of filing because the owner had not used the mark in commerce as of the date of the application.

 

On appeal, the Federal Circuit affirmed the TTAB's cancelation.  The court held that "use in commerce" for registration requires actual use in conjunction with the services described in the application, and not merely offering services.  The court further noted that, although ITU applications are available, and procedures for substitution of an ITU application for a standard application are available, such substitution is specifically provided for prior to publication and registration.  As a result, once a standard trademark application is published, it can no longer be converted into an ITU application. 

 

This case highlights the need for mark owners to understand when and how they use their marks.  For the incautious, failure to fully consider and communicate these use issues may result in loss of trademark rights. 

 

The full opinion is available here.  

MVS Filewrapper® Blog: Claim Preambles as Limitations– the Saga Continues

Post by Dan Lorentzen

 

The preamble of a patent claim normally recites some purpose or objective, but is generally not considered to limit the scope of the claim unless it "breaths life and meaning into the claim."  There are a number of ways that the preamble can take on patentable weight, including by serving as the antecedent basis for a limitation in the body of the claim. 

 

In Pacing Tech v. Garmin, the Federal Circuit added a new wrinkle to the analysis of whether a preamble can serve as a claim limitation.  Pacing Techs. sued Garmin asserting infringement of U.S. Patent No. 8,101,843.  The independent claim at issue recites a preamble of "[a] repetitive motion pacing system for pacing a user."  The body of the independent claim does not further incorporate the "repetitive motion pacing system," although the term "user" is repeated.  Further, a separate, dependent claim does recite "the repetitive motion pacing system." 

 

The Federal Circuit determined that the repetition of the term "user" and recitation of the "repetitive motion pacing system" in a separate claim were sufficient to render the preamble of the independent claim a limitation.  As a result, the court determined that practicing the independent claim was deemed to require repetitive motion pacing, and Garmin's accused product did not infringe the asserted claims. 

 

The decision increases the circumstances under which a claim preamble can be considered limiting.  As a result, it may become easier to limit the scope of a claim based on the stated intended purpose or object contained in the preamble. 

 

The full opinion is available here.

MVS Filewrapper® Blog: Patent Exhaustion does not Apply to Related—but Distinct—Inventions

Post by Dan Lorentzen

 

The doctrine of "patent exhaustion" (also referred to as "first sale doctrine") is a judicially created limit on the exclusive rights of a patent holder.  Under the exhaustion doctrine, once a patent owner licenses or authorized a first production or sale of their invention, they cannot claim any damages arising from downstream sale or use arising from that authorized first production or sale.  The recent decision by the Federal Circuit in Helferich Patent Licensing v. New York Times has limited the exhaustion doctrine by holding that a first sale does not preclude a patent owner from enforcing their rights in a related, but distinct, invention.

           

Helferich owns U.S. Patent Nos. 7,280,838; 7,499,716; 7,835,757; 8,107,601; 8,116,741; 8,134,450; and 7,155,241, which relate to systems and methods for handling information and providing it to wireless devices, such as mobile-phone handsets, as well as handsets and methods of using them.  Helferich sued a number of defendants, including the New York Times, for infringement of the claims dealing with the systems and methods.  The defendants asserted patent exhaustion as a defense, claiming that by granting handset manufacturers licenses based on the handset claims of the patents at issue, and conferring broad authority to sell the handsets, Helferich had exhausted its ability to enforce its patents not only against acquirers of the handsets but also against the defendant content providers who use presumptively distinct inventions to manage content and deliver it to handset users.  The District Court granted summary judgment of non-infringement to the defendants based on this application of the exhaustion doctrine.

 

On appeal, the Federal Circuit reversed, concluding that patent exhaustion is not so broad as to cover distinct inventions, even if those inventions are specifically designed to be used with the licensed product and are essential to the licensed products utility.  The court deemed the application urged by the defendants to be an unwarranted expansion of the exhaustion doctrine.  The decision underscores the importance of understanding the scope of license agreements, as well as the scope of a potential licensee's patent portfolio. 

 

The full opinion is available here.

MVS Filewrapper® Blog: Federal Circuit Upholds First IPR Decision

Post by Dan Lorentzen

 

The America Invents Act (AIA) included provisions establishing new "trial" procedures at the USPTO Patent Trial and Appeal Board (PTAB) for testing the validity of issued patents.  One such procedure, Inter Partes Review (IPR), has quickly become a common alternative or addition to traditional patent litigation since it was implemented in September of 2012. However, a number of issues relating to the operation and review of the new USPTO trial procedures have remained unresolved.

 

A three-judge panel of the Federal Circuit has upheld the decision of the PTAB in the very first IPR filed.   The Federal Circuit affirmed all of the PTAB's determinations, finding that the PTAB was not in error in applying the broadest reasonable interpretation (BRI) standard to the claims in the IPR proceeding, the PTAB properly determined obviousness, and the PTAB properly denied the patent owner's motion to amend the claims. 

 

Notably, the Federal Circuit declined to review the decision by the PTAB to institute the IPR.  The patent owner argued that the PTO improperly instituted the IPR on two of the patent claims because it relied on prior art that the party seeking the IPR did not identify in its petition with respect to those two specific claims.  The pertinent portion of the AIA (encoded in 35 U.S.C. § 314) provides that “[t]he determination by the Director whether to institute an inter partes review under this section shall be final and nonappealable.”  The patent owner asserted that this provision merely postpones review of the PTO’s authority until after the issuance of a final decision by the Board.  The Federal Circuit, however, concluded that § 314 prohibits review of the decision to institute IPR even after a final decision.  The court did note that mandamus may be available to challenge the institution of an IPR where the PTO has clearly any indisputably exceeded its authority. 

 

Although disagreement remains as to whether the Federal Circuit was correct in its determinations (see, e.g., Judge Newman's dissenting opinion), the decision provides some clarity as to the standards that apply during IPR proceedings at the USPTO.  The full decision is available here.

MVS Filewrapper® Blog: Federal Circuit Emphasizes "Reasonable" in Broadest Reasonable Interpretation

Post by Dan Lorentzen

 

 

During examination, the claims of patent application are given their broadest reasonable interpretation ("BRI") by the patent examiner.  This USPTO standard is intentionally broad—broader than the interpretation applied in litigation—in order to reduce the possibility that the claim, once issued, will be interpreted more broadly than is justified.  A recent Federal Circuit decision, however, has indicated that the "reasonable" element of the standard is still essential.

 

In In re Imes, the application at issue was directed to a device for communicating digital camera image and video information over a network.  Independent claim 1 encompassed such a device having memory for storing digital images, a display for displaying the images, an input device for receiving a request for communication, and a housing that stores a first (wireless cellular) communication module and a second (“low power high-speed”) wireless communication module.  Two other independent claims recited communications modules operable to wirelessly communicate streaming video. 

 

During prosecution, the examiner rejected claim 1 as obvious over a reference that disclosed a first wireless communication module and second module in the form of a removable memory card.  The examiner concluded that the removable memory card met the BRI of the second wireless communication device because it had to be removed in order to communicate the information to a computer—i.e. the metal contacts between the memory card and the computer are not "wire," and therefore communication along the metal contacts to the computer are "wireless."  The examiner rejected the other independent claims as anticipated or obvious over a reference that disclosed a wireless digital camera system that transmits still images over the internet.  The examiner concluded that the BRI of "streaming video" included a continuous process of sending images. The applicant appealed to the Patent Trial and Appeal Board, which affirmed the examiner's rejections.

 

On appeal, the Federal Circuit took issue with the reasonableness of the USPTO's interpretation of the claims.   The court emphasized that the interpretation must be reasonable in view of the specification.  With regards to the "wireless" element, the USPTO's interpretation was not reasonable because the specification defined the term to refer to electromagnetic waves moving through atmospheric space rather than along a wire.  Accordingly, communication through metal contacts—and not atmospheric space—cannot be reasonably interpreted to constitute "wireless" communication.

 

With respect to the "streaming video" element, the court concluded that the USPTO's interpretation was not reasonable because there was no substantial evidence to support the conclusion that sending a series of individual still images is equivalent to streaming video. 

 

The holding in this case can potentially provide some needed clarity to both applicants and examiners as to what is "reasonable" when interpreting claims during patent prosecution.  The full decision is available here. 

MVS Filewrapper® Blog: Unauthorized Planting does not Constitute Public Use

Post by Dan Lorentzen

 

The Federal Circuit Court of Appeals has issued a decision in Delano Farms Company v. California Table Grape Commission, holding that the actions of two individuals who obtained samples of the two patented plant varieties in an unauthorized manner and planted them in their own fields did not constitute invalidating public use of the plant varieties.

 

The case involves two varieties of grapes, which are covered by plant patents owned by the USDA.  The USDA licensed the varieties to the California Grape Commission.  Delano Farms filed suit alleging that the patents were invalid because the varieties were in public use for more than one year before applications for the varieties were filed.  The United States District Court for the Eastern District of California initially ruled that sovereign immunity barred action against the USDA, and that the case could not go forward without the USDA as a party.  The Federal Circuit overturned the decision and remanded to the District Court.  

 

On remand, the plaintiffs asserted that the claimed varieties were planted and cultivated more than a year before the filing date of the patent applications, which constituted a prior public use under 35 U.S.C. § 102(b) (pre-AIA), thereby invalidating the patents.   The plaintiffs had obtained access to and grew the varieties in 2002, without permission and before the varieties were available to anyone else.  They did not, however, sell or distribute the varieties or their fruit.  The District Court concluded that this activity did not rise to the level use required to invalidate the patents under § 102(b), and ruled for the defendants.  The plaintiffs again appealed to the Federal Circuit.

 

On appeal, the plaintiffs pointed to a number of actions—cultivation of the varieties, one plaintiff providing plant material to another, and disclosure (but not provision) of the varieties to a business partner—were sufficient to constitute a public use.  The plaintiffs pointed to a number of cases, including the Federal Circuit's 2013 decision in Dey, L.P. v. Sunovion Pharm., Inc., to support their argument that because the plaintiffs made no affirmative efforts to conceal the varieties or keep them secret, their planting constituted public use.  The Federal Circuit held that despite the plaintiffs exchanging of the varieties among themselves and disclosing them to a business partner, all of the actions were taken with the expectation of secrecy.  Further, the court held that the plantings themselves could not constitute public use because, even though they were visible to the public, the varieties could not be identified by the public simply by viewing the vines, and as a result, the public could not be put in possession of the varieties' features. 

 

The Federal Circuit specifically did not address the issue of whether use of an invention by one who has misappropriated that invention (or obtained it through other improper means) can ever qualify as an invalidating public use. 

MVS Filewrapper® Blog: Shifting Pre-Trial Strategy in the Wake of Alice and Ultramercial

Post by Paul S. Mazzola

 

Four recent Supreme Court cases involving patentable subject matter under 35 U.S.C. § 101 (Bilski v. Kappos, Mayo Collaborative Services v. Prometheus Laboratories, Inc., Ass'n for Molecular Pathology v. Myriad Genetics, Inc., and Alice Corp. v. CLS Bank International ) have had the practical effect of heightening the standard for patentability.  However, these cases may also be altering the way patent cases are handled in their early stages.

 

The Federal Circuit recently decided the case of Ultramercial, Inc. v. Hulu, LLC for a third time.  The case was originally filed in the Central District of California in 2009. Initially, the district court granted the defendant's pre-answer motion to dismiss under Rule 12(b)(6), finding the patent at issue did not claim patent-eligible subject matter.  In the first appeal, the Federal Circuit reversed the district court, and the Supreme Court vacated the decision of the Federal Circuit for further consideration in light of Mayo. On remand, the Federal Circuit again reversed the district court, finding it was improper to dismiss the suit by granting a Rule 12(b)(6) motion.  To that end, the court made several compelling statements regarding the interplay between such motions and the § 101 analysis.  The court stated, "[I]t will be rare that a patent infringement suit can be dismissed at the pleading stage for lack of patentable subject matter."  The court reasoned that issued patents are presumed to be valid, and "the analysis under § 101, while ultimately a legal determination, is rife with underlying factual issues." Adding that claim construction should be required if there are factual disputes, the court succinctly stated, "Rule 12(b)(6) dismissal for lack of eligible subject matter will be the exception, not the rule."

 

After a second petition for certiorari was filed with the Supreme Court, the Court decided Alice.  The holding in Alice—that an abstract idea is not patent eligible subject matter if "merely requires generic computer implementation"—was squarely relevant to the patent at issue in Ultramericial, leading the Supreme Court to again vacate the decision of the Federal Circuit for further consideration in light of Alice.

 

In applying Alice to the patent at issue in Ultramericial, the Federal Circuit held that the claims do not recite patent-eligible subject matter under § 101, but affirmed the motion to dismiss under Rule 12(b)(6).  In doing so, the court deviated sharply from the decisive language from its previous decision, but dedicated no discussion to reconcile why a motion to dismiss is the appropriate mechanism to dispose of a suit involving an issued patent in an infringement suit presumably "rife with underlying factual issues."  However, the concurring opinion of Judge Mayer was almost entirely devoted to this issue.  "First, whether claims meet the demands of 35 U.S.C. § 101 is a threshold question, one that must be addressed at the outset of litigation.  Second, no presumption of eligibility attends to the section 101 inquiry."  Describing section 101 as a "gateway" and a "sentinel" akin to establishing jurisdiction, Judge Mayer forwarded three benefits of resolving any issue of patentable subject matter at the outset of litigation: conserving judicial resources, thwarting vexatious infringement suits, and protecting the public. In addressing the district court opinion, Judge Mayer stated, "No formal claim construction was required because . . . no 'reasonable construction would bring the claims within patentable subject matter.'"  Regarding the presumption of validity for issued patents requiring clear and convincing evidence to the contrary, Judge Mayer noted "the PTO has for many years applied an insufficiently rigorous subject matter eligibility standard." Thus, Judge Mayer found, "[T]he district court properly invoked section 101 to dismiss Ultramercial's infringement suit on the pleadings."

 

Given the apparent shift by the Federal Circuit toward resolving issues of patent-eligible subject matter at the pleadings stage, defendants of infringement suits involving uncertain subject matter eligibility are more likely to use a motion to dismiss to try to avoid costly discovery and claim construction.  The opportunity for an alleged infringer to undercut an infringement suit at the pleadings phase may also impact litigation strategy, including whether such a motion should be pursued in conjunction with other mechanisms such as post-grant proceedings before the Patent Trial and Appeal Board.

 

 

 

MVS Filewrapper® Blog: Federal Circuit Schedules Oral Hearing in First Appeal of Inter Partes Review

Post by Jonathan Kennedy

The Federal Circuit has scheduled oral arguments for the first appeal of an inter partes review ("IPR") decision by the Patent Trial and Appeal Board ("PTAB").  Oral arguments have been scheduled for November 3, 2014.  The appeal involves a number of interesting issues.  First, it arises from the first IPR filed with the PTAB—Garmin USA, Inc. v. Cuozzo Speed Technologies, LLC (IPR2012-00001).  In that IPR, the PTAB invalidated three claims (claims 10, 14, and 17) of U.S. Patent No. 6,778,074.  Second, pursuant to a settlement agreement, Garmin agreed not to take part in any appeal.  Instead, once Cuozzo appealed the PTAB's decision, the Patent Office intervened under 35 USC § 143 to oppose Cuozzo's appeal, effectively taking Garmin's place. 

 

Cuozzo appealed four issues from the PTAB decision, relating both to procedural and substantive matters:  (1) "Whether the PTAB lacked authority to institute IPR for claims 10 and 14 on grounds of unpatentability not identified in the Petition"; (2) "Whether the B[roadest] R[easonable] I[nterpretation] standard applies to IPR, and whether the PTAB erred by construing the term 'integrally attached'"; (3) "Whether, if the PTAB had jurisdiction over claim 10, it erred in cancelling claim 10 as invalid under 35 U.S.C. § 103"; and (4) "Whether the PTAB erred in denying Cuozzo's motion to amend the claims." 

 

The petition for IPR originally filed by Garmin alleged forty-three different grounds of invalidity based on a number of patents.  The PTAB rejected forty-one of those grounds and chose to institute the IPR based on two grounds of invalidity alleged by Garmin against dependent claim 17.  However, when instituting the IPR the PTAB applied those same two grounds of invalidity against claims 10 and 14, even though Garmin had not asserted those grounds against claims 10 or 14.  In its final decision, the PTAB cancelled claims 10, 14, and 17 based on the two grounds Garmin had raised against claim 17.  Whether the PTAB can expand the scope of its review by applying grounds of invalidity against claims in a manner not raised by the Petitioner is a significant question and clarity from the Federal Circuit is greatly anticipated. 

 

Garmin's petition did not set forth any proposed claim constructions.  Despite this, in instituting the IPR—without any input from either party—the PTAB chose to construe the claim term "integrally attached" based on the broadest reasonable interpretation standard.  In its brief, Cuozzo argues this standard is improper for PTAB and only appropriate during examination and reexamination.  Instead, Cuozzo argues that the PTAB should be held to the standards set forth in the Federal Circuit's Phillips' decision.  The PTAB's construction of the term was pivotal in the other decisions in the IPR.  For example, the PTAB denied Cuozzo's motion to amend claims during the IPR under 35 USC § 316(d) based on the construction of the term "integrally attached."  Clarification regarding the claim construction standard that applies to the PTAB will be critical moving forward.

MVS Filewrapper® Blog: Legitimate Advocacy and Genuine Misrepresentation of Material Facts

The Federal Circuit has issued a decision in Apotex Inc. v. UCB, Inc., upholding a district court's finding that Apotex's U.S. Patent No. 6,767,556 ("the '556 patent") is unenforceable due to inequitable conduct. 

 

Dr. Sherman, founder and chairman of Apotex, wrote the '556 patent application and is its sole inventor.  The '556 is based on Canadian application filed on April 5, 2000.  The ’556 patent is generally directed to a process for manufacturing tablets of moexipril tablets—an angiotensin-converting enzyme (“ACE”) inhibitor used to treat hypertension. The ’556 patent discloses a process of making moexipril tablets consisting mostly of moexipril magnesium obtained by reacting moexipril or its acid addition salts with an alkaline magnesium compound to improve stability and prevent degradation of the normally instable moexipril hydrochloride.

 

Two existing drugs— Univasc and Uniretic—were both cited as prior art in the prosecution of the '556 patent, and were also asserted to infringe the '556 patent after issuance.  During prosecution, Dr. Sherman, through his patent attorney, asserted that the prior drugs did not render the invention of the '556 patent obvious because the process for making them simply combined components, rather than reacting them.  However, evidence presented at trial indicated that Dr. Sherman suspected that the existing drugs were made by the process recited in his application at the time the application was filed, and later conducted experiments to confirm that the components in those existing drugs were reacted, rather than simply combined as he represented to the PTO.  The court also found that Dr. Sherman has misled or failed to inform a declarant, Dr. Lipp, regarding the true nature of the existing drugs in relation to the claimed invention, resulting in a declaration by Dr. Lipp that perpetuated Dr. Sherman's mischaracterizations of those existing drugs.  In addition, the court determined that Dr. Sherman withheld relevant prior art from the PTO.  The district court held the combined misrepresentations and withholdings were material to the prosecution of the '556 patent, and that Dr. Sherman intended to deceive the PTO based on his overall pattern of misconduct, and therefore the '556 patent was unenforceable due to inequitable misconduct. 

 

On appeal, Dr. Sherman argued that the conduct before the PTO was merely advocating a particular interpretation of the prior art.  However, the Federal Circuit determined that his statements were not mere advocacy for a preferred interpretation; his statements were factual in nature and contrary to the true information he had in his possession.  The court clarified that there is no duty to disclose suspicions or beliefs regarding the prior art, and that there is nothing wrong with advocating, in good faith, a reasonable interpretation of the teachings of the prior art.  However, affirmatively and knowingly misrepresenting material facts regarding the prior art goes beyond failing to disclose a personal belief or alternative interpretations of the prior art, and enters the realm of inequitable conduct, which may result in an unenforceable patent.

 

The full opinion is available here.  

 

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