1. 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

2. 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.

3. 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?

4. 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.

5. 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

6. 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

7. 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

8. 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

9. 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

10. 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

11. 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.

12. 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

13. 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

14. 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

15. 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

16. 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

17. 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