Intellectual Property Law

Finding of inequitable conduct without considering materiality vacated

By McKee, Voorhees & Sease, P.L.C.

In a decision on Friday, the Federal Circuit reversed a district court's summary judgment of invalidity and noninfringement and subsequent finding of inequitable conduct.  The court also vacated the district court's exceptional case finding and the associated award of attorney's fees.

The plaintiff was initially awarded partial summary judgment of infringement of six patents.  The district judge then assigned a special master to examine the remaining issues in the case, including invalidity and inequitable conduct.  The case was then transferred to a new judge who, without written opinion, overturned the plaintiff's ruling of summary judgment and awarded partial summary judgment of noninfringment and invalidity.  The judge then held a brief bench trial on the issue of inequitable conduct, where the plaintiff was only allowed to present inventor testimony regarding candor and good faith; all evidence of materiality was precluded.  After this trail, the court, from the bench, made a ruling of inequitable conduct against the plaintiff, ruled the case was exceptional under § 285, and awarded attorney's fees.

The Federal Circuit reversed, vacated, or remanded every ruling made by the trial court.  Specifically, the court held that in order to support a finding of inequitable conduct, there must be threshold findings of both materiality and intent to deceive.  Here, the district court only examined intent, rendering the record insufficient to support a holding of inequitable conduct.  The court also held the district court's findings regarding intent to deceive were clearly erroneous.  On top of that, the court held the summary judgment rulings "lack[ed] findings for judicial review," and that "the record show[ed] many potential issues of fact that would prevent entry of summary judgment."  Given the district judge's handling of the case, the court further ordered the case reassigned to a new trial judge on remand.

More on Research Corp. Tech., Inc. v. Microsoft Corp. after the jump.

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Full post as published by FileWrapper on August 06, 2008 (boomark / email).