CAFC: Gross Negligence Does Not Constitute Inequitable Conduct

M. Eagles Tool v. Fisher Tooling (Fed. Cir. 2006, 05–1224).

On summary judgment, the district court found that Fisher’s patent was unenforceable due to inequitable conduct.  Specifically, the court found that a device that the patentee had been selling for twenty years contained many of the same components present in the patented invention and thus would have been material to the examiner’s analysis.  It was also undisputed that the inventors were familiar with the prior-art device.

On appeal, the CAFC took an opportunity to caution against overzealous findings of inequitable conduct:

Although it is not impermissible to grant summary judgment of inequitable conduct, this court “urges caution” in making an inequitable conduct determination at the summary judgment stage.

Here, the patentee took the position that “even if the failure to disclose the [prior art] constituted gross negligence, that cannot be the sole basis for finding an intent to deceive.”  The CAFC agreed.

The district court’s finding of inequitable conduct . . . essentially amounted to a finding of strict liability for nondisclosure. Such is not the law. Even if there were evidence of gross negligence in nondisclosure, which was not found, that would not necessarily constitute inequitable conduct.

Reversed.