Inventor’s Post-filing Publication Disparaging Invention Leaves Patent Unenforceable

AIPLATalk217Research Corporation Technologies v. Microsoft (D. Az. 2006).

After a bench trial, Arizona District Court Judge Manual Real of found that RCT’s patents were unenforceable based on inequitable conduct that occurred during prosecution of the patents in suit. And, because it was an “exceptional case,” the judge granted Microsoft’s request for $8 million in attorney fees.

Back in 2001, RCT sued Microsoft for its patents directed to a “blue noise mask” used in halftoning digital images.  The new procedure was touted in the patent application as being “visually pleasing” and lacking “low frequency graininess at every level of gray.”  At the same time the inventors published a paper that reported resulted of “visually annoying clumps” with graininess.  In the paper, the inventors reportedly rejected the claimed algorithm in favor of another technique that was inconsistent with the patent.  That paper was never submitted to the PTO. 

The court found this seemingly contradictory information material because a “reasonable Patent Examiner clearly would have considered [the contradictory information] important to at least the written description and enablement requirement for patentability.”  For intent, the judge found that:

It is not credible that they did not know that a reasonable Examiner would consider it important to know that patent applicants’ reported efforts to practice the applications’ disclosed No K technique had led to “visually annoying clumps,” not the “visually pleasing” images promised by the patent applications and their patent claims.” 

In addition, the inventors were awful on the stand — one was “not credible” and the other “evasive.” Thus, further supporting the finding of intent to mislead the PTO.

AIPLATalk218According to a release by Microsoft’s attorney John Vandenberg*, the patents previously had been asserted against Hewlett-Packard Company, Seiko Epson Corporation, and Lexmark International, each of whom had settled out of court and taken a license. In awarding Microsoft attorney fees, the Court found it to be an “exceptional case” and that RCT knew or should have known of the inequitable conduct before the Patent Office. 

A couple of readers wrote-in to identify Judge Manny Real as a legendary old-school federal judge, and former chief judge in the central district of California. It appears that Judge Real is sitting by designation for this patent case. 

9 thoughts on “Inventor’s Post-filing Publication Disparaging Invention Leaves Patent Unenforceable

  1. I confuse, if the inventor’s comments outside the application are material to unenforceable of the patent, what we do if one cite his application pending and unpublished in background of another his appliacion.

  2. Citing recent irregularities of the CAFC: If the court is to revert back to pre Kingsdown mentallity then there is no doubt the “should have known” argument will be upheld. However, and perhaps ill-placed faith on my part, I don’t see the Appeals Court supporting this decision. I haven’t seen any decision lately where the court strayed from the “Show of intent to decieve” requirement.

    When put into perspective, the ‘sliding scale’ factors in the requirement for determination of inequitable conduct doesn’t meet reality. Without having read the document I hate to make any predictions but one would have to prove gross intent to decieve the PTO with a weak document or some mild condition with a persuasive relavant document. Does the evidence point to any intent to decieve? There lays the question.

  3. Phil argues, “Enablement concerns whether sufficient information is provided to make and/or practice the claimed invention. Again, the inventors’ subjective thoughts as to whether an invention is good or bad is immaterial.”

    I believe inventors’ statements could be material to enablement under *some* circumstances.

    If the inventors have the level of skill of the hypothetical person having ordinary skill in the art (PHOSITA), their comments could be material to enablement–which considers whether the PHOSITA could practice claimed invention without undue experimentation.

    In particular, if the claim recited a particular result and if one could conclude from the inventor’s comments that the algorithm could not achieve that result without undue experimentation, their comments would likely be material.

    In Bristol-Myers Squibb v. Rhone-Poulenc Rorer, 326 F.3d 1226 (Fed. Cir. 2003), the Federal Circuit held that the inventors’ article discussing technology related to the invention was material to enablement. In particular, the Federal Circuit found that the inventors’ article would have been material to the enablement of the ability to produce taxol. See id. at 1234 (“Moreover, the evidence supports the district court’s finding that a reasonable patent examiner reviewing the subject patent application would have expected the use of TMS and MOM groups to yield more than trace amounts of taxol, but that a review of [the inventors'] article would have raised doubts that the use of TMS and MOM would produce taxol in more than trace amounts.”).

    Like in Bristol-Myers Squibb, the district court in this case found that the inventors’ statements would have been material to the enablement of the ability to produce a particular type of result. In Bristol-Myers Squibb, the result was the production of an amount of taxol. In this case, the result was an amount of “visual appeal” (whatever that is).

  4. You need to look at the file history of the application to determine whether or not the article was material or not.

    You need to see what arguments were made by the examiner against patentability, or by the applicant in favor of patentability to determine whether or not the reference is material. You can’t really say conclusively without reference to the file history.

    When it comes to these inequitable conduct issues, it pays to be conservative.

  5. In discussing written description, Phil notes, “If the claimed invention is described, the requirement is satisfied, regardless of what the inventors actually think of their invention.” I agree.

    I have a hard time understanding how the inventors’ characterizations of their algorithm is material to written description. Either the patent application demonstrates the inventors’ intellectual possession of the algorithm or it does not.

    If anything, the inventors’ comments would *support* the conclusion that they intellectually possessed the algorithm because they presumably described the algorithm before criticizing it. Nevertheless, written description must be shown from the patent application itself (and not external sources like the inventors’ comments). A reasonable examiner would find the inventors’ comments irrelevant and immaterial to written description.

  6. My guess is that this gets reversed at the Federal Circuit. (Well, more accurately, I think it should get reversed — whether that actually happens remains to be seen. The Court has been coming up with some pretty strange decisions recently.)

    Written description goes simply to whether the claimed invention is actually described in the application as filed. Value judgments really don’t enter into the picture. If the claimed invention is described, the requirement is satisfied, regardless of what the inventors actually think of their invention.

    Enablement concerns whether sufficient information is provided to make and/or practice the claimed invention. Again, the inventors’ subjective thoughts as to whether an invention is good or bad is immaterial.

    The District Judge is thus wrong if he thinks the inventors’ comments outside the application are “material” to either the written description or enablement requirements. Both questions are resolved simply by looking at what is actually in the application, not at what the inventors “really” think.

    In short, I am not aware of any basis on which an Examiner could have rejected the application even if he had the extraneous comments before him.

    Best mode might be an issue but that apparently wasn’t raised.

    As to the fact that the inventors later found problems in what they thought was a great idea is nothing new. The history of technology going back to the days of cavemen is that no solution is perfect, and people soon start looking for improvements in whatever they create no matter how good they thought it was when first conceived.

    Who among us has never confronted the problem of an inventor who doesn’t think he actually invented much, while his employer (i.e., your real client) thinks the idea is great and worth patenting? Can disgruntled employees now torpedo their employers’ patents by publishing disparaging comments about their pending applications? Is this a good thing? Microsoft, are you SURE you’re on great terms with all your current and ex employees?

  7. D. The case is Lear (1969 i think), but the ability to challenge validity after a settlement does not apply when the plaintiff had filed suit and the settlement is accompanied by a dismissal with prejudice. (CAFC case on this today)

  8. My understanding is that they can get out of the license agreement due to the Sup. Ct’s stance that further enforcing a licensing agreement based on an invalid/unenforceable patent is against public policy (can’t remeber the citation off the top of my head).

    However, no restitution, as HP/etc. benefited from the agreement in that they did not have to defend/expend resources on the matter.

    i.e., they could have done what MS did, but chose to take the cheap way out.

    -D

  9. Re the previous licensing agreements, would the counter parties (HP, lexmark, etc) generally have a right to demand restitution for previous payments upon this type of inequitable conduct determination? My instinct is that this would depend on the specific structure of the license. Even if this is so, I’d appreciate any comment on how typical licenses would deal with this situation.

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