Judge Rader Again Defends Patentee Against Charges of Inequitable Conduct

AIPLATalk217Research Corporation Technologies v. Microsoft (Fed. Cir. 2008)

In the third of a trio of inequitabe conduct opinions by Judge Rader, the CAFC reversed the lower court’s ruling that RCT’s digital halftoning patents were unenforceable. Amazingly, the appellate panel found instead that it was storied district court judge Manny Real who was guilty of bad behavior. [Discussion of the district court case.]

The panel – Judges Newman, Rader, & Freeman – could not have been better for a patentee accused of inequitable conduct.  Here, the CAFC held that the lower court clearly erred by failing to establish the materiality of RCT’s actions during prosecution.

“The trial judge found inequitable conduct because the inventors did not disclose [the inventor’s] post-filing K factor tests to the USPTO. Because [the inventor’s] work occurred after she and Dr. Parker had filed the patent application, these K factor experiments were not material to their inventive activity. In the circumstances of this case, therefore, the inventors had no obligation to report their later tests to the USPTO.”

The next quote will be taken out of context and often used:

“Importantly, [the inventor] and her coauthors published the K factor tests to the scientific community. Publication is an act inconsistent with an intent to conceal data from the USPTO.”

 

22 thoughts on “Judge Rader Again Defends Patentee Against Charges of Inequitable Conduct

  1. “The only material data I can think of would be data that establish the invention as inoperative or indicate that there is a better mode of practicing than that disclosed in the application. Such data are material only if they are known to the inventor prior to FILING, not prior to the patent being issued.”

    Really? So let’s say I file a patent and prosecute a claim that is “supported” by a prophetic example but when I actually do the experiment one week after filing I discover that the prophetic example is a total crock and failure. If I fail to disclose that fact to the Examiner, you are telling me that is not a material omission on my part?

  2. “How about when the data is published after issuance of the patent in a foreign language in an obscure journal for the sole purpose of creating the impression that there was no intent to conceal the data?” — Mooney.

    Who knows what evil lurks in the hearts of patentees, eh Mooney?

    But I can’t follow your dark hypothesis. The only material data I can think of would be data that establish the invention as inoperative or indicate that there is a better mode of practicing than that disclosed in the application. Such data are material only if they are known to the inventor prior to FILING, not prior to the patent being issued. Once you file the application, any such after-acquired data are nugatory with respect to that application. I don’t see your focus on the date the patent issued. Irrelevant.

    And if someone wants to spend tens of thousands of dollars to get a patent on an invention they later learn is inoperative, I say: go for it. Obviously one can’t infringe a patent on an inoperative invention, so there’s no down side for the public.

    But your point is that having the damning data in hand prior to filing the application and then publishing those data obscurely after issue would be consistent with trying to fool folks into thinking there was no intent not to include the data in the application. ???

    It’s not calculating. But then I’m not a Batman fan and it’s hard for me to shift my mind sufficiently into sinister-mode.

  3. “This example of judicial incompetence/negligence is so disgusting, even Mooney should be able to get it.”

    I did recognize it, in one of the early comments in the first thread relating to this case.

    That said, I remain dubious of the claims at issue.

  4. “Under what circumstances would publishing be an act CONSISTENT with an intent to conceal data?”

    How about when the data is published after issuance of the patent in a foreign language in an obscure journal for the sole purpose of creating the impression that there was no intent to conceal the data?

  5. From the CAFC:

    “The prior art of halftoning images at the time of this invention
    produced grainy results and contained distracting artifacts.”

    Perhaps so, but since the alleged object of the invention was to achieve results equivalent to those observed in certain prior art processes which were attributed by Dr. Robert Ulichney to properties of the equivalent radial spectral power distribution of the halftoning function, that seems conclusory and unsupported by any fact or testimony.

    ” At the time of invention, the
    halftoning art used different kinds of masks, including constant threshold masks, varying
    threshold masks, random masks, and white noise masks. Due to difficulties with each
    of these masks, Dr. Parker and Dr. Mista invented a blue noise mask.”

    The good Doctors appear to have rather thought that they’d implemented an allegedly more efficient algorithm for generating halftoning masks with “blue noise”-like radial PSDs. Whether these resultant data arrays are statutory subject matter of “invention” and whether even the algorithm implemented is such would be an interesting though perhaps lengthy object of bickering.

    ” Dr. Ulichney could only generate blue noise halftone using a
    complex mathematical process called error diffusion.”

    ………

    “Drs. Parker and Mista then invented a Blue Noise Mask that was
    quick, used very little computer memory, and produced high quality halftone images,
    and subsequently applied for patents on their inventions.”

    Hard to see how a mask, once generated could be determined as “quick” relative to another mask subsequent to its generation by another method. Parker and Mista seem to have generated their mask by a complex mathematical process called “binary-pattern-power-spectrum matching algorithm” (BIPPSMA: see “Digital halftoning technique using a blue-noise mask” J. Opt. Soc. Am. A/Vol. 9, No. 11/November 1992) operating on a “seed” pattern generated by a complex mathematical process called “algorithm for the construction of the blue-noise
    mask” (ABCNOM: ibid.) Since no comparative data of run time in execution of any mask generating algorithm is provided in the published data, whether the mask is “faster” or not seems rather moot, even if the process of its generation is less computationally intensive.

    Fortunately, there appears to be the alternative of a “green noise” mask (see “Digital halftoning by means of green-noise masks” Lau et al. Vol. 16, No. 7/July 1999/J. Opt. Soc. Am. A) that would readily be converted into a “blue noise mask” by summation with a band limited white noise mask and subsequent normalization. U. Delaware would get a few bucks in the process.

  6. BB,

    I don’t dispute that “publishing data” might be consistent with “no intent to deceive” but it doesn’t demonstrate conclusively that there wasn’t such intent. (BTW, I don’t see anything in this record that shows any “intent to deceive” on the part of the applicant, including the published data.) In fact, the way Judge Rader’s opinion phrased it, it was viewed as the “important” consideration for the ruling of “no intent to deceive.” I don’t feel you can reach that conclusion simply on the basis of the applicant “publishing data.” Instead, the “materiality” prong is where this allegation of IC by Microsoft completely falls apart.

  7. EG

    I don’t know about the facts in Rhone-Poulenc, but the facts in this case simply could not support an IC charge based on the after-acquired data. First of all, these data on the K-factor were clearly not material. Period.

    Second, even if they were material I don’t think they would have to be disclosed. Utility or how to practice the invention are relevant only as of the time of filing. As long as you disclose the best mode as of that date, you’re good. The actual publication itself cannot not act as PA for a number of reasons, the best one being because it’s published after the filing date.

    Now, if a publication after filing is based on data acquired prior to filing and those data suggest lack of utility for being inoperative or something, then I would agree the late publication might be material. But the issue there is not the publication, per se, but having the data in hand prior to filing the application.

    Furthermore, I think you and Dennis are reading too much into Rader’s statement about publishing being inconsistent with concealing data. That is a very sound statement. Under what circumstances would publishing be an act CONSISTENT with an intent to conceal data?

  8. Thanks for the interesting report on Eli Lilly v. Medtronic, Mr. Breimayer. I suspect that we’ll see more requests for reassignment on remand, but I wouldn’t ask for that unless I had some very strong indications in the record of bias and closed-mindedness.

    If the CAFC doesn’t see any basis for such a request, you risk losing credibility with the court. Also, if you win remand and the district judge sees that you made that request on appeal, you might have generated some ill will.

  9. Re Research Corporation Technologies v.Microsoft, I listened to the CAFC oral argument, and it brings to mind the oral argument on appeal of Judge Ditter’s finding of contempt by Medtronic of his injunction entered in Eli Lilly v. Medtronic. Medtronic was accused of contempt (i.e., infringing the Mirowski patents in suit) by virtue of: (1) providing a mock-up of an automatic implantable cardioverter-defibrillator (ICD) for a St. Paul Science Museum display on past, present and future medical devices; (2) providing an update in the Medtronic annual report of the status of the ICD development program ongoing in Europe, and; (3) knowing in advance of and/or assisting the presentation of a paper by one of the Medtronic ICD clinical investigators at a medical meeting. Lilly vaguely argued that these acts somehow devalued the exclusion of Medtronic ICDs from the U.S. market gained by the injunction (ignoring the fact that Medtronic had discontinued the clinical testing in the U.S. of any ICDs).

    The CAFC panel immediately pounced on the absence of any infringing acts, cut the Lilly arguments short, and issued the reversal within 2 weeks, with the one word opinion “Reversed”. The CAFC later heard the appeal of Judge Ditter’s 271(e)(1) ruling and reversed, finding no infringement by applying the 271(e)(1) safe harbor to FDA regulated medical devices (affirmed by SCOTUS setting to rest the argument that the statute did not apply to medical devices).

    As an aside, Judge Ditter was so predisposed against Medtronic (prior to trial and culminating in the contempt order) that he would not rule on the Medtronic pre-trial motion raising the 271(e)(1) defense until after jury trial, refused to allow Medtronic to present a patent file wrapper non-infringement defense, allowed Lilly to present a reasonable royalty damages theory of a one-time, up-front royalty payment of $26,000,000 as the value (to Medtronic based in part on overly optimistic internal sales projections and the cost to Lilly of the Mirowski patent portfolio) of starting the clinical investigation while the patents in suit were still in force, allowing the jury to treble the damages (a total of $78,000,000 for less than $300,000 in actual clinical test sales of 30 Medtronic ICDs), and reading the word “implantable” into the claims (despite the refusal in the record of the USPTO examiner to allow that word to be put into the claims during reexamination as “implantable” was not embled by the specification) to render the claims allowable over the non-implantable automatic defibrillator prior art introduced at trial (it is not clear whether Judge Ditter ever looked at the file wrapper to see that action taken by the examiner and it is not discussed at all in his finding of validity, presenting Medtronic with another appeal possibility that was rendered moot).

    In any case, Medtronic prevailed on the 271(e)(1) defense, so the other matters were never taken up on appeal. The parties cross-licensed their ICD and pacing patent portfolios as the Lilly subsidiary had in the meantime infringed a number of Medtronic patents. Lilly then spun off Guidant, now owned by Boston Scientific). Some years after the Supreme Court ruling, I was told that Judge Ditter remarked to Medtronic trial counsel that the “wool was pulled over his eyes” by Lilly.

    It never occurred to us in either appeal that was heard at the CAFC to ask the CAFC to remand with an order to replace Judge Ditter. But, from now on litigants should be aware of this option when the trial judge for one reason or another becomes irrationally inflamed against an accused infringer or patent holder.

  10. How about all patent cases going to a 3 judge panel of:

    “I never saw a patent I didn’t like” Newman
    “I never saw a patent I liked” Moore and
    a sitting by designation District Court judge who has never tried a patent case

  11. I’ll admit that “Publication is an act inconsistent with an intent to conceal data from the USPTO” is an overstatement of what facts would contradict an “intent to deceive. (Judge Rader might have been better off leaving this sentence out as it was unnecessary to the holding, or rephrasing it to make clear that, in this particular situation, publication was inconsistent with an “intent to deceive.”) For example, Rhone-Poulenc got tagged with IC by Bristol-Meyers for failing to disclose a “post-filing” publication that was inconsistent with what was stated in the patent application. And I’d be surprised if a patentee would be able to argue that the current case would allow what happened in the Rhone-Poulenc situation.

    But let’s also put the current case in perspective, and not “beat up” on this Federal Circuit panel who certainly reached the right result on at least the “materiality” prong (as others have suggested, let’s beat up instead on the district judge who issued this true “monstrosity” of a ruling without even an opinion). In the Rhone-Poulenc situation, the “post-filing” publication was directly related to (“material”) to what was in the patent application because what the publication said was contradictory (inconsistent) with what the patent application said. By contrast, in the current case, there was nothing alleged that was contraditory or inconsistent (“material”) between the post-filing experiments and what was described in the patent application. As Rader said, the “K-factor” wasn’t referred to in the patent application or necessary for its practice. In fact, the alleged “materiality” of this “post-filing experiment” to issuance of this patent not only escaped Rader and his colleagues, it also completely escapes me.

    While this decision may not be a perfect “10″ on the IC issue, it certainly got to the right result, which can’t always be said of the Federal Circuit in the IC area. And let’s not forget who the defendant is here who urged all this nonsense.

  12. This typical polite understatement from the CAFC opinion …

    “Neglecting to consider both prongs of the analysis was clear error.”

    Clear error? Anyone reading the case would consider it actionable judicial negligence. (Oxymoron?)

    And this . . .

    “The special master did not enter a recommendation regarding infringement under the doctrine of equivalents because he was uncertain about infringement under the doctrine of equivalents.”

    What in blue blazes is a special master who knows nothing about DOE doing in the case? More disgusting judicial incompetence. At least I hope that’s all it is. Some decisions are so far off the mark they suggest all sorts of unpleasant explanations.

    This example of judicial incompetence/negligence is so disgusting, even Mooney should be able to get it. He’s still having trouble sorting out Rader’s dissent in Aventis.

    All patent cases should go to a single panel of Rader, Newman, and Michel. If Prost and Moore had had this case, they would have affirmed Real on all issues.

    Microsoft is getting real pushy with the inequitable conduct gambit. Ironic then taht MS has been accused of inequitable conduct in an opposition over in the TTAB. It has asserted 2 dozen marks and 106 goods and services. If even one of those alleged goods/services is not provable –> inequitable conduct, and out goes the registration (Hurley v Volta). Have you ever seen a Microsoft beer cooler,yo-yo, sunglasses, pocket knife or stapler? Ho, just imagine the discovery in that case.

  13. The Defendant received the trial judge they desired, and the Appellant received the appellate panel they desired.

    Seems like a fair result.

  14. “”Publication is an act inconsistent with an intent to conceal data from the USPTO.”

    LOL. Then again, according to Rader, merely having a reputation as a competent scientist is inconsistent with an intent to conceal data from the USPTO.

  15. These are naive questions I’m sure, but I’d like to be certain:
    Do Judges carry liability insurance similar to doctors and attorneys?
    Can a Judge be sued for civil damages resulting from a bad decision?

  16. “Publication is an act inconsistent with an intent to conceal data from the USPTO.”

    What a horrible, horrible statement to make at face value.

  17. “Amazingly, the appellate panel found instead that it was storied district court judge Manny Real who was guilty of bad behavior.”

    Here is the conclusion of the CAFC and the directions provided to the Chief Judge of the District:

    “After a thorough review of all the evidence, testimony, and facts of this case, this court concludes the strongly expressed convictions of the trial court in this case may not be easily and objectively reconsidered. Accordingly, this court remands with instructions to reassign this case. . . . Thus, this court remands to the Chief Judge of the United States District Court for the District of Arizona to determine the reassignment of this case.”

    “Finally, this court remands with instructions to assign this case to a different judge for a proper determination of validity and infringement on the merits.”

    JAOI,

    If there is ever a lower court case in which the court displays a lack of fairness and a federal court judge at his very worst, this would be one of them. At least, the CAFC was there to correct his poor judgment (but at the cost of an appeal). I would proably concur with anything you have to add, and if imprachment is one of them, you would have my vote (based on historical record).

    In fact, wasn’t there already an impeachment hearing held by the House against “Judge” Manuel L. Real?

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