Inadvertance Can Carry An Applicant Only So Far; 15 Patents Found Unenforceable

Nilssen v. Osram Sylvania, Inc., [2006-1550](October 10, 2007)[LOURIE, Mayer, Linares] The Federal Circuit found no abuse of discretion, and affirmed unenforceability of all fifteen of Nilssen's patents in suit.
SIGNIFICANCE: Failure to comply with the MPEP can make a patent unenforceable!
QUOTE: "[T]he patent process is complicated one, one that require both technical and legal credentials in order to effectively prosecute patents for inventors.
BRIEF: Nillsen prosecuted his own applications because he felt that his understanding of the subject matter was better than that of any attorney. In the course of prosecuting the applications Nillsen failed to disclose that declarant in a declaration submitted in support of the applications had a financial interest in the application, failed to pay large entity fees while some of the patents were licensed to a large entity, and failing to disclose on-going litigation to the PTO as required by the MPEP. The Federal Circuit reviews a district court's finding of inequitable conduct for abuse of discretion. An abuse of discretion occurs when the court's decision (1) is clearly unreasonable, arbitrary, or fanciful; (2) is based on an erroneous construction of the law; (3) is based on clearly erroneous findings of fact; (4) there is no evidence in the record on which the court could have rationally based its decision.
The Federal Circuit found no abuse of discretion in holding patents invalid for failing to disclose the relationship between the affiant and the pending applications, noting that "it is material to an examiner's evaluation of the credibility and content of affidavits to know of any significant relationship between an affiant and an applicant." The Federal Circuit also found no abuse of discretion in finding patents unenforceable where Nillsen had entered into agreements concerning the patents with large entities, but continued to pay the small entity maintenance fee. The Federal Circuit relied on the district court's finding of an obvious intent to mislead, and a finding that Nilsson's exculpatory statements were not credible. The Federal Circuit also found not abuse of discretion in finding patents unenforceable for improper priority claims, even in the absence of any reliance by the Examiner, finding a misrepresentation that would not have immediately affected patentability is still material. The Federal Circuit found no abuse of discretion in finding patents unenforceable for failing to disclose ongoing litigation relating to the subject matter of application, in violation of MPEP 2001.06(c)(c). Finally, the Federal Circuit found no abuse of discretion in holding patents unenforceable for failure to disclose prior art.
The Federal Circuit felt compelled to add a closing comment that while each of the defenses raised by Nilssen to the inequitable conduct allegations was not per se unreasonable when considered in isolation, the case presents such a collection of problems including "repeated attempts to play fair and square with the patent system." The Federal Circuit conceded that "[m]istakes do happen, but that inadvertence can carry an applicant only so far." Mr. Nilssen thought he didn't need professional patent help. "The result of this case, regrettably, proves that he was wrong."