INADEQUATE EXPLANATION FOR NON-DISCLOSURE SUPPORTS DETERMINATION OF INEQUITABLE CONDUCT

Praxair, Inc. v. Atmi, Inc., [2007-1483, -1509] (September 29, 2008) [DYK, Lourie, Bryson] The Federal Circuit affirmed the district court’s determination that the ’115 patent is unenforceable due to inequitable conduct, reversed the district court’s unenforceability conclusion with respect to the ’609 patent, affirmed the determination that the asserted claims of the ’609 patent were not proven invalid, vacated the determination of infringement with respect to the ’609 patent (because the district court used an incorrect claim construction), and remanded for a determination as to infringement of the ’609 patent under the correct claim construction. The Federal Circuit also reversed the district court’s judgment of invalidity for indefiniteness of the asserted claims of the ’895 patent and remanded for further proceedings.
DISCUSSION: Inequitable conduct in breach of this duty can be established by showing by clear and convincing evidence that the applicant (1) made an affirmative misrepresentation of material fact, failed to disclose material information, or submitted false material information, and (2) intended to deceive the PTO. The required showings of materiality and intent are separate, and a showing of materiality alone does not give rise to a presumption of intent to deceive. However, an inference of intent to deceive is generally appropriate, however, when (1) highly material information is withheld; (2) the applicant knew of the information and knew or should have known of the materiality of the information; and (3) the applicant has not provided a credible explanation for the withholding. The Federal Circuit observed that a patentee facing a high level of materiality and clear proof that it knew or should have known of that materiality, can expect to find it difficult to establish ‘subjective good faith’ sufficient to prevent the drawing of an inference of intent to mislead. The Federal Circuit found the explanation for non-disclosure inadequate. There was no testimony that at the time, he believe the reference was cumulative, that cumulativeness was the reason for non-disclosure, or what the non-disclosed art was cumulative of. The Federal Circuit said that “Hindsight construction of reasons why a reference might have been withheld cannot suffice as a credible explanation of why, at the time, the reference was not submitted to the PTO.” The Federal Circuit thus affirmed inequitable conduct with respect to one patent, where the applicant’s arguments made the withheld art highly relevant, and reversed as to another patent, where there were no arguments or other circumstances that made the withheld art highly relevant.