The U.S. Court of Appeals for the Federal Circuit found a district court did not abuse its discretion in holding 15 patents unenforceable for multiple improprieties by the patentee. Nilssen, et al. v. Osram Sylvania, Inc., et al., Case No. 06-1550 (Fed. Cir., Oct. 10, 2007) (Lourie, J.).
Nilssen filed a patent infringement action against Osram, asserting patents for lighting products, including compact fluorescent light bulbs and ballasts for traditional fluorescent bulbs. Osram’s defenses included patent unenforceability for fraudulent procurement based on improper (1) submission of affidavits; 2) small entity payments; 3) claim of priority dates, 4) disclosure of co-pending patent litigation, and/or 5) disclosure of prior art. By the parties’ agreement, a trial date was granted on the issue of inequitable conduct.
During a six-day bench trial, Osram attacked Nilssen’s 11 asserted patents and four withdrawn patents. The court heard testimony from legal experts (on U.S Patent and Trademark Office procedures), technical experts (on the materiality of withheld prior art) and, most significantly, from Nilssen, the inventor and pro se applicant of the 15 patents. Ultimately, Nilssen’s self-professed knowledge of the patent statutes, USPTO procedures and case law cited during patent prosecution led to his demise. The district court found all 15 patents unenforceable.
The Federal Circuit found no fault with the district court’s rulings on the four withdrawn patents dropped late in the case and held that under the doctrine of infectious unenforceability, the court was justified in considering and ruling upon inequitable conduct of these four patents prior to determining if the same acts rendered the additional 11 related patents unenforceable.
The Court found no fault with the district court’s determination that each grounds supporting inequitable conduct was material to the asserted patents. The Court heavily deferred to the district court’s credibility determination of Nilssen’s trial testimony. “[T]his case presents a collection of … problems, which … indicated repeated attempts to avoid playing fair and square with the patent system. … Mr. Nilssen, while apparently gaining considerable knowledge of the patenting process, thought he did not need professional help. The result of this case, regrettably, proves that he was wrong.” Specifically, Nilssen’s intent to mispay fees was supported by Nilssen’s occasional payment of maintenance fees at the large entity rate. Nilssen’s intent to misclaim priority was supported by evidence of his priority strategy changes and contemporaneous letters expressing concern about obtaining new patents. Nilssen’s intent to hide the co-pending Motorola litigation was not excused by his testimony that he was unaware of the requirement to disclose related litigation, given his broad knowledge of other patent rules. Finally, the finding of intent to withhold prior art repeatedly cited in related patent applications was supported by Nilssen’s failure to provide any good-faith explanation for withholding the prior art.