In disposing of yet another inequitable conduct case in the lead up to the en banc Therasense case, the U.S. Court of Appeals for the Federal Circuit remanded for factual findings a case about whether a patent agent and an inventor read a brochure that contradicted their statements to the U.S. Patent and Trademark Office (USPTO) about the state of the art, where the brochure was listed in an IDS but the brochure itself was not submitted to the USPTO. Golden Hour Data Sys., Inc. v. emsCharts, Inc., Case No. 09-1306 (Fed. Cir., August 9, 2010) (Dyk, J.) (Newman, J., dissenting). The majority also affirmed a finding of no joint infringement on the grounds that neither defendant exerted the control or direction over the entire process, as required under Muniauction. On the latter issue, Judge Newman, in dissent, argued that Golden Hour effectively (and wrongly) holds that there is no infringement liability if two defendants collaborate to practice all steps of a claim but neither defendant by itself performs each and every step.
The technology-in-suit involved computerized information management for emergency medical transport services by helicopter. The claimed systems provide for integration of data for dispatch and tracking, clinical services and billing the patient.
The application for the patent-in-suit was filed in March 1998. The specification described the invention as the first fully integrated system of its kind. According to the specification, the older AeroMed system did not fully integrate flight information with clinical diagnosis, billing and administrative information. At some time before August 4, 1998, co-inventor Dr. Kevin Hutton (who was also Golden Hour’s chief executive office) provided an undated AeroMed brochure to prosecution counsel, who prepared and submitted an IDS. Hutton said he had obtained the brochure some weeks earlier at a trade show. The inside pages of the brochure—not provided to the USPTO—disclosed that the AeroMed system did in fact have integrated billing functions, contrary to representations made to the USPTO.
The district court found inequitable conduct for failure to disclose the information about billing capabilities in the AeroMed brochure. With respect to materiality, the district court found that the brochure disclosed integration of data and billing. The district court found that the inventive aspect of the patent was billing integration and that Golden Hour’s representations to the USPTO were clearly inconsistent with the information in the withheld brochure. Golden Hour appealed.
The Federal Circuit affirmed the finding of high materiality. However, with respect to intent, the Federal Circuit found that the district court failed to make essential factual findings. If Hutton and Michael Fuller, a senior patent agent working on behalf of Golden Hour, did not know what was in the brochure (even if they did not read the brochure so as to avoid learning the contents), that would merely be gross negligence, which does not satisfy the intent prong of inequitable conduct under Kingsdown. The Federal Circuit stated that the record before it did not compel a finding of intent, although there was ample evidence to support such a finding. However, the Court remanded the case for the district court to make findings as to crucial facts; most important, whether Hutton or Fuller read the brochure.
Judge Newman dissented, stating that the party with the burden of proof had simply failed to meet its burden to prove inequitable conduct, and the case should not be remanded for a second bite at the apple.