Addressing inequitable conduct, the U.S. Court of Appeals for the Federal Circuit cautioned patent applicants that, in terms of an inequitable conduct analysis, arguments made during patent prosecution can elevate material prior art to highly material status in terms of the inquiry of whether an applicant intended to deceive the Patent and Trademark Office (PTO). Praxair, Inc. v. ATMI, Inc., Case Nos. 07-1483, -1509 (Fed. Cir., Sept. 29, 2008) (Dyk, J.; Lourie, J., dissenting).
In the case before the district court, two of three Praxair patents involving limitation of accidental hazardous gas discharge in storage containers were held unenforceable due to inequitable conduct before the PTO. The prior art included restrictive flow orifice (RFO) devices, i.e., devices having small holes acting as narrow passage ways. RFOs are similar to, but not exactly like, the capillary tubes claimed in the patent.
The district court’s holding on unenforceability was based on the court’s findings that Praxair failed to disclose material information, namely the RFOs, to the PTO and that the failure was coupled with culpable intent to deceive the PTO. The court inferred intent to deceive because the applicant withheld “highly material information,” knew it was material (based on arguments made to the PTO in support of patentability) and lacked a good-faith explanation for withholding it. Praxair appealed.
The Federal Circuit upheld the district court’s conclusion regarding the unenforceability of one of the patents (the ’115 patent), but reversed that finding concerning another Praxair patent (the ’609 patent). The Court determined that four statements by applicant to the PTO in the ’115 patent file history rendered the RFOs highly material. Praxair stated that existing technology did not use “extreme limitation in flow” in a commercial design, was “highly complex” and “elaborate,” did not use “severe flow restriction” to safely deliver gases and did not have a flow path diameter under 0.2mm. The RFOs contradicted these assertions, because RFOs were a “simple” safety measure providing “significant flow limitation” using diameters as small as 0.1mm. The Court concluded that had the RFOs been before the examiner, Praxair could not have made these contentions.
However, no similar statements were made in the prosecution of the ’609 patent, nor were the statements made in the ’115 patent prosecution alleged to have “infected” the ’609 patent. Indeed, as the Court noted, those statements were made after the Notice of Allowance issued in the application for the ’609 patent. Accordingly, the prior art was found not sufficient material to infer an intent to deceive in the ’609 patent prosecution.
Judge Lourie dissented from the majority’s affirmation of the conclusion unenforceability of the ’115 patents, arguing that non-citation “does not necessarily justify an inference of intent to deceive.” Praxair’s conduct was not as egregious as the conduct in issue Bruno, upon which the district court relied, where the applicant cited prior art references to the FDA but not to the PTO. Although Judge Lourie agreed that such a “smoking gun” is not required, he also reminded us that based on Kingsdown, materiality alone is insufficient to find inequitable conduct.
Practice Note: Applicants and inventors (and anyone who owes a duty of disclosure under R. 56) must ensure that statements made during patent prosecution are consistent with material prior art, even if that art is dissimilar from the invention. Statements inconsistent with known prior art may render that prior art sufficiently material to establishing inequitable conduct.
Editor's Note: About one month earlier, in Star Scientific v. R. J. Reynolds (see IP Update, Vol. 11, No. 9), in an opinion authored by C. J. Michele, a different panel held that under Kingsdown, scienter could not be inferred from materiality.