Ring Plus, Inc. v. Cingular Wireless Corp., No. 2009-1537 (Fed. Cir. Aug. 6, 2010).

The patent-in-suit disclosed a software–based algorithm and method for generating and delivering messages over a phone line during a “ringing signal” period. After granting summary judgment of noninfringement, the district court held a bench trial and concluded that the patent was unenforceable due to inequitable conduct.

The Federal Circuit agreed that the applicant’s assertion that two prior art references proposed hardware–based systems but not software to operate those systems was a material misrepresentation. Although neither reference explicitly disclosed software, the district court did not clearly err in finding that a person of ordinary skill in the art would have understood the references to disclose software-based algorithms. Although an attorney is free to argue vigorously in favor of patentability without being subject to allegations of inequitable conduct, the law prohibits genuine misrepresentations of material fact. During prosecution of the patent, the statement in the Background of the Invention that the prior art proposed no software to operate hardware–based systems was outside the bounds of permissible attorney argument because it was a misrepresentation of the prior art references.

The Federal Circuit disagreed, however, that the accused infringer had established the patentee’s intent to deceive the PTO by clear and convincing evidence. The prior art references were ambiguous as to operating software, and the prosecuting attorney’s testimony gave rise to the inference that the applicant believed that the two references did not disclose software for operating a telephone system. This inference was just as reasonable as the court’s inference of deceptive intent, and a district court clearly errs when it overlooks one inference in favor of another equally reasonable inference.

The fact that the applicant prepared, but decided not to file, an IDS that listed both prior art references went to the issue of materiality and not to intent because both references were in any event disclosed in the application itself.

A copy of the opinion can be found here.