In order to prove inequitable conduct, an accused infringer must show that the patentee (1) made an affirmative misrepresentation of material fact, failed to disclose material information, or submitted false material information, and (2) intended to deceive the Patent and Trademark Office. In Ring Plus, while the accused infringer proved that the patentee made a material misrepresentation, there was no clear and convincing evidence of deceptive intent. The Federal Circuit, therefore, reversed the lower court’s finding of unenforceability for inequitable conduct.
Defendant Cingular alleged that the patent applicants misrepresented the content of two prior art references in the background section of the patent application, by describing both references as proposing hardware systems, but not software to operate those systems. As to whether the statements were misrepresentations, the Federal Circuit noted that while neither reference explicitly discloses software, both references disclose components which are generally understood by those of skill in the art to be associated with computers and software. In addition, Cingular’s invalidity expert and the attorney who prosecuted the ‘608 patent testified that both references would be operating at least in part by software. In light of these findings, the Federal Circuit found that the district court did not clearly err in finding the applicants’ statement in the background section was a misrepresentation. The court dismissed Ring Plus’s contention that the statement was merely attorney argument, reasoning that because the statement was misrepresented, it was “outside the boundary of permissible attorney argument.” The Federal Circuit also found that the district court did not clearly err in finding the misrepresentation in the background section to be material. Testimony at trial showed that the cited references were among the most relevant prior art references. In addition, a patentability opinion prepared for the patent applicants indicated that no references were more pertinent than the two cited references, and that those two references “fairly well precluded broad patent protection.”
However, the Federal Circuit found that the district court clearly erred in finding clear and convincing evidence of deceptive intent. The Federal Circuit noted that the district court had premised its finding of intent “almost entirely on its view that the references unambiguously disclose software,” but disagreed that the references were unambiguous. On the contrary, the Federal Circuit found that reasonable minds could examine the references and conclude that they do not disclose software for operating a telephone system. Furthermore, testimony for the plaintiff gave rise to an inference that the applicants believed the references did not disclose software for operating a telephone system. The Federal Circuit viewed this inference to be just as reasonable as the district court’s inference of deceptive intent, and found that overlooking one inference in favor of another equally reasonable inference in finding clear and convincing evidence of deceptive intent was clear error, thus precluding a finding of inequitable conduct.
Although the characterization in the patent’s specification ultimately did not rise to the level of inequitable conduct, Ring Plus makes clear that statements made in a patent’s specification are subject to such scrutiny and may not be dismissed as mere attorney argument. If prior art is to be discussed in a patent application, practitioners should exercise due care to ensure any characterizations are factually supported.