Monday, June 14, 2010

Advanced Magnetic Closures case: "one bad apple" on inventorship spoils the patent

The Court of Appeals for the Federal Circuit in the AMC case affirmed a finding of
unenforceability of a patent because of misnaming of inventors:

We affirm the district
court’s holding that the ’773 patent is unenforceable based
on inequitable conduct and its award of 35 U.S.C. § 285
attorney’s fees and costs against AMC

AMC tried to argue that the district court needed to establish
true inventorship. The CAFC rejected this.

AMC’s argument is not supported by this court’s deci-
sions. We have held that when named inventors deliber-
ately conceal a true inventor’s involvement, the applicants
have committed inequitable conduct and the patent is
unenforceable even as to an innocent co-inventor. Frank’s
Casing Crew & Rental Tools, Inc. v. PMR Techs., Ltd., 292
F.3d 1363, 1376–77 (Fed. Cir. 2002). In Frank’s Casing,
this court held that the named inventors committed
inequitable conduct by deliberately excluding an innocent
co-inventor from their patent application. Id. at 1376.
The court explained that “‘if unenforceable due to inequi-
table conduct, a patent may not be enforced even by
“innocent” co-inventors. One bad apple spoils the entire
barrel. Misdeeds of co-inventors, or even a patent attor-
ney, can affect the property rights of an otherwise inno-
cent individual.’”
Id. at 1337 (quoting Stark v. Advanced
Magnetic, Inc., 119 F.3d 1551, 1556 (Fed. Cir. 1997)).
Accordingly, this court sustained the district court’s
holding of unenforceability. Id. The court, however,
remanded the case “for the limited purpose of determining
the correct inventorship” because an action under
35 U.S.C. § 256 did not “prevent[] a court from correcting
the inventorship of an unenforceable patent.” Id. at 1377
(alteration added).

On inequitable conduct:

Patent applicants “have a duty to prosecute patent
applications in the [PTO] with candor, good faith, and
honesty.” Honeywell Int’l Inc. v. Universal Avionics Sys.
Corp., 488 F.3d 982, 999 (Fed. Cir. 2007) (alteration
added); see also 37 C.F.R. § 1.56(a) (2009). A party assert-
ing inequitable conduct must prove by clear and convinc-
ing evidence that a patent applicant breached that duty
by (1) “fail[ing] to disclose material information or sub-
mit[ting] materially false information to the PTO” with (2)
“intent to mislead or deceive the examiner.” McKesson
Info. Solutions, Inc. v. Bridge Med., Inc., 487 F.3d 897,
913 (Fed. Cir. 2007) (internal quotation marks omitted)
(alterations added). “The required showings of material-
ity and intent are separate, and a showing of materiality
alone does not give rise to a presumption of intent to
deceive.” Praxair, Inc. v. ATMI, Inc., 543 F.3d 1306, 1313
(Fed. Cir. 2008).

Cited within the AMC case:
Shchlaifer Nance
& Co. v. Estate of Warhol, 194 F.3d 323, 333 (2d Cir.
Gollomp v.
Spitzer, 568 F.3d 355, 368 (2d Cir. 2009)
es “a
Chem. Pac. Ltd. v. Rascator Maritime S.A., 782 F.2d 329,
344 (2d Cir. 1986).

The case also contains issues about expert witnesses
and finite element analysis.


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