Advanced Magnetic Closures v. Rome Fastener

By Jason Rantanen

Early this week, I wrote about Leviton, former Chief Judge Michel's last opinion on inequitable conduct before leaving the bench.  Advanced Magnetic Closures brings another perspective on the issue – this time in the form of a comment from the new Chief Judge about issuing inequitable conduct opinions while Therasense v. Becton, Dickinson is pending en banc.

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Fastener Advanced Magnetic Closures, Inc. v. Rome Fastener Corp. (Fed. Cir., June 11, 2010)

In Advanced Magnetic Closures, the court reviewed a district court determination that U.S. Patent No. 5,572,773 is unenforceable due to inequitable conduct by the alleged inventor.  The panel also reviewed the district court’s entry of attorney fees against both the patent holder (AMC) and its attorney. 

Inequitable conduct: The focus of the inequitable conduct determination was on the district court’s finding that the alleged inventor falsely claimed to the PTO that he was the inventor of the claimed magnetic fastener when, in fact, he was not.  Applying the Star Scientific standard, the panel concluded that the district court did not err by finding that “the single most reasonable inference able to be drawn from the evidence is that [the alleged inventor] intended to deceive the PTO.”  Slip Op. at 19 (internal quotations omitted). 

Attorney’s Fees: After concluding that the exceptional case determination was appropriate on the basis of both inequitable conduct and litigation misconduct (an issue that the appellant waived by failing to include it in its briefs), the court addressed the attorney sanctions entered against AMC’s attorney under 28 US.C. § 1927.  Applying Second Circuit law, the Federal Circuit concluded that the district court abused its discretion by sanctioning the attorney.  The court noted that attorney sanctions under 28 U.S.C. § 1927 require a finding of bad faith, as opposed to objective unreasonableness, and concluded that the district court’s single statement that the attorney “should have been aware” of the deficiency of AMC’s patent infringement claim was insufficient to rise to this level.  

Chief Judge Rader’s Concurrence: The most notable aspect of the opinion comes at the end, in the form of the new Chief Judge’s concurrence.  While Judge Rader agreed with the outcome of the appeal, he wrote separately to stress that “absent extreme facts such as those found in the present case, this court should refrain from resolving inequitable conduct cases until it addresses the issue en banc.”  He also provided the following interesting comment regarding Therasense:

“In Therasense, this court has been asked to address the transformation of inequitable conduct from the rare exceptional cases of egregious fraud that results in the grant of a patent that would not otherwise issue to a rather automatic assertion in every infringement case. The exception has become the rule. Generally, I would hold inequitable conduct cases until after this court reexamines whether to put the doctrine back into the exception category.”

Although no Federal Circuit decisions involving inequitable conduct have issued since Advanced Magnetic Closures, only a short time has passed.  It remains to be seen whether the Chief Judge’s proposed policy on inequitable conduct determinations will be followed for the coming months.

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For the sake of full disclosure, I note that I previously represented Abbott Laboratories in connection with the Therasense litigation.  I no longer represent clients, including Abbott.

24 thoughts on “Advanced Magnetic Closures v. Rome Fastener

  1. 24

    Someone ask: write a good poem, is by talent? Still rely on art? My opinion is that of genius without intense Labour, genius without training, useless, Both should be combined with each other for that.

  2. 23

    I do not know if anyone is reading this blog several months after the article… But Romag was the defendant and spent 12 years fighting this frivolous lawsuit. It could have used the time and resources, not to mention about $1,500,000 of legal fees to make some jobs, or do something creative in this world. Now that the patent fraud has been exposed the plaintiff AMC is hiding behind his corporate veil to stiff Romag of the awarded return of fees. Recovery will require the further expenditure of resources for Romag to have justice done (if you call a simple reclamation of fees without damages after 12 years justice). At least the law firm would have paid it’s fair share of putting before our burdened legal system a frivolous, fraudulent case for 12 years.

  3. 21

    And I don’t have any Proxies.

    Well there’s your problem, sarah. 6 has seven proxies. How can you possibly compete?

  4. 18

    If Big D is hidden they think they can win.
    If Big D comes out and it will, it’s Prima Fascia.
    The Cases closed were closed because of the battle. And they need no more Arrows. And I thought it was just more of the same.
    And “It” was pulled out to control and intertwine the cases. And violating my rights came with it.
    They are protecting the first (2) Attys.one deceased I have been told and themselves because they are responsible for all of it. Responsible for nearly every crime I sent in. If it were anyone else they would have been criminally prosecuted by now.
    Finally I get it. There is a major major battle.And I thought the court of Jackson Tennessee was the court of Gaff me off Tennessee. And to think that what was done as stare decisis has to be a criminal act. WHAT UP WITH THAT? No one would get away with that in the real world.But now something is changing I have been allowed back on Pacer, and it is what I sent. I wonder why the Judge claimed it was different? Or was that a Decision from the Judge at all?
    And I don’t have any Proxies.

  5. 17

    I wonder if this opinion tells us anything about Therasense. The impetus behind the en banc-ing of Therasense seems to be that several judges think that inequitable conduct claims should be harder to win. And Therasense will probably accomplish that. If that’s right, and the judges are sure that that’s the direction Therasense will go, then it wouldn’t make any difference in this case where even under the current law a reversal is required.

    I suppose if the court affirms any findings of inequitable conduct while Therasense is pending, that would cut the other way.

    And I’m not sure if I agree with Judge Rader’s concurrence. It makes sense logically, but Therasense won’t even be argued until November, which means no opinion until roughly February-June 2011. It’s probably fine for some litigants to wait that long, but in a case like this one where the judges may be confident that Therasense won’t make a difference down the road, perhaps it’s not such a bad thing to dispose of the case sooner.

    Also, even for this blog, this post seems to have attracted a disproportionate number of incoherent comments… I can’t tell how many of these are real and how many are ever-more sophisticated spambots.

  6. 14

    Right! And we also have the very very important detail on the hidden “D”. Making the second Valid… I suppose…How’s them apples pingaling

  7. 13

    Of course the whole patent enforceability issue is moot.

    Except, of course, for the minor detail that the enforceability of the patent was before the court because the patentee was attempting to enforce it.

  8. 12

    Of course the whole patent enforceability issue is moot. That patent expired in Nov. 2008 for not paying maintenance fees.

  9. 11

    How many registrants have lost their registration after IC decisions since this “plague” began?

    Not nearly enough.

  10. 10

    What about a case where Someone tells you they are an Atty. STEALS your idea. Tells you you can’t have what you invented. And the Law Firm that was supposed to be in charge does nothing. letting the so called atty. steal it for his BOSS. And then you hire another Atty. to get what you are being denied. And that Atty. then keeps what you gave him ti file for you and then he tries to cash in on it..
    Has anyone heard about a case like this.

  11. 8

    99% of inequitable conduct cases are frivolous. That’s why everyone still has their reg. numbers.

  12. 6

    The client quits sending you cases to write and you keep your patent bar registration number.

    Is someone going to lose his/her patent bar registration number in light of this decision?

    That would be news. How many registrants have lost their registration after IC decisions since this “plague” began?

  13. 5

    Finally, if the man didn’t invent the subject matter then we have a 102(f) prohibition of patentability. It is clearly within the court’s power to strike such a patent.

  14. 4

    What is a patent attorney to do under these circumstances if he has a duty to disclose the inventorship dispute to the PTO? Clearly, the boss controls the employee so that the joint letter can be taken with a grain of salt. The boss is lying, but the boss is also the boss.

    There is a very simple answer to this. You write an e-mail explaining the situation to the client. The client gets upset, because you placed the communication in a clearly discoverable medium. The client quits sending you cases to write and you keep your patent bar registration number.

  15. 3

    TURKEY TROTS TO WATER GG FROM CINCPAC ACTION COM THIRD FLEET INFO COMINCH CTF SEVENTY-SEVEN X WHERE IS RPT WHERE IS THE EN BANC THERASENSE DESCISION RR THE WORLD WONDERS

  16. 2

    This is the second case in one week where the Feds suggested that the failure to disclose an inventorship dispute is IC.

    In the end, I believe this case could be limited to a finding of IC b/c the alleged inventor falsely swore that he was the inventor when he was not. Violation of Section 115. But there is a host of discussion about “non disclosure” as well.

    Here also we have a complication that we have not previously addressed. The prosecuting attorney representing the “boss” was informed by an employee that the employee was the inventor, not the boss. Later the boss and the employee jointly wrote that only the boss was the inventor.

    What is a patent attorney to do under these circumstances if he has a duty to disclose the inventorship dispute to the PTO? Clearly, the boss controls the employee so that the joint letter can be taken with a grain of salt. The boss is lying, but the boss is also the boss.

    Wow, this case is loaded with food for thought.

  17. 1

    Everything about this opinion weighs towards upholding the IC finding against the patentee in the Therasense case.

    This is just a reminder to District Court judges: touch all the evidentiary bases when you write your decisions, maybe twice, and explain any findings regarding witness credibility in as much detail as possible.

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