By Jason Rantanen
American Calcar, Inc. v. American Honda Motor Co., Inc. (Fed. Cir. 2011) Download 09-1503-1567
Panel: Lourie (author), Bryson, and Gajarsa
In its first decision addressing the issue of inequitable conduct since Therasense v. Becton Dickinson, the Federal Circuit affirmed the district court's finding of materiality with respect to one patent, but remanded for further findings on materiality (in connection with the two remaining patents) and intent (with respect to all three patents).
The inequitable conduct issues in this case revolve around a family of patents sharing a common specification. One of the patents, No. 6,330,497 ("the Three-Status patent"), relates to "a system that allows a user to select an option from a list, to be shown a preview of information about it, and then to activate it." Slip Op. at 12. Two other patents, Nos. 6,438,465 and 6,542,795 ("the Search patents") claim a system for performing searches on a system in a vehicle.
Prior to the filing of the patent application, the inventors closely examined an Acura 96RL that contained a navigation system with features similar to those later claimed in the Three-Status and Search patents. Although the 96RL system is described in the background section of the patent application, that description is limited to the navigation aspect of the system, not the user interface aspects. Thus, the inventors "never disclosed to the PTO the aspects of the 96RL system relating to the three-status feature or the search feature." Slip Op. at 14.This failure to disclose formed the basis of the district court's finding of inequitable conduct, which Calcar sought to overturn on appeal.
Jury Verdict Merely Advisory
In reaching its conclusion of inequitable conduct, the district court disregarded an advisory jury verdict of no inequitable conduct. The CAFC rejected Calcar's argument that this constituted error. "Inequitable conduct is equitable in nature, with no right to a jury, and the trial court has the obligation to resolve the underlying facts of materiality and intent...Where a court submits the question to a jury, and both parties agree that the jury findings will be advisory, the court shall treat them as such.  That is the universal rule." Slip Op. at 23 (internal citations omitted).
Appliation of Therasense
The CAFC next turned to the substance of the district court's findings. With respect to the Three-Status patent, the panel concluded that, even under the "but-for" standard of Therasense, the district court had correctly found materiality. "We agree with Honda that the undisclosed 96RL information was material to the Three-Status patent because the jury found, and the court upheld, the asserted claims as anticipated by the 96RL system, and ACI has not appealed that decision to us." Slip Op. at 25.
The materiality of the Search patents was more questionable, given that the jury had rejected Honda's invalidity arguments based on the 96RL system. Nevertheless, "the withheld information may be material if it would have blocked patent issuance under the PTO's preponderance of the evidence standard, giving those patents' claims their broadest reasonable construction." Id. As a result the CAFC remanded to the district court to assess materiality under a "but-for" standard, applying the evidentiary standard and claim scope used by the PTO. The CAFC did not give any guidance as to how the latter might differ from the scope previously applied by the district court.
The CAFC reached a similar result on intent, concluding that the district court had relied on a sliding scale standard, "basing its finding of intent significantly on the materiality of the 96RL system to the claimed invention." Slip Op. at 26. That approach was rejected in Therasense, and the CAFC remanded for further consideration in light of that opinion.
Note: The court also affirmed the district court's rulings of noninfringement as to several other patents and reversed its denial of judgment as a matter of law that another patents was invalid.
For those who find this information noteworthy, the panel in this case included two members of the dissent in Therasense. Judge Lourie, the author of this opinion, was a member of the Therasense majority.