Thursday, February 07, 2008

E.D. Va: Contents of Inequitable Conduct Must Be Stated With Particularity

Applied Interact LLC v. Continental Airlines, Inc., Civil Case No. 2:07cv341 (E.D. Va., January 17, 2008)

Applied Interact ("AI") filed a complaint against Continental and MN Airlines alleging that they infringed 5 patents "by [their] unlicensed use of printing boarding passes over the Internet," and infringing another patent "by [their] unlicensed use of sweepstakes conducted over the Internet."

In the Answer, the defendants pled an affirmative defense alleging inequitable conduct:

The [five (5)] Patents are unenforceable because of the actions of at least one individual, substantively involved in the prosecution of the applications that led to the issuance of the [five (5)] Patents, misrepresented the state of the prior art during prosecution of each identified patent and/or failed to disclose to the United States Patent and Trademark Office material information known to those substantively involved in the prosecution of the applications that issued as the identified patents.

On information and belief, the individuals involved in the failure to disclose material information include [various prosecuting attorneys and inventor]. At no time did these individuals provide any references or prior art to the Patent Office with respect to the use of computer networks to print at a remote location information generated at a central location and/or information related to the use of computer networks to implement games of random chance during the pendency of the applications that led to the issuance of the [five (5)] Patents. The individuals involved in the failure to disclose material information also include individuals who were substantively involved in the reexamination of [one (1) of the] Patent[s] that, on information and belief, include: [names of individuals].

On information and belief, the information that was withheld includes information that is material to the scope of the claims currently advanced by Applied Interact including, but not limited to information concerning: [7 features of the claimed invention].

On information and belief, the withheld information was known by the individuals to have been material and the failure to disclose prior art to the Patent Office was made with intent to deceive the United States Patent and Trademark Office into improperly issuing the identified patents or a reexamination certificate for the same.


AI moved to strike this defense under FRCP Rule 12 ("the [C]ourt may strike from a pleading an insufficient defense or any redundant, immaterial, impertinent, or scandalous matter") and Rule 9 ("[i]n alleging fraud or mistake, a party must state with particularity the circumstances constituting fraud or mistake.")

In weighing whether the affirmative defense of inequitable conduct was properly pled, the Court considered whether the pleading specified:

1. The time of the inequitable conduct;

2. The place of the inequitable conduct;

3. The parties responsible for the inequitable conduct; and

4. The contents of the inequitable conduct.

Here, there wasn't much argument over the first 3 factors, but the court questioned whether the "contents of the inequitable conduct" was sufficiently pled. AI contended that "Continental's Amended Answer fails to state its inequitable conduct defense with particularity because (1) it does not identify any misrepresentation; and (2) it does not identify any specific prior art that was withheld."

The court agreed with AI, stating that the pleading "merely describe[s] the subject matter of the material omitted but do not state with specificity the documents or information omitted." Additionally, the court ruled that:

Continental's pleading . . . [describes] omissions that relate "to the subject matter [of the patent], namely, the use of computer networks to print at a remote location information generated at a central location and/or information related to the use of computer networks to implement games of random chance." . . . However, this description of the material omissions constituting the inequitable conduct does not provide Plaintiff with "guidance as to the specific [information]" allegedly withheld. . . . While Continental claims some information should have been submitted regarding these subject areas, Continental fails to allege any specific document or information that should have been produced.

[T]he Court additionally concludes that Continental's pleading is defective in so far as it references the entire patent as being affected by the material omissions. Rather, Continental must state with specificity what aspects of the patent were implicated by the complained of material omissions.

Motion to strike Affirmative Defense GRANTED

View/download the opinion here (link)

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