Failure To Correct Significance of Submitted Prior Art Leads to Inequitable Conduct

Golden Hour Data Systems, Inc. v. emsCharts, E.D. Tex. (2:06 CV 381), March 23, 2009

It has now officially become "inequitable conduct week" at the 271 Blog. Here, a patent application, being handled by a patent agent/law student under the supervision of a partner, discussed a prior art system ("AeroMed") in the "background of the invention" section.:

Although others have attempted to remedy this conflict, no fully integrated medical systems have been developed. For example, the Air Medical Software (Innovative Engineering of Lebanon, N.H.) provides computer software for dispatching emergency crews to accident scenes and managing flight information. However, it does not provide comprehensive integration of the flight information with a clinical diagnosis, billing system and administrative system.

Shortly after the application was filed, the inventors and prosecution counsel received a brochure on the AeroMed system at a conference. The brochure indicated that the AeroMed system did indeed provide the features discussed in the application.

The prosecution counsel tangentially cited the brochure in an IDS, by stating

[a]pplicants are aware of AeroMed Software, computer software for Air Medical Dispatch, Flight Program Management, Medical Charting, Continuing Education Tracking, Transfer Center, Physician’s Referral Lines, and Custom Applications. AeroMed Software is a product of Innovative Engineering of Lebanon, New Hampshire.

This description was an exact duplication of the system on the front of the brochure, and the court found "that the only explanation is that counsel copied the language from the front of the brochure when it submitted the IDS." The court also stated that counsel "selected that part of
the brochure to disclose that did not threaten patentability. He excluded, however, the entire teaching that would have been a serious obstacle to patentability. There can be no question that a 'reasonable examiner' would have considered the information in the brochure material."

On materiality, Judge Ward stated:

[T]he inventive feature of the ‘073 patent was billing integration. The specification made that clear. Indeed, in the one Office Action issued before the application was allowed, the examiner stated: “[t]he prior art teaches systems and methods of computerized integrated data management, but does not teach or suggest a computerized method that includes collecting and integrating patient information with flight information to produce an encounter record, as set forth in the claims.” Golden Hour can hardly argue now that its representation of AeroMed in the ‘073 patent application was not an “argument for patentability.” It is clearly how the examiner distinguished AeroMed from the invention disclosed in the ‘073 patent. Golden Hour can point to no law suggesting that only those arguments used to overcome a rejection from the PTO are “arguments of patentability.” Indeed, this argument is fundamentally wrong.

And on intent,

[T]he IDS disclosed only that part of the brochure that did not threaten the
patentability of the invention. The language was lifted directly from the front of the brochure. It was incumbent upon Golden Hour “to provide the PTO with sufficient information for a reasonable examiner to consider the [brochure] in context, not with a selective and misleading disclosure.” . . . Here, Golden Hour and its counsel selected the one part of the AeroMed brochure to disclose what was consistent with how it had described AeroMed to the PTO. Furnishing the entire brochure would have revealed the inconsistencies between Golden Hour’s description in the application and the truth about the AeroMed system. Such selectivity is strong evidence of intent to mislead the patent office about the relevant prior art system as described by its competitor.

Accordingly, Judge Ward ruled that Golden Hour was guilty of inequitable conduct, and rendered the patent unenforceable.

NOTE 1: The finding of inequitable conduct came after the court found infringement.

NOTE 2: The brochure was undated, and prosecution counsel correctly pointed out that undated disclosures are not typically considered by the PTO. Judge Davis rejected this argument, stating that it "disregaraded the continuing duty of candor."