Patentee's Failure to Cite Prior Art Leads to Inequitable Conduct on Summary Judgment

Sabasta v. Buckaroos, Inc., No. 4:06-cv-180 (S.D. Iowa, February 3, 2010)

Sabasta sued Buckaroos on a patent relating to roll-bending dies used to make saddles for pipe insulation.   Just prior to filing the patent, Sabasta discovered that specially-fabricated dies used in conjunction with a "two roll-bending machine" could efficiently produce pipe saddles of interest.  Based on this discovery, Sabasta purchased an "Acrotech Model 1618" and worked with Acrotech to fabricate specially designed dies.  These dies were ultimately the subject of Sabasta's patent.

During prosecution of the patent application, the original claims were rejected based on other prior art, but the Examiner indicated that certain dependent claims "would be allowable if rewritten in independent form."  These dependent claims recited features related to the Acrotech machine.  Neither the Acrotech machine, nor the related manuals, were cited to the USPTO.  Sabasta incorporated these features in a subsequent amendment, which ultimately led to the allowance of the application.  When the amendments were made, the applicant remarked:

Examiner has indicated in [] the Office Action that the prior art of record fails to teach or adequately suggest the claimed features of claim 6 together with the base claim and any intervening claims. Therefore, claim 1, by virtue of its incorporation of the limitations of claim 6 and any intervening claims, is believed to be allowable.

Defendant argued that the “Acrotech machine and manual are directly inconsistent with and refute the position taken by Sabasta in overcoming the Examiner’s prior art rejections. . . . Sabasta explicitly amended his pending claims to add the limitation which required that cam followers engage the die [and] relied on this as the critical distinction to overcome prior art rejections.”

The district court agreed with Buckaroos:

[T]he Plaintiff relied on the mounting portion/cam roller limitation to overcome the Patent Examiner’s rejection of the as-submitted claims. To overcome the Patent Examiner’s rejections, Plaintiff explicitly stated that it believed the independent claims to be allowable based on the incorporation of the formerly dependent claim limitation providing that the die comprise “a pair of mounting portions” that extend from the opposite ends of the die and that are designed to engage cam rollers on a roll-bending machine for purposes of maintaining the die’s alignment. . . . After receiving this amendment, the Patent Examiner subsequently approved Plaintiff’s patent application. Given these facts, the Court has no doubt that prior art teaching a die that comprises mounting portions to engage preexisting cam rollers on a two-rollbending machine would be considered by a reasonable patent examiner to be important in a determination of whether to allow an application to issue as a patent.

On the issue of intent, the court added:

[I]n the present case, an inference of intent is supported not simply by the lack of a credible good faith explanation for the nondisclosure, but also by independent evidence of a far more substantial factual basis, namely that Plaintiff actually made an argument in favor of patentability that contained, as the primary distinguishing element, a feature that was not disclosed in any of the prior art before the examiner and that was readily apparent in the undisclosed Acrotech machine and manual. As Defendant correctly emphasizes, Plaintiff  “went beyond merely silently failing to disclose the Acrotech machine and manual as a general reference”; rather, he “affirmatively made misrepresentations by failing to disclose the closest, highly material reference which went to the critical point of patentability [i.e., the mounting portion/cam roller limitation] which Sabasta relied upon to obtain the ‘995 Patent.”

The Federal Circuit has squarely held that “a trial court may infer deceptive intent based on a showing that a patentee withheld references with which it was intimately familiar and which were inconsistent with its own patentability arguments to the PTO.” Agfa Corp., 451 F.3d at 1378. That is precisely the case in the present matter. It is undisputed on the record that Plaintiff was fully aware of the Acrotech machine and manual, and that Plaintiff was well acquainted with the features of the Acrotech machine, including those of the Standard OD Attachment. . . .

[T]he record likewise demonstrates that Plaintiff relied specifically on the addition of the mounting portion/cam roller recitation to overcome the Patent Examiner’s rejection of Independent Claims 1 and 15 . . . Coupled with the fact that Plaintiff designed the die of the ‘995 Patent to be used, specifically, in conjunction with the Acrotech 1618 Machine, these factors provide strong support for a conclusion that Plaintiff knew or should have known that the Acrotech machine and manual were material not only to his assertion that the mounting portion/cam roller limitation would make patentability “allowable,” but also to the general prosecution of his patent application. Finally, it is apparent on the record that Plaintiff did not disclose the Acrotech machine or manual to the USPTO, despite knowledge of both the prior art and its materiality.

Read/download a copy of the opinion here (link)

Source: DocketNavigator