Failure to Disclose Federal Circuit Order May Support Inequitable Conduct Defense

The court granted defendants' motion to amend its answer to add a claim for inequitable conduct and rejected plaintiff's argument that the amendment was futile. "Defendants' proposed Amended Answer alleges, on information and belief, that during prosecution of the [patent-in-suit], [plaintiff] and its attorneys withheld [a] Federal Circuit Order with the intent to deceive the PTO. . . . According to the Amended Answer, had the PTO been aware of the Federal Circuit Order which stated that the specification's language requires scan conversion entirely on 'a floating point basis' . . . the PTO would not have permitted the issuance of claims in the [patent]. . . . [I]t is undisputed that the examiner was not given actual notice of the Federal Circuit's subsequent decision. While Plaintiff contends this alleged non-disclosure is not material, as the Federal Circuit Order is merely cumulative of the District Court Order, Defendants have articulated a plausible theory to the contrary. . . . The Amended Answer alleges that the Federal Circuit Order is material because it contained adverse statements not contained in the District Court Order. Had such statements by the Federal Circuit been before the PTO, the PTO may have either rejected the . . . claims for failure to satisfy §112 due to lack of written description, or may have found the [patent] could not claim priority to [an earlier] patent and then, considering the expanded range of prior art, may have rejected those claims.”

Graphics Properties Holdings, Inc. v. Google Inc., 1-12-cv-01394 (DED November 20, 2014, Order) (Stark, J.)