Elk Corporation of Dallas v. GAF Building Materials Corporation

United States Court of Appeals for the Federal Circuit (Fed. Cir). February 11, 1999

BACKGROUND
In the course of evaluating the patentability of your new design invention, a search is performed in the technical and patent literatures by your technical staff and an outside patent search firm. You review the results of this search, and write a letter to your patent practitioner providing copies of the search results and note that certain references are particularly close to your invention. A design patent application is timely filed. You note that an Information Disclosure Statement filed in the application does not list the references that you noted were particularly close to the invention and notify your patent practitioner.

EXECUTIVE SUMMARY
In this case relating to design patents for roofing shingles, the district court and the Fed. Cir. were faced with determining whether the failure to disclose certain references to the United States Patent and Trademark Office (USPTO) that were obtained during a patentability search for the design patent application amounted to inequitable conduct. Based on the materiality of the references, memorandum indicating the materiality of the references, arguments made before the USPTO and citing the references to the USPTO in a later-filed and related application, the district court held the patent unenforceable. The Fed. Cir. affirmed. The Practice Pointer to be gained from this case is that care should be taken to assure that appropriate references are provided to the USPTO during the prosecution of utility and design patent applications.

THE LAW
Under 37 C.F.R.  1.56, individuals associated with the filing or prosecution of a patent
application before the USPTO must submit information material to the patentability of the pending claims. Such individuals include each inventor, each attorney or agent who prepares or prosecutes the application, and every other person substantively involved in the preparation or prosecution of the application. Inequitable conduct due to failure to disclose material information must be proved by clear and convincing evidence of: 1) prior art that was material, 2) knowledge chargeable to an applicant of that prior art and of its materiality, and 3) failure of the applicant to disclose the art resulting from an intent to mislead the USPTO. See Molins PLC v. Textron, Inc., 33 USPQ2d 1823 (Fed. Cir. 1995).

Information is material when there is a substantial likelihood that a reasonable examiner wold have considered the information important in deciding whether to allow the application to issue as a patent. See Molins. However, an otherwise material reference need not be disclosed if it is merely cumulative of or less material than other references already disclosed. See Halliburton Co. v. Schlumberger Tech. Corp., 17 USPQ2d 1834 (Fed. Cir. 1991) and Baxter Int'l, Inc. v. McGaw, Inc., 47 USPQ2d 1225 (Fed. Cir. 1998). Knowledge of the materiality of information can be determined from the evidence, such as the patentability search reports and memorandum that were of record in the present case. The intent to mislead the PTO can be proven by direct evidence, or can be inferred the facts and circumstances surrounding an applicant's overall actions. See Merck & Co. v. Danbury Pharm., 10 USPQ2d 1682 (Fed. Cir. 1989) and Paragon Podiatry Lab., Inc., v. KLM Lab., Inc., 25 USPQ2d 1561 (Fed. Cir. 1993) The greater the degree of materiality, the less the degree of intent that must be shown to reach a conclusion of inequitable conduct. See Critkon, Inc. v. Becton Dickinson Vascular Access, Inc., 43 USPQ2d 1666 (Fed. Cir. 1997).

IMPORTANCE OF THE CASE
This case is important because it accentuates the need to evaluate information obtained, known, evaluated and commented upon by all parties involved in the patenting process.