Resuscitating Therasense? CD Cal Court Finds Inequitable Conduct by Patentee

IP practitioners have witnessed the dearth of inequitable conduct findings in the wake of Therasense, Inc. v. Becton, Dickinson & Co., 649 F.3d 1276 (Fed. Cir. 2011).

There, the Federal Circuit reiterated en banc that to establish unenforceability for inequitable conduct before the United States Patent and Trademark Office (“PTO”), a party must prove by clear and convincing evidence that (1) information material to patentability was withheld from the PTO, or material misinformation was provided to the PTO, and that such act was done (2) with the intent to deceive or mislead. A few months ago, we reported on a case that continued to signal the death knell of this formerly ubiquitous defense, and thus begging the present question: is inequitable conduct even alive anymore? Of course it is.

Recently, the Court in Kim Laube & Co., Inc., et. al. v. Wahl Clipper Corp., et. al., 2-09-cv-00914 (CACD July 18, 2013, Order) (Kronstadt, J.) ruled after a bench trial that plaintiff patentee had engaged in inequitable conduct by deliberately withholding material prior art from his prosecution counsel and the U.S. Patent & Trademark Office (“PTO”).

In so ruling, the Court found the patent prosecutor to be credible, but took the patentee to task and found that he deliberately withheld material prior art. This was based on the Court’s observation of “the content of [his] testimony as well as his demeanor and the tone and manner in which it was presented.” The patentee’s credibility also suffered due to his “evasive answers to direct questions” and his inconsistencies about knowledge of patents and prosecution. The Court thus found the case to be exceptional, due to its inequitable conduct determination, and granted defendant’s motion for attorney fees.

For practitioners, this decision shows that inequitable conduct still has life, and patentees and accused infringers should continue to be guided accordingly.