Header graphic for print
Chicago IP Litigation Tracking Northern District of Illinois IP Cases

Tag Archives: Inequitable Conduct

Delay During Settlement Talks Not Prejudiced

Posted in Pleading Requirements

Avnet, Inc. v. Motio, Inc.., No 12 C 2100, Slip Op. (N.D. Ill. Jan. 30, 2015) (Lefkow, J.).

Judge Lefkow granted defendant Motio’s motion to amend its answer and counterclaim adding counterclaims and an affirmative defense regarding inequitable conduct and related antitrust claims.

As an initial matter, while Fed. R. Civ. P. 15 requires that courts liberally allow amendment, after the deadline to amend of right has passed, Fed. R. Civ. P. 16 allows courts to grant amendment only if the party can show good cause.  Motio had good cause because it could not have identified the alleged inequitable conduct until plaintiff produced the alleged evidence.  And Motion did not unduly delay seeking amendment.  Motio waited for at least a year, but the case was not stayed for settlement discussion during much of that year.

And defendants were prejudiced by not learning of the claims until late in discovery.  But given the seriousness of the claims, the prejudice was not undue.

Finally, neither the antitrust nor the inequitable conduct claims were futile.

Expert May Not Speculate on an Examiner’s Hypothetical Reactions

Posted in Experts

The Medicine Co. v. Mylan Inc., No. 11 C 1285, Slip Op. (N.D. Ill. Apr. 17, 2014) (St. Eve, J.).

Judge St. Eve granted in part and denied in part plaintiff The Medicine Company’s (“TMC”) Daubert motion seeking to exclude certain opinions of defendants (collectively “Mylan”) in this patent case involving an injectable anticoagulant that prevents blood clotting during coronary procedures.  As an initial matter, the Court held that because it would be the tried of fact, the Court was free to delay its gatekeeping function by allowing “borderline” testimony, subjecting the testimony to cross-examination and deciding later whether the testimony should be considered or excluded.  The Court noted, however, that at some point it would be required to provide “more than just conclusory statements of admissibility or inadmissibility ….”

The Court denied TMC’s motion to the extent that the expert was allowed to rely upon a statistical analysis table prepared by a second expert.  The Court already held that the second expert’s analysis was sufficiently reliable and an expert was free to rely upon research conducted by others.  Furthermore, the expert independently opined upon the analysis based upon his own experience.

The Court granted TMC’s motion to the extent that the expert sought to testify regarding how the prosecuting Patent Examiner would have acted or what she would have thought had TMC provided different information during prosecution. Those opinions were speculation and, therefore, were not sufficiently reliable.  The expert, however, was permitted to testify to facts and what the expert believes would have been material to the Patent Examiner, without opining upon what the Patent Examiner would have thought or done.

Patents Held Unenforceable After Bench Trial

Posted in Trial

Intellect Wireless, Inc. v. HTC Corp., No. 09 C 2945, Slip Op. (N.D. Ill. Sep. 6, 2012) (Hart, Sen. J.).

Judge Hart entered findings of fact and conclusions of law after a patent bench trial related to cell phones with caller ID, text messaging, pictures or video.  The Court dismissed with prejudice plaintiff Intellect Wireless’s patents because they were unenforceable due to inequitable conduct.  Of particular interest, the Court held the following:

  • Several declarations submitted to the PTO during prosecution of the patents in suit contained false statements regarding inventions, reduction to practice and diligence.
  • The declarations were necessary to procure the patents in suit.
  • None of the false statements were withdrawn, corrected or identified to the patent examiner.
  • The clear and convincing evidence “strongly support[ed]” that the false statements were made with an intent to deceive, not just by mistake.

No Inequitable Conduct Where Multiple Inferences Can be Drawn as to Intent

Posted in Summary Judgment

Fujitsu Ltd. v. Tellabs Ops., Inc., No. 09 C 4530, Slip Op. (N.D. Ill. Jul. 31, 2012) (Holderman, C.J.).

Judge Holderman granted plaintiff Fujitsu’s motion for summary judgment of no inequitable conduct.  The inventors allegedly failed to disclose two prior art references which had been disclosed in prior patent prosecutions, each of which was disclosed during prosecution of the patents in suit.  There was a question of fact as to whether each reference was duplicative of other disclosed art and, therefore, was material.  But defendant Tellabs did not show the required specific intent the specific intent “must be the single most reasonable inference able to be drawn from the evidence.”  Therasence, Inc. v. Becton, Dickinson & Co., 649 F.3d 1276, 1290 (Fed. Cir. 2011).  In each case, it was reasonable to infer intent to deceive from the undisputed facts.  But it was also reasonable to infer that the inventors believed the references were cumulative or that the inventors forgot to include the references.  Because multiple inferences could be drawn, there was no intent as a matter of law.

Defendant Granted Leave to Replead Inequitable Conduct

Posted in Pleading Requirements

Sloan Valve Co. v. Zurn Indus., Inc., No. 10 C 204, Slip Op. (N.D. Ill. Apr. 1, 2012) (St. Eve, J.).

Judge St. Eve granted in part defendants’ (collectively “Zurn”) Fed. R. Civ. P. 12(b)(6) motion to dismiss plaintiff Sloan Valve’s (“Sloan”) inequitable conduct counterclaims and denied Zurn its request for attorneys’ fees and costs in this patent dispute involving valves.  But to the extent the Court dismissed the counterclaims, it was without prejudice to replead using facts learned during discovery.  Sloan was not prejudiced by the amendment because Sloan was on notice of the facts gleaned during the two year discovery period.

The Court acknowledged the inequitable conduct pleading requirements set forth in Exergen, and noted that they were not changed by the heightened proofs required by Therasense.  The Court also held that at the pleading stage, Zurn need not show that its alleged “intent to deceive is the single most likely explanation for non-disclosure.”   Zurn need only allege facts from which intent may be reasonably inferred.

With respect to Counterclaim III, Sloan waived its argument regarding identity and intent, by failing to challenge them in its first motion to dismiss Zurn’s original Counterclaim III, which was substantively the same as this amended counterclaim.  But even if Sloan had not waived its arguments, Zurn could have met Rule 9(b) pleading standards by amending to add information learned during discovery.

And while the Court’s original pre-Therasense ruling on Zurn’s materiality pleading was based upon the “reasonable examiner” standard, Zurn’s pleadings also met Therasense’s “but for” materiality test.  Zurn pled that but for Sloan’s counsel’s statements during prosecution regarding the size of a plunge and a bushing passage taught by the prior art, at least Claim 1 would not have been allowed.

While Counterclaim IV was not adequately pled, Zurn was given leave to replead.  Zurn’s counterclaim did not identify who withheld the prior art, but Zurn had since identified the individuals during discovery.  Zurn’s materiality pleading was also deficient, but Zurn was granted leave to replead with information learned during discovery.  And Zurn was similarly granted leave to amend its intent allegations.

Early Inequitable Conduct Bench Trial Streamlines Case

Posted in Trial

Intellect Wireless, Inc. v. HTC Corp., No. 09 C 2945, Slip Op. (N.D. Ill. Mar. 2, 2012) (Hart, Sen. J.).

Judge Hart denied defendant’s (collectively “HTC”) motion for summary judgment of inequitable conduct based upon the submission to the Patent Office of allegedly false and misleading declarations.  The Court held that there were disputed questions of fact preventing summary judgment, without elaborating upon what facts were disputed.  And based upon the parties’ papers, the Court reversed the inequitable conduct claims for an early bench trial. 

The Court then ordered that, within four weeks, the parties file:

  • Statements of undisputed facts;
  • Proposed conclusions of law;
  • Exhibit lists; and
  • Witness lists.

This appears to be another example in the growing trend of Northern District judges looking for ways, like mini-Markmans and early Rule 30(b)(6) depositions, to streamline patent cases.

Federal Circuit Heightens Inequitable Conduct Standards, But Does it Increase Unethical Behavior?

Posted in Legal News

Yesterday, the Federal Circuit handed down its anticipated en banc decision in Therasense, Inc. v. Becton, Dickinson & Co., increasing the standards for inequitable conduct.  The 6-5 majority held that: 

  1. an omitted reference is material only if the claim or patent would not have issued, but for omission of the reference;
  2. specific intent to deceive must be shown by clear and convincing evidence;
  3. courts can no longer employ a "sliding scale" of intent and materiality, both must be showng by clear and convincing evidence; and
  4. courts should apply equity to ensure that the remedy is not based upon conduct "immaterial to the issuance of the patent." 

Patent Docs has an excellent explanation of the opinion and the case background.  And there is plenty of commentary about the opinion (see links below).  My initial reaction was that the heightened standards will not actually reduce the number of inequitable conduct claims that are filed, although it may reduce the number of inequitable conduct findings. 

So, while the overall outcomes may change, the general cost and complexity of patent litigation will likely remain the same.  But when I said as much on Twitter (@rdd), I got an interesting reaction from what appears to be an anonymous patent lawyer.  This anonymous person suggested that the heightened standard would actually embolden inventors and patent prosecutors to omit references and hide information from the Patent Office because they are now less likely to be charged with inequitable conduct.  My inclination is to dismiss this theory based upon my operating presumption that most patent prosecutors, and most inventors, are, or at least intend to, zealously advocate for their clients, or themselves, within the Patent Office’s rules and the relevant ethics standards.  Of course, I have seen exceptions, and they can be severe.  But my experience is that those are the exceptions, not the rule.  I am curious to hear what others think about this.  Am I wrong?

Here is a round up of some of the blog posts about the decision:

Court Analogizes Inequitable Conduct Pleading to False Marking Pleading

Posted in Pleading Requirements

Patent Compliance Group, Inc. v. Brunswick Corp., No. 10 C 4645, Slip Op. (N.D. Ill. Jan. 14, 2010) (Der-Yeghiayan, J.).

Judge Der-Yeghiyan denied defendant Brunswick’s Fed. R. Civ. P. 12(b)(6) motion to dismiss plaintiff Patent Compliance Group’s ("PCG") false patent marking claims regarding Brunswick’s exercise equipment. First, the Court held that Rule 9(b) heightened pleadings applied to the intent to deceive requirement of false patent marking, and anologized to the Federal Circuit’s inequitable conduct pleading requirements. While PCG’s first complaint alleging that Brunswick was a sophisticated company, PCG’s amended complaint attaching Patent Office documents identifying the expiration dates of the allegedly expired patents and identifying Brunswick’s in-house patent counsel was sufficient.

No Inequitable Conduct Where “Withheld” Reference Was Previously Disclosed

Posted in Legal News

Avery Dennison Corp. v. Continental Datalabel, Inc., No. 10 C 2744, Slip Op. (N.D. Ill. Nov. 30, 2010) (Kennelly, J.).

Judge Kennelly granted plaintiff Avery Dennision’s ("ADC") Fed. R. Civ. P. 12(b)(6) motion to dismiss defendant Continental Datalabel’s ("CDI") inequitable conduct, Walker Process fraud and sham litigation counterclaims in this patent dispute regarding labels with a tear off liner to expose a portion of a label column for easy removal.

Inequitable Conduct

CDI alleged two bases of inequitable conduct. First, ADC allegedly intentionally failed to tell the examiner that certain limitations outlined in a series of bullet points were from a particular prior art reference. That claim filed because ADC had previously disclosed the prior art reference at issue to the examiner – once a reference is before an examiner, it cannot be found to have been withheld from the examiner. Second, ADC allegedly intentionally failed to disclose to the examiner that curling up of labels is an inherent characteristic of adhesive labels. But ADC had disclosed the inherent curling up by disclosing various prior art references regarding adhesive labels that taught the inherent curling up, combined with the examiner’s presumed experience in the art.

Walker Process Fraud Claim

Because CDI’s Walker Process claim was premised upon the alleged inequitable conduct, CDI’s Walker Process claim failed. The Court further noted that because inequitable conduct is a broader concept than Walker Process fraud, a party that fails to make its case for inequitable conduct, cannot make a Walker Process fraud claim.

Sham Litigation

CDI’s sham litigation claim was based upon allegations that ADC knew the patent was invalid based upon the Brady prior art reference, which was before the examiner, and because had ADC tested CDI’s accused labels, ADC would have realized its suit was baseless. Because the Brady reference was before the examiner, however, the Court could not find that the claim was "objectively baseless" as required for sham litigation. ADC could have reasonably believed that after the examiner considered Brady and granted ADC’s patent, ADC’s patent was in fact valid over Brady.

And ADC’s alleged failure to test the accused CDI product was not sufficient for a sham litigation claim. Sham litigation requires more than an unsuccessful suit. While CDI may eventually prove that it did not infringe, ADC’s failure to perform one test identified by CDI does "not permit the court to infer more than the mere possibility" that ADC’s suit was in bad faith.

Defendant Cannot Show Knowledge of Prior Art Necessary for Inequitable Conduct

Posted in Legal News

Neutral Tandem, Inc. v. Peerless Network, LLC, No. 08 C 3402, Slip Op. (N.D. Ill. Dec. 2, 2010) (Darrah, J.).

Judge Darrah granted plaintiff Neutral Tandem summary judgment as to defendants’ (collectively "Peerless Network") inequitable conduct claim. Peerless offered no clear and convincing evidence that the inventor knew of the allegedly withheld prior art, referred to as the "Phase II Order." The fact that the inventor was involved in the proceeding’s from which the Phase II Order issued was not sufficient. Those proceedings lasted eleven years and resulted in thirteen orders. And the inventor testified that he did not remember the Phase II Order. Furthermore, similarities between a paragraph of the Order and a statement made during prosecution was not sufficient. Finally a petition filed with the FCC by the inventor referencing the Order was not sufficient because he testified it was written by his outside counsel and he had not reviewed the petition.

Court Considers Rule 9(b) Inequitable Conduct Pleading

Posted in Pleading Requirements

Bone Care Int’l, LLC v. Pentech Pharms., Inc., No. 08 C 1083, Slip Op. (N.D. Ill. Apr. 23, 2010) (Dow, Jr.).

Judge Dow granted in part plaintiffs’ motion to dismiss plaintiff’s inequitable conduct affirmative defenses and corresponding counterclaim in this patent case related to a treatment for hyperthyroidism. The Court dismissed defendants’ defenses and claims based upon infectious unenforceability. Defendants showed a relationship between the patents-in-suit and the earlier patents. But defendants did not meet the Fed.R.Civ.P. 9(b) pleading standards because they did not plead an "immediate and necessary" relationship between the patents-in-suit and the earlier patents in the family.

The Court denied the motion to dismiss as to prior art references that had been disclosed in earlier, related patent prosecutions, but not the prosecutions of the patents-in-suit. Defendants’ allegations were sufficient to allow the Court to infer that the prior art references were intentionally withheld to avoid rejections similar to those from the earlier prosecutions based upon that prior art. It did not matter that defendants did not allege that the prior art references were not cumulative. Rule 9(b) pleading is designed to put the opposing part on notice, not to require the recitation of "certain magic words." The Court dismissed defendants’ allegations regarding allegedly false statements to the PTO because other writings requested the applicant did not believe the statements to be false. 

Defendants’ allegations regarding certain of plaintiffs’ undisclosed articles were sufficiently plead. Defendants identified specific articles written by patentee, and plead that they were relevant and that patentee failed to disclose them. 

Finally, defendants sufficiently pled that plaintiff’s submitted article made misleading statements about the state of the art. Among other reasons, the Court noted that the truth of the contested statements could not be decided upon a motion to dismiss. 

Internet Archive Website is Admissible Evidence

Posted in Legal News

SP Techs., LLC v. Garmin Int’l., Inc., No. 08 C 3248, Slip Op. (N.D. Ill. Sep. 30, 2009) (Pallmeyer, J.)

Judge Pallmeyer denied defendants’ motion for summary judgment of inequitable conduct in this patent infringement case. Plaintiff SP Technologies ("SPT") asserted a patent for a touch screen keyboard that cannot be moved, resized or closed by a user. Defendants argued the patent should be held unenforceable based upon the inventor’s alleged failure to disclose to the Patent Office twenty lines of code for disabling a close button allegedly copied from a website and used in the patent, as well as certain alleged prior art Palm Pilot devices.

Intent to Deceive

The Court held there were questions of fact as to the investor’s alleged intent to deceive the Patent Office as to both alleged pieces of prior art. With respect to the code, there was evidence that the inventor believed there was no need to submit any evidence about a portion of the code because only the entirety of the code was relevant to patenting. Regarding the Palm devices, the inventor believed he had disclosed the Palm Pilots because they were mentioned in articles submitted to the Patent Office. 


Regarding the allegedly copied code, the Court noted that few inventors could be considered the sole inventor of every aspect of their invention. Almost all inventions include some known components. And defendants did not prove that the single component of the invention represented by the allegedly copied code was central to patentability. The Court did, however, note that it appeared the code was likely copied as it was identical to that on the website and in other manuals, down to a misspelling. The Court accepted as evidence a printout of a copy of the website at issue from the relevant 1999 date. The copy of this website was maintained by the Internet Archive, or the Way Back Machine. The printout was authenticated by an Internet Archive employee that explained the Internet Archive’s process of maintaining historic copies of websites.

Similarly, defendants did not present sufficient evidence of the materiality of the Palm devices. Defendants offered only pictures without proof, such as a manual, that a user could not move, resize or close the keyboard.

Patent Reform: ABA on Inequitable Conduct

Posted in Legal News

Another sign that patent reform is heating up again:  the ABA’s IP Section has sent the Senate Judiciary Committee a position paper regarding inequitable conduct reform (click here to get to the Section’s advocacy page which has a link to the letter).  The ABA argues that inequitable conduct materiality should be based upon the law and standards at the time of the alleged conduct, not based upon the present day standards.  The ABA also argues that inequitable conduct decisions should continue to be made by the federal courts, not the PTO.  And finally, the ABA argues that the standard for inequitable conduct should be:

(1) that a person having a duty of candor and good faith to the PTO in connection with the patent or an application therefor knowingly and willfully misrepresented a material fact or material information to the PTO or omitted a known material fact or known material information from the PTO;

(2) that, in the absence of such misrepresentation or omission, the PTO, acting reasonably, would not have granted or maintained in force at least one invalid patent claim; and

(3) that the misrepresentation or omission occurred with a specific intent to deceive the PTO, and that such intent cannot be established by the mere materiality of the misrepresentation or omission.

Patent Expert Allowed on Limited Subjects

Posted in Experts

Se-Kure Controls, Inc. v. Diam USA, Inc., No. 06 C 4857, Slip Op. (N.D. Ill. Jan. 9, 2009) (Cox, Mag. J.).*

Judge Cox denied plaintiff’s motion to exclude defendants’ patent law expert witness, but placed limits on the expert’s testimony following the reasoning of a previous opinion in a related case about the same expert — click here to read about that opinion in the Blog’s archives. The Court held that a patent expert’s testimony could aid the Court’s understanding of Patent Office procedures and of what would have been material to a reasonable patent examiner. But the patent law expert was not allowed to testify as to any legal conclusions. And the testimony would be given outside the jury’s presence to avoid any prejudice. Because the Court decides inequitable conduct, there was no need for the jury to hear the expert’s testimony.

* Click here for more on this case and related cases in the Blog’s archives. Also, note that the Court continues the progressive use of footnote citation.

Overlapping Issues & Earlier Trial Date Do Not Warrant Transfer

Posted in Jurisdiction

ACCO Brands USA LLC v. PC Guardian Anti-Theft Prods., Inc., No 06 C 7102, Slip Op. (N.D. Ill. Dec. 10, 2008) (Zagel, J.).*

Judge Zagel denied defendant PC Guardian’s ("PCG") renewed motion to transfer plaintiff’s patent suit against PCG, but not necessarily the other defendants, to the Northern District of California, where plaintiff and PCG were litigating a related patent.  The Court previously denied this motion, reasoning that all issues related to the patents in suit should be tried in one court, as opposed to the Northern District of California resolving the case as to PCG and the Northern District of Illinois to resolve the issues as to the other defendants in this suit. 

PCG renewed its motion because its new Northern District of California inequitable conduct motion implicated both the patents in suit in the Northern District of California and those at issue in the Northern District of Illinois.  But the Court held that transfer of the case would still leave this Court to resolve the identical issues as to the remaining defendants.  Additionally, because the Northern District of California court would likely rule on the issues before this Court, this Court would have the opportunity to consider the California rulings before deciding the issues.  And this Court had already construed the claims in this case (click here), resulting in only two minor differences between the courts.

Click here for more on this case in the Blog’s archives.

Allegations That Specific References Were Withheld Sufficient for Inequitable Conduct Claim

Posted in Legal News

UTStarcom, Inc. v. Starent Networks, Corp., No. 07 C 2582 Slip Op. (N.D. Ill. Dec. 5, 2008) (Lindberg, Sen. J.).

Judge Lindberg granted in part plaintiff’s motion to dismiss certain of defendant Starent’s counterclaims.  Starent’s allegations that specific patentee withheld specific references from the Patent Office were sufficient to meet the Rule 9(b) heightened pleading standards for inequitable conduct.  But the Court dismissed Starent’s tortious interference counterclaim to the extent that it was based upon the filing of a law suit because Illinois prohibits tortious interference with prospective economic advantage claims based upon filing law suits.  The Court also dismissed Starent’s malicious prosecution counterclaim because Starent did not allege a special injury, such as arrest, seizure of property, taking or interference with property.

Posner Inequitable Conduct Opinion Analysis

Posted in Legal News

 New Medium LLC v. Barco N.V., No. 05 C 5620, 2008 WL 4615682 (N.D. Ill. Oct. 16, 2008) (Posner, J. sitting by designation).

In my previous entry about this case, I linked to a copy of this decision and briefly explained the result, but did not provide any analysis of the opinion because I was previously involved in the case — click here to read that entry in the Blog’s archives.  Since that post, Dennis Crouch has provided some excellent analysis of the opinion — click here to read it at Patently-O.  Thanks Dennis.

Posner Holds Patents Unenforceable Due to Inequitable Conduct

Posted in Legal News

New Medium LLC v. Barco N.V., No. 05 C 5620, 2008 WL 4615682 (N.D. Ill. Oct. 16, 2008) (Posner, J. sitting by designation).

I was previously involved in this case and, therefore, I have not posted about prior opinions in detail.  But because I posted that Judge Posner (who is sitting by designation) was holding an inequitable conduct bench trial/evidentiary hearing in the case, I am posting the opinion Judge Posner issued based upon that hearing — click here to read the opinion and here for the Blog’s prior post.  The Court dismissed one of defendant’s inequitable conduct arguments, but based upon the other, held two of the patents in suit unenforceable because of inequitable conduct.

Subpoena of Plaintiff’s Prosecution/Trial Counsel Denied.

Posted in Legal News

Miyano Machinery USA, Inc. v. MiyanoHitec Machinery, Inc., No. 08 C 526, 2008 WL 236610 (N.D. Ill. Jun. 6, 2008) (Nolan, Mag. J.).

Judge Nolan granted plaintiff’s motion to quash defendants’ subpoenas of plaintiff’s counsel – who represented: 1) plaintiffs and perhaps individual defendants in plaintiffs’ earlier trademark prosecution; and 2) plaintiffs in this case. The Court denied defendants’ motions to compel production of communications between plaintiffs and plaintiffs’ counsel and to pierce the privilege.

Defendants argued that plaintiffs committed fraud on the PTO, and therefore inequitable conduct, when plaintiffs’ counsel allegedly knowingly submitted false declarations during prosecution of plaintiffs’ trademarks. Defendants based their claims on an allegedly privileged communication between plaintiff and its counsel (Exhibit L) that plaintiffs claimed was inadvertently produced.


The Court held that Exhibit L was inadvertently produced – it was just one document among 22,000 pages and plaintiffs requested its return immediately after discovering its production. Furthermore, Exhibit L was essentially a list of questions from counsel to plaintiffs, by which counsel was making sure he had sufficient information to file the declarations in question – evidence supporting plaintiffs’ defense of defendants’ inequitable conduct claims.

Continue Reading

Federal Circuit Upholds Northern District’s Attorney’s Fees Award

Posted in Legal News

Nilssen v. Osram Sylvania, Inc., No. 2007-1998, -1348 Slip. Op. (Fed. Cir. June 17, 2008).

The Federal Circuit affirmed Judge Darrah’s award of defendant’s/appellee’s attorney’s fees – click here to read the Blog’s post about the inequitable conduct opinion. Judge Darrah previously held and the Federal Circuit previously affirmed that plaintiffs committed inequitable conduct by, among other things: (1) falsely claiming small entity status; (2) failing to disclose material prior art to the PTO; and (3) failing to disclose related litigation to the PTO. Judge Darrah then held that the case was exceptional based upon plaintiff’s inequitable conduct, filing of a frivolous suit, and litigation misconduct. Because the case was exceptional, Judge Darrah awarded defendants their attorney’s fees.

The Federal Circuit agreed with plaintiffs, holding that an inequitable conduct finding did not require a case be deemed exceptional. But the Court held that Judge Darrah’s findings were supported by evidence and, therefore, were within his discretion.

Judge Newman dissented, stating:

The court today promotes unexceptional trial procedures and non-culpable prosecution errors into an "exceptional case" of such severity as to warrant the award of attorney fees. That is not what the status, or precedent, or policy contemplates. I respectfully dissent.

Check the following blogs for more on this opinion:

Trading Technologies v. eSpeed: No Inequitable Conduct

Posted in Legal News

Trading Techs. Int’l, Inc. v. eSpeed, Inc., No. 04 C 5312, Slip Op. (N.D. Ill. May 6, 2008) (Moran, Sen. J.).*

After a two-day hearing and two rounds of briefing, Judge Moran held that defendants (collectively “eSpeed”) had not met their burden of proving that plaintiff Trading Technologies (“TT”) engaged in inequitable conduct before the Patent & Trademark Office (“PTO”). The Court held that one of the TT patent’s inventors engaged in commercial use between the priority dates for the patent’s provisional and parent applications. But the Court held that TT was not required to disclose the commercial use to the PTO because it was not material to patentability. First, TT sought priority from its provisional application in good faith and had a reasonable belief that priority from the provisional was warranted. The reasonableness of the belief was born out when both the jury and the Court determined that the patent could claim priority from the provisional application. Because the commercial use happened after the patent’s critical date (based upon the provisional application), it was not material.**

Additionally, TT did not commit inequitable conduct when it responded to the Examiner’s request for, among other things, “any use of the claimed invention” with a series of brochures and presentations that described the software’s features, but without identifying the inventor’s commercial use. TT argued that the Examiner was seeking an explanation of all of the features of TT’s software because it had identified anticipatory prior art from TT’s website in a prior Office Action. The Court held that this was a reasonable reading of the Examiner’s request because the Examiner accepted TT’s response which did not address whether the software had been in use. Had the Examiner wanted an answer to that question, he could have asked again, instead of allowing the patent to issue.

Many readers will be wondering what is next. The Court has a few more pending motions, and a motion for reconsideration would not be surprising in this case. But for the most part, I suspect that this case is now on a fast track to the Federal Circuit, where the Court predicted it was going months ago. As always, I will keep you updated as the case develops, both in the Northern District and at the Federal Circuit.

Click here to read much more about this case in the Blog’s archives and click here for this opinion.

** Click here and here for more on the determination of the appropriate priority date in the Blog’s archives.

Trading Technologies v. eSpeed: Inequitable Conduct Post-Trial Update

Posted in Trial

Trading Techs. Int’l, Inc. v. eSpeed, Inc., No. 04 C 5312, Min. Order (N.D. Ill. Feb. 20, 2008) (Moran, Sen. J.).*

I have received several emails asking about the status of this case and, specifically, when the inequitable conduct portion of the case will be decided.  The post-trial inequitable conduct briefing appears to be complete — if you want to read the briefs, they are largely available on Pacer.  So, unless the Court asks for further briefing or an additional hearing either of which seem unlikely, the Court will consider the evidence and the parties’ post-trial papers, and then write an opinion deciding the inequitable conduct issues.  There is not any way to accurately predict when the opinion will issue.  The timing is governed by numerous factors, including the complexity of the case and the size of the Court’s current docket. 

Additionally, the parties have filed other motions which the Court will also have to decide.  For example, Trading Technologies ("TT") filed a motion for a protective order sealing certain evidence that was produced as "Highly Confidential," but which was put into evidence and used without immediate restriction or objection, as to confidentiality, during the public trial.  I will keep you updated as the Court issues any decisions regarding inequitable conduct or any other issues in the case.

Click here to read much more about this case in the Blog’s archives.

Trading Technologies v. eSpeed: Inequitable Conduct Update

Posted in Trial

Trading Techs. Int’l, Inc. v. eSpeed, Inc., No. 04 C 5312, Min. Order (N.D. Ill. Feb. 20, 2008) (Moran, Sen. J.).*

Judge Moran is scheduled to begin a two-day inequitable conduct bench trial this morning, and everything appears to be ready.  The deposition designations, exhibit lists and motions in limine have all been filed.  The eSpeed defendants have also filed motions to preclude Trading Technologies’ counsel from testifying and to enforce eSpeed’s understanding  of a stipulation (not surprisingly, the parties disagree as to what was stipulated) regarding the critical date.

Trial is scheduled to begin this morning at 10:30 am CDT.  Unfortunately, client obligations will prevent me from attending.  But I will continue to keep you updated based upon the Court’s rulings.

Click here to read much more about this case in the Blog’s archives.

Trading Technologies v. eSpeed: Inequitable Conduct Hearing Scheduled

Posted in Legal News

Trading Techs. Int’l, Inc. v. eSpeed, Inc., No. 04 C 5312, Min. Order (N.D. Ill. Feb. 20, 2008) (Moran, Sen. J.).*

Judge Moran scheduled a two-day inequitable conduct hearing Wednesday and Thursday, April 2 and 3, thereby granting by implication defendant eSpeed’s motion for such a hearing.  The Court also set a March 21 status hearing to discuss witness and privilege issues, presumably related to the inequitable conduct hearing.  So, there is at least one more round of argument and possibly briefing before the Court’s judgment is complete and final.  I hope to attend the inequitable conduct hearing and will blog about it if I do.

Click here to read much more about this case in the Blog’s archives.