Simple knowledge of a prior art reference not disclosed to the PTO is not sufficient to plead inequitable conduct

Graphic Packaging International sued C.W. Zumbiel Co. for patent infringement related to a number of cardboard carton packages.  As part of its defense,  CW argued that one of the patents, U.S. Pat. No. 7,134,551, was not enforceable due to GPI's inequitable conduct in prosecuting the '551 Patent with the Patent and Trademark Office.  Specifically, GPI's counsel was aware of certain prior art references, but did not tell the PTO about them.

CW's counterclaim included relatively detailed allegations, including a claim chart, listing how 2 of the 3 the withheld references impacted the patentability of the '551 Patent.  GPI responded by asking the Court to dismiss the counterclaim (and strike certain allegations).

Inequitable conduct pleading requirements

While a claim for relief must only contain a "short and plain statement of the claim showing that the pleader is entitled to relief," inequitable conduct claims must satisfy Rule 9(b)'s heightened pleading requirement.  The Court explained the law:

In [Exergen v. Wal-Mart Stores, Inc., 575 F.3d 1312 (Fed. Cir. 2009)], the U.S. Court of Appeals for the Federal Circuit directed  that,  “in  pleading  inequitable conduct  in  patent cases, [Federal  Rule  of Civil Procedure] 9(b) requires identification of the specific who, what, when, where, and how of the material misrepresentation or omission committed before the PTO.”  575 F.3d at 1327. In addition, the Exergen Court identified the pleading requirements for the “conditions of mind” relevant to an inequitable conduct claim, i.e., “(1) knowledge of the withheld material information  or  of the falsity  of the material misrepresentation, and (2)  specific intent to deceive the PTO.”  Id. While knowledge and intent may be averred generally, according to the Federal Circuit, pleadings must allege sufficient underlying facts from which a court may reasonably infer that a party acted with the requisite state of mind.  Id

CW's allegations of inequitable conduct related to 3 prior art references not disclosed to the PTO during prosecution.  CW's claim chart only discussed 2 of those references.  As to the third, the Court found that CW had not sufficiently plead which claim limitations the withheld reference concerned, where in the withheld reference the material information was located, and why the withheld reference was material. 

As to the other 2 references, which included a relatively detailed claim chart, the Court still found the allegations fell short because they did not give rise to a reasonable inference of scienter.

The Federal Circuit makes clear in Exergen that a reasonable inference of scienter arises only when there are factual allegations which particularly point out an individual who owed a duty of disclosure to the PTO, who knew the specific information in the reference that is alleged to be material, and who did not disclose the specific information to the PTO. 575 F.3d at 1330.  Defendant’s allegations do point to three individuals who listed the ’671 Publication and the ’991 Patent on various IDSs submitted to the PTO. (Doc. No. 55, ¶¶ 64-66, 68, 72, 74-75, 76.)  These allegations suggest that these three individuals were aware of the ’671 Publication  and the  ’991 Patent.  That is  not enough,  however.  It  is  not knowledge of a reference but rather knowledge of the material information in the reference that must be averred.  Because a “reference many be many pages long, and its various teachings may be relevant to different applications for different reasons,” the Court “cannot assume that an individual, who generally knew that a reference existed, also knew of the specific material information contained in that reference.” 575 F.3d at 1330 (emphasis in original).  Further, the “mere fact that an applicant disclosed a reference during prosecution of one application, but did not disclose it  during  prosecution of a  related  application, is insufficient to meet the threshold level of deceptive intent required to support an allegation of inequitable conduct.”  Id. at 1331.

(underlined emphasis supplied by the Court, bold emphasis supplied by me).  The closest CW came was the allegation that one of the prosecuting patent attorneys discussed one of the withheld references in response to an office action.  But this still didn't cut it:

One can draw more inferences from this allegation than from a bare recitation of omission from an  IDS,  but not many  more.  Specific  allegations  identifying  the material  information contained in a reference is needed, and none are averred here. Defendant does not identify the specific information from the ’991 Patent that was  “discussed.”  Thus, Defendant’s allegations are missing a key pleading requirement for deceptive intent.

Counterclaim dismissed.

Striking allegations from the counterclaim

GPI also asked the court to strike: (1) all allegations related to one of the withheld references because it was not actually prior art; and (2) certain affirmative defenses for failing to satisfy heightened pleading.  The Court dispensed with these quickly.

As to the first argument, the Court punted, stating that determining the reference date for an international application (the withheld reference) was "a tricky thing" and needn't be handled now.  As to the second, the Eleventh Circuit has not determined whether or not heightened pleading applied to affirmative defenses and there was split in this circuit.  Regardless, the allegations throughout the counterclaim made up for whatever shortcoming GPI complained of.  

Motion to strike denied.
Thanks Docket Navigator for bringing this case to my attention.

Graphic Packaging International, Inc. v. C.W. Zumbiel Co., slip op., Case No. 3:10-cv-891 (M.D. Fla. Sept. 12, 2011)(J. Dalton, Jr.)