Federal Circuit Finds Material Withholdings and Misrepresentations to Support Inequitable Conduct

In Ohio Willow Wood Co. v. Alps South, LLC, the Federal Circuit found that Ohio Willow Wood had both withheld material information and made material representations during proceedings before the USPTO. Because the district court had granted summary judgment of no inequitable conduct in Ohio Willow Wood’s favor, the Federal Circuit vacated and remanded for the district court to assess the credibility of Ohio Willow’s witnesses on the issue of intent to deceive.

The Patents at Issue

The primary patent at issue was Ohio Willow Wood’s U.S. 5,830,237. As summarized by the Federal Circuit, the patent relates to “cushioning devices that go over the residual stumps of amputated limbs to make the use of prosthetics more comfortable.”

The Alleged Inequitable Conduct 

The alleged inequitable conduct arose during reexamination of the ’237 patent. The Federal Circuit explains the prosecution history in detail in a different part of its opinion, and emphasizes the following facts for the inequitable conduct inquiry:

OWW was only able to obtain issuance of the ’237 patent in the reexamination proceedings by arguing that the prior art lacked gel liners with no observable gel material on their exterior surfaces. …. In the second reexamination, OWW was only able to overcome the examiner’s final rejection in view of [a prior art advertisement for] the SSGL [prior art product] by convincing the [USPTO Board] that Mr. Comtesse [a developer of the SGGL product] was a highly interested witness and there was no evidence, as required by law, to corroborate his testimony that the SSGL was constructed using a Coolmax fabric [that would not exhibit bleed-through].

Material Information Withheld

Before the second reexamination proceeding even had begun, OWW had obtained evidence (including witness testimony, documents, and physical samples) that the prior art SSGL product exhibited “no bleed-through of the gel,” and/or was made with Coolmax fabric.

Additionally, although Ohio Willow Wood had told the USPTO Board that “there were no known examples of SSGL products from the relevant time period” and characterized them as a “ghost,” OWW knew that the manufacturer had filed a patent application on the product and that contemporaneous samples had been reviewed by Mr. Comtesse during concurrent litigation.

Thus, the Federal Circuit concluded:

[V]iewing the evidence in a light most favorable to Alps, we conclude that there is a genuine issue of fact regarding whether OWW withheld evidence from the PTO that was sufficient to corroborate Mr. Comtesse’s testimony.

Material Misrepresentations 

As summarized by the Federal Circuit, OWW asserted in its brief to the [USPTO Board], that “Mr. Comtesse admits that he is an interested party with respect to the outcome of this Reexamination and the related litigation” and that “Mr. Comtesse has admitted that he continues to receive royalties on the Socket Gel Liner products he helped develop for Silipos.”

However, according to the Federal Circuit:

Mr. Comtesse never admitted that he was interested in the outcome of the present dispute nor did he ever admit that he was receiving royalty payments at the time of his deposition in 2006. To the contrary, Mr. Comtesse’s testimony indicated that his relationship with Silipos ended in 1999 and that he had no personal stake in the outcome of the dispute between Alps and OWW….

Thus, the Federal Circuit also found that Ohio Willow Wood had made material misrepresentations regarding Mr. Comtesse’s alleged bias. Indeed, the court determined that statements by Ohio Willow Wood’s counsel “demonstrate that OWW’s counsel knew that the misrepresentations about Mr. Comtesse’s interest and inventorship would ‘affect issuance of the patent’ by triggering heightened scrutiny of his testimony” Citing Therasense, the court concluded:

[V]iewing the foregoing facts in a light most favorable to Alps, we find OWW’s misrepresentations to the BPAI tantamount to the filing of an unmistakably false affidavit.

Thus, the court found ample evidence that the “materiality” prong of inequitable conduct was satisfied.

Intent to Deceive

The Federal Circuit found that the knowing “misrepresentations and misleading statements that were directly refuted by credible evidence that OWW did not otherwise disclose” created “a genuine issue of material fact as to whether [Ohio Willow Wood’s counsel’s] conduct before the PTO was undertaken for the deliberate purpose of obtaining an otherwise unwarranted patent.” The court noted that Ohio Willow Wood’s unsuppoted, “subjective assertions of good faith” did not “outweigh the evidence of  deceptive intent on summary judgment.” The court explained

If OWW had simply withheld a single piece of information or made a single misrepresentation, this would be a different case. However, OWW withheld various pieces of material information and had no reasonable explanation for the several misrepresentations it made to the PTO. In total, the collective weight of this evidence supports our conclusion that the evidence would support a finding of intent that is the single most reasonable inference to be drawn from the evidence at this stage of the proceedings.

The Federal Circuit remanded to the district court “to determine if the inference of deceptive intent that we hold could be drawn when viewing the evidence in a light most favorable to Alps remains after  assessing the credibility of OWW’s witnesses.”

How Did OWW Prevail on Summary Judgment? 

After reviewing the Federal Circuit opinion, it is difficult to imagine why the district court granted summary judgment of no inequitable conduct. It appears that the district court misunderstood the basis of the USPTO Board decision, and so concluded that Ohio Willow Wood’s misconduct was not “material.”