Federal Circuit Affirms Inequitable Conduct Determination Under Therasense 'But For' Exception And Reaffirms Significance Of Rohm & Haas

Today, the Federal Circuit upheld the District Court's inequitable conduct verdict based on the submission of false affidavits to the United States Patent & Trademark Office ("PTO"). Intellect Wireless, Inc. v. HTC Corp., 2012-1658. In its precedential opinion, the Federal Circuit (Moore*, Prost, & O'Malley) handed down its first decision that affirmed a finding of materiality under the exception to the "but for" standard created in its pioneering opinion in Therasense, Inc. v. Becton, Dickinson & Co., 649 F.3d 1276 (Fed. Cir. 2011) (en banc). The Federal Circuit also stated that the submission of a false declaration to the PTO alone can be enough to show intent to deceive under the "single most reasonable inference" standard. Further, thirty years after it decided Rohm & Haas Co. v. Crystal Chem. Co., 722 F.2d 1556 (Fed. Cir. 1983), the Federal Circuit affirmed that it remains the framework for curing inequitable conduct before the PTO.

Background

This case stemmed from the Northern District of Illinois, where Intellect Wireless sued HTC and numerous other defendants for allegedly infringing patents for sending images and caller ID information over a wireless network. After summary judgment briefing, the District Court bifurcated the case ordering a bench trial on the limited issue of inequitable conduct.

During prosecution of the patents-in-suit and other patents in the family, the inventor and founder of Intellect Wireless, Daniel Henderson, submitted a Rule 131 declaration claiming that he had actual reduction to practice of his invention (i.e., that he built a working prototype of a mobile device that could send or receive messages and provide caller ID). A short time later, Henderson submitted additional declarations in the same and other related applications continuing to swear that he built a working prototype of his invention. These declarations were necessary to overcome prior art that was cited by the PTO. During trial, it was revealed that Henderson never actually built a prototype that could wirelessly send or receive images or caller ID as he swore in his declarations to the PTO.

Materiality

Given that Henderson never actually reduced his invention to practice, the Federal Circuit determined that "[i]t is undisputed that Mr. Henderson's original declaration was unmistakably false." Intellect, slip op. at 5. The Federal Circuit went on to hold that an unmistakably false declaration "alone establishes materiality." Id. Thus, the...