Failure To Expressly Negate A False Declaration Establishes Materiality And Raises A Strong Inference Of Intent For Inequitable Conduct

This article was written by Daniel S. Perry*

In Intellect Wireless, Inc. v. HTC Corp., No. 12-1658 (Fed. Cir. Oct. 9, 2013), the Federal Circuit affirmed the district court's judgment that U.S. Patent Nos. 7,266,186 ("the '186 patent") and 7,310,416 ("the '416 patent") asserted by Intellect Wireless, Inc. ("Intellect Wireless") were unenforceable due to inequitable conduct.

The '186 and '416 patents are directed to the wireless transmission of caller identification information. During prosecution, the sole inventor, Daniel Henderson, submitted a declaration under 37 C.F.R. § 1.131 ("Rule 131 declaration") to overcome a prior art reference, averring that the claimed invention was actually reduced to practice and demonstrated at a meeting in July 1993. The claimed invention was, however, never actually reduced to practice.

Henderson later filed a revised Rule 131 declaration. In this declaration, Henderson mentioned diligence from conception to the effective filing date, implying reliance upon constructive reduction to practice. Henderson's prosecuting attorney also informed the examiner that the revised declaration contained none of the actual reduction to practice elements. Yet, the revised declaration also described a "prototype now in the Smithsonian that was in development for a . . . demonstration" in July 1993 and a "product brochure and packing receipt," and expressly mentioned "actual reduction to practice" and "bringing the claimed subject matter to commercialization." Slip op. at 6 (citations omitted). Furthermore, to obtain claims in several related patents, Henderson submitted a declaration and a press release, both of which also indicated that he had built a device that could actually receive wireless transmissions.

Following a bench trial, the district court found the '186 and '416 patents unenforceable due to inequitable conduct. The district court concluded that HTC Corporation ("HTC") had proven the materiality prong because the Rule 131 declaration contained a false statement that was neither withdrawn, specifically called to the attention of the PTO, nor fully corrected. The district court also concluded that Henderson had acted with specific intent to deceive the PTO, finding that his explanations for the misrepresentations during prosecution of the asserted patents were not credible given the pattern of false and misleading statements regarding actual reduction to practice made during prosecution of related patents...