After Therasense, Knowledge Of A Reference's Materiality Does Not Prove An Intent To Deceive The PTO

In 1st Media, LLC v. Electronic Arts, Inc., No. 10-1435 (Fed. Cir. Sept. 13, 2012), the Federal Circuit reversed the district court's grant of DJ of inequitable conduct and the district court's finding that U.S. Patent No. 5,464,946 ("the '946 patent") is unenforceable.

1st Media, LLC ("1st Media") owns the '946 patent, which is directed to an entertainment system used in purchasing and storing multimedia karaoke information. The '946 patent names Dr. Scott Lewis as the inventor. Lewis's lawyer, Joseph Sawyer, filed and prosecuted the application that led to the '946 patent. While the '946 patent was pending, Sawyer prosecuted the following three patent applications for related inventions made by Lewis: International Patent Application No. PCT/US93/10930 ("the PCT application"); the application that became U.S. Patent No. 5,325,423 ("the '423 patent"); and the application that became U.S. Patent No. 5,564,001 ("the '001 patent"). During examination of the PCT application, a European patent examiner rejected it, citing as the closest prior art International Publication WO 90/01243 ("Bush"). While examining the application that led to the '423 patent, a U.S. examiner rejected several claims as anticipated by U.S. Patent No. 5,027,400 ("Baji"). During examination of the application that led to the '001 patent, a U.S. examiner rejected claim 1 as obvious in view of U.S. Patent No. 5,220,420 ("Hoarty"). During prosecution of the '946 patent, neither Lewis nor Sawyer ever disclosed the Bush, Baji, or Hoarty references (collectively "the three references") to the PTO, and the PTO did not consider the three references.

1st Media sued Electronic Arts, Inc. ("Electronic Arts") for infringement of the '946 patent. Electronic Arts asserted an inequitable conduct defense, based in part on 1st Media's failure to cite the three references, and counterclaimed for DJ of inequitable conduct.

At trial, Lewis and Sawyer both testified that they did not appreciate the materiality of the three references. Specifically, Lewis testified that "nondisclosure of the Bush reference was 'an oversight that got lost in the cracks at that time and wasn't a conscious decision not to report [it].'" Slip op. at 6 (alteration in original) (citation omitted). Sawyer testified that while he was prosecuting the '946 patent, he had newly set up a solo office out of his home, and his practice at that time was very active. Both Lewis and Sawyer further testified that the...