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for the Southern District of New York

Court Invalidates Patent Based on Patent Counsel's Inequitable Conduct

In a September 30, 2013 ruling, Judge Laura Taylor Swain invalidated plaintiff Worldwide Home Products, Inc.'s patent on the ground of inequitable conduct, and dismissed plaintiff's infringement action against Bed, Bath and Beyond, Inc. and Cohesion Products Inc.  The patent-in-suit relates to a clothing hanger having two configurations.  During the prosecution of the application that matured into the patent-in-suit, the plaintiff's patent lawyer submitted to the PTO pages from a website of another product that it deemed relevant to the claimed invention.  The website pages, however, only had low resolution images of the product, which made it difficult to distinguish particular product features.  The plaintiff's patent counsel made representations to the patent examiner about what the web pages showed about the product, and on the basis of those representations, the examiner allowed the application.  Unbeknownst to the PTO, however, the plaintiff's attorney had an actual sample of the product and high resolution photographs of the product that had been supplied by the defendants' counsel.  The actual product and the high resolution photographs showed that plaitniff's patent counsel's representations to the PTO were untrue.  Patent counsel claimed that he did  not supply the product or high resolution photographs to the PTO because they were undated, so he could not tell whether or not they were prior art.

A threshold issue for Judge Swain in determining the defendants' motion for summary judgment of invalidity based on inequitable conduct was the admissibility of the report and testimony of defendants' expert witness, William Poms, n former patent examiner, that that plaintiff's patent counsel had committed inequitable conduct.  The plaintiff argued that Poms' testimony was "not properly admissible under Federal Rule of Evidence 702 in that it inaccurately informs the Court of the law and usurps the court's and jury's roles in determining the law and facts of" the case.  The Court rejected the challenge, ruling that "Mr. Poms is qualified as an expert in the patent prosecution process, having served as both a PTO examiner and a prosecuting attorney.  He has based his opinions on the factual record before the Court, and has reliably applied his knowledge of the facts and the law."

With regard to the inequitable conduct defense, Judge Swain applied the Federal Circuit's heightened standard from the Therasense case that "a defendant must prove by 'clear and convincing evidence' that the applicant 'knew of the reference, knew it was material, and made a deliberate decision to withhold it.'"  Judge Swain found that the materiality of the withheld materials was not disputed by the parties.  With regard to plaintiff's deliberate intent to deceive, the Court found "that the only reasonable inference to be drawn from the undisputed facts is that [plaintiff's patent counsel] intended to deceive the PTO about a reference he knew was material and that he in fact did so."  The Court further concluded that counsel's "proffer as to his belief that he had no legal obligation to disclose the physical hangers and the high-resolution photographs does not raise any triable issue of facts as to the existence of any proper justification for his submission of deceptive information to the PTO examiner."  Judge Swain closed her decision by writing that "Defendants may make any available motion for attorney's fees within thirty (30) days after the entry of judgment."

In an order in another case before Judge Swain involving the same patent, the Court sua sponte dismissed the action, finding that inequitable "'conduct regarding any single claim renders the entire patent unenforceable.'"
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