228 F. Supp. 3d 1331
N.D. Ga.2017Background
- The dispute concerns U.S. Patent No. 6,175,655 (the ’655 patent), which expired when IMS failed to pay its 11.5‑year maintenance fee; IMS later went into bankruptcy and assigned the patent to MedFlex, owned by Maurice Bailey, which then assigned it to 3D Medical.
- Bailey filed a PTO online petition under 37 C.F.R. § 1.378(b) certifying the delay in payment was "unintentional," without personal knowledge of IMS’s reasons and without conducting any investigation; the PTO granted the petition the same day and reinstated the patent.
- Visage and Pro Medicus were later sued for infringement; they counterclaimed (and defended) asserting inequitable conduct, arguing Bailey’s certification was false and rendered the patent unenforceable.
- The sole legal question at summary judgment was whether Bailey’s certification amounted to inequitable conduct (a material misrepresentation made with specific intent to deceive the PTO).
- The district court found Bailey’s certification was a misrepresentation, was material because the PTO required that certification, and that the single most reasonable inference from Bailey’s conduct (certifying without knowledge or investigation) was specific intent to deceive; the court denied Counterclaim Defendants’ motion and granted Defendants’ cross‑motion.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Bailey’s certification that the delay was "unintentional" constitutes a material misrepresentation | Certification was proper use of PTO form and, like Network Signatures, use of the standard form does not prove inequitable conduct | The certification was false or at least made without knowledge; PTO required that statement, so it was material | Held material: certification was misrepresentation and satisfied "but for" materiality because PTO required the statement |
| Whether Bailey acted with specific intent to deceive the PTO | Bailey believed reinstatement was permitted based on the facts he understood; no intent to deceive | Bailey admitted no knowledge of IMS’s reasons and no investigation; certifying anyway supports an inference of intent to deceive | Held: specific intent inferred; the single most reasonable inference from the record is intent to deceive |
| Whether Network Signatures immunizes use of the PTO form from an inequitable conduct finding | Plaintiff: Network Signatures precludes a finding here because Bailey used the standard PTO form | Defendant: Network Signatures is limited and does not bar inequitable conduct where facts differ (e.g., lack of knowledge/investigation) | Held: Network Signatures not controlling; distinguished because NRL attorney had factual basis for certification whereas Bailey had none |
| Remedy: Whether inequitable conduct renders the patent unenforceable | N/A | N/A | Held: Patent unenforceable due to inequitable conduct; summary judgment for Defendants on this issue |
Key Cases Cited
- Therasense, Inc. v. Becton, Dickinson and Co., 649 F.3d 1276 (Fed. Cir. 2011) (establishes clear‑and‑convincing standard and elements for inequitable conduct)
- Network Signatures, Inc. v. State Farm Mut. Auto. Ins. Co., 731 F.3d 1239 (Fed. Cir. 2013) (use of standard PTO delayed‑payment form alone does not establish inequitable conduct)
- In re Rosuvastatin Calcium Patent Litig., 703 F.3d 511 (Fed. Cir. 2012) (discusses materiality and intent standards for inequitable conduct)
- Ulead Sys., Inc. v. Lex Comput. & Mgmt. Corp., 351 F.3d 1139 (Fed. Cir. 2003) (inequitable conduct doctrine applies to post‑issuance maintenance fee/payment misconduct)
- Aristocrat Techs. Australia Pty Ltd. v. Int’l Game Tech., 543 F.3d 657 (Fed. Cir. 2008) (procedural compliance can be irrelevant after issuance unless inequitable conduct is proven)