305 F. Supp. 3d 563
D. Del.2018Background
- Evonik filed three overlapping requests: (1) informal request to find Materia engaged in inequitable conduct re: the '590 patent, (2) motions to set aside the jury's no-willfulness verdict and to find pre- and post-verdict willfulness on summary judgment, and (3) a motion for enhanced damages under 35 U.S.C. § 284.
- Jury trial (Jan 2017) resulted in Evonik prevailing on invalidity counterclaims and receiving damages for infringement of the '528 patent; jury found no willfulness. Court later granted summary judgment (Aug 2017) for Evonik on Materia's indefiniteness counterclaim and entered judgment.
- Evonik alleged four bases for inequitable conduct: nondisclosure of Materia’s own '125 patent (alleged but-for prior art), nondisclosure of alleged derivation by Nolan, failure to disclose factual bases for preliminary interference motions, and settlement of interferences to conceal information.
- Court analyzed applicable burdens post-Octane Fitness and concluded Therasense's clear-and-convincing standard for inequitable conduct still applies even when inequitable conduct is asserted in support of a § 285 fee request.
- On the merits, the court found (a) it could not relitigate the derivation fact because the jury’s verdict on willfulness foreclosed that finding, (b) evidence did not support a single reasonable inference of intent to deceive (Trimmer and Warzel testimony did not establish deliberate deception), and (c) settlement of the interferences did not constitute egregious misconduct.
- Court denied Evonik’s requests to amend the judgment or grant summary judgment on pre- or post-verdict willfulness, and denied enhanced damages because willfulness was not established.
Issues
| Issue | Evonik's Argument | Materia's Argument | Held |
|---|---|---|---|
| Whether Materia committed inequitable conduct in prosecuting the '590 patent | Materia withheld the '125 patent and other Boulder/interference materials and settled to conceal derivation and bases for motions; these were but‑for material and demonstrate intent to deceive | No deliberate intent to deceive; nondisclosures were inadvertent or unknown to responsible actors; derivation was rejected by jury verdict | Denied: Evonik failed to prove (by clear and convincing evidence) materiality plus specific intent to deceive; inequitable conduct not shown |
| Proper burden of proof for inequitable conduct when used to support a § 285 fee request | Post-Octane: preponderance should apply to § 285/exceptionality context | Therasense’s clear-and-convincing standard remains required for inequitable conduct findings | Clear and convincing evidence required for inequitable conduct; court applies Therasense standard |
| Whether the jury’s no-willfulness verdict should be set aside / summary judgment finding of pre-verdict willfulness | Jury was tainted by admission of evidence that Materia later believed '528 invalid; Evonik sought alteration and summary judgment on willfulness | Jury reasonably could credit Trimmer’s testimony that Materia did not appreciate the patent as adverse until later; credibility for jury | Denied: court will not disturb jury factfinding; Halo does not limit the relevant temporal window as Evonik urges |
| Whether Materia’s post-verdict infringement (until court’s indefiniteness ruling) was willful and supports enhanced damages | Continued sales after verdict show culpable/post-verdict willfulness and warrant enhanced damages | Materia ceased sales upon court’s indefiniteness ruling; no earlier adjudicated invalidity so post-verdict conduct not willful | Denied: insufficient evidence of post-verdict willfulness; without willfulness, enhanced damages not warranted |
Key Cases Cited
- Therasense, Inc. v. Becton, Dickinson & Co., 649 F.3d 1276 (Fed. Cir.) (establishes clear-and-convincing standard and specific‑intent requirement for inequitable conduct)
- Octane Fitness, LLC v. Icon Health & Fitness, Inc., 134 S. Ct. 1749 (U.S.) (standard for finding an "exceptional" case under § 285 governed by preponderance for fee awards)
- Halo Electronics, Inc. v. Pulse Electronics, Inc., 136 S. Ct. 1923 (U.S.) (overrules Seagate; willfulness inquiry is discretionary and centers on actor’s subjective state of mind)
- Jurgens v. CBK, Ltd., 80 F.3d 1566 (Fed. Cir.) (enhanced damages require culpability; inequitable litigation conduct alone does not substitute for willful infringement)
- Leviton Mfg. Co. v. Universal Sec. Instruments, Inc., 606 F.3d 1353 (Fed. Cir.) (inequitable conduct can support a finding of an exceptional case under § 285)