Network Signatures, Inc. v. State Farm Mutual Automobile Insurance
731 F.3d 1239
Fed. Cir.2013Background
- The Navy-owned U.S. Patent No. 5,511,122 (the '122 patent) on Intermediate Network Authentication lapsed for nonpayment of the 7.5-year maintenance fee (effective April 23, 2004).
- Two weeks after lapse, Network Signatures inquired about licensing; NRL petitioned the PTO to accept delayed payment of the fee and the petition was granted.
- The '122 patent was licensed to Network Signatures following the PTO’s approval of delayed payment.
- Network Signatures sued State Farm for infringement; State Farm moved for summary judgment of inequitable conduct based on Karasek’s alleged misrepresentation that the delay was unintentional.
- The district court granted summary judgment of inequitable conduct and held the patent unenforceable; the court’s ruling was appealed.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Was the delay unintentional and material to revival? | Network Signatures argues it was a mistake of fact; disclosure would have shown ongoing commercial interest and would likely have led to denial of revival. | State Farm contends the information was material and Karasek intended to deceive the PTO by withholding it. | Not established; court reversed on inequitable conduct and remanded. |
| Did Karasek have the requisite intent to deceive the PTO? | Network Signatures contends the evidence supports an intent to deceive due to withholding information. | State Farm contends there was deliberate concealment to mislead the PTO. | Remanded for merits trial on intent; not decided at summary judgment. |
Key Cases Cited
- Therasense, Inc. v. Becton, Dickinson & Co., 649 F.3d 1276 (Fed.Cir.2011) (established clear-and-convincing standard for intent and materiality in inequitable conduct)
- In re Rosuvastatin Calcium Patent Litig., 703 F.3d 511 (Fed.Cir.2012) (requires separate proof of materiality and intent; applies clear-and-convincing standard)
- Laerdal Med. Corp. v. Ambu, Inc., 877 F. Supp. 255 (D. Md. 1995) (reaffirmed deference to PTO proceedings on procedural issues)
- Burlington Industries, Inc. v. Dayco Corp., 849 F.2d 1418 (Fed.Cir. 1988) (summary judgment on inequitable conduct should be rare and scrutinized)
- In re Maldague, 10 U.S.P.Q.2d 1477 (Comm'r Pat. 1988) (mistake-of-fact theory; highlights limitations of post-decision information)
- Aventis Pharms. S.A. v. Hospira, Inc., 675 F.3d 1324 (Fed.Cir. 2012) (discusses standards for materiality in inequitable conduct)