These are cross-appeals from decisions of the United States District Court for the Northern District of Illinois,
BACKGROUND
A. Sweet’s Invention
The Sweet patent is directed to a direct writing signal recording system which writes on a record medium by projecting a stream of writing fluid in the form of a succession of uniformly spaced droplets. The droplets are charged electrostatically in accordance with instantaneous signal values [independent of one another] and then deflected electrostatically in accordance with the charges carried by the droplets.
U.S.Pat. No. 3, 596, 275 Abstract; see col. 1.
A complete description of Sweet’s patented invention and other relevant facts are set forth in the opinions of the district court in this case and in another case relating to the same patent.
Mead Digital Systems, Inc. v. A.B. Dick Co.,
B. Pertinent Prior Art
1.
Waage article
(1956). This reference states that a “uniform succession of water droplets could be produced,” which are then deflected in an “electrostatic field in a manner analogous to deflection of electrons in a cathode ray tube.”
Mead,
2.
Magarvey articles.
Two articles based on studies by Magarvey with Taylor (M-T) (1956) and Magarvey with Blackford (M-B) (1962) (collectively, the Magarvey articles).
Mead,
3.
Winston patent
(No. 3,060,429, issued Oct. 1962). The reference discloses a recorder in which the ink drops were charged uniformly and. shot through a deflecting field of varying electrical magnitudes. Winston “employed an attractive electrostatic force ... to draw the ink droplets from the nozzle.”
Mead,
4. Hendricks. An article cited by the Sweet patent examiner in 1970, not otherwise relevant.
5. Jacob. A patent cited by the Sweet patent examiner in 1970, not otherwise relevant.
C. Sweet Prosecution
Funded by an Army Signal Corps contract in the early 1960’s, Sweet developed a technique for selective charging and deflection of individual ink droplets for an oscillograph,
Sweet entered into a license with Minneapolis-Honeywell, which, in accordance with the agreement, prosecuted Sweet’s patent application.
4
Lockwood Burton was Honeywell’s in-house counsel prosecuting the Sweet application.
Sweet’s application was filed on July 31, 1963, SN 298,996.
At least by late 1963 or early 1964, Sweet knew of the Magarvey articles.
Id.
In March, 1964, Sweet published a report еntitled “High Frequency Oscillography with Electrostatically Deflected Ink Jets,” listing as references the Magarvey articles and the Waage article.
Id.; see Mead,
Before the PTO acted on the application, Honeywell filed a continuation-in-part (CIP) application on March 25, 1964, No. 354,659, which eventually matured into the Sweet patent.
In September, 1964, Sweet submitted to Review of Scientific Instruments an article in which he stated that, “[rjecently, Magarvey and Blackford ... have reported on techniques for forming, charging, and deflecting water drops, using methods similar to those described here.”
In late 1965, the firm of Flehr and Swain assumed responsibility for prosecution of Sweet’s application.
On April 4, 1967, the patent examiner rejected numerous claims under 35 U.S.C. §§ 102 and 103, but did not cite the Magarvey articles or Waage article. In response, on June 28, Sweet amended several of the claims and traversed the examiner’s rejections on several of the others. Also on June 28, Sweet copied claims 32-42 from a patent, Lewis et al. (and later copied claims *1395 43-48), and filed a Rеquest for Declaration of Interference. In October of 1967, the examiner wrote attorney Flehr that “claims 1-31 are allowed.”
An interference was declared (No. 96,-185), at which time the prosecution of the CIP application was suspended. During the interference proceedings, Flehr submitted numerous documents, including the 1964 Sweet report and subsequent Sweet article that cited the Magarvey articles, to support Sweet’s right to make the counts.
In April of 1970, Sweet and Flehr corresponded on the claims remaining in the application.
Sweet amended his application in June of 1970. Claim 19 was amended to distinguish from Waage, but Flehr did not cite Waage to the examiner.
Id.
At the same time, Sweet cancelled the copied claims, substituted claims 49 and 50 for 14 and 15, and added new claims 51-53. The examiner issued an office action in July of 1970, rejecting claims 1-4, 6-9, 16, 17, 19, 25, 30, 31, and nеw claims 49, 51, and 52 as anticipated by or rendered obvious from M-B, M-T, and Hendricks, and rejected claims 50 and 53 for obviousness from the M-B reference in view of Jacob.
See
On October 5, 1970, Sweet cancelled rejected claim 16 (the broadest claim), substituted a new claim for claim 19, and amended the remaining claims, arguing,
inter alia,
that the publications cited did not anticipate or render obvious certain features of Sweet’s invention. In traversing the examiner’s rеjections, Flehr referred to the Hendricks article as follows: “The Hendricks publication in Journal of Colloid Science discloses apparatus for forming a jet spray which is somewhat similar to what is disclosed in Winston ... previously cited by the Examiner.”
See
■ On October 9, 1970, the examiner and Flehr held a telephone conference in which an amendment to a сlaim was discussed, and Flehr then filed a supplemental amendment. The Notice of Allowance issued January 18, 1971, and the Sweet patent issued July 27, 1971, with 33 claims.
D. District Court Proceedings
On the issue of inequitable conduct, the district court was primarily concerned with Sweet’s failure to bring to the attention of the examiner the Magarvey articles. The court reviewed the evidence establishing the dates of Sweet’s knowledge of the Magarvey articles, the evidence (both his correspondence and his own articles) of his own opinion of their importance, his failure to draw the Magarvеy articles to the attention of the examiner, his actions on his claims made in response to the examiner’s office actions after the examiner discovered the Magarvey articles, and, as circumstantial evidence, his actions and statements to the examiner with respect to other references.
The court interpreted Sweet’s 1964 statement that the M-B article described “methods similar to those described here” as characterizing that reference as highly relevant to his own work on ink-jet recorders.
The court declined to base its holding of inequitable conduct solely on Sweet’s withholding of the Waage article or on the Winston patent (or combination), although so argued by Burroughs. However, the court interpreted Sweet’s conduct with respect to those references as evidence going to the issue.
The court found that the failure to cite Waage did not rise to a high level of materiality because the
Mead
court had determined that Waage wаs either more remote or cumulative to the prior art known by the examiner. Despite the lack of significant materiality, the district court found opprobrious Flehr’s failure to cite Waage in light of Sweet’s reference to the article in a letter to him as “the closest prior art that I am aware of.”
Regarding the Winston patent, the district court explained that evidence of intent to deceive or mislead the examiner was clear from the amendment filed in response to the examiner’s July of 1970 rejection of claims. The district court stated that
[i]n the context of Sweet’s response that was an affirmatively misleading representation, for Winston disclosed a single file of uniform drops — and the clearly intended implication of the response was that Sweet’s use of a single file of drops distinguished it from the prior art because the prior art had not disclosed such a use. Nothing in the response, with its offhand earlier reference to Winston, 5 pointed the Examiner toward a fresh look at Winston which would have disclosed the misleading character of the distinction asserted by Sweet.
ANALYSIS
The precise issue is whether nondisclosure by an applicant during prosecution can be considered inequitable conduct sufficient to render the issued patent unenforceable where the nondisclosure was of known prior art references on which the examiner (after independently discovering the references) rejected claims previously allowed, most of which were then allowed after amendment.
Much has been written in this court about the duty of candor patent applicants and their counsel are required to maintain in their relationship with the PTO, the violation of which constitutes inequitable conduct resulting in unenforceability of a patent.
Driscoll v. Cebalo,
*1397 A. Materiality
One of the standards identified by this court as appropriate to determine materiality is Rule 56(a), 37 C.F.R. § 1.56(a).
See In re Jerabek,
Dick argues that the Magarvey articles were immaterial because Sweet considered them irrelevant. The relevance of the Magarvey articles to Sweet’s invention might once have been disputed. They did not disclose a recording function for the method and device which is an object of Sweet’s invention. However, they describe induction charging of individual water drops (sometimes with blue dye added) produced at a vibrating nozzle and an electrode for electrostatically deflecting the charged drops as a function of the charge of the drops. As Sweet himself stated in 1963 to Burton, “the most important part of the system is that portion that forms, charges, and projects the ink droplets.”
Despite the possibility оf good faith dispute on the aptness of the Magarvey articles as references, Sweet indisputably knew of the Magarvey articles throughout most, if not all, of the prosecution of his CIP application. He stated in 1964 that the M-B article described “methods similar to those described” by himself at that time. Moreover, the Magarvey articles describe a device and methodology very like “the most important part of the system.” The examiner confirmed the materiality of the Magarvey articles when, in 1970, he rejected fourteen claims allowed in 1967 before he independently discovered the Magarvey articles.
Dick also asserts that the Magarvey articles did not render unpatentable the claims earlier allowed but later rejected and that the previously allowed claims “were patentable over Magarvey all along.” However, the test for materiality is not whether there is anticipation or obviousness but, rather, what a “reasonable examiner would consider ... important in deciding whether to allow the application to issue as a patent.”
Dick invokes
Kimberly-Clark Corp. v. Johnson & Johnson,
Kimberly-Clark Corp.
bears no resemblance to this case except for the superficial similarity of the issue of the effect of nondisclosure on the court’s determination of inequitable conduct. Notably dissimilar is the effect of nondisclosure on the claims in the application. In
Kimberly-Clark Corp.,
the nondisclosure of prior art was “material only to abandoned claims long since cancelled during prosecution aftеr being rejected by the examiner as unpatent
*1398
able for reasons not involving the uncited prior art.”
Although not directly on point,
Driscoll v. Cébalo, supra,
is more nearly analogous. Dick attempts to distinguish
Driscoll
on the basis that, in that case, the uncited prior art would have rendered the claims invalid; whereas, here many claims rejected on the withheld Magarvey articles were later allowed after amendment. Such a (hypothetically final) rejection is merely a difference in degree from a rejection of claims subsequently allowed after amendment. Both rejections similarly reflect an examiner’s belief that a reference is material under Rule 56(a). In this case, as evidenced by the examiner’s actions after discovery of the Magarvey articles, it is beyond peradventure thаt the examiner would have considered them important. Sweet
cancelled
two claims in response. That the claims may be patentable over the withheld prior art, as argued by Dick, is not relevant. What is relevant is that, as the district court found, a reasonable examiner considered such prior art material under Rule 56(a) in deciding whether to allow the application.
See Driscoll,
We are unpersuaded by Dick’s argument that the 1970 claim amendments by Flehr were, as Flehr stated in his response at the time, to “more clearly bring out the novel features of applicant’s invention.” Lаnguage such as this is gratuitous and virtually meaningless, as an amendment for any other reason would lack purpose. Accordingly, we reject Dick’s assertion that the district court “had neither factual nor legal basis for its conclusion that the Magarvey prior art was highly material to those claims.”
B. Intent
A degree of materiality may be offset by a showing of subjective good faith on the part of the applicant. However, a determination of inequitable conduct will not be avoided if knowledge of materiality or gross negligence greatly outweighs the lack of dеceptive intent.
Argus Chemical Corp. v. Fibre Glass-Evercoat Co.,
In this case, there is unrebutted evidence of record that the Sweet application would have issued in 1967 but for the intervening interference, after which the examiner rejected fourteen of the claims previously allowed on the basis of the Magarvey articles. During the interference, Sweet, through Flehr, submitted as exhibits and relied upon the 1964 Sweet reрort and 1965 Sweet article that cited the Magarvey articles to support his case. We are not persuaded that from this submission, which implied a relationship between the Magarvey articles and the Sweet application, the district court drew an unsupported inference that Sweet and Flehr knew or should have known that the articles were material.
*1399 Dick argues that “the record shows that Sweet considered the Magarvey papers irrelevant to his invention, and nothing in the record suggests that Flehr felt otherwise.” To support this statement, Dick pоints to the three federal court opinions, cited above (Sixth Circuit, S.D.Ohio, and N.D.Illinois), in which the Sweet patent had been held not invalid over the prior art. We disagree with the arguments. Sweet’s own prior statements flatly contradict the first portion of the statement. With respect to Flehr’s “feelings,” the three court opinions are based on different records, and the issue Dick points to them as having decided, validity, cannot serve as a defense to inequitable conduct. We note that Flehr obtained Sweet’s report and article, which underscore the significance of the Magarvey articles, and proffered them during the interference. Dick’s assertion that “[n]ot a scintilla of evidence in this record suggests that Messrs. Sweet and Flehr had any conscious intent to do wrong” fails under the rule of Argus Chemical Corp., stated supra.
Dick further argues that citing Waage and the Magarvey articles in Sweet’s own 1964 Report and 1965 article (both brought to the attention of the Board of Interferences) “rebuts the notion that Sweet concealed any prior art.” However, we know of no support for the proposition that distribution “to the technical libraries of this сountry more than two years before the Patent Office first acted” on the Sweet application “negates the existence of mens rea.” If Sweet’s citation of the articles supports any inference, it is the inference of the district court to the effect that Sweet understood their importance to his invention. 7
The district court relied on Sweet’s conduct (i.e., Flehr’s failure to bring to the attention of the examiner the Waage article 8 ) and his mischaracterization of the Winston patent to support its finding of intent underlying the holding of inequitable conduct. However, because we are satisfied that the finding оf intent is otherwise well supported, we need not rely on these examples of Sweet’s conduct.
Unlike the circumstances in
Kimberly-Clark Corp.,
in which the “essential elements of materiality of [the references] and the intent of the patent solicitor are both exceedingly weak,”
C. Unfavorable Inferences from Failure to Testify
Twice in its opinion, the district court observed that neither Sweet nor his prosecution attorneys had testified at the trial, although Sweet was contractually committed to Dick (his assignee) to do so.
In view of the foregoing, we are satisfied that thе district court’s holding of inequitable conduct by Sweet before the PTO is supported by clear and convincing evidence.
Accordingly, the decision of the district court in No. 86-562 that the Sweet patent claims are unenforceable is affirmed. The appeal in No. 86-645 is moot. 11
AFFIRMED.
Notes
. The patent in suit (the Sweet patent) is U.S. Pat. No. 3,596,275 for a high-speed ink-jet recorder, issued to Richard Sweet on July 27, 1971, based on an application filed Mar. 25, 1964.
. The district court adopted wholesale many of the findings made by the Mead Digital Systems, Inc. district court. Where we refer to such a finding, appropriate cross-citations are made to “Mead."
. Another Magarvey reference, an article published in 1957, was found to be important by the district court,
. In May, 1966, Dick entered into an exclusive license with Sweet, subject to outstanding licenses.
. Claims 51-53, rejected on M-B or M-B with Jacob, were initially proposed in 1970, when prosecution was resumed after the interference was dissolved. Those claims are not relevant to the discussion of inequitable conduct in this case.
It is not dead certain whether the locution employed in the response was disingenuous or only careless (if the latter, note the authorities’ use оf "gross negligence” as satisfying the intent requirement of inequitable conduct). Hendricks may indeed have disclosed an apparatus "somewhat similar" to that of Winston. But in the phrase quoted in the first sentence of this Finding 43(b), the immediate antecedent of “which is somewhat similar" was "jet spray” and not "apparatus" — and the essence of the patent application practice is the precise use of language. Winston did not disclose a jet spray, and the single file of droplets it did disclose (as Sweet’s work did later) was the specific focus of the lawyer’s and Sweet’s substantive argument — advanced by them in their successful effort to distinguish Sweet’s work from the pri- or art.
. No evidence of record indicates that the examiner during prosecution was involved in the interference. However, the findings of the district court clearly suggest the contrary. The point was not contested by the parties on appeal.
. Also, the district court pointed out that "the PTO cannot realistically be thought of as the equivalent (say) of a small law office, in which notice to one person may fairly be deemed notice to all. It is not necessarily true that the PTO Examining Division will have access to proofs filed in the course of an interference.”
. Directly on point is
In re Clark,
While appellant may have believed that Stow et al. was not a relevant reference, the Patent and Trademark Office now has ample evidence from which to conclude that Stow et al. was known by Beckman to be highly relevant prior art. The duty to disclose relevant, material prior art under these circumstances, known to the applicant or his agents and not found by the examiner, is well established____ If appellant considered his claims sufficiently narrow to be clеar of the close Stow et al. reference, the examiner, and not he or "others skilled in this art," was the person to decide whether appellant’s original claims had been amended sufficiently to be patentable over Stow et al. We do not agree that appellant could, under the state of the law in 1956 or now, amend claims expressly to avoid a ... reference unknown to the examiner and justifiably consider there was no duty to bring that reference to the examiner’s attention.
. Even had the court drawn such inferences, it was not reversible error. Whеn a party knows of witnesses on a material issue and they are within his control to produce, if the party chooses to not call the witnesses, the fact finder may draw the inference that the testimony would have been unfavorable.
Chicago College of Osteopathic Medicine
v.
George A. Fuller Co.,
. Burton, although not a witness at trial, was deposed during discovery.
. Although the court found that Sweet’s conduct before the PTO rendered this case exceptional, “given the enormous amount of time spent in this litigation on substantive issues on which Dick and not Burroughs prevailed,”