This is а patent infringement and antitrust case dealing with a unique ice cream product. Plaintiffs Dippin’ Dots, Inc. and Curt D. Jones (collectively “DDI”) appeal from the district court’s claim construction and summary judgment of noninfringement of U.S. Patent No. 5,126,156 (“the '156 patent”) and from the judgment following jury trial that all claims of that patent are obvious, that the patent is unenforceable due to inequitable conduct during prosecution, and that DDI violated the antitrust laws by asserting a patent that had been procured through fraud on the Patent Office. We affirm the judgments of noninfringement, obviousness, and un-enforceability, but reverse as to the antitrust counterclaim.
*1340 I. BACKGROUND
A. The Technology and Patent
The '156 patent, covering subject matter invented by plaintiff Jones and exclusively licensed to plaintiff Dippin’ Dots, is directed to a process for making a form of cryogenically prepared novelty ice cream product. Claim 1, the only independent claim, reads:
A method of preparing and storing a free-flowing, frozen alimentary dairy product, comprising the steps of:
[ (1) ] preparing an alimentary composition for freezing;
[ (2) ] dripping said alimentary composition into a freezing chamber;
[ (3) ] freezing said dripping alimentary composition into beads;
[ (4) ] storing said beads at a temperature at least as low as -20° F. so as to maintain said beads free-flowing for an extended period of time;
[ (5) ] bringing said beads to a temperature between substantially -10° F. and -20° F. prior to serving; and [ (6) ] serving said beads for consumption at a temperature between substantially -10° F. and -20° F. so that said beads are free flowing when served.
'156 patent col.6 11.41-57 (numbering added for reference). DDI has commercialized this process. The ice cream it produces, sold under the Dippin’ Dots brand, is known to patrons of amusement parks, stadiums, shopping malls, and the like.
The initial application that eventually issued as the '156 patent, filed on March 6, 1989, omitted the final “serving” step from Claim 1. The examiner rejected all of the claims as obvious in light of Canadian Patent No. 964,921, of Aref et al. DDI appealed the rejections to the Board of Patent Appeals and Interferences (“Board”), which affirmed the rejection. DDI then filed a continuation application, amending Claim 1 by adding the “serving” step. The examiner again rejected over the Aref reference, noting that “dependent on the food product being served,” it would be obvious to serve the product in a cold, free-flowing state. DDI then submitted a declaration pursuant to 37 C.F.R. § 1.132 in which it submitted evidence of the significant commercial success of its method. It argued that its commercial success should weigh against a finding of obviousness.
See Graham v. John Deere Co.,
B. The Festival Market Sales
Much of the debate in this case centers on the import of sales made at the Festival Market mall in Lexington, Kentucky, more than a year before DDI filed its patent application. Sales made more than one year before the patent’s priority date implicate the on-sale bar of 35 U.S.C. § 102(b). For the '156 patent, this critical date is March 6, 1988. Starting on July 24, 1987, Jones sold cryogenically-pre-pared, largely beaded ice cream at the Festival Market. During Jones’s time at Festival Market, which lasted at least until July 29th, оver 800 customers purchased his beaded ice cream and others received free samples. The customers were permitted to leave with the product and were not restricted by any kind of confidentiality agreement. Jones later testified that his main goal at the Festival Market was to “get ... test-marketing information” and not to further develop technical aspects of his product such as particular temperature ranges for storage and service.
It is undisputed that the Festival Market sales were never disclosed to the Pat *1341 ent and Trademark Office (“PTO”) during prosecution of the '156 patent. The declaration of commercial success which ultimately persuaded the examiner to grant the patent contained a sworn statement by Jones that “[t]he initial sales were in March of 1988,” which was on or after the critical date.
Jones testified that at Festival Market he only practiced the first three steps of the claimed method, not the storing, bringing, or serving steps. He testified that he considered the evidence of what had happened at Festival Market to be irrelevant to patentability. The attorney who prosecuted the '156 patent, Warren Schickli, testified that he considered the sales to have been experimental since the process as practiced at Festival Market could not be feasibly commercially exploited. He also testified that the Festival Market ice cream was not sold for “direct consumption” under the meaning of Claim 1, because the ice cream was too cold to eat comfortably when initially given to the consumer.
C. Prior Litigation
The controversy in this case began when several of DDI’s distributors severed their relationship, found alternative manufacturing sources, and entered into competition against DDL DDI initiated a series of patent infringement lawsuits against its new competitors in various judicial districts. In this appeal, the defendants fall into two primary cаtegories: the “manu-factoring parties” who make the competing ice cream product and the “distributing parties” who sell it to consumers.
1
The defendants counterclaimed for violation of § 2 of the Sherman Act due to DDI’s allegation of patent infringement based on a fraudulently acquired patent. This type of antitrust claim has become known as a
“Walker Process
” claim, named for the Supreme Court’s decision in
Walker Process Equipment, Inc. v. Food Machinery & Chemical Corp.,
After the pretrial proceedings in the Northern District of Georgia were completed, the case was remanded to the United States District Court for the Northern District of Texas. Judge Thrash, sitting by designation, continued to preside over the Northern District of Texas proceed *1342 ings. That court conducted a jury trial on the issues of invalidity, unenforceability, and antitrust violations by DDL By special verdict, the jury found that the sales by Jones prior to March 1988 could be asserted against the patent as prior art and that all claims of the '156 patent were invalid as obvious. The jury also found that both Jones and Schickli had, with intent to deceive, made material misrepresentations or omissions in violation of the duty of candor to the PTO. It also determined that defendants Mini Melts, Inc. and Frosty Bites Distribution had proven all required elements of their antitrust counterclaim, including the requisite fraud on the PTO. However, it found no antitrust damages, granting the counterclaim plaintiffs zero dollars in damages on their Sherman Act counterclaim. The district court denied DDLs motion for judgment notwithstanding the verdict (JMOL), finding that there was sufficient evidence for the jury to find all claims obvious and that DDI had withheld a material reference with the deceptive intent required for Walker Process liability. The district court then weighed that same evidence of intent and materiality itself and found the patent unenforceable due to inequitable conduct before the PTO. In its final judgment dated February 28, 2005, it awarded attorney fees under the Clayton Act to defendant Frosty Bites Distribution (“FBD”) in the amount of $676,675.46.
The defendants appealed to this court on March 25, 2005. After the notice of appeal was filed, the district court made two additional rulings. On August 4, 2005, it granted defendant Mosey’s motion for attorney fees under the Clayton Act, which had been outstanding at the time of the final judgment. On August 18, 2005, FBD moved for an amendment of the attorney fee order to add fees under 35 U.S.C. § 285, the pаtent statute’s fee-shifting provision. We deactivated the appeal while that motion was pending. On October 13, 2005, the district court granted FBD’s motion and awarded it an additional $504,158.16 in fees under § 285. On November 18, 2005, this court reactivated the appeal and set a briefing schedule. DDI’s opening brief included challenges to the August 4 and October 13 fee awards. A motions panel of this court ruled that, since DDI had failed to amend its March 25 notice of appeal to include references to the later district court orders, we lacked jurisdiction to hear DDLs challenge to those later orders. Dippin’ Dots v. Mosey, No. 05-1330, slip op. at 3 (Fed.Cir. May 1, 2006). DDI was directed to file a replаcement brief omitting the arguments held to be jurisdictionally barred. Id., slip op. at 4.
In its amended brief, DDI appeals the claim construction and summary judgment of noninfringement, the refusal to overturn the jury verdict of obviousness and liability under the antitrust laws, the finding of inequitable conduct, and the award of attorneys’ fees under the Clayton Act granted to FBD. We have jurisdiction under 28 U.S.C. § 1295(a)(1).
II. DISCUSSION
A. Claim Construction and Infringement
DDI challenges the summary judgment of noninfringement on the grounds that the district court 3 construed the claims of the '156 patent erroneously. Its primary arguments relate to the appropriate reach of the term “beads” in Claim 1, which the district court construed to mean “small frozen droplets ...- which have a smooth, *1343 spherical (round or ball shaped) appearance.” The district court’s construction also excluded processes which produce any “irregular or odd shaped particles such as ‘popcorn.’ ” The district court correctly found that the claim steps mentioning “beads” were limited to covering processes that produce beads and only beads. The accused process produces both spheres and irregular particles, so under this construction, the defendants do not infringe. DDI objects both to the definition of “beads” and to the district court’s refusal to use the word “comprising” to extend the coverage of the сlaim beyond a beads-only process. As to the definition of “beads,” the district court correctly noted that the written description specifically describes “beads” as having a “smooth, spherical appearance.” '156 patent col.5 11.22-23. Indeed, DDI argued to the Special Master before whom the construction issue was originally presented that a “bead” was “a small round ball or round drop.” There is no error in the district court’s definition of this term.
As to DDI’s second argument, we acknowledge that the term “comprising” raises a presumption that the list of elements is nonexclusive.
See Genentech, Inc. v. Chiron Corp.,
DDI also objects to the district court’s definition of “free flowing,” but the court did not rely on that definition to support its summary judgment ruling.
Dippin’ Dots,
B. Obviousness
The case was transferred to the Northern District of Texas and tried to a jury, which found all claims of the '156 patent to be obvious. When reviewing a district court’s JMOL determination as to obviousness, “[tjhis court reviews a jury’s conclusions on obviousness, a question of law, without deference, and the underlying findings of fact, whether explicit or implicit within the verdict, for substantial evidence.”
LNP Eng’g Plastics, Inc. v. Miller Waste Mills, Inc.,
To find obviousness in light of the Festival Market sales requires two conclusions: first, those sales must have been in the prior art; second, the process practiced at Festival Market combined with any other relevant prior art must render the claims of the '156 patent obvious. Substаntial evidence existed for the jury to find the facts necessary to support both conclusions.
The first question is whether the sales at Festival Market constitute prior art that can be asserted against the '156 patent claims in an obviousness analysis. It is undisputed that those sales occurred before the patent’s critical date of March 6, 1988. Sales made before the critical date would render invalid any claims that they anticipate, but the defendants do not allege here that the Festival Market sales embodied every element of any claim of the '156 patent. Instead, they argue that the claims are obvious in view of the Festival Market sales combined with the prior art cited by the examiner during prosecution. Those sales may indeed be considered when determining whether the claims are invalid for obviousness. The public sale of goods produced by a process more than one year before a patent is filed places that process in the § 102(b) prior art.
See Invitrogen Corp. v. Biocrest Mfg.,
The secоnd question is whether the Festival Market sales, considered as prior art to the '156 patent, render its claims invalid for obviousness. We conclude that they do. The first three steps of the patented process (preparing, dripping, and freezing) were concededly practiced at Festival Market. The last two — bringing to a higher temperature and then serving at that temperature for direct consumption' — -were at least very closely approximated. No evidence of the exact temperature of any product served at Festival Market has been presented, but it would have been obvious in light of the activity there to measure that temperature and serve the product within an easily determined range of palatability. The fourth step, “storing” at a very cold temperature for an extended period of time, may not have been present, but extended cold storage was an obvious
*1345
elaboration on the Festival Market sales in order to distribute and retail the product. The motivation for DDI to make these trivial modifications is readily apparent from the problem to be solved. Someone of ordinary skill in the art of ice cream retailing, seeking to commercially develop the inventive kernel found at Festival Market, would immediately seek thе appropriate temperature ranges within which to store and serve the product.
See Alza,
The jury could reasonably have found that the secondary factor of commercial success advanced by Jones to obtain the '156 patent was obviated by the Festival Market sales. If the factors that led to DDI’s later commercial success were largely present at Festival Market, later changes to the process encompassed by the '156 patent could reasonably be seen as not improving the prior art’s commercial appeal much, if at all.
See J.T. Eaton & Co. v. Atlantic Paste & Glue Co.,
The factual underpinnings implicit in the jury’s verdict are supported by substantial evidence, and based on those facts, we affirm the judgment of obviousness.
C. Inequitable Conduct
We have stated that “[a] patent may be rendered unenforceable for inequitable conduct if an applicant, with intent to mislead or deceive the examiner, fails to disclose material information or submits materially false information to the PTO during prosecution.”
Digital Control Inc. v. The Charles Mach. Works,
The first prong of the inequitable conduct test, materiality, is clearly met here. As discussed
supra,
the Festival Market sales render the '156 patent invalid for obviousness. Had those sales been disclosed to the PTO, the patent may or may not have issued. At the very least, the existence of such sales рrior to the critical date is a matter that “a reasonable examiner would have considered ... important in deciding whether to allow the ... application.”
Dayco Prods., Inc. v. Total Containment, Inc.,
The question of deceptive intent is a more difficult one, but we find no clear error in the district court’s determination on this point. “ ‘Smoking gun’ evidence is not required in order to establish an intent to deceive.... Rather, this element of inequitable conduct[] must generally be inferred from the facts and circumstances surrounding the applicant’s overall conduсt.”
Paragon Podiatry Lab., Inc. v. ELM Labs. Inc.,
*1346 Absent explanation, the evidence of a knowing failure to disclose sales that bear all the earmarks of commercialization reasonably supports an inference that the inventor’s attorney intended to mislead the PTO. The concealment of sales information can be particularly egregious because, unlike the applicant’s failure to disclose, for example, a material patent reference, the examiner has no way of securing the information on his own.
Id.
at 1193. While DDI wholly neglected to disclose the Festival Market sales to the PTO, it enthusiastically touted sales made after the critical date as evidence of the commercial appeal of its process. That combination of action and omission permits an inference of the minimum, threshold level of intent required for inequitable conduct. The evidence to support a finding of intent may not be particularly strong here (a point we discuss further in Part II.D,
infra.)
However, the district court was permitted to balance the relatively weak evidence of intent together with the strong evidence that DDI’s omission was highly material to the issuance of the '156 patent and tо find that on balance, inequitable conduct had occurred.
4
Such a finding, as an exercise of the district court’s equitable powers, is within its discretion.
See Molins,
D. Walker Process Antitrust Claim
The defendants in this case counterclaimed against DDI for violation of § 2 of the Sherman Act, and the same jury that found the patent obvious found DDI liable on that counterclaim. Proof that a patentee has “obtainеd the patent by knowingly and willfully misrepresenting facts to the Patent Office ... [is] sufficient to strip [the patentee] of its exemption from the antitrust laws.”
Walker Process Equip., Inc. v. Food Mach. & Chem. Corp.,
The first barrier for a
Walker Process
claimant to clear is the requirement that the patent be obtained through actual fraud upon the PTO. This question is governed by Federаl Circuit law.
No-belpharma AB v. Implant Innovations, Inc.,
The heightened standard of materiality in a
Walker Process
case requires that the patent would not have issued but for the patent examiner’s justifiable reliance on the patentee’s misrepresentation or omission.
C.R. Bard,
Ultimately, the defendants’ fraud case here is built only upon DDI’s omission of the Festival Market sales from the prosecution record. While
Walker Process
intent may be inferred from the facts and circumstances of a case, “[a] mere failure to cite a reference to the PTO will not suffice.”
Nobelpharma,
Nobelpharma serves as a good example of the sort of facts that do prove Walker Process fraud by omission. In that case, the inventors had transmitted to their Swedish patent agent a draft patent application which included a citation to a book written by the patentee in 1977. 141 F.Bd at 1062. That book was eventually held to anticiрate the patent. Id. at 1072. The agent “deleted all reference to the 1977 Book from the patent application that was ultimately filed in Sweden” and then also failed to mention the book in the U.S. application that led to the patent at issue. Id. at 1062. When pressed on the issue at trial, the agent “could not explain, even in retrospect, why he deleted all reference to the 1977 Book.” Id. at 1072. We found that the evidence of actual deletion by the patent agent gave the jury reasonable ground to find intent to defraud by the patentees. Id.
There is no similarly strong evidence that the omission in this case was fraudulent. It might be argued that bеcause the omitted reference was so important to pat-entability, DDI must have known of its importance and must have made a conscious decision not to disclose it. That argument has some force, but to take it too far would be to- allow the high materiality of the omission to be balanced against a lesser showing of deceptive intent by the patentee. Weighing intent and materiality together is appropriate when assessing whether the patentee’s prosecution conduct was inequitable.
Molins,
DDI also argues that the antitrust judgment must be reversed because the jury was not presented with sufficient evidence of the definition of the relevant market. Fraudulent acquisition of the asserted. patent strips the
Walker Process
defendant
5
of its antitrust immunity, but that is the beginning, not the end, of the inquiry. The counterclaimant must also show the basic elements of an antitrust violation defined by the regional circuit’s law, including that the patentee’s behavior was directed to a relevant product market.
Unitherm Food Sys., Inc. v. Swift-Eckrich, Inc.,
E. Attorney Fees
With the judgment of antitrust liability reversed, the grant of attorney’s fees under § 4 of the Clayton Act must be vacated. As mentioned supra, a motions panel of this court has found that we lack jurisdiction to hear DDI’s challenge of that fee grant as to defendant Mosey. Dippin’ Dots v. Mosey, No. 05-1330, slip op. at 3 (Fed.Cir. May 1, 2006). However, our va-catur of fees is entirely derivative of our ruling on the merits, not based on an acceptance of DDI’s jurisdictionally barred direct challenge to the fee award. The vacatur therefore extends to all defendants, including Mosey. 7
DDI argued as a separate ground for reversal of the attorney fee award that a jury verdict indicating zero dollars in antitrust damages cannot support a Clayton Act fee award. Since the judgment of liability is reversed, we do not reach this argument.
The district court indicated that if it were to reduce its Clayton Act fee grant, it would increase the fees under the Patent Act to compensate. With the Clayton Act fee grant vacated, the district court may review the award of fees under the patent statute. On remand, the district court may determinе whether and to what extent fees under 35 U.S.C. § 285 are appropriate.
III. CONCLUSION
We affirm the findings of noninfringement, obviousness, and unenforceability due to inequitable conduct. We reverse the district court’s denial of JMOL as to the antitrust counterclaim, vacate the grants of attorneys’ fees under the Clayton Act, and remand for the district court to consider whether an additional fee award under the patent statute is available.
AFFIRMED-IN-PART, REVERSED-IN-PART, VACATED-IN-PART, AND REMANDED.
No costs.
Notes
. The manufacturing parties are Defendants Thomas Mosey, Dots of Fun, International Laser Expressions, Inc., Nicholas Angus, and Frosty Bites, Inc. (now known as Mini Melts, Inc.). Defendant Frosty Bites Distribution, its various local affiliates, and individuals such as founder Victor Bauer are the distributing parties. The issues in this case are not generally resolved in a manner unique to particular defendants, so we refer collectively to "the defendants” where appropriate.
. The district court also granted summary judgment in favor of the defendants as to claims of trade dress infringement,
id.
at 1374-75, and trade secret violations,
id.
at 1376. It granted summary judgment to the plaintiffs on a minor contract issue.
Id.
at 1378. These issues are not before us on appeal. The trade dress issue was appealed separately to the Eleventh Circuit, which affirmed.
Dippin' Dots, Inc. v. Frosty Bites Distrib.,
. As described supra, the claim construction and summary judgment phases of this litigation were handled by the United States District Court for the Northern District of Georgia. “The district court” as used in this section refers to that court.
. The district court characterized DDI’s intent to deceive as "of a high nature.’’ We disagree, but believe that in light of the high materiality of the nondisclosure, inequitable conduct can still be found here even though the evidence reveals less than an egregiously willful intent to deceive.
. Here that defendant is the plaintiff DDI, which is defending against a Walker Process counterclaim.
.
Unitherm
applied Tenth Circuit antitrust law.
Id.
(citing
United States v. AMR Corp.,
. Defendants move to strike the portions of DDI’s amended brief which argue that the fee awards should be vacated if DDI prevails on the merits. Br. of Mosey et al. at 1; Br. of Frosty Bites Distribution LLC at 1. Their objections are denied.