October 2012

Spotlight Info

In Outside the Box Innovations, LLC v. Travel Caddy, Inc., No. 09-1171 (Fed. Cir. Sept. 21, 2012), the Federal Circuit, inter alia, reversed and remanded the district court’s judgment of unenforceability based on inequitable conduct.  The district court held two related patents assigned to Travel Caddy, Inc. (“Travel Caddy”) were unenforceable due to inequitable conduct, because Travel Caddy failed to disclose the patent litigation of the parent patent during the prosecution of the continuation patent and because Travel Caddy incorrectly claimed “small entity” status during prosecution.  As to the first point, the Federal Circuit found neither but-for materiality nor specific intent to deceive the examiner, because no information relevant to the patentability of the continuation application had been provided in the litigation of the parent patent while the application was pending.  Second, although Travel Caddy, with fewer than 500 employees, met the definition of small entity, it also had a sales agreement with a larger distributor, which had more than 500 employees.  The Court concluded that even if a false assertion of small entity status were per se material, there was no clear and convincing evidence that anyone involved in the prosecution knew about the agreement and deliberately withheld that information in order to pay small entity fees.  See this month’s edition of Last Month at the Federal Circuit for a full summary of this decision.