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No Inequitable Conduct for Failing to Investigate and Disclose to the PTO a Competitor’s Unsubstantiated Claim of Prior Art

February 13, 2009

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Last Month at the Federal Circuit - March 2009

Judges: Rader (author), Friedman, Bryson

[Appealed from: D.N.J., Judge Brown]

In Rothman v. Target Corp., No. 08-1375 (Fed. Cir. Feb. 13, 2009), the Federal Circuit affirmed-in-part and reversed-in-part the district court’s denial of plaintiff Rothman’s JMOL motions. The Court affirmed the denial of JMOL for invalidity but reversed the denial of JMOL for unenforceability due to inequitable conduct.

U.S. Patent No. 6,855,029 (“the ’029 patent”) claims a nursing garment with a built-in nursing bra. After spending a few days thinking about the idea, Ms. Rothman created a prototype in one day by combining an off-the-shelf tank top, an off-the-shelf nursing bra, additional fabric, and fasteners. Thereafter, Ms. Rothman filed for a patent application and, during its prosecution, formed Glamourmom LLC (“Glamourmom”) to produce, market, and sell the invention. After licensing negotiations with defendant Leading Lady broke down, Glamourmom brought an infringement suit a few months after the ’029 patent issued.

A jury found the ’029 patent infringed by all but one defendant, but they also found the patent anticipated, obvious, and unenforceable due to inequitable conduct. After trial, Glamourmom renewed its JMOL motions that the patent-in-suit was not anticipated, not obvious, infringed by all defendants, and not unenforceable for inequitable conduct. The district court denied all of Glamourmom’s JMOL motions and awarded costs to the defendants.

On appeal, the Federal Circuit found the jury’s verdict on obviousness supported by substantial evidence, rejecting all three of Glamourmom’s arguments in support of nonobviousness. First, the Court disagreed with Glamourmom’s argument that the testimony from the defendants’ expert and the defendants themselves showed the garment was not obvious. The expert testified that the idea to combine a tank top with a nursing bra did not occur to him and was not imaginable in his work. The Court explained that an expert’s testimony regarding his own inventive feats has little relevance to whether an invention would have been obvious to a person of ordinary skill in the art, and therefore a reasonable jury could dismiss this testimony. In addition, the Court stated that nothing in defendants’ own testimony motivated the Court to question the jury’s verdict because the testifying defendants were not experts or ordinary nursing garment artisans, and, even if they were, the jury could properly credit or discredit their testimony.

The Federal Circuit also did not agree with Glamourmom’s second argument that the defendants had failed to show a motivation to combine the prior art elements. The Court explained that the invention was in a very predictable field, and in such a field, a trial record may more readily show a motivation to combine known elements to yield a predictable result. The Court concluded that the defendants presented ample testimony supporting a motivation to combine.

Finally, the Court disagreed with Glamourmom’s last argument that the jury failed to properly consider secondary indicia of nonobviousness. The Court reiterated that a strong prima facie obviousness showing may stand even in the face of considerable evidence of secondary considerations, and that evidence of secondary considerations is a factual component within the province of the jury. The Court further explained that because the district court had correctly instructed the jury to consider and weigh the evidence of secondary considerations, there was no reason to disturb the jury’s verdict.

Because the Court held the district court had properly denied the JMOL motion for obviousness, it declined to address the additional validity and infringement arguments made by Glamourmom. The Court then turned to the issue of inequitable conduct, considering the two counts brought at trial.

The first count alleged that Glamourmom failed to submit two known prior art references, owned by defendant Leading Lady, to the PTO. The Court held no reasonable jury could find the first prior art reference material to a reasonable examiner because the art was cumulative of, and less material than, other references already disclosed to the PTO by the patentee. Because it was not material, the Court found that failure to submit this piece of prior art could not support a finding of inequitable conduct.

The Court also found no inequitable conduct in the failure to submit the second piece of prior art to the PTO because no reasonable jury could find an intent to deceive the PTO. After a year of licensing negotiations, Leading Lady informed Glamourmom in a letter that they were going to sell their own prior art nursing top, style 460, to Target instead of Glamourmom’s top. No sample, photograph, drawing, or description of the style 460 top was sent to Glamourmom with the letter. The Court held that receipt of a threatening letter containing vague descriptions of unsubstantiated prior art at the end of a souring business relationship neither creates an automatic duty to disclose the prior art nor creates a duty to further investigate the declaration that the reference is in fact prior art. Because Glamourmom had nothing more than a vague description of the prior art, the Court reasoned, Glamourmom could not be charged with culpable intent in withholding information it did not have.

The Court further pointed out that Glamourmom had grounds for a good-faith belief that style 460 was not material prior art; a patent application for style 460 listed the ’029 patent as prior art, and Leading Lady’s claimed invention date occurred two years after the invention of the ’029 patent top. In addition, the Court pointed out the existence of style 460 was disclosed to the PTO when Glamourmom filed a Petition to Make Special. As part of the Petition, Glamourmom submitted the letters from Leading Lady discussing both pieces of prior art. Based on these findings, the Court stated there was no intent to deceive the PTO, and therefore no inequitable conduct.

The second count of inequitable conduct alleged that Glamourmom’s patent attorney made unsubstantiated statements about how one of ordinary skill in the nursing bra field would interpret certain prior art references. Glamourmom’s attorney argued to the examiner that nursing garments and maternity garments were not analogous and it was therefore improper to combine a prior art reference from nursing garments with prior art from garments generally. The Court pointed out that the law prohibits genuine misrepresentations of material fact, but prosecuting attorneys are free to present arguments in favor of patentability without fear of committing inequitable conduct. Holding that the statements in this case were attorney argument attempting to characterize the prior art in a manner favorable to the attorney’s client, the Court found no reasonable jury could rely on this statement for clear and convincing proof of inequitable conduct. Without substantial evidence to support any of the claims of inequitable conduct, the Court reversed the jury’s verdict on this point and vacated the award of attorneys’ fees.