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Inequitable Conduct Renders Sofa Patent Unenforceable

September 07, 2001

Decision icon Decision

Last Month at the Federal Circuit - October 2001

Judges: Mayer (author), Newman, and Clevenger

In GFI, Inc. v. Franklin Corp., No. 00-1268 (Fed. Cir. Sept. 7, 2001), the Federal Circuit affirmed a district court’s decision holding GFI, Inc.’s (“GFI”) U.S. Patent No. 5,064,244 (“the ‘244 patent”) unenforceable for inequitable conduct.

The ‘244 patent is directed to a sectional sofa. The sofa has a pair of reclining seats separated by a fixed console containing a control means for the reclining seats. During prosecution of the ‘244 patent, GFI spoke with Walter Durling, a furniture designer who crafted a loveseat unit having two recliners joined by a console. Durling had filed a patent application directed to the loveseat two months before the ‘244 patent application was filed. GFI’s discussions with Durling focused on his conception and reduction to practice of the loveseat design. Although Durling’s application did not specify that the console contained the control means for the recliners, several months before filing his invention, the inventor of the ‘244 patent had seen a model of the Durling furniture with
console-mounted controls.

On appeal, GFI argued that the district court had improperly forced it to disclose privileged information to Franklin Corporation (“Franklin”). Applying Fifth Circuit law, the district court had found that GFI had waived the attorney-client privilege when its patent attorney testified during an earlier trial about his state of mind, knowledge of prior art, and communications with his client. The Federal Circuit agreed that waiver of attorney-client privilege was a procedural question to be decided under regional circuit law and found no error with the district court’s decision to release the allegedly privileged information.

During prosecution of the ‘244 patent, GFI failed to disclose to the PTO the Durling application or the Durling model having the console-mounted controls. GFI argued that Durling cannot be material because it was not prior art. But according to the Federal Circuit, Durling’s status as prior art is not dispositive of its materiality. Furthermore, like the district court, the Federal Circuit found that GFI had a duty to disclose the potential priority conflict to the PTO and should not have unilaterally determined that the Durling references were not prior art. Thus, the Federal Circuit concluded that the district court properly found the Durling references material. As GFI did little more than deny any intent to deceive, the Federal Circuit also upheld the district court’s finding that GFI proved the threshold deceptive intent by clear and convincing evidence. Finding no abuse of discretion by the district court, the Federal Circuit affirmed the lower court’s conclusion that the claims of the ‘244 patent were unenforceable due to inequitable conduct.