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Unclean Hands Forge Inventor’s Notebooks

November 05, 2001

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Last Month at the Federal Circuit - December 2001

Judges: Rader (author), Mayer, and Linn

In Aptix Corp. v. Quickturn Design Systems, Inc., No. 01-1468 (Fed. Cir. Nov. 5, 2001), the Federal Circuit affirmed a district court’s finding of unclean hands and the dismissal of Aptix Corporation’s (“Aptix”) suit for patent infringement. The Federal Circuit also affirmed the district court’s dismissal of Meta Systems, Inc.’s (“Meta”) complaint since, as a mere nonexclusive licensee, Meta lacked standing to enforce the patent without Aptix. The Federal Circuit vacated, however, the district court’s judgment declaring the patent-in-suit unenforceable.

U.S. Patent No. 5,544,069 (“the ‘069 patent”) discloses and claims field-programmable circuit boards that permit computer programmers to reconfigure electronic components of an integrated circuit. Dr. Amr Mohsen is the sole inventor of the ‘069 patent and the founder, chairman, and chief executive officer of Aptix, the assignee of the ‘069 patent.

Aptix licensed the ‘069 patent to Meta and Mentor Graphics Corporation. Aptix and Meta jointly sued Quickturn Design Systems, Inc. (“Quickturn”) in the United States District Court for the Northern District of California for infringement of the ‘069 patent. Discovery in that case yielded four documents relating to the conception of the ‘069 invention: a copy of a portion of a 1989 notebook by Dr. Mohsen that was used by Mohsen’s attorneys when prosecuting the ‘069 patent; a seventeen-page excerpt purportedly from Dr. Mohsen’s 1989 notebook, but which contained discrepancies from the portion of the 1989 notebook used by Mohsen’s prosecuting attorneys; a notebook by Dr. Mohsen allegedly started in 1988; and an “Ink-on-Photocopy” version of the 1989 notebook, which apparently served as the template for creating the forged, seventeen-page excerpt of the notebook.

Dr. Mohsen had insisted on personally keeping the original notebooks and locking them in a safe in his house. When compelled by the district court to produce the original notebooks for forensic testing, Dr. Mohsen had asserted that the notebooks were stolen from his car. The trial court had found that the circumstances of the theft strongly suggested that Dr. Mohsen had staged the incident.

Later, Dr. Mohsen produced his 1989 Daytimer to corroborate his asserted conception date. His 1989 Daytimer appeared to include various entries referring to the missing engineering notebooks. However, forensic evidence showed that these entries were written with an ink that was not manufactured until 1994, five years after the supposed entries.

In his deposition, Dr. Mohsen conceded that he had added material to his notebooks after they had been signed. Apparently, Dr. Mohsen inked new material onto a photocopied version of the original 1989 notebook. He then placed these pages underneath corresponding pages of the original 1989 notebook to assist as a copying template. Forensic evidence showed that the “Ink-on-Photocopy” version of the notebook pages retained the impressions of Dr. Mohsen’s pen as he copied the newly inked material into the original 1989 notebook.

Before an evidentiary hearing concerning the notebooks, Dr. Mohsen produced a priority mail package containing fragments of the missing notebooks. The package, which bore Dr. Mohsen’s correct mailing address, had no return address but contained an anonymous note from “FL” stating: “These were discovered lately in our backyard. These look like important documents for you.”

The trial court had also found several forgeries concerning the alleged 1988 notebook. For example, in several places, Dr. Mohsen had first written “1998” and then overwritten the date to read “1988.” Also, all of the witnesses’ signatures were written in the same ink, despite their purportedly being signed on dates twenty-two days apart.

At the hearing, Dr. Mohsen took the stand and asserted his Fifth Amendment privilege against selfincrimination in response to all questions. Finding that Dr. Mohsen had forged the notebook pages and staged the disappearance and return of the notebook pages, the district court had dismissed the complaint under the unclean hands doctrine, had ordered Aptix to pay Quickturn’s reasonable attorney fees and costs, and had determined that the ‘069 patent was unenforceable.

On appeal, Aptix argued that the district court lacked clear and convincing evidence to find unclean hands. The Federal Circuit stated, however, that “rarely, if ever, will litigation misconduct be so thoroughly documented. The record clearly and convincingly supports the district court’s conclusion of extreme litigation misconduct.” Aptix, slip op. at 8. Therefore, the Federal Circuit found that the district court was fully justified in its decision to dismiss Aptix from suit and award attorney fees and costs to Quickturn. Moreover, the Federal Circuit agreed that since Meta was a nonexclusive licensee with only limited rights under the patent, Meta thus lost standing to sue in its own right when Aptix was dismissed.

However, the Federal Circuit disagreed with the district court’s finding that the ‘069 patent was unenforceable. In particular, the Federal Circuit found that litigation misconduct, while serving as a basis to dismiss the wrongful litigant, does not infect or even affect the original grant of the property right. The Federal Circuit concluded that the doctrine of unclean hands does not reach out to extinguish a property right based on misconduct during litigation to enforce the right. Despite the litigation misconduct by Aptix, the Federal Circuit found that there was no evidence of misconduct by Aptix before the PTO and, therefore, the ‘069 patent remained a presumptively valid grant of personal property.

In dissent, Judge Mayer disagreed with vacating the unenforceability of the ‘069 patent, noting that a fraud upon the Court is no less grave than a fraud upon the PTO and should render the ‘069 patent unenforceable. Judge Mayer also noted that the doctrine of unclean hands may be applied broadly, giving the district court discretion to declare the ‘069 patent unenforceable.