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No Inference of Suppression or Concealment When There Is No Evidence That a Party’s Delay Between Reduction to Practice and Commercialization Was Unreasonable

July 13, 2006

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Last Month at the Federal Circuit - August 2006

Judges: Bryson, Linn (author), Prost

[Appealed from: W.D. Mich., Judge McKeague]

In Flex-Rest, LLC v. Steelcase, Inc., Nos. 05-1354, -1367 (Fed. Cir. July 13, 2006), the Federal Circuit affirmed the district court’s grant of SJ of noninfringement of U.S. Patent No. 5,961,231 (“the ’231 patent”) and upheld the jury verdict finding U.S. Patent No. 5,709,489 (“the ’489 patent”) invalid for anticipation and obviousness. Further, the Federal Circuit determined that the district court did not abuse its discretion when it failed to find inequitable conduct in the procurement of the ’489 patent.

Flex-Rest, LLC (“Flex-Rest”) filed suit against Steelcase, Inc. (“Steelcase”) asserting both the ’231 and the ’489 patents. Both patents relate to computer keyboard positioning systems. The district court construed the limitation “sidewall” in the ’231 patent as “a structure projecting or extending upward.” Recognizing that Steelcase’s accused devices did not include a structure projecting or extending upward, the district court granted SJ of noninfringement of the ’231 patent. The district court also considered the ’489 patent and construed the keyboard positioning claim limitation as covering a device that “permits the bottom of a keyboard to be tilted backward (i.e., at any angle of less than 0 degrees).” Slip op. at 3.

At the outset of trial, the parties agreed to streamline the remaining issues with respect to the ’489 patent. Steelcase stipulated to infringement of the ’489 patent, and in response, Flex-Rest stipulated that Steelcase’s KBS device was conceived and reduced to practice prior to the conception of the invention claimed in the ’489 patent. Therefore, the central issue at trial was whether or not Steelcase’s KBS device rendered the ’489 patent invalid under 35 U.S.C. §§ 102(g) or 103. Additionally, the district court denied Flex-Rest’s request for a jury instruction regarding suppression or concealment, finding that a prima facie case of suppression or concealment by Steelcase had not been made. The district court also granted Steelcase’s motion in limine to limit the testimony of Flex-Rest’s expert.

The jury returned a verdict in favor of Steelcase, finding that the ’489 patent was invalid under §§ 102 and 103. After entering judgment, the district court addressed the issue of whether Flex-Rest engaged in inequitable conduct in theprocurement of the ’489 patent by failing to disclose to the PTO a letter and photographs that allegedly constituted material prior art. The district court determined that the evidence presented did not rise to the level of clear and convincing evidence of intent to deceive and, therefore, held that Flex-Rest did not engage in inequitable conduct.

On appeal, Flex-Rest challenged the district court’s jury instructions, limitation of expert testimony, and claim construction. Steelcase cross-appealed, challenging the district court’s holding that Flex-Rest did not engage in inequitable conduct.

First, the Federal Circuit determined that there was no disputed evidence of record supporting Flex-Rest’s proposed jury instruction on suppression and concealment, and agreed with the district court’s refusal to provide the jury instruction. The Court explained that Flex-Rest did not present evidence that Steelcase intended to withhold the KBS device from the public, which would have been intentional suppression or concealment, nor did Flex-Rest present evidence to indicate that Steelcase’s delay of six and a half months between reduction to practice and commercialization was not the result of reasonable steps, thereby warranting an inference of suppression or concealment. The Court also distinguished the present case from precedent, wherein, in an interference context, the Court held that delayed filing, due to commercialization efforts or improvements not reflected in the application, is inexcusable.

Second, the Federal Circuit upheld the district court’s evidentiary ruling in precluding testimony of Flex-Rest’s expert. The Court stated that the district court held a hearing to fully investigate the expert’s expertise and there is no indication that the district court abused its discretion in reaching the conclusion that Flex-Rest’s expert should only be considered with respect to his expertise in ergonomics, and not as one of ordinary skill in the art of keyboard design.

Third, the Federal Circuit agreed with the district court’s construction of “sidewalls” in the ’231 patent. The Court determined that the claim language and written description supported the district court’s construction and that the prosecution history was consistent. The Court also noted that Flex-Rest’s attempt to avoid the limitation by characterizing it as “inconsequential” was contrary to basic patent law doctrine that every claim limitation is material. Thus, the Federal Circuit affirmed the district court’s grant of SJ of noninfringement of the ’231 patent.

Finally, the Federal Circuit affirmed the district court’s denial of Steelcase’s motion on inequitable conduct. The Court observed that the evidence showed that Flex-Rest’s attorney did not regard the photos as credible evidence of prior art in existence before the filing date of the ’489 patent and that he believed the photos were cumulative of art later cited to the PTO. In view of this evidence, the Court determined that Steelcase did not meet its burden of proving by clear and convincing evidence that patent counsel possessed an intent to deceive or mislead the PTO. The Federal Circuit distinguished the facts of the underlying case from those in Brasseler, U.S.A. I, L.P. v. Stryker Sales Corp., 267 F.3d 1370 (Fed. Cir. 2001), where the attorneys had knowledge of a potential on-sale bar and offered no credible evidence for their failure to inquire about the sale before or during the prosecution of the patent. Absent intent, the Court affirmed the district court’s holding.