John M. Wang | December 6, 2013
Decided November 15, 2013
Before Dyk (Circuit Judge), Bryson (Circuit Judge) and Reyna (Circuit Judge). Opinion by Reyna.
Keywords: collateral estoppel, obviousness, inequitable conduct, reexamination, and rule of reason.
OWW initiated a suit against Alps for patent infringement. After a long legal battle including two ex parte reexaminations, two District Court proceedings, and two CAFC appeals, OWW lost two patents and was charged with inequitable conduct.
OWW is the owner of US Patent No. 5,830,237 (the ‘237 patent), entitled “Gel and Cushioning Devices,” filed on March 5, 1996. The ‘237 patent disclosed cushioning devices designed to cover the residual stumps of amputated limbs, acting as a shape-conforming buffer, as illustrated below, to make the use of attached prostheses more comfortable. The primary invention was a cushion liner comprising a fabric covering in the shape of a tube sock coated on only one side with mineral oil-based polymeric gels.
On December 27, 2004, OWW filed its complaint against Alps for infringement of the ‘237 patent. After the District Court issued its Claim Construction order in the proceedings, Alps filed its first request for an ex parte reexamination of the ‘237 patent. The District Court stayed the litigation for the duration of reexamination proceedings, pending resolution of the validity of the disputed patent.
During the first ex parte reexamination of the ‘237 patent, Alps submitted as prior art a gel liner, the “Silosheath,” manufactured by Silipos, Inc. (“Silipos”). During an interview with the examiner, OWW presented a sample Silosheath, pointing out a small amount of the polymeric gel bleeding out through the fabric onto the exterior surface of the device, which would create friction with a prosthetic, causing user discomfort. OWW argued that, although not specifically recited in the original claim 1, the ‘237 patent excluded any gel liners that could allow the gel to be extruded onto the exterior surface of the fabric. The Examiner agreed with OWW and issued an ex parte reexamination certificate, allowing claim 1 to be amended as follows:
1. A tube sock-shaped covering for enclosing an amputation stump, said covering having an open end for introduction of said stump and a closed end opposite said open end, said covering comprising fabric in the shape of a tube sock [coated on only one side] and having a coating of polymeric material residing on only an interior surface thereof [with], said polymeric material comprising a foamed or non-foamed gel composition comprising a block copolymer and mineral oil.
Soon thereafter, Alps filed a request for a second ex parte reexamination of the ‘237 patent based on another Silipos product, the “Single Socket Gel Liner” (SSGL). Alps argued that the SSGL could not have any gel on its exterior surface due to its use of a proprietary DuPont fabric, “Coolmax,” which, as a relatively impermeable fabric material, prevented any gel bleed-through to the outer surface. To support this assertion, Alps submitted as prior art an advertisement of the SSGL published on January 1, 1995, and corresponding testimony from Mr. Comtesse, who had been directly involved in the development and production of both the Silosheath and SSGL products. In light of this evidence, the examiner agreed with Alps, rejecting all of the claims of the ‘237 patent for obviousness.
OWW appealed this rejection to the Board of Patent Appeals and Interferences (“BPAI”), arguing that Mr. Comtesse’s testimony should have been found inadmissible because Mr. Comtesse’s status as highly interested party defeated any presumption of credibility, especially absent any corroboration by either factual or independent testimonial evidence. The BPAI agreed with OWW and issued a second reexamination certificate for the ‘237 patent.
While the present case was stayed for the pendency of these reexamination proceedings, OWW filed a similar suit against Thermo-Ply. Inc. (“Thermo-Ply”) for infringement of US Patent No. 7,291,182 (the ‘182 patent), which had been filed as a continuation of the ‘237 patent. The court found the ‘182 patent obvious based on the Silosheath in view of the prior art, including both US Patent No. 4,923,474 and known techniques in the relevant field. The court held that it would have been obvious to one of ordinary skill in the art to select an impermeable fabric to prevent the gel bleeding through to the exterior surface. This obviousness determination was further affirmed on appeal.
As a result, upon lifting the stay of the present case, the District Court granted summary judgment on Alps’s invalidity contentions, finding six of the claims of the ‘237 patent invalid by the application of collateral estoppel per the Thermo-Ply decision, and five other claims invalid for obviousness. The District Court additionally granted OWW’s motion for summary judgment on the inequitable conduct issue. Both parties appealed.
Despite minor differences in the specific claim language of the two patents, the asserted claims of the ‘237 patent are substantially similar to the invalidated claims of the ‘182 patent. Collateral estoppel does not require the two sets of patent claims to be identical. CAFC affirms.
Several dependent claims in ‘237 patent further limit independent claim 1 by placing numeric limits on certain characteristics of the “gel composition” and the “fabric.” For example, claims 18 and 23 limit the “gel composition” to those that have “60-85% by weight mineral oil” or “a shore A Durometer of from [sic] 1-20,” respectively. Claims 19, 21, and 22 each require a “fabric” having “an elasticity of 10-400%.”
OWW argued that, in failing to consider the entirety of the combined claims in context, the District Court’s analysis was improperly “piecemeal.” Furthermore, there was no necessary reason to combine the identified references. However, the CAFC held that all of the numeric limitations in the dependent claims were the result of routine optimization efforts. Regarding the evidence submitted by OWW as secondary indicia of non-obviousness (showing, e.g. commercial success, long-felt but unmet business needs, and having been copied and praised by the industry), the CAFC held that OWW failed to show the requisite nexus between these secondary indicia and the patented invention; and, regardless, all of these factors applied equally to the prior art SSGL device. The CAFC affirms the finding of obviousness and subsequent invalidity of these dependent claims.
During the second reexamination proceeding, the Examiner’s final rejection was reversed by the BPAI on the basis of OWW’s argument that Mr. Comtesse’s testimony was not credible because of lack of corroboration and Mr. Comtesse’s alleged financial and proprietary interests in the product and the outcome of this related litigation.
Alps asserted that OWW had committed inequitable conduct by having withheld and/or misrepresented material information that would have corroborated Mr. Comtesse’s testimony during the reexamination proceedings.
Alps alleged that in the course of earlier discovery, OWW had in its possession three declarations from prosthetists knowledgeable about the prosthetic liners available on or before the critical date of March 5, 1995. These declarations directly supported Mr. Comtesse’s testimony, confirming that there was no gel on the exterior of the SSGL because of the improved quality of the fabric material used in the product at that time.
For example, OWW had argued during reexamination that there were no known examples of SSGL products from the time period in question, characterizing their alleged existence as that of a “ghost.” However, one of the declarations showed that in the mid-1990s, OWW sent a sample SSGL to Mr. Gailey, an associate professor at the University Of Miami School Of Medicine. The SSGL used a special fabric that prevented any gel bleed-through. Mr. Gailey’s testimony stated that he still had the SSGL and would produce it as an exhibit to be used in the litigation. OWW neglected to disclose this information to the PTO.
Similarly, while OWW had shown several physical samples of SSGL devices from the relevant period to Mr. Comtesse during his deposition, it failed to disclose these to the PTO or BPAI.
Additionally, OWW had actual knowledge that Silipos had filed a patent application on June 15, 1993 covering these SSGL devices. Although the application was later abandoned, its description of a SSGL with gel only on the interior surface of the device would have corroborated Mr. Comtesse’s reexamination testimony if it had been disclosed to the examiner and BPAI.
Using a “rule of reason” approach to evaluate the question of credibility by reviewing the totality of direct and circumstantial evidence, the CAFC determined that the evidence withheld by OWW provided consistent and convincing corroboration of Mr. Comtesse’s testimony, which the court deemed credible in light of the “cumulative weight of this evidence,” despite OWW’s repeated assertions of the absence or insufficiency of relevant documentary or physical evidence.
The CAFC also found that, in purposely having sought to discredit Mr. Comtesse’s testimony in the second reexamination proceeding by making misleading statements and misrepresentations of material information that ultimately were directly refuted by credible evidence that OWW had conspicuously failed to disclose, OWW had specific intent to commit inequitable conduct. The CAFC reverses the District Court’s grant of summary judgment on the issue of inequitable conduct and remands the issue for trial.
1. Disclose to the PTO all relevant evidence, including adverse evidence corroborating the opponent’s arguments.
2. Avoid making aggressively “winning” arguments that you know are not supported by the evidence before the PTO.
Reference: U.S. Patent No. 5,830,237