Inequitable Conduct Found in Knowing Submission of a False Video to PTO

Case: Frazier v. Roessel Cine Photo Tech, Inc. , No. 04-1060, 04-1092 (Fed. Cir. 8/2/05)

The One Sentence Summary: The Federal Circuit upheld findings of inequitable conduct based upon the submission of a false video purporting to show photographs shot by the claimed lens, but reversed findings of inequitable conduct based upon failure to disclose an advertisement that did not disclose the claimed invention.

Federal Circuit Holdings:

• "Inequitable conduct requires a breach of the duty of candor that is both material and undertaken with intent to deceive the Patent and Trademark Office ("PTO"). Li Second Family Ltd. P’ship v. Toshiba Corp., 231 F.3d 1373, 1378 (Fed. Cir. 2000). Breaches of the duty of candor may include submission of false material information or failure to disclose material information. Kingsdown Med. Consultants, Ltd. v. Hollister Inc., 863 F.2d 867, 872 (Fed. Cir. 1988)." Slip Opinion at 6.
• The district court properly found materiality of the submission of a false video for the purpose of demonstrating the claimed lens system. Even if the lens could have taken the photographs shown in the video, the false submission was nevertheless material. "Perseptive Biosystems, Inc. v. Pharmacia Biotech, Inc., 225 F.3d 1315, 1322 (Fed. Cir. 2000) ("[T]he materiality of intentional false statements may be independent of the claims of the patent."); Rohm & Haas Co. v. Crystal Chem. Co., 722 F.2d 1556, 1571 (Fed. Cir. 1983) ("In contrast to cases where allegations of fraud are based on the withholding of prior art, there is no room to argue that submission of false affidavits is not material.") ." Slip Opinion at 8.
• Knowing submission of false information allowed a finding of intent to deceive the PTO despite appellant's argument that he lacked subjective intent to deceive. Direct evidence of subjective intent to deceive is not necessary, and intent may be inferred.
• With respect to an advertisement that was not submitted to the PTO, the district court erred in finding that it was material when it did not disclose the invention to one of skill in the art.
• The district court erred in finding that the advertisement triggered a duty to investigate by the applicant because there is no duty to conduct a prior art search before applying for a patent.
• The district court should reconsider its finding of an "exceptional case" justifying the award of attorneys' fees in light of the reversal of the inequitable conduct finding with respect to the advertisement.