In Inequitable Conduct Dispute, Materiality of Undisclosed Prior Art Presented Factual Questions Inappropriate for Summary Judgment

Case: Digital Control Inc. v. Charles Machine Works, No. 05-1128 (Fed. Cir. 2/8/06)

The One Sentence Summary: The panel reversed and remanded a ruling of patent invalidity due to inequitable conduct where the trial court improperly granted summary judgment on materiality of prior art which was not disclosed to the PTO.


What They Were Fighting About: Plaintiff claimed that its patents on locating devices for underground digging tools were infringed. The trial court granted in part defendant's motion for summary judgment on patent invalidity due to inequitable conduct, holding that there was no issue of material fact that patentee's submission of a misleading declaration and failure to disclose prior art was material. The trial court then invalidated the patent after a bench trial, finding that patentee had intended to deceive the PTO.

Federal Circuit Holdings:

• Inequitable conduct can be determined on a motion for summary judgment, but it is rare. For example, summary judgment may be granted where only specious or conclusory declarations are submitted in opposition to the motion.
• The 1992 amendment of the PTO's Rule 56 regarding the duty to disclose did not change the standard for determining materiality. There is no single test for materiality, and the panel discussed four different formulations used in cases. The earlier standard of whether a reasonable examiner would have considered prior art important is the broadest statement of the duty, and continues to be applicable.
• When undisclosed prior art satisfies more stringent tests for materiality, e.g., it would have caused the PTO to withhold approval for the claim, a lesser showing of facts allowing inference of intent to deceive is allowed.
• The trial court properly granted summary judgment of materiality as to a misleading declaration of reduction to practice submitted by patentee. The true information would have been important to a reasonable examiner, and there was no need to show that it would have rendered the invention unpatentable. Affirmative misstatements are more likely to be material.
• The trial court erred in finding that patentee made a material non-disclosure by failing to disclose a prior art patent. There were disputed factual questions as to whether the patent was cumulative of other prior art cited, and as to the scope, content and teachings of the prior art.
• The trial court's finding of invalidity after a bench trial on intent to deceive must be reversed and reconsidered because the trial court relied on its summary judgment rulings of materiality, one of which was now reversed.