United States Court of Appeals for the Federal Circuit
2009-1265
OPTIUM CORPORATION,
Plaintiff-Appellant,
v.
EMCORE CORPORATION,
Defendant-Appellee.
Douglas J. Kline, Goodwin Procter LLP, of Boston, Massachusetts, argued for
plaintiff-appellant. With him on the brief were Don M. Kennedy, of Boston,
Massachusetts, and Charles Wizenfeld, of New York, New York.
Gregory A. Castanias, Jones Day, of Washington, DC, argued for defendant-
appellee. With him on the brief were Robert C. Kahrl and Sheryl H. Love, of Cleveland,
Ohio.
Appealed from: United States District Court for the Western District of Pennsylvania
Chief Judge Donetta W. Ambrose
United States Court of Appeals for the Federal Circuit
2009-1265
OPTIUM CORPORATION,
Plaintiff-Appellant,
v.
EMCORE CORPORATION,
Defendant-Appellee.
Appeal from the United States District Court for the Western District of Pennsylvania in
Case no. 07-CV-1683, Chief Judge Donetta W. Ambrose.
___________________________
DECIDED: May 5, 2010
___________________________
Before NEWMAN, MAYER and PROST, Circuit Judges.
Opinion for the court filed by Circuit Judge NEWMAN. Concurring in the result opinion
filed by Circuit Judge PROST.
NEWMAN, Circuit Judge.
Optium Corporation appeals the summary judgment of the United States District
Court for the Western District of Pennsylvania, holding that Emcore Corporation did not
commit inequitable conduct in obtaining the patents in suit. The district court had accepted
the premise, for summary judgment purposes, that Emcore did not disclose a material
reference to the patent examiner. The court ruled that because Optium had not presented
evidence upon which the court could find intent to deceive or mislead the examiner,
summary judgment should be granted in favor of Emcore. We affirm the district court’s
ruling. 1
BACKGROUND
The patented technology
The Emcore patents in suit, U.S. Patent Nos. 6,282,003 (“the ’003 patent”) and
6,490,071 (“the ’071 patent”), concern improvements in an optical communication system
wherein a laser transmits a signal in the form of a light wave along an optical fiber. The two
patents are related, and each is titled “Method and Apparatus for Optimizing SBS
Performance in an Optical Communication System Using at Least Two Phase Modulation
Tones.” The acronym “SBS” stands for “stimulated Brillouin scattering,” which is a kind of
interference that limits the amount of power that can be transmitted over fiber-optic lines,
and thereby limits the distance across which information is transmitted. Stimulated Brillouin
scattering occurs when the energy from the laser causes so much excitation of the
molecules within the optical fiber that a portion of the light energy is reflected backward
toward the transmitter. Such interference can cause problems with optical communication
systems such as cable television, in which signals must be transmitted across long
distances. The ’003 and ’071 patents relate to the use of “two-tone phase modulation” to
minimize this SBS interference.
The technique of phase modulation was known, and refers to the division of the
optical signal into different frequency bands (known as “sidebands”) that are sufficiently
separate to have independent power thresholds at which SBS interference occurs. This
division occurs when a separate radio signal (or “tone”) is applied to the optical signal. By
1
Optium Corp. v. Emcore Corp., No. 07-CV-1683 (W.D. Pa. Feb. 18, 2009).
2009-1265 2
distributing the optical signal across several such sidebands, the overall power transmitted
across the optical fiber can be increased without producing deleterious interference. Two-
tone phase modulation refers to the known application of two separate radio frequency
signals with the effect of splitting the optical signal into an even greater number of
sidebands. See ’003 patent col.1 ll.36–38 (“[T]he utilization of two modulation tones,
specifically 2 and 6 GHz tones, to achieve the desired phase modulation is admitted prior
art.”).
The invention described and claimed in the ’003 and ’071 patents is an improvement
on this technology, optimizing SBS suppression by a method in which “an operational
region of SBS suppression is established as a function of the phase modulation of the light
such that the operational region identifies combinations of first and second phase
modulation levels at which optimum SBS suppression is achieved for the first and second
tones.” ’003 patent col.1 ll. 60–64. The “phase modulation levels” are the power levels at
which each radio frequency tone is applied. Based on this operational region, “the first and
second phase modulation levels are adjusted such that the system operates with optimum
SBS suppression.” Id. col.1 ll.65–67. The inventors’ key contribution is the determination
of how to derive this function of two variables so that the performance of a given pair of
tones used for phase modulation can be determined or predicted through mathematical
relationships instead of empirical laboratory measurement. E.g., id. col.4 l.64 – col.5 l.14.
The patents also describe how the operational region, after it is calculated, can be
expressed in the form of a “contour map” as shown in Figure 2 of both patents, with each
contour line representing an “SBS threshold level,” meaning the maximum power level at
which the optical signal can be transmitted without encountering SBS interference:
2009-1265 3
In Figure 2, region 114 is a local peak on the contour map, and thus indicates an operating
region at which the corresponding power levels for the two phase modulation tones result in
relatively high SBS suppression. Peak 114 is quite narrow and steep, however, and thus a
slight variation in the phase modulation power levels can result in a significant drop-off in
the SBS threshold level. The contour map enables identification of other favorable regions
with relatively high SBS suppression that are less susceptible to this problem, such as
circular region 128, within the broader “plateau” region indicated by 116. Because region
128 is relatively flat the SBS threshold level is less susceptible to variation even if the
2009-1265 4
phase modulation power levels vary slightly. See generally ’003 patent col.4 l.31 – col.6 l.8.
The patents state that “operating points centered within relatively broad features of the
map will inherently be more tolerant to drift of the operating point, thus providing a more
stable SBS threshold” and increasing the “operational stability” of the system. Id. col.5
ll.53–60.
The ’003 and ’071 patents include both method and apparatus claims directed to
optimizing SBS suppression using these contributions.
The Willems reference
Optium’s charge of inequitable conduct is based on Emcore’s failure to cite to the
patent examiner an article by F.W. Willems, J.C. van der Plaats, and W. Muys, titled
“Harmonic distortion caused by stimulated Brillouin scattering suppression in externally
modulated lightwave AM-CATV systems,” published in Electronics Letters, Vol. 30, No. 4,
343 (1994) (herein “Willems”). Willems describes single-tone phase modulation, and
discusses the kinds of intermodulation distortion that can be caused by the larger spectral
width that results from the separation of the light signal into sidebands. Willems states that
this distortion is virtually eliminated when single-tone phase modulation is applied at a
frequency above twice the highest cable television subcarrier frequency. Willems does not
discuss two-tone phase modulation, and does not show a contour map or the use of a
contour map to identify optimal SBS suppression regions as described in the ’003 and ’071
patents.
Emcore does not dispute that the inventors knew of Willems, for the article was cited
in the background section of an internal research report they prepared in February 1997, at
endnote [1] referenced in the following passage:
2009-1265 5
While observations of SBS-induced noise enhancement and CSO [composite
second-order] degradation have been reported previously [1], to our
knowledge, no quantitative analysis of these effects has been reported. We
believe that the observed intensity noise enhancement may originate from
the random nature of the photon scattering from the forward-propagating
wave into the backscattered wave. The CSO degradation may be due to
clipping of the optical waveform peaks at the onset of SBS that induces
asymmetry, and hence, enhanced second-order distortion. However, both of
these effects require more study to obtain a quantitative understanding and
correlation with observations.
The inventors again referred to Willems in their invention disclosure form to their employer,
in the section titled “Background information on the invention,” in response to the question:
C. What were the previous methods or apparatus that were used but failed
to solve the problem? (Give source of previous information on the subject
that is closest to your invention, such as known use, publication or patents.)
The inventors responded:
To achieve SBS suppression in fiber-optic transmission systems, frequency-
modulation of the laser source, as well as phase modulation using a phase
modulation section on an external modulator have been employed [1]. Since
high-power semiconductor lasers are not typically optimized for high-
frequency injection current modulation, phase modulation is the only
approach available. However, it has not been previously apparent what the
characteristics of the phase modulation signal are to achieve optimum
performance.
While [1] is not referenced again within the invention disclosure form, which contains no
endnotes, Emcore does not dispute that the notation was a reference to the same endnote
in the inventors’ research report that contained the Willems citation.
During prosecution of the ’003 patent, Emcore’s patent attorneys submitted an
Information Disclosure Statement that mentioned several references, but did not list
Willems. The examiner cited additional references, including U.S. Patent No. 5,828,477,
which discussed Willems in its section on the background art. See ’477 patent col.2 ll.26–
36. During prosecution of the ’071 patent, which was filed as a continuation of the earlier
2009-1265 6
application, the examiner identified another patent, U.S. Patent No. 5,953,139, as a
“reference of interest”; this reference, too, discussed Willems in the context of the
background art. See ’139 patent col.2 l.61 – col.3 l.17. The examiner did not cite or
mention Willems during prosecution of either the ’003 or the ’071 patent.
District court proceedings
In September 2006 Emcore filed suit against Optium in the Western District of
Pennsylvania, charging infringement of the ’003 and ’071 patents. After discovery, in
December 2007 Optium filed a separate declaratory judgment action against Emcore in the
same court, requesting a declaration that the ’003 and ’071 patents are unenforceable for
inequitable conduct. This declaratory action was referred to a Special Master, upon the
parties’ cross-motions for summary judgment. The Special Master reviewed the testimonial
and documentary evidence relating to the patent filing and prosecution, including the
deposition testimony of the inventors and three of the four attorneys who prosecuted the
patent applications, the research report and invention disclosure forms the inventors had
prepared, and reports prepared by Optium’s expert, Dr. Katherine Hall, Ph.D. Neither the
inventors nor the prosecuting attorneys could recall the precise details of the events that
had occurred ten years earlier, and none provided an explanation why Willems, which had
been cited as a background reference in the inventors’ research report and invention
disclosure, had not been submitted to the Patent Office. Dr. Hall opined that Willems was
material prior art, and that claims 1, 6, 7, 13, 14, 15, 21, 24, and 27 of the ’003 patent, and
claim 1 of the ’071 patent, were prima facie obvious in view of a combination of references
including Willems. Optium referred only to claim 24 of the ’003 patent, however, in its
briefing of the materiality issue in its motion for summary judgment.
2009-1265 7
The Special Master concluded that, on the criteria of summary judgment, Optium
had raised a genuine issue of material fact as to whether Willems was material to
patentability. As to intent, the Special Master concluded that intent to deceive could not be
inferred merely on the basis of “high materiality” of the reference and a lack of explanation
for the nondisclosure. Optium had provided no evidence of an intent to deceive or mislead
the examiner, and no basis for such an inference. The Special Master thus held that even
assuming Willems was a material reference, in the absence of any evidence on which
deceptive intent could be found or reasonably inferred, inequitable conduct could not lie.
The district court adopted the Special Master’s analysis, and entered judgment in Emcore’s
favor. This appeal followed.
DISCUSSION
The grant of summary judgment receives plenary review, applying the same
standard as did the district court. Innogenetics, N.V. v. Abbott Labs., 512 F.3d 1363, 1378
(Fed. Cir. 2008). Although the issue of inequitable conduct is reviewed on the standard of
abuse of discretion, it requires proof by clear and convincing evidence of the threshold facts
of both materiality and intent. Thus summary judgment may be granted when, drawing all
reasonable factual inferences in favor of the non-movant, the evidence is such that the non-
movant cannot prevail. ATD Corp. v. Lydall, Inc., 159 F.3d 534, 547 (Fed. Cir. 1998).
When a party has failed to introduce evidence sufficient to establish the existence of an
essential element of that party’s case in accordance with the applicable standard of proof,
summary judgment is properly granted against that party. Novartis Corp. v. Ben Venue
Labs., Inc., 271 F.3d 1043, 1046 (Fed. Cir. 2001); see Astrazeneca Pharms. LP v. Teva
Pharms. USA, Inc., 583 F.3d 766, 777 (Fed. Cir. 2009) (affirming summary judgment of no
2009-1265 8
inequitable conduct, when the factual premises could not be established by clear and
convincing evidence).
Inequitable conduct resides in failure to disclose material information, or submission
of false material information, with an intent to mislead or deceive the examiner, and those
two elements, materiality and intent, must be proven by clear and convincing evidence.
Norian Corp. v. Stryker Corp., 363 F.3d 1321, 1330–31 (Fed. Cir. 2004). Clear and
convincing evidence must support “at least a threshold level of each element.” Star
Scientific, Inc. v. R.J. Reynolds Tobacco Co., 537 F.3d 1357, 1365 (Fed. Cir. 2008). When
both materiality and intent have been established, the court must balance the equities and
determine whether the applicant’s conduct in prosecuting the patent application was
egregious enough to warrant holding the entire patent unenforceable. Id.; see J.P. Stevens
& Co. v. Lex Tex Ltd., 747 F.2d 1553, 1560 (Fed. Cir. 1984) (“Once the thresholds of
materiality and intent are established, the court must balance them and determine as a
matter of law whether the scales tilt to a conclusion that inequitable conduct occurred.”).
Because the district court concluded that Optium made a sufficient showing of materiality to
survive summary judgment, but concluded that the facts could not support a finding of
intent under the relevant standard, the question of intent frames this appeal.
Optium argues that Emcore should have brought Willems specifically to the
examiner’s attention, in view of the inventors’ own reference to this article as background
art in their contemporaneous internal documents. Optium states that since Willems was a
“highly material” reference, deceptive intent can be presumed from high materiality absent
contrary evidence from the applicants. Emcore responds that even if Optium could
ultimately succeed in proving high materiality—a point that Emcore has not conceded—no
2009-1265 9
presumption or inference of deceptive intent is permissible in the absence of evidence that
a person involved in obtaining the patent acted with the specific intent to mislead or deceive
the patent examiner. Emcore contends that Optium improperly seeks to shift the burden to
the applicants to explain why a reference was not submitted, in the absence of even
threshold evidence of deceptive intent. The parties cite competing lines of authority from
this court in support of their respective positions.
Despite some divergence, the great weight of Federal Circuit authority has followed
Kingsdown Medical Consultants, Ltd. v. Hollister Inc., 863 F.2d 867, 876–77 (Fed. Cir.
1988) (en banc), and applied the rule that the “intent” element of inequitable conduct is not
simply intent to take the action or omission complained of, but intent to deceive or mislead
the patent examiner into granting the patent. E.g., Dayco Prods., Inc. v. Total Containment,
Inc., 329 F.3d 1358, 1367 (Fed. Cir. 2003) (“[I]nequitable conduct requires not intent to
withhold, but rather intent to deceive.”). That is, “one must have intended to act
inequitably.” Kingsdown, 863 F.2d at 872 (quoting FMC Corp. v. Manitowoc Co., 835 F.2d
1411, 1415 (Fed. Cir. 1987)). In situations of nondisclosure of information rather than
affirmative misrepresentation, “clear and convincing evidence must show that the applicant
made a deliberate decision to withhold a known material reference.” Molins PLC v.
Textron, Inc., 48 F.3d 1172, 1181 (Fed. Cir. 1995). Thus “[i]ntent to deceive can not be
inferred solely from the fact that information was not disclosed; there must be a factual
basis for a finding of deceptive intent.” Herbert v. Lisle Corp., 99 F.3d 1109, 1116 (Fed.
Cir. 1996). Extensive precedent continues to reinforce this standard. E.g., Larson Mfg. Co.
of S.D. v. Aluminart Prods. Ltd., 559 F.3d 1317, 1340 (Fed. Cir. 2009) (“[N]ondisclosure, by
itself, cannot satisfy the deceptive intent element.”); Star Scientific, 537 F.3d at 1366
2009-1265 10
(internal citation omitted) (“Thus, the fact that information later found material was not
disclosed cannot, by itself, satisfy the deceptive intent element of inequitable conduct.”).
Optium points out that this court has recognized that direct evidence of deceptive
intent is rarely available, and that intent may be inferred from circumstantial evidence. See
Merck & Co. v. Danbury Pharmacal, Inc., 873 F.2d 1418, 1422 (Fed. Cir. 1989). Optium
argues that deceptive intent can be inferred if the reference is “highly material,” even with
no evidence, direct or circumstantial, of intent to deceive. However, consistent precedent
has rejected the notion that the materiality of a reference alone can suffice to prove
deceptive intent. See, e.g., Astrazeneca, 583 F.3d at 770 (“Intent to deceive cannot be
inferred from a high degree of materiality alone, but must be separately proved to establish
unenforceability due to inequitable conduct.”); Ariad Pharms., Inc. v. Eli Lilly & Co., 560
F.3d 1366, 1380 (Fed. Cir. 2009) (“Lilly cannot prove deceptive intent by clear and
convincing evidence simply by relying on the materiality of the errors.”), vacated pending
reh’g en banc, 595 F.3d 1329 (Fed. Cir. 2009), reinstated in relevant part, 598 F.3d 1336,
1358 (Fed. Cir. 2010) (en banc); Abbott Labs. v. Sandoz, Inc., 544 F.3d 1341, 1356 (Fed.
Cir. 2008) (“Materiality is not evidence of intent, which must be established as a separate
factual element of a discretionary ruling of inequitable conduct.”); Braun Inc. v. Dynamics
Corp. of Am., 975 F.2d 815, 822 (Fed. Cir. 1992) (“[M]ateriality does not presume intent,
which is a separate and essential component of inequitable conduct.”); Halliburton Co. v.
Schlumberger Technology Corp., 925 F.2d 1435, 1443 (Fed. Cir. 1991) (intent to deceive
cannot be based on the materiality of a reference that was not submitted, even if gross
negligence were shown); Allen Organ Co. v. Kimball Int’l, Inc., 839 F.2d 1556, 1567 (Fed.
2009-1265 11
Cir. 1988) (“[M]ateriality does not presume intent, which is a separate and essential
component of inequitable conduct.”).
Optium argues that a divergent line of precedent places a lesser burden on the
challenger, whereby deceptive intent is presumptively established when the evidence could
support a finding of “high materiality,” at least in instances where the applicant has not
provided a credible explanation for the nondisclosure. Optium argues that in such cases,
unless the applicant has persuasively explained why the information was not provided to
the examiner, it is appropriate to infer that the withholding was deliberate and intended to
deceive. Optium states that Ferring B.V. v. Barr Labs., Inc., 437 F.3d 1181 (Fed. Cir.
2006), established this proposition. However, Ferring did not relieve the challenger of the
burden of establishing a threshold level of deceptive intent; the court in Ferring recognized
that intent is a “separate and essential component of inequitable conduct,” and that
“[m]ateriality does not presume intent.” 437 F.3d at 1190. The Ferring court found that the
applicant had deliberately concealed the personal and professional interests of several
affiants whose affidavits were provided to the examiner, and that this concealment, without
credible explanation, constituted affirmative evidence of deceptive intent. Ferring did not
establish a new rule for “inferring” intent from the mere nondisclosure of information. Nor
did Paragon Podiatry Laboratory, Inc. v. KLM Laboratories, Inc., also cited by Optium. See
984 F.2d 1182, 1191 (Fed Cir. 1993) (stating that intent to mislead cannot be inferred from
“the mere failure to disclose known highly material information”). The Paragon court
explained that only when the challenger has met its threshold burden of showing intent
does the burden of coming forward with evidence shift to the applicant. Id.; see Star
Scientific, 537 F.3d at 1368 (“The patentee need not offer any good faith explanation unless
2009-1265 12
the accused infringer first carried his burden to prove a threshold level of intent to deceive
by clear and convincing evidence.”).
Optium offered no evidence, but simply argued that the “high materiality” of the
Willems reference relieved it of the burden to produce any affirmative evidence of intent,
and instead required Emcore to provide a credible explanation for the nondisclosure.
However, this proposed shift in the burdens is contrary to precedent. See Larson, 559 F.3d
at 1340–41 (“[J]ust as merely withholding a reference cannot support an inference of
deceptive intent, so too an accused infringer cannot carry its threshold burden simply by
pointing to the absence of a credible good faith explanation.” (internal citation omitted)); M.
Eagles Tool Warehouse, Inc. v. Fisher Tooling Co., 439 F.3d 1335, 1341 (Fed.Cir.2006)
(“[A] failure to disclose a prior art device to the PTO, where the only evidence of intent is a
lack of a good faith explanation for the nondisclosure, cannot constitute clear and
convincing evidence sufficient to support a determination of culpable intent.”).
The district court correctly ruled that on Optium’s version of the facts, and accepting
the disputed premise that Willems was highly material, Optium had offered no evidence that
could succeed in proving deceptive intent by clear and convincing evidence. We affirm the
district court’s grant of summary judgment of no inequitable conduct.
AFFIRMED
2009-1265 13
United States Court of Appeals for the Federal Circuit
2009-1265
OPTIUM CORPORATION,
Plaintiff-Appellant,
v.
EMCORE CORPORATION,
Defendant-Appellee.
Appeal from the United States District Court for the Western District of Pennsylvania in
case no. 07-CV-1683, Chief Judge Donetta W. Ambrose.
PROST, Circuit Judge, concurring in the result.
While I agree with the result in this case, I write separately from the majority
because I am concerned that the majority opinion might be interpreted to limit the kind
of evidence that may be considered by the district court in determining deceptive intent.
Although the majority correctly points out that a high level of materiality does not
automatically presume intent, the language of the majority opinion seems to imply that a
high level of materiality is entirely irrelevant to an inference of intent. See Majority Op.
at 11-12. If my reading is correct, this implication is contrary to both Federal Circuit
precedent and basic principles of evidence law.
There is no dispute that materiality and intent are separate prongs of the
inequitable conduct analysis, both of which must be proven by clear and convincing
evidence. See Kingsdown Med. Consultants, Ltd. v. Hollister Inc., 863 F.2d 867, 872
(Fed. Cir. 1988). After thresholds of materiality and intent are established, the court
conducts a balancing test and determines whether the scales tilt to a conclusion that
“inequitable conduct” occurred. Halliburton Co. v. Schlumberger Tech. Corp., 925 F.2d
1435, 1440 (Fed. Cir. 1991). Within that balancing test, the more material the omission
or the misrepresentation, the lower the level of intent required to establish inequitable
conduct, and vice versa. Akzo N.V. v. United States Int’l Trade Comm’n, 808 F.2d
1471, 1481-82 (Fed. Cir. 1986). In the context of inequitable conduct, just as in all other
areas of patent law, and all other areas of civil and criminal law, intent may be proven
by circumstantial evidence. See, e.g., Molins PLC v. Textron, Inc., 48 F.3d 1172, 1181
(Fed. Cir. 1995); Moleculon Research Corp. v. CBS, Inc., 793 F.2d 1261, 1272 (Fed.
Cir. 1986).
Optium argues that it presented sufficient evidence of materiality and intent to
survive summary judgment. See KangaROOS U.S.A. v. Caldor, Inc., 778 F.2d 1571,
1576 (Fed. Cir. 1988) (“Intent to mislead or deceive is a factual issue that, if contested,
is not readily determined within the confines of Fed. R. Civ. Proc. 56.”). In doing so,
Optium asserts that it presented evidence of a highly material reference that was known
to the patentee and not disclosed to the patent examiner. Optium argues that since
materiality and knowledge may support an inference of intent and the district court was
required to draw all justifiable inferences in its favor for purposes of Emcore’s motion for
summary judgment, the district court improperly granted Emcore’s motion.
The majority seems to reject Optium’s argument, at least in part, by holding that
materiality and knowledge are per se irrelevant to the determination of whether an
inference of intent is appropriate. See Majority Op. at 11-13. To the extent the majority
opinion can be read this way, this aspect of the opinion is contrary to the law of this
court and inconsistent with fundamental concepts of relevant evidence. Moreover, it is
2009-1265 2
unnecessary to the disposition of this case, which could easily be affirmed on its
undisputed facts.
The definition of “relevant evidence” is evidence that tends to make the existence
of any fact of consequence more or less probable. Fed. R. Evid. 401. If a reference is
of very high materiality, and it is shown that the patentee knew of the reference, then it
is more probable that the reference was withheld from the examiner with deceptive
intent, as compared to a reference of low materiality. In other words, framed under our
standard for deceptive intent, the more material the withheld reference, the more likely
that an inference of deceptive intent is “the single most reasonable inference able to be
drawn from the evidence.” See Larson Mfg. Co. of S. Dakota, Inc. v. Aluminart Prods.
Ltd., 559 F.3d 1317, 1340 (Fed. Cir. 2009) (quoting Star Scientific, Inc. v. R.J. Reynolds
Tobacco Co., 537 F.3d 1357, 1366 (Fed. Cir. 2008)). As such, this court has expressly
considered the level of materiality of a withheld reference in determining whether an
inference of deceptive intent is appropriate. See, e.g., Cargill, Inc. v. Canbra Foods,
Ltd., 476 F.3d 1359, 1366-67 (Fed. Cir. 2007) (quoting Critikon, Inc. v. Becton Dickinson
Vascular Access, Inc., 120 F.3d 1253, 1257 (Fed. Cir. 1997)) (“We have never held that
materiality is irrelevant to the question of intent. To the contrary, we have recognized
that ‘a patentee facing a high level of materiality and clear proof that it knew or should
have known of that materiality, can expect to find it difficult to establish “subjective good
faith” sufficient to prevent the drawing of an inference of intent to mislead.’”); Purdue
Pharma L.P. v. Endo Pharms. Inc., 438 F.3d 1123, 1134-35 (Fed. Cir. 2006) (“In a case
such as this, when the materiality of the undisclosed information is relatively low, there
is less basis for inferring intent from materiality alone.”); see also Praxair, Inc. v. ATMI,
2009-1265 3
Inc., 543 F.3d 1306, 1315-16 (Fed. Cir. 2008); Ferring B.V. v. Barr Labs., Inc., 437 F.3d
1181, 1190-91 (Fed. Cir. 2006); Critikon, Inc., 120 F.3d at 1256-57. Such consideration
of materiality in determining intent does not mean that a high level of materiality alone
presumes intent without other evidence as to the patentee’s state of mind. See M.
Eagles Tool Warehouse, Inc. v. Fisher Tooling Co., 439 F.3d 1335, 1340 (Fed. Cir.
2006). It likewise does not conflate the two prongs of the inequitable conduct test for a
district court to find that the same evidence of materiality is probative of both prongs.
Accordingly, if a reference is of very high materiality, and it is shown that the
patentee knew of the reference and appreciated its high level of materiality, and the
patentee can offer no good faith explanation as to why the reference was withheld, then
a district court may find such circumstantial evidence to be enough to support a finding
of intent to deceive. Ferring B.V., 437 F.3d at 1191; Bruno Indep. Living Aids, Inc. v.
Acorn Mobility Servs., 394 F.3d 1348, 1354 (Fed. Cir. 2005) (“[I]n the absence of a
credible explanation, intent to deceive is generally inferred from the facts and
circumstances surrounding a knowing failure to disclose material information.”); Critikon,
Inc., 120 F.3d at 1257. Depending on the facts of the case and the credibility of the
witnesses, a district court might instead find that this circumstantial evidence is not
sufficient to support a finding of intent to deceive. See Ferring, 437 F.3d at 1191
(declining “to lay down a general rule as to when intent may be or must be inferred from
the withholding of material information by an applicant”).
The district court here found that the evidence of materiality and knowledge did
not support an inference of intent, and thus deceptive intent was not among the
inferences that could be reasonably drawn in favor of Optium, the nonmovant for
2009-1265 4
purposes of Emcore’s summary judgment motion. Even accepting Optium’s contention
that the withheld Willems reference was highly material, given the lack of other evidence
of deceptive intent, the district court properly found that there was insufficient evidence
of intent to survive summary judgment. It is undisputed that the inventors knew of the
Willems reference and cited it in their internal research report and invention disclosure,
but the reference was not submitted to the U.S. Patent and Trademark Office (“PTO”)
during the prosecution of U.S. Patent No. 6,282,003 or U.S. Patent No. 6,490,071. In
his deposition, one of the inventors testified that he believed he gave a copy of the
invention disclosure and the internal research report, which cited the Willems reference,
to one of the prosecuting attorneys. Yet none of the prosecuting attorneys have any
recollection of seeing the Willems reference. Without any evidence indicating a lack of
credibility, this record suggests—at most—negligence on the part of the inventors and
the prosecuting attorneys in failing to effectively collaborate to ensure that all material
references were submitted to the PTO. Yet even “‘gross negligence’ does not of itself
justify an inference of intent to deceive.” Kingsdown Med. Consultants, Ltd., 863 F.2d at
876. Drawing all justifiable inferences in Optium’s favor, an inference of deceptive
intent on these facts would be unreasonable. As such, the district court properly
concluded that Optium’s evidence of intent was insufficient to survive summary
judgment.
The breadth of the legal rule articulated by the majority opinion, however, seems
to go further. For example, the majority describes Optium’s case as relying on a high
level of materiality, but providing “no evidence . . . of intent.” Majority Op. at 11. An
accurate description, however, would be that Optium relies on a high level of materiality
2009-1265 5
and no other evidence of intent. To the extent that the majority opinion characterizes
the level of materiality as per se irrelevant to the intent inquiry, the majority opinion errs.
Any dicta in opinions of this court which may be interpreted as suggesting the same are
also legally erroneous in that respect. See, e.g., Abbott Labs. v. Sandoz, Inc., 544 F.3d
1341, 1356 (Fed. Cir. 2008) (“Materiality is not evidence of intent . . . .”). Although
materiality and intent are separate inquiries, both of which must be proven, it may often
be the case that a district court finds the same evidence of materiality probative for both
prongs of the analysis. Thus, it is not that a high level of materiality lowers the threshold
evidentiary burden for an inference of intent, but rather, that a high level of materiality is
circumstantial evidence of intent that brings the challenger closer to satisfying his
burden.
Because, drawing all justifiable inference in favor of Optium, the facts of this case
cannot support an inference of intent to deceive, I concur with the majority in affirming
the district court’s grant of summary judgment of no inequitable conduct. I depart from
the majority only to the extent that the majority opinion characterizes materiality as
irrelevant to an inference of intent.
2009-1265 6