Taltech Ltd. v. Esquel Enterprises Ltd.

United States Court of Appeals for the Federal Circuit

2009-1344

TALTECH LIMITED
and TAL APPAREL LIMITED,

Plaintiffs-Appellants,

v.

ESQUEL ENTERPRISES LIMITED
and ESQUEL APPAREL, INC.,

Defendants-Appellees.

William K. West, Jr., Howrey LLP, of Washington, DC, argued for plaintiffs-
appellants. With him on the brief was Pamela S. Kane; Duane Mathiowetz and Farah S.
Anthony, of San Francisco, California.

Ronald L. Grudziecki, Drinker Biddle & Reath LLP, of Washington, DC, argued for
defendants-appellees. With him on the brief were Gary J. Rinkerman and Jeffrey G.
Killian. Of counsel was Michael J. McManus.

Appealed from: United States District Court for the Western District of Washington

Senior Judge Thomas S. Zilly
 UNITED STATES COURT OF APPEALS FOR THE FEDERAL CIRCUIT

2009-1344

TALTECH LIMITED
and TAL APPAREL LIMITED,

Plaintiffs-Appellants,

v.

ESQUEL ENTERPRISES LIMITED
and ESQUEL APPAREL, INC.,

Defendants-Appellees.

Appeal from the United States Court for the Western District of Washington in case no.
04-CV-974, Senior Judge Thomas S. Zilly.

______________________

DECIDED: May 12, 2010
_______________________

Before MAYER, FRIEDMAN, and GAJARSA, Circuit Judges.

Opinion for the court filed by Circuit Judge MAYER. Dissenting opinion filed by Circuit
Judge GAJARSA.

MAYER, Circuit Judge.

Taltech Limited and TAL Apparel Limited (collectively “TAL”) appeal the

supplemental judgment of the United States District Court for the Western District of

Washington reinstating its July 13, 2007, judgment, awarding attorney fees and costs

under 35 U.S.C. § 285, and post-judgment interest at the rate allowable at the time of

the earlier judgment. Taltech Ltd. v. Esquel Enters. Ltd., 609 F. Supp. 2d 1195, 1211
(W.D. Wash. 2009) (Taltech). We affirm the award of attorney fees and costs, and

reverse the post-judgment interest rate.

BACKGROUND

Taltech Limited owns United States Patent No. 5,568,779 (“’779 patent”) which is

drawn to seams including thermal adhesive to reduce pucker. TAL Apparel Limited,

licensee of the ’779 patent, manufactures and sells garments, including dress shirts.

On April 29, 2004, defendant Esquel Enterprises, Ltd. (“Esquel”), an apparel

manufacturer and TAL competitor, filed a complaint seeking a declaratory judgment of

non-infringement, and TAL counterclaimed, alleging infringement.

Following a bench trial, the district court concluded that Taltech inventor John

Wong engaged in inequitable conduct during prosecution of the ’779 patent before the

United States Patent and Trademark Office (“PTO”) when he did not disclose a raincoat

seam that included heat-fusible adhesive tape (undisclosed raincoat seam, “URS”), and

when he misrepresented a raincoat seam previously made and sold by TAL (“double

top-stitch seam”). Based on these inequitable conduct findings, and a finding of

litigation misconduct, the court declared the case exceptional under 35 U.S.C. § 285.

The July 13, 2007, final judgment awarded Esquel attorney fees and costs based on the

exceptional case finding. TAL appealed.

This court vacated the inequitable conduct determination. Taltech Ltd. v. Esquel

Apparel, Inc., 279 F. App’x. 974 (Fed. Cir. 2008). The attorney fees and costs were

also vacated because the exceptional case finding was based, at least in part, on TAL’s

inequitable conduct in failing to disclose the URS. The case was remanded for the

2009-1344 2
district court to determine if the URS was cumulative to German Patent No. 1 104 802

(“Robers”). Id. at 977.

On remand, the district court set out its previously presented reasons as three

separate and independent bases to support its finding of exceptional case: (1)

inequitable conduct in failing to disclose the URS; (2) inequitable conduct in

misrepresenting the double top-stitch seam; and (3) abusive litigation tactics. Taltech,

609 F. Supp. 2d at 1211. On these bases, the court entered a supplemental final

judgment which also imposed interest from the date of the earlier July 13, 2007,

judgment. TAL moved under Rule 60(a) of the Federal Rules of Civil Procedure that the

judgment specify an interest rate under 28 U.S.C. § 1961 from the date of the new

judgment. The motion was denied. TAL appeals both the exceptional case finding and

the judgment interest rate. This court has jurisdiction under 28 U.S.C. § 1295(a).

DISCUSSION

District courts may award reasonable attorney fees to a prevailing party “in

exceptional cases.” 35 U.S.C. § 285. “‘[T]he types of conduct which can form a basis

for finding a case exceptional [include] . . . inequitable conduct before the P.T.O., [and]

misconduct during litigation.’” Hoffman-LaRoche, Inc. v. Invamed, Inc., 213 F.3d 1359,

1365 (Fed. Cir. 2000) (quoting Beckman Instruments, Inc. v. LKB Produkter AB, 892

F.2d 1547, 1551 (Fed. Cir. 1989)). To establish inequitable conduct the accused

infringer must prove by clear and convincing evidence that the patentee withheld

material information with intent to deceive the PTO. Kingsdown Med. Consultants, Ltd.

v. Hollister Inc., 863 F.2d 867, 872 (Fed. Cir. 1988) (en banc to overrule precedent that

stated “gross negligence” mandates a finding of deceptive intent). Materiality and intent

2009-1344 3
are questions of fact that we review for clear error. GFI, Inc. v. Franklin Corp., 265 F.3d

1268, 1273 (Fed. Cir. 2001). If the materiality and intent requirements are met, the

court must then determine whether the cited conduct amounts to inequitable conduct by

balancing the levels of materiality and intent; a greater showing of one allows a lesser

showing of the other. Larson Mfg. Co. of S.D. v. Aluminart Prods. Ltd., 559 F.3d 1317,

1327 (Fed. Cir. 2009) (citing Digital Control, Inc. v. Charles Machine Works, 437 F.3d

1309, 1313 (Fed. Cir. 2006)); Star Scientific, Inc. v. R.J. Reynolds Tobacco Co., 537

F.3d 1357, 1365 (Fed. Cir. 2008) (“[T]he district court must still balance the equities to

determine whether the applicant’s conduct before the PTO was egregious enough to

warrant holding the entire patent unenforceable.”). “Thus, even if a threshold level of

both materiality and intent to deceive are proven by clear and convincing evidence, the

court may still decline to render the patent unenforceable.” Star Scientific, 537 F.3d at

1365.

We review the district court’s ultimate determination of inequitable conduct for an

abuse of discretion. Larson Mfg., 559 F.3d at 1327 (citing Digital Control, 437 F.3d at

1313). “An abuse of discretion occurs ‘when [the district court’s] decision is based on

clearly erroneous findings of fact, is based on erroneous interpretations of the law, or is

clearly unreasonable, arbitrary, or fanciful.’” Nilssen v. Osram Sylvania, Inc., 528 F.3d

1352, 1357 (Fed. Cir. 2008) (quoting Cybor Corp. v. FAS Techs., Inc., 138 F.3d 1448,

1460 (Fed. Cir. 1998) (en banc)).

We review a finding that a case is exceptional within the meaning of 35 U.S.C.

§ 285 for clear error. Nilssen, 528 F.3d at 1357. “Once a case is determined to be

exceptional, we review a district court’s decision to award attorney fees under an abuse

2009-1344 4
of discretion standard.” Id. (citing Forest Labs., Inc. v. Abbott Labs., 339 F.3d 1324,

1328 (Fed. Cir. 2003)). “The trial judge's discretion in the award of attorney fees

permits the judge to weigh intangible as well as tangible factors: the degree of

culpability of the infringer, the closeness of the question, litigation behavior, and any

other factors whereby fee shifting may serve as an instrument of justice.” Nat’l Presto

Indus., Inc. v. West Bend Co., 76 F.3d 1185, 1197 (Fed. Cir. 1996). “Litigation

misconduct and unprofessional behavior are relevant to the award of attorney fees, and

may suffice to make a case exceptional.” Sensonics, Inc. v. Aerosonic Corp., 81 F.3d

1566, 1574 (Fed. Cir. 1996).

I.

The district court’s first independent ground for finding the case exceptional is

TAL’s inequitable conduct in not disclosing the URS. The court concluded that the URS

met “the most stringent of the materiality standards,” and also found that the patentee’s

“culpability . . . is high.” Taltech, 609 F. Supp. 2d at 1209. A cumulative reference,

however, is not material, see 37 C.F.R. § 1.56(b) (2008), and TAL argues that the URS

is cumulative to Robers.

The district court found the URS not cumulative to Robers because: (1) TAL’s

translation was inadequate to inform a patent examiner that Robers was material to

patentability; (2) the URS had an armhole seam relevant to dependent claims 6, 7, 24,

and 25 of TAL’s application, while Robers only described a closure seam; and (3) the

URS incorporated Vilene SL33, the adjudicated withheld best mode for the ’779 patent,

while Robers only disclosed a generic thermoplastic component. Taltech, 609 F. Supp.

2d 1203, 1204, 1207.

2009-1344 5
 TAL responds to the translation finding by alleging the court erred in striking its

comparison of the URS and Robers to the ’779 patent claims, and that this comparison

demonstrates Robers’ disclosure of more claim elements than the URS. The district

court noted two “crucial exceptions,” not “minor,” as the dissent would have it, where

TAL’s translation (using “closure” and “seam,” respectively) and Esquel’s translation

(using “assembly” and “ribbon,” respectively) employ words with different meanings. Id.

at 1203-04. By the use of “closure” instead of “assembly,” the court reasoned that

TAL’s “translation limits . . . the Robers Patent to seams associated with fastenings, for

example, buttonholes, which are specifically discussed therein.” Id. at 1204. Regarding

TAL’s use of “seam” instead of “ribbon,” the court said that using “seam” was

“nonsensical” because it resulted in a “joint [that] is then itself sewn into a joint between

two pieces.” Id. Therefore it concluded that TAL’s submission was so inadequate that

“the patent examiner would not have understood the Robers Patent to teach anything

material to patentability of the ‘smooth seam’ method and product claims at issue.” Id.

TAL cites Dayco Products, Inc. v. Total Containment, Inc., 329 F.3d 1358, 1367

(Fed. Cir. 2003), and Halliburton Co. v. Schlumberger Technology Corp., 925 F.2d

1435, 1441 (Fed. Cir. 1991), as support for admitting its URS-Robers comparison.

These cases state the accepted idea that when determining if uncited prior art is

cumulative to art before the examiner the trial court must compare both to the claims of

the patent-in-suit, but neither involves the adequacy of a translation. Similarly, the

dissent emphasizes an element-by-element comparison of Robers and the URS, which

it says results in Robers being more relevant, thereby making the URS cumulative. But

the dissent’s underlying premise is flawed. The trial court’s failure to conduct a

2009-1344 6
URS-Robers comparison was based on thoroughly analyzing the differences between

the Robers translations. From this the court deemed Robers to not have been before

the examiner for all intents and purposes, which obviated the need for a comparison.

TAL also disputes the court’s second reason for finding the URS non-cumulative

to Robers, claiming that not applying Robers to armholes inappropriately narrowed its

disclosure by focusing solely on the claims to the exclusion of Robers’ broad disclosure.

And it objects to the court’s use of an improper dictionary definition for “closure.”

The district court’s emphasis on the term “closure” did not limit Robers to its

claims; “closure” appears throughout the Robers specification, not only in the claims.

TAL alleges the court improperly focused on the claims based on a single sentence in

its opinion stating that “plaintiffs’ translation limits the claims of the Robers Patent.”

TalTech, 609 F. Supp. 2d at 1204 (emphasis added). Based on this sentence, TAL

implies that the court did not consider all of Robers, when it clearly did. Id. at 1205

(“Plaintiffs’ translation of the Robers Patent restricted its scope to ‘closure’ seams.”)

(emphasis added).

Further evidence that the court fully considered the Robers specification, in

addition to the claims, is its disregard of TAL’s argument that Robers must include

armhole seams because the specification contains the phrase “universally applicable.”

TAL relies on a sentence taken out of context within the specification that states “[t]he

invention is universally applicable.” According to TAL, this sentence alone precludes

Robers from being limited to closure seams. The sentence, however, refers to diverse

laundering methods, and the court correctly found that it does not “broaden the scope of

seams for which the invention might be useful.” Id.

2009-1344 7
 TAL’s argument against the district court’s chosen dictionary meaning also fails.

While TAL proffers its own definitions for closure, “drawing together of edges or parts to

form a united integument,” and integument, “something that covers or encloses,” these

definitions do not alter the outcome. Even if the preferred “closure” definition is more

pertinent, TAL does not explain how it would have better informed a patent examiner of

Robers’ “universal[] applicability.” Moreover, both of TAL’s arguments for universal

applicability are undermined by its own proposed findings 1 that advocated against

Robers being applicable to armhole seams. These proposed findings are ignored by

the dissent.

TAL further disputes the court’s finding by alleging that the URS does not

disclose an armhole, and that even if it disclosed an armhole seam, it would not have

been important to the examiner because he already had references with a variety of

clothing seams and thermal adhesives. The finding that the URS is an armhole seam is

supported by the evidence. Id. at 1206. Even if it were a different type of seam, as the

dissent seems to think, it remains non-cumulative because Robers is limited to closure

seams.

As for the Vilene finding, TAL asserts that (1) the examiner would not have been

concerned with the URS’s use of a particular adhesive because the broad claims did not

require that degree of specificity; (2) even if he would have been concerned with

particular adhesives, Robers’ disclosure of a small genus anticipates the species, or

1
“Robers does not teach or suggest the subject matter of claim 25 of the
’779 Patent because it does not teach or suggest a dress shirt armhole seam,” and
“Robers only generally discloses use of a thermoplastic strip in assembly seams, but
does not specifically state the use of a thermoplastic strip in an armhole seam … [and
was] never intended to apply Figures 4 and 5 to a dress shirt armhole seam.”

2009-1344 8
renders the claims obvious; (3) Robers’ disclosure of a pressing temperature—150

degrees Celsius—teaches specific thermoplastics; and (4) the examiner had many

examples of thermoplastic adhesives in various garment seams in other patents.

Regarding the first argument, a patent examiner would have found the URS’s

Vilene SL33/armhole combination important because dependent claims 3 and 22

include polyamide, of which Vilene SL33 is a specific example, and the specification

states that “[t]he phenomenon of seam pucker is most troubling in armhole seams

because of their visible location and the manner of attachment between the shirt body

. . . and the shirt sleeve.” ’779 patent col.3, ll.32-36. Vilene SL33 in an armhole seam is

“a new, different combination—previously not disclosed—of elements before the

examiner only in separate references,” that is, non-cumulative. Larson Mfg., 559 F.3d

at 1333 (citing Molins PLC v. Textron, Inc., 48 F.3d 1172, 1180 (Fed. Cir. 1995)).

The dissent reasserts TAL’s argument that the broad claims did not require the

URS’s degree of specificity, citing Larson Manufacturing Co. of South Dakota v.

Aluminart Products Ltd., 559 F.3d 1317 (Fed. Cir. 2009), as support. In that case the

claim language did not require a specific type of weather stripping or a particular

retention capability; therefore references with these teachings were immaterial. Id. at

1333. Here, however, claims 3 and 22 include polyamide, and Vilene SL33 is a specific

example of a polyamide. This information is material because a reasonable examiner

would consider it important in deciding whether to allow the application to issue as a

patent. Star Scientific, 537 F.3d at 1367. The dissent’s assertion that Vilene SL33 is

“wholly irrelevant” because its corresponding limitation is not discussed in the

examiner’s reasons for allowance is unsupportable.

2009-1344 9
 TAL’s second and third arguments are wholly inconsistent with its previous

assessment of Robers. When distinguishing Robers from the ’779 patent, Wong

admitted that Robers’ interlining was technologically distinct from polyamide, and

unsuitable due to its bias cut and type of adhesive. TAL’s proposed findings at trial 2

also undercut its current position that Robers either anticipates or renders obvious the

URS’s Vilene SL33 teaching. Taltech, 609 F. Supp. 2d at 1207. TAL argued that when

Robers issued “there were, perhaps, hundred of materials and resins which could be

characterized as ‘thermoplastics.’ This lack of disclosure would severely confound a

skilled practitioner.” If a skilled practitioner would be confounded by Robers’ generic

disclosure of thermoplastics, it cannot anticipate “the group consisting of polyamide,

polyester, olefinic, polyurethane, and ethylene vinylacetate copolymer materials” recited

by claims 3 and 22. Id.; ’779 patent col.6, ll.63-65; col.8, ll.49-51. TAL’s argument

regarding Robers’ disclosure of a pressing temperature fails for similar reasons.

The argument that the examiner had many thermoplastic adhesive examples in

various garment seams in other patents is also unpersuasive. The “skilled practitioner”

of TAL’s proposed findings would, by definition, have knowledge of the “examples of

thermoplastic adhesives . . . in the other prior patents,” yet this knowledge was deemed

insufficient by TAL when arguing against Robers. We decline to apply a level of

2
“At the time Robers issued, there were, perhaps, hundreds of materials
and resins which could be characterized as ‘thermoplastics.’ This lack of disclosure
would severely confound a skilled practitioner.” “Robers teaches the use of interlinings,
which are to be coated with thermoplastic material on one or both sides, but does not
disclose whether they are to be applied in powder, pure or solvent forms; for a
practitioner of the art seeking to solve the pucker problem in 1994. These are important
operational information.” “Robers mentions the use of tapes without interlinings, but
discloses little if any detail[] of the material composition and properties of desired or
workable tapes.”

2009-1344 10
ordinary skill higher than that advocated by TAL. Accordingly, the URS’s Vilene SL33

disclosure is not cumulative to Robers because Vilene SL33 is within the polyamide

group included in claims 3 and 22, and is not taught by Robers’ recitation of

thermoplastic.

The district court also did not err in concluding that TAL acted with the requisite

deceptive intent in failing to disclose the URS. Proving intent does not require direct

evidence; it can be inferred from indirect and circumstantial evidence. Star Scientific,

537 F.3d at 1366. TAL chose to disclose the double top-stitch seam, presented as

“wholly inadequate for dress shirts” in a 1996 amendment, instead of the URS that more

closely approximated a high-priced dress shirt seam; and its failure to disclose the URS,

which included Vilene SL33, is consistent with its non-disclosure of the Vilene SL33

best mode. “[T]he involved conduct, viewed in light of all the evidence, including

evidence indicative of good faith . . . indicate[s] sufficient culpability to require a finding

of intent to deceive.” Kingsdown, 863 F.2d at 876. On these bases, the district court

could properly infer that TAL acted with deceptive intent. The dissent insists that

Robers was before the examiner and the URS was therefore cumulative, but, again, the

district court deemed to the contrary because of the faulty translation.

Moreover, there is no evidence of good faith to counter the evidence of intent.

The dissent relies on Wong’s voluntary disclosure of the URS, citing Rothman v. Target,

556 F.3d 1310 (Fed. Cir. 2009). But in Rothman this court found no substantial

evidence that the patentee had the requisite intent to deceive based on the patentee

submitting letters to the PTO discussing the alleged prior art; the holder of the alleged

prior art previously participating in negotiations to license rights to the patent prior to

2009-1344 11
issue; the patentee having no sample, photograph, drawing, or description of the

alleged prior art to submit to the PTO; the patentee’s attorney having a good faith belief

that the alleged prior art was not prior art; and the patentee submitting all the

information it did have to the PTO with its petition to make special. 556 F.3d at 1327-

28. The dissent also cites Pfizer, Inc. v. Teva Pharmaceuticals USA, Inc., but there, the

district court credited the testimony of a named inventor that the reference was

significantly different from the invention, noted the PTO’s recognition of the differences,

and relied on Pfizer’s “highly consistent pattern of disclosing references.” 518 F.3d

1353, 1366-67 (Fed. Cir. 2008). In stark contrast, Wong disclosed the prior art during a

deposition, after the patent issued, despite having sufficient knowledge and ability to

disclose it during prosecution; was deemed not credible by the court; and offers no

consistent pattern of disclosing references. This is not good faith.

Seeing no clear error in the materiality or deceptive intent analyses of TAL’s

failure to disclose the URS, we conclude that the district court did not abuse its

discretion in finding inequitable conduct.

II.

The district court’s second independent ground for finding an exceptional case is

TAL’s inequitable conduct in misrepresenting the double top-stitch seam. TAL alleges

that this argument was “deemed insubstantial by this Court on the first appeal.” To the

contrary, this court drew no conclusions about the inequitable conduct arguments

surrounding the misrepresentation of the double top-stitch seam. Instead, we “vacate[d]

the order of attorney fees under 35 U.S.C. § 285 because the district court based its

2009-1344 12
conclusion that this was an exceptional case at least in part upon its finding of

inequitable conduct.” 279 Fed. App’x. at 977.

“[I]nformation is material to patentability when it is not cumulative to information

already of record or being made of record in the application, and . . . [i]t refutes, or is

inconsistent with, a position the applicant takes in: (i) Opposing an argument of

unpatentability relied on by the Office, or (ii) Asserting an argument of patentability.” 37

C.F.R. § 1.56(b) (2008). The inequitable conduct analysis of TAL’s misrepresentations

relies on two aspects: It withheld that about five percent of dress shirts sold in the

United States by TAL Apparel featured two top stitches in the armhole seam; and it

withheld that about five to six percent of the dress shirts sold by TAL Apparel in the

early 1990s had overlock stitches. The double top-stitch seam misrepresentation is

material because it is not cumulative of other disclosures, and it refutes TAL’s argument

that “the appearance of two top stitches protruding through the upper garment ply may

be acceptable in the seams of heavy raincoats, but such a configuration is wholly

inadequate for most garments, particularly dress shirts.” Similarly, the overlock stitch

misrepresentation is material because it also is not cumulative of other disclosures, and

it refutes TAL’s statement in its March 11, 1996, amendment that “[a]lthough the open

edge C can be avoided by incorporating an overlock stitch along the edges, this stitch is

unacceptable in most applications, particularly shirts, because it increases the thickness

of the seam and is uncomfortable as it rubs a wearer.” The district court did not err in

finding these misrepresentations material.

For both misrepresentations, however, the dissent asserts non-materiality. In

essence, the dissent says that section 1.56(b) requires the misrepresentation be tied to

2009-1344 13
reasons claims are allowed. There is no such requirement. The statements in TAL’s

March 11, 1996, amendment are arguments intended to prevent TAL’s latest disclosure

from being applied to dress shirts, and combined with a reference disclosing an

overlock stitch. In both cases, TAL is “[a]sserting an argument of patentability” as

required. It is irrelevant whether these arguments were the ultimate reasons for the

patent’s allowance.

Despite knowledge of facts to the contrary, TAL represented to the examiner that

“two top stitches” and the “overlock stitch” were, respectively, “wholly inadequate,” and

“unacceptable.” The consequence of both representations was that the examiner would

have been led to believe factually inaccurate statements.

The dissent alleges materiality and intent have been conflated. We agree that

intent is an element of inequitable conduct requiring support by clear and convincing

evidence, but the dissent’s belief that intent requires facts wholly distinct from those

establishing materiality is incorrect. TAL’s assertion of unequivocal untruths about a

reference, simultaneous with presentation of the reference, in order to minimize the

reference’s impact on the examiner shows TAL’s intent to deceive.

The dissent is also troubled by the district court’s statement that Wong

“represented to the PTO that he had ‘recently become aware’ of the Double Top-Stitch

Seam,” Taltech, 609 F. Supp. 2d at 1208, when it was his attorney making the

statement. The district court, however, fully grasped the attorney’s decision to be

intentionally ambiguous about when Wong was aware of the prior sales, and this

misdirection is imputable to Wong, FMC Corp. v. Manitowoc Co., Inc., 835 F.2d 1411,

2009-1344 14
1415 n.8 (Fed. Cir. 1987) (“[T]he knowledge and actions of applicant’s attorney are

chargeable to applicant.”).

Accordingly, it was not clear error for the district court to find deceptive intent in

these misrepresentations; and after “balanc[ing] the equities to determine whether the

applicant’s conduct before the PTO was egregious enough to warrant holding the entire

patent unenforceable,” Star Scientific, 537 F.3d at 1365, in so holding.

III.

The district court’s final independent ground for finding an exceptional case is

abusive litigation tactics. TAL argues that its tactics were reasonable under the

circumstances and do not support a finding of bad faith. The district court relied on the

cumulation of TAL’s dismissal of its damages claim after Esquel conducted discovery

and prepared a defense; waiver of a jury request only weeks before trial and after

Esquel had extensively prepared; voluntary dismissal with prejudice, in the middle of

trial, of five of its claims of infringement in order to avoid responding to Esquel’s motion

for entry of judgment pursuant to Fed. R. Civ. P. 52(c); withdrawal of an International

Trade Commission complaint shortly before the hearing began; and engaging in similar

tactics on remand from this court.

“As an appellate court, we are ill-suited to weigh such evidence. All of the

instances described above are context-specific, and the district court found that, taken

in context, they amounted to litigation misconduct. There is sufficient evidence in the

record for the district court to have concluded that trial misconduct occurred, and we are

not left with the firm conviction that a mistake was committed. Furthermore, it ill

behooves an appellate court to overrule a trial judge concerning litigation misconduct

2009-1344 15
when the litigation occurred in front of the trial judge, not the appellate court.” Nilssen,

528 F.3d at 1359. The district court presided over this case for over five years, and it

had the opportunity to review the litigation conduct after remand, during which it found

that TAL’s misconduct continued. Taltech, 609 F. Supp. 2d at 1210. The court also

found that based on “Mr. Wong’s pattern of changing his testimony to suit the theory du

jour and in light of plaintiffs’ shifting contentions . . . the record cannot be improved.” Id.

The trial court had ample reasons for concluding that TAL’s litigation tactics were

abusive.

IV.

Now turning to the interest calculation: “[I]nterest shall be calculated from the

date of the entry of the judgment, at a rate equal to the weekly average 1-year constant

maturity Treasury yield, as published by the Board of Governors of the Federal Reserve

System, for the calendar week preceding[] the date of the judgment.” 28 U.S.C.

§ 1961(a) (2009). We consider the district court’s interest award in accordance with the

Ninth Circuit’s standard of review, see GFI, 265 F.3d at 1272, which is de novo,

Planned Parenthood v. Am. Coalition of Life Activists, 518 F.3d 1013, 1020 (9th Cir.

2008). According to the Ninth Circuit, under Kaiser Aluminum & Chem. Corp. v.

Bonjorno, 494 U.S. 827 (1990), “post-judgment interest may run only from the date of a

judgment later determined to be supported by the evidence. It may not run from a

legally insufficient judgment.” Planned Parenthood, 518 F.3d at 1021.

TAL contends that the April 10, 2009, judgment (.58% interest rate), is the only

legally sufficient judgment, while Esquel argues for the July 13, 2007, judgment (4.99%

interest rate). Our May 22, 2008, judgment vacated the district court’s finding of

2009-1344 16
inequitable conduct for failure to disclose the URS, and necessarily the exceptional

case ruling because it was based, at least in part, on this inequitable conduct finding.

Therefore, the July 13, 2007, judgment was legally insufficient and the April 10, 2009,

judgment and its .58% interest rate applies.

CONCLUSION

Accordingly, the judgment of the district court is affirmed in part, and reversed in

part, and the case is remanded for further proceedings in accordance with this opinion.

Costs to appellees.

AFFIRMED- IN- PART, REVERSED- IN- PART AND REMANDED

2009-1344 17
 United States Court of Appeals for the Federal Circuit

2009-1344

TALTECH LIMITED
and TAL APPAREL LIMITED,

Plaintiffs-Appellants,

v.

ESQUEL APPAREL, INC.,
and ESQUEL ENTERPRISES LIMITED,

Defendants-Appellees.

Appeal from the United States District Court for the Western District of
Washington in Case No. 04-CV-974, Senior Judge Thomas S. Zilly.

GAJARSA, Circuit Judge, dissenting.

This case exemplifies the ongoing pandemic of baseless inequitable conduct

charges that pervade our patent system. For the reasons stated below, I respectfully

dissent from the majority opinion.

Defendants’ inequitable conduct claim rests on a handmade drawing that the

inventor, John Wong, sketched on a piece of paper during his deposition. Defendants’

counsel requested that Wong draw the prior art that “inspired” him to experiment in

making pucker-free seams in dress shirts. In response, he sketched a prior art seam

used to waterproof raincoats manufactured in the TAL factory. During litigation, Wong’s

drawing was labeled the “Undisclosed Raincoat Seam” (“URS”). After a bench trial, the

district court found that Wong committed fraud on the U.S. Patent and Trademark Office

(“PTO”) because he failed to disclose the URS as the “inspiration” for his invention.
We vacated the inequitable conduct finding on the first appeal because there is no legal

requirement that an inventor disclose the “inspiration” for his invention to the PTO.

We remanded the case for a proper substantive inquiry into whether the URS was

merely cumulative of the prior art on record with the PTO. Taltech Ltd. v. Esquel

Enters., Inc., 279 F. App’x 974, 977 (Fed. Cir. May 22, 2008) (“If the undisclosed

raincoat seam was merely cumulative to Robers, then no inequitable conduct lies in its

nondisclosure.”).

On remand, the district court again found that Wong had committed inequitable

conduct based on his failure to disclose the URS, but did so based on a flawed

cumulativeness inquiry. The district court erroneously limited the teachings of both the

URS and the Robers reference in order to render them non-cumulative prior art.

Had the district court properly interpreted the teachings of both references, it would

have found that the URS was merely cumulative of Robers.

The district court also improperly inferred intent to deceive from the materiality of

the non-disclosed reference and several statements Wong made to the PTO.

In both instances, the district court drew an inference of bad faith despite an equally

plausible, and likely more reasonable, inference of good faith. Such an analysis has

been rejected by this court and is legally erroneous. See Scanner Techs. Corp. v. ICOS

Vision Sys. Corp., 528 F.3d 1365, 1376 (Fed. Cir. 2008) (“Whenever evidence proffered

to show either materiality or intent is susceptible of multiple reasonable inferences,

a district court clearly errs in overlooking one inference in favor of another equally

reasonable inference.”). The district court’s numerous legal and factual errors are

discussed in more detail below.

2009-1344 2
 A.

The district court began its cumulativeness inquiry by interpreting the teachings

of Robers, the closest prior art on record. Robers is a German patent application that

was considered by the examiner during prosecution and is cited as a reference on the

face of the ’779 patent. As part of its cumulativeness inquiry, the district court

considered a portion of the English translation of Robers that TAL submitted to the PTO:

a process for the production of a pucker free closure seam,
in particular for popeline and gabardine materials, wherein a
seam of or containing a thermoplastic is sewn into the seam
by a method already known, and the part of the material
adjoining the seam is then ironed while under slight tension.

During litigation, Esquel submitted a different translation of the Robers patent to

aid the district court in interpreting the German reference. After comparing the two

translations on remand, the district court found TAL’s translation inadequate and held

that the inadequacies limited Robers’ disclosure. Taltech Ltd. v. Esquel Enters., Inc.,

609 F. Supp. 2d 1195, 1204 (W.D. Wash. 2009).

The district court’s analysis is flawed. First, the issue on remand was whether

the URS was cumulative of Robers, not vice versa. Thus, it is not apparent what the

district court meant when it stated that “the Court would not view the Robers Patent as

cumulative.” Taltech, 279 F. App’x at 977. Second, while the district court quibbled

over the proper translation of several words from German to English, it also noted

that “the translators chose different English words having, for the most part, equivalent

meanings.” Taltech, 609 F. Supp. 2d at 1204 (emphasis added). The art of translation

is not precise, and, absent any evidence of intent to deceive, minor variations in

submitted translations do not constitute inequitable conduct.

2009-1344 3
 Had the district court properly considered the teachings of Robers, it would have

concluded that the URS is merely cumulative of Robers. To determine whether a

reference is cumulative of the prior art disclosed to the PTO, this court uses an element-

by-element approach to compare the disclosed prior art reference and the undisclosed

prior art reference with the claimed invention. See Baxter Int’l Inc. v. McGaw, Inc.,

149 F.3d 1321, 1329 (Fed. Cir. 1998). In this case, the undisclosed prior art reference,

the URS, has the following elements: (a) a top fabric layer, (b) a bottom fabric layer,

(c) a folded strip of adhesive, (d) a set stitch, and (e) a top stitch. Likewise, the

disclosed reference, the Robers patent, has the very same elements: (a) a top fabric

layer (“2”), (b) a bottom fabric layer (“3”), (c) a folded strip of adhesive (“1”), (d) a set

stitch (“4”), and (e) a top stitch (“5”).

Robers, however, also discloses an important element that is not present in the

URS. Robers’ top stitch passes through the first fabric layer, the strip of adhesive, and

2009-1344 4
the second fabric layer. Wong testified that this type of top stitch was discovered to be

vital in preventing seam puckering in dress shirts. The claimed invention uses a top

stitch that passes through both layers of fabric and the strip of adhesive. This element

was critical to the success of the claimed invention, yet it is entirely absent from the

URS because the URS’s top stitch passes through layers of fabric only. Thus, Robers

discloses every element that the URS discloses and also discloses the critical top stitch

not disclosed in the URS. Accordingly, the URS is merely cumulative and does not

support a finding of inequitable conduct. See Halliburton Co. v. Schlumberger Tech.

Corp., 925 F.2d 1435, 1443 (Fed. Cir. 1991) (“[T]he cited references were more

pertinent to the Halliburton applications than were the withheld references. Halliburton

had no obligation to disclose cumulative references.”). The failure by the district court to

properly analyze the two references element by element is reversible error.

Moreover, had the district court correctly read the teachings of Robers and the

URS in the context of the ’779 patent, it would have concluded that Robers is the more

relevant reference. The claimed invention is directed to achieving pucker-free

seams in dress shirts. Likewise, Robers claims a method of achieving pucker-free

seams in dress shirts. Indeed, Robers teaches that its “chief aim” was to provide

“seams for garments in which the occurrence of puckers is reliably

prevented . . . despite subsequent treatment in the form of repeated laundering and

drying.” Conversely, as Wong testified, the URS was used only in raincoats.

Because the more relevant reference, Robers, was disclosed, Wong’s failure to disclose

the less relevant reference does not support the district court’s inequitable conduct

2009-1344 5
finding. See Pro-Mold Tool Co. v. Great Lakes Plastics, Inc., 75 F.3d 1568, 1577

(Fed. Cir. 1996) (finding that less relevant art is not material prior art).

Additionally, in finding the URS not cumulative of Robers, the district court

improperly limited the scope of both the URS and Robers. Turning first to the URS, the

district court concluded that the URS was an “armhole seam.” However, there is no

evidence whatsoever that the URS was an “armhole seam.” Wong testified that his

factory in Thailand made a raincoat seam that had only one top stitch, but he did not

testify that such seams were used as armhole seams. Wong also testified that the TAL

plant in Malaysia used different seams for raincoats, one of which had a set stitch and

another not having a set stitch. When Wong sketched the URS at his deposition in

2006, he did not identify it as an armhole seam. Wong did testify that “the rain coat

seams that [he] either took apart or looked at in early 1994” contained a variety of

different patterns and stitches and that some were used “in the armhole or around the

arm of a rain coat.” But Wong was never asked during the deposition whether the URS,

a drawing which he made at the deposition, was an armhole seam. Furthermore, he

never testified that it was. Nevertheless, the district court improperly limited the URS to

an armhole seam of a raincoat, instead of merely a raincoat seam. The district court

failed to understand that the URS was a drawing made during the deposition

subsequent to the issuance of the patent, and only in reply to how the inventor was

“inspired” to make the invention. See Taltech, 279 F. App’x at 977.

Furthermore, the majority improperly affirms the district court’s flimsy attempt to

distinguish the URS as non-cumulative prior art based on the URS’s disclosure of a

specific type of thermoplastic adhesive, Vilene SL33. Maj. Op. at 8. While Robers

2009-1344 6
discloses an adhesive element, it does not specifically disclose Vilene SL33. However,

the district court’s materiality finding based on Vilene SL33 is error. Claims 3 and 22

disclose a general type of thermoplastic adhesive, a polyamide, for the garment seams.

However, none of claims require Vilene SL33 or any other specific type of thermoplastic

adhesive. The examiner considered numerous examples of polyamide adhesives for

garment seams in the prior art on record, including Benstock, Swan, Off, and

Saniscalchi. Thus, no reasonable examiner would have found the URS’s disclosure of

Vilene SL33 material because the specific type of polyamide adhesive was not relevant

to the examination of the pending claims.

This court has already rejected the argument that the majority now upholds,

namely, that an undisclosed reference is material where it discloses a specific element

in greater detail than the examiner’s cited references. Larson Mfg. Co v. Aluminart

Prods., 559 F.3d 1317, 1332-33 (Fed. Cir. 2009). Reversing the finding of inequitable

conduct, this court noted that:

The claim language and limitations at issue require neither a
specific type of weather stripping nor a particular retention
capability. Rather, the limitations . . . simply require any type
of general weather stripping . . . [T]he Panel was not
concerned with a particular retention capability. Accordingly,
a greater retention capability of weather stripping was wholly
irrelevant—i.e., immaterial . . . and could not be the basis of
a distinguishing feature to make the [undisclosed prior art
reference] and the DE ’478 patent not cumulative—i.e.,
material.

Id. at 1333 (internal citations omitted). The same analysis applies in this case.

The examiner was not concerned with any specific type of adhesive. The examiner’s

focus was the “particular folding steps of the garment parts (or particular positioning of

the above parts) with respect to the bonding element,” as specified in the ’779 patent’s

2009-1344 7
independent claims. Those “particular folding steps” and “positioning” of the elements

were not present in either Robers or the URS; thus, the examiner allowed the claims.

Accordingly, the specific type of adhesive—Vilene SLL3 or otherwise—was wholly

irrelevant, i.e., immaterial, and cannot be a basis for distinguishing the URS as non-

cumulative prior art.

Turning to the district court’s analysis of Robers, the district court improperly

limited the scope of Robers to buttonholes. Yet Robers teaches that his invention “may

be used to advantage with closure seams of all types” and is not limited to fastening

such as buttonholes, as the district court erroneously found. Robers also teaches that

that these closure seams may be used to achieve a “smooth shirt breast” and explains

that “the invention may also be used, for example, on one or both sides of a buttonhole

for the purpose of reinforcement . . . .” A buttonhole is merely one type of closure

contemplated by the patent. Despite this express disclosure, the district court held that

Robers’ disclosure was limited to buttonholes. The district court’s interpretation of the

URS and Robers are unreasonable and contradicted by the express teachings of both

references.

In sum, Robers discloses a method to achieve “smooth” dress shirt seams, like

the claimed invention covering “pucker-free” seams in dress shirts. The URS, on the

other hand, discloses seams in raincoats to prevent water from entering the raincoats,

not to prevent puckering. Moreover, Robers discloses more elements of the claimed

invention than the URS. Robers is the more relevant reference in relation to the

claimed invention. Thus, the URS is not material and is merely cumulative of Robers,

a reference which TAL disclosed to the PTO during prosecution. Accordingly,

2009-1344 8
the district court’s finding of inequitable conduct based on Wong’s failure to disclose the

URS is entirely improper and legally erroneous.

The majority also affirms the district court’s reliance on a series of immaterial

representations made during the prosecution of the ’779 patent. Even assuming that

the statements regarding the prior art are factually incorrect, none of the statements are

material to patentability of the claimed invention.

First, the majority affirms the district court’s erroneous reliance on

TAL’s statement regarding the “double top-stitch seam” found in the prior art.

TAL stated in its 1996 Amendment that “two top stitches protruding through the upper

garment ply may be acceptable in the seams of heavy raincoats, but it is wholly

inadequate for most garments, including dress shirts.” The majority finds that statement

is “refute[d]” by evidence that a small percentage of TAL’s dress shirts included two top

stitches. Maj. Op. at 12. The majority assumes, however, that these statements are

somehow “material” because “it is not cumulative of other disclosures,” despite the fact

that the claimed invention does not include two top stitches. Id. Accordingly, the

examiner would have had no interest in this representation because it does not impact

the patentability of the claimed seams.

Second, the majority affirms another erroneous finding regarding a statement in

TAL’s 1996 Amendment about prior art “overlock” stitches. Maj. Op. at 12-13.

TAL stated that an “overlock stitch . . . is unacceptable in most applications, particularly

dress shirts, because it increases the thickness of the seam and is uncomfortable

as it rubs a wearer.” Again, the majority relies on evidence that some of TAL’s

dress shirts included the use of an overlock stitch to find that TAL made a

2009-1344 9
material misrepresentation relating to its claimed pucker-free dress shirts. Id. at 12.

However, the majority fails to explain how TAL’s statement, that a thick overlock stitch

was not acceptable for a smooth dress shirt seam, misled the examiner in allowing the

claims, none of which includes this type of overlock stitch. Accordingly, there is no

logical factual or legal support for the inequitable conduct finding.

B.

Because I believe that the URS and TAL’s representations to the PTO are not

material, I need not determine whether TAL intended to deceive the PTO. See Star

Scientific, Inc. v. R.J. Reynolds Tobacco Co., 537 F.3d 1357, 1365 (Fed. Cir. 2009)

(“[A]t least a threshold level of each element—i.e., both materiality and intent to

deceive—must be proven by clear and convincing evidence.”). But, because the

majority has approved a deceptive intent finding that lacks any support in law or fact

and represents a dangerous departure from our precedent, I will now turn to the district

court’s intent to deceive analysis.

Conceding it lacked a smoking gun, the district court inferred that TAL intended

to deceive the PTO from circumstantial evidence. Taltech, 609 F. Supp. 2d at 1208.

First, the district court found TAL’s disclosure of a raincoat seam with no set stitch and

two top stitches, coupled with TAL’s representation to the PTO that such a seam is

“wholly inadequate for dress shirts,” evidenced an intent to deceive. Id. According to

the district court, intent could be inferred because “[TAL] disclosed only the seam with

two top stitches, which he argued was not suitable for his invention, while

contemporaneously withholding the seam with only one top stitch [the URS], which

more closely approximates the seam used in high-priced dress shirts.” Id. Yet, it is

2009-1344 10
undisputed that Robers disclosed a single top stitch. See supra p. 4 (Robers’ Fig. 3).

Even if the majority and district court believe that the Robers translation was

“inadequate,” such inadequacy could not have prevented the examiner from

understanding Robers’ Figure 3 which, whether read in German or English, indisputably

contains a single top stitch. Accordingly, the district court inferred intent from the failure

to disclose a prior element that was in fact already before the examiner.

This establishes not only that the URS was cumulative of Robers, but also that the

district court’s inference of deceptive intent is unwarranted. See Hebert v. Lisle Corp.,

99 F.3d 1109, 1116 (Fed. Cir. 1996) (“Intent to deceive cannot be inferred solely from

the fact that information was not disclosed; there must be a factual basis for a finding of

deceptive intent.”).

Next, the district court inferred intent from an allegedly “misleading” statement by

Wong that he had only recently become aware of the disclosed double top-stitch seam.

See Taltech, 609 F. Supp. 2d at 1208. The statement that the district court labeled

“misleading” occurred in the 1996 amendment that presented the drawing of the

“Disclosed Raincoat Seam” in these words:

In addition to the current prior art of record, applicant’s
representative has recently become aware that applicant has
made prior sales in the United States of raincoats that
incorporate an adhesive structure along a raincoat seam.

According to the district court, Wong “represented to the PTO that he had ‘recently

become aware’ of the Double Top-Stitch Seam (i.e., the ‘Disclosed Raincoat Seam’),

see Conclusion No. 88 (Docket No. 301).” The district court concluded it was

“misleading” for Wong to represent that “he” was only “recently aware” of that raincoat

seam because Wong admitted that he learned of the “Disclosed Raincoat Seam” before

2009-1344 11
filing his patent application and it was “the very source of his idea to use thermal

adhesives in dress shirts.”

However, in the context of the amendment, “applicant’s representative” clearly

referred to the patent attorney, not Wong himself. Wong is the applicant, not the

applicant’s representative. Wong first told his patent prosecution attorneys in the United

States about the “Disclosed Raincoat Seam” shortly before the filing of the 1996

amendment during his visit to the United States. The district court simply

misunderstood this scenario. The statement it criticized as “misleading” was not

misleading at all; it was entirely accurate. The statement did not represent that Wong

himself had “recently become aware” of the “Disclosed Raincoat Seam,” and the

examiner was not misled.

Nonetheless, the majority contends that the district court “fully grasped the

attorney’s decision to be intentionally ambiguous about when Wong was aware of the

prior sales.” Maj. Op. at 15. A cursory reading of the district court’s opinion, however,

reveals that the district court completely misread the 1996 amendment as referring to

Wong’s knowledge of the Double Top-Stitch Seam, instead of the patent attorney’s

knowledge. See Taltech, 609 F. Supp. 2d at 1208 (“[I]n his 1996 amendment, he

represented to the PTO that he had ‘recently become aware’ of the Double Top-Stitch

Seam, a statement that was misleading because Mr. Wong was aware . . . before filing

his patent application”) (emphases added). The majority’s attempt to rewrite the district

court’s opinion fails to correct the blatant legal errors committed below.

Next, the district court cited Praxair, Inc. v. ATMI, Inc., 543 F.3d 1306, 1313-14

(Fed. Cir. 2008), for the proposition that deceptive intent can be inferred when a highly

2009-1344 12
material reference is withheld without a credible explanation. See Taltech,

609 F. Supp. 2d at 1209. The district court, however, failed to take into account Wong’s

good faith in introducing the URS into this record. Evidence of good faith must be

taken into account in determining intent to deceive. See Larson, 559 F.3d at 1341;

Dayco Prods., Inc. v. Total Containment, Inc., 329 F.3d 1358, 1366 (Fed. Cir. 2003).

In this case, Wong voluntarily drew the URS during his 2006 deposition. There is

no other evidence of the URS in this record. This voluntary disclosure during litigation

provided good faith evidence that Wong believed there was nothing material about the

URS and had no intent to hide it. See Rothman v. Target, 556 F.3d 1310, 1328

(Fed. Cir. 2009) (“[Jacobson] did not call the examiner’s attention to these garments as

prior art, [but had he] intended to conceal the existence . . . from the PTO, he never

would have included [the prior art references] in his petitions filings.”); Pfizer, Inc. v.

Teva Pharms. USA, Inc., 518 F.3d 1353, 1367 (Fed. Cir. 2008) (“Given the existence of

a credible reason for the withholding, the materiality of the references standing alone is

not sufficient to establish intent.”). These inferences of good faith are more reasonable

than the district court’s unsupported inference of deceptive intent. See Scanner Techs.,

528 F.3d at 1377 (“[T]he district court erred when it adopted an unfavorable

inference . . . over an equally reasonable favorable inference.”).

Moreover, the district court’s intent to deceive analysis, and the majority’s

affirmance thereof, fails to follow our precedent. The majority repeatedly conflates the

issues of materiality and intent. See Maj. Op. at 11, 13-14. This approach improperly

reads the element of intent to deceive out of our inequitable conduct precedent.

See Astrazeneca Pharms. LP v. Teva Pharms. USA, Inc., 583 F.3d 766, 776

2009-1344 13
(Fed. Cir. 2009) (“Intent to deceive is an independent element of inequitable conduct,

and must be independently established by clear and convincing evidence.”).

While it is true that “when the misrepresentation or withheld information is highly

material, a lesser quantum of proof is needed to establish the requisite intent,” Purdue

Pharma. L.P. v. Endo Pharms. Inc., 438 F.3d 1123, 1129 (Fed. Cir. 2006), some

quantum of proof is still necessary. See Allen Organ Co. v. Kimball Int’l, Inc., 839 F.2d

1556, 1567 (Fed. Cir. 1988) (“[M]ateriality does not presume intent, which is a separate

and essential component of inequitable conduct.”).

In this case, the majority’s opinion fails to identify any quantum of proof beyond

questionable materiality findings. For example, the majority infers deceptive intent from

“TAL’s assertion of unequivocal untruths about a reference, simultaneous with

presentation of the reference, in order to minimize the reference’s impact on the

examiner.” Maj. Op. at 14 (emphasis added). An inference of deceptive intent may be

drawn from an applicant’s gross mischaracterization or unreasonable interpretation of

the prior art. Young v. Lumenis, Inc., 492 F.3d 1336, 1349 (Fed. Cir. 2007).

However, attorneys are entitled to make reasonable arguments regarding the prior art.

Rothman, 556 F.3d at 1328-29 (“While the law prohibits genuine misrepresentations of

material fact, a prosecuting attorney is free to present argument in favor of patentability

without fear of committing inequitable conduct.”).

The district court and majority characterize TAL’s statements that certain prior art

stitches are “wholly inadequate” or “unacceptable” for dress shirts, despite evidence

of their inclusion in five percent of TAL’s dress shirts, as “unequivocal untruths.”

Maj. Op. at 14. However, there is an equally reasonable inference that TAL believed

2009-1344 14
that the prior art stitches are “wholly inadequate” or “unacceptable” and, therefore,

incorporated these stitches into only five percent of their shirts on the market.

Because TAL’s statements support two equally plausible inferences and can be viewed

as reasonable attorney argument, the district court and the majority commit legal

error by inferring deceptive intent in this situation. Star Scientific, 537 F.3d at 1365

(explaining that an inference of deceptive intent “must be the single most reasonable

inference able to be drawn from the evidence to meet the clear and convincing

standard”).

In conclusion, the majority’s opinion affirms a district court judgment that contains

no supportable finding of intent, limited materiality findings, and wholly ignores evidence

of good faith. In doing so, the majority reverses the road upon which this court’s

inequitable conduct precedent is presently travelling. As we recently explained,

“[t]he need to strictly enforce . . . [an] elevated standard of proof . . . is paramount

because the penalty for inequitable conduct is so severe, the loss of the entire

patent . . . . This penalty was originally applied only in cases of fraud on the Patent

Office.” Id. (internal quotation marks omitted). The district court’s finding of deceptive

intent is not supported by clear and convincing evidence and the inequitable conduct

finding should be reversed. Id.

D.

Because I disagree with the majority’s finding of inequitable conduct, I also

dissent regarding the majority’s findings of exceptionality and the award of attorney’s

fees. The district court’s findings are so clearly erroneous that affirming its

determinations causes this court to compound errors occasioned by the district court’s

2009-1344 15
failure to follow this court’s precedent. For these reasons, I would reverse the district

court, because its conclusions are legally erroneous.

2009-1344 16