Optium Corp. v. Emcore Corp.

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

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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.

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