Dayco Products, Inc. v. Total Containment, Inc.

Dayco Products, Inc. v. Total Containment, Inc.[1]

This case involved an appeal of a grant of summary judgement of unenforceability and invalidity of four patents owned by Dayco. Total Containment (TCI) had been accused of infringing certain ones of those patents. This was not the first time the parties have been before the Court of Appeal. In 2001 the Court of Appeal overturned the district court’s grant of summary judgment of non-infringement of the four patents because the district court had adopted an incorrect claim interpretation construction.[2]

On remand, the district court again granted summary judgment for the accused infringer (TCI) with respect to the ‘752, ‘822, ‘050, and ‘023 patents, this time on the ground that the patents were unenforceable due to inequitable conduct during prosecution and that the asserted claims were invalid as anticipated.

The patents-in-suit all claim priority through a string of continuation applications to U.S. Application No. 408,161, filed September 15, 1989 and all relate to flexible hoses and coupling assemblies that connect to each other for use in underground gas containment systems.

TCI complained that Dayco had committed inequitable conduct because it had not disclosed the existence of other copending and related applications to the Patent Office while the applications were pending before the USPTO. The court noted that the Manual of Patent Examiner Procedure (“M.P.E.P.”) makes clear that “if an inventor has different applications pending in which similar subject matter but patentably indistinct claims are present that fact must be disclosed to the examiner of each of the involved applications.”[3] Somewhat surprisingly, it seems that no one raised the issue that the M.P.E.P. is not adopted pursuant to the Administrative Procedures Act and therefore its pronouncements are not the same things as rules of practice.

Nevertheless, TCI did not prevail on this issue (at this time) since the lower court did not apply the correct test for finding inequitable conduct. The Court noted that in order “[t]o prove inequitable conduct in the prosecution of a patent, [the defendant] must have provided evidence of affirmative misrepresentations of a material fact, failure to disclose material information, or submission of false material information, coupled with an intent to deceive” citing Purdue Pharma L.P. v. Boehringer Ingelheim GMBH.[4] The court also noted that “[b]oth intent and materiality are questions of fact that must be proven by clear and convincing evidence.” The Court went on to note that the requisite intent to deceive could not be inferred merely because the USPTO was not advised about all co-pending applications. Indeed, the USPTO had been informed about at least some of the related applications.

TCI also complained about a prior art reference which was not cited and because the plaintiff had not advised an Examiner about a contrary decision of another examiner reviewing a substantially similar claim. The later claim seems to have been a matter of first impression and the Court ruled that there is an obligation to inform one Examiner about a contrary decision of another examiner reviewing a substantially similar claim. But again the lower court’s action in granting summary judgment was overruled, the court noting that the district court did not address intent to deceive related to the failure to disclose the Examiner’s adverse decision. The court opined that a “trial on this issue is, therefore, necessary.” Apparently the Court is not interested in reviewing a third summary judgment decision by the lower court.[5]

On the issue of validity, the lower court was admonished to treat the claims one by one (there can be no grouping of the claims for an validity analysis) and to make sure that each and every limitation of each claim be found in the prior art (the lower court had overlooked certain limitations).

[1] Appeal 02-1497 Decided May 23, 2003.
[2] 59 USPQ2d 1489 (Fed. Cir. 2001).
[3] M.P.E.P. § 2001.06(b)
[4] 237 F.3d 1359, 1366, 57 USPQ2d 1647, 1652 (Fed. Cir. 2001).
[5] Indeed, the Court concludes its decision by stating:

“This is the second time that we have reversed a grant of summary judgment in favor of the defendant. The time has come when this case must be set for trial. In that connection, we note that this case is complex, involving as it does multiple patents, multiple claims, and defenses and counterclaims of unenforceability and invalidity. On remand counsel for both parties have an obligation to cooperate in narrowing the issues, and avoiding untenable arguments, which serve only to confuse the real issues before the district court. On the present record there is no basis for a claim of unenforceability concerning the failure to disclose the copendency of the ‘196 application or the Wilson patent, nor is there any basis for a claim of invalidity of the asserted claims as being anticipated under 35 U.S.C. § 102 given the presumption of validity that applies to all patents. Absent the discovery of material new evidence the court should entertain summary judgment motions by plaintiff to dispose of these claims.”