Lessons learned regarding how to deal with a false declaration
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In Intellect Wireless, Inc. v. HTC Corporation and HTC America, Inc., decided on October 9, 2013 by the CAFC, the court found that the patents at issue were unenforceable due to inequitable conduct, which is a high hurdle to meet but which was met in this instance. A review of the facts involved during prosecution history of the Intellect Wireless patents provides a roadmap for what not to do with respect to submitting a declaration to the PTO.
To prove inequitable conduct, the challenger must show by clear and convincing evidence that the patent applicant (1) misrepresented or omitted information material to patentability, and (2) did so with specific intent to deceive the U.S. PTO. In the Therasense, Inc. v. Becton, Dickinson & Co. en banc CAFC case decided in 2011, the filing of an unmistakably false affidavit was held to be material to patentability.
During the prosecution of the Intellect Wireless patent applications before the U.S. PTO, a Rule 131 (“swear behind”) Declaration was filed that stated that the claimed invention was actually reduced to practice and that the claimed invention was demonstrated at a meeting in July of 1993. As it turns out, both of these statements were incorrect. The patent attorney prosecuting the Intellect Wireless patent applications tried to quickly correct these errors in the first declaration, by filing a revised Rule 131 declaration. The revised Rule 131 declaration did not include any of the facts supporting actual reduction to practice that were included in the first declaration. Also, the revised declaration asserted that the Applicant was relying on constructive reduction to practice, but it did not state that it was not relying on actual reduction to practice.
The CAFC found several problems with the revised declaration. One problem was that the revised declaration did not specifically state that the first declaration had incorrect statements regarding actual reduction to practice. The CAFC relied on a 1983 CAFC case, Rohm & Haas Co. v. Crystal Chem. Co., which held that “if the misrepresentation is of one or more facts, the PTO [must] be advised what the actual facts are.” Such advisement was not done in the revised declaration.
Another problem was that the revised declaration still referred to “actual reduction to practice” in one place in that declaration. While this appears to have been a “copy-and-paste” error, the CAFC stated that it clouded the issue as to whether or not actual reduction to practice or construction reduction to practice was being asserted in the revised declaration.
Even though Intellect Wireless’ patent attorney stated that he “expressly advised the PTO about the misrepresentations during prosecution,” these advisements do not appear to be of record in the prosecution of the Intellect Wireless patent applications. As such, the CAFC did not give these assertions much if any weight.
Given all of the above, the CAFC found that the revised declaration did not correct the problems associated with the first declaration, and that the first “material to patentability” prong to show inequitable conduct has been met.
As to the second “intent to deceive” prong, the CAFC found that the inventor, by the filing of the first declaration with incorrect information, as well as providing false information regarding related applications dealing with a misleading Smithsonian press release, showed a specific intent to deceive the PTO, due to a “pattern of deceit.”
In particular, the CAFC held that “[t]he completely false statements in a first declaration [that] were followed by a replacement declaration that, rather than expressly admitting the earlier falsity, dances around the truth,” is enough to show an intent to deceive the PTO. As such, the CAFC found that the second “intent to deceive” prong was also met.
Since both the first and second prongs were met, the Wireless Intellect patents were held to be unenforceable due to inequitable conduct.
Should a Patent Attorney Be Alarmed due to the Wireless Intellect holding:
The short answer is No. There were multiple blunders committed during patent prosecution of the Intellect Wireless patent applications. A first lesson learned is to review all filings in detail prior to filing them with the U.S. PTO. A declaration is an important document, in which every word matters, and so it should be a matter of course to review it with a fine tooth comb, to make sure that all statements made in the declaration are correct. The phrase “actual reduction to practice” that appeared in the revised declaration was unfortunate, but should have been caught during a review of that declaration prior to it being filed with the U.S. PTO. The revised declaration should then have been resent to the inventor with the correction of “actual reduction to practice” to “constructive reduction to practice.” Whether this by itself would have changed the holding in this case is unclear, since the other “intent to deceive” things done during prosecution of the Intellect Wireless patent applications might still have been enough to show inequitable conduct in this case.
A second lesson learned from this case is that if a patent attorney is aware that a declaration was filed with incorrect and/or misleading statements, then a revised declaration should specifically point out which statements in the previous declaration were incorrect and/or misleading, which was not done in this instance.
So, bottom line, before filing a “swear behind” declaration with the U.S. PTO, whereby the filing of such declarations will be reduced over time due to the enactment of the AIA and its first-to-file provisions, check and double-check the declaration. Also, prior to preparing and filing the declaration with the U.S. PTO, discuss the content of the declaration in detail with whomever is to sign the declaration, to ensure that the statements made in the declaration are correct to the best knowledge of the patent attorney. Since Rule 130 declarations can be utilized for “first-to-file” applications, the lessons learned from this case are very much applicable.