From the appeals court decision (CAFC 05-1354) -

Flex-Rest owns the ’489 and ’231 patents, which relate to computer keyboard positioning systems. The ’489 patent involves a clamping system that allows adjustment of the keyboard to a negative tilt position, with the palm rest adjusted above the plane of the keys. The ’231 patent involves a tray system that positions the keyboard in a similar negative tilt position.

Validity

As trial began on the ’489 patent, Steelcase stipulated that its accused devices infringed. In turn, Flex-Rest stipulated that Steelcase’s KBS device was conceived and reduced to practice before Flex-Rest’s invention was conceived in November 1990, and that the KBS device taught each limitation of the asserted claims. Thus, the primary issue for trial was whether the KBS device anticipated the ’489 patent under 35 U.S.C. § 102(g) or qualified as prior art for obviousness purposes.

The jury found for Steelcase, that "the ’489 patent invalid under both 35 U.S.C. § 102(g) and 35 U.S.C. § 103."

After entering judgment for Steelcase, the district court considered Steelcase’s motion for a determination of inequitable conduct in procuring the ’489 patent. Steelcase argued that Flex-Rest received—but failed to disclose to the U.S. Patent and Trademark Office (the Patent Office)—a letter and photographs from a competitor that constituted prior art material to patentability. Steelcase also argued that Flex-Rest failed to disclose the KBS device to the Patent Office, and that Flex-Rest’s patent counsel made a false declaration in his petition to make special because he did not investigate the photographs or the KBS device in his search of the prior art. The court concluded that Steelcase failed to show clear and convincing evidence of an intent to deceive and therefore denied the motion.

Flex-Rest had argued that KBS had kept its invalidating device secret, hence did not apply as § 102(g) prior art. But both courts failed to see any intention to suppress or conceal.

Patent law provides that: “[a] person shall be entitled to a patent unless—. . . before such person’s invention thereof, the invention was made in this country by another inventor who had not abandoned, suppressed, or concealed it.” 35 U.S.C. § 102(g)(2) (2004); Dow Chemical, 267 F.3d at 1339. If prior invention has been established, the burden shifts to the patentee to produce sufficient evidence to create a genuine issue of material fact as to whether the prior inventor abandoned, suppressed, or concealed the invention. Dow Chemical, 267 F.3d at 1339. There are two types of suppression or concealment: cases in which the inventor intentionally suppresses or conceals his invention, and cases in which a legal inference of suppression or concealment can be drawn based on an unreasonable delay in making the invention publicly known. Id. at 1342; Fujikawa, 93 F.3d at 1567.

Flex-Rest first argues that the KBS device was intentionally suppressed or concealed. Intentional suppression occurs when an inventor “designedly, and with the view of applying it indefinitely and exclusively for his own profit, withholds his invention from the public.” Paulik v. Rizkalla, 760 F.2d 1270, 1273 (Fed. Cir. 1985) (en banc) (quoting Kendall v. Winsor, 62 U.S. 322, 328 (1858)); see also Fujikawa, 93 F.3d at 1567. The only evidence Flex-Rest offers for this argument is the time taken to file the patent application for the KBS device and the fact that the device was kept secret during that time. “Intentional suppression, however, requires more than the passage of time. It requires evidence that the inventor intentionally delayed filing in order to prolong the period during which the invention is maintained in secret.” Fujikawa, 93 F.3d at 1567 (emphasis added). The record demonstrates that after reduction to practice, Steelcase moved almost immediately towards both filing a patent application and commercially disclosing the KBS device at a trade show, actions which indicate an intent to make a public disclosure. Both the patent application and commercialization efforts came to fruition about six and one-half months later. That the device was kept secret during this time is not, by itself, indicative of intentional suppression or concealment. See E.I. Du Pont de Nemours & Co. v. Phillips Petroleum Co., 849 F.2d 1430, 1436 n.5 (Fed. Cir. 1988) (“Because work is ‘secret’ does not necessarily mean that it has been ‘abandoned, suppressed or concealed.’”). Because Flex-Rest did not offer any evidence indicating a designed intent to withhold the KBS device from the public, we conclude that there is not sufficient evidence to support a jury instruction regarding intentional suppression or concealment.

Claim Construction

As to '231, a claim construction dispute went to a claim term "sidewall." Flex-Rest tried to belittle the term, as it was the basis for a non-infringement decision, but that silly tactic didn't work.

Flex-Rest’s attempt to avoid the sidewall limitation by characterizing it as “inconsequential” disregards the basic patent law doctrine that every limitation of a claim is material. See Warner-Jenkinson Co. v. Hilton Davis Chem. Co., 520 U.S. 17, 29 (1997) (“Each element contained in a patent claim is deemed material to defining the scope of the patented invention . . . .”).

Inequitable Conduct

Steelcase had asserted inequitable conduct against Flex-Rest's '489, but both courts found that, at the least, convincing evidence of intent to deceive was lacking.

Failing to disclose material information, or submitting false material information or statements, coupled with an intent to mislead or deceive the Patent Office, constitutes inequitable conduct. Purdue Pharma L.P. v. Endo Pharms. Inc., 438 F.3d 1123, 1128 (Fed. Cir. 2006); Kingsdown, 863 F.2d at 872; 37 C.F.R. § 1.56(a) (2004). Materiality and intent must both be proven by clear and convincing evidence. Kingsdown, 863 F.2d at 872.