Nilssen and Geo Foundation sued Osram Sylvania in the Northern District of Illinois (01C3585) for infringing 26 patents, later pared down to 11, related to fluorescent lamps.

Defendants answered, denying infringement, and filed a counterclaim for declaratory judgment, alleging that the patents have not been infringed by Defendants and that the patents in suit are invalid because Nilssen engaged in five types of inequitable conduct: (1) submitted misleading affidavits to the Patent and Trademark Office ("PTO"); (2) improperly claimed and paid fees as a small entity; (3) improperly claimed priority dates in several patent applications; (4) failed to disclose litigation against Motorola, Inc. during the prosecution of patents in suit that involved the same subject matter as the patents at issue in the Motorola litigation; (5) failed to disclose material prior art references to the PTO during the prosecution of several patent applications; and (6) based on Plaintiffs' inequitable conduct, Plaintiffs' infringement action is barred by the doctrine of unclean hands.

The Geo Foundation is a Cayman Islands tax wheeze set up by Nilssen, whose stated "goal was to preserve the wealth of the wealthy." According to the Geo Foundation, "taxes are illegal under the Takings Clause of the U.S. Constitution." But, while it seems I digress into tax chicanery, this plays into evidence of intent with regard to paying fees to the PTO, inequitable charge 2).

Trial of the inequitable conduct issues was by the Court without a jury.¹ During the six-day trial, the parties presented over four hundred exhibits and testimony of seven witnesses, including four expert witnesses. The parties also submitted extensive post-trial written arguments and proposed findings of facts and conclusions of law.

¹ There is no right to a jury trial as to inequitable conduct. See Paragon Podiatry Lab., Inc. v. KLM Labs., Inc., 984 F.2d 1 182, 1 190 (Fed. Cir. 1993).

Nilssen originally hired registered patent attorneys to draft and prosecute his patent applications. In 1983, Nilssen assumed the prosecution of his pending patent applications and began drafting and prosecuting his patent applications, pro se. Nilssen considers himself an expert in the prosecution of patents and prosecuting his patent applications, pro se, because he believes that he understands the subject matter "far better than any attorney." Nilssen estimates that as apro se applicant, he has prosecuted over 1,000 patent applications. Nilssen also prosecuted, pro se, appeals before the Board of Patent Appeals and the Federal Circuit. As a pro se applicant and appellee, Nilssen regularly cites to the Manual of Patent Examining Procedure (MPEP), case law, and patent statutes and regulations. Nilssen prosecuted the applications for the twenty-six patents (now eleven) involved in the present lawsuit, pro se. Nilssen is listed on these patents as the sole inventor. With each patent application, Nilssen signed a declaration attesting, under oath, that he understood the duty to disclose material information and that he had complied with this duty. Nilssen is knowledgeable regarding patent law and patent examining procedure.

In short, Nilssen knew what he was doing.

The judge's ruling details Nilssen's shenanigans in every regard. The "unclean hands" pathetic comedy section, beginning on page 18, regales in what many prosecutors may have thought in similar form, but would never have the indecency to utter.

On numerous occasions, Nilssen inappropriately criticized patent examiners and the Board of Appeals. For example, in his petition to the Commissioner, Appeal No. 071107,765, Nilssen stated that he "finds subject Examiner to be not only incompetent with respect to the particular subject matter of the various claimed inventions, but also seriously lacking in the basic mental facilities needed to properly perform his assigned role." In another petition to the Commissioner, Nilssen stated:

a) Mr. Dixon cannot be characterized as being skilled in the arts to which subject applications pertain . . .
b) Mr. Dixon is severely deficient in his understanding and use of reason and logic . . .
c) Mr. Dixon has an inadequate command of the English language . . .
d) Mr. Dixon has repeatedly shown himself to be overtly noncooperative and non-caring.

That "non-caring" accusation really had to hurt.

In Judge John W. Darrah's excellent Conclusions of Law, beginning on p. 19, the Court writes:

All patent applicants have an affirmative duty to prosecute patents in the PTO with candor and good faith. See 27 C.F.R. 5 1.56(a). The duty of candor extends throughout the entire prosecution history of the patent. See Fox Indus., Inc. v. Structural Preservation Sys., Inc., 922 F.2d 801, 803 (Fed. Cir. 1991) (Fox). Inequitable conduct occurs when a patentee breaches his or her duty to the PTO of "candor, good faith, and honesty." Molins PLC v. Textron, Inc., 48 F.3d 1 172, 1 178 (Fed. Cir. 1995) (Molins). This conduct includes "affirmative misrepresentations of material fact, failure to disclose material information, or submission of false material information, coupled with an intent to deceive." Molins, 48 F.3d at 1178.

The inequitable conduct analysis consists of two steps: (1) a determination of whether the conduct meets a threshold level of materiality and intent to mislead and (2) a weighing of the materiality and intent in light of all of the circumstances to determine whether the applicant's conduct is so culpable to render the patent unenforceable. See Purdue Pharma L.P. v. Boehringer Ingelheim GMBH, 237 F.3d 1359,1366 (Fed. Cir. 200 1) (Boehringer). The predicate facts must be proven by clear and convincing evidence. See Dayco Prods., Inc. v. Total Containment, Inc., 329 F.3d 1358, 1362 (Fed. Cir. 2003). A finding of inequitable conduct as to a single claim of a patent renders all claims of that patent unenforceable, even as to those claims not tainted by the inequitable conduct. See Pharmacia Corp. v. Par Pharmaceutical, Inc., 417 F.3d 1369, 1374-75 (Fed. Cir.

Information is material under the "reasonable examiner" standard - if there is a substantial likelihood that a reasonable examiner would have considered the information important in deciding whether to allow the application to issue as a patent - or under the narrower standard set forth in the amended Rule 56. See Digital Control Inc. v. Charles Machine Works, 437 F.3d 1309, 13 14-1 6 (Fed. Cir. 2006) (Digital Control). Amended Rule 56 provides that information is "material" if:

[I]t is not cumulative to information already of record or being made of record in the application, and
(1) It establishes, by itself or in combination with other information, aprima facie case of unpatentability of a claim; or
(2) It refutes, or is inconsistent with, a position the applicant takes in:
(i) Opposing an argument of unpatentability relied upon by the Office, or
(ii) Asserting an argument of patentability.

37 C.F.R. $ 1.56(b)(2004). "[Tlo the extent that one standard requires a higher showing of materiality than another standard, the requisite finding of intent may be lower." Digital Control, 437 F.3d at 1316.

The result of a PTO proceeding assessing patentability in light of information not previously disclosed can be of strong probative value in determining the materiality of the undisclosed information. See Molins, 48 F.3d at 1179. A PTO examiner need not rely on a misrepresentation in order for the misrepresentation to be material. See Molins, 48 F.3d at 1180.

Regarding the element of intent, direct evidence of intent to mislead or deceive is rare. Intent may be inferred from clear and convincing evidence of the surrounding circumstances. See Purdue Pharma L.P. v. Endo Pharmaceuticals Inc., 438 F.3d 1123,1133-34 (Fed. Cir. 2006) (Purdue). The surrounding circumstances include the "facts and circumstances surrounding the applicant's conduct." Molins, 48 F.3d at 1 18 1. However, intent cannot be inferred solely from the fact that the material was not disclosed; instead, there must be some factual basis for finding intent to mislead or deceive. See Purdue, 438 F.3d at 1134.

When determining intent, the court must weigh all of the evidence, including evidence of good faith. See Purdue, 438 F.3d at 1134. If the materiality of the undisclosed information is relatively low, there is less basis to infer intent from materiality alone. On the other hand, if the undisclosed information is highly material, there can be an inference of the requisite intent to mislead or deceive. See Purdue, 43 8 F.3d at 1 134.

"[A] breach of the duty of candor early in the prosecution may render unenforceable all claims which eventually issue from the same or a related application." Fox, 922 F.2d at 804. A patent that issues from a continuation or divisional application may be held unenforceable where (1) the applicant engaged in inequitable conduct with respect to the prosecution of an earlier related application in the chain leading to the challenged patent and (2) the inequitable conduct relates to the asserted claims of that patent. See Semiconductor Energy Lab. v. Samsung Electronics Co., 24 F. Supp. 2d 537,543-44 (E.D. Va. 1998), aff'd on other grounds 204 F.3d 1368 (Fed. Cir. 2000) (Semiconductor); eSpeed, Inc. v. Brokertec USA, 4 17 F. Supp. 2d 5 80,595 (D. Del. 2006) (espeed). However, the mere occurrence of inequitable conduct in connection with an application in a chain of applications is not sufficient to invalidate a patent issued as a result of a later application in that chain; instead, the earlier inequitable conduct in the chain must be related to the targeted claims of the ultimately issued patents sought to be enforced. See Semiconductor, 24 F. Supp. 2d at 543. Generally, mere similarity in subject matter, mere citation to the unenforceable patent, and sharing a parent application are insufficient to invalidate a patent issued from a chain of applications in which inequitable conduct has been found as to an application within that chain. See Baxter Int '1, Inc. v. McGaw, Inc., 149 F.3d 1321,133 1-32 (Fed. Cir. 2004) (Baxter); Hoffman-La Roche, Inc. v. Promega Corp., 3 19 F. Supp. 2d 101 1,1021-22 (N.D. Cal. 2004) (Hoffman-La Roche).

Inequitable conduct can be cured by an applicant by: (1) expressly advising the PTO of the misrepresentation's existence, (2) advising the PTO of what the actual facts are and making it clear that further examination in light thereof may be required if any PTO action has been based on the misrepresentation, and (3) establishing patentability on the basis of the factually accurate record. See Rohm & Haas Co. v. Crystal Chem. Co., 722 F.2d 1556, 1572 (Fed. Cir. 1983). Curing inequitable conduct cannot be made through manipulation of the patent prosecution procedures, such as amending or cancelling claims or filing continuation and divisional applications. See Semiconductor, 24 F. Supp. 2d at 544-45.

The doctrine of unclean hands can apply where a plaintiff engages in misconduct related to a patent at issue. See Keystone Driller Co. v. General Excavator Co., 290 U.S. 240,245-46 (1933) (Keystone); Consolidated Aluminum Corp. v. Foseco Int 'I Ltd., 9 10 F.2d 804,8 12 (Fed. Cir. 1990) (Consolidated). Under the doctrine of unclean hands, inequitable conduct can render all patent claims having an "immediate and necessary relation" to that conduct unenforceable as to a single patent or to a series of related patents. See Keystone, 290 U.S. at 245-46; Consolidated, 910 F.2d at 812.

The Court found the five kinds of inequitable conduct so in evidence as to invalidate all 11 asserted patents. As to unclean hands, Judge Darrah held insufficient interrelationship -

Lastly, Defendants seek to have each of the related patents in suit held unenforceable under the doctrine of unclean hands based on the inequitable conduct that directly renders the patents in suit unenforceable. While the above findings demonstrate that Nilssen engaged in a pattern of inequitable conduct over an extended period of time, Defendants have not demonstrated by clear and convincing evidence that the inequitable conduct engaged in by Nilssen that directly renders certain patents unenforceable had an immediate and necessary relation to other related patents to render the other patents unenforceable under the doctrine of unclean hands. See Baxter, 149 F.3d at 133 1-32; Hoffman-La Roche, 3 19 F. Supp. 2d at 102 1-22.

Thanks to John Mitchell for tipping me off on this case.