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August 1, 2008

There Is No Arizona

Whether Arizona has a functioning patent court remains an open question. Research Corporation Technologies (RCT) sued Microsoft for infringing its halftoning six-pack patent portfolio. After RCT won summary judgment of infringement, the case was transferred to a different judge, who reversed the ruling and granted Microsoft's motion of non-infringement, without opinion. At Microsoft's behest, the judge then scrapped the scheduled jury trial, and ran a kangaroo court for inequitable conduct. Appeal turned the tables once again.

Research Corporation Technologies v. Microsoft (CAFC 2006-1275)

The long-playing version of appeal setup -

On December 21, 2001, RCT filed suit against Microsoft for infringement of six patents claiming digital halftoning--U.S. Patent Nos. 5,111,310 ('310); 5,341,228 ('228); 5,477,305 ('305); 5,543,941 ('941); 5,708,518 ('518); and 5,726,772 ('772). Dr. Kevin J. Parker, from the University of Rochester, and his graduate student at the time, Dr. Theophano Mista, made these inventions. After a Markman hearing, RCT moved for partial summary judgment that certain Microsoft products contain infringing halftoning masks. Microsoft filed a motion for partial summary judgment that the same claims are invalid for anticipation under 35 U.S.C. § 102(b) and lack of written description under 35 U.S.C. § 112 ¶1.

The trial court granted RCT's infringement motion, and then appointed a special master, Mr. Bruce Brunda, to consider the additional summary judgment motions. At that point, the case was transferred to a different trial judge. After the transfer, the parties filed additional summary judgment motions.

Without opinion, the new district judge reversed the prior judge's grant of RCT's summary judgment motion for infringement and also granted, without opinion, Microsoft's summary judgment motion for noninfringement. Again without opinion, the new trial judge also granted Microsoft summary judgment on invalidity. Finally, the judge who received the transfer granted all of Microsoft's motions in limine and set a jury trial to commence August 8, 2005.

But then, at Microsoft's request, the new judge cancelled the scheduled jury trial and ordered a trial on inequitable conduct instead. Microsoft's argument at this inequitable conduct trial lasted an hour and featured no witnesses. The new judge barred RCT from presenting expert testimony on materiality. RCT's case was limited to testimony from the inventors about candor and good faith. On November 23, 2005, the trial court ruled from the bench that the RCT patents were unenforceable due to inequitable conduct. The court entered its cursory final order on January 27, 2006.

After RCT appealed, Microsoft filed motions with the district court seeking attorney fees, amplification of the court's findings, and an extension of the effective date for appeal pending a decision on the first two motions. The trial judge granted the motions on the deadline and attorney fees but did not amplify its findings of fact or conclusions of law on any topic.

Technology brief (very brief) -

All the patents at issue relate to image halftoning technology used in computers and printers. A halftone is an image which simulates a continuous tone image, but is actually an arrangement of individual dots. The particular spacing between the dots gives the viewer the illusion of a continuous picture consisting of varying shades of gray in a halftone image. Halftoning may feature one tone (single bit dots) or more than one tone (multi-bit dots). The prior art of halftoning images at the time of this invention produced grainy results and contained distracting artifacts.

Drs. Parker and Mista then invented a Blue Noise Mask that was quick, used very little computer memory, and produced high quality halftone images, and subsequently applied for patents on their inventions.

Case law on flipping the Arizona inequitable conduct flapjack -

Where a court premises its inequitable conduct determination upon clearly erroneous findings of fact or a misapplication of law, this court must reverse. Id. To find a patent unenforceable for inequitable conduct, there must be clear and convincing evidence that the applicant (1) made an affirmative misrepresentation of material fact, failed to disclose material information, or submitted false material information, and (2) intended to deceive the PTO. Cargill, Inc. v. Canbra Foods, Ltd., 476 F.3d 1359, 1363 (Fed. Cir. 2007). A determination based solely on one part of the test is legally erroneous. Id. Here, the trial court erroneously found the patent unenforceable based on only one prong of the two-pronged test for inequitable conduct, intent to deceive the USPTO. The first prong, materiality, is a required element of the inequitable conduct analysis.

Infantile behavior, genetically programmed as a reptilian survival mechanism, is to see what one can get away with to one's mutually exclusive advantage. This trait is carried into adulthood by most furless simians known as humans. This court case is exemplary. To be more precise, this is example 1057,943, given a few trillion margin of error, by an 800-pound corporate simian.

The trial judge found inequitable conduct because the inventors did not disclose Dr. Mista's post-filing K factor tests to the USPTO. Because Dr. Mista's work occurred after she and Dr. Parker had filed the patent application, these K factor experiments were not material to their inventive activity. In the circumstances of this case, therefore, the inventors had no obligation to report their later tests to the USPTO.

[T]he patents do not even mention the K factor. The K factor research is not necessary to practice the patented invention.

In addition to missing the materiality prong, the district court's intent analysis was clearly erroneous. The trial court, for instance, focused improperly on comments that Dr. Parker made at trial regarding the purposes of the patent system. An inventor's motives in applying for a patent or his views on the purposes of the patent system are generally irrelevant to a proper determination of inequitable conduct. Dr. Parker is not required to know or recite the purposes of the patent system. Moreover, although Dr. Parker may likely not profit directly from the patent himself, even if he did hope for remuneration, any financial reward does not alone show an intent to deceive the USPTO.

More shenanigans -

The special master determined that several later-filed RCT patents were not entitled to their ancestor application filing date and were thus invalid over intervening prior art. The trial court, without explanation or reasoning, adopted the special master's recommendation that the '310 application did not support the later-filed claims and therefore was anticipatory prior art to the later-filed claims.

Similarly, the special master determined that Microsoft's multi-bit images do not literally infringe the claim at issue. The special master did not enter a recommendation regarding infringement under the doctrine of equivalents because he was uncertain about infringement under the doctrine of equivalents. Again without explanation, the district court adopted the special master's recommendations for no literal infringement and held--even though the special master did not recommend it--no infringement under the doctrine of equivalents.

Back to sanity -

Microsoft's motions for summary judgment were granted without a proper analysis regarding inequitable conduct. This court therefore lacks findings and conclusions for adequate review. "For an appellate court to fulfill its role of judicial review, it must have a clear understanding of the grounds for the decision being reviewed." Gechter v. Davidson, 116 F.3d 1454, 1457 (Fed. Cir. 1997); see Nazomi Communs., Inc. v. Arm Holdings, PLC, 403 F.3d 1364, 1371 (Fed. Cir. 2005) (vacating a district court's grant of summary judgment with the explanation that "this court must be furnished sufficient findings and reasoning to permit meaningful appellate scrutiny"). Further, the record shows many potential issues of fact that would prevent entry of summary judgment. Consequently, this court remands both matters for a proper determination on the merits.

The CAFC even punted the incompetent judge.

Because the trial court incorrectly held RCT's patents unenforceable due to inequitable conduct, this court reverses that holding and vacates the award of attorney fees. We also vacate the trial court's grant of Microsoft's noninfringement and invalidity motions as well as the grants of Microsoft's motions in limine. Finally, this court remands with instructions to assign this case to a different judge for a proper determination of validity and infringement on the merits.

Reversed, vacated, and remanded.

Microsoft was represented by Klarquist Sparkman. John D. Vandenberg argued for defendant-appellee.

Country music fans will note the title as belonging to the first hit of female country singer Jamie O'Neal. Patents naturally fit into the country music ethos of hard luck stories. Well, so do the blues...

In case you are wondering, as inquiring minds do, new age music is nothing more than country music played backwards. After all, your pickup truck works, your girlfriend forgives you, you get your job back, you have money for bourbon and beer, and your dog is alive again. How much more soothing could life be?!

Posted by Patent Hawk at August 1, 2008 1:16 PM | Inequitable Conduct


I've read the opinion and you wouldn't believe what happened until reading it. It is simply astounding that a federal district court trial judge could have rendered these rulings without an opinion or based on rulings from the bench. Judge Rader also didn't mince words in trouncing this travesty of justice. That the request to have the case reassigned on remand goes without saying.

Posted by: EG at August 1, 2008 12:39 PM

And the public complains when goofy patents are allowed by lower level Patent Office bureaucrats (sorry, examiners, for that characterization) who are working under a demanding "count" system, and then high level bureaucrats (judges) with all of their support mess up litigation.

Posted by: patent prosecutor at August 1, 2008 1:13 PM

this is not surprising if you know Judge Real.

see this post by Howard Bashman


Posted by: jimmie at August 2, 2008 4:24 AM