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Inequitable Conduct Defense Dismissed Where Defendants Did Not Even Purport to Identify an Allegedly Fraudulent Document Submitted to the PTO

Zep Solar Inc. (“Zep”) filed a patent infringement action against several defendants. Two of the defendants, Lightway Green new Energy Company, LTD (“Lightway”) and Brightway Global LLC (“Brightway”) answered and counterclaimed with an allegation of inequitable conduct. Zep moved to strike or dismiss the counterclaim and affirmative defense.

As the district court stated, “[i]n the fourth affirmative defense, Brightway and Lightway allege that ‘[t]he Complaint and the purported claim for relief therein is barred because the ‘537 Patent, and each claim thereof, is unenforceable due to inequitable conduct.’ (Docket No. 49, Answer and Counterclaims for Relief at 7:26-27.) In their second counterclaim for relief, Lightway and Brightway alleged hat the ‘537 Patent is ‘invalid and/or unenforceable for failing to meet the conditions of patentability including but not limited to hose specified in 36 U.S. C. Sections 1 et seq., including 35 U.S.C. sections 102, 103, 112, 199, 256 and 37 C.F.R. section 1.56.'”

Relying on the Federal Circuit decision in Exergen Corp. v. Wal-Mart Stores, Inc., 575 F.3d 1312, 1318 (Fed. Cir. 2009), the district court noted that “[t]he essential elements of a claim of inequitable conduct under Federal Circuit law are: (1) an individual associated with the filing and prosecution of a patent application affirmatively misrepresents a material fact, fails to disclose material information, or submits false material information; and (2) the individual does so with the specific intent to deceive the U.S. Patent and Trademark office (“PTO”). Exergen, 575 F.3d at 1327 n.3. To plead the circumstances of inequitable conduct with the requisite particularity required by Rule9(b), the pleading must specifically state the ‘who, what, when, where, and how’ of the misrepresentation or omission made to the PTO. Id. At 1327. thus, ‘[a] pleading that simply avers the substantive elements of inequitable conduct, without setting forth the particularized factual bases for the allegation, does not satisfy Rule 9(b).’ Id.”
The district court then noted that Lightway and Brightway did not even purport to identify an allegedly fraudulent document that Zep submitted to the PTO. Instead, the defendants alleged only that the patent-in-suit was invalid and/or unenforceable. No misrepresentation or omission to the PTO was identified and no facts regarding the “who, what, when, where and how” were identified.

Accordingly, the district court found the allegations “woefully inadequate” and granted the motion to strike.

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Given the current state of the law pertaining to inequitable conduct, it is imperative that any defendant seeking to make such an allegation avoid mere boilerplate and plead with detail the facts supporting such a defense. The failure to do so will likely invite a motion to strike.

Zep Solar Inc. v. Westinghouse Solar Inc., et al., Case No. C 11-06493 JSW (N.D. Cal. April 17, 2012)

The authors of are patent trial lawyers at Jeffer Mangels Butler & Mitchell LLP. We represent inventors, patent owners and technology companies in patent licensing and litigation. Whether pursuing patent violations or defending infringement claims, we are aggressive and effective advocates for our clients. For more information contact Stan Gibson at 310.201.3548 or