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Withholding A Court’s Order From the USPTO in A Co-Pending Reexamination May Render A Patent Unenforceable in Litigation

In Masimo Corporation v. Philips Electronic North America Corporation, et al., the Philips Defendants moved for leave to amend their answer to add a defense of inequitable conduct based on Masimo’s alleged inequitable conduct during the ex parte reexamination of the patent-in-suit. Masimo opposed the amendment on the grounds that it was futile and unduly prejudicial. As summarized below, the Court sided with Philips and allowed the amendment and related discovery.

After setting forth the good cause standard for leave to amend after a deadline in the scheduling order, the Court recited the substantive elements of inequitable conduct required to plead this defense:

“(l) an individual associated with the filing and prosecution of a patent application made an affirmative misrepresentation of a material fact, failed to disclose material information, or submitted false material information; and (2) the individual did so with a specific intent to deceive the PTO.” Exergen Corp. v. Wal-Mart Stores, Inc., 575 F.3d 1312, 1327 n.3 (Fed. Cir. 2009). “[I]n pleading inequitable conduct in patent cases, Rule 9(b) requires identification of the specific who, what, when, where, and how of the material misrepresentation or omission committed before the PTO.” Id. at 1327. Generally, the materiality required to establish inequitable conduct is “but-for materiality.” Therasense, Inc. v. Becton, Dickinson & Co., 649 F.3d 1276, 1291 (Fed. Cir. 2011). As for the intent prong, Rule 9(b) states that “[m]alice, intent, knowledge, and other conditions of mind of a person may be averred generally.” The relevant “conditions of mind” for inequitable conduct include: “(l) knowledge of the withheld material information or of the falsity of the material misrepresentation, and (2) specific intent to deceive the PTO.” Exergen, 575 F.3d at 1327.

In its amended answer, Philips alleged that Masimo’s representatives “each failed on several occasions to inform the PTO that the interpretation of the asserted claims of the ‘984 patent Masimo urged the PTO to adopt had been rejected by this Court, including: (i) when Magistrate Judge Thynge issued her Report & Recommendation (“R&R”) regarding summary judgment, (ii) when the PTO issued its Notice of Intent to Issue Reexamination Certificate (“NIRC”) based on that rejected construction, and (iii) when the undersigned District Judge issued his Summary Judgment Opinion and Order (“SJ Order”) adopting the magistrate’s R&R.”

The Court determined that “Philips provides sufficient factual support for these allegations to support materiality as well as an intent to deceive.” Specifically, the Court stated that “[i]n response to Philips’ motion for summary judgment, Masimo…argued that ‘[t]he claims require that a first calculator determine at least a first ratio, and a second calculator determine at least a second ratio. Hence, Masimo took the position that the claims of the ‘984 patent do require that a first and second calculator actually determine a calculation.” “At about the same time, in March 2013, Masimo (as part of the ongoing ex parte reexamination of the ‘984 patent) responded to an office action advocating before the PTO the same claim construction it was pressing on Magistrate Judge Thynge, i.e., that both the first and second calculators must actually determine a ratio.” However, on April 2, 2013, relying on the “capable of” language used in the claims, Judge Thyne rejected Masimo’s construction and instead held that the claims do not require that both the first and second calculators must actually determine a ratio. While Masimo submitted Judge Thyne’s R&R to the PTO, it “did not explain how Judge Thyne’s construction or explanation related to the claim construction positions Masimo had advocated before Judge Thyne and was continue [sic] to advocate before the PTO.”

Later, on March 31, 2014, the Court issued its SJ Order adopting all of Judge Thyne’s recommendations, which neither side had objected, including the disputed claim construction. Thus, at this time, “the Court construed the claims of the [patent-in-suit] as not requiring the two calculators to actually determine a ratio.” According to the Court, “[l]ess than two weeks later, on April 10, the PTO issued its NIRC for the ‘984 patent. In the NIRC, the examiner’s reasoning appeared to indicate that she was relying on the rejected construction advanced by Masimo – that the claims do require the calculation of two ratios – as the basis for distinguishing several prior art references.” The Court found that this “enhanced” the plausibility of Philip’s allegations:”

The plausibility of Philips’ allegations that (i) the examiner relied on Masimo’s proposed claim construction which was rejected by this Court, and (ii) the examiner would have found the claims of the ‘984 patent to be invalid had the examiner been advised this Court had rejected Masimo’s proposed construction is enhanced by the fact that it appears the examiner intended to adopt the same claim construction this Court was adopting, and that the examiner mistakenly believed she had done so. In the NIRC, the examiner stated: ”the claims considered herein are interpreted in accordance with the court decision resulting from the litigation of Masimo v. Philips, No. 1:09-CV-00080-LPS-MPT explained in the Joint Claim [Construction] and Stipulations.”

The Court found that “[a]t no point did Masimo disclose to the PTO that on March 31, the Court issued is SJ Order [rejecting Masimo’s position], ” including the 10 day period from March 31 SJ Order to the April 10 issuance of the NIRC. Consequently, the Court held that “it is plausible to believe that Masimo intentionally decided not to make these disclosures because Masimo intended to deceive the examiner into believing she was applying the Court’s claim construction, when Masimo knew she was not, and when Masimo feared application of the Court’s claim construction could lead the examiner to invalidate its claims.”


This decision illustrates the importance of providing the PTO with critical rulings from the co-pending litigation involving the same or related patents in reexamination or post-grant proceedings before the PTO, such as inter partes reviews or covered business method proceedings. While the failure to provide such material information in this case may have helped the patent survive reexamination, the failure to timely provide this information to the PTO may ultimately render the patent unenforceable.
Masimo Corporation v. Philips Electronic North America Corporation, et al., Case No. 09-80-LPS-MPT, Case No. 1:14-cv-21499-UU (S.D. Fla. September 2, 2014).

The authors of are patent trial lawyers at Jeffer Mangels Butler & Mitchell LLP. The authors represent inventors, patent owners and technology companies in patent licensing and litigation in U.S. District Courts and in the United States Patent and Trademark Office, including numerous IPRs currently pending before the PTAB. Whether pursuing patent violations or defending infringement claims, we are aggressive and effective advocates for our clients. For more information contact Greg Cordrey at 949.623.7236 or