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Five things not to do when prosecuting patent applications
October 11, 2007

In a decision yesterday, the Federal Circuit affirmed a district court's judgment of patent unenforceability as a result of inequitable conduct on behalf of the applicant. The court affirmed that five different actions on the part of the patentee constituted inequitable conduct:1. Failure to identify the association between the applicant and the individual providing a Rule 132 affidavit during prosecution
2. Incorrect payment of small entity maintenance fees after the patents were licensed to a large entity
3. Intentionally misclaiming an earlier effective priority date
4. Failing to disclose ongoing litigation of various patents to the USPTO
5. Failing to disclose relevant prior artThe court provides a reminder to all applicants and attorneys the duty of candor, good faith, and honesty is required. Also, the court noted that this applicant prosecuted these patents pro se, and the court noted that while the inventor frequently has superior knowledge regarding the technical aspects of the invention, prosecuting patents "requires both technical and legal credentials" to be effective.More detail of Nilssen v. Osram Sylvania, Inc. after the jump.

Nilssen is the inventor of numerous patents related to electrical lighting products. At issue are fifteen patents relating to compact fluorescent light bulbs and ballasts. Nilssen initially utilized the expertise of a patent attorney, but later began prosecuting his own applications as he believed he was more knowledgeable than an attorney. The applications which Nilssen prosecuted resulted in the present suit.In 2000, Nilssen sued Sylvania alleging patent infringement of his ballasts, and Sylvania asserted that Nilssen engaged in inequitable conduct during the procurement of his patents. The Federal Circuit reviewed five actions that the district court held constituted inequitable conduct for abuse of discretion.

Disclosure of the relationship between the inventor and 132 affiantFirst, the district court determined that Nilssen's submission of two affidavits during a examination of one patent and reexamination of another constituted inequitable conduct for failure to disclose a personal and professional association with an affiant, as well as financial interest in the patent's issuance. However, the court did not invoke the doctrine of "infectious unenforceability" to invalidate related patents based on insufficient relatedness among the patents to justify invalidating all three of the patents which were related to the improper declarations. The Federal Circuit affirmed this holding, noting that it was material to an Examiner's determination of credibility and content of an affidavit whether there is any relationship between an affiant and applicant, therefore failing to disclose the material information rendered a violation of the duty of disclosure.Improper payment of small entity feesSecond, the district court also determined Nilssen improperly paid small entity maintenance fees, based on a finding that he entered into licenses for the patents with a business having more than 500 employees, resulting in the requirement that large entity fees be paid. Such improper small entity fees were paid in each of the fifteen patents involved in the suit, resulting in the unenforceability of each patent for inequitable conduct for failing to pay large entity maintenance fees. Upon review by the Federal Circuit, the court looked at the various time frames when maintenance fees were patent to determine Nilssen's intent in submitting small entity fees. The court held that Nilssen had entered into license agreements which precluded it from paying small entity fees, and also that the district court's determination that Nilssen's testimony that he believed he was entitled to small entity fees was not believable was not clearly erroneous. Ultimately, the court stated that the district court did not abuse its discretion in holding the patents unenforceable based on the failure to pay proper maintenance fees. Misclaiming priority dateThird, the district court also found that Nilssen intentionally misclaimed the effective priority date in several applications, and this rendered these unenforceable. According to the Federal Circuit, claims for priority are "inherently material to patentability because [they] may determine validity, whether an issue arises in prosecution or later in court challenges to validity." This is the case even if the misrepresentation "would not have immediately affected patentability." As a result, the court once again found no abuse of discretion, and affirmed the district court on this point as well.Failure to disclose related litigationFourth, the district court concluded that Nilssen failed to disclose ongoing litigation with Motorola to the USPTO, which rendered eight of the fifteen patents unenforceable. The Federal Circuit agreed, stating that because applicants are required to make this disclosure under MPEP § 2001.06(c), "the existence of litigation itself is material information that the examiner needs to have . . . because it signals the examiner that other material information relevant to patentability may become available through the litigation proceedings." Thus, there was no abuse of discretion.

Failure to disclose prior art
Finally, the district court concluded that Nilssen engaged in inequitable conduct by failing to identify to the USPTO all known and relevant prior art. The references at issue were several patents that were cited during prosecution of several of Nilssen's applications, but that Nilssen did not disclose in related applications. The Federal Circuit again agreed with the district court that this constituted inequitable conduct.In its conclusion, the Federal Circuit noted that Nilssen's defenses to the assertions of inequitable conduct were not per se unreasonable in isolation. But when the conglomerate of failures and alleged mistakes were considered it represented a showing of "repeated attempts to avoid playing fair and square with the patent system." The comments went on to state that "mistakes do happen, but inadvertence can carry an applicant only so far." As a caution to other would-be pro se patent prosecutors, the court offered this advice:

Perhaps some of the errors were attributable to Mr. Nilssen's representing himself during the prosecution of his patents. It surely was true that he knew more about the subject matter of his inventions than most, or even any, attorney. That is almost always the case with an invention, particularly one dealing with complex subject matter. However, the patent process is a complicated one, one that requires both technical and legal credentials in order to effectively prosecute patents for inventors. The same credentials are generally required to prosecute patents on one’s own inventions. Mr. Nilssen, while apparently gaining considerable knowledge of the patenting process, thought he didn't need professional patent help. The result of this case, regrettably, proves that he was wrong.

To read the full decision in Nilssen v. Osram Sylvania, Inc., click here.

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