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Judge Stark grants leave to amend answer with inequitable conduct claims and defenses

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In a recent memorandum order, Chief Judge Leonard P. Stark granted defendants’ motion for leave to amend their answer to add a defense and counterclaim asserting that U.S. Patent No. 7,215,984 (“the ’984 Patent”) is unenforceable due to plaintiff’s inequitable conduct during the ex-parte reexamination of the ’984 Patent. Masimo Corp. v. Philips Electronic North America Corp. et al, C.A. No. 09-80-LPS-MPT (D. Del. Sept. 2, 2014). The main issue Judge Stark resolved was whether defendants’ claim was futile. Defendants alleged that several plaintiff representatives committed inequitable conduct when they “each failed on several occasions to inform the PTO that the interpretation of the asserted claims of the ‘984 patent [plaintiff] 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.” Id. at 3. Plaintiff submitted the R&R to the PTO and expressly identified the pages containing Judge Thynge’s construction, but did not “explain how Judge Thynge’s construction or explanation related to the claim construction positions [plaintiff] had advocated before Judge Thynge and was continue to advocate before the PTO.” Id. at 7. Subsequent to the R&R but prior to the PTO’s NIRC, the Court adopted the R&R, making the previous recommended construction an Order of the Court. Id. As Judge Stark explained, plaintiff never disclosed to the PTO the Order of the Court adopting the R&R, even after the issuance of the NIRC. Id. at 8. Judge Stark also noted that the examiner’s reasoning in the NIRC “appeared to indicate that she was relying on the rejected construction advanced by [defendant]” and that the examiner mistakenly believed she was adopting the same construction as the Court. Id. at 8-9. Judge Stark ultimately concluded the following:

Regardless of whether a patentee in all cases has an obligation to disclose a District Court’s adoption of an unobjected-to recommended claim construction, or whether a patentee has an obligation to explain the impact of a Court’s claim construction on arguments the patentee has made to the examiner, under the facts alleged here it is plausible to believe that [plaintiff] intentionally decided not to make these disclosures because [plaintiff] intended to deceive the examiner into believing she was applying the Court’s claim construction, when [plaintiff] knew she was not, and when [plaintiff] feared application of the Court’s claim construction could lead the examiner to invalidate its claims. While [defendants have] not yet proven these allegations, [they have] stated plausible claims for relief . . . .

Id. at 9. Judge Stark also found that plaintiff would not be unduly prejudiced from the amendment, as defendants sought “only limited additional discovery, including short depositions of the four [plaintiff] representatives and production of the readily available reexam history . . . , which should not affect the [scheduled trial].” Id. at 10.

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