The opinion of the court was delivered by: Honorable B. Lynn Winmill Chief U. S. District Judge
MEMORANDUM DECISION AND ORDER
The Court has before it 55 Brake's motion for summary judgment on the defense of inequitable conduct. The motion was argued on December 8, 2010, and the Court took the motion under advisement. For the reasons expressed below, the Court will deny the motion.
Defendant Volkswagen claims that the '587 patent is invalid due to plaintiff 55 Brake's inequitable conduct. Plaintiff 55 Brake seeks summary judgment striking this defense on the ground that the record contains no evidence from which a reasonable juror could find inequitable conduct.
In assessing summary judgment, the evidence is viewed "through the prism of the evidentiary standard of proof that would pertain at a trial on the merits." TriMed, Inc. v. Stryker Corp., 608 F.3d 1333 (Fed.Cir. 2010). At trial, Volkswagen has the burden of showing by clear and convincing evidence that 55 Brake (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, 1364-65 (Fed. Cir. 2007). Thus, to fend off 55 Brake's summary judgment, Volkswagen must point to evidence in the record that a reasonable juror could construe as clear and convincing evidence of materiality and intent. TriMed, 608 F.3d at 1340. In determining whether Volkswagen has made this showing, the Court must construe all justifiable inferences in Volkswagen's favor. See Fujitsu Ltd. v. Netgear Inc., 620 F.3d 1321 (Fed.Cir. 2010).
Because direct evidence of deceptive intent is rarely available, intent may be inferred from circumstantial evidence. Optium Corp. v. Emcore Corp., 603 F.3d 1313, 1319 (Fed. Cir. 2010). Ultimately, materiality and intent to deceive are "distinct factual inquiries." Syntex (USA) LLC v. Apotex, Inc., 407 F.3d 1371 (Fed.Cir. 2005). Here, there are factual questions on both issues that preclude summary judgment.
In its inequitable conduct defense, Volkswagen argues that 55 Brake intentionally let the '587 patent lapse by failing to pay the required patent fee. 55 Brake argues that the record contains no clear and convincing evidence from which a reasonable juror could find that 55 Brake's failure to pay was intentional.
55 Brake points to the deposition testimony of its principals showing that they intended to pay, and that the failure to pay was, at most, simply a mistake. The record also shows that 55 Brake was notified numerous times prior to that patent's expiration date of the need to pay the fee. At this time, 55 Brake was suffering financial difficulties. They had valued the patent at just over $1,000, a figure not much more than the overdue patent fee of $900.
When 55 Brake failed to pay the fee, the patent lapsed on September 18, 2006. About two months later, in early November of 2006, 55 Brake's patent counsel, Joseph Coppola, informed 55 Brake principal Dave MacGregor about the lapse and warned him that time was of the essence in getting the patent reinstated. Despite this, 55 Brake took no action to revive the patent until August of 2007, when MacGregor met with Edward Goldstein.
Under these facts, a reasonable juror (or trier of the fact) could infer that 55 Brake was simply negligent. The parties agree that even gross negligence is not sufficient to find intent. But a reasonable trier of fact could also find that clear and convincing evidence exists that the failure to pay was intentional given (1) the numerous warnings, (2) the length of the delay, (3) the low value of the patent, and (4) the deteriorating financial condition of 55 Brake.
Intent, as discussed above, is a factual inquiry. Much will hinge on the credibility of 55 Brake's principals concerning their intent. Given this, and that all inferences are to be made in Volkswagen's favor, the Court finds genuine issues of material fact over whether the nine month delay was intentional. While there are other reinstatement issues, the Court's finding on this issue is ...