Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-caed-2_03-cv-01232/USCOURTS-caed-2_03-cv-01232-6/pdf.json

Nature of Suit Code: 830
Nature of Suit: Patent
Cause of Action: 35:271 Patent Infringement

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UNITED STATES DISTRICT COURT

FOR THE EASTERN DISTRICT OF CALIFORNIA

JOSEPH V. KAPUSTA,

NO. CIV. S-03-1232 LKK

Plaintiff,

v.

 O R D E R

GALE CORPORATION,

Defendant.

 /

This case is on remand from the Federal Circuit, which

vacated this court’s previous Claim Construction Order. Pending

before the court now are plaintiff’s three motions for summary

judgment and defendant’s motion for summary judgment. First,

plaintiff argues that it is entitled to summary judgment on the

issue of infringement. Second, plaintiff contends that

defendant should be precluded from arguing that plaintiff’s

patent is invalid because defendant will be unable to establish

the level of ordinary skill in the art. Third, plaintiff argues

that its patent cannot be invalidated on grounds of

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anticipation, because none of defendant’s prior art references

disclose each and every limitation of plaintiff’s patent. Last,

defendant claims that plaintiff’s patent is invalid because he

abandoned the application and that the patent is unenforceable

because of inequitable conduct. 

For the reasons set forth below, the motion for

infringement is granted; the motion for no invalidity under §

103(a) is denied; the motion for no invalidity under § 102(b) is

granted in part and denied in part; and the motion for summary

judgment of patent invalidity and unenforceability is denied.

I. Facts

Plaintiff Joseph Kapusta has brought an action for patent

infringement against defendant Gale Corporation. At issue are

Kapusta’s patent, U.S. Patent 6,043,663 (the “‘663 patent”), and

Gale’s Pocket Toners 1, 2, and 6 (collectively, the “accused

products”). The patented invention relates to devices that

detect malfunctions in coaxial cables. The court previously

issued a Claim Construction Order on August 4, 2004 construing

the ‘663 patent and, specifically, the meaning of the phrase

“hand-grip size case.” The Federal Circuit vacated that order

on November 15, 2005, and the matter is now before the court on

remand. Kapusta v. Gale Corp., No. 05-1091, slip op. at 10

(Fed. Cir. Nov. 15, 2005).

A. Infringement

Kapusta first moves for summary judgment with respect to

infringement. The threshold and ultimately determinative issue

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with regard to this motion concerns the parties’ Stipulation for

Entry of Final Judgment of November 2, 2004, as that document

dictates what facts remain in dispute. The parties submitted

their stipulation after this court issued its Claim Construction

Order construing the term “hand-grip size case.” Paragraph six

of the stipulation states that “[t]he parties agree that each

claim element specified in claims 1, 2 and 3 of the ‘663 patent,

other than the term ‘hand grip size case’ described in paragraph

5 above, are present in the Gale Pocket Toner products.” Pl.’s

Statement of Undisputed Fact (“SUF”) 3. Gale does not dispute

this statement to the extent that it was qualified and

contingent upon this court’s Claim Construction Order. However,

it contends that the stipulation was voided once the Federal

Circuit vacated that order.

There is no dispute that at least certain stipulations were

made expressly contingent upon the non-reversal of this court’s

claim construction. For example, paragraph five of the

stipulation states that:

The parties stipulate if the claims of the ‘663 patent

are interpreted as specified in the claim construction

order dated August 5, 2004, then the Gale Pocket Toner

products . . . do not infringe claims 1-3 of the ‘663

patent, because they do not fall within the scope of

the Court’s interpretation of the term “hand grip size

case.”

Likewise, paragraph seven states:

Because the parties hereby stipulate to judgment of

non-infringement based on the Court’s claim

construction ruling, the remaining claims and issues

in Kapusta summary judgment motion and in this action

are moot and can be dismissed. If the United States

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Court of Appeals for the Federal Circuit reverses the

Court’s claim construction, then Gale may proceed with

its defense of invalidity and unenforceability on

remand.

Gale takes the position that paragraph six, like paragraphs five

and seven, was also conditioned upon the continued operation of

this court’s Claim Construction Order. Because the Federal

Circuit vacated that order on November 15, 2005, the court must

now determine the nature of the stipulation. 

B. Expert Reports

The second major issue before the court pertains to expert

reports. Kapusta contends that Gale will be unable to provide

expert testimony regarding a critical element in its defense

that the patent is invalid. This court’s Status (Pretrial

Scheduling) Conference order from March 20, 2006 instructed that

“the written report specified in Fed. R. Civ. P. 26A2B shall be

filed not later than thirty (30) days [after the deadline for

expert designation].” Order at 2. Thus, in this case, expert

reports were due no later than May 19, 2006. Pl.’s SUF 2. 

However, an expert witness for defendant, Mr. Robert Gale,

failed to provide plaintiff with an expert report. Pl.’s SUF 3.

The parties disagree as to whether Mr. Gale was required to

submit such a report under Rule 26. 

Moreover, the parties dispute whether Mr. Gale was the only

technical expert identified by defendant to testify. Def.’s SUF

1. Defendant notes that it previously identified Mark Scheitrum

as one of its technical experts and mailed Mr. Scheitrum’s

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expert report to plaintiff on April 23, 2004. Finnerty Decl. in

Support of Def.’s Opp’n to Pl.’s Mot. for Summ. J. (“Finnerty

Decl.”), Exhs. A, B. Mr. Scheitrum’s report stated: “The

electrical knowledge and skill required . . . was known to the

vast majority of electrical engineers and technicians for many

years prior to the filing of the Kapusta Patent.” Id., Rep. at

3-4. Kapusta disputes whether this statement is sufficient to

establish the level of ordinary skill in the art, which Gale

needs in order to prove invalidity under 35 U.S.C. § 103(a).

C. Prior Art References

The third major issue before the court pertains to prior

art. The parties dispute whether two prior art references

anticipate Claims 1 and 3 of the ‘663 patent, thereby rendering

them obvious and invalid. The first prior art reference is U.S.

Patent No. 4,281,283 issued to Ross et al. (“Ross”). The

parties dispute whether Ross discloses or illustrates “a test

circuit comprising . . . a first probe and a second probe,

wherein said first probe and said second probe comprise a

central conductor and surrounding shield, respectively, of a

test circuit connector which is releasably connectable to a

coaxial cable connector mounted on a first end of the coaxial

cable to be tested.” Def.’s SUF 6. They also dispute whether

the Ross reference discloses “a device capable of generating a

signal in response to a completion of a circuit involving said

first test circuit, said test circuit and the coaxial cable to

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Kapusta moved for summary judgment that the Canzano reference 1

did not anticipate the ‘663 patent. One of the reasons cited was

that Canzano discloses a parallel circuit, whereas the ‘663 patent

discloses a series circuit. Gale argued that if this is true, then

Gale’s accused products do not infringe, because they also use a

parallel circuit. The standard for evaluating anticipation is the

same as that for evaluating infringement.

Kapusta made this damaging argument because of the

stipulation. Gale already conceded that the accused products met

every limitation in the ‘663 patent but for the “hand grip size

case” limitation. 

Gale, recognizing the potential double-bind for itself,

attempted to provisionally dispute whether Canzano disclosed the

series limitation. It disputed this fact only to the extent that

the accused products were found to infringe. If the accused

products were found to infringe, then it could argue that Canzano

disclosed a series circuit, because the court would have

necessarily found, in the infringement analysis, that the accused

products contained a series circuit. If the accused products were

found not to infringe, however, then it was willing to concede

Kapusta’s point that the Canzano reference actually disclosed a

parallel circuit.

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be tested,” as well as whether a “third probe” or “fourth probe”

is disclosed. Def.’s SUF 13.

The second prior art reference is U.S. Patent No. 4,553,085

issued to Canzano (“Canzano”). Gale disputes whether Canzano 1

discloses or illustrates “a test circuit comprising, in series,

a battery, a device capable of generating a signal in response

to completion of said circuit, a first probe and a second

probe.” Def.’s SUF 8. However, Gale disputes this fact only to

the extent that it is determined that its accused products

infringe any claim of the ‘663 patent. Id. Gale does not wish

to dispute this fact to the extent that the accused products do

not infringe the ‘663 patent. Put directly, Gale’s wishes in

this regard are irrelevant: the court will examine the evidence

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proffered, and if it suggests a dispute of material fact, then

summary judgment must be denied.

The remaining prior art references discussed by the parties

are undisputed. These include U.S. Patent No. 1,372,570 to

Smith (“Smith”), U.S. Patent No. 2,459,351 to Weincord

(“Weincord”), and U.S. Patent No. 2,413,484 to Berger

(“Berger”). It is undisputed that Smith, Weincord, and Berger do

not disclose the “test circuit comprising . . .” limitation. 

Def.’s SUF 2, 4, 10. Furthermore, it is undisputed that these

references do not disclose the “device capable of generating a

signal . . .” limitation. Def.’s SUF 11-12, 14. Nevertheless,

Gale notes that these limitations would have been obvious to a

skilled artisan. Def.’s SUF 2, 4, 10-12, 14.

D. Abandonment & Inequitable Conduct

Last, Gale moves for summary judgment on the grounds of

abandonment and inequitable conduct. At issue is Kapusta’s

conduct during the pendency of his application. The facts here

are mostly undisputed. On October 13, 1983, Kapusta filed an

application for a patent with the Patent Office. Def.’s SUF 3. 

Soon thereafter, in 1983-84, Kapusta entered into an agreement

with a company, Lemco, that would manufacture and distribute a

product believed to be covered by the pending application, and

began to receive royalty payments pursuant to this agreement. 

Def.’s SUF 4-5.

In September of 1984, Kapusta was diagnosed with kidney

cancer, and his right kidney was removed as a result. Def.’s

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SUF 6. As a result of financial losses caused by the cost of

his cancer treatment, Kapusta lost both his house and his

business. Def.’s SUF 7. Thereafter, in June 1985, he moved in

with family. Id. 

On November 1, 1985, the Patent Office issued a final

office action in the prosecution of the application. Def.’s SUF

8. In late 1985, Kapusta’s patent attorney, Walter Spruegel,

told Kapusta that there was a possibility that the application

could go abandoned if further action was not taken, although it

is unclear whether he was referring to the final office action,

or whether he had even received the final office action. Def.’s

SUF 9. In response, Kapusta instructed Spruegel, who was in his

late eighties at this point, to “delay taking any action ‘as

long as you can.’” Id. Kapusta has declared that when he said

this, it was his intention to delay the prosecution as long as

legally possible without abandoning the application. Kapusta

Decl. in Support of Pl.’s Opp’n to Def.’s Mot. for Summ. J.

(“Kapusta Decl.”) at ¶ 5.

Kapusta then stopped receiving phone calls from Spruegel in

1986 without explanation. Def.’s SUF 10. On June 10, 1986, the

Patent Office issued a Notice of Abandonment that the

application had become abandoned due to Kapusta’s failure to

respond to the office action of November 1, 1985. Def.’S SUF

12. In 1988, Spruegel died. Def.’s SUF 13. However, Kapusta

did not learn of this until 1989, when he attempted to contact

Spruegel regarding the status of his application. Def.’s SUF

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14. Kapusta asserts that from 1989-90, he tried to contact

Spruegel’s widow to obtain his file but was unable to locate

her. Def.’s SUF 15. Indeed, Kapusta alleges that he first

learned of the abandonment when he contacted the Patent Office

himself in late 1990 or early 1991, at which point the officials

there recommended that he retain an attorney to assist with the

revival of the application. Def.’s SUF 18.

On October 28, 1991, Kapusta filed a petition to revive the

application through his newly appointed counsel on the grounds

that the application’s abandonment was unavoidable. Def.’s SUF

22. In support of his petition, Kapusta provided an affidavit

stating that the loss of communication between him and Spruegel

was caused by (1) Kapusta’s cancer, (2) his financial losses,

and (3) possibly Spruegel’s old age and the fact that he was

working out of his house. Def.’s SUF 24. On December 17, 1991,

the Patent Office dismissed Kapusta’s first petition. Def.’s

SUF 25. In doing so, it noted that Kapusta lacked “an adequate

verified showing of the cause of the unavoidable delay.” Def.’s

SUF 26. Specifically, the Office required Kapusta to submit (1)

a statement by all persons with knowledge of the cause of delay;

(2) a showing of the responsible person’s financial condition

that caused the unavoidable delay in payment of the fee; and (3)

a nexus between the lack of diligence in filing a timely

petition to revive and the asserted financial difficulty. Id.

After this office decision, Kapusta learned that Spruegel’s

widow had died, Def.’s SUF 27, and that Spruegel’s son had no

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knowledge of whether anyone reviewed his father’s papers after

his death, Def.’s SUF 28. On March 2, 1992, Kapusta filed a

renewed petition to revive the application. Def.’s SUF 29. In

this petition, Kapusta informed the Office that Spruegel’s widow

had died, that Spruegel had no secretary or other attorney who

would be knowledgeable about the case, and that Spruegel’s son

also did not have any knowledge regarding the delay. Def.’s SUF

30. Furthermore, Kapusta submitted that his financial condition

was not the direct cause of the delay in filing a response to

the office action, nor was it the reason for any lack of

diligence in filing the petition to revive. Def.’s SUF 31. The

parties dispute whether Kapusta failed to submit this financial

information because he was receiving royalties from the company

Lemco in connection with the sale of products believed to be

covered by the application. Def.’s SUF 34. 

Kapusta ultimately asserted as grounds for delay: the loss

of communication between him and Spruegel, caused by Kapusta’s

moves; the fact that Mr. Spruegel was working out of his home;

the subsequent death of Mr. Spruegel; and the subsequent efforts

undertaken by Kapusta to ascertain the status of his

application. Def.’s SUF 32. Kapusta informed the Patent Office

that financial difficulty per se was not the cause of the delay;

rather, his financial condition caused him to move several

times, resulting in the loss of communication with his attorney. 

On May 20, 1992, the Patent Office granted the renewed petition

and thereby revived the application. 

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III. Standards

SUMMARY JUDGMENT STANDARDS UNDER FED. R. CIV. P. 56

Summary judgment is appropriate when it is demonstrated

that there exists no genuine issue as to any material fact, and

that the moving party is entitled to judgment as a matter of

law. Fed. R. Civ. P. 56(c); See also Adickes v. S.H. Kress &

Co., 398 U.S. 144, 157 (1970); Secor Ltd. v. Cetus Corp., 51

F.3d 848, 853 (9th Cir. 1995).

Under summary judgment practice, the moving party

[A]lways bears the initial responsibility of informing

the district court of the basis for its motion, and

identifying those portions of "the pleadings,

depositions, answers to interrogatories, and admissions

on file, together with the affidavits, if any," which

it believes demonstrate the absence of a genuine issue

of material fact.

Celotex Corp. v. Catrett, 477 U.S. 317, 323 (1986). "[W]here

the nonmoving party will bear the burden of proof at trial on a

dispositive issue, a summary judgment motion may properly be

made in reliance solely on the 'pleadings, depositions, answers

to interrogatories, and admissions on file.'" Id. Indeed,

summary judgment should be entered, after adequate time for

discovery and upon motion, against a party who fails to make a

showing sufficient to establish the existence of an element

essential to that party's case, and on which that party will

bear the burden of proof at trial. See id. at 322. "[A]

complete failure of proof concerning an essential element of the

nonmoving party's case necessarily renders all other facts

immaterial." Id. In such a circumstance, summary judgment

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should be granted, "so long as whatever is before the district

court demonstrates that the standard for entry of summary

judgment, as set forth in Rule 56(c), is satisfied." Id. at

323.

If the moving party meets its initial responsibility, the

burden then shifts to the opposing party to establish that a

genuine issue as to any material fact actually does exist. 

Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574,

586 (1986); See also First Nat'l Bank of Ariz. v. Cities Serv.

Co., 391 U.S. 253, 288-89 (1968); Secor Ltd., 51 F.3d at 853. 

In attempting to establish the existence of this factual

dispute, the opposing party may not rely upon the denials of its

pleadings, but is required to tender evidence of specific facts

in the form of affidavits, and/or admissible discovery material,

in support of its contention that the dispute exists. Fed. R.

Civ. P. 56(e); Matsushita, 475 U.S. at 586 n.11; See also First

Nat'l Bank, 391 U.S. at 289; Rand v. Rowland, 154 F.3d 952, 954

(9th Cir. 1998). The opposing party must demonstrate that the

fact in contention is material, i.e., a fact that might affect

the outcome of the suit under the governing law, Anderson v.

Liberty Lobby, Inc., 477 U.S. 242, 248 (1986); Owens v. Local

No. 169, Assoc. of Western Pulp and Paper Workers, 971 F.2d 347,

355 (9th Cir. 1992) (quoting T.W. Elec. Serv., Inc. v. Pacific

Elec. Contractors Ass'n, 809 F.2d 626, 630 (9th Cir. 1987), and

that the dispute is genuine, i.e., the evidence is such that a

reasonable jury could return a verdict for the nonmoving party,

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Anderson, 477 U.S. 248-49; See also Cline v. Industrial

Maintenance Engineering & Contracting Co., 200 F.3d 1223, 1228

(9th Cir. 1999).

In the endeavor to establish the existence of a factual

dispute, the opposing party need not establish a material issue

of fact conclusively in its favor. It is sufficient that "the

claimed factual dispute be shown to require a jury or judge to

resolve the parties' differing versions of the truth at trial." 

First Nat'l Bank, 391 U.S. at 290; see also T.W. Elec. Serv.,

809 F.2d at 631. Thus, the "purpose of summary judgment is to

'pierce the pleadings and to assess the proof in order to see

whether there is a genuine need for trial.'" Matsushita, 475

U.S. at 587 (quoting Fed. R. Civ. P. 56(e) advisory committee's

note on 1963 amendments); see also Int’l Union of Bricklayers &

Allied Craftsman Local Union No. 20 v. Martin Jaska, Inc., 752

F.2d 1401, 1405 (9th Cir. 1985).

In resolving the summary judgment motion, the court

examines the pleadings, depositions, answers to interrogatories,

and admissions on file, together with the affidavits, if any. 

Rule 56(c); See also In re Citric Acid Litigation, 191 F.3d

1090, 1093 (9th Cir. 1999). The evidence of the opposing party

is to be believed, see Anderson, 477 U.S. at 255, and all

reasonable inferences that may be drawn from the facts placed

before the court must be drawn in favor of the opposing party,

see Matsushita, 475 U.S. at 587 (citing United States v.

Diebold, Inc., 369 U.S. 654, 655 (1962) (per curiam)); See also

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Headwaters Forest Defense v. County of Humboldt, 211 F.3d 1121,

1132 (9th Cir. 2000). Nevertheless, inferences are not drawn

out of the air, and it is the opposing party's obligation to

produce a factual predicate from which the inference may be

drawn. See Richards v. Nielsen Freight Lines, 602 F. Supp.

1224, 1244-45 (E.D. Cal. 1985), aff'd, 810 F.2d 898, 902 (9th

Cir. 1987).

Finally, to demonstrate a genuine issue, the opposing party

"must do more than simply show that there is some metaphysical

doubt as to the material facts. . . . Where the record taken as

a whole could not lead a rational trier of fact to find for the

nonmoving party, there is no 'genuine issue for trial.'" 

Matsushita, 475 U.S. at 587 (citation omitted).

IV. Analysis

A. Infringement

Kapusta first moves for summary judgment on the issue of

infringement. Infringement is a two-step process in which the

court construes the claims and the fact-finder compares the

claims with the accused device to determine whether there is

infringement. Rexnord Corp. V. Laitram Corp., 274 F.3d 1336,

1341 (Fed. Cir. 2001). The question of literal infringement is

one of fact. Kemco Sales, Inc. V. Control Paper, Inc., 208 F.3d

1353, 1359-60 (Fed. Cir. 2000).

The main issue in dispute concerns the parties’ joint

stipulation. Kapusta asserts that, after this court’s entry of

final judgment on November 2, 2004, which incorporated the

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parties’ stipulation, the only remaining issue for the Federal

Circuit was the claim construction order regarding the “hand

grip size case” limitation. Paragraph 6 of the stipulation

states: “The parties agree that each claim element specified in

claims 1, 2, and 3 of the ‘663 patent, other than the ‘hand grip

size case’ . . . are present in the Gale Pocket Toner products.” 

Because the Federal Circuit reversed this court’s claim

construction with respect to the hand-grip size case limitation,

Kapusta argues that there is no genuine issue of material fact

that the accused products comprise all the limitations of the

‘663 patent. 

In response, Gale first contends that the entire

stipulation was dependent on this court’s claim construction. 

Because the Federal Circuit vacated that claim construction,

Gale takes the position that it may now dispute whether the

accused products meet the other limitations of the ‘663 patent,

i.e., those other than the hand-grip size case element. Second,

Gale argues that even if it is limited to disputing the “handgrip size case” element, that element is defined by more than

merely size, and that the accused products do not possess these

additional properties. Finally, Gale argues that if the court

interprets the stipulation as Kapusta interpreted it, Gale

should be relieved of the generally binding nature of its

admissions.

1. Interpretation of Stipulation

The first task for the court is to construe the

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stipulation. Interpretation of a stipulation is similar to

contract interpretation in that both present a legal issue to be

decided by the court. See Fuji Photo Film Co. v. Jazz Photo

Corp., 394 F.3d 1368, 1373 (Fed. Cir. 2005). 

As Gale notes, there is language in the stipulation

suggesting that the admissions made were contingent on the

court’s claim construction order. For instance, paragraph five

states: “The parties stipulate that if the claims of the ‘665

patent are interpreted as specified in the claim construction

order dated August 5, 2004, then the Gale Pocket Toner products

. . . do not infringe.” Similarly, paragraph seven states that

“[b]ecause the parties hereby stipulate to judgment of noninfringement based on the Court’s claim construction ruling, the

remaining claims and issues in Kapusta summary judgment motion

and in this action are moot and can be dismissed.” 

There are several problems, however, with Gale’s reliance

on these statements. One problem is that both statements appear

to be contingent admissions on the part of Kapusta, not Gale,

and therefore the “if” language protects Kapusta’s interests,

rather than Gale’s. In contrast, paragraph six, in which the

parties agreed that the remaining elements of the ‘663 patent

were present in the accused products, is an admission on the

part of Gale. Furthermore, given that paragraphs five and seven

were expressly conditioned on this court’s claim construction

order being upheld, the absence of the same language elsewhere

appears purposeful. Similarly, the very last sentence of the

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stipulation reads: “If . . . the Federal Circuit reverses this

Court’s claim construction, then Gale may proceed with its

defenses of invalidity and unenforceability on remand.” It does

not, notably, say anything about proceeding with other arguments

of non-infringement. Finally, a plain reading of paragraph six

fails to reveal any language of condition or qualification.

Nevertheless, it is unclear why Gale would have stipulated

that all the limitations of the ‘663 patent were present in the

accused products but for the hand grip size case. Presumably,

if Gale had intended to make such a sweeping admission, it would

have received something in exchange for it. Perhaps Kapusta’s

admissions in paragraphs five and seven served as consideration

in the bargain. Alternately, perhaps the parties felt that a

qualified stipulation with regard to the other limitations might

jeopardize the Federal Circuit’s jurisdiction to hear the case,

given that its jurisdiction under 28 U.S.C. § 1295 is limited to

appeals from a final judgment and after a full adjudication on

the merits. See Silicon Image, Inc. v. Genesis Microchip, Inc.,

395 F.3d 1358, 1362-63 (Fed. Cir. 2005) (holding that “[t]he

final judgment rule cannot be satisfied by stipulation of the

parties.”)

In any event, it is not the court’s role to read the

parties’ minds. The court can only decipher the parties’ intent

based on the face of the stipulation. As the Federal Circuit

noted with regard to settlement agreements, “the parties were

the architects of their own settlement structure. However

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unfortunate those choices in designing their settlement

agreement, these choices may not now be unilaterally undone by a

court.” Id. at 1363. Similarly, Gale and Kapusta submitted a

stipulation that, while not a model of clarity, appears to

stipulate that the accused products meet all the limitations of

the ‘663 patent but for the hand grip size case. So construed,

Gale cannot now dispute that the accused products lack the

remaining limitations of the ‘663 patent.

2. Hand-Grip Size Case

Gale next argues that, even if it is limited to disputing

whether the accused products meet the “hand-grip size case”

limitation, this term is not merely defined by its size. 

Rather, Gale argues that the case is also defined by a “test

circuit” mounted within the case—which Gale contends is lacking

in the accused products. In addition, Gale argues that even if

the accused products have a “test circuit” so defined, they do

not have a single case that houses both test circuits, as

disclosed in Claim 3 of the ‘663 patent. While ingenious, these

arguments are also precluded by the court’s order adopting the

stipulation and entering final judgment for three reasons.

First, the order stated that the “parties agree that each

claim element specified in claims 1, 2 and 3 of the ‘663 patent,

other than the term ‘hand grip size case’ described in paragraph

5 above, are present in the Gale Pocket Toner products.” Order

¶ 6. The only disputed was the term “hand grip size case” as it

related to the three limitations described in paragraph five. 

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This included the limitation that the case be (1) “no smaller

than the width of an adult palm, so that it can be grasped

firmly in one’s hand,” (2) “no smaller than 1 inch in width,”

and (3) “of a rectangular shape.” ¶ 5. Absent from this list

of limitations is any mention of test circuits, or the number of

cases disclosed by the “hand grip size case.” 

Second, while claim 1 of the ‘663 patent discloses a “handgrip size case in which said test circuit is mounted,” the order

indicates that the only issue in dispute was a “hand grip size

case.” It may also be inferred on this basis that the omitted

text (i.e., “in which said test circuit is mounted”) was not in

dispute. A contrary interpretation would render the omitted

text meaningless or superfluous.

Finally, the Federal Circuit’s opinion reveals a similar

understanding of the order as the one the court now adopts. 

First, the court construed “hand-grip size case” as “a case of a

size that can be gripped in a normal hand”—nothing more and

nothing else. Gale cannot now interpose its own elements in the

Federal Circuit’s definition of that term. Second, the court

observed: “[w]hile we might . . . make our own judgment on the

question of infringement, based on the record, the better

practice is to have the district court make that factual

determination on remand.” Kapusta, slip op. at 10. In order to

grant summary judgment on infringement, there must be no genuine

dispute over material facts. Accordingly, if the Federal

Circuit could have entered a judgment on infringement, it must

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have necessarily assumed that the remaining limitations of the

‘663 patent—including the non-size based limitations in “hand

grip size case”—were agreed upon.

Thus, in sum, the court declines to adopt Gale’s

interpretation of the “hand-grip size case” element as

encompassing more than size-based limitations. This is based

upon the language of this court’s claim construction order read

as a purposeful whole, the language of the ‘663 patent itself,

and the Federal Court’s understanding of the posture of the

case.

3. Relief from Admissions and/or Final Judgment

Finally, Gale asks the court to relieve it from the binding

nature of its admissions in the stipulation. The critical

defect with this argument is that these admissions formed the

basis of this court’s entry of final judgment, and Rule 60(b)

sets the parameters on when a court may grant relief from a

final judgment. Fed. R. Civ. P. 60(b). In relevant part, Rule

60(b) states that a court may relieve a party from final

judgment not later than one year after entry of judgment when

the reason for doing is because of mistake, inadvertence,

surprise, or excusable neglect. Even assuming, arguendo, that

Gale had grounds for seeking relief from final judgment, the

time in which such relief could have been granted has now

expired. Accordingly, the stipulation remains binding on both

parties.

4. Literal Infringement

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With the order and stipulation of final judgment properly

construed, the court turns to the last issue of infringement. 

As noted earlier, infringement is a two-step process. Rexnord

Corp., 274 F.3d at 1341. Given that the Federal Circuit’s

holding in this case completes the step of claim construction,

the only remaining issue is whether there is a genuine issue of

material fact that the accused products do not infringe the ‘663

patent.

Kapusta has submitted sufficient evidence that there is no

genuine issue here. Paragraph six in the order conclusively

establishes that each element of the ‘663 patent is present in

the accused products. The only question now is whether the

accused products employ “a case of a size that can be gripped in

a normal hand.” Kapusta, slip op. at 10. There is little doubt

that they do. Even examination of a photograph of the accused

products plainly reveals that the products can be gripped in a

normal hand. Simonis Decl. in Support of Pl.’s Opp’n to Def.’s

Mot. for Summ. J. (“Simonis Decl.”), Exh. E (photograph of

accused devices next to rulers). Moreover, Kapusta’s expert

observed that the accused products “fit[] comfortably into the

grip of the human hand.” Expert Rep. of Michael DeAngeli, at 8

and 12, Exh. D of Simonis Decl. This comports with Gale’s own

description of the PT-1, PT-2, and PT-6 models as “ergonomic” on

its website. Id. As Gale has failed to produce any evidence

suggesting that any of the accused products could not be gripped

in a normal hand, summary judgment with respect to infringement

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must be granted.

B. Expert Reports

Kapusta next moves for summary judgment on the grounds that

defendant cannot establish the invalidity of the ‘663 patent for

obviousness.

A patent may not be obtained . . . if the differences

between the subject matter sought to be patented and

the prior art are such that the subject matter as a

whole would have been obvious at the time the invention

was made to a person having ordinary skill in the art

to which said subject matter pertains.

34 U.S.C. 103(a). Specifically, plaintiff argues that defendant

will be unable to provide an expert who can testify as to the

level of ordinary skill in the art, an element of the

obviousness analysis. As described earlier, defendant’s

technical expert, Mr. Robert Gale, has not submitted an expert

report in accordance with the scheduling order and Kapusta

therefore contends that he cannot testify regarding this issue.

Defendant responds in three ways. First, defendant argues

that it has already provided plaintiff with the expert report of

another technical expert, Mark Scheitrum, who will be able to

testify as to the level of ordinary skill in the art. Second,

defendant argues that Mr. Gale was not required to submit an

expert report under Rule 26(a)(2)(B) of the Federal Rules of

Civil Procedure. Third, defendant argues that expert testimony

is not required in order to establish obviousness.

With respect to the first argument, the court agrees that

Gale’s other expert, Mark Scheitrum, may testify as to the level

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Because the court has determined Scheitrum's report satisfies 2

the evidentiary requisite, the court need not go further.

The court notes that it is doubtful that the present case 3

would fall into any of the categories that plaintiff identifies as

situations in which expert testimony is unnecessary. These include

situations where the art is relatively simple and capable of being

understood by a lay person—which seems unlikely given that the

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of ordinary skill in the art. Mr. Scheitrum’s report was mailed

to plaintiff on April 23, 2004, more than two years in advance

of the court’s deadline regarding the provision of expert

reports. Furthermore, the report detailed Mr. Scheitrum’s

opinion with respect to the disputed element of nonobviousness. 

Kapusta argues that Mr. Scheitrum’s report only speaks in

generalities about the ordinary level of skill in electronics

testing devices. As support, he cites Ruiz v. A.B. Chance, in

which the Federal Circuit held that the expert testimony at

issue was not specific enough to prove the ordinary level of

ordinary skill by clear and convincing evidence. 234 F.3d 654,

667 (Fed. Cir. 2000). However, the report submitted by Mr.

Scheitrum is not his testimony. Rather, as indicated by the

plain language of Rule 26, the report need only disclose the

“basis and reasons” for the opinions to be expressed. Mr.

Scheitrum has done so here. Accordingly, there is a genuine

dispute about the level of ordinary skill in the art.2

Given that defendant will be able to offer the testimony of

Mr. Scheitrum, it is unnecessary to rule on defendant’s third

argument, that is, whether expert testimony is needed at all to

prove the level of ordinary skill in the art. 

3

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prior art consists of patents related to coaxial cable

equipment—and situations where the level of skill is reflected in

the prior art itself.

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C. Prior Art References

Kapusta also moves for summary judgment with respect to the

issue of invalidity under 35 U.S.C. § 102(b), which provides,

inter alia, that one may not patent an invention that was

previously patented. “[A] claim is anticipated if each and

every limitation is found either expressly or inherently in a

single prior art reference.” Celeritas Techs. Ltd. V. Rockwell

Int’l Corp., 150 F.3d 1354, 1360 (Fed. Cir. 1998). 

Specifically, Kapusta argues that the ‘663 patent is not

anticipated by any of the prior art references identified by

Gale. Gale does not dispute that three of the prior art

references—Smith, Weincord, and Berger—lack certain limitations

(i.e., the “test circuit comprising . . .” limitation and the

“device capable of generating a signal . . .” limitation). As

there is no genuine issue of material fact that these references

fail to anticipate the ‘663 patent, summary judgment with

respect to these references is proper. The remaining dispute

centers on the Ross and Canzano references, and Claims 1 and 3

of the ‘663 patent. 

1. Ross Reference

In its attempt to cover multiple prior art references in

its initial brief, Kapusta spends a meager six sentences

explaining to the court why Ross does not anticipate Claim 1. 

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In essence, he points to his own patent, points to the Ross

patent, and calls it a day, apparently expecting the court to

divine from this why it should grant summary judgment. For

example, Kapusta does not explain whether Ross does not

anticipate the ‘663 patent because it fails to disclose a “first

probe” and “second probe”—which it seemingly does, given that

each jack in Ross has a probe connecting to the central

conductor cable and a probe connecting to the cable shield—or

whether it fails to anticipate because the jack is directed

toward audio cables, rather than coaxial cables. 

Kapusta attempts to retreat from this scattershot approach

in his reply brief by narrowing the issue to whether the probes

comprise a central conductor and surrounding shield. Not only

is this too late, as it denies Gale a fair opportunity to

respond, but there is a genuine dispute on the merits. At least

at first blush, conductor wire 21 seems to disclose a “central

conductor,” and ground wire 22 seems to disclose a “surrounding

shield.” Ross Reference, Fig. 2 and Col. 3, lines 31-32. 

Accordingly, Kapusta has failed to meet his initial burden of

proving that there is no genuine issue of material fact here. 

And, because there is a genuine issue of material fact as to

whether Ross anticipates Claim 1, there is also the same dispute

as to whether Ross anticipates Claim 2. See SIBIA

Neurosciences, Inc. V. Cadus Pharm. Corp., 225 F.3d 1349, 1359

(Fed. Cir. 2000).

Kapusta’s argument with respect Claim 3 of the ‘663 patent

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is derivative of his arguments with respect to Claim 1. He

argues that because Ross fails to disclose a “first probe” and

“second probe” as described above, Ross also fails to disclose

“third probe” and “fourth probe” of a second test circuit that

form a coaxial cable connector. However, Ross discloses two

jacks—each of which contain two probes—equaling a total of four

probes. Id. at ¶ 7-8. Again, there is at least a genuine

dispute with regard to whether Ross discloses the limitations in

Claim 3. Thus, summary judgment as to this issue would also be

inappropriate.

2. Canzano Reference

Next, Kapusta asserts that the Canzano reference does not

anticipate the ‘663 patent because it “fails to disclose a test

circuit comprising, in series, a battery, a device capable of

generating a signal in response to completion of said circuit, a

first probe and a second probe.” Pl.’s Mot. for Summ. J. at 7,

11. The crux of the dispute is that Canzano discloses a

parallel circuit, whereas the ‘663 patent discloses a series

circuit. Kapusta argues that this difference makes it

impossible for Canzano to anticipate any of the ‘663 claims. 

Kapusta has met its initial burden of proving that there is no

genuine issue of material fact that Canzano does not anticipate. 

Canzano discloses that “[a] short indicator circuit including

light and switch is connected across the battery terminals in

parallel with the center conductors and ground conductors”

(emphasis added). In contrast, all of the circuits in the ‘663

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patent appear to employ a series configuration.

The burden then shifts to Gale to establish that a genuine

issue of material fact actually exists. Gale couches its

disagreement as contingent on the court’s ruling with respect to

infringement because if the court had adopted its interpretation

of the stipulation, it would have caught Kapusta in a catch-22. 

If Canzano did not anticipate because it employed a parallel

circuit, then Gale could not infringe because it too employs a

parallel circuit, or so the argument would go. However, as

discussed above, Gale cannot dispute that it uses a series

circuit, given that it stipulated to the contrary. 

Because the circuit with the signaling device in Canzano

uses a parallel circuit, anticipation is impossible. At some

point, each of the three claims in the ‘663 patent disclose a

series circuit that includes “a device capable of generating a

signal in response to completion of [the] circuit.” This

appears in the main text of Claim 1, is incorporated by

reference in Claim 2, and is disclosed in subpart b of Claim 3. 

Because a prior art reference must disclose “each and every

limitation” in order to anticipate a claim, Canzano cannot do

so. As there is no genuine issue of material fact that Canzano

does not anticipate the ‘663 patent, summary judgment should be

granted.

D. Abandonment & Inequitable Conduct

Last, Gale moves for summary judgment with respect to its

affirmative defenses of patent invalidity due to abandonment and

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unenforceability based upon inequitable conduct. First, Gale

argues that the Patent Office’s decision to revive Kapusta’s

application was arbitrary and capricious. The Patent Office

made this decision after determining that Kapusta’s delay in

responding to an office action, which caused the application to

be deemed abandoned, was “unavoidable.” Second, Gale argues

that Kapusta engaged in inequitable conduct related to the nondisclosure of financial information to the Patent Office. The

court considers each argument in turn.

1. Abandonment

This court must review decisions of the Patent Office under

the deferential arbitrary and capricious standard of the

Administrative Procedure Act. Ray v. Lehman, 55 F.3d 606, 608

(Fed. Cir. 1995), cert. denied, 516 U.S. 916 (1995). Agency

action may only be set aside if it is “arbitrary, capricious, an

abuse of discretion, or not otherwise in accordance with the

law.” 5 U.S.C. § 706(2)(A). See also Morganroth v. Quigg, 885

F.2d 843, 848 (Fed. Cir. 1989) (holding that the Patent Office’s

interpretation of statutory and regulatory provisions regarding

abandonment and revival of patent applications is entitled to

“considerable deference”). 

Accordingly, this court may “not [] substitute its own

judgment for that of the agency.” Ray, 55 F.3d at 608. Indeed,

this court should only set aside decisions of the Patent Office

if they “lack any basis in reason or common sense.” Smith v.

Mossinghoff, 671 F.2d 533, 538 (D.C. Cir. 1982). At the same

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time, however, a court “should not supply a reasoned basis for

the agency’s action that the agency itself has not given.” 

Motor Vehicle Mfrs. Ass'n of U.S. v. State Farm Mutual Auto.

Ins. Co., 463 U.S. 29, 43 (1983) (internal quotations omitted). 

Here, Gale points out that the Patent Office’s decision

consisted of a single sentence, “The Petition is granted.” 

Patent Office Decision Granting Renewed Petition, Exh. B8 to

Finnerty Decl. Thus, Gale argues that because the agency has

not set forth a reasoned basis for its decision, this court must

set that decision aside.

Gale is correct with regard to the law, but incorrect with

regard to the facts. First, a single sentence decision issued

by an agency would typically constitute arbitrary and capricious

action in violation of the APA. See Commc’ns. and Control, Inc.

v. F.C.C., 374 F.3d 1329, 1335-36 (D.C. Cir. 2004) (finding that

agency’s departure from usual practice of correcting

typographical errors for license applicants “with no

explanation” was the epitome of arbitrary and capricious

decision-making) (emphasis in original); Am. Tel. & Tel. Co. v.

F.C.C., 974 F.2d 1351, 1355 (D.C. Cir. 1992) (finding that

“conclusory assertions” by agency were arbitrary and

capricious); Columbia Gas Transmission Corp. v. F.E.R.C., 448

F.3d 382, 387 (D.C. Cir. 2006) (“A tight-lipped punt will not

do.”). While it may not be that every single agency action (or

choice of inaction) must be accompanied by written explanation,

here, the Patent Office was required to make a determination as

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to whether Kapusta’s delay was “unavoidable.” This

determination is the type of agency adjudication that warrants

explanation.

Nevertheless, Gale’s argument that the Patent Office’s

decision only consisted of one sentence, “The petition is

granted,” is taken out of context. Kapusta submitted two

petitions: an initial petition on October 28, 1991 and a renewed

petition on March 5, 1992. The Patent Office’s decision to

reject the initial petition was accompanied by a two-page

decision. That decision set forth the criteria for when a

petition to revive should be granted, and explained those that

were satisfied in Kapusta’s petition and those that were not:

A grantable petition to revive an abandoned

application under 32 USC 122 and 37 CFR 1.137(a) must

be accompanied (1) by an adequate verified showing of

the cause of unavoidable delay, (2) by the proposed

response to the outstanding office action, (3) by the

petition fee required by law, and (4) by a terminal

disclaimer and fee . . . This petition lacks items (1)

and (2) above.

Patent Office Decision Denying Petition, Exh. B5 to Finnerty

Decl. The office then explained why the items were lacking,

e.g., because of the absence of a verified statement from the

widow of Kapusta’s attorney Spruegel, and the absence of

verified financial information. Id.

The subsequent decision granting Kapusta’s renewed petition

should be viewed in light of the office’s previous decision,

which instructed Kapusta on how to cure the defects in his

initial petition. While the Patent Office did not specifically

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state in its subsequent decision that Kapusta in fact remedied

the pre-existing problems, it may be fairly inferred that

Kapusta did so, given that he adopted the steps recommended in

the office’s prior decision. This is particularly the case in

light of the back-and-forth nature of the proceedings. “[A]

court can uphold an agency decision ‘of less than ideal clarity

if the agency's path may reasonably be discerned.’” Northwest

Motorcycle Ass’n v. U.S. Dep’t of Agriculture, 18 F.3d 1468,

1478 (9th Cir. 1994), quoting Motor Vehicle Mfrs. Ass’n, 463

U.S. at 43.

An applicant may revive an abandoned application by

demonstrating that the delay in responding to the office action

was either “unavoidable” or “unintentional.” 35 U.S.C. § 133;

37 C.F.R. § 1.137. As noted earlier, the Patent Office issued a

Notice of Abandonment after Kapusta failed to respond to its

final office action, and Kapusta thereafter chose to revive his

application under the “unavoidable” standard. The Patent Office

evaluates these petitions for revival according to a reasonably

prudent person standard. Ray, 55 F.3d at 609. Whether an

application’s delay in prosecuting the patent application is

unavoidable “must be decided on a case-by-case basis, taking all

of the facts and circumstances into account.” Smith, 671 F.2d

at 538. 

In the vast majority of cases discussing what constitutes

“unavoidable” delay, courts have deferred to the decisions of

the Patent Office. See, e.g., Rydeen v. Quigg, 748 F. Supp.

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900, 905 (D.D.C. 1990) (holding that the Patent Office’s

interpretation of “unavoidable” was not arbitrary or capricious,

despite somewhat conflicting legislative history); Haines v.

Quigg, 673 F. Supp. 314, 318 (N.D. Ind. 1987) (holding that the

Patent Office’s decision as to what constituted unavoidable

delay was not arbitrary or capricious); Kim, 718 F. Supp. at

1281-84 (holding that the Patent Office’s decision not to revive

application was not arbitrary or capricious). Of course, in

most of these cases, the parties seeking review are patent

applicants who have been denied revival, rather than here, where

Kapusta was granted revival. Nevertheless, they are instructive

of the substantial deference afforded to the Patent Office. 

a. Delay in Responding to Office Action

While there might be situations in which it would be

appropriate for a court to find the Patent Office’s decision to

revive an application as arbitrary and capricious, cases in

which patent applicants have had to deal with cancer and the

death of their attorney are not among them. First, Kapusta has

pointed to a number of reasons why his initial delay in

responding to the Office Action should be deemed unavoidable. 

For instance, his initial delay in responding to the Office

Action of November 1, 1985 is explicable by his statement to his

attorney to delay taking action for as long as possible, and the

subsequent loss of communication between the two. While the

record does not definitively reveal a reason for Spruegel’s

inaction, it would not be arbitrary for the Patent Office to

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conclude that Spruegel’s inaction was excusable in light of

Kapusta’s previous instruction, and the inability to contact

Kapusta for any further clarification.

Even so, Gale chides Kapusta for failing to keep Spruegel

apprised of his new addresses. However, in light of the

circumstances, it would not be arbitrary for the Patent Office

to conclude that his failure to do so was unavoidable. Even

though, as Gale points out, a patent applicant is responsible

for the acts or omissions of his attorney, where the attorney’s

actions derive from the conduct of the applicant, and the

applicant’s behavior is deemed unavoidable, the attorney’s

actions are similarly unavoidable. Additionally, it would not

be arbitrary for the Patent Office to conclude that the death of

Spruegel (and, presumably, his capacity in the time period

preceding his death) made Kapusta’s delay in responding to the

Office Action unavoidable.

b. Delay in Reviving Application

Second, the Patent Office’s conclusion that Kapusta’s delay

in reviving his application was unavoidable is also not

arbitrary. In his renewed petition, Kapusta explained that this

second delay was due to the fact that it took an extended period

of time for Kapusta to learn that the application had become

abandoned, to find out that his attorney had died, and to

contact the Patent Office himself after several unsuccessful

months of attempting to informally revive the application. In

light of all these factors, this court cannot say that the

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Patent Office’s decision to grant the renewed petition “lack[ed]

any basis in reason or common sense.” Smith, 671 F.2d at 538. 

Gale maintains that Kapusta’s failure to initiate

communication with his attorney after Kapusta stopped receiving

phone calls from him demonstrates that he was not diligent in

prosecuting his patent. However, Gale ignores the fact that the

Patent Office could have taken into account the underlying

reasons for why Kapusta did not do so, to wit, his constant

moving prompted by the financial burden of medical treatment for

cancer. Moreover, it would not be arbitrary for the Patent

Office to take into account the time and effort that it took for

Kapusta seek out and retain new counsel in order to file a

petition to revive the application.

Gale presses that the standard for demonstrating that delay

is unavoidable is high. It cites, for example, the Patent

Office’s own manual, which states that “‘unavoidable’ delay is

the epitome of ‘unintentional’ delay.” Manual of Patent

Examining Procedure (“MPEP”) 711.03(c)(II)(C)(2). Gale also

notes that a finding of unavoidable delay requires the patent

applicant to have exercised the care and diligence “generally

used and observed by prudent and careful men in relation to

their most important business.” Futures Tech., Ltd. v. Quigg,

684 F.Supp. 430, 431 (E.D. Va. 1988). However, the demanding

nature of this standard also suggests that on those seemingly

rare occasions when the Patent Office deems it appropriate to

excuse an applicant’s delay as unavoidable, a court should be

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reluctant to second-guess that decision. Even if this court

were to disagree as to whether Kapusta’s delay was truly

unavoidable, that is not the issue before the court. Rather,

the issue is whether the Patent Office’s actions were arbitrary,

capricious, or an abuse of discretion, which is not the case

here.

2. Inequitable Conduct

Finally, Gale argues that the ‘663 patent is unenforceable

because of Kapusta’s allegedly inequitable conduct. Gale

alleges that Kapusta’s inequitable conduct stems from both (1)

the fact that he had been receiving royalty payments during the

pendency of his application without revealing the same to the

Patent Office and (2) that he allegedly submitted false

affidavits asserting his delay was unavoidable. According to

Gale, Kapusta intentionally—rather than unavoidably—delayed

seeking revival of his application until the entry of a

competing product in the market and the resulting loss of

royalty payments.

 Patent applicants must prosecute patent applications with

candor, good faith, and honesty. Bristol-Myers Squibb Co. v.

Rhode-Poulenc Rorer, Inc., 326 F.3d 1226, 1233 (Fed. Cir. 2003). 

A finding of inequitable conduct may be demonstrated by showing

that the patent applicant (1) failed to disclose material

information—thereby breaching this duty—and (2) had an intent

to deceive the Patent Office. Bristol-Myers Squibb Co., 326

F.3d at 1233. A court may balance these elements against one

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 The standard for materiality changed slightly in 1992, but 4

the relevant standard for purposes here is the one noted. See

Ulead Sys. Inc. v. Lex Computer & Mgmt. Corp., 351 F.3d 1139, 1145

(Fed. Cir. 2003) (applying the standard of inequitable conduct in

place when the alleged conduct occurred).

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another such that a strong showing of materiality permits a

somewhat weaker showing of intent. Id. at 1234.

Information is material if there is a substantial

likelihood that a reasonable examiner would consider it

important in deciding whether to allow an application to issue

as a patent. Dayco Prods., Inc., v. Total Containment, Inc., 4

329 F.3d 1358, 1363 (Fed. Cir. 2003) (internal quotations

omitted). Information may be material even if its disclosure

would not have rendered the invention unpatentable. Digital

Control, Inc. v. Charles Mach. Works, 437 F.3d 1309, 1318 (Fed.

Cir. 2006). In other words, there is no requirement of “but

for” causation.

Evidence of intent to deceive is usually inferred from the

patentee’s overall conduct, and direct evidence of intent is not

required. Ulead Sys., 351 F.3d at 1146. Nevertheless, intent

to deceive may not be inferred simply based upon information

that was in existence at the time of patent prosecution but not

disclosed to the examiner. C.R. Bard, Inc. v. M3 Sys., Inc.,

157 F.3d 1340, 1365 (Fed. Cir. 1998).

The party claiming inequitable conduct must meet the heavy

burden of proving the materiality and intent elements with clear

and convincing evidence. Bristol-Myers Squibb Co., 326 F.3d at

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1233. Moreover, these elements are questions of fact often

inappropriate for resolution at summary judgment. See Ulead

Sys., 351 F.3d at 1146 (reversing finding of inequitable conduct

on summary judgment where sworn statements indicated absence of

intent); Baker Oil Tools, Inc. v. Geo Vann, Inc., 828 F.2d 1558,

1583 (Fed. Cir. 1987) (“If the facts of materiality or intent

are reasonably disputed, the issue is not amenable to summary

disposition.”); Scripps Clinic & Research Foundation v.

Genentech, Inc., 927 F.2d 1565, 1583 (Fed. Cir. 1991) (denying

summary judgment as to inequitable conduct).

Here, there is a genuine dispute regarding whether

Kapusta’s non-disclosure of his financial information was

material to the ultimate issuance of the patent. While it is

true that the Patent Office initially requested this

information, it is equally true that the Office subsequently

decided to grant his renewed petition without it. It appears

that the only reason that the Patent Office requested Kapusta’s

financial information was because he suggested that his finances

were to blame for the unavoidable delay; once Kapusta clarified

that his financial woes were only indirectly responsible, the

financial information fell out of issue. While Gale need not

prove that but for Kapusta’s non-disclosure, the patent would

not have issued, the Office’s decision to grant the renewed

petition—blind to Kapusta’s financials—is probative of the

importance of the undisclosed information in the materiality

analysis. 

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Of course, this does not foreclose the possibility that a

reasonable examiner would have found the financial information

“important” for a wholly unrelated reason. Dayco Prods., 329

F.3d at 1363. Admittedly, in the usual case, a patent

applicant’s renewed interest in the abandoned application upon

the threatened end of royalty payments would be of significant

interest to an examiner. MPEP § 711.03(c)(II)(D), 700-193

(“[D]elaying the revival of an abandoned application, by a

deliberately chosen course of action, until the industry or a

competitor shows an interest in the invention is the antithesis

of an ‘unavoidable’ or ‘unintentional’ delay.”). However, given

the facts in this situation, the financial information might not

be important, because it would not necessarily undercut

Kapusta’s other proffered excuses for delay, such as his cancer

and the death of his attorney. Although a close issue, there is

a genuine dispute regarding whether Kapusta’s financial

information was material, making summary judgment inappropriate.

In addition, the issue of whether Kapusta had the requisite

intent to deceive the Patent Office also remains a genuine issue

of material fact. The intent to mislead does not require direct

evidence and may be inferred from the facts and surrounding

circumstances. Bristol-Myers, 326 F.3d at 1239. As support,

Gale points to the fact that Kapusta only sought to revive his

application after learning of a competing and potentially

infringing product in the market. To be sure, the fact that

Kapusta wrote the phone number for the Patent Office on the same

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envelope that carried the message in which Lemco (Kapusta’s

manufacturer/distributor) informed him of a competing product

lends support to an inference that his subsequent actions were

motivated by the entry of a market competitor. However, on

summary judgment, the court draws all reasonable inferences in

favor of the nonmoving party. 

Furthermore, it could also be true, as the Patent Office

apparently believed, that the reasons for Kapusta’s delay were

his medical condition and the ensuing problems that flowed from

that. See Petition for Revival & Renewed Petition, Exhs. B & D

of Simonis Decl. Accordingly, Kapusta’s non-disclosure of

financial information could have simply been based upon grounds

that it was irrelevant—an explanation that is “not on its face

implausible.” Dayco Prods., 329 F.3d at 1367 (“[I]nequitable

conduct requires not intent to withhold, but rather intent to

deceive. Intent to deceive cannot be inferred simply from the

decision to withhold the [information] where the reasons given

for the withholding are plausible.”).

In sum, Gale has not met its burden of proving by clear and

convincing evidence that the undisclosed financial information

was material, given the other proffered and accepted reasons for

delay, or that Kapusta had the requisite intent to deceive the

Patent Office, in light of the other reasons for non-disclosure

of the information.

CONCLUSION

Plaintiff’s motion for summary judgment of infringement is

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GRANTED.

Plaintiff’s motion for summary judgment of no invalidity

under 35 U.S.C. § 103(a) is DENIED.

Plaintiff’s motion for summary judgment of no invalidity

under 35 U.S.C. § 102(b) in GRANTED in part and DENIED in part.

Defendant’s motion for summary judgment of patent

invalidity and unenforceability is DENIED.

IT IS SO ORDERED.

DATED: October 13, 2006.

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