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Doc. No. 234.

United States District Court

For the Northern District of California

IN THE UNITED STATES DISTRICT COURT

FOR THE NORTHERN DISTRICT OF CALIFORNIA

ADVANCED MICRO DEVICES (AMD), et al.,

Plaintiffs,

 v.

SAMSUNG ELECTRONICS CO., et al., 

Defendants. /

No. C 08-00986 SI

ORDER GRANTING SUMMARY

JUDGMENT OF NO INEQUITABLE

CONDUCT RE: CHENG ’990 PATENT

AND GRANTING MOTION FOR

JUDGMENT ON THE PLEADINGS RE:

IACOPONI ’594 PATENT.

BACKGROUND

 The procedural background of this litigation is as follows. Plaintiffs Advanced Micro Devices,

Inc. and ATI Technologies, ULC (collectively, “AMD”) brought suit against defendants Samsung

Electronics Co., Ltd.; Samsung Semiconductor, Inc.; Samsung Austin Semiconductor, LLC; Samsung

Electronics America, Inc.; Samsung Telecommunications America, LLC; Samsung Techwin Co., Ltd.;

and Samsung Opto-Electronics America, Inc. (collectively, “Samsung”), alleging infringement of seven

AMD patents, including United States Patents Nos. 5,559,990 to Cheng (“Cheng ’990 Patent”) and

5,545,592 to Iacoponi (“Iacoponi ’592 Patent”). On May 18, 2009 this Court granted Samsung leave

to amend its answer to include counterclaims of inequitable conduct.1

 Samsung’s amended counterclaim

now alleges that the Cheng ’990 Patent applicants engaged in inequitable conduct by failing to disclose

U.S. Patent No. 5,285,421 to the United States Patent and Trademark Office (“PTO”) and that the

Iacoponi ’592 Patent applicants engaged in inequitable conduct by failing to disclose certain prior art

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Doc. No. 287.

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Doc. No. 284.

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references. Before the Court are AMD’s motion for summary judgment of no inequitable conduct

relating to the Cheng ‘990 Patent, and motion for judgment on the pleadings of no inequitable conduct

relating to the Iacaponi ‘592 Patent. Samsung opposes the summary judgment motion,2 and opposes

the motion for judgment on the pleadings,3

 alternatively requesting leave to amend its complaint. The

separate facts and issues underlying each motion are set forth in turn below.

DISCUSSION

I. Motion For Summary Judgment on Cheng ’990 Patent.

A. Factual Background

The underlying inequitable conduct claim with respect to the Cheng ’990 Patent arises from

allegations that the prosecuting attorney, Michael Shenker (“Shenker”), intended to deceive the PTO

when he failed to disclose to the PTO the fact that the previously cited Young ’899 application had

issued as the Young ’421 Patent. Shenker never disclosed the Young ’421 Patent itself. The undisputed

facts are as follows: 

On February 14, 1992, Shenker, an attorney with the law firm Skjerven, Morril, MacPherson,

Franklin & Friel, filed U.S. Patent Application No. 07/836,667 naming as inventors AMD employees

Pearl Cheng, Michael Briner and James Yu. A continuation application (Application No. 08/328,337)

was filed on October 24, 1994, and on September 24, 1996, the Cheng ‘990 Patent issued, for the

invention “Memories with Burst Mode Access.” This patent was assigned to AMD. 

At the time the application leading to the Cheng ’990 Patent was filed, two other patent

applications related to high speed memory design were pending with the PTO. One was Patent

Application No. 07/588,033 (“Young ’033 Application”) and the other was Application No. 07/557,899

(“Young ’899 Application”). Both applications were filed on July 25, 1990 by attorneys at Skjerven,

Morril, MacPherson, Franklin & Friel; but Shenker was not himself involved in the prosecution of those

applications. Elvan Young, an AMD employee at the time, was the named inventor for both

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Both Shenker’s response to the office action and the IDS were dated March 21, 1994 but

apparently received March 24, 1994. See Kepper Decl. at 1717, 1760.

3

applications and both were also assigned to AMD. On January 18, 1994 the Young ’033 Application

issued as U.S. Patent No. 5,280,594 (“Young ’594 Patent”). On March 31, 1992, the Young ’899

Application was replaced by a continuation application (Application No. 07/865,812), and it ultimately

issued as U.S. Patent No. 5,285,421 (“Young ’421 Patent”) on February 8, 1994. 

On April 17, 1992, during the prosecution of the Cheng ’990 patent, Shenker filed an

Information Disclosure Statement (IDS) with the PTO that cited additional references for the examiner

to consider. Among the references listed were the Young ’899 Application and the Young ’033

Application. Declaration of Andrew M. Kepper in Support of Plaints’ Mot. for Sum J. (“Kepper Decl.”)

Exh. 1. at 1544-1546. In response to this filing, the examiner at the PTO issued an office action, dated

October 19, 1993, informing Shenker of the following: 

16. Applications for Patents cannot be cited on form PTO-1449. However, they may

be referenced in the ‘Background of the Invention’ portion of the disclosure. Therefore,

applications 07/558,033 and 07/557,899 were not considered by the examiner. 

Id. at 1677. 

On March 21, 1994, Shenker responded to the office action with the following language: 

On April 17, 1992, Applicants filed an Information Disclosure Statement listing, among

other things, U.S. patent applications 07/558,033 and 07/557,899. Per the Office Action,

paragraph 16, the Examiner did not consider these patent applications apparently on the

grounds that the patent applications were not referenced in the Applicants’ “Background

of the Invention”. However, 37 C.F.R. §§ 1.56, 1.97 and 1.98 that govern filing of

information disclosure statements do not require that patent applications cited in such

statements be referenced in the Background of the Invention. Therefore, Applicants

respectfully request consideration of patent applications 07/558,033 and 07/557,899.

Id. at 1732-33. That same day, Shenker also filed another IDS calling the examiner’s attention to “U.S.

Patent 5,280,594 to Young et al., issued January 18, 1994.”4

 Id. at 1760. No similar IDS was filed

concerning the Young ‘421 Patent that issued on February 8, 1994.

The examiner responded on June 23, 1994 and stated:

11. As to the Applicant’s comments concerning the Information Disclosure Statement

listing U.S. patent applications 07/558,033 and 07/557,899, application 07/558,033 is

now Patent Number 5,280,594 which has been considered by the Examiner per PTO

Form 1449 received 3-24-94. A copy of this PTO Form 1449 is included with this office

action. As for application 07/557,899, this is not a printed document at this time and

should not be listed on a PTO Form 1449 as a U.S. Patent Document. The application

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can be listed as “Other Art” along with providing a statement of relevance to the present

invention if the Applicant still wishes this application to be considered as ‘Prior Art’ in

the current application.

12. Applicant’s arguments filed March 24, 1994 have been fully considered but they are

not deemed to be persuasive.

Id. at 1777. 

Finally, on September 23, 1994, Shenker again responded to the examiner’s rejection by stating:

Regarding paragraph 11 of the Office Action, Applicants thank the Examiner for

considering the U.S. Patent No. 5,280,594 under Rule 56, and the undersigned attorney

apologizes for inadvertently listing the U.S. patent application 07/557,899 as a “U.S.

Patent Document” in the PTO 1449 form filed April 17, 1992. However, it is

respectfully submitted that the 07/557,899 application should be considered under Rule

56. Indeed, contrary to the suggestion in the Office Action, that application need not be

listed as “Other Art” on PTO 1449. See MPEP §609, last paragraph. Further, a

statement of relevance mentioned in the Office Action need not be provided because the

application 07/557,899 is in the English language. See 37 C.F.R. §1.98(a)(3). The

information regarding the application 07/557,899 was timely submitted under 37 C.F.R.

§ 1.97(b)(1) within three months of the filing date of the present application.

Consideration of application 07/557,899 is therefore respectfully requested.

Id. at 1822. There is nothing more in the evidence suggesting the examiner considered the Young ’899

Application or responded with another objection to its submission. 

B. Applicable Law

1. Summary Judgment

Summary judgment is proper “if the pleadings, depositions, answers to interrogatories, and

admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any

material fact and that the moving party is entitled to a judgment as a matter of law.” Fed. R. Civ. P.

56©). The moving party bears the initial burden of demonstrating the absence of a genuine issue of

material fact. See Celotex Corp. v. Catrett, 477 U.S. 317, 323 (1986). The moving party, however, has

no burden to negate or disprove matters on which the non-moving party will have the burden of proof

at trial. The moving party need only demonstrate to the Court that there is an absence of evidence to

support the non-moving party’s case. See id. at 325.

The burden then shifts to the non-moving party to “set out ‘specific facts showing a genuine

issue for trial.’” Id. at 324 (quoting Fed. R. Civ. P. 56(e)). To carry this burden, the non-moving party

must “do more than simply show that there is some metaphysical doubt as to the material facts.”

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Matsushita Elec. Indus. Co., Ltd. v. Zenith Radio Corp., 475 U.S. 574, 586 (1986). “The mere existence

of a scintilla of evidence . . . will be insufficient; there must be evidence on which the jury could

reasonably find for the [non-moving party].” Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 252 (1986).

In deciding a summary judgment motion, the evidence is viewed in the light most favorable to

the non-moving party, and all justifiable inferences are to be drawn in its favor. Id. at 255. “Credibility

determinations, the weighing of the evidence, and the drawing of legitimate inferences from the facts

are jury functions, not those of a judge [when she] is ruling on a motion for summary judgment.” Id.

The evidence presented by the parties must be admissible. Fed. R. Civ. P. 56(e). Conclusory,

speculative testimony in affidavits and moving papers is insufficient to raise genuine issues of fact and

defeat summary judgment. Thornhill Publ’g Co., Inc. v. GTE Corp., 594 F.2d 730, 738 (9th Cir. 1979).

2. Inequitable Conduct

“Each individual associated with the filing and prosecution of a patent application has a duty of

candor and good faith in dealing with the [PTO], which includes a duty to disclose to the [PTO] all

information known to that individual to be material to patentability.” 37 C.F.R. § 1.56(a). A breach of

the duty of candor may lead to a finding of inequitable conduct rendering the entire patent

unenforceable. See Honeywell Int'l Inc. v. Universal Avionics Sys. Corp., 488 F.3d 982, 999-1000 (Fed.

Cir. 2007). “To hold a patent unenforceable due to inequitable conduct, there must be clear and

convincing evidence that the applicant (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, 1363 (Fed. Cir. 2007). Both the

materiality and intent elements are fact-driven, McKesson Info. Solutions, Inc. v. Bridge Med., Inc., 487

F.3d 897, 902 (Fed. Cir. 2007), and it is the accused infringer that bears the burden of proving a

threshold level of these elements, Star Scientific, Inc. v. R.J. Reynolds Tobacco Co., 537 F.3d 1357,

1365 (Fed. Cir. 2008). Moreover, while “[a] determination of inequitable conduct is committed to a

district court’s discretion,” Critikon, Inc. v. Becton Dickinson Vascular Access, Inc., 120 F.3d 1253,

1255 (Fed. Cir. 1997), it is only after the threshold levels of both materiality and intent are established

that a court may exercise its discretion in balancing the substance of the elements to make an inequitable

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conduct determination, Star Scientific, 537 F.3d at 1367. A greater showing of materiality allows a

lesser showing of intent and vice versa. McKesson, 487 F.3d at 913. Because of the severe penalty for

finding inequitable conduct, courts are to “strictly enforce the burden of proof and elevated standard of

proof” and “courts must be vigilant in not permitting the defense to be applied too lightly.” Star

Scientific, 537 F.3d at 1365-56.

“Although the premises of inequitable conduct require findings based on all the evidence, a

procedure that may preclude summary determination, a motion for summary judgment may be granted

when, drawing all reasonable factual inferences in favor of the non-movant, the evidence is such that

the non-movant can not prevail.” Astrazeneca Pharms. LP v. Teva Pharms. U.S., Inc., 583 F.3d 766,

770 (Fed. Cir. 2009) (citing ATD Corp. v. Lydall, Inc., 159 F.3d 534, 547 (Fed. Cir. 1998)). In order

to survive summary judgment, the party asserting the inequitable conduct defense must “introduce

evidence from which a trier of fact could find materiality and intent by clear and convincing evidence.”

Abbott Labs. v. TorPharm, Inc., 300 F.3d 1367, 1379 (Fed. Cir. 2002).

C. Analysis

Samsung argues, and AMD denies, that summary judgment is improper since factual

determinations as to both questions of materiality and intent require resolution by a fact finder.

Although AMD is the moving party for purposes of the summary judgment motion, on the inequitable

conduct claim Samsung bears the ultimate burden of proof. Accordingly, to prevail, AMD need only

show an absence of evidence in support of Samsung’s case. See Celotex, 477 U.S. at 325. 

1. Materiality

The Federal Circuit has developed and employed several tests for materiality, but has indicated

that “there is no reason to be bound by any single standard, as a finding of inequitable conduct requires

a balancing of materiality and intent.” Digital Control Inc. v. Charles Mach. Works, 437 F.3d 1309,

1315 (Fed. Cir. 2006) (internal citation omitted). Nonetheless, the majority of courts start with the

“reasonable examiner test” as it is a “broader all-encompassing test.” Id. at 1316. The test, taken from

the pre-1992 version of 37 C.F.R. § 1.56 (Rule 56), states that “information is material when a

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Samsung additionally relies on an expert in the area of patent prosecution, Gerald J.

Mossinghoff, for this proposition. The Court notes AMD’s objection to Mr. Mossinghoff’s declaration,

and does not rely on his testimony to the extent he opines on the ultimate conclusion. However, the fact

that Mr. Mossinghoff did not discuss the provisional rejection practice is not objectionable; he is not

required to elaborate on every area of PTO procedure. 

7

reasonable examiner would consider it important in deciding whether to allow the application to issue

as a patent.” Symantec Corp. v. Computer Assocs. Int’l, Inc., 522 F.3d 1279, 1297 (Fed. Cir. 2008).

However, as noted in the current version of Rule 56, and recognized by the Federal Circuit,

“[i]nformation cumulative of other information already before the Patent Office is not material.”

Honeywell Int’l, 488 F.3d at 1000; 37 C.F.R. § 1.56(b) (“information is material to patentability when

it is not cumulative to information already of record or being made of record in the application”); Star

Scientific, 537 F.3d at 1367 (“information is not material if it is cumulative of other information already

disclosed to the PTO.”) (emphasis added). 

AMD argues that the Young ’421 Patent was not material to the PTO’s consideration of the

Cheng ’990 Patent application because it is cumulative, that is, it contains no new technical information

that was not already disclosed to the PTO in the Young ’899 Application. Samsung concedes that no

new content was added to the application, but argues this is not the relevant inquiry. Opp. to Mot.

Summ. J at 14 n.2. Instead of focusing on the lack of differences in the technical content, Samsung’s

argument appears to be based on form. That is, Samsung argues the material difference is that the

application issued as a patent. 

As Samsung argues, the issuance of a patent is a material event because, until a patent issues,

it can not be prior art under 35 U.S.C. § 102(e). Opp. to Mot. Summ. J. at 14:21-25.5

 While Samsung

correctly states the law, it fails to consider the PTO’s provisional rejection practice. The provisional

rejection practice, described in Section 706.02(f) of the Manual of Patent Examining Procedure,

authorizes examiners to make “provisional” rejections under 35 U.S.C. § 102(e) based on co-pending

patent applications. As the Federal Circuit has explained, “examiners may ‘provisionally reject claims

not patentably distinct from the disclosure in a co-pending application having an earlier U.S. filing date

and also having either a common assignee or a common inventor.’ The rejection is termed ‘provisional’

because the application must eventually issue as a patent to be a true § 102(e) reference.” In re Bartfeld,

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925 F.2d 1450, 1451 (Fed. Cir. 1991) (citation omitted). AMD was the common assignee of the Young

’421, Young ’594 and Cheng ’990 patents and, as such, provisional rejections would have been proper

during the Cheng ’990 prosecution. AMD’s PTO expert, Larry Nixon opines, and Samsung does not

dispute, that under the then existing PTO rules Shenker properly disclosed the Young ’899 Application

as required under 37 C.F.R. § 1.97(b) and thus the examiner should have considered its technical

content. Nixon Suppl. Decl. at ¶ 6, Nixon Decl. at ¶ 19. 

Notwithstanding the identical technical content, Samsung maintains that the issuance of the

patent itself was material. To support its claim, Samsung cites Brasseler, where the Federal Circuit

explicitly listed the issuance of a patent as a “possibly material event.” Brasseler, U.S.A. I, L.P. v.

Stryker Sales Corp., 267 F.3d 1370 (Fed. Cir. 2001)). Though Brasseler did not deal with this point

directly, the court did list the “issuance of a patent, occurring on or about one year before the application

is filed” as being a “possibly material event.” Id. The Young ’421 Patent, however, did not issue one

year before the application for the Cheng ’990 Patent was filed, in fact, it issued almost two years after.

(Cheng ’667 Application filed Feb. 14, 1992, Young ’421 Patent issued Feb. 8, 1994). 

As further support for its claim, Samsung cites to McKesson, where the prosecuting attorney’s

failure to inform one patent examiner about another examiner’s allowance of claims in a co-pending

application was deemed material because the claim language in both patents was substantially similar

and could have conceivably served as a basis for a double patenting rejection. 487 F.3d at 925. In fact,

the patents were so similar, the district court found only one notable variation. McKesson Info.

Solutions, Inc. v. Bridge Med., Inc., No. 02-2669, 2006 U.S. Dist. LEXIS 76517, at *66 (E.D. Cal. June

13, 2006), aff’d, McKesson, 487 F.3d 897. The purpose for “[a] double patenting rejection [is to]

preclude[] one person from obtaining more than one valid patent for either (a) the ‘same invention,’ or

(b) an ‘obvious’ modification of the same invention.” Boehringer Ingelheim Int'l GmbH v. Barr Labs.,

Inc., 592 F.3d 1340, 1346 (Fed. Cir. 2010) (quoting In re Longi, 759 F.2d 887, 892 (Fed. Cir. 1985)).

 The co-pending Cheng and Young applications did not have substantially identical claim language, and

while the technical content of the Young application may have been relevant, double patenting has not

been raised as a conceivable issue. Nonetheless, although McKesson found the patent claims to be

material based on the substantial similarity of co-pending patent claims, the court noted that substantial

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similarity is not necessary for a finding of materiality, “so long as the evidence clearly and convincingly

proves materiality in one of the accepted ways.” 487 F.3d at 920 (referencing Digital Control, 437 F.3d

at 1316). 

As noted, the broader, “all-encompassing” test for materiality, employed here, is whether a

reasonable examiner would have considered the information important in determining patentability.

Samsung argues that a reasonable examiner would have found the Young ’421 Patent issuance material

and points specifically to the examiner’s June 23, 1994 response to Shenker’s IDS and his disclosure

of the Young ’594 Patent. In paragraph 11 of that response, the examiner explained that because the

Young ’594 Patent had issued it would be considered, but the Young ’899 Application (not yet a

published document) would need to be listed elsewhere. Kepper Decl. at 1777. While Samsung points

to this as evidence that this particular examiner would have found issuance of the Young ’421 Patent

to be material, “[t]he standard to be applied in determining whether a reference is ‘material’ is not

whether the particular examiner of the application at issue considered the reference to be important;

rather, it is that of a ‘reasonable examiner.’” Bristol-Myers Squibb Co. v. Rhone-Poulenc Rorer, Inc.,

326 F.3d 1226, 1237 (Fed. Cir. 2003). 

The issue of materiality is highly fact-specific. The facts show that Shenker fulfilled his

obligation to disclose the Young ’899 Application, and the Young ’421 Patent contained no new

information not already disclosed in the Young ’899 Application. AMD’s PTO expert, Larry Nixon,

states that in his opinion, a reasonable examiner would not find the issuance of the Young ’421 Patent

to be material because he or she would have already considered the technical content of the Young ’899

Application under the provisional rejection practice and its contents would be cumulative. Nixon Suppl.

Decl. at ¶ 11. Under the circumstances of the present case, however, the particular examiner did not

consider the Young ’899 Application, and only considered the Young ’594 Patent once it had issued.

For summary judgment purposes, the court is to draw all reasonable inferences in favor of Samsung, and

while the focus is not on the particular examiner’s actions, they may be considered in determining what

a reasonable examiner would find to be material. Thus, since it appears the Cheng ’990 Patent examiner

may have thought the issuance of the Young ’421 Patent was important, it is possible – although not

likely – that a reasonable patent examiner may have found the issuance of the Young ’421 Patent to be

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material to the patentability of the Cheng ’990 Patent. 

2. Intent

A finding of materiality alone is insufficient for a successful inequitable conduct claim. The

accused infringer must also show deceptive intent. Direct evidence of intent to deceive is rarely

available, however, and courts frequently must rely on circumstantial evidence to infer intent. Critikon,

120 F.3d at 1256. Additionally, inferences of deceptive intent must “be the single most reasonable

inference able to be drawn from the evidence to meet the clear and convincing standard.” Star

Scientific, 537 F.3d at 1365 (citing Scanner Techs. Corp. v. ICOS Vision Sys. Corp., 528 F.3d 1365,

1376 (Fed. Cir. 2008)). “Evidence of mistake or negligence, even gross negligence, is not sufficient to

support inequitable conduct in patent prosecution.” Astrazeneca Pharms., 583 F.3d at 776 (citing

Kingsdown Med. Consultants, Ltd. v. Hollister Inc., 863 F.2d 867, 876 (Fed. Cir. 1988) (en banc)).

AMD argues that, even if the issuance of the Young ’421 Patent was material, Samsung cannot

meet the intent element because, during the relevant time, Shenker did not know of its issuance. Rule

56 imposes on a prosecuting attorney a duty to disclose material references only of which the attorney

is aware. 37 C.F.R. § 1.56(a). Samsung responds that in light of the issuance of the companion Young

‘594 Patent, Shenker had a duty to investigate whether the Young ’421 Patent had also issued. In

Brasseler, the Federal Circuit noted that generally there is no duty to investigate “where there is no

notice of the existence of material information.” 267 F.3d at 1382. By contrast, if the attorney is on

notice that “specific, relevant, material information exists,” he has a duty to inquire. Id. at 1383. An

attorney may not cultivate ignorance to avoid this duty, however, and notice may be inferred in certain

scenarios: “notice of a possibly material event – a sale, public use, publication, issuance of a patent,

occurring on or about one year before the application is filed – arises when information of which the

attorney is aware suggests the existence of specific information that may be material.” Id. Samsung

asserts that Brasseler establishes that the issuance of a patent is a material event that gives rise to a duty

to investigate. For summary judgment purposes, assessing the evidence in the light most favorable to

the non-moving party, the Court determines that a jury could find that in light of the issuance of the

Young ’594 Patent, Shenker had a duty to investigate whether the Young ’421 Patent had also issued.

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To the extent that Mr. Young’s testimony may support an inequitable conduct claim based on

AMD’s failure to name Young as a co-inventor on the ’990 patent, such facts are not relevant to

Shenker’s credibility and are outside the bounds of the pleadings in their current form. 

11

Even if notice of the Young ’421 Patent, or a duty to investigate its status, could be inferred,

however, there must be evidence that Shenker intended to deceive the PTO. For this, Samsung relies

primarily on the fact that Shenker has not offered a credible, good faith explanation for why he did not

disclose the Young ’421 Patent. An absence of a good faith explanation alone, however, “does not

constitute clear and convincing evidence warranting an inference of intent.” Star Scientific, 537 F.3d

at 1368 (quoting M. EaglesTool Warehouse, Inc. v. Fisher Tooling Co., 439 F.3d 1335, 1341 (Fed. Cir.

2006)). In fact, “a patentee need not offer any good faith explanation unless the accused infringer first

carried his burden to prove a threshold level of intent to deceive by clear and convincing evidence.” Id.

at 1368 (internal citation omitted). Thus, to show evidence sufficient to meet the threshold level of

intent, Samsung needs to offer more than the absence of a good faith explanation on Shenker’s part. 

In an attempt to persuade the Court that summary judgment is inappropriate, Samsung also

attacks Shenker’s credibility. Samsung has failed, however, to offer specific facts that call Shenker’s

credibility into question. “Summary judgment should not be denied simply because the opposing party

asserts that the movant’s witnesses are not to be believed. However, summary judgment is not

appropriate where the opposing party offers specific facts that call into question the credibility of the

movant’s witnesses.” Typeright Keyboard Corp. v. Microsoft Corp., 374 F.3d 1151, 1158 (Fed. Cir.

2004). Samsung relies on Shenker’s inability to remember certain events as evidence that he is not

credible, but this alone is insufficient. Samsung initially sought to postpone this ruling to depose Anne

Killingsworth and Elvan Young in order to ascertain facts which it believed would support its credibility

assertion. Mr. Young was the named inventor on the Young ’594 and ’421 patents. Ms. Killingsworth

was a former in-house paralegal for AMD who was involved in the prosecution of the Cheng ’990,

Young ’594 and Young ’421 patents. Shenker testified that Killingsworth was his primary contact on

the prosecution of the Cheng ’990 Patent. At this point, Samsung has taken both Mr. Young’s and Ms.

Killingsworth’s depositions; however, neither witness’s testimony appears to lend additional support

to Samsung’s claim that Shenker is not credible.6

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In addition to Ms. Killingsworth’s involvement, Samsung relies on evidence that the same law

firm prosecuted the three patents at issue and similar prior art references were cited in all three patents.

Samsung argues the “only logical inference” is that Shenker or someone involved in the coordinated

prosecution was tracking each application and knew when the patents issued and the “only” explanation

is they intended to keep the Young ’421 Patent from the PTO to avoid a rejection. Opp. to Mot. Summ

J. at 19. The Court disagrees that this conclusion is the only explanation for Shenker’s failure to

disclose the patent, nor is it “the single most reasonable inference” to be drawn from the evidence. See

Star Scientific, 537 F.3d at 1365. The Court must take into account all evidence of intent, including

evidence of good faith on the part of the prosecuting attorney, and failure to do so may constitute

reversible error. See Akron Polymer Container Corp. v. Exxel Container, 148 F.3d 1380, 1384 (Fed.

Cir. 1998) (reversing the district court’s finding of deceptive intent as clearly erroneous where the court

failed to consider that disclosure of a co-pending application inferred good faith; also noting the

applicant “hardly could be seeking to deceive the PTO as to the existence of copending applications

when it actually disclosed the fact of copendency to the [PTO] examiner.”). This is not a scenario where

an applicant made a material misrepresentation or even failed to disclose a relevant reference altogether.

The undisputed evidence shows Shenker repeatedly requested the PTO examiner to consider the Young

’899 Application and its technical specifications in determining patentabilty of the Cheng ’990 Patent.

While the Court declines to speculate why Shenker did not simply follow the examiner’s

recommendation and list the reference elsewhere, the rules of the PTO at the time and the expert

testimony of Larry Nixon indicate that his disclosure of the application was proper. At most, Shenker’s

conduct amounts to negligence in failing to investigate and failing to update the PTO.

After considering all the circumstantial evidence before the Court and drawing all inferences in

favor of Samsung, the Court concludes that the factual inferences do not give rise to a conspiracy theory

of intent to deceive the PTO. Samsung has not raised a triable issue as to whether Shenker’s failure to

inform the PTO examiner of the issuance of the Young ’421 Patent was done with the specific intent

to deceive the PTO. 

In sum, evidence of materiality is equivocal, evidence of knowledge is lacking, evidence of a

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duty to investigate is circumstantial, specific evidence of intent to deceive the PTO is lacking and

inferential proof of intent to deceive the PTO requires choosing the least reasonable, rather than the most

reasonable, inference to be drawn from the evidence. Under these circumstances, Samsung cannot meet

the threshold levels of materiality and intent required for proof of inequitable conduct, and the Court

need not engage in the balancing of elements suggested by Star Scientific, 537 F.3d at 1367.

Accordingly, AMD’s motion for summary judgment of no inequitable conduct as to the Cheng ’990

Patent is GRANTED.

II. Motion for Judgment on the Pleadings

A. Factual Background

On May 18, 2009 the Court granted Samsung leave to amend its answer to include, among other

things, an affirmative defense of unenforceability of the Iacoponi ’592 Patent due to inequitable conduct.

In the defense, Samsung alleges that inventor John Iacoponi withheld a number of material references

from the PTO, including a paper authored by Mr. Iacoponi himself. Over AMD’s objections, the Court

accepted the amended answer and counterclaim. Subsequently, the Federal Circuit issued a decision

setting forth the particularity requirements for pleading inequitable conduct in a patent case. AMD

brings the present Motion for Judgment on the Pleadings of No Inequitable Conduct Relating to U.S.

Patent No. 5,545,592 on the ground that Samsung’s amended answer and counterclaim does not conform

to the new pleading standard. Samsung asserts that its pleadings are sufficient under governing case law

and requests, in the alternative, that it be given leave to amend. 

B. Applicable Law

1. Judgment on the Pleadings

“After the pleadings are closed but within such time as not to delay the trial, any party may move

for judgment on the pleadings.” Fed. R. Civ. P. 12©). “Judgment on the pleadings is proper when the

moving party clearly establishes on the face of the pleadings that no material issue of fact remains to

be resolved and that it is entitled to judgment as a matter of law.” Hal Roach Studios, Inc. v. Richard

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Feiner & Co., 896 F.2d 1542, 1550 (9th Cir. 1989). “For purposes of the motion, the allegations of the

non-moving party must be accepted as true, while the allegations of the moving party which have been

denied are assumed to be false.” Id.

Although Rule 12©) neither specifically authorizes nor prohibits motions for judgment on the

pleadings “directed to less than the entire complaint or answer . . . [i]t is the practice of many judges to

permit ‘partial’ judgment on the pleadings (e.g., on the first claim for relief, or the third affirmative

defense).” See William W. Schwarzer, et al., Federal Civil Procedure Before Trial, 9:340 (2001).

“[C]ourts have discretion to grant a Rule 12©) motion with leave to amend.” Id. 9:341.

When considering a motion on the pleadings, courts may consider exhibits submitted or

referenced in the complaint and matters that may be judicially noticed pursuant to Federal Rule of

Evidence 201. See, e.g., Burnett v. Twentieth Century Fox Film Corp., 491 F. Supp. 2d 962, 966 (C.D.

Cal. 2007). Indeed, “documents specifically referred to in a complaint, though not physically attached

to the pleading, may be considered where authenticity is unquestioned.” Id. (citing Daly v. Viacom, Inc.,

238 F. Supp. 2d 1118, 1121-22 (N.D. Cal. 2002) (considering television program referenced in, but not

attached to, complaint).

2. Leave to Amend

Federal Rule of Civil Procedure 15 governs amendment of the pleadings. It states that if a

responsive pleading has already been filed, the party seeking amendment “may amend its pleading only

with the opposing party’s written consent or the court’s leave. The court should freely give leave when

justice so requires.” Fed. R. Civ. P. 15(a). This rule reflects an underlying policy that disputes should

be determined on their merits, and not on the technicalities of pleading rules. See Foman v. Davis, 371

U.S. 178, 181-82 (1962). Accordingly, the Court must be generous in granting leave to amend. See

Morongo Band of Mission Indians v. Rose, 893 F.2d 1074, 1079 (9th Cir. 1990) (leave to amend granted

with “extreme liberality”); Ascon Properties, Inc. v. Mobil Oil Co., 866 F.2d 1149, 1160 (9th Cir. 1989).

However, there are several accepted reasons to deny leave to amend, including the presence of

bad faith on the part of the pleader, undue delay, prejudice to the opponent, futility of amendment, and

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that the pleader has previously amended. See Ascon Properties, 866 F.2d at 1160; McGlinchy v. Shell

Chem. Co., 845 F.2d 802, 809 (9th Cir. 1988). Courts do not ordinarily consider the validity of a

proposed amended pleading in deciding whether to grant leave to amend, but leave may be denied if the

proposed amendment is futile or would be subject to dismissal. See Saul v. United States, 928 F.2d 829,

843 (9th Cir. 1991).

C. Analysis

For issues pertaining uniquely to patent law, including the pleading standards for alleging

inequitable conduct, Federal Circuit precedent is binding on this Court. Exergen Corp. v. Wal-mart

Stores, Inc., 575 F.3d 1312, 1326 (Fed. Cir. 2009). In Exergen, the Federal Circuit recently articulated

the heightened standard for pleading inequitable conduct: 

[T]o plead the “circumstances” of inequitable conduct with the requisite “particularity”

under [Federal] Rule [of Civil Procedure] 9(b), the pleading must identify the specific

who, what, when, where, and how of the material misrepresentation or omission

committed before the PTO. Moreover, although “knowledge” and “intent” may be

averred generally, a pleading of inequitable conduct under Rule 9(b) must include

sufficient allegations of underlying facts from which a court may reasonably infer that

a specific individual (1) knew of the withheld material information or of the falsity of

the material misrepresentation, and (2) withheld or misrepresented this information with

a specific intent to deceive the PTO. 

Id. at 1328-29.

In light of this recent decision, AMD brings a motion for judgment on the pleadings asserting

that Samsung has failed to plead inequitable conduct with sufficient particularity. Alternatively, AMD

urges the Court to reconsider its previous order granting Samsung leave to amend its answer based on

a change in the law. By adopting the Seventh Circuit “who, what, when, where and how” standard from

DiLeo v. Ernst & Young, 901 F.2d 624, 627 (7th Cir. 1990), Exergen heightened the pleading standard

for inequitable conduct claims. Id. at 1327. The decision had no effect, however, on the Ninth Circuit

standard for granting leave to amend. Indeed, as noted in Exergen, “a motion to amend a pleading under

Rule 15(a) is a procedural matter governed by the law of the regional circuit.” Id. at 1318. Thus, the

change in law, contrary to AMD’s contention, does not require dismissal of Samsung’s counterclaim;

rather, in the words of the Ninth Circuit, “[h]aving initiated the present lawsuit without the benefit of

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Though the Exergen court states it requires the who, what, when, where and how, they

additionally require “why” the withheld information is material and not cumulative.” Id. at 1329.

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the Court's latest pronouncements on pleadings, [defendants] deserve a chance to supplement their

complaint with factual content in the manner that [Exergen] require[s].” Moss v. U.S. Secret Serv., 572

F.3d 962, 972 (9th Cir. 2009).

Samsung apparently concedes that its pleadings must comply with the law set forth in Exergen,

but argues its pleadings already meet this standard. Opp. Mot. J on Plead. at 1: 7-11. Samsung argues

the pleadings in Exergen were found to be deficient based on a number of collective deficiencies, and

therefore one or two deficiencies should not be fatal. Opp. Mot. J. on Plead. at 4:4-7. While the court

in Exergen did base its finding on several deficiencies, it explicitly stated that pleadings “must identify

the specific who, what, when, where, and how of the material misrepresentation or omission.” 575 F.3d

at 1328 (emphasis added). Thus, Samsung’s pleadings must allege who engaged in inequitable conduct,

to what claims the omitted references were relevant, where in the references the material information

is found, why the information in these references “is material and not cumulative,” “and ‘how’ an

examiner would have used this information in assessing the patentability of the claims.”7 Id. at 1329-

1330. Samsung’s First Amended Answer and Counterclaims (“FAAC”) does not state what claims the

omitted references are relevant to, why the references are material and not cumulative of other

references before the examiner or how the examiner would have used the information to assess

patentability of the claims. Thus, the Court finds that the pleadings do not meet the requirement for

particularized pleading of facts. Having filed these claims without the benefit of Exergen’s teachings,

however, equity and precedent require Samsung be granted leave to amend its complaint to include more

specific facts. Moss, 572 F.3d at 972.

Attached to its opposition, Samsung has included a Proposed Second Amended Answer and

Counterclaim (“PSAAC”) in which it attempts to amend the deficiencies of the FAAC. AMD opposes

the Court’s adoption of the PSAAC, arguing that the proposed pleading also falls short of Exergen’s

pleading standard. It is not disputed that Samsung’s PSAAC satisfies the who and what elements.

Samsung clearly alleges inequitable conduct by Mr. Iacoponi and specifically states the references were

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relevant to patentability of claims 1 and 4. Further, it appears Samsung has adequately stated the

“where” element. Samsung cites to page numbers, and occasionally subsections, of where the allegedly

material references are found. Moreover, in oral argument, AMD admitted the PSAAC answers the

“where.” Hr’g Tr. 11:1, Feb. 24, 2010.

AMD contends, however, that Samsung’s PSAAC does not sufficiently plead the “why” and

“how.” In Exergen, the court found the defendant’s general pleading that information was “material”

and “not cumulative to the information already of record” to be deficient as it did not specify “why” it

was not cumulative and “how” the examiner would have used the information. Id. at 1329-1330.

Applying this standard to Samsung’s PSAAC, the Court finds that Samsung must explain more than

simply that the references are “highly material and non-cumulative to the art submitted to or by the

USPTO.” Appendix to PSAAC, at ¶ 9. While paragraph 9 goes beyond this general statement and

continues to explain the technical detail of what the references generally disclose, it only discusses these

teachings as being non-cumulative over the Nulman, Yamazaki and Ellwanger prior art, and it fails to

allege that none of the prior art discloses these teachings. Paragraph 8 discusses the particular teachings

of the omitted references, properly cites which claims they apply to, and further continues by alleging

that “Iacoponi represented to the USPTO that none of the admitted prior art disclosed” these teachings.

Id. at ¶ 8. This paragraph, while coming closer to stating why the references are non-cumulative of any

prior art, stops short of making that allegation and explaining how the examiner would have used the

information to assess patentability of claims 1 and 4. The Court agrees the PSAAC also falls short of

the pleading requirement. The Court must follow Ninth Circuit precedent, however, and finds that

Samsung should have the opportunity to amend its complaint to include particular facts and allegations

to cure this deficiency. 

AMD argues Exergen also heightened the pleading standard for intent and claims Samsung’s

PSAAC is insufficient on the grounds that it makes no further showing of intent over what was alleged

in the FAAC. The Court disagrees. In Exergen, the Federal Circuit simply reiterated its prior standard

of averring knowledge and intent generally. Exergen, 575 F.3d at 1327 (“Although ‘knowledge’ and

‘intent’ may be averred generally, our precedent, like that of several regional circuits, requires that the

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pleadings allege sufficient underlying facts from which a court may reasonably infer that a party acted

with the requisite state of mind.”) (emphasis added). Because the intent standard has not changed,

Samsung’s pleadings remain sufficient in this respect.

Finally, AMD contends that permitting Samsung to file an amended answer and counterclaim

would prejudice AMD as it “would not have the opportunity to explore the factual bases for those

allegations.” Reply at 5:22-28 (Doc. No. 294). The Court finds this argument unpersuasive. The Court

must presume that to this point AMD has been attempting to defend against Samsung’s previously filed

and allowed claim of inequitable conduct. Requiring Samsung to amend its counterclaim to include

more particularized facts will only narrow the scope of the issues presented and will allow AMD to

focus its defense on the specific areas in contention. Because Ninth Circuit precedent so compels, the

Court grants Samsung leave to amend its counterclaim by March 26, 2010. AMD properly points out,

however, that Samsung’s PSAAC was filed several months after Exergen came down. Thus, it may well

be that Samsung cannot amend its counterclaim to conform with Exergen’s requirements. The Court’s

order is not intended to encourage Samsung to amend, but merely to give it leave to do so in the event

it believes it can meet the new standard. 

///

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CONCLUSION

For the foregoing reasons and for good cause shown, the Court hereby GRANTS AMD’s Motion

for Summary Judgment and GRANTS AMD’s Motion for Judgment on the Pleadings. (Docket Nos.

274, 273). Samsung is GRANTED leave to amend its answer and counterclaim to include additional

facts necessary to meet the Exergen standard of pleading for its inequitable conduct claim relating to

the Iacaponi ’592 Patent. Samsung’s second amended complaint and counterclaim must be filed no later

than March 26, 2010. 

IT IS SO ORDERED.

Dated: March 15, 2010 

SUSAN ILLSTON

United States District Judge

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