United States Court of Appeals 

for the Federal Circuit ______________________ 

NETWORK SIGNATURES, INC.,

Plaintiff-Appellant,

v.

STATE FARM MUTUAL AUTOMOBILE 

INSURANCE COMPANY,

Defendant-Appellee.

______________________ 

2012-1492

______________________ 

Appeal from the United States District Court for the 

Central District of California in No. 11-CV-0982, Judge 

James V. Selna.

______________________ 

Decided: September 24, 2013

______________________ 

PETER R. AFRASIABI, One LLP, of Newport Beach, California, argued for plaintiff-appellant. With him on the 

brief was NATHANIEL L. DILGER. 

ASHLEY C. PARRISH, King & Spalding, LLP, of Washington, DC, argued for defendant-appellee. With him on 

the brief were R. WILLIAM BEARD, JR. and TRUMAN H.

FENTON, of Austin, Texas; and ADAM M. CONRAD of Charlotte, North Carolina. Of counsel was DARYL L. JOSEFFER, 

of Washington, DC. 
2 NETWORK SIGNATURES, INC. v. STATE FARM MUTUAL AUTO

HOWARD S. SCHER, Attorney, Appellate Staff, Civil Division, United States Department of Justice, of Washington, DC, argued for amicus curiae. With him on the brief 

were STUART F. DELERY, Acting Assistant Attorney General, and SCOTT R. MCINTOSH, Attorney. 

______________________ 

Before NEWMAN, CLEVENGER, and WALLACH, Circuit 

Judges. 

Opinion for the court filed by Circuit Judge NEWMAN. 

Dissenting opinion filed by Circuit Judge CLEVENGER. 

NEWMAN, Circuit Judge. 

U.S. Patent No. 5,511,122 (the ’122 patent), entitled 

“Intermediate Network Authentication,” pertains to 

internet security, and is assigned to the United States of 

America represented by the Secretary of the Navy. The 

technology was developed by a scientist at the Naval 

Research Laboratory (NRL). The NRL permitted the 

patent to lapse for nonpayment of the 7.5-year maintenance fee. Two weeks after the lapse became effective, 

the NRL received an inquiry from the predecessor to 

Network Signatures, Inc. about licensing the patent. The

NRL then petitioned the Patent and Trademark Office 

(PTO) to accept delayed payment of the fee; the PTO 

granted the petition. The ’122 patent was duly licensed. 

Network Signatures sued State Farm Mutual Automobile Insurance Company for infringement of the ’122 

patent. In defense, State Farm asserted that the patent 

was permanently unenforceable on the ground that the 

NRL patent attorney, John Karasek, had engaged in

inequitable conduct by “falsely representing” to the PTO 

that the NRL’s non-payment of the maintenance fee was 

“unintentional.” The district court granted summary 

judgment of inequitable conduct, and held the patent 
NETWORK SIGNATURES , INC. v. STATE FARM MUTUAL AU TO 3

unenforceable.1 We conclude that the PTO Director acted

in accordance with law and within his discretion in excusing the delayed payment, and that inequitable conduct 

was not established.

BACKGROUND

Mr. Karasek and his staff were responsible for managing the NRL’s patent portfolio, which “is typically 

around 700 patents at any given time.” The ’122 patent

was issued on April 23, 1996, and the period for paying 

the 7.5-year maintenance fee ended on April 23, 2004. 

See 37 C.F.R. §1.362. Mr. Karasek explained that the 

NRL made maintenance fee payment decisions once or 

twice a year, and that “if there is an expression of interest, the NRL will pay the nominal maintenance fee,” but 

will “allow the patent to go abandoned” as a matter of 

“routine practice” absent any “identified commercial 

interest.” Karasek Decl. ¶12 (Apr. 26, 2012).

Mr. Karasek stated that for the ’122 patent, the NRL 

did not know of any commercial interest, and the 7.5-year 

fee was not paid. On May 10, 2004—two weeks after the 

final payment date—Mr. Hazim Ansari of Network Signatures’ predecessor company telephoned Ms. Jane Kuhl at 

the NRL Technology Transfer Office, and inquired about

licensing the ’122 patent. Mr. Ansari told Ms. Kuhl that 

he had been trying to contact the NRL, but had been 

unable to reach anyone. Mr. Ansari later specified that

he left a voicemail message with the Technology Transfer 

Office on April 5, 2004, and that he sent e-mails to that 

office on April 12 and 14, both of which “bounced back.”

Ms. Kuhl promptly told Mr. Karasek of the inquiry, 

and that same day, May 10, 2004, Mr. Karasek filed a 

1 Network Signatures, Inc. v. State Farm Mut. Auto. 

Ins. Co., No. 11-cv-0982, 2012 WL 2357307 (C.D. Cal. 

June 13, 2012) (D. Ct. Op.).

 
4 NETWORK SIGNATURES, INC. v. STATE FARM MUTUAL AUTO

petition with the PTO for delayed payment of the maintenance fee in accordance with 37 C.F.R. §1.378(a). The 

petition was on the PTO’s standard form, which was prepopulated with the statement that “[t]he delay in payment of the maintenance fee to this patent was unintentional.” 37 C.F.R. §1.378(c)(3). The petition provided for 

payment of the $2,090 maintenance fee and the $1,640 

late payment surcharge. The PTO approved the delayed 

payment for the ’122 patent during the week of May 17, 

2004, see n.2, infra, the week after Mr. Karasek filed the 

petition. The NRL duly licensed the patent to Network 

Signatures. 

In June 2011 Network Signatures brought this infringement suit against State Farm Mutual Automobile 

Insurance Company. State Farm moved for summary 

judgment of unenforceability of the ’122 patent, on the 

ground that Mr. Karasek committed inequitable conduct 

in his request for delayed payment of the maintenance 

fee, because the delay was not “unintentional” in that the 

NRL paid the fee only after learning of Mr. Ansari’s 

interest. 

Mr. Karasek testified that the late payment was indeed unintentional, for it resulted from a “mistake of 

fact.” The PTO has explained that “A distinction must be 

made between a mistake in fact, which may form the 

basis for a holding of unintentional abandonment . . . , 

and the arrival at a different conclusion after reviewing 

the same facts a second time.” In re Maldague, 10 

U.S.P.Q.2d 1477, 1478 (Comm’r Pat. 1989). Mr. Karasek

stated that there was indeed a mistake of fact, for the 

NRL would have routinely paid the maintenance fee had 

it known of this commercial interest. Mr. Karasek stated: 

It is . . . a mistake of fact where a patent applicant 

learns of previously unknown facts that—had 

they been known previously and which were not 

unknown because of neglect of a legal duty—
NETWORK SIGNATURES , INC. v. STATE FARM MUTUAL AU TO 5

would have altered the decision to abandon. Here, 

the NRL was faced with previously unknown 

facts—Mr. Ansari’s earlier attempts to contact the 

NRL prior to abandonment to obtain a license to 

the ’122 patent—facts that were unknown and 

unknowable at the time of April 23, 2004 due to 

the . . . circumstances with the phone system and 

the gravely ill head of the TTO. These facts—had 

they been known—would have altered the NRL’s 

decision to abandon the ’122 patent.

Karasek Decl. ¶19. 

The district court held that this circumstance did not 

amount to a “mistake of fact,” citing the ruling of the 

Commissioner in In re Carlson that “[t]he discovery of 

additional information after making a deliberate decision 

to withhold a timely action is not the ‘mistake in fact’ that 

might form the basis for acceptance of a maintenance fee . 

. . under the reasoning of Maldague.” Carlson, 2003 WL 

25523657, at *6 (Comm’r Pat. Jan. 24, 2003) (reconsidering 2002 decision). In Carlson the patentee had allowed 

the patent to lapse, and three months later learned of 

possible infringement and sought to revive the patent by 

late payment of the fee. 

The district court found Carlson “to be most on point,” 

and held that the omission of “any evidence or explanation of why the delay was considered unintentional was 

but-for material.” D. Ct. Op. at *10. The court concluded

that “there is no genuine issue of fact that Karasek withheld material information from the PTO with the specific 

intent to deceive it,” and ruled that the criteria of inequitable conduct were met. Id. at *12. This appeal followed.

DISCUSSION

“To prove inequitable conduct, the challenger must 

show by clear and convincing evidence that the patent 

applicant (1) misrepresented or omitted information 
6 NETWORK SIGNATURES, INC. v. STATE FARM MUTUAL AUTO

material to patentability, and (2) did so with specific 

intent to mislead or deceive the PTO.” In re Rosuvastatin 

Calcium Patent Litig., 703 F.3d 511, 519 (Fed. Cir. 2012)

(citing Therasense, Inc. v. Becton, Dickinson & Co., 649 

F.3d 1276, 1287 (Fed. Cir. 2011) (en banc)). “Materiality 

and intent must be separately established.” Id.

The facts of materiality and intent must be established by clear and convincing evidence, for, as stated in

Burlington Industries, Inc. v. Dayco Corp., 849 F.2d 1418, 

1422 (Fed. Cir. 1988), “summary judgment that a reputable attorney has been guilty of inequitable conduct, over 

his denials, ought to be, and can properly be, rare indeed.” 

On appeal, we exercise plenary review of the district 

court’s grant of summary judgment. Astrazeneca Pharms. 

LP v. Teva Pharms. USA, Inc., 583 F.3d 766, 770 (Fed. 

Cir. 2009).

The district court stated that “While a close issue, the 

Court cannot conclude that Karasek’s statement rises to 

the level of affirmative egregiousness of the cases Therasense references.” D. Ct. Op. at *8. However, the 

district court found that Mr. Karasek intended to deceive 

the PTO, apparently by using the PTO’s standard form 

petition for “unintentional” delay without setting forth the 

details of how or why the delay occurred. We do not agree 

that this action constituted material misrepresentation 

with intent to deceive. “To establish materiality, it must 

be shown that the PTO would not have allowed the claim 

but for the nondisclosure or misrepresentation. To establish intent, intent to deceive the PTO must be the single 

most reasonable inference able to be drawn from the 

evidence.” Rosuvastatin, 703 F.3d at 519 (citations and 

internal quotation marks omitted).

Acceptance of late payment of maintenance fees is authorized by statute, 35 U.S.C. §41(c)(1), and implemented 

by 37 C.F.R. §1.378(a), which states that the Director
NETWORK SIGNATURES , INC. v. STATE FARM MUTUAL AU TO 7

may accept the payment of any maintenance fee 

due on a patent after expiration of the patent if, 

upon petition, the delay in payment of the 

maintenance fee is shown to the satisfaction of the 

Director to have been unavoidable (paragraph (b) 

of this section) or unintentional (paragraph (c) of 

this section) and if the surcharge . . . is paid as a 

condition of accepting payment of the maintenance fee. 

The PTO provides a standard form for late payment. 

After legislative change enacted in 1992, the statute 

states that “unintentional” delay is sufficient ground for 

acceptance of late payment. See Late Payment of 

Maintenance Fees, Pub. L. No. 102-444, 106 Stat. 2245 

(1992). Before 1992, §41(c) required the petitioner to 

show that the late payment was “unavoidable,” and the 

pre-1992 regulation, 37 C.F.R. §1.378, required the petitioner to “enumerate the steps taken to ensure timely 

payment.” The statute was amended on legislative recognition that “[t]he ‘unavoidable’ standard has proved to be 

too stringent in many cases. Many patentees have been 

deprived of their patent rights for failure to pay the 

maintenance fees for reasons that may have been unintentional yet not unavoidable.” H.R. Rep. No. 102-993, at 

2 (1992).

The current regulation, 37 C.F.R. §1.378(c)(3), requires only a statement that the delay was “unintentional.” The standard PTO form requires no details for 

“unintentional” delay, and contains the preprinted 

“statement” that: “The delay in payment of the maintenance fee to this patent was unintentional,” without 

requesting further detail.

Mr. Karasek acted promptly upon learning of commercial interest in the ’122 patent, after only two weeks of 

delay. The record shows no irregularity in Mr. Karasek’s 

actions. He submitted the NRL petition on the form 
8 NETWORK SIGNATURES, INC. v. STATE FARM MUTUAL AUTO

provided by the PTO; the form does not require a statement of the reasons for the initial non-payment and for 

the changed position. In Field Hybrids, LLC v. Toyota 

Motor Corp., No. 03-4121, 2005 WL 189710 (D. Minn. Jan. 

27, 2005) the court held that there was not inequitable 

conduct in representing that the delay was unintentional, 

for the attorney “simply used the standard language 

required by federal regulations.” Id. at *9.

Mr. Karasek’s compliance with the standard PTO procedure for delayed payment, using the PTO form for 

delayed payment, does not provide clear and convincing 

evidence of withholding of material information with the 

intent to deceive the Director. On matters unrelated to 

the substantive criteria of patentability, but within the 

authority of the Director, “it is almost surely preferable 

for a reviewing court not to involve itself in the minutiae 

of Patent Office proceedings and to second-guess the 

Patent Office on procedural issues at every turn.” 

Laerdal Med. Corp. v. Ambu, Inc., 877 F. Supp. 255, 259 

(D. Md. 1995) (citation and internal quotation marks 

omitted).2 We have recognized an “unwillingness to 

2 Our colleague in dissent argues that Mr. Karasek 

committed inequitable conduct by not explaining to the 

PTO the factual circumstances of the “unintentional” 

delay, although the PTO procedure and standard form do 

not require such explanation. 37 C.F.R. §1.378(c) requires 

only “(3) A statement that the delay in payment of the 

maintenance fee was unintentional.” Mr. Karasek used 

the official form for delayed payment, and the Director 

accepted the payment. The PTO record lists the grant of 

such petitions; see, e.g., USPTO Official Gazette Notice of 

Delayed Payment of Maintenance Fee, 1283 OG 24 (June 

15, 2004) (listing thirty-four patents including the ’122 

patent approved for delayed payment during the week of 

May 17, 2004); 1283 OG 23 (June 8, 2004) (listing thirty 

patents approved for delayed payment the week before 

 
NETWORK SIGNATURES , INC. v. STATE FARM MUTUAL AU TO 9

extinguish the statutory presumption of validity” where 

the patentee’s conduct “did not affect the issuance of the 

patent.” Therasense, 649 F.3d at 1291.

the ’122 patent); 1283 OG 25 (June 22, 2004) (listing 

twenty-six patents approved for delayed payment the 

week after the ’122 patent). An examination of recently 

approved petitions confirms that such petitions are routinely filed and granted without explanation for the 

“unintentional” delay. The Official Gazette of August 13, 

2013 lists thirty-six petitions, 1393 OG 85, twenty-one of 

which were available for our review. None of the reviewed petitions include a substantive discussion of 

“unintentional” delay by either the petitioner or the 

Director. The other fifteen petitions were not accessible

electronically. The PTO grants petitions to excuse “unintentional” delay “automatically,” and in “real-time.” EFSWeb, Petition Under 1.378(c) Quick Start Guide, available 

at

http://www.uspto.gov/ebc/portal/efs/petition_1378c_quicks

tart.pdf. Contrary to the dissent’s assertion, Mr. Karasek’s adherence to standard, well-established PTO 

procedure is not evidence of intent to deceive the Office.

The dissent also states that the “materiality” component of inequitable conduct need be shown by only a 

preponderance of the evidence when the information 

relates to patentability. However, the en banc court in 

Therasense stated that “[t]he accused infringer must 

prove both elements—intent and materiality—by clear 

and convincing evidence.” 649 F.3d at 1287. The court 

did not distinguish among issues, when the charge was 

that the lawyer had committed inequitable conduct. The 

court in Therasense sought to ameliorate the opportunistic 

plague of personal attack and satellite litigation, by 

establishing a consistent standard.

 
10 NETWORK SIGNATURES, INC. v. STATE FARM MUTUAL AUTO

The district court’s summary judgment of inequitable 

conduct cannot stand. The judgment is reversed. The 

case is remanded for proceedings on the merits of the 

complaint. 

REVERSED AND REMANDED
United States Court of Appeals 

for the Federal Circuit ______________________ 

NETWORK SIGNATURES, INC.,

Plaintiff-Appellant,

v.

STATE FARM MUTUAL AUTOMOBILE 

INSURANCE COMPANY,

Defendant-Appellee.

______________________ 

2012-1492

______________________ 

Appeal from the United States District Court for the 

Central District of California in No. 11-CV-0982, Judge 

James V. Selna.

______________________ 

CLEVENGER, Circuit Judge, dissenting. 

I respectfully dissent from the majority’s reversal of 

summary judgment of inequitable conduct. I believe the 

district court was correct in granting summary judgment 

to State Farm on materiality, but should not have granted 

summary judgment on intent. Because there are material 

facts regarding Mr. Karasek’s intent to deceive the Patent 

and Trademark Office (PTO) in dispute, I would remand 

the issue of intent to the district court for a trial on the 

merits. 

I. MATERIALITY
2 NETWORK SIGNATURES, INC. v. STATE FARM MUTUAL AUTO

“The materiality required to establish inequitable 

conduct is but-for materiality.” Therasense, Inc. v. Becton, 

Dickinson & Co., 649 F.3d 1276, 1291 (Fed. Cir. 2011) (en 

banc). The majority states that “the PTO Director acted in 

accordance with law and within his discretion in excusing 

the delayed payment,” Maj. Op. at 3, but the PTO director’s past action is not in question. The correct question on 

materiality is whether the PTO would have granted 

Karasek’s revival petition if he had disclosed the circumstances surrounding the revival. Therasense, 649 F.3d at 

1291-92. Because I believe that State Farm has shown1

1 There is some dispute in our post-Therasense case 

law over the correct standard of proof on materiality. 

Compare Aventis Pharma S.A. v. Hospira, Inc., 675 F.3d 

1324, 1334 (Fed. Cir. 2012) (applying the preponderance 

standard) with In re Rosuvastatin Calcium Patent Litig., 

703 F.3d 511, 519 (Fed. Cir. 2012) (applying a clear and 

convincing standard). In Therasense we faced a situation 

involving the withholding of prior art, and adopted a 

preponderance standard to accord with the PTO’s hypothetical review of the prior art during patent prosecution. 

Therasense, 649 F.3d at 1291-92 (“[I]n assessing the 

materiality of a withheld reference, the court must determine whether the PTO would have allowed the claim if it 

had been aware of the undisclosed reference. In making 

this patentability determination, the court should apply 

the preponderance of the evidence standard . . . .”). Therasense also addressed our older unclean hands doctrine, 

which required “[t]he accused infringer [to] prove both 

elements—intent and materiality—by clear and convincing evidence.” Id. at 1287. In this case, we are not evaluating withheld prior art, but rather information withheld 

post-issuance. At least two post-Therasense cases involving inequitable conduct not related to patentability used a 

clear and convincing evidence standard. Outside the Box 

Innovations, LLC v. Travel Caddy, Inc., 695 F.3d 1285, 

 
 NETWORK SIGNATURES , INC. v. STATE FARM MUTUAL AU TO 3

that the PTO would have denied Karasek’s petition, I 

would affirm the grant of summary judgment on materiality. 

The relevant facts on materiality are not in dispute. 

The Navy made a deliberate decision not to pay the 7.5 

year maintenance fee for the ’122 Patent, and the ’122 

Patent expired on April 23, 2004. Several days later, 

Karasek learned that Hazim Ansari had attempted to 

contact the Naval Research Laboratory (NRL) about 

licensing the patent. No one at the NRL received or 

appreciated these messages. On the same day that Karasek received this second-hand information, he filed a 

revival petition with the PTO stating that the ’122 Patent 

was unintentionally abandoned. Karasek did not include 

any information about Mr. Ansari’s contacts with the 

NRL or inform the PTO of the NRL’s original intentional 

decision to abandon the patent. Over one month later, 

Karasek received a letter from Mr. Ansari stating that 

“[o]n April 5th, we called the general number of the NRL 

Office of Technology Transfer and asked to speak to a 

person about the ’122 Patent” and “[o]n April 12th, we 

sent an email expressing interest in the ’122 Patent to 

[the NRL’s general email address] . . . .” J.A. 443. 

1294 (Fed. Cir. 2012) (false declaration of small entity 

status); Powell v. Home Depot U.S.A., Inc., 663 F.3d 1221, 

1235 (Fed. Cir. 2011) (failure to update Petition to Make 

Special). I would clarify that where inequitable conduct 

involves withheld prior art, it is correct to apply the 

preponderance standard. In cases such as this one, involving information not related to patentability, I would apply 

a clear and convincing evidence standard to materiality. 

Regardless, I would find for State Farm on materiality 

under either standard.

 
4 NETWORK SIGNATURES, INC. v. STATE FARM MUTUAL AUTO

Network Signatures, relying on cases such as In re 

Patent No. 6,118,582, 2006 WL 4926249 (Comm’r Pat. 

June 13, 2006) and In re Maldague, 10 U.S.P.Q.2d 1477, 

1478 (Comm’r Pat. 1988), argues that the above facts 

present a “mistake of fact” scenario and the PTO would 

have granted the revival petition had Karasek disclosed 

them to the PTO. State Farm disagrees, and argues that 

this situation is indistinguishable from cases such as In re 

Patent of Carlson, 2003 WL 25523657 (Comm’r Pat. Jan. 

24, 2003) and In re Patent No. 5,181,974, 2007 WL 

4974450 (Comm’r Pat. Aug. 17, 2007), where the PTO 

denied revival under a mistake of fact theory. 

The PTO’s cases do suggest that a petitioner can rely 

on a mistake of fact to revive an expired patent, but 

Network Signatures cannot cite to any case where the 

PTO actually granted revival under this theory. In Carlson, the PTO denied a revival petition because 

[t]he discovery of additional information after 

making a deliberate decision to withhold a timely 

action is not the “mistake in fact” that might form 

the basis for acceptance of a maintenance fee . . . . 

The discovery of additional, other information is 

simply a change in circumstances that occurred 

subsequent to the expiration of the patent.

2003 WL 25523657, at *6. 

In re ’974 also reaches the same conclusion. In that 

case, the patentee allowed the patent to go abandoned 

when he failed to recognize that the patent was the subject of a pre-existing license agreement. In re ’974, 2007 

WL 4974450, at *3. The PTO denied revival, holding that 

“intentional action or inaction [in paying a maintenance 

fee] precludes a finding of unintentional delay, even if the 

agent-representative made his decision not to timely take 

the necessary action in a good faith error.” Id. at *4.
 NETWORK SIGNATURES , INC. v. STATE FARM MUTUAL AU TO 5

The regulatory history of the unintentional revival 

rules also supports the rejection of Karasek’s petition. In 

its Final Rule notice, the PTO explained when a petition 

for unintentional abandonment of a patent application 

will not be granted: 

Where the applicant deliberately permits an 

application to become abandoned (e.g., due to a 

conclusion that the claims are unpatentable, that 

a rejection in an Office action cannot be overcome, 

or that the invention lacks sufficient commercial 

value to justify continued prosecution), the abandonment of such application is considered to be a 

deliberately chosen course of action, and the resulting delay cannot be considered as “unintentional” within the meaning of § 1.137(b). . . . An 

intentional delay resulting from a deliberate 

course of action chosen by the applicant is not affected by: (1) The correctness of the applicant’s (or 

applicant’s representative’s) decision to abandon 

the application or not to seek or persist in seeking 

revival of the application; (2) the correctness or 

propriety of a rejection, or other objection, requirement, or decision by the Office; or (3) the discovery of new information or evidence, or other 

change in circumstances subsequent to the abandonment or decision not to seek or persist in seeking revival.

See Changes to Patent Practice and Procedure, 62 Fed. 

Reg. 53132, 53158-59 (Oct. 10, 1997) (to be codified at 37 

C.F.R. pt. 1) (discussing the meaning of “unintentional” 

delay in the context of the revival of an abandoned application) (emphasis added); see also 

MPEP § 711.03(c)(II)(C)(1) (8th ed. Rev. 9, Aug. 2012). 

The PTO treats unintentional revival of a patent application in the same manner as unintentional revival of an 

issued patent. See In re ’974, 2007 WL 4974450, at *3-4. 
6 NETWORK SIGNATURES, INC. v. STATE FARM MUTUAL AUTO

The case before us today is no different from Carlson

or In re ’974—the ’122 Patent was the subject of a preexisting indication of commercial interest, which the NRL 

failed to appreciate. Network Signatures attempts to 

distinguish these cases by arguing that the unappreciated

facts in Carlson and In re ’974 were available to the 

petitioner at the time of the decision to abandon, but here 

the NRL could not know about Mr. Ansari’s interest in the 

patent. I would not excuse the NRL’s ignorance on the 

basis of a malfunction of its phone system and the illness 

of an employee at the time of Mr. Ansari’s contact with 

the office. Maj. Op. at 4. Mr. Ansari left messages with 

the NRL’s general number and email address, and the 

NRL’s failure to receive or act on those messages cannot 

negate its deliberate decision to abandon the ’122 Patent. 

Essentially, the NRL would like to invoke a mistake 

of fact defense when the reason it failed to learn of Mr. 

Ansari’s commercial interest in the ’122 Patent was of 

their own making. In In re ’974 the PTO chose not to 

excuse a lawyer’s failure to appreciate the existence of a 

license. Similarly, in In re ’582 the PTO would not excuse 

a patentee’s failure to “investigate all patent matters in 

which [the patentee] had a stake before making a decision 

thereabout.” In re ’582, 2006 WL 4926249, at *5. Network 

Signatures has not found a single case where the PTO 

granted a revival petition based on a mistake of fact, and 

nothing in the PTO’s cases suggest that it would have 

excused the NRL’s neglect of multiple phone and email 

messages. 

Network Signatures cannot distinguish itself from the 

PTO’s clear line of revival decisions, and I would affirm 

the district court’s finding that Karasek’s failure to disclose the facts surrounding the revival petition was material. While the majority believes that Karasek complied 

“with the standard PTO procedure for delayed payment,” 

Maj. Op. at 8, the cases above demonstrate that the 

appropriate procedure is to disclose the petitioner’s basis 
 NETWORK SIGNATURES , INC. v. STATE FARM MUTUAL AU TO 7

for believing a deliberate abandonment was unintentional. The PTO’s practice of granting unintentional revival 

petitions as a matter of course is not the issue. Maj. Op. at 

8 n.2. The problem is that Karasek knew the NRL patent 

was intentionally abandoned and did not alert the PTO to 

that fact. The PTO’s practice of granting such petitions 

automatically cuts against Karasek on the issue of intent 

to deceive; it does not negate the materiality of his actions. If the PTO had known the true facts, I have no 

doubt whatsoever that Karasek’s revival petition would 

have been denied. 

II. INTENT

To prevail on summary judgment of intent to deceive 

the PTO, State Farm must prove by clear and convincing 

evidence that (1) Karasek knew of the withheld information, (2) knew that the information was material, and 

(3) made a deliberate decision to withhold it. To meet the 

clear and convincing evidence standard, a specific intent 

to deceive must be “the single most reasonable inference 

able to be drawn from the evidence.” Therasense, 649 F.3d

at 1290. 

In this case, the parties do not dispute that Karasek 

knew of the withheld information. The parties hotly 

dispute whether Karasek knew the information was 

material and made a deliberate decision to withhold it 

from the PTO. 

While I do not believe that these issues cannot be resolved against Karasek on summary judgment, I cannot 

foreclose the possibility that State Farm could produce 

evidence sufficient to meet the Therasense standard at a 

merits trial. For example, Karasek’s statement that he 

never considered filing a supplemental statement with 

the revival petition rings hollow in light of his review of 

several PTO cases which included supplemental statements. See J.A. 344. The evidence that Karasek knew the 

PTO granted revival petitions as a matter of course also 
8 NETWORK SIGNATURES, INC. v. STATE FARM MUTUAL AUTO

suggests that he deliberately decided to withhold information. Id. at 17-18. 

However, at the summary judgment stage we must 

take the facts in the light most favorable to Network 

Signatures. State Farm has not shown that the “single 

most reasonable inference” to be drawn is that Karasek 

intended to deceive the PTO. At the summary judgment 

stage, another reasonable inference is that Karasek 

honestly, although misguidedly, believed that the PTO 

would grant his revival petition even if he did disclose the 

surrounding circumstances. This would make Karasek 

negligent, but negligence does not rise to the level of

deliberately deceiving the PTO under Therasense. 649 

F.3d at 1290. 

III

The correct result in this appeal is a remand to the 

trial court on intent and an affirmance on materiality. I 

see nothing within the PTO’s cases on unintentional 

revival suggesting that the PTO would excuse NRL’s 

deliberate decision to abandon the ’122 Patent simply 

because the NRL failed to check its messages. I also see 

disputed facts suggesting that the NRL’s lawyer deliberately withheld information from the PTO, knowing that 

the PTO would grant his revival petition if he remained 

silent. Because the majority does not agree with me, I 

respectfully dissent.