UNITED STATES DISTRICT COURT

EASTERN DISTRICT OF MICHIGAN

SOUTHERN DIVISION

SUNDANCE, INC., and

MERLOT TARPAULIN AND SIDEKIT

MFG. CO., INC.,

Plaintiffs,

Case No. 02-73543

-vs- Hon. AVERN COHN

DE MONTE FABRICATING, LTD.;

QUICK DRAW TARPAULIN SYSTEMS,

INC. and WALTER DE MONTE,

Defendants.

/

MEMORANDUM AND ORDER

DENYING DEFENDANTS’ MOTION FOR PARTIAL SUMMARY JUDGMENT

REGARDING INEQUITABLE CONDUCT

I.

This is a patent case involving U.S. Patent No. 5,026,109 (the ‘109 patent),

Segmented Cover Systems. The background of the case is described in the (1)

Decision on Claim Construction, filed November 18, 2003, (2) Joint Pretrial Statement,

filed April 4, 2006, (3) Memorandum and Order Granting Plaintiffs’ Motion for Judgment

as a Matter of Law or For a New Trial, filed September 20, 2006, and (4) the current

posture of the case as described in the Scheduling Order, filed November 27, 2006.

Before the Court is defendants’ motion for partial summary judgment, filed July 5,

2006, on the grounds that the patent applicants “committed inequitable conduct at the

U.S. Patent and Trademark Office (PTO) during reexamination of the ‘109 patent,

2:02-cv-73543-AC Doc # 165 Filed 11/30/06 Pg 1 of 4 Pg ID 2570
2

rendering the patent unenforceable.” For the reasons which follow, the motion is

DENIED.

II.

A.

To prove that a patent is unenforceable due to inequitable conduct, the alleged

infringer must provide clear and convincing evidence of (1) affirmative

misrepresentations of a material fact, failure to disclose material information, or

submission of false material information and (2) an intent to deceive. Alza Corp. v.

Mylan Labs., Inc., 391 F.3d 1365, 1373 (Fed. Cir. 2004).

B.

Essentially, defendants argue that plaintiffs made factually and legally baseless

arguments to persuade the examiner to withdraw a prior art-based rejection of the

patent claims during a reexamination of the ‘109 patent.

A review of the record during the two (2) reexaminations to which the ‘109 patent

were subject to by the PTO belie this assertion.

The essential steps in the first reexamination were as follows:

December 13, 2002 - Defendants filed an Ex parte Request

for Reexamination

February 11, 2003 - Defendants’ request for reexamination granted

July 19, 2004 - Office Action on Reexamination, rejecting

claims 1-6, 10, 13-16, and 18-20 

August 11, 2004 - Applicant has ex parte personal interview

with examiner

August 31, 2004 - Applicant submitted a formal Amendment

2:02-cv-73543-AC Doc # 165 Filed 11/30/06 Pg 2 of 4 Pg ID 2571
3

April 15, 2005 - Applicant’s counsel had telephone interview

with examiner during which examiner accepted applicant’s

argument regarding patentability of claims 1-13

July 6, 2005 - PTO issued a Notice of Intent to Issue Ex

Parte Reexamination Certificate, confirming patentability of

claims

The essential steps in the second reexamination were as follows:

July 5, 2005 - Defendants’ Second Request for Ex Parte

Reexamination (made while first reexamination was pending)

August 3, 2005 - PTO Order Denying Second Request for

Reexamination

September 6, 2005 - Defendants filed a Petition Under 37

CFR 1.515(e) (request for reconsideration of denial of

second reexamination)

February 28, 2006 - Reexamination Certificate Issued resulting from first

reexamination

April 28, 2006 - PTO letter granting defendants’ petition for review of

August 3, 2005 Order Denying Second Request for Reexamination

July 28, 2006 - Office Action on Ex Parte Reexamination,

rejecting certain of the claims

October 28, 2006 - PTO issued Notice of Intent to Issue Ex

Parte Reexamination Certificate, affirming the claims

Based on the above, it is clear that defendants had and took advantage of the

opportunity to apprise the PTO of their views regarding the errors in the patent owner’s

arguments in favor of patentability. Indeed, defendants pointed out to the examiner that 

“The Patent Owner’s Concocted Argument of Non-Analogous Art [is] Blatantly False

and Misleading Given the Patent Disclosure, the State of the Certificate and Long

Standing Law. . . .” Defendants had a rather unusual opportunity, through two

reexaminations, in which to persuade the PTO that the claims were unpatentable in light

2:02-cv-73543-AC Doc # 165 Filed 11/30/06 Pg 3 of 4 Pg ID 2572
4

of the prior art and plaintiffs’ alleged manipulation regarding the prior art.

While the examiner was initially persuaded as to the merit of defendants’

arguments against patentability, these arguments were ultimately rejected as reflected

in the Notice of Intent of October 28, 2006.

Given the action of the PTO in finding “patentability and/or confirmation” of the

claims in suit after being made aware of all the arguably relevant prior art, it cannot be

said that the patent owner engaged in inequitable conduct before the PTO rendering the

‘109 patent unenforceable. 

SO ORDERED.

 s/Avern Cohn 

AVERN COHN

UNITED STATES DISTRICT JUDGE

Dated: November 30, 2006

I hereby certify that a copy of the foregoing document was mailed to the parties of

record on this date, November 30, 2006, by electronic and/or ordinary mail.

 s/Julie Owens 

Case Manager, (313) 234-5160

2:02-cv-73543-AC Doc # 165 Filed 11/30/06 Pg 4 of 4 Pg ID 2573