## United States Court of Appeals for the Federal Circuit
2008-1096, -1174

LARSON MANUFACTURING COMPAN Y OF SOUTH DAKOTA, INC., Plaintiff-Appellant,

v. ALUMINART PRODUCTS LIMITED and CHAMBERDOOR INDUSTRIES, INC., Defendants-Cross Appellants. Charles H. De La Garza , Chaz De La Garza & Associates, LLC, of Austin, Texas, argued for plaintiff-appellant. Alan W. Kowalchyk , Merchant & Gould P.C., of Minneapolis, Minnesota, argued for defendants-cross appellants. With him on the brief were Kristine M. Boylan and Joshua P. Graham

. Appealed from: United States District C ourt for the District of South Dakota Judge Lawrence L. Piersol

## United States Court of Appeals for the Federal Circuit

2008-1096, -1174

LARSON MANUFACTURING COMPAN Y OF SOUTH DAKOTA, INC., Plaintiff-Appellant,

v. ALUMINART PRODUCTS LIMITED and CHAMBERDOOR INDUSTRIES, INC., Defendants-Cr oss Appellants.
Appeal from the United States District C ourt for the District of South Dakota, No. 03-CV-4244, Judge Law rence L. Piersol.

_________________________ DECIDED: March 18, 2009

_________________________ Before SCHALL, CLEVENGER, and LINN, Circuit Judges

. Opinion for the court filed by Circuit Judge SCHALL. Concurring opinion filed by Circuit Judge LINN. SCHALL, Circuit Judge

. This is a patent case. Larson Manufactu ring Company of South Dakota, Inc. (“Larson”), appeals the final judg ment of the United States District Court for the District of South Dakota dismissing its suit against Aluminart Pr oducts Limited and Chamberdoor Industries, Inc. (t ogether, “Aluminart”), for infr ingement of claims 14 and 21 of Larson’s U.S. Patent No. 6,618,998 (t he “’998 patent”). Ex Parte Reexamination Certificate U.S. Patent No. 6,618,998 C1 (the “’998 Reexami nation Certificate”). Thedistrict court dismissed Larson’s suit after it held, following a bench trial, that the ’998 patent was unenforceable due to inequitable conduct during reexamination proceedings before the U.S. Patent and Trademark Office (“PTO”) re lating to the patent. Larson Mfg. Co. v. Aluminart Prods. Ltd. , 513 F. Supp. 2d 1102 (D.S.D. 2007) (“ Inequitable Conduct Decision ”). The court found that Larson failed to disclose to the Reexamination Panel three items of prior art and two office actions issued in the prosecution of a continuation app lication that grew out of the application that resulted in the ’998 patent. The court rejected Larson’s argument that the three items of prior art were cumulative of prior art which alr eady was before the Reexamination Panel and therefore were not material, as well as it s argument that the office actions were not material because all of the critical refer ences noted in them already had been disclosed to the Reexamination Panel. After fi nding that Larson intended to deceive the Reexamination Panel, the court balanced its findings of materiality and intent and found inequitable conduct. Aluminart has filed a cross- appeal. In it, Aluminart argues that the district court erred in declining to find the case ex ceptional under 35 U. S.C. § 285 (1952). Larson Mfg. Co. v. Aluminart Prods. Ltd. , 529 F. Supp. 2d 1059 (D.S.D. 2007) (“ Fees Decision ”). For the reasons set forth below, we conc lude that the distri ct court erred in finding that the three undisclos ed items of prior art were mate rial because they were not cumulative of prior art alr eady before the Reexamination P anel. As a result, although we agree with the district court that the two office actions that Larson failed to disclose to the Reexamination Panel we re material, we vacate the court’s finding of inequitable

2008-1096, -1174 2conduct and its resulting judgment in favor of Aluminart by reason of unenforceability of the ’998 patent. We do so because the district court di d not analyze Larson’s deceptive intent separately for each of the three items of prior art and two office actions. Rather, its determination that Larson intended to deceive the Reex amination Panel was based upon its finding that Larson failed to disclose co llectively three items of prior art and two office actions, all of which the court determi ned were material. We hold today, however, that the three items of prior art which were not disclosed we re cumulative of prior art already before the Reexam ination Panel. Hence, they we re not material. In contrast, we affirm the district court’s determination t hat the two office actions were material. Under these circumstances, the district cour t must redetermine the issue of intent and then, if it finds intent, balanc e anew materiality and intent to arrive at an ultimate conclusion as to whether ther e was inequitable conduct. We therefore remand the case to the district court for further proceedings . Our decision renders Aluminart’s crossappeal moot. BACKGROUND I. Larson manufactures door products, incl uding storm doors with a retractable screen feature. The ’998 patent, which iss ued from U.S. Applic ation No. 10/212,465 (the “’465 Application”) and is owned by Larson, is titled “Door With Variable Length Screen.” The patent claims a door with a movi ng glass insert. The insert travels in weather stripping-lined tracks and attaches to a spring-based rolled screen. ’998 patent abstract. One embodiment of the invention is dep icted in figures 10 and 10A of the patent, reproduced below.

2008-1096, -1174 3Figure 10 shows a door 60 which has a header 62a , doorjambs 62b and c (only the latter marked), and a sill 62d

. Id. col.6 ll.32-33. The door carries a screen module 66 , shown in figure 10A and depicted in detail in figure 7B below, with a screen in it. The screen module can be coupled to t he door’s header, jambs, or sill. Id. col.3 ll.18- 19. A free end of the screen is coupled to the upper end of glass panel insert 64a

. Id. col.6 ll.38-41. In operation, the rolled sc reen retracts into the screen module and is hidden from view when the glass pane insert is raised toward the header and the screen module. When the glass insert is lowered toward the door sill, it travels into hollow panel 64b , thereby allowing the screen to unroll into service. Id. col.6 ll.32-47. The glass panel insert moves up and down in weather stripping-lined insert tracks which are located in the doorjambs. Id. col.4 ll.51-54.

2008-1096, -1174 4Claim 14 of the patent, which is r epresentative of the claims at issue, states, A door comprising: first and second spaced apart jambs, the jambs are connected at one end by a header and at the other end by a sill wherein each jamb carries an axially oriented insert track, and an axially oriented fabric track; elongated, facing, weather stri pping located in each fabric track wherein first and seco nd portions of the weather stripping face one another; a screen module coupled to the header, the screen module carries a retractable screen having a selected width and having a free end wherein the free end is attached to an elongated feed assembly that extends at least across the width of the screen and which ca rries an elongated L-shaped connector element; an insert carried in and movable in the insert tracks wherein the insert is positionable at a plurality of 5 locations along the jambs and wherein the connector element slidably engages an elongated section of the insert whereby as the insert moves toward the sill the sc reen is extracted from the module and edges of the scr een and ends of the elongated feed assembly slide in the fabric tracks between facing weather stripping portions with the screen retracting into the module as the insert moves toward the header. Id. col.8 l.55-col.9 l.13. 2008-1096, -1174 5The ’998 patent issued on September 16, 2003. On June 25, 2003, Larson filed a continuation application, No. 10/606,039 (the “’039 Continua tion”), directed towards similar screen door technology. II. Aluminart manufactures storm door prod ucts, including a storm door with a retractable screen. On October 24, 2003, Larson file d suit against Aluminart, alleging that its storm door with a retractable scree n infringes the ’998 patent. Responding to Larson’s infringement all egations, Aluminart contended that Larson had engaged in inequitable conduct during the pros ecution of the ’465 Application. Aluminart also filed a request for reexamination (“Reexam Reques t”) of the ’998 patent on September 28, 2004, arguing there was a subst antial new question of patent ability based on prior art not considered during prosecutio n. Aluminart requested reexamination of claims 14-22 of the ’998 patent based on U. S. Patent No. 3,244,222 (the “Johnson patent”), which had not been considered by the PTO examiner during prosecution. The district court stayed Larson’s lawsuit on October 4, 2004, pendi ng the outcome of the reexamination. III. 

### A. The PTO simultaneously conducted the pros ecution of the ’ 039 Continuation and the reexamination of the ’998 patent. In both proceedings, Larson was represented by James Patterson, its patent attorney. In S eptember 2004, the examiner issued an office action, rejecting certain claims of the ’039 Continuation in view of the Johnson patent (“First Office Action”). Alum inart included the First Office Action in its Reexam Request. On May 3, 2005 (“Second Office Action”) and September 21, 2005 (“Third Office

2008-1096, -1174 6Action”), the examiner issued further office actions rejecting claims in view of the Johnson patent, but also in combination with U.S. Patent No . 6,640,869 (the “Ralph patent”) and U.S. Patent No. 2,10 7,755 (the “Kemp pat ent”). On June 23, 2006, after receiving a response from Larson to the Third Office Action, the examiner rejected cl aims of the ’039 Continuation as obvious in view of the Johnson patent and the Kemp patent (“Fourth O ffice Action”). Although agreeing with Larson that the Johnson patent failed to disc lose a “screen and member extending into the screen tracks,” the examiner stated that “other prior ar t, of which [the Kemp patent] is used as an example (see also German 19639478)” showed these same limitations. The German 19639478 Patent (the “DE ’478 pat ent”) is an untranslated German patent purportedly showing a scr een and window configurat ion. To date, t he ’039 Continuation has not issued as a patent and it appears to have become abandoned. 

### B. The PTO granted the Reexam Request on De cember 20, 2004. On February 25, 2005, during the reexamination proceedings, Larson’s patent attorney, Mr. Patterson, submitted an Information Discl osure Statement (“IDS”) discl osing some 200 patents for review by the Reexamination Panel. In addit ion, Mr. Patterson submitted several district court pleadings from this litigation, incl uding Aluminart’s initial inequitable conduct allegations. He also submitted a supplemen tal IDS on June 10, 2005, disclosing the copending ’039 Continuation, the ex istence of the Second Office Action in the prosecution of the ’039 Continuation, and th ree additional references cit ed during the prosecution of the ’039 Continuation—U.S. Patent No. 5,540,476, and the Kemp and Ralph patents. However, neither the Third Office Action, t he Fourth Office Action, nor the DE ’478

2008-1096, -1174 7patent cited by the examiner in the Fourth Office Action, were ever disclosed to the Reexamination Panel. On September 13, 2005, t he Reexamination Panel reje cted claims 1-22 of the ’998 patent as being anticipated by the Johnson patent, or obvious in light of the Johnson patent in combination with other prior art references. Responding, Mr. Patterson appeared before the Reexaminat ion Panel and submitted a written amendment, contending that the rejections were incorrect. He argued, among other distinguishing features, that the Johnson patent did not di sclose “an elongated feed assembly which slides in the fabric tr acks between facing weat her stripping.” The Reexamination Panel agreed and suggested that the claim rejections in view of Johnson be withdrawn. On January 26, 2006, the Reexamination Panel issued a Notice of Intent to Issue Ex Parte Reexamination Certificate, canceling claims 1-10 , confirming the patentability of claims 14-20, and allowin g claims 11-13, 21, and 22 wit h slight amendments. The ’998 Reexamination Certificate was pub lished on September 19, 2006. IV. After the PTO issued the ’998 Reexamination Certificate, the district court lifted its stay of proceedings. Subsequently, Al uminart amended its pleadings to include a counterclaim alleging that Larson had engaged in ineq uitable conduct during the reexamination of the ’998 patent. On July 17 and 18, 2007, the district court held a bench trial on Aluminart’s inequi table conduct claims. Allu minart argued that Larson withheld several material references from the Reexamination Panel: (1) product and marketing materials for screen configurati ons produced by a company named Genius

2008-1096, -1174 8(the “Genius Literature”); (2) the DE ’478 patent; (3) produc t and marketing materials for screen configurations produced by a company named Pref erred Engineering (the “Preferred Engineering Literature”); and (4) the Third and Fourth Office Actions. Aluminart further argued, based on compar isons with the disclosed prior art and testimony from its expert, Dr. Jerry Hall, that the withheld references were not cumulative of prior art already before the Reexamination Panel. Aluminart also argued that this material was wit hheld with deceptive intent. According to Aluminart, notwithstanding its inability to provide direct evidence, Larson’s deceptive intent could be inferred by the number of withheld references and its failure to provide any plausible excuse for its non-disclosure. In response, Larson asserted that each of the allegedly material references was cumulative of prior art already disclosed to the Reexamination Panel, namely the Johnson and Kemp patents, a nd U.S. Patent No. 6,082,432 (the “Kissinger patent”). Regarding the Third and Four th Office Actions, Larson argued that, while these were not disclosed, every critical reference cited in them had been disclosed to the Reexamination Panel. Furthermore, Larson ar gued that there was no need to disclose the Third and Fourth Office Actions themselves because they both merely contained examiner analysis that was the same as t hat in previous office actions, which had already been disclosed to the Reexamination Panel. Addressing the issue of intent, Larson focused on the absence of direct ev idence, arguing that merely withholding references, without more, could not constitute the requisite inten t. Additionally, Larson argued that it had disclosed to the Reexaminat ion Panel the parallel prosecution of the

2008-1096, -1174 9’039 Continuation. This discl osure, it asserted, was evi dence of good faith rather than an intent to deceive. On September 26, 2007, t he district court found that Larson had engaged in inequitable conduct before the PTO. C onsequently, it held the ’998 patent unenforceable. Inequitable Conduct Decision , 513 F. Supp. 2d at 110 5. Agreeing with Aluminart, the court found that each of the withh eld items—the Genius Literature, the Preferred Engineering Literature, the DE ’478 patent, and the Thir d and Fourth Office Actions—were material and not cumulati ve of prior art already before the Reexamination Panel. Id. at 1110-16. Regarding the thr ee prior art references, the court concluded, based on Dr. Ha ll’s testimony, that each re ference disclosed important material that had not been previously provided. Id. at 1110-15. Relying on our decision in Dayco Products, Inc. v. Total Containment, Inc. , 329 F.3d 1358 (Fed. Cir. 2003), the court also found that the wit hheld Third and Fourth Office Actions were material. Inequitable Conduct Decision , 513 F. Supp. 2d at 1114-16. In that regard, the court noted that, in addition to providing the ex aminer’s comments about the substantially similar claims of the ’039 C ontinuation, the Fourth Office Action also mentioned the DE ’478 patent—which was not disclos ed and was found to be material. Id. The district court also ruled that Lar son had withheld the above material with the requisite intent. Id. at 1116-17. The cour t agreed with Aluminart, fi nding that deceptive intent could be inferred from the circumstances. Id. According to the court, Larson not only failed to disclose several material re ferences, but it also did not provide any plausible excuse for withholding t hese materials from the PTO. Id.

2008-1096, -1174 10Determining that the threshold levels of materiality and intent had been satisfied, the district court balanced these two fa ctors and determined that Larson had engaged in inequitable conduct. Id. at 1117-18. Based on its determinations that each reference was highly material, in conjunction with w hat it viewed as Larson’s implausible arguments relating to cumulative ness and good faith, the distri ct court held that the ’998 patent was unenforceable. Id. The court therefore dism issed Larson’s infringement claims. 1 Arguing that the case was exceptional, Al uminart moved for attorney’s fees under 35 U.S.C. § 285. In denying the motion, the court noted that not every ruling of inequitable conduct results in an ex ceptional case determination. Fees Decision , 529 F. Supp. 2d at 1060. Additionally , the court noted that Lars on alerted the Reexamination Panel to the prosecution of the ’039 Continuation and had not made affirmative misrepresentations, both of which the court viewed as weighing agai nst an exceptional case determination. Id. at 1061. DISCUSSION Larson appeals the district court’s decision that the ’998 patent is unenforceable by reason of inequitable conduct. For its part, Aluminart cross-appeals the court’s decision that the case was not exceptional under § 285. We turn first to Larson’s appeal. I. “A patent may be rendered unenforceable fo r inequitable conduct if an applicant, with intent to mislead or deceive the examiner, fails to discl ose material information or

1 At the same time, the court dismi ssed as moot Aluminart’s counterclaims of noninfringement and invalidity. 2008-1096, -1174 11submits materially false information to the PTO during prosecution.” Digital Control, Inc. v. Charles Mach. Works , 437 F.3d 1309, 1313 (Fed. Cir. 2006). To successfully prove inequitable conduct, “the accused in fringer must present ‘evide nce that the applicant (1) made an affirmative misrepresent ation of material fact, fa iled to disclose material information, or submitted false material information, and (2) intended to deceive the [PTO].’” Star Scientific, Inc. v. R.J. Reynolds Tobacco Co. , 537 F.3d 1357, 1365 (Fed. Cir. 2008) (quoting Cargill, Inc. v. Canbra Foods, Ltd. , 476 F.3d 1359, 1363 (Fed. Cir. 2007)). In addition, “at least a threshold le vel of each element—i.e., both materiality and intent to deceive—must be proven by clear and convincing evidence.” Star Scientific, 537 F.3d at 1365

. “[W]e have held that ‘information is mate rial when a reasonable examiner would consider it important in decid ing whether to allow the applicat ion to issue as a patent.’” Star Scientific , 537 F.3d at 1367 (quoting Symantec Corp. v. Computer Assocs. Int’l, Inc. , 522 F.3d 1279, 1297 (Fed. Cir. 2008)). Mor eover, “[i]nformation concealed from the PTO may be material even though it would not invalidat e the patent.” Li Second Family Ltd. v. Toshiba Corp. , 231 F.3d 1373, 1380 (Fed. Cir. 2000). However, a withheld otherwise material reference is not materi al if it is merely cumulative to, or less relevant than, information already considered by the examiner. See Digital Control , 437 F.3d at 1319; Pro-Mold & Tool Co. v. Great Lakes Plastics, Inc. , 75 F.3d 1568, 1577 (Fed. Cir. 1996). “[I]nequitable conduct requires no t intent to withhold, but rat her intent to deceive.” Dayco Prods. , 329 F.3d at 1367. “The intent element of the offense is . . . in the main proven by inferences drawn fr om facts, with the collecti on of inferences permitting a

2008-1096, -1174 12confident judgment that deceit has occurred.” Akron Polymer Container Corp. v. Exxel Container, Inc. , 148 F.3d 1380, 1385 (Fed. Cir. 1998). If the requirements of materiality and intent are met, “[t] he court must then determine whether the question ed conduct amounts to inequi table conduct by balancing the levels of materiality and intent, ‘with a greater showing of one factor allowing a lesser showing of the other.’” Digital Control , 437 F.3d at 1313 (quoting Union Pac. Res. Co. v. Chesapeake Energy Corp. , 236 F.3d 684, 693 (Fed. Cir. 2001)). “When, after a trial, the court has made factual findings as to materiality and deceptive intent, those factual findings are reviewed for clear error, and the decision of the ultimate issue of inequitable conduct is reviewed for abuse of discretion.” Digital Control , 437 F.3d at 1313. A factual finding is clearly err oneous “when, ‘although there is evidence to support [the fi nding], the reviewing court on t he entire evidence is left with the definite and firm conviction that a mistake has been committed.’” Tegal Corp. v. Tokyo Electron Am., Inc. , 257 F.3d 1331, 1338-39 (Fed. Cir. 2001) (quoting United States v. U.S. Gypsum Co. , 333 U.S. 364, 395 (1948)). An abuse of discretion occurs when (1) the trial court’s decision is clearly unreasonable, arbitrary, or fanciful, (2) the court’s decision is based on an erroneous construc tion of the law, (3) the court’s factual findings are clearly erroneous, or (4) the record contains no evidence upon which the court rationally could have based its decision. See W. Elec. Co. v. Piezo Tech., Inc. , 860 F.2d 428, 430-31 (Fed. Cir. 1988). Larson argues that the district court clear ly erred in finding that Aluminart had established by clear and convincing evidence that the Genius Literature, the DE ’478 patent, the Preferred Engineering Literature, and the Th ird and Fourth Office Actions

2008-1096, -1174 13are material. Specifically, Larson contends, as it did before the district court, that the references are cumulative of prior art that was already before the Reexamination Panel, namely the Kissinger and Kemp patent s. In addition, Larson co ntends that the district court clearly erred in finding, without direct evidence, that it intended to deceive the Reexamination Panel. Specifically, accordi ng to Larson, the court improperly inferred intent merely because of the nondisclosure of references. Finally, Larson urges that, even if the district court’s findings of mate riality and intent were correct, the court abused its discretion in balancing the two factors in ultimately ruling that the ’998 patent was unenforceable. II. A. We turn first to Larson’s failure to disclose to the Reexamination Panel the Genius Literature and the DE ’478 patent. We treat these it ems together because, according to Larson, they both are allegedly cumulative of the Kissinger patent, which was before the Reexamination Panel. The Genius Literature is product and market ing material disclosing different sizes and designs of retractable roller insect screen systems, which can be installed on windows or doors. A rigid frame or “casse tte” borders the insect screen. The frame, including the insect screen, inserts into guide rails, which are lined with “brushpile.” Once the frame and insect screen are inserted in to the guide rails, the insect screen is able to slide up and down or, in other words, retract. The di strict court found the Genius Literature material because it “discloses a retractable screen assembly containing an elongated member extending in to screen tracks and between we ather stripping that was

2008-1096, -1174 14advertised for incorporation into a door or window.” Inequitable Conduct Decision , 513 F. Supp. 2d at 1111. According to the English abstract, the DE ’478 patent discloses a meshwork cloth blind that can be pulle d from a coiling roller to cover a doorway or window. As shown in figures 4 and 5 of the DE ’478 patent below, brushes 60 and 66 engage the cloth blind 2

.

2008-1096, -1174 15The district court found the DE ’478 patent material because, similar to the Genius Literature, it discloses an “e longated engagement member, ot herwise referred to as the ‘pull bar’ . . . extending into the screen tracks and between weather stripping.” Inequitable Conduct Decision , 513 F. Supp. 2d at 1114. On appeal, Larson argues that the Genius Literature a nd the DE ’478 patent are cumulative of the Kissinger patent, whic h was before the Reexamination Panel. According to Larson, the Kissinger patent shows an el ongated pull bar member extending into screen tracks that contain weather stripping—el ements which the district

2008-1096, -1174 16court found to be important to the Reexam ination Panel—thereby making the Genius Literature and the DE ’478 patent cumulative. Larson contends that Dr. Ha ll’s testimony, upon which the district court relied, does not support the proposition t hat the Genius Literature and the DE ’478 patent are material and noncumulative. Larson points out that Dr. Hall testified that the Genius Literature and the DE ’478 patent are not cumulative because they both disclose weather stripping that mainta ins continuous contact with a screen, as opposed to the Kissinger patent, which, according to Dr. Hall, only discloses “partial weather stripping.” According to Larson, however, Dr. Hall admitted that parti al weather stripping can still be considered “weather stripping.” Concerni ng the DE ’478 patent, Larson further notes that because Dr. Hall could not read the Ge rman specification, he admitted that his opinion was based solely on assumptions m ade from the brush angle in the patent’s figures (shown above). Additionally, Larson argues that, regardless of Dr. Hall’s weather stripping distinction, weather stripping that maintains continuous contact with a screen was irrelevant to the Reexamination P anel and therefore could not be evidence of materiality. In short, Larson urges that the Kissin ger patent discloses the same weather stripping as the Genius Litera ture and the DE ’478 patent. Aluminart responds that the district cour t’s materiality finding is supported by the Genius Literature and the DE ’478 patent as we ll as Dr. Hall’s testimony. Aluminart argues that the district court correctly dete rmined that the Genius Literature and the DE ’478 patent are not cumulative of the Kissinger patent. Pointing to Dr. Hall’s testimony, Aluminart contends that the Genius Literature and the DE ’478 patent show, more clearly and completely than the Kissinger patent, a retractable screen assembly having

2008-1096, -1174 17an elongated member extending into scree n tracks and between weather stripping— features that the Reex amination Panel could not find in the prior art. Aluminart also asserts that, as opined by Dr. Hall, the G enius Literature and the DE ’478 patent disclose weather stripping with co mplete retention capability. The Kissinger patent is directed to “[ a] roll-up screen door app liance for drawing a screen panel horizontally across the span of a door frame . . . .” Kissinger patent abstract. The patent describes a “channeled horizontal track 28 for mating engagement with the pull rod 25 to guide the screen panel 15 across the span of the door opening”— i.e., an elongated member extending into screen tracks. See id. col.3 ll.35-59; figs.5, 7.

At the same time, the Kissi nger patent discloses the us e of weather stripping: Upper and lower edges of the screen panel 15 are dressed on both sides to present smooth, burrless edges to engage the opposed brushes 35, 36 extending inwardly from opposite sides of the track 28 sidewalls, FIGS.5 and 7 . This constitutes insect impeding stru cture, and is disposed along 2008-1096, -1174 18said horizontal track across the span of the door to keep insects from passing through or around the screen panel in the presence of breezes that would otherwise cause flutter and gapping, and to resist gappi ng caused by contact with the extended screen surfaces. Id. col.4 ll.1-10. We hold that the district court clearly e rred in ruling that the Genius Literature and the DE ’478 patent ar e material and not cumulative of the Kissinger patent. As stated by the district court and Aluminart’s expert, Dr. Hall, the Genius Literature and the DE ’478 patent were found to be material bec ause they disclose an elongated member extending into screen tracks and between weather stripping. Inequitable Conduct Decision , 513 F. Supp. 2d at 1111, 1114. As seen above, however, the Kissinger patent, which was already before the Reexamination Panel, discloses these same elements. Specifically, the Kissin ger patent shows a pull rod extending into a channeled horizontal track to guide the scr een panel—in other words, an elongated member extending into screen tracks. In a ddition, the Kissinger patent shows that the screen tracks are lined with brushes, or weat her stripping. Ther efore, even if the Genius Literature and the DE ’478 patent do disclose these elements, they are merely cumulative and therefore not material. See, e.g. , Digital Control , 437 F.3d at 1319 (“However, a withheld otherwise mate rial prior art reference is not material for the purposes of inequitable conduct if it is merely cumulative to that information considered by the examiner.”); Molins PLC v. Textron, Inc. , 48 F.3d 1172, 1185 (Fed. Cir. 2000) (“[The withheld reference] was no more pertinent to [the patent applicat ion at issue] than was claim 26 of the Lemelson ’770 patent, whic h was already of record. . . . Thus the court’s finding that the [withheld reference] was material was clearly erroneous . . . .”); Litton Indus. Prods. Inc. v. Solid State Sys. Corp. , 755 F.2d 158, 167 (Fed. Cir. 1985) 2008-1096, -1174 19(“Given the cumulative nature of Balamuth ’ 288 compared to Balamuth ’674 . . . [the] failure to disclose Balamuth ’288 to the PT O . . . does not reach the threshold level of materiality . . . .”). Our view is not changed by Dr. Hall’s testimony about weather stripping, upon which the district court relied. In testifying that the Genius Literature and the DE ’478 patent were more material than, and not cumu lative of, the Kissinger patent, Dr. Hall emphasized that the Genius Literature’s and the DE ’478 patent’s weather stripping provides “a retention capabilit y of the screen,” whereas the “brushes” of the Kissinger patent only demonstrate “partial weather stripping.” Trial Tr. 102:1-4; 156:1-5, July 17, 2007. Dr. Hall further testified that the Kissi nger patent “doesn’t call it weather stripping, it calls it brushes that impede insects.” Id. at 162:16-18. Dr. Hall admitted, however, that he did not in fact know whether or not the fiber pile of the Genius Literature is “complete weather stripping” ra ther than “partial weather st ripping”—the very distinction that he opined makes the Genius Literatu re material and not cumulative. Id. at 126:10-
24. He further admitted that brushes 35 and 36 in figures 5 and 7 of the Kissinger patent could possibly be cons idered weather stripping. Id. at 151:17-22. In addition, Dr. Hall conceded that neither the Genius Litera ture nor the Kissinger patent uses the term “weather stripping.” Instead, both disclose similar “fiber pile” brushes. Id. at 164:15-19. Regarding the DE ’478 patent, Dr. Hall admitted that both the DE ’478 and Kissinger patents show the same type of weather stripping for the same primary purpose— brushes to impede insects. Id. at 162:6-163:2. In short, we are unable to conclude that Dr. Hall’s testimony, upon which the district court relied, su pports the finding that the

2008-1096, -1174 20weather stripping shown in the Genius Lite rature and the DE ’478 patent is not cumulative of the brushes de scribed in the Kissinger patent. Moreover, Dr. Hall’s testimony relating to purported greater retention capability of the weather stripping in the Genius Literature and the DE ’478 patent was irrelevant to the claim limitations at iss ue and therefore could not support a finding of materiality and non-cumulativeness. See, e.g. , Regents of the Univ. of Ca l. v. Eli Lilly & Co. , 119 F.3d 1559, 1575 (Fed. Cir. 1997) (“W hat is relevant is whether [the withheld material] discloses subject matter relevant to the exami nation of the . . . patent application that is not taught by the [material already before the PTO].”); Micro Chem., Inc. v. Great Plains Chem. Co. , 103 F.3d 1538, 1550 (Fed. Cir. 1997) (finding withheld reference merely cumulative because patents disclosing the “rele vant limitations of the claims” were already before the examiner), abrogated on other grounds by Pfaff v. Wells Elecs., Inc. , 525 U.S. 55 (1998); cf. Pro-Mold & Tool , 75 F.3d at 1577 (concludi ng that withheld prior art was not material because it failed to show several relevant claim limitations that were disclosed in art already before the PTO); Litton Indus. Prods. , 755 F.2d at 167 (reversing the district court’s finding that a reference was not cumulative because “[w]hile the precise structural arrangem ents of the devices disclosed by these references differ, they have the same relati ve degree of materiality with respect to the claimed invention”). The claim language and limitations at issue require neither a specific type of weather stripping nor a particula r retention capability. Rather , the limitations that were at issue before the Reexami nation Panel simply require any type of general weather stripping. See, e.g. , ’998 patent col.8 ll.62-64 (“weather stripping located in each fabric

2008-1096, -1174 21track wherein first and second portions of the weather stripping face one another”); id. col.9 ll.10-13 (“the elongated feed assembly sli de in the fabric tracks between facing weather stripping portions with th e screen retracting into the m odule as the insert moves toward the header”). Consequen tly, because the Reexaminat ion Panel was required to give the claim language its broadest reasonable interpretation, see, e.g. , In re Trans Holdings Corp. , 498 F.3d 1290, 1298 (Fed. Cir. 2007) (“Claims are given ‘their broadest reasonable interpretation, consistent with the specification, in reexamination proceedings.’” (quoting In re Yamamoto , 740 F.2d 1569, 1571 (Fed. Cir. 1984))), the Reexamination Panel was not concerned with a particular retention capability. Accordingly, a greater retent ion capability of weather stri pping was wholly irrelevant— i.e., immaterial—to the Reexamination Panel and could not be the basis of a distinguishing feature to ma ke the Genius Literature and the DE ’478 patent not cumulative—i.e., material. 2 Aluminart makes one argument specific to the Genius Literature. It contends that the Genius Literature shows how the elem ents of the references already before the Reexamination Panel—particularly, the John son patent and the Ke mp patent—could be used with weather stripping. Accordingly, relying on our decisions in Cargill and Molins PLC , Aluminart contends that the Genius Litera ture is material because it discloses a

2 Even if a greater screen retention capability was re levant, it is not clear that the Kissinger pat ent does not also describe this f eature. As disclosed in the Kissinger patent, “the pull rod 25 for entering the upper channel [is] frictionally grasped between typically two hollow r ubber frictional pad members 30, 31 .” Kissinger patent col.3 ll.53-56; see also id. figs. 5, 7. Indeed, these “r ubber frictional pads” “retain the screen panel 15 tautly,” thereby seemi ngly creating a significant retention pressure on the screen. Id. col.3 ll.55-57. 2008-1096, -1174 22new combination of elements that were only previously known in several, separate references. We are not persuaded by this argument. Aluminart’s reliance on Cargill and Molins PLC is misplaced. In Cargill , we determined that withheld test data was materi al because it was different from, and not comparable to, other information before the exam iner—a fact admitted by the patentee. See Cargill , 476 F.3d at 1365-66. Similarly in Molins PLC , we determined that withheld prior art was material and not cumulati ve because it showed a new, different combination—previously not disclosed—of elements before the examiner only in separate references. See Molins PLC , 48 F.3d at 1180. In this case, in contrast, the allegedly new combination— an elongated pull bar extendi ng into screen tracks that contain weather stripping—is the same co mbination that was already before the Reexamination Panel in the Kissinger patent. Cargill and Molins PLC therefore do not support Aluminart’s position. For the foregoing reasons, we hold that t he district court clearly erred in finding the Genius Literature and the DE ’478 patent not cumulative of prior art that was already before the Reexamination Panel. We theref ore reverse the finding that the Genius Literature and the DE ’478 patent were material. B. We turn next to Larson’s failure to disc lose the Preferred En gineering Literature to the Reexamination Panel. Similar to t he Genius Literature, the Preferred Engineering Literature consists of product and instructiv e material for a “self-storing window screen” made by Preferred Engi neering. Pertinent to this case, the Preferred Engineering Literature describes a window frame assembly that secures a retractable mesh screen.

2008-1096, -1174 23One end of the mesh screen is attached to a “roll tube,” which the mesh screen is housed in and rolls-up into. A “ pull rail” is attached to the opposite end of the mesh screen, providing a handle to pull the mesh screen out of the “roll tube.” The “roll tube,” including the mesh screen that it houses, is attached to one side of the frame. When the mesh screen is rolled into and out of the “roll tube,” t he remaining two sides of the mesh screen—not attached to either the “roll tube” or the “pull rail”—tra vel in rails in the frame. Relying upon the testimony of Dr. Hall, the district court found the Preferred Engineering Literature material because it di scloses a “pull bar in channels and shows that the screen would be sliding in the channels.” Inequitable Conduct Decision , 513 F. Supp. 2d at 1112. In addition, the court found significant t he fact that the Preferred Engineering Literature could be easily modified to attach a glass insert, despite failing to explicitly disclose this ability. Id. On appeal, Larson challenges the court’s findi ng. It argues that the Kemp patent, which was already before the Reexamination Panel, discloses these same elements. Larson also argues that the Kemp patent discloses a screen that is attachable to glass—an element that is not present in the Preferred Engineering Literature. Aluminart argues that the district cour t’s materiality finding regarding the Preferred Engineerin g literature is supported by the trial evidence, such as the literature itself and trial testimony. According to Alum inart, Dr. Hall testified that the Preferred Engineering literature was clear er than the Kemp patent, and an Aluminart employee, Mr. Frank Raponi, testified t hat only a slight m odification of the Pr eferred Engineering product was necessary to attach a glass inse rt. According to Al uminart, the ease with

2008-1096, -1174 24which the Preferred E ngineering product could be modified to include a glass insert is additional evidence that it is not cumu lative of the Kemp patent. As seen, relying on the testimony of Dr. Hall, the district court found that the Preferred Engineering Literature is material because it shows “a pull bar in channels and that the screen would be sliding in the channels.” Id. The Kemp patent, which was before the Reexamination Panel, discloses each of these features, however. Thus, regardless of whether t he Preferred Engineering Literature discloses these features, it is nonetheless cumulative of prior art already before the PTO. See, e.g. , Digital Control , 437 F.3d at 1319 (“However, a withheld otherwise material prior art reference is not material for the purposes of inequitable conduc t if it is merely cumulative to that information considered by the examiner.”). As suggested by Larson, the Kemp patent shows the same elements that the district court found material in the Preferred Engineeri ng Literature—a pull bar in channels, with a screen sliding in the channels. The invent ion claimed in the Kemp patent “relates to roll screens of the type em ployed in residences and other structures for the purpose of preventing insects from entering through opened windows . . . .” Kemp patent col.1 ll.1-4. Referring to figure 1, the pat ent states that a window frame is indicated at 20 which encompasses the windows indicated generally at 21 and 22 respectively each of which includes a sash 24 and a glass 26 . The frame 20 includes the usual sill 27 . The . . . windows are vertically slidable in the frame in accordance with conventional practice. A roll screen formed in accordance with the present invention is shown as including a roller housing 28 secured to the window sill 27 inside of the window 21 , guide members 30 , one fixed to each side of the window opening in the frame 20 , a flexible screen 32 removably secured at one end . . . and adapted to be rolled upon or unrolled from a suitable roller within housing 28

. . . . 2008-1096, -1174 25Kemp patent pg.2 col.1 ll.1-5; fig.1. Significantly, the Kemp patent discloses these elements for use in a retractable screen system—the same type of system that is disclosed in the Preferred Engineering Literature. See, e.g. , id. fig.1. Moreover, the Kemp patent—consisting of a detailed technical written description and accompany ing diagrams—more completely describes the limitations at issu e than the Preferred E ngineering Literature does. This, we think, makes it more material than the Pr eferred Engineering Literature. See, e.g. , Mentor H/S, Inc. v. Med. Device Alliance, Inc. , 244 F.3d 1365, 1378 (Fed. Cir. 2001) (“The ’700 patent is more material in at least one re spect because it is directed to ultrasonic vibration on soft tissue . . . We therefor e conclude that the ’363 patent is merely
2008-1096, -1174 26cumulative of art already c onsidered by the examiner.”); Pro-Mold & Tool , 75 F.3d at 1577 (failing to disclose material “less relevant” than material already submitted was not inequitable conduct); Halliburton Co. v. Sc hlumberger Tech. Corp. , 925 F.2d 1435, 1442 (Fed. Cir. 1991) (“[B]ecause the skip-a-beat patents are less material than the cited references, no disclosure obligation attached.”). Accordingly, the Preferred Engineering Literature is merely cumulati ve of art that was already before the Reexam ination Panel. 3 Although the district court acknowl edged that the Preferred Engineering Literature did not disclose the ability to attach a glass insert, the court nonetheless found support for materiality because, acco rding to Mr. Raponi, the products described in the literature could be easily modi fied to attach a glass insert. Inequitable Conduct Decision , 513 F. Supp. 2d at 1113. As admitt ed on several occasions by Dr. Hall, however, the Kemp patent explicitly discloses th is same feature, furt her suggesting it is more material than the Preferred Engineering Literature. Kemp patent pg.2 col.1 ll.1-19;
see, e.g. , Mentor H/S , 244 F.3d at 1378 (concluding that prior art already disclosed to the PTO was more material because it disclo sed relevant features not present in the withheld reference). When test ifying concerning the Genius Li terature, Dr. Hall stated as follows: Q. Dr. Hall, does the Genius literature you reviewed show the retractable screen connected to a sliding piece of glass?

3 Furthermore, the court acknowle dged that neither the Preferred Engineering Literature nor the Kemp patent disclose using weather stripping. Inequitable Conduct Decision , 513 F. Supp. 2d at 1113. As described above, however, the Kissinger patent does discl ose weather stripping, in addition to the combination of other limitations at issue. See supra Section II.A. The Prefe rred Engineering Literature, therefore, is less relevant than, and cumula tive of, the Kissinger patent as well. See, e.g. , Mentor H/S , 244 F.3d 1378 (affirming cumulative ness finding because art already disclosed was “more material in at least one respect”). 2008-1096, -1174 27A. It does not. Q. Now does that in your opini on make the Genius literature not material to the reexam pan el in its consideration of the ’998 claim? A. Absolutely not, because the reexam panel already had windows connected to screens in both the Johnson and Kemp patents, so they di dn’t need to see that any more

.... Trial Tr. 102:5-15 (emphasis added); see also id. at 110:16-23 (“That’s already been demonstrated in the Johnson and the Kemp patents.”); id. at 134:6-135:2 (“[B]ut that particular item had been previously taught in Johnson and Kemp, so it didn’t have to be taught in that literature.”). In fact, Dr. Hall not only admitted several times that the Kemp patent discloses the ability to attach a gl ass insert, but he also repeatedly emphasized that attaching a glass insert to a pull bar was well known: “You can connect that pull bar to anything, or adopt a sliding window or a sliding panel of any sort”; “Every pull bar can be adapted to be an elongated attachment member”; and “[T]he pull bar can be an attachment, it can be attached to anything.” Id. at 110:112-23; 134:6-135:2. Considering the Kemp patent discloses a ll of the relevant elements—including the ability to attach a glass insert to a pull bar —the fact that the Preferred Engineer product could be easily modified to attach a glass in sert adds no value to its alleged materiality and supports the proposition that it is cumulative. For the foregoing reasons, we hold that t he district court clearly erred in finding the Preferred Engineering Litera ture not cumulative of prior art that was already before the Reexamination Panel. We therefore reverse the fi nding that the Preferred Engineering Literature was material.

2008-1096, -1174 28C. We now come to Larson’s failure to disclose to the Reexamination Panel the Third and Fourth Office Actions from the ’039 Continuation. As noted above, both the Third and Fourth Office Actions contain ed PTO examiner rejections and analysis concerning claims similar to those in the ’998 patent’s reexamination. In addition, the Fourth Office Action cited the DE ’478 pat ent. Larson first points out that the ’039 Continuation’s First Office Acti on was used as the basis fo r the Reexamination Request, and that the Second Office Action was explicitly referenced in an IDS submitted to the Reexamination Panel. Under these circum stances, Larson argues, despite not having the subsequent Third and Fourth Office Acti ons before it, the Reexamination Panel was aware of the simultaneous proceedings before the PTO and the possibility of future office actions in the ’039 Co ntinuation. Larson further argues that it disclosed each material reference cited in the Third and F ourth Office Actions. Although the Fourth Office Action revealed the DE ’478 patent for the first time, Larson contends that the examiner merely mentioned the DE ’478 patent as an example of art already before the Reexamination Panel. Larson acknowledges that the Third and F ourth Office Actions both contained examiner comments and rejections. It argues, though, that the exam iner provided only summary rejections without meaningful analysi s. According to Lars on, in the Third and Fourth Office Actions, the examiner articulated rejections almost identical to the previous office actions; mostly di scussed the Johnson patent, which had been thoroughly explained in previous office acti ons; and focused on claim limitations that were not at issue. In other words, Larson contends, because th e Third and Fourth

2008-1096, -1174 29Office Actions did not contain examiner comments different from previous office actions and because Larson disclosed all of the materi al references discussed in those actions, the office actions themselves were not material. Relying on Dayco Products , Aluminart responds that Larson fails to recognize that it is not only the references cited in the office actions that are important, but also the substance of the examiner’s comments. According to Al uminart, the Third and Fourth Office Actions contained remarks that are in consistent with Larson’ s arguments to the Reexamination Panel. Specifically, in the Th ird Office Action, the examiner rejected the claims at issue because the Johnson patent allegedly discloses a screen that extends into tracks. Subsequently, Larson arg ued the exact opposite position to the Reexamination Panel—that the Johnson patent does not show th is feature. In addition, Aluminart argues that the exam iner in the Fourth Office Ac tion, despite conceding that the Johnson patent does not di sclose a screen that extends into tracks, articulated a new rejection based on the Johnson and Kemp patent s, stating for the first time that the Kemp patent discloses this feature. We agree with Aluminart on this point. Because the Third and Fourth Office Actions contained another ex aminer’s adverse decisions about substantially similar claims, and because the Third and Fourth Office Actions are not cumulative to the First and Second Office Actions, the district court correctly found the withheld Office Actions material. In Dayco Products , the patentee failed to disclos e rejections in a copending application of claims “that were substantia lly similar in content and scope to claims pending in the applications that issued as t he patents-in-suit.” 3 29 F.3d at 1367. We held “that a contrary decisi on of another examiner reviewing a substantially similar

2008-1096, -1174 30claim” was material. Id. at 1368. We further explained that, because a “rejection of a substantially similar claim refutes, or is in consistent with the posit ion that those claims are patentable, [the] adv erse decision by another exami ner . . . meets the materiality standard.” Id. It is undisputed that the claims of the ’039 Continuation and the ’998 patent have similar content and scope, and that the Th ird and Fourth Office Actions contained another examiner’s rejections . Indeed, Larson does not argue that the claims are not substantially similar or that the ’039 Continua tion office actions do not contain contrary statements from an exam iner. Rather, Larson posits that it disclosed each material reference disclosed in the office actions and that the examiner’s rejections were only boilerplate reiterations of previous reje ctions. Larson’s arguments are unpersuasive, however, because they disregard the propos ition that “knowl edge of a potentially different interpretation is clearly information that an examiner could consider important when examining an application.” Id. Indeed, although previous office actions used the Johnson patent to reject the similar claims of the ’039 Cont inuation, the Third Office Acti on explicitly explained, for the first time, that the Johnson patent shows “the screen is attached ‘across it’s width’... to the coupling element . . . t hereby indicating that such ext ends into the tracks.” This was the first time that the examiner of the ’039 Continuat ion conveyed such specific explanation about the Johnson patent in c onnection with the “ext ending into screen tracks” limitation. After rece iving the Third Office Action c ontaining this explanation, Larson did not disclose it. Rather, contrary to the ’039 Continuati on’s examiner’s view, Larson contended to the Reexaminati on Panel that the Johnson patent did not show a

2008-1096, -1174 31screen extending into tracks. We acknowle dge that the ’039 Cont inuation examiner later withdrew his rejection based upon the Johnson patent and came to the same ultimate conclusion as the Reexaminat ion Panel—that the Johnson patent did not disclose the “extending into screen tracks” limitat ion. The ’039 Cont inuation examiner’s later view, however, does not change the fact that the Third Office Action contained valuable reasoning and rejections at the time when it was made. 4 Importantly, during the time from when the Third Office Action issued to the time when the Fourth Office Action withdrew the pertinent rejection— more than a year—there was an adverse decision by another examiner t hat refuted, or was inconsis tent with, the position that claim limitations of the ’998 patent were patentable ov er the Johnson patent. Accordingly, the Third Offi ce Action was material. The Fourth Office Action articulated a new rejection of the “extending into screen tracks” limitation in view of the Johnson and Kemp patents. Specifically, in the Fourth Office Action, the examiner found for the fi rst time that the Kemp patent shows a “screen end member actually being locat ed in a screen track.” Furthermore, the examiner explained in the Fourth Office Ac tion that a “screen end member extending into the screen tracks” was readily known in the prior art, and not just shown in the

4 We do not find the Third Office Action material because of Larson’s attorney arguments to the Reexamination P anel, which were contrary to the ’039 Continuation examiner’s interpreta tions in the Third Office Action. Cf. Line Rothman & Glamourmom LLC v. Target Corp. , No. 2008-1375, 2009 WL 349 474, at *15 (Fed. Cir. Feb. 13, 2009) (“While the law prohibits genui ne misrepresentations of material fact, a prosecuting attorney is free to present argum ent in favor of patentab ility without fear of committing inequitable conduct.”); Young v. Lumenis, Inc. , 492 F.3d 1336, 1349 (Fed. Cir. 2007) (arguing contrary to an examiner’s rejection and attempting to distinguish the claims from the prior art were not affirmat ive misrepresentations of material fact). Rather, as explained, the Third Office Ac tion was material because it contained an interpretation and adverse decision by another examiner that refuted the patentability of the claim limitations of the ’998 patent. 2008-1096, -1174 32Kemp patent. Significantly, the Reexamination Pane l, despite thoroughl y analyzing the Kemp patent, as well as other prior art, failed to come to the same conclusion that the “screen end member extending in to the screen tracks” limitat ion was disclosed in the Kemp patent or other prior ar t. Under these circumstances, the adverse decision of the examiner in the ’039 Continuation, based on a different explanation and interpretation of the Kemp patent and ot her prior art, was “clearly info rmation that an examiner could consider important.” Dayco , 329 F.3d at 1368. For the foregoing reasons, we hold that the district court did no t err in finding the Third and Fourth Office Actions not cumulative and material. 5
III. We now turn to the district court’s fi nding that, in failing to disclose the Genius Literature, the DE ’478 paten t, the Preferred Engineering Li terature, and the Third and Fourth Office Actions to the Reexamination Panel, Larson ac ted with deceptive intent. In concluding that the clear and convincing threshold ha d been satisfied, the court largely inferred deceptive int ent based on Larson’s failure to disclose all of the above five items to the Reexaminat ion Panel, in conj unction with its failu re to provide any explanation for its nondisclosure. Inequitable Conduct Decision , 513 F. Supp. 2d at 1117. However, because we today hold that three of these fi ve items—the Genius Literature, the DE ’478 patent, and the Pr eferred Engineering Literature—are not

5 There is nothing in the record pr esented to us indicating that the Reexamination Panel was indep endently aware of the Third and Fourth Office Actions. We, therefore, need not consider whether Larson would have had a duty to disclose the office actions under those circumstances. Cf. Litton Sys., Inc. v. Honeywell, Inc. , 87 F.3d 1559, 1571 (Fed. Cir. 1996) (“An applic ant cannot [be deemed to have] intentionally with[eld] a re ference actually considered by the PTO, even though the applicant may not have di sclosed the art.”), vacated on other grounds by 520 U.S. 1111 (1997); Molins PLC , 48 F.3d at 1185 (same). 2008-1096, -1174 33material, the district court’s findi ng of deceptive intent cannot stand. See, e.g. , Digital Control , 437 F.3d at 1311 (“As the di strict court’s determination of inequitable conduct was premised on the materiality of both the misstatements in the Ru le 131 declaration and the failure to disclose prior art, we must vacate the distri ct court’s determination that the patents were unenforceable for ine quitable conduct and remand for further proceedings.”); id. at 1321 (“[W]e cannot tell how heavily the district court relied upon the [improper finding of] materiality of the omission of the Rorden patent when assessing Dr. Mercer’s credibility and when determining that the misstatements in the Rule 131 declaration were made wit h intent to deceive the PTO.”); Eli Lilly , 119 F.3d at 1575 (“Because we conclude that the district court’s finding of materiality was clearly erroneous, we also necessarily conclude that t he district court clearly erred in inferring deceptive intent . . . .”). We therefore vacate the court’s deceptive intent finding and, consequently, its ultimate deter mination of inequitable conduct. See, e.g. , Purdue Pharma L.P. v. Endo Pharmas. Inc. , 438 F.3d 1123, 1135 (Fed. Cir. 2006) (vacating unenforceability because the deceptive in tent finding was clearly erroneous and remanding “to give the trial court an opportunity to recons ider its intent finding”); Molins PLC , 48 F.3d at 1184 (finding of deceptive in tent was “clearly erroneous, and the determination that the method of disclosur e constituted inequitable conduct cannot be sustained”). We remand the case to the di strict court for determination of whether Larson withheld the only remaining materi al items—the Third and Fourth Office Actions—with a threshold level of deceptive intent and, if so, whether balancing that level of intent with the level of mate riality warrants holdi ng the ’998 patent unenforceable.

2008-1096, -1174 34IV. Although the issue is not pr esently before us, we believe that, in the interest of judicial economy, it is appropriate for us to give some guidance to the district court with respect to the issue of deceptive intent. See, e.g. , Hansen Bancorp, Inc. v. United States , 367 F.3d 1297, 1314 (Fed. Cir. 2004) (givin g guidance is appropriate for the “benefit of the parties and the trial court”); Rumsfeld v. Applied Companies, Inc. , 325 F.3d 1328, 1335 (Fed. Cir. 2003) (“The Board’s statements regarding quantum suggest that it is appropriate for us to provi de guidance regarding th e proper measure of Applied’s recovery.”). First, on remand, it will not be necessary for the district court to accept additional evidence. Rather, the court s hould analyze all of the evidenc e of record, consistent with this opinion, and determine if Larson withhel d the Third and Fourth Office actions with an intent to deceive the PTO. Second, materiality does not presume in tent, and nondisclosure, by itself, cannot satisfy the deceptive intent element. See, e.g. , Star Scientific , 537 F.3d at 1366; M. Eagles Tool Warehouse, In c. v. Fisher Tooling Co. , 439 F.3d 1335, 1340 (Fed. Cir. 2006); see also Praxair, Inc. v. ATMI, Inc. , 543 F.3d 1306, 1313 (F ed. Cir. 2008) (“[A] showing of materiality alone does not give rise to a presumption of intent to deceive.”). Rather, the alleged infringer must prove by clear and convincing evidence a specific intent to deceive the PTO. See Star Scientific , 537 F.3d at 1366; see also Kingsdown Med. Consultants v. Hollister, Inc. , 863 F.2d 867, 876 (Fed. Cir. 1988) (en banc in relevant part) (holding even “‘ gross negligence’ does not of it self justify an inference of intent to deceive”). While deceptive intent can be inferred from circumstantial evidence,

2008-1096, -1174 35the circumstantial evidence must still be clear and convincing. Star Scientific , 537 F.3d at 1366. “Further, the inference must not only be based on sufficient evidence and be reasonable in light of that evidence, but it must also be the single most reasonable inference able to be drawn from the evidence to meet the clear and convincing standard.” Id. Relatedly, just as merely wit hholding a reference cannot support an inference of deceptive intent, see Dayco Prods. , 329 F.3d at 1367 (“Intent to deceive cannot be inferred simply from the decision to withhold the reference where the reasons given for the withholding are pl ausible.”), so too an accus ed infringer cannot carry its threshold burden simply by pointing to the ab sence of a credible good faith explanation. Star Scientific , 537 F.3d at 1368; see M. Eagles Tools Warehouse , 439 F.3d at 1341 (“When the absence of a good faith explanation is the only evidence of intent, however, that evidence alone d oes not constitute clear and conv incing evidence warranting an inference of intent.”). Third, on remand, the district court shoul d take into account any evidence of good faith, which militates against a finding of deceptive intent. See, e.g. , Purdue Pharma , 438 F.3d at 1134; N. Telecom, Inc. v. Datapoint Corp. , 908 F.2d 931, 939 (Fed. Cir. 1990). However, while the court mu st consider any such evidence provided, the patentee is not required to offer evidenc e of good faith unless the accused infringer first meets its burden to prov e—by clear and convincing evidence—the threshold level of deceptive intent. See Star Scientific , 537 F.3d at 1368. In that regard, we note that, on remand, the district court should consi der that Larson notified the Reexamination Panel of the simultaneous pros ecution of the ’039 Continuat ion, and “thus put the PTO on notice of copendency.” Akron Polymer Container , 148 F.3d at 1383-84; see Dayco

2008-1096, -1174 36Prods. , 329 F.3d at 1366 (“[M]embers of the family of applicati ons that issued as the patents-in-suit were disclosed to the exami ner assigned to the copending application,” which pointed “away from an int ent to deceive.”). The court also should consider the fact that Larson disclosed several pleadings from this lawsuit—including Aluminart’s initial allegations of inequitable conduct—a nd that there was a Second Office Action issued in the ’039 Continuati on proceedings. Despite Larson’s failure to expressly notify the Reexamination Panel of the Third and Fourth Office Actions, the court should consider whether its disclosur e to the Reexamination Panel of the parallel proceedings, nevertheless, points away from deceptive intent and must be given weight. See Akron Polymer Container , 148 F.3d at 1383-84 (“Exxel contends, we think convincingly, that it hardly could be seeking to deceive the PTO as to the existence of copending applications when it actually disclosed the fa ct of copendency to the Ve nus examiner.”). If the district court satisfies itself—in li ght of all the evidenc e and consistent with our materiality findings—that Aluminart has es tablished a threshold level of intent by clear and convincing evidence, it will then be required to balance the levels of materiality and intent to determine if a fi nding of inequitable conduct is warranted. Star Scientific , 537 F.3d at 1367 (balancing requires a determination of “whether the applicant’s conduct before the PTO was egregi ous enough to warrant holding the entire patent unenforceable”). At that point, the c ourt must balance the substance of those threshold levels—with a higher level of mate riality permitting a lower level of intent, and vice versa. Id. Indeed, some references may be highly material, while others may only be minimally material. See, e.g. , Kemin Foods, L.C. v. Pigmentos Vegetales , 464 F.3d 1339, 1345-46 (Fed. Cir. 2006) (affirming the dist rict court’s finding on the “level of

2008-1096, -1174 37materiality” that a withheld reference was not “highly material”); Purdue Pharma , 438 F.3d at 1133 (“Th[e] omission of information wa s material, but not as material as an affirmative misrepresentation . . . .”). In th at regard, while we agree with the district court that the Third and Fourth Office Actions are material, t he court based its finding of a high level of materiality, at least in part, on the fact that Fourth Office Action revealed the DE ’478 patent. On remand, the court s hould take into account that the DE ’478 patent is not material and whet her or not that im pacts the level of materiality of the Fourth Office Action. V. Finally, although the district court held the ’998 patent unenforceable, it declined to find this case exceptiona l and therefore did not award Aluminart attorney’s fees. Fees Decision , 529 F. Supp. 2d at 1060-61. Aluminart has cross-appealed that decision, contending that the di strict court clearly erred in failing to find clear and convincing evidence of an exceptional case . However, because we have vacated the finding of inequitable conduct, Alumin art’s cross-appeal is now moot. See, e.g. , Hewlett-Packard Co. v. Bausch & Lomb, Inc. , 882 F.2d 1556, 1563 n.6 (Fed. Cir. 1989) (vacating inequitable conduct ho lding rendered cross-appeal on attorney’s fees moot). Consequently, we also vaca te the district court’s Fees Decision

. See, e.g. , id. at 1569- 70 (mooting the cross-appeal on attorney’s fees consequently vacated the district court’s order on attorney’s fees). CONCLUSION In sum, we affirm the district court’ s holding that the Thir d and Fourth Office Actions are material. However, we reve rse the court’s holding that the Genius

2008-1096, -1174 382008-1096, -1174 39 Literature, the DE ’478 patent, and the Pref erred Engineering Literature were not cumulative of prior art al ready before the Re examination Panel and therefore were material. Because we have reversed the di strict court’s finding that the Genius Literature, the DE ’478 patent, and the Pref erred Engineering Literature were noncumulative and material, we vacate the court’s finding of dec eptive intent and, consequently, its ultimate determination that the ’998 patent is unenforceable due to inequitable conduct. We remand the case to the district court for further proceedings consistent with this opinion, as set forth above. Specifical ly, the district court should determine whether Larson acted with deceptive intent when it failed to disclose the Third and Fourth Office Actions to the Reexaminat ion Panel. If the court finds that Larson acted with deceptive intent, it should t hen balance materiality and intent in order to decide whether the ’998 patent should be held unenforceable. Finally, because we have vacated the district court’s finding of inequitable conduct, Aluminart’s cross-appeal is moot. We vacate the court’s Fees Decision as moot.

COSTS Each party shall bear its own costs. AFFIRMED-IN-PART , REVERSED-IN-PART , VACATED-IN-PART , and REMANDED

.

## United States Court of Appeals for the Federal Circuit
2008-1096, -1174

LARSON MANUFACTURING COMPAN Y OF SOUTH DAKOTA, INC., Plaintiff-Appellant,

v. ALUMINART PRODUCTS LIMITED and CHAMBERDOOR INDUSTRIES, INC., Defendants-Cross Appellants.

Appeal from the United States District Court for the District of South Dakota, No. 03-CV4244, Judge Lawrence L. Piersol.

LINN, Circuit Judge , concurring. I join the opinion of the court, because our precedent so requires. I write separately, however, to express my view th at this precedent has significantly diverged from the Supreme Court’s tr eatment of inequitable conduc t and perpetuates what was once referred to as a “plague” that our en banc court sought to cure in Kingsdown Medical Consultants, Lt d. v. Hollister Inc. , 863 F.2d 867, 876 n.15 (Fed. Cir. 1988) (en banc) (quoting Burlington Indus., Inc. v. Dayco Corp. , 849 F.2d 1418, 1422 (Fed. Cir. 1988) (“[T]he habit of charging inequitable conduct in almost every major patent case has become an absolute plague.”)). Symptoms of this plague are apparent from the facts of this case. The patent-insuit has undergone examination twice in th e PTO, and the patentee has been accused of inequitable conduct on each occasion for a llegedly withholding material information. During original prosecution, the PTO c onsidered 143 references, 135 of which thepatentee itself had submitted. When the patent was later a sserted in litigation, the accused infringer responded by alleging i nequitable conduct. It also initiated reexamination of the pat ent, which stayed the litigation. With all parties’ eyes on the reexamination, the patentee submitted an additional 210 references with its first information disclosure statement (“ IDS”), including a copy of the competitor’s inequitable conduct allegations. The patentee then alerted the PTO to rejections in a co-pending application and submitted two more IDSs in the reexaminati on, each within approximately one month of the application’s Office Actions. The IDSs contained all references relied on in those rejections but did not include the Office Actions themselves. With full knowl edge of the co-pending applicat ion, the PTO confirmed the patent, which survived reexamination without substantive change to the litigated claims. When the litigation resumed, the accused infringer again charged the patentee with inequitable conduct, this time based on conduct in the reexamination. This second inequitable conduct allegation was the sole i ssue at trial. Following remand today, the litigation will continue to focu s on inequitable conduct, to the exclusion of the patentee’s infringement contentions. The ease with which inequitable conduct can be pled, but not dismissed, is a problem of our own making. The Supreme Court’s three inequitable conduct cases involved overt fraud, not equivocal acts of omission. Precision Instrument Mfg. Co. v. Auto. Maint. Mach. Co. , 324 U.S. 806, 809, 819 (1945) (“ patent claims infected with fraud and perjury” where assignee knew that its employee “gave false dates as to the conception, disclosure, drawing, descr iption and reduction to practice” during interference proceeding and th en “secured the perjured . . . application and exacted

2008-1096, -1174 2promises from the other parties never to questi on the validity of any patent that might be issued on that application”); Keystone Driller Co. v. Gen. Excavator Co. , 290 U.S. 240, 243 (1933) (false affidavits and deposition testimonies obtained “for valuable considerations” averring that the prior art use “was an abandoned experiment” and “to keep secret the details of the prior use”); Hazel-Atlas Glass Co. v. Hartford-Empire Co. , 322 U.S. 238, 240, 243 (1 944) (false trade article proc ured from “an ostensibly disinterested expert” in exchange for $8, 000 to gain patent issuance in spite of previously “insurmountable Pa tent Office opposition”), overruled on other grounds by Standard Oil Co. v. United States , 429 U.S. 17 (1976). We clarified en banc that the “two elements, materiality and intent, must be proven by clear and convincing evidence,” and that “‘gross neg ligence’ does not of itself justify an inference of intent to deceive.” Kingsdown , 863 F.2d at 872, 876. But in seeming contradiction with Kingsdown , a standard even lower than “gross negligence” has propagated through our case law. This standard permits an inference of deceptive intent when “(1) highly mate rial information is withheld; (2 ) ‘the applicant knew of the information [and] . . . knew or should have k nown of the materiality of the information; and (3) the applicant has not provided a credible explanation for the withholding.’” Praxair, Inc. v. ATMI, Inc. , 543 F.3d 1306, 1313-14 (Fed. Ci r. 2008) (alterations in original) (quoting Ferring B.V. v. Barr Labs., Inc. , 437 F.3d 1181, 1191 (Fed. Cir. 2006)) (citing Pfizer, Inc. v. Teva Pharms. USA, Inc. , 518 F.3d 1353, 1367 (Fed. Cir. 2008); Critikon, Inc. v. Becton Di ckinson Vascular Access, Inc. , 120 F.3d 1253, 1257 (Fed. Cir. 1997)).

2008-1096, -1174 3This test is problematic. First, the “hi gh materiality” prong of the intent element simply repeats the materiality element. Conf lating materiality and intent in this manner is inconsistent with the principle that “mate riality does not presume intent, which is a separate and essential component of inequitable conduct.” Manville Sales Corp. v. Paramount Sys., Inc. , 917 F.2d 544, 552 (Fed. Cir. 1990) (quoting Allen Organ Co. v. Kimball Int’l, Inc. , 839 F.2d 1556, 1567 (Fed. Cir. 1988)). The second, “should have known” prong sets forth a simple negligen ce standard, lower even than the “gross negligence” standard that wa s expressly rejected in Kingsdown

. 1 I also question whether a fact-finder who has deemed information to be “highl y material” would not also be compelled to conclude that a reas onable patentee “should have known of the materiality,” at least when the patentee “knew of the information,” as prong two requires. Third, the “credible explanat ion” prong effectively shifts the burden to the patentee to prove a negative: that it di d not intend to deceive the PTO. But it is the “accused infringer”—not the patentee—who “must prove by clear and convincing evidence that the material information was withheld with t he specific intent to deceive the PTO.” Star Scientific, Inc. v. R.J. Reynolds Tobacco Co. , 537 F.3d 1357, 1366 (Fed. Cir. 2008). As to this third prong, we have also explained that “[t]he patentee need not offer any good faith explanation unless the accused infri nger first carried his burden to prove a threshold level of intent to deceive by clear and convincing evidence.” Id. at 1368

1 The source of this divergence can be traced to Critikon , 120 F.3d at 1256 (citing Driscoll v. Cebalo , 731 F.2d 878, 885 (Fed. Cir. 1984 )). It relied on the preKingsdown “should have known” standard of Driscoll v. Cebalo , a case explicitly overruled by Kingsdown on the issue of gross negl igence, 863 F.2d at 876. See Lynn C. Tyler, Kingsdown Fifteen Years Later: What Does It Take to Prove Inequitable Conduct? , 13 Fed. Cir. B.J. 267, 276- 83 (2004) (collecting panel de cisions that rely on precedent explicitly overruled by Kingsdown ).
2008-1096, -1174 42008-1096, -1174 5 (emphasis added). As explained above, howeve r, the first two prongs are not evidence of deceptive intent. The first is evidence of materiality; the second is evidence of negligence. These two prongs are therefore insu fficient as a matter of law to establish a clear and convincing “threshold level” of decept ive intent before the third prong can ever properly come into play. As it now stands, the test generally permits an inference of deceptive intent to be drawn whenever the three prong s are satisfied. This is in tension with the rule in Star Scientific that “the inference must not only be based on sufficient evidence and be reasonable in light of that evidence, but it must also be the single most reasonable inference able to be drawn from the evidence.” Id. at 1366 (emphasis added). It cannot be said that deceptive intent is the “single most reasonabl e inference” when all that prong two shows is that the patentee “should have known” that the information was material. An equally reasonable inference under this test is that the patentee incorrectly believed that the information was not materi al, or that the patentee was negligent, or even grossly negligent. None of these gives rise to deceptive intent under Kingsdown , nor is deceptive intent the “singl e most reasonable inference” under Star Scientific

. For the foregoing reasons, I respectfully submit that the test for inferring deceptive intent, as it currently exists, falls short of the standard “need[ed] to strictly enforce the burden of proof and elevated standard of proof in the inequitable conduct context.” Star Scientific , 537 F.3d at 1365. The facts of th is case suggest that the time has come for the court to review the issue en banc.