Case Name: PERSEPTIVE BIOSYSTEMS, INC., Plaintiff-Appellant, v. PHARMACIA BIOTECH, INC., Pharmacia Biotech AS, Sepracor Inc., Pharmacia LBK Biotechnology AB, Biosepra, Inc., and Pharmacia Biotech (also known as Pharmacia Biopress Technology, also known as Procordia AB), Defendants-Appellees
Court: United States Court of Appeals for the Federal Circuit
Jurisdiction: United States
Decision Date: 2000-08-29
Citations: 225 F.3d 1315
Docket Number: No. 98-1325
Parties: PERSEPTIVE BIOSYSTEMS, INC., Plaintiff-Appellant, v. PHARMACIA BIOTECH, INC., Pharmacia Biotech AS, Sepracor Inc., Pharmacia LBK Biotechnology AB, Biosepra, Inc., and Pharmacia Biotech (also known as Pharmacia Biopress Technology, also known as Procordia AB), Defendants-Appellees.
Judges: Before NEWMAN, PLAGER, and CLEVENGER, Circuit Judges.
Reporter: Federal Reporter 3d Series
Volume: 225
Pages: 1315–1331

Head Matter:
PERSEPTIVE BIOSYSTEMS, INC., Plaintiff-Appellant, v. PHARMACIA BIOTECH, INC., Pharmacia Biotech AS, Sepracor Inc., Pharmacia LBK Biotechnology AB, Biosepra, Inc., and Pharmacia Biotech (also known as Pharmacia Biopress Technology, also known as Procordia AB), Defendants-Appellees.
No. 98-1325.
United States Court of Appeals, Federal Circuit.
Aug. 29, 2000.
Donald R. Dunner, Finnegan, Henderson, Farabow, Garrett & Dunner, L.L.P., of Washington, DC, argued for plaintiff-appellant. With him on the brief was Thomas H. Jenkins. Of counsel was Scott H. Blackman. Of counsel on the brief were David S. Godkin, David C. Berry, and Richard S. Sanders, Testa, Hur-witz & Thibeault, LLP, of Boston, Massachusetts. Also of counsel on the brief was Lee Carl Bromberg, Bromberg & Sun-stein, LLP, of Boston, Massachusetts.
Robert H. Stier, Jr., Pierce Atwood, of Portland, Maine, argued for defendants-appellees. Of counsel on the brief was Kenneth R. Adamo, Jones, Day, Reavis & Pogue, of Cleveland, Ohio.
Before NEWMAN, PLAGER, and CLEVENGER, Circuit Judges.

Opinion:
Opinion for the court filed by Circuit Judge CLEVENGER. Dissenting Opinion filed by Circuit Judge PAULINE NEWMAN.
CLEVENGER, Circuit Judge.
PerSeptive Biosystems, Inc. ("PerSep-tive") appeals the judgment of the United States District Court for the District of Massachusetts, holding PerSeptive's United States Patents Nos. 5,019,270 ("the '270 patent"), 5,228,989 ("the '989 patent") and 5,384,042 ("the '042 patent") (collectively, "the patents") unenforceable due to inequitable conduct before the United States Patent and Trademark Office ("PTO"). Because the district court correctly found that the named inventors of the patents made material misrepresentations regarding inventorship with intent to deceive the PTO during the prosecution of the patents, we affirm the holding of inequitable conduct.
I
In 1993, PerSeptive sued Pharmacia Biotech, Inc., Pharmacia Biotech AS, Sep-racor Inc., Pharmacia LBK Biotechnology AB, and Biosepra, Inc. (collectively, "Phar-macia") for patent infringement of the '270 and '989 patents. In 1995, PerSeptive added a claim for infringement of the '042 patent. All three patents, which derived from a single patent application, are concerned with high-speed chromatography, or separation of biological materials, of a type described by the patents as "perfu-sive" chromatography. The '270 patent claims a method for practicing perfusive chromatography, the '989 patent claims a particle used for perfusive chromatography, and the '042 patent claims a matrix of particles used for perfusive chromatography. All three patents list the same inventors, Dr. Noubar Afeyan, Professor Fred Regnier, and Dr. Robert Dean.
In response to the PerSeptive allegations, Pharmacia raised, among others, the defenses that the patents were invalid'for failure to name the correct inventors, and that they were unenforceable due to inequitable conduct practiced by the named inventors during prosecution. In January 1996, the district court ruled on cross-motions for summary judgment on the question of whether the patents were invalid for failure to list the correct inventive entity. See PerSeptive Biosystems, Inc. v. Pharmacia Biotech, Inc., No. 93-12237, slip op. at 32-33 (D.Mass. Jan. 9, 1996) ("PerSeptive I"). In that decision, the district court concluded that there was "undisputed, clear and convincing evidence" that the inventorship was incorrect, but declined to hold the patents invalid. The district court reasoned that Pharmacia had not shown an absence of genuinely disputed facts regarding whether the named inventors had omitted the unnamed inventors with deceptive intent, thereby precluding the correction of inventorship under the then-current understanding of 35 U.S.C. § 256 (1994). See PerSeptive I, slip op. at 31 ("[T]here remains a disputed issue of fact as to the named inventors' state of mind, preventing the court from ordering the correction of the patent without hearing."). Accordingly, the court invited PerSeptive to move, under section 256, to correct the inventorship of the patents. See id.
In March 1997, after a ten-day hearing, the district court denied PerSeptive's motion to correct inventorship, basing its conclusion on a pattern of false statements and misrepresentations by the named inventors to the PTO regarding the inven-torship and timing of the invention. See PerSeptive Biosystems, Inc. v. Pharmacia Biotech, Inc., No. 93-12237, slip op. at 126 (D.Mass. Mar. 31, 1997) ("PerSeptive II").
Soon after that ruling, the Federal Circuit decided Stark v. Advanced Magnetics, Inc., 119 F.3d 1551, 43 USPQ2d 1321 (Fed.Cir.1997). In Stark, this court held that section 256 authorizes correction of inven-torship when there is no deceptive intent on the part of the omitted inventors and does not require inquiry into the intent of the' originally-named inventors. Because this holding was contrary to the understanding of the district court and the parties at the time of the PerSeptive II decision, the district court, in January 1998, reconsidered PerSeptive II. See PerSeptive Biosystems, Inc. v. Pharmacia Biotech, Inc., 12 F.Supp.2d 69, 70 (D.Mass.1998) ("PerSeptive III ").
In PerSeptive III, the district court vacated its denial of PerSeptive's section 256 motion, concluding that no evidence had been introduced relating to the intent of the unnamed inventors. See id., at 71. The court did, however, "reexamine the legal effect of its factual findings in PerSeptive II that [Pharmacia had] proven by clear and convincing evidence that the named inventors made a series of misrepresentations to the [PTO]." Id., at 71. Adopting all the factual findings of PerSeptive II, the district court concluded that the named inventors had committed inequitable conduct when prosecuting the application that yielded the three patents. See id., at 73. Accordingly, the court held that the patents were unenforceable, and entered final judgment under Fed.R.Civ.P. 54(b). See PerSeptive Biosystems, Inc. v. Pharmacia Biotech, Inc., No. 93-12237, slip op. at 2 (D.Mass. Mar. 13,1998) (Order).
This appeal followed, vesting us with jurisdiction pursuant to 28 U.S.C. § 1295(a)(1) (1994).
II
Inequitable conduct includes affirmative misrepresentations of a material fact, failure to disclose material information, or submission of false material information, coupled with an intent to deceive. See Molins PLC v. Textron, Inc., 48 F.3d 1172, 1178-79, 33 USPQ2d 1823, 1826-27 (Fed.Cir.1995). The defense of inequitable conduct is entirely equitable in nature, and thus not an issue for a jury to decide. See Paragon Podiatry Lab. Inc. v. KLM Labs., Inc., 984 F.2d 1182, 1190, 25 USPQ2d 1561, 1568 (Fed.Cir.1993); Gardco Mfg., Inc. v. Herst Lighting Co., 820 F.2d 1209, 1211-13, 2 USPQ2d 2015, 2017-19 (Fed.Cir.1987).
Determination of inequitable conduct requires a two-step analysis. First, the trial court must determine whether the conduct meets a threshold level of materi ality. The trial court must then also determine whether the evidence shows a threshold level of intent to mislead the PTO. See Baxter Int'l, Inc. v. McGaw, Inc., 149 F.3d 1321, 1327, 47 USPQ2d 1225, 1228-29 (Fed.Cir.1998); Halliburton Co. v. Schlumberger Tech. Corp., 925 F.2d 1435, 1439, 17 USPQ2d 1834, 1838 (Fed.Cir.1991). These threshold determinations are reviewed by this court under the clearly erroneous standard of Federal Rule of Civil Procedure 52(a). See Kingsdown Med. Consultants, Ltd. v. Hollister, Inc., 863 F.2d 867, 872, 9 USPQ2d 1384, 1389 (Fed.Cir.1988). Once the threshold levels of materiality and intent have been established, the trial court is required to weigh materiality and intent. See Molins, 48 F.3d at 1178, 33 USPQ2d at 1826-27. The more material the conduct, the less evidence of intent will be required in ordér to find that inequitable conduct has occurred. See N.V. Akzo v. E.I. Dupont de Nemours, 810 F.2d 1148, 1153, 1 USPQ2d 1704, 1708 (Fed.Cir.1987). In light of all the circumstances, the court must then determine whether the applicant's conduct is so culpable that the patent should be held unenforceable. See LaBounty Mfg., Inc. v. United States Int'l Trade Comm'n, 958 F.2d 1066, 1070, 22 USPQ2d 1025, 1028 (Fed.Cir.1992). We review the district court's ultimate determination of inequitable conduct under an abuse of discretion standard. See Kolmes v. World Fibers Corp., 107 F.3d 1534, 1541, 41 USPQ2d 1829, 1834 (Fed.Cir.1997); Halliburton, 925 F.2d at 1440, 17 USPQ2d at 1838; Kingsdown, 863 F.2d at 876, 9 USPQ2d at 1389.
A
The patent application which led to the '270, '989, and '042 patents was filed in July 1989, and listed only Afeyan, Regnier and Dean as inventors. See PerSeptive II, slip op. at 69. In PerSeptive I, the district court, after extensive factfinding and analysis, determined that "undisputed, clear and convincing evidence" supported the conclusion that the named inventors were not the sole inventors of the subject matter of the three patents. PerSeptive I, slip op. at 25. The district court decided that Frank Warner and Linda Lloyd of Polymer Laboratories, Ltd. ("Polymer Labs"), a British company specializing in the area of chromatography and polymer analysis, also should have been named as inventors. See id. at 29. The district court also considered whether Mary Ann Rounds, Regnier's research assistant at his Purdue University laboratory, should have been named as an inventor, but concluded that this question was "a hotly disputed issue of fact." Id. at 21.
There is no dispute now between the parties that Warner, Lloyd, and Rounds— none of whom are named as inventors— worked in close collaboration with the named inventors in the development of the perfusive chromatography techniques and materials that are the subject of the three PerSeptive patents. As the district court noted, it is undisputed that it was Polymer Labs that supplied the materials and data that were critical to the named inventors' understanding of the perfusive chromatography process. In fact, it was the Polymer Labs' particles that were the genesis of the inventions — these particles exhibited beneficial chromatographic properties, leading the named inventors to work, together with Warner, Lloyd, and Rounds, to understand the cause of these properties. But while the district court itself clearly believed that Warner, Lloyd, and perhaps Rounds should have been named as inventors of the three patents at issue, and theorized that the omission of inventors with deceptive intent would be inequitable conduct because it would involve "filing a false oath," PerSeptive III, at 72 (citing Stark, 119 F.3d at 1555, 43 USPQ2d at 1325), it noted that this conclusion was unnecessary for the purposes of its inequitable conduct judgment. See PerSeptive III, at 73 ("[A] good faith disagreement over the law of joint inventorship does not provide the basis for this [inequitable conduct] ruling"). Instead, the district court found that the named inventors intentionally misrepresented to the PTO the relationship between themselves and Polymer Labs for the purpose of concealing the issue of inventorship (ie., whether Warner, Lloyd, and Rounds perhaps should have been listed as inventors). In particular, the district court found, by clear and convincing evidence, see PerSeptive II, slip op. at 99, the following intentional misrepresentations to the PTO:
[1] the named inventors falsely stated that Regnier had "initiated" or "directed" the particle work at Polymer Labs, when in fact a named inventor (Dean) in a contemporaneous writing, flatly contradicted this assertion, see id., slip op. at 99-101;
[2] the named inventors falsely stated that they alone discovered that certain of the Polymer Labs materials produced outstanding separations, when in fact Lloyd and Rounds discovered this characteristic, see id., slip op. at 101;
[3] at least one of the named inventors "intentionally did not disclose" the extensive collaboration between his lab and Polymer Labs personnel, as supported by the contemporaneous documentation, id., slip op. at 101-02;
[4] the named inventors deliberately failed to disclose the extensive exchange of data "concerning pore volume and structure" of the Polymer Labs particles, as evidenced by a named inventor's (Dean's) contemporaneous memo stating that "I should think that [Polymer Labs & PerSeptive] could get a patent on the structure of [the particles] re perfusion," id., slip op. at 102-03;
[5]the named inventors misleadingly and falsely suggested that Polymer Labs was only a source of raw materials, see id., slip op. at 104-05.
The district court concluded, in PerSeptive II, that these intentional falsehoods, misrepresentations, and nondisclosures violated 37 C.F.R. § 1.56, which establishes the standard of truthful disclosure to the PTO. See id., slip op. at 105. The district court reaffirmed these findings upon reconsideration in PerSeptive III, noting that they demonstrated "the persistent course of material misrepresentations, omissions, and half-truths to the PTO that persuade me by clear and convincing evidence of deceptive intent on inventorship." Per-Septive III, at 73.
On appeal, PerSeptive does not directly challenge these findings of fact. Instead, PerSeptive argues that the district court clearly erred in not finding that the totality of the disclosures to the PTO "manifest objective good faith" by the named inventors. Appellant's Brief at 45. In particular, PerSeptive notes that the named inventors disclosed the use of Polymer Labs' particles and that Regnier had "informally consulted" with Polymer Labs prior to the conception of the invention. These facts, however, were fully considered by the district court, see PerSeptive II, slip op. at 74, and found to be supportive of a finding of intent to deceive the PTO rather than indicative of good faith. See id. at 105 ("[T]he information, which suggested that Polymer Labs was just a 'source' of 'raw materials,' was misleading because it provided the patent examiner with only a red flag for the possible issue of prior art and obviousness — and obfuscated the threshold issue of inventorship."). A review of the exhaustive record of deceptive intent compiled by the district court, see PerSeptive III, at 74 (noting "extensive testimony and hundreds of documents reviewed"); Per-Septive II, slip op. at 1 (noting the 10-day hearing), when conducted through the lens of our standard of review, simply does not leave one with "the definite and firm conviction that a mistake has been commit ted." United States v. United States Gypsum Co., 333 U.S. 364, 395, 68 S.Ct. 525, 92 L.Ed. 746 (1948) (describing clear error standard of review); see also Elk Corp. of Dallas v. GAF Bldg. Materials Corp., 168 F.3d 28, 31-32, 49 USPQ2d 1853, 1857 (Fed.Cir.1999) (affirming factual findings supporting inequitable conduct); Key Pharms. v. Hercon Labs. Corp., 161 F.3d 709, 719, 48 USPQ2d 1911, 1919 (Fed.Cir.1998) (finding no clear error in an inequitable conduct analysis because "the finding on intent in particular depended heavily on the presentation of evidence and witness testimony at trial. The trial court was able to hear these matters first hand and assess witness credibility"). The district court's finding of intent to deceive was not clear error.
B
PerSeptive's primary argument on appeal is that the district court erred in concluding, in PerSeptive I, that Warner and Lloyd should have been named as joint inventors of the patents at issue in this case. See PerSeptive I, slip op. at 29. From this premise, PerSeptive asserts that "no predicate exists" for the district court's PerSeptive III judgment — that the patents are unenforceable for inequitable conduct. Appellant's Brief at 42. As noted above, however, this is a misreading of the PerSeptive III judgment. The district court specifically stated that the PerSeptive I conclusion — that inventorship of the patents was incorrect — was unnecessary to the inequitable conduct decision. See PerSeptive III, at 73 ("[A] good faith disagreement over the law of joint inventorship does not provide the basis for this ruling."). Instead, the district court noted that the PerSeptive III holding was based on the "persistent course of material misrepresentations, omissions and half-truths to the PTO" relating to inventorship. Id.
There can be no doubt that — irrespective of whether the district court was correct in holding (in PerSeptive I) that the inventorship was incorrect — the intentional "misrepresentations, omissions and half-truths to the PTO," made as a "persistent course" of conduct, are highly material. As the court found, these falsehoods and omissions were calculated to "obfuscate the threshold issue of inventorship." Per-Septive II, slip op. at 105. As a critical requirement for obtaining a patent, inven-torship is material. See, e.g., 35 U.S.C. § 102(f) (1994) ("A person shall be entitled to a patent unless . he himself did not invent the subject matter sought to be patented."); 35 U.S.C. § 116 ("When an invention is made by two or more persons jointly, they shall apply for a patent jointly."). Examiners are required to reject applications under 35 U.S.C. § 102(f) on the basis of improper inventorship. See Manual of Patent Examining Procedure § 2137.01 (hereinafter "MPEP"). Accordingly, the Manual of Patent Examining Procedure details the "rules" of inventor-ship to be used by examiners, see id., and specifically notes that information about inventorship is material under 37 C.F.R. § 1.56, see MPEP § 2001.06(c) (inventor-ship disputes are material information); MPEP § 2004 (suggesting that applicants carefully consider inventorship in the duty to disclose context).
Furthermore, the intentional falsehoods and omissions found by the district court easily meet our oft-stated test for materiality: information is material if there "is a 'substantial likelihood that a reasonable examiner would consider it important in deciding whether to allow the application to issue as a patent.' " Baxter, 149 F.3d at 1327, 47 USPQ2d at 1229 (quoting 37 C.F.R. § 1.56 (1989)); see also J.P. Stevens & Co. v. Lex Tex Ltd., 747 F.2d 1553, 1559, 223 USPQ 1089, 1092 (Fed.Cir.1984). As we noted above, an examiner must attend to the question of inventorship, pursuant to 35 U.S.C. § 102(f). A full and accurate disclosure of the true nature of the relationship between PerSeptive and Polymer Labs, and the contributions of Warner, Lloyd, and Rounds, would have been "important" to a reasonable examiner's consideration of the inventorship question.
PerSeptive's argument that the patents' claims were narrowed during prosecution, thereby curing any possible inventorship problem, misses the point. First, whether the inventorship of the patents as issued is correct does not determine the materiality of the statements in this case, just as whether concealed prior art would actually invalidate the patent is irrelevant to materiality. See, e.g., A.B. Dick Co. v. Burroughs Corp., 798 F.2d 1392, 1397, 230 USPQ 849, 853 (Fed.Cir.1986) ("[T]he test for materiality is not whether there is anticipation or obviousness but, rather, what a 'reasonable examiner would consider . important in deciding whether to allow the application to issue as a patent.' ") (emphasis omitted); Gardco, 820 F.2d at 1214, 2 USPQ2d at 2019-20 ("The simple fact is that a patent may be valid and yet be rendered unenforceable for misuse or inequitable conduct. . In determining the inequitable conduct issue, a district court need not make explicit findings on whether undisclosed art anticipates the claimed invention or whether it would have rendered the claimed invention obvious under 35 U.S.C. § 103.").
Second, the materiality of intentional false statements may be independent of the claims of the patent. See, e.g., General Electro Music Corp. v. Samick Music Corp., 19 F.3d 1405, 1411, 30 USPQ2d 1149, 1154 (Fed.Cir.1994) (finding a false statement that the patentee had conducted a prior art search to be material); Rohm & Haas Co. v. Crystal Chem. Co., 722 F.2d 1556, 1571, 220 USPQ 289, 300 (Fed.Cir.1983) ("[T]here is no room to argue that submission of false affidavits is not material."); see also 18 U.S.C. § 1001 (1994) (making intentionally false statements to federal agencies punishable by fines and/or imprisonment of up to five years). Accepting PerSeptive's argument that the narrowing of the claims here renders immaterial the false statements misdirects the focus of the inquiry: the issue is not inventorship per se, but misinformation about inventorship. The district court found that the named inventors intentionally presented falsehoods and omissions to the PTO on the subject of inventorship. There is no clear error in the -district court's finding that these statements were material.
C
Our final question is whether the district court abused its discretion in holding the patents unenforceable. See, e.g., Critikon, 120 F.3d 1253, 1255, 43 USPQ2d 1666, 1668 (stating that the ultimate conclusion of inequitable conduct is reviewed for abuse of discretion). To recap, the district court found at least five specific instances of intentional falsehoods, misrepresentations, and omissions to the PTO. We have concluded that there is no clear error in these findings. The district court also found that these falsehoods, misrepresentations and omissions were all directed towards a central issue — whether the named inventors were the sole inventors— and that this issue (inventorship) was material. Again, there is no clear error in these findings. Given the absence of clear error in the factual findings on which the district court's judgment stands, we cannot conclude that the district court abused its discretion in determining that the behavior of the applicants constituted inequitable conduct. Accordingly, we affirm the district court's holding of inequitable conduct.
COSTS
No costs.
AFFIRMED
. Eventually, however, the relationship ended: the district court found that after the named inventors surprised Polymer Labs by filing for a patent on the properties exhibited by the Polymer Labs particles (contradicting earlier assurances that such a patent would not be sought), PerSeptive announced to Polymer Labs that it would file suit if Polymer Labs sold their particles to anyone but Per-Septive. See PerSeptive II, slip op. at 97.
. This standard reflects an older PTO rule in effect at the time the instant patents were prosecuted; the current PTO rule defines materiality differently. See Nobelpharma AB v. Implant Innovations, Inc., 141 F.3d 1059, 1070 n. 8, 46 USPQ2d 1097, 1107 n. 8 (Fed.Cir.1998) (citing Critikon, Inc. v. Becton Dickinson Vascular Access, Inc., 120 F.3d 1253, 1257, 43 USPQ2d 1666, 1669-70 (Fed.Cir.1997) (quoting 37 C.F.R. § 1.56(b)(2)(ii) (1996))). As the district court found, the intentional falsehoods and omissions in this case would be plainly material under the newer PTO rule as well. See 37 C.F.R. § 1.56(b)(2)(i)-(ii) (1999) (''[Ijnformation is material to patentability when . [i]t refutes, or is inconsistent with, a position the applicant takes in [a]sserting an argument of patentability."); see also Response to Office Action, S/N 376,885, Aug. 1990, at 9-11 (describing the nature of the relationship between the named inventors and Polymer Labs).