Court Opinion

ID: 9477693
Source: CourtListenerOpinion
Date Created: 2023-08-05 06:28:54.598897+00
Date Added: 2024-06-11T17:45:59.839503
License: Public Domain

*810DAVIS, Circuit Judge,
dissenting.
I would affirm because, in my view, Mr. Agata was guilty at least of gross negligence and therefore of inequitable conduct toward the Patent and Trademark Office (PTO).
1.The record facts (unchallenged by the majority) show the following: Shortly after the original application was filed with the PTO (in January 1974), Mr. Daniel (the American patent attorney prosecuting the application before the PTO) wrote to Mr. Agata (the Japanese patent agent) two letters, each cautioning that a newly-found (but prior) disclosure of a compound within the scope of the application’s claims would invalidate those claims. Such material pri- or art was disclosed in January 1975 and soon became known to one of the inventors (Ajisawa) who specifically asked Mr. Agata whether it was necessary to call that prior art to the attention of the PTO. Agata advised that it was not necessary to do so. At that time Agata affirmatively considered that prior art as material. The reasons later given by Mr. Agata were that (a) in Japan there is no such requirement to reveal prior art and (b) Agata’s knowledge of U.S. patent practice was limited. He has also admitted, however, that for U.S. patent applications “he would rely on United States Attorneys for their knowledge of U.S. patent practice.” Nevertheless he did not, at the time, contact Mr. Daniel for advice with respect to disclosure of this prior art (or even tell Daniel of the newly-found existence of this prior art). The patent issued in February 1976, and it was only thereafter that this prior art was disclosed to the PTO in connection with the reissue proceeding. Before the issuance of the patent, there was correspondence between Messrs. Daniel and Agata about voluntary amendments to the U.S. application’s claims, and therefore Agata knew that such a voluntary amendment (correcting a claim that had been too broadly or inartfully drafted) was permissible in U.S. patent practice.
2. For me, Agata’s conduct, in failing to take up the matter with the U.S. patent prosecutor, before the patent issued, amounted to gross negligence (at the very least). He was an experienced Japanese patent practitioner and he knew the newly-discovered prior art was material. He had been specifically asked by one of the inventors whether he should report the new disclosure to the PTO. He knew that his understanding of U.S. patent practice was limited. He knew he should rely on Mr. Daniel for knowledge of U.S. patent practice. He knew that voluntary amendments restricting over-broad claims (in the application) were allowable in U.S. patent practice, and he had been warned about the effect (during prosecution) of disclosure of compounds within the scope of the then claims. Nevertheless he did nothing, before the patent issued, to alert either Mr. Daniel or the PTO. The PTO considered all this to reveal gross negligence on Agata’s part — and I agree that it was so shown by clear and convincing evidence.
3. “Gross negligence” is one form of inequitable conduct specified in the July 1982 patent rule embodied in 37 C.F.R. § 1.56(d), and this court has accepted that foundation for showing the proper measure of intent, especially where, as here, there is a high level of materiality.1 See Specialty Composites v. Cabot Corp., 845 F.2d 981, 993 (Fed.Cir.1988); Akzo, N.V. v. E.I. DuPont de Nemours, 810 F.2d 1148, 1153, 1 USPQ2d 1704, 1708 (Fed.Cir.1987); In re Jerabek, 789 F.2d 886, 891, 229 USPQ 530, 533 (Fed.Cir.1986); J.P. Stevens & Co. v. Lex Tex Ltd., 747 F.2d 1553, 1560, 223 USPQ 1089, 1092 (Fed.Cir.1984), cert. denied, 474 U.S. 822, 106 S.Ct. 73, 88 L.Ed.2d 60 (1985); Driscoll v. Cebalo, 731 F.2d 878, 884-85, 221 USPQ 745, 751 (Fed.Cir.1984); American Hoist & Derrick Co. v. Sowa & Sons, Inc., 725 F.2d 1350, 1363, 220 USPQ 763, 773 (Fed.Cir.); cert. denied, 469 U.S. 821, 105 S.Ct. 95, 83 L.Ed.2d 41 (1984).
4. The majority seems to suggest that in 1975-76 the requirements for finding inequitable conduct were stricter and did *811not encompass “gross negligence (without more). However, the March 1977 version of 37 C.F.R. 1.56 expressly referred to “gross negligence” as a basis for a determination of inequitable conduct. In addition, our precedents reiterate that the later versions of Rule 56 generally embody the PTO policy as it earlier existed. See In re Clark, 522 F.2d 623, 627, 187 USPQ 209, 212-13 (CCPA 1975); Driscoll v. Cébalo, 731 F.2d at 884-85, 221 USPQ at 750-51, and cases cited; Argus Chemical Corp. v. Fibre Glass-Evercoat Co., 759 F.2d 10, 13-14, 225 USPQ 1100, 1102 (Fed.Cir.), cert. denied, 474 U.S. 903, 106 S.Ct. 231, 88 L.Ed.2d 230 (1985).2 In particular, it was plain, in 1975-76 as today, that prior art of the high level of materiality of the prior art in this case should have been disclosed to the PTO.
5. Here, too, as in Jerabek, 789 F.2d at 892, 229 USPQ at 534, “[balancing materiality and intent — both properly found to have existed in high measure — [I] must conclude that ‘inequitable conduct’ occurred through the gross negligence of [Mr. Agata] in failing to disclose to the PTO [or to U.S. counsel] a very significant reference.”

. In this case the Board said: "The materiality of the undisclosed prior art evidence in the present case was incontrovertible since lack of novelty is a bar to patentability in virtually every patent statute in the world.” This factual finding must be upheld because it is not clearly erroneous. In re Jerabek, 789 F.2d 886, 889-90, 229 USPQ 530, 532-33 (Fed.Cir.1986).

. There has been some challenge to the PTO’s conclusion that it was merely codifying prior practice (16 AIPLA QJ. 13-15, 76-81, 134-38 (1988)) but we are bound — until overruled by the court in banc — by the holdings of our precedents. In any event, the 1977 regulation, almost contemporaneous with Agata’s refusal to inform the PTO about the newly discovered prior art, explicitly included "gross negligence” as a significant component of inequitable conduct.