Burlington Industries, Inc. v. Dayco Corporation
849 F.2d 1418 (1988)
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Rule of Law:
A finding of inequitable conduct requires clear and convincing evidence of a specific intent to mislead the Patent and Trademark Office (PTO). Summary judgment is improper on an inequitable conduct claim when the evidence, viewed in the light most favorable to the non-movant, supports a reasonable inference of mistake, confusion, or gross negligence rather than a deliberate intent to deceive.
Facts:
- James N. McGee, an employee of Burlington Industries, invented an improved V-belt cover fabric.
- The invention involved running a fabric through a solution to impregnate yarn bundles and encapsulate the individual fibers within those bundles.
- In the patent application, McGee's attorney, Robert A. Vanderhye, used inconsistent terminology, sometimes describing the process as impregnating 'yarn bundles' and at other times as impregnating 'the individual fibers.'
- This distinction was critical, as a claim to impregnate individual fibers helped overcome a prior art rejection by the patent examiner.
- The final issued patent contained these conflicting descriptions throughout its specifications and claims.
- Vanderhye later stated in an affidavit that he used the phrases interchangeably and considered 'impregnating the individual fibers' to be a 'shorthand' for the more complex concept, denying any intent to mislead.
Procedural Posture:
- The patent holder, Burlington Industries, Inc., presumably sued another party for patent infringement in a U.S. District Court (trial court).
- The defendant filed a motion for summary judgment, arguing the patent was unenforceable due to inequitable conduct during prosecution, among other grounds.
- The trial court granted the motion for summary judgment on the issue of inequitable conduct, holding the patent unenforceable.
- The trial court denied summary judgment on the separate issues of obviousness and noninfringement.
- Burlington Industries, Inc. (appellant) appealed the trial court's grant of summary judgment on inequitable conduct to the U.S. Court of Appeals for the Federal Circuit.
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Issue:
Is it proper for a court to grant summary judgment finding a patent unenforceable for inequitable conduct based on inconsistent language in the patent application, where the evidence could support an inference of mistake or confusion rather than a specific intent to deceive the PTO?
Opinions:
Majority - Nichols, Senior Circuit Judge.
No. Summary judgment finding a patent unenforceable for inequitable conduct is improper where the evidence does not eliminate all triable issues of fact regarding the applicant's intent to deceive. A finding of inequitable conduct requires proof of intent to mislead, which cannot be automatically inferred from confusing or inconsistent language in a patent application. The court reasoned that on a motion for summary judgment, all evidence must be viewed in the light most favorable to the non-moving party, Burlington. Here, the inconsistent language, while problematic, could plausibly be interpreted as the result of confusion or poor draftsmanship ('elegant variation') by the patent attorney, rather than a deliberate scheme to deceive the patent examiner. The court found it was a 'permissible inference that both the applicant’s attorney and the examiner were alike confused.' Because a reasonable inference of innocent mistake existed alongside the inference of deceit, a genuine issue of material fact regarding intent remained, making summary judgment inappropriate. The court emphasized that inequitable conduct must be proven by clear and convincing evidence at trial, and a summary judgment finding a reputable attorney guilty of such conduct over his denials should be 'rare indeed.'
Analysis:
This decision reinforces the high evidentiary standard for proving inequitable conduct in patent litigation, specifically the requirement of proving a specific 'intent to deceive.' It serves as a strong caution to district courts against granting summary judgment on this issue, as questions of intent and credibility are generally reserved for the trier of fact. The court's opinion, particularly its characterization of routine inequitable conduct charges as a 'plague,' has had a lasting impact, discouraging litigants from asserting such claims without substantial evidence and signaling that the Federal Circuit will scrutinize such findings closely.
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