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PARA GEAR EQUIP. CO., INC. v. SQUARE ONE PARACHUTES

September 14, 2005.

PARA GEAR EQUIPMENT CO., INC., an Illinois corporation, Plaintiff,
v.
SQUARE ONE PARACHUTES, INC., a California corporation; and ANTHONY J. DOMENICO, a California resident, Defendants.



The opinion of the court was delivered by: JOHN DARRAH, District Judge

MEMORANDUM OPINION AND ORDER

Plaintiff, Para Gear Equipment Co., Inc., filed a Complaint for Declaratory Judgment against Defendants, Square One Parachutes, Inc. and Anthony J. Domenico. The Complaint contains three counts, alleging the patent at issue is unenforceable (Count I) and invalid (Count II) and alleging lack of infringement by Para Gear (Count III). Presently before the Court is Para Gear's Motion for Summary Judgment.

BACKGROUND

  In December 2003 and January 2004, Square One, through letters from its attorney, charged Para Gear with infringement of U.S. Patent No. Des. 381,886 ("`886 Patent"). (Plaint.'s 56.1(a)(3) Statement ¶ B-2).*fn1 The '886 patent was issued on August 5, 1997, to the inventor, Anthony J. Domenico, who assigned the patent to Square One. (Id., ¶ C-1). The '886 patent's sole claim is for "[t]he ornamental design for a rescue knife, as shown." (Id., ¶ C-3). The December 1992, January 1993, February 1993, March 1993, April 1993, May 1993, and June 1993 issues of Parachutist magazine contain an advertisement by Square One Sales & Service, stating, in part: "New color catalogue available February, 1993. Call today to receive your copy." (Plaint.'s 56.1(a)(3) Statement ¶¶ C-10-C-16). The July 1993 issue of Parachutist contains an advertisement by Square One, stating, in part: "New 150 Page Color Catalog Now Shipping — Just $5.00." (Id., ¶ C-17).

  The Square One 1993/94 Catalog contains photographs of other hook knives sold by Square One, including a hook knife identified as "Deluxe Metal Knife Item No. 20200" and a hook knife identified as "Jack The Ripper Hook Knife Item No. 2023." (Plaint.'s 56.1(a)(3) Statement ¶¶ C-21-22). A portion of the 1993/94 Catalog page containing photographs of the hook knives appeared in an advertisement of the August 1993 issue of Parachutist. (Id., ¶ C-23).

  Square One sold 128 Square One Item No. 20200 hook knives in 1993 and 166 in 1994. (Plaint.'s 56.1(a)(3) Statement ¶¶ C-24-25). Domenico knew that Square One commenced selling Item No. 20200 in mid to late 1992. (Id., ¶ C-26). Domenico also knew that the 1993/94 Catalog was most likely printed in 1993. (Id., ¶ C-32).

  Para Gear received a Square One 1993/94 catalog in the summer of 1993. (Plaint.'s 56.1(a)(3) Statement ¶ C-27). Para Gear purchased a hook knife identified as Item No. 20200 that same summer. (Id., ¶ C-28). The hook knife identified as Item No. 20200 in the 1993/94 Catalog purchased by Para Gear in 1993 has the similar outside shape of Figure 2 of the '886 patent, except that Figure 2 of the patent shows a double blade, whereas, Item 20200 has a single blade. (Id., ¶ C-33). The Jack the Ripper Hook Knife Item No. 2023 of the 1993/94 Catalog is shown with double blades. (Id., ¶ C-34). Aeroplay is another hook knife that was offered for sale in the United States prior to November 24, 1994. (Id., ¶ C-56).

  On December 19, 1995, Domenico signed a patent application containing the following language: "I acknowledge the duty to disclose information which is material to the examination of this application in accordance with Section 1.56(a) of Title 37 of the Code of Federal Regulations." (Plaint.'s 56.1(a)(3) Statement ¶ C-35). The patent application, which matured into the '886 patent, was filed in the Patent and Trademark Office ("PTO") on December 22, 1995. (Id., ¶ C-37). On March 21, 1996, Domenico's attorney filed the '886 patent application and an Information Disclosure Statement ("IDS") in the PTO. (Id., ¶ C-38). The March 21, 1996 Information Disclosure Statement was the only IDS filed in the '886 patent application. The IDS lists the following U.S. Patents: 1,472,826; 3,370,163; 4,783,867; 4,918,775; 4,944,392, and 5,313,376. No other prior art was listed. (Id., ¶ C-39).

  None of the patents cited in Domenico's IDS disclose a hook knife. (Plaint.'s 56.1(a)(3) Statement ¶ C-40). Domenico's IDS does not disclose any part of the 1993/94 Catalog, Item 20200, or any knife offered for sale by Square One prior to December 22, 1994. (Id., ¶¶ C-41-45).

  On June 10, 1996, the patent examiner issued an Examiner's Action in the '886 application wherein he cited eleven United States patents. (Plaint.'s 56.1(a)(3) Statement ¶ C-48). On December 23, 1996, Domenico filed a Supplemental Declaration in the '886 patent application. (Id., ¶ C-50). Domenico did not disclose any additional prior art outside that already disclosed in the previously filed IDS. (Id., ¶ C-51). The application underlying the '886 patent was Domenico's first effort at patenting one of his designs. (Def.'s 56.1(B)(3) Statement ¶ 4). ANALYSIS

  Summary judgment is proper if "the pleadings, depositions, answers to interrogatories, and admissions on file, together with affidavits, if any, show that there is no genuine issue as to any material fact." Fed.R.Civ.P. 56(c); see also Celotex Corp. v. Catrett, 477 U.S. 317, 322-23 (1986). All the evidence and the reasonable inferences that may be drawn from the evidence are viewed in the light most favorable to the nonmovant. Miller v. American Family Mutual Ins. Co., 203 F.3d 997, 1003 (7th Cir. 2000). Summary judgment may be granted when no "reasonable jury could return a verdict for the nonmoving party". Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986).

  Para Gear argues that the '886 patent is unenforceable because Domenico engaged in inequitable conduct by failing to disclose the 20200 hook knife and the 1993/94 Catalog that depicted this and other hook knives.

  Failure to prosecute a patent application with candor, good faith, and honesty constitutes inequitable conduct. See Molins PLC v. Textron, Inc., 48 F.3d 1172, 1178 (Fed. Cir. 1995) (Molins). The court undertakes a two-step analysis in determining whether inequitable conduct occurred. GFI, Inc. v. Franklin Corp., 265 F.3d 1268, 1273 (Fed. Cir. 2001) (GFI). First, the court determines whether there has been an affirmative misrepresentation of material fact — a failure to disclose material information or a submission of false material information, coupled with an intent to deceive. See Semiconductor Energy Lab. Co. v. Samsung Elect. Co., 204 F.3d 1368, 1373 (Fed. Cir. 2000) (Samsung). The party asserting the defense must demonstrate by clear and convincing evidence that the information was both material and that the conduct was intended to deceive. See Samsung, 204 F.3d at 1373. Second, the court weighs the materiality and intent to deceive in light of all the circumstances to determine whether the patent applicant's conduct is so culpable to render the patent unenforceable. See GFI, 265 F.3d at 1273.

  Because the presently disputed patent was filed after March 16, 1992, materiality is determined by the current version of PTO Rule 56, rather than the pre-1992 version of the rule. See Purdue Pharma L.P. v. Endo Pharmaceuticals Inc., 410 F.3d 690, 696 (Fed. Cir. 2005) (Purdue); Bruno Indep. Living Aids, Inc., 394 F.3d 1348, 1352-53 (Fed. Cir. 2005) (Bruno). Information is "material" if:
[I]t is not cumulative to information already of record or being made of record in the application, and
(1) It establishes, by itself or in combination with other information, a prima facie case of unpatentability of a claim; or
(2) It refutes, or is inconsistent with, a position the applicant takes in:
(i) Opposing an argument of unpatentability relied upon by the Office, or
(ii) Asserting an argument of patentability.
37 C.F.R. § 1.56(b)(2004). "Materiality is not limited to prior art but instead embraces any information that a reasonable examiner would be substantially likely to consider important in deciding whether to allow ...

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