The opinion of the court was delivered by: James F. Holderman, District Judge
MEMORANDUM OPINION AND ORDER REGARDING PLAINTIFF'S MOTION UNDER 35 U.S.C. § 285 FOR ATTORNEYS' FEES AND COSTS
Plaintiff Chatsworth Products, Inc. ("Chatsworth") filed this lawsuit on April 26, 2005 against defendant Panduit Corporation ("Panduit"), seeking a declaratory judgment that Panduit's patent number 6,884,942 ("'942 patent") was invalid. Panduit with its answer filed a counterclaim alleging infringement of the '942 patent by Chatsworth. The parties reached a settlement in this case on February 7, 2006. With the consent of the parties, this court entered an order on March 15, 2006, dismissing Panduit's counterclaim with prejudice. In that same order, Chatsworth's claims for declaratory judgment were dismissed without prejudice for lack of subject matter jurisdiction. (Dkt. No. 67.) Before the court is Chatsworth's motion for attorneys' fees and costs pursuant to 35 U.S.C. § 285. (Dkt. No. 73.) For the reasons stated below, that motion is denied.
The key issue raised by Chatsworth's motion is whether Panduit engaged in inequitable conduct in its dealings with the Patent and Trademark Office ("PTO") when prosecuting the '942 patent by failing to disclose with intent to deceive the PTO allegedly material prior art regarding hinged covers. The '942 patent is a continuation of Panduit's patent number 6,766,093 ("'093 patent"). The claims in the two patents are for a mounted cable manager with a "front cable routing section" that includes "a plurality of spaced fingers" and a "removable cover" that "may be hingedly connected." (Dkt. No. 73, Exs. 1, 9.) In other words, the patents are for a mounted cable manager with a hinged cover that attaches to the cable manager's fingers.
A. '093 Patent and Related Litigation, Case No. 04 C 4765
The '093 patent was the subject of earlier, related litigation in case no. 04 C 4765 filed in this district court by Panduit against Chatsworth for alleged infringement on July 21, 2004, the day after the '093 patent issued. Panduit v. Chatsworth, No. 04 C 4765. During the discovery phase of case no. 04 C 4765, Chatsworth identified on August 11, 2004 an installation sheet ("Early Installation Instructions") published by Panduit for distribution along with hinged covers for its cable managers as early as June 1999 (Pl. Mot. Ex. 4, hereinafter "Ex. 4"). (Pl. Mot. Ex. 11.) Chatsworth also identified on September 3, 2004 a prior Panduit patent, patent number 6,437,243 ("'243 patent"), (Pl. Mot. Ex. 20, hereinafter "Ex. 20"), which described a claim for a cable manager with a hinged cover attachable to the cable manager's "duct fingers." (Pl. Mot. Exs. 11.) Panduit promptly disclosed both of these sources of prior art to the PTO on August 17, 2004 and September 16, 2004 in relation to the '093 patent. (Pl. Mot. Exs. 11, 12, 14.) On September 27, 2004, Chatsworth identified another instruction sheet ("Later Installation Instructions"), (Pl. Mot. Ex. 5, hereinafter "Ex. 5"), that Panduit allegedly sent to customers as early as September 1999 along with hinged covers for its cable managers and a Product Bulletin, (Pl. Mot. 3, hereinafter "Ex. 3"), with images and descriptions of the hinged covers. (Pl. Ex. 11.)
Panduit provided only the Product Bulletin (Ex. 3) to the PTO on November 18, 2004, when Panduit filed a request that the PTO reissue the '093 patent, citing the Early Installation Instructions, and the Product Bulletin, along with several other sources. (Pl. Mot. Ex. 23.) Panduit then requested a stay of the litigation in case no. 04 C 4765 pending the outcome of the PTO's decision regarding the '093 patent. The court granted the stay on March 2, 2005. (Dkt. Nos. 53, 54 in case no. 04 C 4765.)
While case no. 04 C 4765 remained pending, Panduit filed on May 10, 2004 an application for the issuance by the PTO of its '942 patent, which was a continuation of the '093 patent. (Pl. Mot. Ex. 1.) Panduit did not submit to the PTO the hinged covers and the Later Installation Instructions (Ex. 5), although the PTO examiner is considered to have reviewed the Earlier Installation Instructions (Ex. 4) and the '243 patent (Ex. 20) since these were in the file of the parent '093 patent. Chatsworth also claims that the PTO was not provided the Product Bulletin (Ex. 3), although its own materials as well as Panduit's application to reissue the '093 patent establish that Panduit disclosed the Product Bulletin (Ex. 3) to the PTO on November 18, 2004. The PTO issued the '942 patent on April 26, 2005. In issuing the patent, the examiner stated the previously listed limitation of the front cable routing system with the "plurality of spaced fingers" and "the hinged cover rotatably attachable to the plurality of fingers" was "neither disclosed nor taught by the prior art of record, alone or in combination." (Dkt. No. 73, Ex. 2.)
The same day the '942 patent issued, April 26, 2005, Chatsworth's complaint in the present litigation was filed. As mentioned earlier, in its complaint, Chatsworth sought a declaratory judgment that the '942 patent was invalid based on Panduit's failure to disclose the prior art of its hinged covers, the Later Instructions Sheet (Ex. 5), and the Product Bulletin (Ex. 3) to the PTO. Chatsworth contended that '942 patent's earliest filing date was March 28, 2000 (based on parent patent applications), but Panduit sent out the Later Installation Instructions (Ex. 5) as early as September 1999 regarding the hinged covers and published the Product Bulletin (Ex. 3) around the same time. According to Chatsworth, the hinged covers, the Later Installation Instructions (Ex. 5), and the Product Bulletin (Ex. 3) were materially relevant prior art that should have been disclosed to the PTO.
Two months later, on June 15, 2005, Panduit filed a request for reexamination of the '942 patent, at which point Panduit disclosed all the remaining prior art, including the Later Installation Instructions. Panduit, however, did not provide the PTO the Early Installation Instructions (Ex. 4) or the '243 patent (Ex. 20), in relation to the '942 patent reexamination because those materials were disclosed in the reexamination of the '093 parent patent to the '942 patent. The Product Bulletin (Ex. 3), according to this court's review of the record (Pl. Mot. Exs. 11, 23), had been disclosed to the PTO on November 14, 2004. The parties appear to agree that, at the latest, the Product Bulletin (Ex. 3) was disclosed to the PTO along with the Later Installations Instructions (Ex. 5) on June 15, 2005.
On August 25, 2005, the PTO granted Panduit's request for reexamination, stating that "at least the publications of the 'PAN-NET Cable Management Systems Hinged Covers' [Product Bulletin, Ex. 3] and the "Panduit Corp. 1999 Installation Instructions for Attaching the Hinged Cover to the Horizontal/Vertical Cable Management' [Later Installation Instructions, Ex. 5] raise a substantial new question of patentability" of the '942 patent. (Pl. Mot., Ex. 7 at 1.) The PTO emphasized that the "teaching of a cable manager comprising a plurality of spaced fingers and a hinged cover rotatably attachable to the plurality of fingers was not present in the prosecution of the application" which became the '942 patent. (Id. at 2.) Panduit filed its counterclaim alleging infringement of the '942 patent on August 21, 2005, the same day the PTO granted reexamination of the '942 patent. According to the record as it exists at this time, the PTO has not yet decided whether to cancel the '942 patent.
As stated earlier, the parties agreed to settle the case on February 7, 2006. Panduit's counterclaim for infringement was dismissed with prejudice and Chatsworth's claims for declaratory judgment were dismissed for lack of subject matter jurisdiction. (Dkt. No. 67.) In addition, Panduit unconditionally ...