The Federal Circuit affirmed that district court's ruling that the patents are unenforceable due to inequitable conduct arising from failure to disclose an offer for sale of the invention more than one year prior to the critical date.
Specifically, the Federal Circuit held that the accused infringer must prove, in order to prevail on a claim of inequitable conduct in a patent case, that the patentee: i) knew of the prior commercial sale; ii) knew that it was material; and iii) made a deliberate decision to withhold it. Further, the Federal Circuit held that the district court correctly determined that: i) CleanTech knew the offer for sale threatened its chances of patenting its ethanol oil recovery method; ii) the inventors and attorneys withheld evidence of successful testing in 2003 and made false representations by implying that the invention was not reduced to practice until 2004; iii) CleanTech and the attorneys “threatened” Agri-Energy (to whom the offer for sale was made) to coerce its support regarding the critical date for the patents-in-suit, after the July 2003 Proposal (i.e., the offer for sale) surfaced and during the pendency of the patents; iv) the inventors and attorneys made a “patently false” statement in one of the declarations, by claiming the July 2003 Proposal was delivered to Agri-Energy after the critical date; and v) the inventors’ and the attorneys’ failure to correct the false declaration in the ’484 patent prosecution was “strong evidence of intentional deceit."
Read the case here.
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