8 UNITED STATES DISTRICT COURT
9 NORTHERN DISTRICT OF CALIFORNIA 10 SAN JOSE DIVISION 11
12 CERTAINTEED GYPSUM, INC., Case No. 19-CV-00802-LHK
13 Plaintiff, ORDER GRANTING MOTION TO DISMISS WITH PREJUDICE 14 v. Re: Dkt. No. 127 15 PACIFIC COAST BUILDING PRODUCTS, INC., et al., 16 Defendants. 17
18 Plaintiff CertainTeed Gypsum, Inc. (“CertainTeed”) brings the instant case seeking a 19 declaratory judgment that two patents owned by Defendant Pacific Coast and Building Products 20 Inc. (“Pacific Coast”) are unenforceable due to inequitable conduct and that CertainTeed has not 21 infringed those patents. ECF No. 126 (“FAC”). Before the Court is Defendant Pacific Coast and 22 Defendant PABCO Building Products, LLC’s (“PABCO”) (collectively, “Defendants”) motion to 23 dismiss certain inequitable conduct claims in CertainTeed’s First Amended Complaint (“FAC”). 24 ECF No. 127.1 Having considered the parties’ submissions, the relevant law, and the record in 25
26 1 Defendants’ motion to dismiss contains a notice of motion that is separately paginated from the points and authorities in support of the motion. Civil Local Rule 7-2(b) requires that the notice of 27 motion and the points and authorities in support of the motion must be contained in one document with the same pagination for a total of no more than 25 pages. See Civ. Loc. R. 7-2(b). 1 this case, the Court GRANTS Defendants’ motion to dismiss with prejudice. 2 I. BACKGROUND 3 This case arises from a series of disputes between the parties involving U.S. Patent Nos. 4 10,125,492 (“the ’492 patent”), 10,123,076 (“the ’076 patent”), and 9,388,568 (“the ’568 patent”). 5 For the instant motion to dismiss, the key issue is whether Defendants engaged in inequitable 6 conduct during the prosecution of the ’492 and ’076 patents. Below, the Court describes in turn: 7 (1) the parties and the patents; (2) the parties’ disputes in the Northern District of California 8 involving the ’568 patent; (3) the prosecution history of the ’492 and ’076 patents; (4) the parties’ 9 dispute in the Western District of Arkansas involving the ’492 and ’076 patents; and (5) the 10 procedural history of the instant case. 11 A. The Parties and the Patents 12 Plaintiff CertainTeed is a Delaware corporation with its corporate headquarters in 13 Pennsylvania. FAC ¶ 15. CertainTeed manufactures and sells gypsum wallboard products, 14 including a product called the “SilentFX QuickCut.” ECF No. 87 ¶ 19. 15 Defendant Pacific Coast is a California corporation with its principal place of business in 16 California. FAC ¶ 11. Pacific Coast is the owner of the ’568, ’492 and ’076 patents. Id. ¶¶ 1, 18. 17 Defendant PABCO is a Nevada limited liability company with its principal place of business in 18 California. Id. ¶ 17. PABCO is the exclusive licensee of the ’492 and ’076 patents. Id. ¶ 19. 19 PABCO manufactures and sells gypsum wallboard products. Id. ¶ 25. 20 Each of the ’568 patent, the ’492 patent, and the ’076 patent is titled “Acoustical Sound 21 Proofing Material with Improved Fracture Characteristics and Methods for Manufacturing Same.” 22 As discussed further below, the ’492 and ’076 patents are children of the ’568 patent. Thus, the 23 three patents have identical figures, nearly identical specifications, and similar claims. 24 B. The Parties’ Disputes in the Northern District of California Involving the ’568 Patent 25 1. The 2017 Case Involving the ’568 Patent 26 On March 3, 2017, Pacific Coast filed an action against “CertainTeed Corporation” in this 27 Court (“the 2017 N.D. Cal Action”) asserting that the SilentFX QuickCut product infringed at 1 least claim 21 of the ’568 patent. FAC ¶ 31. Pacific Coast was represented in the action by 2 attorneys from the law firm Sheppard, Mullin, Richter & Hampton LLP (“Sheppard Mullin”). Id. 3 ¶ 6. Because Pacific Coast had intended to sue Plaintiff CertainTeed Gypsum, Inc. 4 (“CertainTeed”), Pacific Coast filed an amended complaint on April 21, 2017 which “remov[ed] 5 CertainTeed Corporation as a defendant and add[ed] CertainTeed Gypsum, Inc. as a named 6 defendant in its place.” Id. ¶ 32. 7 On May 5, 2017, CertainTeed filed an answer and counterclaimed that all claims of the 8 ’568 patent which use the term “scored flexural strength” are invalid for indefiniteness. Id. ¶ 33. 9 On July 28, 2017, CertainTeed sent Pacific Coast a letter explaining why the term “scored flexural 10 strength” is indefinite. Id. ¶ 34. On August 18, 2017, Jason Mueller of Sheppard Mullin 11 responded in a letter arguing that the term “scored flexural strength” is not indefinite because the 12 specification of the ’568 patent explains how to perform a “flexural strength test.” Id. ¶ 35. 13 On August 18, 2017, CertainTeed filed an amended answer. Id. The amended answer 14 reasserted CertainTeed’s indefiniteness counterclaim. Id. The amended answer also added a 15 counterclaim that claim 21 of the ’568 patent is anticipated or rendered obvious by Unexamined 16 Japanese Patent Application Publication No. 2004-42557 (“Hirata”). Id. ¶¶ 3, 35. On August 30, 17 2017, CertainTeed served invalidity contentions. Id. ¶ 36. On September 12, 2017, CertainTeed’s 18 representatives met with Pacific Coast’s representatives, including Mr. Mueller, to discuss 19 CertainTeed’s invalidity contentions. Id. ¶ 37. 20 On October 3, 2017, Pacific Coast dismissed its infringement claims without prejudice and 21 CertainTeed dismissed its counterclaims without prejudice. Id. ¶ 39. 22 2. The 2018 Case Involving the ’568 Patent 23 On January 16, 2018, Pacific Coast filed an action against CertainTeed in this Court (“the 24 2018 N.D. Cal Action”) asserting, as in the 2017 N.D. Cal. Action, that the SilentFX QuickCut 25 product infringed at least claim 21 of the ’568 patent. FAC ¶ 40. Pacific Coast was represented 26 by attorneys from Sheppard Mullin, including Mr. Mueller and Galyn Gafford. Id. ¶¶ 43, 50. 27 On February 13, 2018, CertainTeed filed an answer and counterclaims. Id. ¶ 151. As in 1 the 2017 N.D. Cal. Action, CertainTeed counterclaimed that all claims of the ’568 patent that use 2 the term “scored flexural strength” are invalid for indefiniteness and that claim 21 of the ’568 3 patent is anticipated or rendered obvious by Hirata. Id. ¶ 41. 4 On June 18, 2018, CertainTeed served invalidity contentions. Id. ¶ 46. CertainTeed’s 5 invalidity contentions “detailed how the ‘scored flexural strength’ terms are indefinite.” Id. 6 Additionally, the contentions “explained, on a limitation-by-limitation basis, that claim 21 of the 7 ’568 patent is invalid for anticipation and/or obviousness based on Hirata.” Id. 8 On August 17, 2018, CertainTeed and Pacific Coast filed a joint claim construction 9 statement which included a declaration by CertainTeed’s expert Dr. Paul Miller. Id. ¶ 48. Dr. 10 Miller’s declaration explained why, based on different test methods, the term “scored flexural 11 strength” is indefinite. Id. On September 17, 2018, Mr. Gafford deposed Dr. Miller. Id. ¶ 55. 12 On November 29, 2018, the Court held a claim construction hearing to address, among 13 other issues, the meaning of the term “scored flexural strength.” Id. ¶ 64. The same day, the 14 Court issued a claim construction order holding that the term “scored flexural strength,” as used in 15 the ’568 patent, is indefinite. See Pac. Coast Bldg. Prod., Inc. v. CertainTeed Gypsum, Inc., No. 16 18-CV-00346-LHK, 2018 WL 6268880, at *12 (N.D. Cal. Nov. 29, 2018). 17 On January 9, 2019, the Court entered a stipulated judgment holding that claim 21 of the 18 ’568 patent is invalid for indefiniteness. FAC ¶ 65. On February 11, 2019, Pacific Coast appealed 19 the Court’s invalidity determination to the Federal Circuit. See Pac. Coast Bldg. Prod., Inc. v. 20 CertainTeed Gypsum, Inc., No. 19-1524, ECF No. 1 (Fed. Cir. June 30, 2020). On June 30, 2020, 21 the Federal Circuit affirmed the Court’s invalidity determination. Pac. Coast Bldg. Prod., Inc. v. 22 CertainTeed Gypsum, Inc., 816 F. App'x 454, 455 (Fed. Cir. 2020). 23 C. Prosecution History of the ’492 and ’076 Patents 24 The applications for the ’492 and ’076 patents were filed on March 1, 2013. Each of the 25 ’492 and ’076 patents lists Sheppard Mullin as the “Attorney, Agent, or Firm” responsible for 26 prosecuting the patent. The application for the ’492 patent was a continuation of the application 27 that became the ’568 patent. The application for the ’076 patent was a divisional of the 1 application that became the ’568 patent. 2 CertainTeed alleges that Mr. Gafford and Mr. Mueller were responsible for prosecuting the 3 ’492 and ’076 patents. FAC ¶¶ 72, 76. Specifically, CertainTeed alleges that each of Mr. Gafford 4 and Mr. Mueller “was listed as an ‘Attorney/Agent’ authorized to communicate with the Patent 5 Office on Pacific Coast’s behalf regarding prosecution of the ’492 and ’076 patents.” Id. ¶¶ 73, 6 78. Similarly, “file-folder covers for the ’492 and ’076 patent prosecution files produced by 7 Pacific Coast” list both Mr. Gafford’s and Mr. Mueller’s initials. Id. ¶¶ 133–34. 8 CertainTeed’s allegations regarding Mr. Gafford show that Mr. Gafford had primary 9 responsibility for communicating with the U.S. Patent and Trademark Office (“PTO”) regarding 10 the prosecution of the ’492 and ’076 patents. Mr. Gafford “signed responses to office actions and 11 other documents in the ’492 patent prosecution . . . at least as early as October 1, 2013” and “in the 12 ’076 patent prosecution . . . at least as early as October 2, 2013.” Id. ¶¶ 83–84. 13 By contrast, CertainTeed’s allegations regarding Mr. Mueller indicate that Mr. Mueller had 14 a managerial role in the prosecution of the ’492 and ’076 patents. Mr. Mueller “was the lead 15 partner at [Sheppard Mullin] responsible for Pacific Coast as a client during prosecution of the 16 ’492 and ’076 patents.” Id. ¶ 77. Additionally, CertainTeed alleges, “[o]n information and 17 belief,” that Mr. Mueller “was Sheppard Mullin’s billing attorney and was responsible for 18 approving all time billed to Pacific Coast by Sheppard Mullin for work on the prosecution of the 19 then-pending applications for the ’492 and ’076” patents. Id. ¶ 88. 20 CertainTeed also points out that Mr. Mueller executed assignments of the applications for 21 the ’492 and ’076 patents. On February 17, 2014, Mr. Mueller submitted to the PTO assignments 22 of the applications for the ’492 and ’076 patents from PABCO to Pacific Coast. See id. ¶¶ 79–80. 23 On May 2, 2014, Mr. Mueller submitted to the PTO assignments of the applications for the ’492 24 and ’076 patents from Serious Energy, Inc. to PABCO. See id. ¶¶ 81–82. 25 On August 22, 2014, an Examiner of the PTO rejected the application for the ’076 patent 26 based on findings of obviousness and non-statutory double patenting. Final Action dated August 27 22, 2014, in U.S. App No. 13/783,179. On August 25, 2014, the Examiner rejected the application 1 for the ’492 patent for the same reasons. Final Action dated August 25, 2014, in U.S. App No. 2 13/783,165. 3 Pacific Coast appealed these rejections to the Patent Trial and Appeal Board (“PTAB”) of 4 the PTO. On May 22, 2018, the PTAB held a hearing regarding this appeal. FAC ¶ 85. Mr. 5 Gafford argued the appeal for Pacific Coast. Id. Mr. Gafford did not inform the PTAB about the 6 2018 N.D. Cal. Action or any of the arguments that had been made in that action. Id. 7 On June 11, 2018, the PTAB reversed the Examiner’s obviousness rejections and affirmed 8 the Examiner’s double patenting rejections. Decision on Appeal dated June 11, 2018, at 11, in 9 U.S. App No. 13/783,165; Decision on Appeal dated June 11, 2018, at 11, in U.S. App No. 10 13/783,179. 11 On July 19, 2018, Mr. Gafford filed with the PTO Requests for Continued Examination of 12 the applications for the ’492 and ’076 patents and Terminal Disclaimers of the patents that had 13 caused the double patenting rejections. See FAC ¶ 94. Mr. Gafford’s filings did not mention the 14 2018 N.D. Cal. Action or any of the arguments that had been made in that action. Id. ¶ 94. 15 On August 29, 2018, Mr. Gafford filed with the PTO an Amendment and Response in the 16 application for the ’492 patent. Id. ¶ 96. The Amendment and Response did not mention the 2018 17 N.D. Cal. Action or any of the arguments that had been made in that action. Id. 18 On September 12, 2018, the PTO issued a notice of allowance for the ’076 patent. Id. 19 ¶ 98. On September 13, 2018, the PTO issued a notice of allowance for the ’492 patent. Id. ¶ 100. 20 On November 13, 2018, ’492 patent issued. Id. ¶ 104. On November 20, 2018, the ’076 patent 21 issued. Id. ¶ 106. 22 D. The Parties’ Dispute in the Western District of Arkansas Involving the ’492 and ’076 Patents 23 On December 11, 2018, Pacific Coast filed an action against CertainTeed Gypsum 24 Manufacturing, Inc., Plaintiff CertainTeed’s corporate sibling, in the Western District of Arkansas 25 asserting that the SilentFX QuickCut product infringed the ’492 and ’076 patents. FAC ¶ 109. 26 Mr. Mueller and Mr. Gafford represented Pacific Coast in the action. Id. 27 1 On February 15, 2019, CertainTeed Gypsum Manufacturing filed a motion to stay the case 2 in favor of the instant case which, as discussed further below, was filed on February 14, 2019. Id. 3 On August 27, 2019, the Western District of Arkansas stayed the case pending resolution of the 4 instant case. See id.; Pac. Coast Bldg. Prods, Inc. v. CertainTeed Gypsum Mfg., Inc., Case No. 5 4:18-cv-04165-SOH, ECF No. 60 (W.D. Ark. Aug. 27, 2019). 6 E. Procedural History of the Instant Case 7 On February 14, 2019, CertainTeed filed a complaint asserting four declaratory judgment 8 claims: (1) declaratory judgment that the ’492 patent is unenforceable due to inequitable conduct; 9 (2) declaratory judgment that the ’076 patent is unenforceable due to inequitable conduct; (3) 10 declaratory judgment that the SilentFX QuickCut product does not infringe ’492 patent; and (4) 11 declaratory judgment that the SilentFX QuickCut product does not infringe the ’076 patent. ECF 12 No. 1 ¶¶ 116–43. To support the inequitable conduct claims, CertainTeed alleged that Mr. 13 Mueller and Mr. Gafford owed a duty of candor to the PTO during the prosecution of the ’492 and 14 ’076 patents. Id. ¶ 109. According to CertainTeed, Mr. Mueller and Mr. Gafford breached that 15 duty by failing to inform the PTO about the 2017 N.D. Cal. Action and the 2018 N.D. Cal Action; 16 about Dr. Miller’s declaration supporting CertainTeed’s argument that the term “scored flexural 17 strength” is indefinite as used in the ’568 patent (“the Miller Declaration”); or about CertainTeed’s 18 invalidity contentions arguing that Hirata anticipates or renders obvious claim 21 of the ’568 19 patent (“the Hirata invalidity contentions”). Id. ¶¶ 110–14. 20 On March 15, 2019, Defendants filed a motion to dismiss. ECF No. 29. Defendants’ 21 motion argued: (1) the entire case should be dismissed because the Court lacked subject matter 22 jurisdiction; (2) the inequitable conduct claims regarding Mr. Mueller should be dismissed 23 because CertainTeed did not adequately allege that Mr. Mueller owed a duty of candor to the 24 PTO; (3) the inequitable conduct claims should all be dismissed because CertainTeed did not 25 adequately allege materiality and intent to deceive; and (4) that the “first-to-file” rule required the 26 Court to stay the case in favor of Pacific Coast’s action in the Western District of Arkansas. See 27 id. In connection with their motion to dismiss, Defendants filed a request for judicial notice. ECF 1 No. 29-1. 2 On May 10, 2019, CertainTeed filed an opposition. ECF No. 41. In connection with its 3 opposition, CertainTeed filed a request for judicial notice. ECF No. 42. 4 On May 23, 2019, the Court stayed the instant case pending Pacific Coast’s appeal of the 5 Court’s invalidity determination in the 2018 N.D. Cal. Action. ECF No. 46. On August 11, 2020, 6 CertainTeed informed the Court that the Federal Circuit had affirmed the Court’s invalidity 7 determination and that the Federal Circuit’s mandate had issued. ECF Nos. 49, 50. 8 On October 2, 2020, the Court reopened the case. ECF No. 53. On October 14, 2020, 9 Defendants filed a reply in support of their motion to dismiss. ECF No. 56. 10 On January 11, 2021, Defendants answered the complaint and asserted counterclaims. 11 ECF No. 68. Defendants asserted that CertainTeed’s SilentFX QuickCut product directly 12 infringes at least claim 1 of the ’492 patent and at least claim 1 of the ’076 patent, both literally 13 and under the doctrine of equivalents. ECF No. 68, Counterclaims ¶¶ 24–30, 40–46. Defendants 14 also asserted that CertainTeed has indirectly infringed the same claims by inducing its business 15 partners and customers to make and use the SilentFX QuickCut product. Id. ¶¶ 31–39, 47–55. On 16 February 1, 2021, Defendants amended their answer and counterclaims. ECF No. 82. 17 On February 3, 2021, the parties filed a joint case management statement which informed 18 the Court that, in light of Defendants’ counterclaims asserting infringement of the ’492 and ’076 19 patents, Defendants no longer disputed that the Court has subject matter jurisdiction over 20 CertainTeed’s declaratory judgment claims. ECF No. 83 at 2. 21 On February 16, 2021, CertainTeed answered Defendants’ counterclaims and brought its 22 own counterclaims seeking a declaratory judgment that the asserted claims of the ’492 and ’076 23 patents are invalid for failing to meet the statutory requirement of nonobviousness. ECF No. 87. 24 CertainTeed also sought a declaratory judgment that several unasserted claims of both patents are 25 indefinite based on the Federal Circuit’s decision regarding the ’581 patent. Id. 26 On February 22, 2021, the parties filed a notice informing the Court that the Western 27 District of Arkansas had stayed Pacific Coast’s action asserting the ’492 and ’076 patents. ECF 1 No. 89. Accordingly, the parties stated, only Section IV.D of Defendants’ motion to dismiss 2 (regarding CertainTeed’s inequitable conduct claims) remained at issue. Id. 3 On March 9, 2021, Defendants moved to dismiss CertainTeed’s counterclaims regarding 4 the invalidity of unasserted claims. ECF No. 93. Defendants argued that the Court did not have 5 subject matter jurisdiction to consider those counterclaims. See id. On March 23, 2021, 6 CertainTeed opposed Defendants’ motion to dismiss. ECF No. 97. On March 30, 2021, 7 Defendants filed a reply in support of their motion to dismiss. ECF No. 98. 8 On April 8, 2021, CertainTeed amended its invalidity counterclaims as not to include any 9 counterclaims regarding the unasserted claims of the ’492 and ’076 patents. ECF No. 101. 10 On April 14, 2021, the Court granted Defendants’ motion to dismiss CertainTeed’s 11 inequitable conduct claims without prejudice. See CertainTeed Gypsum, Inc. v. Pac. Coast Bldg. 12 Prod., Inc., No. 19-CV-00802-LHK, 2021 WL 1405477 (N.D. Cal. Apr. 14, 2021). The Court 13 held that CertainTeed had not adequately alleged that Mr. Mueller owed a duty of candor to the 14 PTO. See id. at *6–7. Additionally, the Court held that CertainTeed did not adequately allege 15 materiality and intent to deceive. Id. at *7–10. 16 The same day, Defendants withdrew their motion to dismiss CertainTeed’ invalidity 17 counterclaims. ECF No. 102. On April 22, 2021, Defendants answered CertainTeed’s amended 18 counterclaims. ECF No. 105. 19 On May 14, 2021, CertainTeed filed the FAC. ECF Nos. 113 (redacted), 126 (unredacted). 20 On May 28, 2021, Defendants moved to dismiss the FAC. ECF No. 127 (“Mot.”). On June 18, 21 2021, CertainTeed opposed Defendants’ motion to dismiss. ECF No. 141 (“Opp.”). On July 2, 22 2021, Defendants filed a reply. ECF No. 149 (“Reply”). 23 II. LEGAL STANDARD 24 A. Motion to Dismiss Under Rule 12(b)(6) 25 “To survive a motion to dismiss, a complaint must contain sufficient factual matter, 26 accepted as true, to state a claim to relief that is plausible on its face.” Ashcroft v. Iqbal, 556 U.S. 27 662, 678 (2009) (internal citation and quotation marks removed). “A claim has facial plausibility 1 when the plaintiff pleads factual content that allows the court to draw the reasonable inference that 2 the defendant is liable for the misconduct alleged.” Id. 3 However, where a party alleges a claim based on “fraud or mistake, [the] party must state 4 with particularity the circumstances constituting fraud or mistake.” Fed. R. Civ. P. 9(b). The 5 pleadings must include “an account of the time, place, and specific content of the false 6 representations” at issue. Swartz v. KPMG LLP, 476 F.3d 756, 764 (9th Cir. 2007) (internal 7 quotation marks omitted). 8 Although inequitable conduct is “a broader concept than fraud,” inequitable conduct claims 9 “‘must be pled with particularity’ under Rule 9(b).” Exergen Corp. v. Wal-Mart Stores, Inc., 575 10 F.3d 1312, 1326 (Fed. Cir. 2009) (quoting Ferguson Beauregard/Logic Controls, Div. of Dover 11 Resources, Inc. v. Mega Sys, LLC, 350 F.3d 1327, 1344 (Fed. Cir. 2003)). Because inequitable 12 conduct claims arise when a party has intentionally deceived the PTO by misrepresenting or 13 omitting a material fact, “the pleading must identify the specific who, what, when, where, and how 14 of the material misrepresentation or omission committed before the PTO. Id. at 1328. 15 Additionally, the pleadings must include “sufficient allegations of underlying facts from which a 16 court may reasonably infer that [the party] (1) knew of the withheld material information or of the 17 falsity of the material misrepresentation, and (2) withheld or misrepresented this information with 18 a specific intent to deceive the PTO.” Id. at 1328–29. 19 B. Leave to Amend 20 Under Rule 15(a) of the Federal Rules of Civil Procedure, leave to amend “shall be freely 21 granted when justice so requires,” bearing in mind “the underlying purpose of Rule 15 to facilitate 22 decision on the merits, rather than on the pleadings or technicalities.” Lopez v. Smith, 203 F.3d 23 1122, 1127 (9th Cir. 2000) (en banc) (internal quotation marks and alterations omitted). 24 Generally, leave to amend shall be denied only if allowing amendment would unduly prejudice the 25 opposing party, cause undue delay, or be futile, or if the moving party has acted in bad 26 faith. Leadsinger, Inc. v. BMG Music Publ’g, 512 F.3d 522, 532 (9th Cir. 2008). 27 III. DISCUSSION 1 CertainTeed’s inequitable conduct claims turn on two sets of allegations. First, 2 CertainTeed alleges that each of Mr. Mueller and Mr. Gafford owed a duty of candor to the PTO 3 during the prosecution of the ’492 and ’076 patents. See ECF No. 126 ¶¶ 118–43. Second, 4 CertainTeed alleges that each of Mr. Mueller and Mr. Gafford breached his duty of candor by 5 failing to inform the PTO about: (1) the 2018 N.D. Cal. Action; (2) the Miller Declaration; and (3) 6 the Hirata invalidity contentions. See ECF No. 116 ¶¶ 144–229. 7 Defendants do not move to dismiss CertainTeed’s inequitable conduct claims entirely. 8 Defendants do not dispute that Mr. Gafford owed a duty of candor to the PTO. Additionally, 9 Defendants do not dispute that the FAC adequately alleges that the Miller Declaration should have 10 been disclosed to the PTO. 11 Instead, Defendants seek to dismiss three aspects of CertainTeed’s inequitable conduct 12 claims. First, Defendants contend that CertainTeed has not adequately alleged that Mr. Mueller 13 owed a duty of candor to the PTO. See Mot. at 5–10. Second, Defendants contend that 14 CertainTeed has not adequately alleged that the Hirata invalidity contentions should have been 15 disclosed to the PTO. See id. at 10–17. Third, Defendants contend that CertainTeed has not 16 adequately alleged that the existence of the 2018 N.D. Cal. Action should have been disclosed to 17 the PTO. See id. at 17–18. The Court begins by addressing Defendants’ argument regarding Mr. 18 Mueller. The Court then addresses Defendants’ arguments about the Hirata invalidity contentions 19 and the 2018 N.D. Cal. Action. 20 A. CertainTeed Has Not Adequately Alleged that Jason Mueller Owed a Duty of Candor 21 to the U.S. Patent and Trademark Office 22 Defendants contend that CertainTeed’s inequitable conduct claims may not rely on Mr. 23 Mueller’s conduct because CertainTeed has not adequately alleged that Mr. Mueller owed a duty 24 of candor to the PTO. Mot. at 5–10. For the reasons below, the Court agrees with Defendants. 25 “Whether inequitable conduct has been pleaded with particularity under Rule 9(b) is a 26 question governed by Federal Circuit law.” Exergen, 575 F.3d at 1318 (citing Cent. Admixture 27 Pharmacy Servs., Inc. v. Advanced Cardiac Solutions, P.C., 482 F.3d 1347, 1356 (Fed.Cir.2007)). 1 An inequitable conduct claim arises when an individual who represents a patent applicant 2 breaches the duty of candor owed to the PTO. “PTO Rule 56, codified at 37 C.F.R. § 1.56, 3 imposes on all individuals associated with the filing and prosecution of a patent application a duty 4 of candor and good faith in dealing with the PTO during the period of examination of a patent 5 application.” Avid Identification Sys., Inc. v. Crystal Imp. Corp., 603 F.3d 967, 973 (Fed. Cir. 6 2010) (citing 37 C.F.R. § 1.56(a)). In turn, “Rule 56 defines ‘individual[s] associated with the 7 filing or prosecution of a patent application’ as (1) each named inventor, (2) each attorney or agent 8 that prepares or prosecutes the application, and (3) every other person who is substantively 9 involved in the preparation or prosecution of the application and who is associated with the 10 inventor or assignee.” Id. (citing 37 C.F.R. § 1.56(c)). If one of these individuals “fails to comply 11 with his duty of candor, then that individual’s misconduct is chargeable to the applicant for the 12 patent, and the applicant’s patent is held unenforceable.” Id. 13 Thus, to state an inequitable conduct claim, a plaintiff must identify a specific individual 14 who was “substantively involved in the preparation or prosecution of the application.” See id. 15 The Federal Circuit has “read ‘substantively involved’ to mean that the involvement relates to the 16 content of the application or decisions related thereto.” Id. at 974. Thus, performing 17 “administrative or secretarial” work for a prosecution does not give rise to a duty of candor. Id. 18 In the Court’s order dismissing the original complaint, the Court held that CertainTeed 19 could not rely on Mr. Mueller’s conduct to state inequitable conduct claims because the complaint 20 contained almost no details about Mr. Mueller’s role in the prosecution of the ’492 and ’076 21 patents. Indeed, CertainTeed relied exclusively on the fact that Mr. Mueller “is a registered Patent 22 Attorney with the [PTO]” and “is listed as an ‘Attorney/Agent’ for the patent applications that 23 issued as the ’492 patent . . . and the ’076 patent.” ECF No. 1 ¶¶ 100–01. The Court held that 24 these allegations were insufficient to establish that Mr. Mueller fell into any of the categories of 25 individuals listed by 37 C.F.R. § 1.56(c). CertainTeed Gypsum, 2021 WL 1405477, at *6. By 26 contrast, the Court explained, the complaint made clear that Mr. Gafford was “substantively 27 involved in the preparation or prosecution of the action” by alleging that he “sign[ed] responses to 1 office actions and other documents.” ECF No. 1 ¶¶ 106–07. Because CertainTeed failed to allege 2 that Mr. Mueller “participated in any of these activities,” CertainTeed failed to allege that Mr. 3 Mueller owed a duty of candor to the PTO. CertainTeed Gypsum, 2021 WL 1405477, at *6. 4 The FAC provides additional details about Mr. Mueller’s role in the prosecution of the 5 ’492 and ’076 patents. Specifically, the FAC alleges that Mr. Mueller “was the lead partner at 6 [Sheppard Mullin] responsible for Pacific Coast as a client; “[o]n information and belief,” that Mr. 7 Mueller “was the billing partner responsible for the prosecution of the ’492 and ’076 patents; that 8 Mr. Mueller submitted to the PTO assignments of the applications for the ’492 and ’076 patents; 9 and that Mr. Mueller’s initials were listed on several “prosecution-related folders for the ’492 and 10 ’076 patents.” ECF Nos. 126 ¶¶ 77, 79–82, 88, 133–34. 11 However, these allegations do not show with the specificity required by Rule 9(b) that Mr. 12 Mueller was “substantively involved in the preparation or prosecution of the application[s].” Avid 13 Identification, 603 F.3d at 973 (emphasis added). Under Rule 9(b), “the pleading must identify 14 the specific who, what, when, where, and how” of the circumstances surrounding the alleged 15 inequitable conduct. Exergen, 575 F.3d at 1328. The FAC fails to identify any specific actions 16 performed by Mr. Mueller that involve the development of the “content of the application or 17 decisions related thereto.” Avid Identification, 603 F.3d at 974. Instead, the FAC identifies the 18 following actions: managing client relations, reviewing bills, and submitting application 19 assignments. Although these actions are not merely “administrative or secretarial” in nature, they 20 do not show that Mr. Mueller was involved in developing substantive arguments related to 21 patentability. Similarly, although the fact that Mr. Mueller’s initials appeared on several 22 “prosecution-related folders” indicates that Mr. Mueller performed work related to the 23 prosecution, that fact provides no information about the type of work that Mr. Mueller performed. 24 Under Rule 9(b), which requires specific allegations about the circumstances surrounding alleged 25 inequitable conduct, allegations that Mr. Mueller was involved with the prosecution in a general 26 way are insufficient. Exergen, 575 F.3d at 1328. 27 Moreover, holding Mr. Mueller liable for inequitable conduct would be inconsistent with 1 the Federal Circuit’s guidance that inequitable conduct liability should be narrowly construed. In 2 2010, the en banc Federal Circuit noted that an expansive interpretation of the inequitable conduct 3 doctrine had caused a significant increase in inequitable conduct claims. See Therasense, 649 4 F.3d at 1287–89. In turn, this increase in claims had burdened the patent system by incentivizing 5 patent prosecutors to submit excessive prior art references. Id. at 1289. Relying on these 6 observations, the Federal Circuit significantly raised the bar for finding inequitable conduct. Id. at 7 1290. Thus, although the Federal Circuit has not provided a precise test for determining whether 8 an individual was “substantively involved” in a prosecution, the Federal Circuit has provided a 9 clear principle that courts should interpret the inequitable conduct doctrine narrowly. This 10 principle weighs against holding Mr. Mueller responsible for inequitable conduct based on 11 allegations that fail to identify any particular substantive actions taken by Mr. Mueller with respect 12 to the prosecution. 13 CertainTeed’s arguments to the contrary are unpersuasive. CertainTeed contends that, “as 14 lead litigation counsel, billing partner, and relationship partner for all litigation and prosecution 15 matters, Mr. Mueller must have been substantively involved in the prosecution of the patents-in- 16 suit because this prosecution was directly related to his pending case regarding the ’568 patent.” 17 Opp. at 7. Additionally, CertainTeed contends that “Mr. Mueller must have been substantively 18 involved in the strategy behind arguments and remarks made to the Patent Office . . . because, as 19 continuations of the ’568 patent, their contents and prosecution histories were relevant to the scope 20 of the ’568 patent and the concurrent litigation.” Id. 21 However, as Defendants point out, CertainTeed “requested and obtained a prosecution bar 22 in the 2018 N.D. Cal. Action” which “prohibit[ed] Mr. Mueller and other Pacific Coast attorneys 23 who ha[d] access to CertainTeed’s highly confidential technical documents from participating in 24 ‘Prosecution/Acquisition Activity.’” Mot. at 10. Although the prosecution bar was not in place 25 for the entirety of the 2018 N.D. Cal. Action, this fact directly undermines CertainTeed’s 26 argument that Mr. Mueller must have been substantively involved in the prosecution because he 27 was involved in the 2018 N.D. Cal. Action. 1 Thus, the Court concludes that CertainTeed has failed to allege that Mr. Mueller owed a 2 duty of candor to the PTO. 3 B. CertainTeed’s Allegations Regarding the Hirata Invalidity Contentions and the 2018 N.D. Cal. Action Are Insufficient to State Inequitable Conduct Claims 4 Defendants contend that CertainTeed has not adequately alleged that either the Hirata 5 invalidity contentions or the existence of the 2018 N.D. Cal. Action should have been disclosed to 6 the PTO. Mot. at 10–18. For the reasons below, the Court agrees with Defendants. 7 As noted, “[w]hether inequitable conduct has been pleaded with particularity under Rule 8 9(b) is a question governed by Federal Circuit law.” Exergen, 575 F.3d at 1318 (citing Cent. 9 Admixture Pharmacy Servs., 482 F.3d at 1356). 10 After identifying an individual who owed a duty of candor, a plaintiff must allege two 11 elements to state an inequitable conduct claim: “(1) [the individual] made an affirmative 12 misrepresentation of a material fact, failed to disclose material information, or submitted false 13 information; and (2) the individual did so with a specific intent to deceive the PTO.” Id. at 1327 14 n.3. “[T]he materiality required to establish inequitable conduct is but-for materiality.” 15 Therasense, Inc. v. Becton, Dickinson and Co., 649 F.3d 1276, 1291 (Fed. Cir. 2011). Thus, “in 16 assessing the materiality of [information], the court must determine whether the PTO would have 17 allowed the claim if it had been aware of the [information].” Id. “However, a withheld otherwise 18 material [piece of information] is not material for the purposes of inequitable conduct if it is 19 merely cumulative to that information considered by the examiner.” Digital Control, Inc. v. 20 Charles Mach. Works, 437 F.3d 1309, 1319 (Fed. Cir. 2006) (emphasis in original). 21 Defendants argue that the Hirata invalidity contentions were cumulative to the material 22 considered by the PTO and that CertainTeed has not adequately alleged a specific intent to deceive 23 the PTO with respect to the Hirata invalidity contentions. See Mot. at 10–17. Additionally, 24 Defendants argue that knowledge of the 2018 N.D. Cal. Action would not have been material. Id. 25 at 17–18. The Court addresses these arguments in turn. 26 1. CertainTeed Fails to Allege that the Hirata Invalidity Contentions Would Not 27 Have Been Cumulative of the Information Already Before the PTO 1 The Hirata invalidity contentions “explained, on a limitation-by-limitation basis, that claim 2 21 of the ’568 patent is invalid for anticipation and/or obviousness based on Hirata.” FAC ¶ 46. 3 Defendants contend that the Hirata invalidity contentions would have been cumulative of the 4 information already before the PTO because “the Hirata reference” was itself “disclosed to the 5 PTO.” Mot. at 11. The Court agrees with Defendants. Accordingly, the Court need not address 6 Defendants’ argument that CertainTeed has not adequately alleged that Mr. Gafford had an intent 7 to deceive the PTO regarding the Hirata invalidity contentions. Mot. at 11–17. 8 As discussed, an applicant for a patent has no duty to disclose cumulative information. 9 Digital Control, 437 F.3d at 1319. Thus, a plaintiff who brings an inequitable conduct claim must 10 allege with particularity why certain omitted information would have added value to the 11 information already before the PTO. For example, if a plaintiff brings an inequitable conduct 12 claim based on an allegation that a patent applicant withheld a prior art reference, the plaintiff 13 must “identify the particular claim limitations, or combination of claim limitations, that are 14 supposedly absent from the information of record.” Exergen, 575 F.3d at 1329. 15 In the Court’s order dismissing CertainTeed’s original complaint, the Court held that “any 16 contentions regarding Hirata necessarily would have been cumulative of Hirata itself.” See 17 CertainTeed Gypsum, 2021 WL 1405477, at *8. Indeed, the original complaint made no effort to 18 explain why the Hirata invalidity contentions were non-cumulative. Instead, the original 19 complaint merely alleged that the Hirata invalidity contentions “are material to at least claim 1 of 20 the ’492 and ’076 patents, as each claim is very similar to claim 21 of the ’568 patent.” ECF No. 21 1 ¶ 89. 22 CertainTeed argues that, in contrast to the original complaint, the FAC specifically alleges 23 that the Hirata invalidity contentions “provide a limitation-by-limitation mapping that shows 24 exactly why the very similar claims of the ’568 patent are invalid and additional technical 25 information, none of which was included, submitted, or otherwise considered by the Patent 26 Office.” Opp. at 16. For example, the FAC alleges that the Hirata invalidity contentions 27 “demonstrate that the Hirata prior art reference discloses the following requirement in claim 1 of 1 the ’492 patent: ‘a first gypsum board having two surfaces, said two surfaces including a first 2 outer clad surface.’” FAC ¶ 203. 3 Additionally, CertainTeed argues that the FAC provides a “concrete example of non- 4 cumulativeness.” Opp. at 16. Specifically, the FAC alleges that Pacific Coast filed continuations 5 of the applications that issued as the ’492 and ’076 patents and that the claims of these 6 continuation applications largely resembled the claims of the ’492 and ’076 patents. FAC ¶¶ 191– 7 94. According to the FAC, Pacific Coast submitted the Hirata invalidity contentions to the PTO 8 during the prosecution of these continuation applications, and the PTO rejected the applications 9 “based on the Hirata prior art reference.” See id. ¶¶ 191–97. According to CertainTeed, these 10 allegations show that the PTO would have analyzed the applications for the ’492 and ’076 patents 11 differently if the PTO had access to the Hirata invalidity contentions. Opp. at 16. 12 Although the FAC makes plausible that the PTO’s analysis may have been different if the 13 PTO had the Hirata invalidity contentions, CertainTeed provides no reason for the Court to revisit 14 its conclusion that “any contentions regarding Hirata necessarily would have been cumulative of 15 Hirata itself.” See CertainTeed Gypsum, 2021 WL 1405477, at *8. As discussed, “the materiality 16 required to establish inequitable conduct is but-for materiality.” Therasense, 649 F.3d at 1291. 17 Under this standard, it is not enough for a plaintiff to allege that a certain piece of information 18 would have aided the PTO or would have weighed against patentability. Instead, the plaintiff 19 must plausibly allege that “the PTO would not have allowed a claim had it been aware” of the 20 information. Id. (emphasis added). Where the omitted information is a specific argument about a 21 prior art reference and that prior art reference already is in front of the PTO, it is not plausible that 22 the omitted information would have been “but-for material.” 23 Thus, the Court concludes that the Hirata invalidity contentions would have been 24 cumulative of the information already before the PTO. 25 2. CertainTeed Fails to Allege that Knowledge of Pacific Coast’s Prior Action Would Have Been Material and Non-Cumulative 26 CertainTeed alleges that knowledge of the 2018 N.D. Cal. Action would have been 27 1 material to the prosecution of the ’492 and ’076 patents. FAC ¶¶ 217–29. Defendants contend 2 that such information would have been cumulative because the only specific filings from the 2018 3 N.D. Cal. Action that CertainTeed identifies as material are the Miller Declaration and the Hirata 4 invalidity contentions. Mot. at 17. The Court agrees with Defendants. 5 In the Court’s order dismissing CertainTeed’s original complaint, the Court concluded that 6 CertainTeed’s allegations regarding the 2018 N.D. Cal. Action were insufficiently specific to meet 7 the requirements of Rule 9(b). The Court explained that CertainTeed “fail[ed] to allege why the 8 PTO would not have allowed the claims for [the ’492 and ’076 patents] had it been aware of the 9 existence of the N.D. Cal. Actions, as opposed to specific filings or documents from those 10 lawsuits.” CertainTeed Gypsum, 2021 WL 1405477, at *9. Instead, the original complaint made 11 repeated references to “filings, contentions, and correspondence” without “stat[ing] with 12 specificity which ‘filings, contentions, and correspondence’ . . . Defendant had a duty to disclose 13 to the PTO.” Id. 14 Although the FAC adds further details, the FAC identifies only two specific “filings, 15 contentions, and correspondence” that the PTO would have discovered: the Miller Declaration and 16 the Hirata invalidity contentions. Specifically, CertainTeed alleges that, “had the Patent Office 17 been informed of the existence of the 2018 N.D. Cal. Action, the Examiner would have known the 18 schedule for claim construction, reviewed the claim construction briefs, learned about 19 CertainTeed’s indefiniteness arguments and identified the Miller Declaration.” FAC ¶ 223. 20 Additionally, the FAC alleges that the “Examiner likely also would have requested other 21 documents from the N.D. Cal. Action, such as the Hirata Invalidity Contentions.” Id. 22 As discussed above, CertainTeed has not adequately alleged that the Hirata invalidity 23 contentions would have been material to the prosecution of the ’492 and ’076 patents because the 24 Hirata invalidity contentions would have been cumulative of the Hirata prior art reference itself, 25 which was before the PTO. See pp. 15–17, supra. Accordingly, the fact that the Hirata invalidity 26 contentions were filed in the 2018 N.D. Cal. Action does not render knowledge of the 2018 N.D. 27 Cal. Action material. 1 Without the Hirata invalidity contentions, CertainTeed’s only remaining argument is that, 2 had the PTO known about the 2018 N.D. Cal. Action, the PTO would have discovered the Miller 3 || Declaration. However, the FAC independently alleges that Pacific Coast’s failure to disclose the 4 Miller Declaration constitutes inequitable conduct, see FAC J] 144-81, and Defendants concede 5 || that those allegations are sufficient to state an inequitable conduct claim, see Reply at 12-13. 6 || Accordingly, CertainTeed has a live inequitable conduct claim based on the Miller Declaration 7 || that is independent of CertainTeed’s claim regarding knowledge of the 2018 N.D. Cal. Action. 8 Thus, even if CertainTeed is correct that knowledge of the 2018 N.D. Cal. Action would have led 9 the PTO to find the Miller Declaration, Pacific Coast’s failure to disclose the 2018 N.D. Cal. 10 || Action does not provide CertainTeed with an additional inequitable conduct claim. 11 || IV. CONCLUSION 12 Because CertainTeed has failed to cure the deficiencies in the original complaint, granting 5 13 leave to amend would be futile and cause undue delay. See Leadsinger, 512 F.3d at 532. 14 || Moreover, requiring Defendants to file yet another motion to dismiss would be unduly prejudicial. 3 15 || Id. Thus, for the foregoing reasons, the Court GRANTS Defendants’ motion to dismiss with a 16 || prejudice. Going forward, CertainTeed’s inequitable conduct claims may rely only on 3 17 CertainTeed’s allegations regarding Mr. Gafford’s failure to disclose the Miller Declaration. 18 || rrissoorpERED. 19 20 Dated: November 22, 2021 21 J ky K oh LUCY M. KOH 22 United States District Judge 23 24 25 26 27 28 19 Case No. 19-CV-O00802-LHK