Goss v. MAN Roland, et al.

2006 DNH 086

Opinion

Goss v. MAN Roland, et a l . 03-CV-513-SM 07/31/06 UNITED STATES DISTRICT COURT

DISTRICT OF NEW HAMPSHIRE

Goss International Americas, I nc., Plaintiff

v.

MAN Roland, Inc. and MAN Roland Druckmaschinen A G , Defendants Civil No. 03-CV-513-SM Opinion No. 2006 DNH 086 MAN Roland. Inc. and MAN Roland Druckmaschinen A G . Counterclaim Plaintiffs

Goss International Americas. Inc. and Heidelberqer Druckmaschinen A G . Counterclaim Defendants

O R D E R

Document no. 173 is MAN Roland's second motion for summary

judgment on its third counterclaim, which seeks a declaratory

judgment of unenforceablity based upon a variety of inequitable

c o n d u c t .1 At issue here is MAN Roland's claim that material

misrepresentations were made and material information was

withheld during the prosecution of the '587 application, which is

listed as an ancestor application in each of the three patents-

1 MAN Roland's previous motion (document no. 145) is denied in a contemporaneous order. in-suit. Specifically, MAN Roland asserts that in a May 27,

1991, petition to revive, Heidelberg Harris, Inc. ("Heidelberg

Harris") falsely represented that the '581 application had been

abandoned unintentionally rather than on purpose, and failed to

provide the PTO with material evidence demonstrating the

intentional abandonment of that application.

The Applicable Law

A. Inequitable Conduct

"A patent may be rendered unenforceable for inequitable

conduct if an applicant, with intent to mislead or deceive the

examiner, fails to disclose material information or submits

materially false information to the PTO during prosecution."

Atofina v. Great Lakes Chem. C o r p . . 441 F.3d 991, 1001 (Fed. Cir.

2006) (quoting Digital Control. Inc. v. Charles Mach. W o r k s . 437

F.3d 1309, 1313 (Fed. Cir. 2006)). Both of these elements,

intent and materiality, must be proven by clear and convincing

evidence. M. Eagles Tool Warehouse. Inc. v. Fisher Tooling C o . .

439 F.3d 1335, 1340 (Fed. Cir. 2006) (citing J.P. Stevens & Co.

v . Lex Tex L t d ., 747 F.2d 1553, 1559 (Fed. Cir. 1984)).

2 B. Revival of Abandoned Patent Applications

At the time the '581 application was revived, 37 C.F.R. §

1.137(b) allowed for "[a]n application unintentionally abandoned

for failure to prosecute . . . [to] be revived as a pending

application if the delay was unintentional." While the

regulation pertaining to unavoidable abandonment required a

petitioner to make "a showing of the causes of the delay," 37

C.F.R. § 1.137(a), the regulation pertaining to unintentional

abandonment required only "[a] statement that the abandonment was

unintentional," § 1.137(b), and did not require a showing of

unintent i o n a l i t y .

In In re M a l d a q u e , 10 U.S.P.Q.2d (BNA) 1477 (Comm'r Pat. &

T.M. 1988), the Commissioner of the PTO denied a petition to

revive and described a set of circumstances that did not

constitute unintentional abandonment:

Petitioner asserts that Mr. Roodhooft's June 30, 1986 decision, although formed with reasonable care and diligence, was in error. A distinction must be made between a mistake in fact, which may form the basis for a holding of unintentional abandonment under 3 7 CFR 1.137(b), and the arrival at a different conclusion after reviewing the same facts a second time. An intentional act is not rendered unintentional when an applicant reviewing the same facts changes his mind as to the appropriate course of action to pursue. An application abandoned as a result of a deliberative, intentional course of action after comparing the

3 claimed invention with the prior art, does not amount to an unintentional abandonment within the meaning of 37 CFR 1 . 1 3 7 ( b ) .

I d . at 1478. A similar result was reached In re Application of

G, 11 U.S.P.Q.2d (BNA) 1378 (Comm'r. Pat. & T.M. 1989), in which

the Commissioner further explained:

A deliberate act is not rendered "unintentional" when an applicant or assignee reviews the same facts (e.g., patentability of the claims) a second time which changes their minds as to the appropriate course of action to pursue. An application abandoned as a result of a deliberate, intentional course of action after comparing the claimed invention with the prior art, does not amount to an unintentional abandonment within the meaning of 35 U.S.C. 41(a)7 and 37 CFR 1.137(b).

I d . at 13 8 0.

Factual Background

The relevant circumstances involve several people and a

series of events. The people are: Thomas Tar o l l i , an attorney

with the law firm that initially prosecuted the '581 application

for Harris Graphics Corporation;2 ("Harris Graphics"); Peter

L o f t u s , Harris Graphics' patent administrator; Roland T.

2 Harris Graphics, a predecessor to Goss, was the assignee of the invention claimed in the '587 application.

4 P almatie r , director of product development at Heidelberg Harris;3

Valentin B o q e r t , the Heidelberger Druckmaschinen AG

("Heidelberger") patent engineer directly responsible for the

'581 application; Heins Stoltenberq, the head of H e i d e l b e r g e r ''s

patent department; Wolfgang Pfizen m e i e r , the Heidelberger board

member to whom Stoltenberg reported; Robert M a v e r , an attorney

with Kenyon & Kenyon, the law firm that filed the petition to

revive the '581 application; Patrick B i r d e , the Kenyon & Kenyon

attorney who actually signed and filed the petition to revive.

The events at issue include the following:

February 2 1 , 1 9 9 1 : The PTO issued a Final Office Action

("FOA") rejecting the last two pending claims of the '581

application4 as obvious in view of the prior art. (MAN Roland's

Mem. of Law (document no. 174), Ex. X - 2 .) In the FOA, Harris

Graphics was notified of a three-month "shortened statutory

period for response" that gave it until May 27, 1991, to respond

to the rejection of the '587 application. (I d .)

3 Heidelberg Harris was a successor of Harris Graphics, a predecessor of Goss, and a subsidiary of Heidelberger.

4 The '587 application claimed a printing press.

5 April 2 , 19 9 1 : Tarolli writes to Loftus, informing him of

the rejection, and stating: "Since we are in the process of

filing a new application to cover the blanket in conjunction with

American Roller, we will allow this application to lapse. Please

let me know if you do not agree." (I d ., Ex. X - 3 .)

May 15, 19 9 1 : The application referred to in the Tarolli

letter, the 'SSS application,5 is filed, with Heidelberg Harris

as its assignee. (I d ., Ex. X-4.) That application, labeled

internally as "HEM 90/142," was designated as a continuation-in-

part of the 'SSV application. (I d .)

May 2 7. 1 9 9 1 : The shortened statutory period for responding

to the February 27 rejection of the 'SSV application ends.

June 25, 19 9 1 : Bogert drafts a "decision-sheet" regarding

the 'SSV application ("Bogert decision-sheet"), directed to

Loftus, which includes the notation: "DO NOT CONTINUE WITH

APPLICATION - REPLACED BY HEM 90/142." (I d . , Ex. X - 6 .)

5 The 'GGS application claimed only a printing blanket.

6 July 31, 19 9 1 : Bogert meets with Loftus and Palmatier to

discuss whether or not to continue with the '581 application.

Loftus signs the Bogert decision-sheet and Palmatier writes on

it: "Stop - do not pursue." (I d .) Bogert subsequently confers

with Tarolli.

August 13, 19 9 1 : Loftus distributes a memo to R.A. Brown6

(with copies to others) titled "Sunday Press Invention Status,"

which includes what appears to be a computer-generated report

that details "the status of the 90 inventions resulting from the

N-954C, PFF-2, NFF, and Telecolor 2 phases of the Sunday Press

program," and contains the notation: "DROPPED DUE TO PRIOR ART -

SEE HEM-90/142 FOR BLANKET CONST." (I d . , Ex. X-7.) The source

of the information contained in the status report is not clear

from the record.

August 26, 1991: Bogert writes, in the "legal opinion"

section of a document titled "Heidelberg Decision Sheet 1991,"

concerning the '581 application: "Object will now be pursued

further in HEM 90/142." (I d ., Ex. X-9.)

6 MAN Roland does not identify R.A. Brown.

7 September 2, 1 9 9 1 : Stoltenberg writes "drop" or "let it

drop" in the "recommendation" section of the Heidelberg Decision

Sheet. (I d .)

September 5. 9. and 17. 1991: Three members of

Heidel b e r g e r ''s Technical Department initial the "comment" section

of the Heidelberg Decision Sheet. (I d .)

September 30. 1991: Pfizenmeier writes "drop" in the

"decision" section of the Heidelberg Decision Sheet. (I d .)

October 4, 19 9 1 : Tarolli receives a PTO Notice of

Abandonment regarding the '581 application. (I d ., Ex. X-10.)

October 18. 1991: After reviewing the '581 application and

the prior art cited against it and conferring with Heidelberger

engineers, Stoltenberg writes on the Heidelberg Decision Sheet

"should be corrected" and Pfizenmeier scratches out his previous

notation "drop" and writes "retracted October 18, 1991." (I d .,

Ex. X-9.)

Late October 1 9 9 1 : Stoltenberg sends Bogert to discuss the

revival of the '581 application with Mayer. Mayer proposes refiling the '581 application as a new application and filing a

petition to revive the original '587.

April 7, 19 9 2 : Mayer files the 'GSO application,7 as a

continuation-in-part of '668 application. (I d ., Ex. X-ll.)

May 27. 19 9 2 : On the last day to do so, Birde files a

petition to revive the '581 application, stating that its

abandonment "was unintentional." (I d ., Ex. X-12.)

January 1 9 9 4 : Tarolli produces, at the request of Kenyon &

Kenyon, an affidavit discussing the abandonment of the '581

application. (I d ., Ex. X-13.)

In MAN Roland's view, Heidelberger acted inequitably in two

ways: (1) by falsely stating, in the petition to revive, that the

abandonment of the '587 application was unintentional; and (2)

failing to provide the PTO with: (a) the April, 2, 1991, Tarolli

letter; (b) the June 25, 1991, Bogert decision-sheet; (c) the

August 13, 1991, "Sunday Press Invention Status Report;" (d) the

Heidelberg Decision Sheet; and (e) the 1994 Tarolli affidavit.

7 Like the '587 application, the '680 claimed a printing press .

9 Discussion

To be entitled to summary judgment, MAN Roland would have to

show that the undisputed factual record contains clear and

convincing evidence that Heidelberg Harris and/or Heidelberger:

(1) abandoned the '581 application intentionally rather than

unintentionally; (2) knowingly misrepresented the circumstances

of the abandonment of that application to the PTO; and (3) did so

with intent to mislead or deceive the examiner. MAN Roland has

not met its burden.

First of all, it is not at all clear (and it seems rather

unlikely ) , based on the recited facts and relevant law, that the

'581 application was abandoned intentionally. To be sure,

Tarolli advised allowing the application to lapse, and Bogert,

Loftus, Palmatier, Stoltenberg, and Pfizenmeier all indicated

concurrence with that advice. However, both Tarolli's letter to

Loftus and Bogert's decision-sheet notation - the only

contemporaneous explanatory writings on the matter by identified

authors - indicate that while the '581 application was to be

abandoned, its subject matter was not. Rather, Tarolli and

Bogert appear to have believed that the subject matter of the

'581 application was covered in the '668 application, which was

10 filed approximately two weeks before the end of the period for

replying to the February 27, 1991, rejection of the '587.

On the other hand, the only documentary evidence of a

contrary motivation for abandoning the '581 application, the

notation "DROPPED DUE TO PRIOR ART," is unattributed, appears in

a memorandum to an unidentified recipient, was written well after

the May 27, 1991, deadline for responding to the F PO,8 and also

refers to the explanation previously stated by Tarolli and

Bogert, i . e . , that the '581 application could be abandoned

because the '581 subject matter was included in the '668

application. If anything, the undisputed facts tilt toward

Heidel b e r g e r ''s and Goss's position; they certainly do not contain

clear and convincing evidence in favor of MAN Roland's position.

Moreover, the facts of this case fall outside the limits of

the rule stated in Maldaque and Application of G . In each of

those cases, a single decision maker twice considered the same

body of information and reached a different conclusion on

8 Given that the '587 application went abandoned on May 27, 1991, the day on which the shortened statutory period for response expired, the August 13, 1991, report is, at best, an after-the-fact characterization of the abandonment, rather than contemporaneous evidence of the decision-making process.

11 reconsideration. The rule of Maldaque and Application of G is

that a different conclusion resulting from a second examination

of the same information does not make the first conclusion a

mistake of fact for purposes of establishing that the abandonment

of a patent application, based upon the first conclusion, was

u n i n tent i o n a l .

Here, MAN Roland has not produced clear and convincing

evidence that the decision to drop the '581 application was "a

deliberative, intentional course of action after comparing the

claimed invention with the prior art." M a l d a q u e , 10 U.S.P.Q.2d

at 1478. What evidence has been presented suggests the decision

was based upon an erroneous comparison of the pending '581

application and the '668 application. And while the comparison

of an invention to the prior art involves a legal analysis, the

determination of whether one application includes all the claims

of another application, when both are filed by the same entity,

is a question of fact.

Moreover, MAN Roland has produced no evidence that Bogert,

Stoltenberg, or Pfizenmeier ever concluded that the '581 subject

matter was not patentable; both the Bogert decision-sheet and the

Heidelberg Decision Sheet note that the '581 subject matter was

12 being pursued in the '668 application - indicating a belief that

the '581 subject matter was patentable. And those documents

contain no mention of the prior art and no indication that anyone

involved in prosecuting the '581 application believed its subject

matter to be unpatentable due to prior art. The only mention of

the patentability of the '581 subject matter appears in the

August 13, 1991, Loftus memorandum, which does not list Bogert,

Stoltenberg, or Pfizenmeier as recipients. Thus, when

Stoltenberg and Pfizenmeier made their revisions to the

Heidelberg Decision sheet (i . e . . retracting their recommendations

to drop the application), they could not have been changing their

minds about the patentability of the '581 subject matter. See

Application of G . 11 U.S.P.Q.2d at 1380.

If Stoltenberg or Pfizenmeier had analyzed the '581

application in view of the prior art and concluded that the '581

subject mater was not patentable in view of the prior art,

and then performed the same comparison a month later only to

reach a different conclusion, the second conclusion would not

make the first one a mistake of fact. See M a l d a q u e . 10

U.S.P.Q.2d at 1478; Application of G . 11 U.S.P.Q.2d at 1380. But

MAN Roland has not produced clear and convincing evidence to

support any such scenario. MAN Roland has not even produced

13 evidence that Stoltenberg or Pfizenmeier ever compared the '581

application and the '668 application prior to recommending that

the '581 application be dropped. Thus, the record simply does

not support MAN Roland's argument that Heidelberg Harris's

petition to revive resulted from a change of mind rather than a

mistake of fact.

Because MAN Roland has failed to provide clear and

convincing evidence that the '587 application was abandoned

intentionally, it has, necessarily, failed to provide clear and

convincing evidence that Heidelberg Harris's statement of

unintentional abandonment was a knowing misrepresentation.

Similarly, because the documents MAN Roland says Heidelberg

Harris should have provided to the PTO contain, at most, a mere

hint of intentional abandonment, i . e . . the unattributed notation

in the August 13, 1991, status report, it was hardly inequitable

of Heidelberg Harris not to provide those documents, especially

since the relevant regulation pointedly did not require

petitioners to make a showing of unintentional abandonment.

MAN Roland has not produced clear and convincing evidence

that Heidelberg Harris acted inequitably in petitioning for

revival of the '587 application. Accordingly, its motion for

14 summary judgment (document no. 173) is denied. Moreover, because

the motion for summary judgment presented in document no. 178 is

premised upon a favorable ruling on the motion presented in

document no. 173, the motion presented in document no. 178 is,

necessarily denied.

SO ORDERED.

Steven J./McAuliffe Chief Judge

July 31, 2006

cc: Daniel E. Will, Esq. Hugh T. Lee, Esq. Richard S. Gresalfi, Esq. Georg C. Reitboeck, Esq. Mark A. Hannemann, Esq. Michael J. Lennon, Esq. T. Gy Walker, Esq. Jonathan M. Shirley, Esq. Alfred H. Hemingway, Jr., Esq. Irvin D. Gordon, Esq. Martin B. Pavane, Esq. Michael J. Songer, Esq. Shari R. Lahlou, Esq. Sidney R. Bresnick, Esq. Teodor J. Holmberg, Esq. Richard D. Margiano, Esq. John F. Sweeney, Esq. Steven F. Meyer, Esq. Tony V. Pezzano, Esq. Bruce W. Felmly, Esq. Seth J. Atlas, Esq. Anthony S. Augeri, Esq.