We will be discussing one ethics-related case and a recent formal opinion of the California Bar committee for professional responsibility.  The case is the first post-Therasense case addressing inequitable conduct during patent prosecution.  The opinion deals with inducing gifts from clients.  We will discuss the case and opinion in our weekly SoCal IP Institute meeting on Monday, July 18, 2011.  Brief synopses are presented below.

American Calcar v. American Honda, No. 2009-1503, -1567 (Fed. Cir. June 27, 2011) (attached).  This case is the first post-Therasense Federal Circuit inequitable conduct case.  American Calcar asserted a total of fifteen patents against Honda.  On appeal in this case were the decisions that several of the patents were invalid as a result of inequitable conduct during prosecution.  Also at issue were the district court’s finding of noninfringement by Honda of several of the asserted patents and a finding on Honda’s cross-appeal regarding anticipation of one asserted patent by prior art.

Before filing several of its patents, the inventors of the American Calcar patents reviewed the navigation systems of the Acura 96L (a Honda product).  American Calcar then hired a patent attorney and filed and prosecuted several patents related to in-car navigation and computer systems.  American Calcar did not disclose the substance of the 96L system or their review of that system to the U.S.P.T.O. The district court found that the failure to disclose this system was material, it resulted in invalidity of several of the patents as anticipated, and that, as a result, the failure to disclose it was intentional.

On appeal, the Federal Circuit remanded this issue for further consideration in view of their recent en banc Therasense decision.  In particular, the Federal Circuit found that the undisclosed 96L system was material, but that the sliding scale employed by the district court in finding the intent element of inequitable conduct was not appropriate.  The district court was instructed that a showing of specific intent to deceive the Patent Office is required and may not be inferred from the materiality of the reference withheld.   The inequitable conduct decision was vacated and remanded in order to address this issue.  American Calcar also argued that the district court’s findings regarding Honda’s noninfringement of five of the patents was incorrect.  The Federal Circuit reviewed these decisions and affirmed.  In addition, the Federal Circuit reversed the district court’s finding that a patent was not invalid as anticipated as against the great weight of the evidence and granted Honda’s JMOL motion of invalidity.

The State Bar of California Standing Committee on Professional Responsibility and Conduct Formal Opinion No. 2011-180 (attached).  This opinion addresses Rule 4-400 of the California Rules of Professional Conduct regarding “Gifts from Clients.”  The rule reads:

A member shall not induce a client to make a substantial gift, including a testamentary gift, to the member or to the member’s parent, child, sibling, or spouse, except where the client is related to the member.

In particular, the opinion discusses the meaning of the terms “induce” and “substantial.”  The opinion helps attorneys to define the California Bar’s general understanding of the types of gifts and gift-seeking behaviors that are not appropriate under the California Rules of Professional Conduct.

All are invited to join us in our discussion  during the SoCal IP Institute meeting on Monday, July 18, 2011 at Noon in our Westlake Village office. This activity is approved for 1 hour of Ethics MCLE credit. If you will be joining us, please RSVP to Amanda Jones by 9 am Monday morning.