Dayco Products, Inc. v. Total Containment, Inc.

• Decision Date: 23 May 2003
• Docket Number: No. 02-1497.,02-1497.
• Citation: 329 F.3d 1358
• Parties: DAYCO PRODUCTS, INC., Plaintiff-Appellant, v. TOTAL CONTAINMENT, INC., Defendant-Appellee.
• Court: U.S. Court of Appeals — Federal Circuit

Page 1358

329 F.3d 1358

DAYCO PRODUCTS, INC., Plaintiff-Appellant, v. TOTAL CONTAINMENT, INC., Defendant-Appellee.

No. 02-1497.

United States Court of Appeals, Federal Circuit.

May 23, 2003.

COPYRIGHT MATERIAL OMITTED

Constance S. Huttner, Skadden, Arps, Slate, Meagher & Flom, LLP, of New York, New York, argued for plaintiff-appellant. With her on the brief were Edward V. Filardi and Douglas R. Nemec.

Randolph J. Huis, Volpe and Koenig, P.C., of Philadelphia, Pennsylvania, argued for defendant-appellee. With him on the brief was John J. O'Malley.

Before MAYER, Chief Judge, MICHEL, and DYK, Circuit Judges.

DYK, Circuit Judge.

Dayco Products Inc. ("Dayco") appeals from the decision of the United States District Court for the Western District of Missouri granting summary judgment of unenforceability of U.S. Patent Nos. 5,199,752 ("the '752 patent"), 5,297,822 ("the '822 patent"), 5,380,050 ("the '050 patent"), and 5,486,023 ("the '023 patent") (collectively "the patents-in-suit") and granting summary judgment of invalidity as to certain claims of those patents. Dayco Prods., Inc. v. Total Containment, Inc., 218 F.Supp.2d 1129 (W.D.Mo.2002). Having granted summary judgment of unenforceability and invalidity, the district court concluded that there was no liability for infringement. Because we conclude that summary judgment for the defendant was improper and genuine issues of material fact remain to be determined, we vacate the decision of the district court and remand for trial.

BACKGROUND

This case returns to us after a remand by this court. Dayco Prods., Inc. v. Total Containment, Inc., 258 F.3d 1317, 59 USPQ2d 1489 (Fed.Cir.2001) ("Dayco I"). Dayco is the owner of the '752, '822, '050, and '023 patents. Total Containment, Inc. ("TCI") is accused of infringing certain claims of those patents. In the earlier appeal, we reversed the district court's grant of summary judgment of noninfringement in favor of defendant TCI with respect to the '752, '822, '050, and '023 patents because the district court had adopted an incorrect claim construction. Id. at 1324, 258 F.3d 1317, 59 USPQ2d at 1495. We affirmed the district court's grant of summary judgment of non-infringement with respect to U.S. Patent No. 5,129,686 ("the '686 patent"). Id. at 1328, 59 USPQ2d at 1498. On remand, the remaining asserted claims were: claims 1, 2, 8-12, and 18-20 of the '752 patent; claims 1, 2, and 8-10 of the '822 patent; claims 1, 2, 8-12, and 18-20 of the '050 patent; and claims 1-8 of the '023 patent (collectively "the asserted claims"). The district court again granted summary judgment for the accused infringer (TCI) with respect to the '752, '822, '050, and '023 patents, this time on the ground that the patents were unenforceable due to inequitable conduct during prosecution, and that the asserted claims were invalid as anticipated.

I

The patents-in-suit all claim priority through a string of continuation applications to U.S. Application No. 408,161 ("the '161 application") filed September 15, 1989, and include identical figures and substantially identical written descriptions. The '161 application issued as U.S. Patent No. 5,037,143 ("the '143 patent"). The technology disclosed in the patents-in-suit was described in detail in Dayco I.

Briefly, the patents-in-suit are directed to flexible hoses and coupling assemblies that connect to each other for use in underground gas containment systems. When assembled for use (as shown below), a hose (31) is inserted into the coupling assembly (32), which forms a seal between the hose and the assembly.

NOTE: OPINION CONTAINING TABLE OR OTHER DATA THAT IS NOT VIEWABLE

Ridges and recesses circumscribe the interior corrugated surface of the hose. The coupling includes an outer sleeve (50) having a flat inner surface and an inner sleeve (51) having a contoured outer surface, the sleeves respectively contact the exterior and interior surfaces of the hose (31). The inner sleeve, the contours on the outer surface of which complement the ridges and recesses of the hose, is expanded outwards to seal the hose between the outer sleeve and the inner sleeve.

Dayco is also the assignee of a separate family of applications that claim original priority to U.S. Application No. 993,196 ("the '196 application") filed December 18, 1992 (collectively "the '196 family"). The technology disclosed in the '196 family is substantially similar to that disclosed in the patents-in-suit, also being directed to flexible hoses and coupling assemblies. The '196 application itself was abandoned during prosecution, and two continuation applications, U.S. Application Nos. 197,891 ("the '891 application") and 263,275 ("the '275 application"), were filed claiming priority therefrom. The '891 and '275 applications respectively issued as U.S. Patent Nos. 5,356,182 ("the '182 patent") and 5,430,929 ("the '929 patent"). The '182 and '929 patents are not asserted in the present appeal.

The '196 family of applications and the applications for the patents-in-suit were assigned to two different examiners by the Patent and Trademark Office ("PTO") and were pending at the same time. The applications that issued as patents-in-suit were assigned to examiner David Arola and the '196 family of applications was assigned to examiner Eric Nicholson. The applications in the '196 family included specific references to members of the family of applications that issued as the patents-in-suit. See, e.g., '929 patent, col. 1, ll. 51-65. Thus, examiner Nicholson was made aware of the applications for the patents-in-suit. However, there is no evidence that examiner Arola was ever notified of the existence of the applications in the '196 family. The claims submitted in the '196 family of applications were in some respects substantially identical to the claims of the patents-in-suit and were rejected by examiner Nicholson on three separate occasions under 35 U.S.C. § 103 as being unpatentable over U.S. Patent No. 3,331,981 to Wilson ("Wilson") in view of U.S. Patent No. 5,096,234 to Oetiker ("Oetiker"). Examiner Nicholson found that Wilson taught all of the elements of the claims except the recited outwardly expanding sleeve, which he concluded was obvious in view of Oetiker. Examiner Arola was not advised of this rejection. Nor was the Wilson patent, a reference cited by examiner Nicholson as the ground for rejection, even called to examiner Arola's attention.

II

Upon remand of this matter after Dayco I, the defendant renewed its motions for summary judgment on the basis of unenforceability and invalidity. On June 21, 2002, the district court granted the defendant's motions. Dayco, 218 F.Supp.2d at 1130.

The first motion for summary judgment granted by the district court was directed to unenforceability. The district court agreed with TCI's argument that Dayco committed inequitable conduct when it "intentionally withheld material prior art and information concerning [the] co-pending ['196] application from the patent examiner [assigned to the patents-in-suit]." Id. at 1131. The court also held that Dayco committed inequitable conduct by failing to disclose U.S. Patent No. 3,331,981 issued to Wilson ("Wilson"). Finally, the inequitable conduct determination was also based on the failure to disclose the rejection of substantially similar claims in the '196 patent based on Wilson.

The second summary judgment motion granted by the district court was directed to invalidity under 35 U.S.C. §§ 102 and 103. This motion was granted as to anticipation under § 102. While the district court referred to other prior art materials, the grant of summary judgment was based solely on three pieces of prior art. The court concluded that every element of all of the asserted claims of the patents-in-suit was disclosed in U.S. Patent No. 2,268,142 issued to Lusher et al. ("Lusher") and also in a publication describing the Titeflex Chemical Transfer Hose No. R292 ("the Titeflex Publication"). Id. at 1136-38. The court also concluded that the claims of the '822 patent were anticipated by a prior art coupling sold by Scovill. Id.

The court dismissed an expert declaration submitted by Dayco concluding that the cited prior art failed to expressly or inherently teach each and every limitation of the asserted claims. The court concluded that "[t]he reference and the claimed invention are easily understandable without the need for expert testimony." Id. at 1137. The court also concluded that, "[h]aving found that Dayco's patents are invalid under 35 U.S.C. § 102, the court need not address the issue of obviousness [under § 103]." Id. at 1138.

Dayco timely filed this appeal. We have jurisdiction under 28 U.S.C. § 1295(a)(1).

DISCUSSION

We review a district court's grant of a motion for summary judgment without deference. Ethicon Endo-Surgery, Inc. v. United States Surgical Corp., 149 F.3d 1309, 1315, 47 USPQ2d 1272, 1275 (Fed. Cir.1998).

I Inequitable Conduct

We first address the district court's grant of summary judgment of inequitable conduct and conclude that that decision must be set aside. In order "[t]o prove inequitable conduct in the prosecution of a patent, [the defendant] must have provided evidence of affirmative misrepresentations of a material fact, failure to disclose material information, or submission of false material information, coupled with an intent to deceive." Purdue Pharma L.P. v. Boehringer Ingelheim GMBH, 237 F.3d 1359, 1366, 57 USPQ2d 1647, 1652 (Fed.Cir.2001) (citations omitted). Both intent and materiality are questions of fact that must be proven by clear and convincing evidence. Id. The inequitable conduct analysis is performed in two steps comprising "first, a determination of whether the withheld reference meets a threshold level of materiality and intent to mislead, and second, a weighing of the materiality and intent in light of all the circumstances to determine whether the applicant's conduct is so culpable that the patent...