Hewlett-Packard Co. v. Bausch & Lomb Inc.

Citation11 USPQ2d 1750,882 F.2d 1556
Decision Date09 August 1989
Docket NumberHEWLETT-PACKARD,Nos. 88-1590,88-1591,s. 88-1590
Parties, 11 U.S.P.Q.2d 1750 COMPANY, Plaintiff/Cross-Appellant, v. BAUSCH & LOMB INCORPORATED, Defendant-Appellant.
CourtUnited States Courts of Appeals. United States Court of Appeals for the Federal Circuit

S. Leslie Misrock, of Pennie & Edmonds, New York City, argued, for plaintiff/cross-appellant. With him on the brief, was Jonathan A. Marshall, of Pennie & Edmonds. Of counsel were Brian D. Coggio, Jennifer Gordon, Jon R. Stark and Bruce J. Barker, of Pennie & Edmonds, and William H. MacAllister, of Hewlett-Packard Co., Palo Alto, Cal.

Laurence H. Pretty, of Pretty, Schroeder, Brueggemann & Clark, Los Angeles, Cal., argued, for defendant-appellant. Of counsel were Gary A. Clark and John T. Wiedemann, of Pretty, Schroeder, Brueggemann & Clark, James W. Colbert, III, of O'Melveny & Myers, Los Angeles, Cal., and Bernard D. Bogdon, of Bausch & Lomb Inc., Rochester, N.Y.

Before NIES and BISSELL, Circuit Judges, and BALDWIN, Senior Circuit Judge.

NIES, Circuit Judge.

Bausch and Lomb Incorporated (B & L) appeals from a final judgment, in favor of Hewlett-Packard Company (HP), entered by the United States District Court for the Northern District of California in a patent The court held claims 10-12, which were added during reissue, invalid because B & L filed blatantly inaccurate affidavits to support reissue. Absent the affidavits, the court held, B & L failed to comply with the requirements of the oath specified in 35 U.S.C. Sec. 251 (1982) and 37 C.F.R. Sec. 1.175 (1988). The court rejected HP's argument, however, that the improper oath also rendered claims 1-9, which were carried over unchanged from the original patent, invalid. Hewlett-Packard Co. v. Bausch & Lomb Inc., 8 USPQ2d 1177 (N.D.Cal.1988); Hewlett-Packard Co. v. Bausch & Lomb Inc., 692 F.Supp. 1118, 1120-32, 8 USPQ2d 1179, 1181-91 (N.D.Cal.1988). Nevertheless, the district court held that B & L's conduct in prosecuting the reissue, including the submission of the false affidavits, rose to the level of inequitable conduct. In the court's view, such misconduct tainted all 12 claims and rendered the '684 patent entirely unenforceable. Hewlett-Packard Co. v. Bausch & Lomb Inc., 692 F.Supp. 1118, 1132-50, 8 USPQ2d 1179, 1192-1206 (N.D.Cal.1988).

infringement suit. Hewlett-Packard Co. v. Bausch & Lomb Inc., 692 F.Supp. 1118 (N.D.Cal.1988). The judgment is based on the district court's holdings that B & L's United States Patent No. Re. 31,684 ('684) is unenforceable and partially invalid. We affirm-in-part, vacate-in-part, and remand.

We affirm the court's holding that claims 10-12, but not claims 1-9, are invalid because the reissue application was defective. It is unclear, however, whether the district court's determination of inequitable conduct is in accord with this court's recent pronouncement in Kingsdown Medical Consultants, Ltd. v. Hollister Inc., 863 F.2d 867, 876-77, 9 USPQ2d 1384, 1392 (Fed.Cir.1988) (in banc). Accordingly, we vacate that part of the judgment and remand for reconsideration.

Finally, B & L asserts it is entitled to a retrial of the case. Following entry of judgment, B & L moved the trial judge to disqualify himself pursuant to 28 U.S.C. Sec. 455 (1982) upon learning that HP employed the judge's son. That circumstance in itself, per B & L, would cause a reasonable person to question the judge's impartiality. B & L appeals the denial of its motion. Hewlett-Packard Co. v. Bausch & Lomb Inc., 8 USPQ2d 1206 (N.D.Cal.1988). We affirm.


1. Did the district court err, by applying an incorrect legal standard, in holding B & L guilty of inequitable conduct in prosecuting the reissue application?

2. Where inequitable conduct is found during reissue proceedings, which renders all new claims added or amended during reissue unenforceable, is a finding of actual fraud or bad faith required to hold the unchanged claims carried over from the original patent also unenforceable?

3. Is a failure to include narrower or dependent claims in a patent sufficient in itself to establish error warranting reissue under 35 U.S.C. Sec. 251?

4. Where a reissue patent issues from a defective application, are all claims invalid or are only the claims added or amended during reissue invalid?

5. Does 28 U.S.C. Sec. 455(a) (1982) require the judge's recusal in this case?


John Yeiser invented an "X-Y Plotter," described in United States Patent No. 3,761,950 ('950), in which chart paper moves under a marking pen. Yeiser's patent issued in 1973 with nine claims. 1 Following B & L, a competitor of HP, discovered the '950 patent during an investigation of HP's patent protection on its plotter. In 1982, B & L bought the '950 patent from MRC for $30,000, admittedly for the purpose of gaining leverage in negotiations--hoping to obtain a cross license from HP--and possible litigation. The record indicates that B & L was concerned, however, that claim 1, which arguably covers HP's plotter and is the only independent claim asserted, was overly broad. To obtain narrower claims which would incorporate details of the HP plotter specifically, B & L filed a reissue application containing three new claims, 10-12. 2 The original nine claims of the '950 patent were included in the reissue application without substantive change.

a series of assignments, the Milton Roy Company (MRC) acquired the '950 patent. The invention claimed in that patent was commercialized only briefly. MRC had been out of the plotter business for some time when, in late 1980 or early 1981, HP introduced its first moving-paper X-Y plotter, with great success.

The PTO rejected the application, inter alia, on the grounds that B & L failed to specify either an error warranting reissue or how the error occurred. B & L successfully overcame the PTO rejections by supplementing the initial declaration with two affidavits signed by the patent agent, Lawrence Fleming, who had prosecuted the original patent. The facts surrounding those affidavits and the effect they had on the reissue will be discussed below in detail in connection with addressing the issues of the validity and enforceability of the '684 patent, which are the central issues of this appeal.

With issuance of the '684 patent imminent, B & L charged HP with infringement. HP countered with a petition for reexamination of claims 1, 2, and 10-12 over certain prior art. The PTO found that HP's petition raised a substantial new question of patentability, but ultimately upheld the validity of all claims. HP then filed a declaratory judgment action in October 1984, asserting invalidity of all claims of the '684 patent under 35 U.S.C. Secs. 102, 103, 112, and 251 (1982), and later added an allegation of unenforceability for inequitable conduct in B & L's prosecution of the reissue application. B & L counterclaimed, charging HP with infringement of claims 1 and 2, which were original claims, and claims 10-12 added by reissue.

On a summary judgment motion, the district court held claims 10-12, but not claims 1-9, invalid. More specifically, the court found that the oath (declaration) in the application for reissue was defective. B & L contends that, as a matter of law, the oath was not defective. On the other hand, HP urges that, because the oath was defective, the district court should have held original claims 1-9 also invalid.

A separate trial on the issue of inequitable conduct was then held, after which the district court held all claims unenforceable. B & L contends that the court legally erred in holding it guilty of inequitable conduct because the court found only that B & L acted with gross negligence, not with an intent to deceive. B & L also maintains that, regardless of the fate of the added claims 10-12, original claims 1-9

                cannot, as a matter of law, be held unenforceable absent actual, "Walker Process "-type fraud. 3   Such fraud was not alleged, proved, or found.  Having disposed of all claims by its decision on the above issues, the district court chose to enter judgment under Federal Rule of Civil Procedure 54(b) without reaching the additional validity questions raised under sections 102, 103, and 112.  It denied HP attorney fees, requested under 35 U.S.C. Sec. 285 (1982), a ruling challenged in HP's cross appeal

The facts surrounding the two Fleming affidavits submitted by B & L to support the reissue application are central to the issues of validity and enforceability. Accordingly, those facts must be set forth in detail.

Upon acquisition of the '950 patent, B & L immediately began steps to secure its reissue. The matter was handled by Bernard Bogdon, B & L's in-house counsel, and William Hyer, outside patent counsel. Hyer delegated the task to an associate of his firm, Jonathan Jobe. It was Jobe's first experience with drafting a reissue application.

Working from the '950 patent file and the specifics Hyer gave him on the HP plotter, Jobe drafted the reissue application, adding three dependent claims to Claim 1 to cover specific features of the HP plotter. Jobe drafted the declaration, later signed by B & L's vice president, George More, to state that the '950 patent was "partly or wholly inoperative ... by reason of the patentee claiming less than he had a right to claim in that he had a right to claim [his invention] more specifically," and that the omission of the dependent claims was caused "because of oversight and without deceptive intent on the part of said John O. Yeiser or his attorney." No one had at that time consulted with Lawrence Fleming, the patent agent (by then retired) who had prosecuted the '950 patent. 4

Although he signed the declaration, More knew nothing about the alleged "error," either personally or based on others' investigations. Indeed, he was told that he was better off not asking any questions. Jobe testified that he included the reference to an "oversigh...

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