Hewlett-Packard Co. v. Bausch & Lomb, Inc., C-84-20642 RPA.

CourtUnited States District Courts. 9th Circuit. United States District Courts. 9th Circuit. Northern District of California
Citation8 USPQ 2d 1179,692 F. Supp. 1118
Decision Date22 July 1988
Docket NumberNo. C-84-20642 RPA.,C-84-20642 RPA.
PartiesHEWLETT-PACKARD COMPANY, Plaintiff, v. BAUSCH & LOMB, INC., Defendant.

James P. Kleinberg, McCutchen, Doyle, Brown & Enersen, San Jose, Cal., Jon R. Stark, Holme Roberts & Owen, Denver, Colo., Jonathan A. Marshall, Pennie & Edmonds, New York City, for plaintiff.

Anne L. Enea, Ferrari, Alvarez, Olsen & Ottoboni, San Jose, Cal., Bernard D. Bogdon, Bausch & Lomb Inc., Rochester, N.Y., James W. Colbert, III, O'Melveny & Myers, Lawrence H. Pretty, Pretty, Schroeder, Brueggemann & Clark, Los Angeles, Cal., for defendant.


AGUILAR, District Judge.


This action went to trial on April 5, 1988. The case involves a suit by plaintiff Hewlett-Packard Company ("HP") for a judicial declaration that it has not infringed defendant Bausch & Lomb, Inc.'s ("B & L") United States Reissue Patent No. 31,684 (the "Yeiser reissue patent"). B & L has counterclaimed for infringement. In support of its position, HP has raised the affirmative defense of inequitable conduct. Specifically, HP contends that B & L committed inequitable conduct before the patent office in procuring the Yeiser reissue patent. This alleged inequitable conduct primarily consisted of the submission of two declarations and two affidavits in support of the reissue application which B & L knew (or absent grossly negligent conduct, should have known) contained blatantly false information.

Shortly before trial, HP filed a motion for summary judgment arguing that because the two affidavits submitted by B & L in obtaining the Yeiser reissue patent were false and were essential to the patent examiner's ruling, the reissue patent is invalid. The motion was granted from the bench on March 18, 1988. The Court ruled that Yeiser reissue patent claims 10-12 were invalid due to the falsity of the affidavits, but the Court refused at that point to nullify claims 1-9 of the reissue patent which were carried over substantially unchanged from the original and untainted patent application. On that same day, the Court sua sponte asked the parties to brief the issue of whether and under what circumstances a district court could nullify all the claims of a reissue patent in light of egregious misrepresentations contained in materials supporting an application for a reissue patent.

After a two week briefing schedule, on April 1, 1988, the Court heard oral argument on the motion for summary judgment as against claims 1-9 of the reissue patent. At the conclusion of the argument, the Court denied the motion for summary judgment finding that there remained a triable issue of material fact. Specifically, there remained a factual question whether B & L intentionally deceived the United States Patent and Trademark Office ("PTO") or was grossly negligent in seeking and gaining the Yeiser reissue patent.

Subsequently, on the morning of the opening day of trial, April 5, 1988, the Court issued a brief order stating its rulings on the various motions raised by the parties and setting forth the schedule for trial. In the order, the Court stated that a fuller explanation of the bases of its rulings would issue at the conclusion of the trial of HP's affirmative defense of inequitable conduct by B & L in obtaining the Yeiser reissue patent. In the sections that follow, the Court will set forth its findings and analysis in connection with its prior rulings; will describe the legal issues presented by HP's affirmative defense of inequitable conduct vis-a-vis the reissue application; and will make findings of fact and state conclusions of law with respect to the merits of HP's assertion of inequitable conduct against B & L. As explained below, the Court will declare unenforceable all remaining claims of the Yeiser reissue patent because of B & L's inequitable conduct before the PTO.

(A) Preface:

In this motion, HP seeks a judicial declaration that the Yeiser reissue patent is invalid.1 The alleged basis for invalidity is that B & L made factually incorrect representations to the patent examiner when seeking a reissue of its original patent. Because the representations were incorrect, as proved by later evidence which was submitted to the Court in connection with this motion, HP contends that the representations should be ignored. Absent the representations, B & L cannot be said to have complied with the regulations regarding reissue applications because B & L did not present evidence to the patent examiner explaining why and how the original patent application was flawed. Without such evidence, the patent examiner could not have authorized the reissue application and, therefore, the Yeiser reissue patent is invalid as a matter of law.

B & L's defense to this motion is twofold. First, B & L argues that as a matter of law the nine claims of the original patent which are identical to and not affected by the reissue application should not be nullified.2 Second, B & L contends that there are material issues of fact regarding the alleged misrepresentations as they affect the three claims added by the reissue patent application.

(B) An Overview of the Reissue Process:

Reissue is one of four ways that a defective patent may be remedied. The other three ways are (1) by the issuance of a certificate of correction, (2) by disclaimer, and (3) by reexamination. See Manual of Patent Examining Procedure (5th ed. 1983) at 1400-1. The most common grounds for seeking to reissue a patent are (1) claims are too narrow or too broad; (2) the disclosure contains inaccuracies; (3) applicant failed to or incorrectly claimed foreign priority; and (4) applicant failed to make reference to or incorrectly made reference to prior co-pending applications. Id.

The framework and procedure for the reissue of patents such as the Yeiser reissue patent in this case is governed by statute. The key patent reissue statute is 35 U.S.C. § 251 which provides in relevant part:

Whenever any patent is, through error without any deceptive intention, deemed wholly or partly inoperative or invalid, by reason of a defective specification or drawing, or by reason of the patentee claiming more or less than he had a right to claim in the patent, the Commissioner shall, on the surrender of such patent and the payment of the fee required by law, reissue the patent for the invention disclosed in the original patent, and in accordance with a new and amended application, for the unexpired part of the term of the original patent. No new matter shall be introduced into the application for reissue.

The concept employed in the reissue statute is that the inventor takes his patent to the patent examiner for a second look to clarify and amend any deficiencies. See In Re Weiler, 790 F.2d 1576, 1579 (Fed.Cir. 1986) ("Congress provided a statutory basis for correction of `error'"). A clear explanation of this process is provided in the following passage from Bally Mfg. Corp. v. Diamond, 629 F.2d 955, 957 (4th Cir. 1980):

The reissue process traditionally has provided a mechanism whereby an inventor who, through error and without any deceptive intention, has been granted a defective patent, may obtain a valid patent conforming to the true scope of his invention. Ordinarily, the patentee submits his previously issued patent, 37 CFR § 1.178, and files an affidavit stating the reason he believes it to be wholly or partly invalid, 37 CFR § 1.175. He also is required to file a reissue application containing the entire specification and claims of the original patent, with proposed deletions bracketed and proposed additions underlined, 37 CFR § 1.173. A patent examiner reexamines all claims included in the reissue application as if they were presented in an original application, 37 CFR § 1.176. If he finds the previously issued patent "wholly or partly inoperative or invalid", 35 USC § 251, the examiner determines whether the applicant is entitled to a patent under the reissue claims. If a reissue is refused, whether because the previously issued patent is entirely valid or because the reissue claims do not describe a patentable invention, the original patent will be returned to the applicant upon his request, 37 CFR § 1.178. Reissue patents are entitled to the same presumption of validity as original patents. citations omitted

See also 4 Lipscomb's Walker on Patents (3d ed. 1985) § 14.1.

The actual procedure used in reissuing patents is contained in the Code of Federal Regulations. See 37 C.F.R. §§ 1.171-1.179 (July 1987). The current regulations are slightly different than those in effect at the time that B & L made its reissue application. As suggested above in the case of Bally Mfg. Corp., 629 F.2d 955 (4th Cir. 1980), in seeking a reissue patent the inventor is basically initiating anew the patent process, starting with his original patent, indicating its errors, and applying to make specific corrections. One aspect of the reissue process that is unique, however, is the inclusion of a reissue oath or declaration by the applicant stating specific details regarding the grounds for seeking a reissue. At the time of B & L's application, the regulations regarding the oath or declaration read as follows:

§ 1.175 Reissue oath or declaration.
(a) Applicants for reissue, in addition to complying with the requirements of the first sentence of § 1.65, must also file with their applications a statement under oath or declaration as follows:
(1) When the applicant verily believes the original patent to be wholly or partly inoperative or invalid, stating such belief and the reasons why.
(2) When it is claimed that such patent is so inoperative or invalid "by reason of a defective specification or drawing," particularly specifying such defects.
(3) When

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    ...be inferred from actions the natural consequences of which would be to mislead or misinform the PTO." Hewlett-Packard Co. v. Bausch & Lomb, Inc., 692 F.Supp. 1118, 1133 (N.D.Cal.1988). Materiality "does not presume intent, which is a separate and essential component of inequitable conduct........
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