United States District Court, N.D. Ohio, Eastern Division
OPINION AND ORDER
CHRISTOPHER A. BOYKO UNITED STATES DISTRICT JUDGE
matter comes before the Court upon the Motion (ECF DKT #81)
of Plaintiff Allied Machine & Engineering Corporation
(“Allied”) for Voluntary Dismissal and the Motion
(ECF DKT #82) of Defendant Competitive Carbide, Inc.
(“Competitive”) to Vacate Stay Pending
Reexamination of the ‘616 Patent and for Leave to
Proceed with its Counterclaim. For the following reasons, the
Plaintiff's Motion to Dismiss the above-captioned action
with prejudice is granted and Defendant's Motion to
Vacate the Stay and Proceed with the Counterclaim is denied.
December 14, 2011, Allied filed its Complaint for Patent
Infringement. Allied alleges it is the owner by assignment of
U.S. Patent No. 7, 942, 616 (‘616 Patent), issued on
May 17, 2011, to the inventors, Joseph P. Nuzzi and Rolf H.
Kraemer, and entitled Drilling Tool and Method for
Producing Port Seals. Further, Allied alleges
Competitive made, used, sold, offered for sale, and/or
imported into the United States drill tools, under the name
“Helmet Head, ” that infringe upon one or more
claims of the ‘616 patent. Specifically, Allied asserts
Claims 1, 2, 4, 7, 9, and 11 through 20 of the ‘616
patent. On January 27, 2012, Competitive filed its Answer and
Counterclaim for Declaratory Judgment of Invalidity and
Unenforceability of the ‘616 patent. Specifically,
Competitive's Counterclaim alleges:
44. The Defendant further asserts that the claims of
invention as set forth in the ‘616 patent are invalid
by reason of inequitable conduct before the United States
Patent and Trademark Office by Plaintiff . . . in violation
of 37 CFR (at) Section 1.56 of the United States Patent
45. As a result of the foregoing conduct, facts, and events,
the Defendants [sic] seek declaratory judgment by this Court
that the subject United States Patent 7, 942, 616 is invalid
and unenforceable under 35 USC 102(b) and 35 CFR 1.56.
September 15, 2012, a third party filed a request with the
Patent Office for ex parte reexamination of
the ‘616 patent. On December 3, 2012, the Patent Office
granted the request and initiated reexamination. On May 7,
2013, Allied moved to stay the litigation pending the outcome
of the reexamination. (ECF DKT #65). On October 8, 2013, the
Court granted Allied's Motion and stayed the litigation
pending the completion of the reexamination. (ECF DKT #69).
reexamination, the Patent Office determined that all of the
claims of the ‘616 patent were unpatentable over the
newly discovered prior art. Allied appealed that decision to
the Patent Trial and Appeal Board (“PTAB”), which
affirmed the decision of the Patent Office. (ECF DKT #81, Ex.
1). Allied sought rehearing by the PTAB, which was finally
denied on September 2, 2016. On November 9, 2016, Allied
filed its notice of appeal to the U.S. Court of Appeals for
the Federal Circuit. (ECF DKT #81, Ex. 2). On February 16,
2017, Allied filed an unopposed motion for voluntary
dismissal of its appeal. (ECF DKT #81, Ex. 3). On February
16, 2017, the Federal Circuit dismissed Allied's appeal,
making final the Patent Office's decision that all of the
claims of the ‘616 patent are unpatentable. (ECF DKT
#81, Ex. 4).
February 16, 2017, Allied filed the instant Motion for
Voluntary Dismissal; and on February 23, 2017, Competitive
filed its Motion to Vacate Stay and Proceed. Competitive asks
the Court to find inequitable conduct by Allied before the
Patent Office and to determine Competitive's reasonable
damages and compensation.
order to clarify the parties' positions and the
applicable law, the Court ordered cross-briefs focused on the
viability of the Inequitable Conduct Counterclaims under 37
CFR § 1.56 and on whether any remedy is available in
light of the final Patent Office decision that all of the
claims of the ‘616 patent are unpatentable and
therefore, unenforceable. (ECF DKT #86).
LAW AND ANALYSIS
CFR § 1.56 - Duty to disclose information material to
§ 1.56 reads in pertinent part: “Each individual
associated with the filing and prosecution of a patent
application has a duty of candor and good faith in dealing
with the Office, which includes a duty to disclose to the
Office all information known to that individual to be
material to patentability . . .[N]o patent will be granted on
an application in connection with which fraud on the Office
was practiced or attempted or the duty of disclosure was
violated through bad faith or intentional misconduct.”
“Inequitable conduct is an equitable defense to a
patent infringement case that, if proved, bars enforcement of
a patent.” Therasense, Inc. v. Becton, Dickinson
& Co., 649 F.3d 1276, 1285 (Fed.Cir. 2011). The
remedy for inequitable conduct is
the “unenforceability of the entire patent.”
Id. at 1287. (Emphasis added). “The concept of
inequitable conduct in a patent procurement derives from the
equitable doctrine of unclean hands: that a person who
obtains a patent by intentionally misleading the PTO cannot
enforce the patent.” Gen. Electro Musical Corp. v.
Samick Music Corp., 19 F.3d 1405, 1408 (Fed.Cir. 1994).
“Perhaps most importantly, the remedy for inequitable
conduct is the ...