BRIAN A. JACKSON, District Judge.
Before the Court is Total Rebuild, Inc.'s
This dispute arises from PHC Fluid Power's sale of a device that Total Rebuild contends infringes one of its patents. At issue is whether PHC Fluid Power can offer facts to support a finding, by clear and convincing evidence, that Lavergne intentionally withheld prior art from the United States Patent and Trademark Office (PTO). The Court holds that it can.
Total Rebuild sells "safety system[s] for testing high-pressure devices." (Doc. 22 at ¶ 7). Lavergne claims to have invented one such system. (Id.). He applied for a patent in August 2008 and obtained one in April 2012. (Doc. 1-4 at 1). The patent is United States Patent No. 8,146,428; its critical date is August 7, 2007. (Id. at 7).
Lavergne assigned the patent to Total Rebuild.
Total Rebuild moves for partial summary judgment on PHC Fluid Power's inequitable-conduct counterclaim.
The Court will grant partial summary judgment if Total Rebuild shows that there is no genuine dispute as to any material fact and that it is entitled to judgment as a matter of law. See FED. R. CIV. P. 56(a). In deciding if Total Rebuild has made that showing, the Court views facts and draws reasonable inferences in PHC Fluid Power's favor. See Midwest Feeders v. Bank of Franklin, 886 F.3d 507, 513 (5th Cir. 2018).
Inequitable conduct is a "defense to patent infringement that, if proved, bars enforcement of a patent." Therasense, Inc. v. Becton, Dickinson and Co., 649 F.3d 1276, 1285 (Fed. Cir. 2011) (en banc). It "has two separate requirements: materiality and intent." Regeneron Pharm., Inc. v. Merus N.V., 864 F.3d 1343, 1350 (Fed. Cir. 2017). Only intent is at issue.
To establish intent, PHC Fluid Power must show that Lavergne acted with the specific intent to deceive the PTO. See Therasense, 649 F.3d at 1290. It need not point to direct evidence; the Court may infer from circumstantial evidence that Lavergne intended to deceive the PTO. See Regeneron, 864 F.3d at 1350. Still, Lavergne's intent to deceive must be the "single most reasonable inference able to be drawn from the evidence." Network Signatures, Inc. v. State Farm Mut. Auto. Ins. Co., 731 F.3d 1239, 1242 (Fed. Cir. 2013) (citation omitted).
Total Rebuild argues that PHC Fluid Power cannot prove that Lavergne acted with deceptive intent.
As Total Rebuild notes, Lavergne testified that he did not intentionally fail to disclose the millennium system to the PTO. (Doc. 170-8 at 2). He testified that "[w]e disclosed what we thought we w[ere] supposed to disclose." (Doc. 170-10 at 2). He explained that his office manager, Tara Benoit, was supposed to provide the disclosures to his patent-prosecution attorney but failed to do so. (Id. at 3).
First, Total Rebuild displayed the millennium system on its website more than four years before the patent's August 2007 critical date. (Doc. 189-47 at 9). If Lavergne is Total Rebuild's alter ego, as Total Rebuild insists, then Lavergne must have known that Total Rebuild's website displayed the millennium system long before August 2007.
Second, Total Rebuild sold millennium systems before the patent's critical date. Lavergne provided a Cameron International representative with quotes for the purchase of a millennium system in November 2005. (Doc. 251-23). And Cameron International invoices show that Total Rebuild made at least thirteen sales before the patent's critical date. (Doc. 251-11, reflecting a 7/6/06 sale; Doc. 251-12, reflecting a 7/21/06 sale; Doc. 251-13, reflecting a 10/25/06 sale; Doc. 251-14, reflecting a 11/9/06 sale; Doc. 251-15, reflecting a 11/9/06 sale; Doc. 251-16, reflecting a 3/12/07 sale; Doc. 251-17, reflecting another 3/12/07 sale; Doc. 251-17, reflecting a third 3/12/07 sale; Doc. 251-18, reflecting a fourth 3/12/07 sale; Doc. 251-19, reflecting a 3/13/07 sale; Doc. 251-20, reflecting a second 3/13/07 sale; Doc. 251-21, reflecting a third 3/13/07 sale; and Doc. 251-22, reflecting a 5/11/07 sale).
Total Rebuild appears to argue that more proof is required.
Both opinions consider inequitable-conduct claims unsupported by summary-judgment evidence. In Furminator, for example, the inequitable-conduct claimant offered no evidence that the patentee knew of the prior art that the claimant alleged the patentee withheld. 758 F. Supp. 2d at 822-823. Here, by contrast, no one disputes that Lavergne knew of the millennium system before the patent's critical date. Nor can they. Lavergne sold and advertised millennium systems for years before the patent's critical date. The second case, Multimedia Patent Trust, is an even less apt comparator. There, the inequitable-conduct claimants rested on "conclusory assertions in their answer" to oppose summary judgment. Multimedia Patent Trust, Doc. 406, p. 5. PHC Fluid Power's claim rests on record evidence.
PHC Fluid Power offers testimony from Lavergne's patent-prosecution attorney showing that Lavergne knew he was required to disclose prior art. (Doc. 251). It also points to invoices, offers, and correspondence showing that Lavergne sold the prior art before the patent's critical date. (Id.). Viewing that evidence in the light most favorable to Total Rebuild, the "single most reasonable inference" to draw is that Lavergne knowingly failed to disclose the millennium system to the PTO. See Network Signatures, 731 F.3d 1242. Thus, PHC Fluid Power offers sufficient evidence to support a finding, by clear and convincing evidence, that Lavergne "made a deliberate decision to withhold a known material reference" when he failed to disclose the millennium system to the PTO. See Therasense, 649 F.3d at 1290.
Accordingly,