# Petition for Writ of Certiorari — Rohm & Haas Co. v. Crystal Chemical Co.

> Briefs, arguments, decisions, and more.

URL: https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40385010_3075%3A1

## Record

- **Collection:** Supreme Court brief
- **Document type:** Petition for Writ of Certiorari
- **Published:** January 1, 1984
- **Citation:** 469 U.S. 851

## Text

8 4 | { Oftice Supreme Court, U.S.
ia ‘ k ILE OD
No. JUL 5 1984

a et STEVAS,
IN THE CLERK

Supreme Court of the Uuited States

OCTOBER TEKM, 1983

ROHM AND HAAS COMPANY,

Petitioner,

CRYSTAL CHEMICAL COMPANY and JOE C. ELLER,

Respondents.

PETITION FOR A WRIT OF CERTIORARI TO THE
UNITED STATES COURT OF APPEALS
FOR THE FEDERAL CIRCUIT

Of Counsel:

JANUAR D. BOVE, JR.
JEFFREY B. BOVE
CONNOLLY, BOVE, LODGE
& HUTZ
1220 Market Building
1220 Markei Street
Wilmington, Delaware 19899

E. BARRETT PRETTYMAN, JR.
HOGAN & HARTSON

815 Connecticut Avenue, N.W.

Washington, D.C. 20006

* Counsel of Record

RUDOLF E. Hutz *
1220 Market Building
1220 Market Street
Wilmington, Delaware 19899
(302) 658-9141

Counsel for Petitioner

PHILIP W. TONE
JENNER & BLOCK
One IBM Plaza
Chicago, Illinois 60611

GEORGE W. F. SIMMONS
Route 2
Box 3377
Lopez, Washington 98261

WILLIAM E. LAMBERT III
ROHM AND HAAS COMPANY
Philadelphia, Pennsylvania

19195

A NE GI RT EI EL EAT DE
- 789-0096 - WASHINGTON, D.C. 20001

WILSON - EPES PRINTING Co., INC.

QUESTIONS PRESENTED

1. Whether the test adopted by the Court of Appeals
for the Federal Circuit which, in that court’s words,
“breaks new ground on the subject of fraud in the PTO
and sets new standards in this area of the law,” is con-
trary to both prior law and public policy, and in partic-
ular is inconsistent with 35 U.S.C. § 282, which requires
the party challenging the validity of the patent, rather
than the patentee, to shoulder the burden of proof on
the key elements of fraud.

2. Whether the Court of Appeals’ retroactive applica-
tion of an admittedly novel rule of law, without affording
any opportunity to comply with the “new standards”, is
inconsistent with Chevron Oil Co. v. Huson, 404 U.S. 97
(1971).

3. Whether, as has been its pattern in a series of re-
cent cases as particularly illustrated by this one, the new
Court of Appeals for the Federal Circuit may (a) over-
turn or ignore District Court findings of fact on con-
trolling issues, including intent to defraud, which are not
and could not have been held clearly erroneous, and (b)
make its own de novo findings on these issues without
remanding the case to the District Court—all in violation
of Fed. R. Civ. P. 52(a).

ii
PARTIES TO THE PROCEEDING

In addition to Respondents Crystal Chemical Company
(“Crystal”) and Joe C. Eller (“Eller”), the following
parties were also defendants in this case: Dawson Chemi-
eal Company and Crystal Manufacturing Corporation
(predecessor corporations of Crystal), Wilton W. Varde-
man (“Vardeman”), Helena Chemical Company (“Hel-
ena’), Vertac Chemical Company (‘“Vertac’), and the
American Rice Growers Exchange (“ARGE’’).*

Rohm and Haas Company has the following subsidaries
or affiliates: Modipon, Limited, Japan Acrylic Chemical
Co., Ltd., Tokyo Organic Chemical Industries, Ltd.,
Quimica Trepic, S.A., Yugocryl, Indofil Chemicals, Ltd.,
Curachem, Shipley Company, Rohm and Haas Mexico
S.A. de C.V., and Advanced Genetic Sciences, Inc. In
addition, Rohm and Haas has twenty-four domestic and
thirty-one foreign, wholly-owned subsidiaries, none of
which is publicly owned or has any interest in the out-
come of this case.

* Vardeman was dismissed prior to trial. Helena, Vertac and
ARGE settled their differences with Rohm and Haas Company and
admitted that the patent in suit was valid and enforceable (H: ‘ena
settlec: just prior to trial, Vertac settled during trial, and ARGE
settled after trial). Crystal and Eller are, therefore, the only re-
maining defendants. For ease of reference we hereafter refer to
the remaining defendants as “respondents”. In a related case in
Louisiana, Rohm and Haas Company was awe “ded substantial com-
pensatory damages against another defendant. The Louisiana case
is presently on appeal before the CAFC. See Rohm and Haas Co. V.
Thompson-Hayward Chemical Co., No. 1614 (E.D.La. Feb. 28,
1983), appeal docketed, Nos. 88-981 and 83-1017 (Fed. Cir. May 9
and 19, 1983).

TABLE OF CONTENTS

Page
QUESTIONS PRESENTED ......00000...... nec eeeeeeeeeee. i
PARTIES TO THE PROCEEDING ..................00.......... ii
A I suscsasenebctammosanaenence 1
Teen inueubaninn 1
CONSTITUTIONAL PROVISION, STATUTE AND
RE EL a 2
ST AR 2
A. The Nature of the Case and Proceedings in the
EE a a
B. The Decision of the District Court
i sae seen Of te CAPS 10
REASONS FOR GRANTING THE PETITION 11
> wee eee cee Sor Cove ................................... 11
2. Retroactive Application of the New Test for
(a STEGER RS S161 ISO cD 19
3. The CAFC’s Pattern of Fact-Finding 24
a stusichis aninisisdhulons 29

(iii)

iv

TABLE OF AUTHORITIES

Cases: Page
Abramson v. Nytronics, Inc., 312 F. Supp. 519

Cec. Bee © heccaieincihinindtthiatienictniiitthaciaiatioaatasinidiinene 16
Aktiebolaget Karlstads Mekaniska Werkstad V.

USITC, 705 F.2d 1565 (Fed. Cir. 1983) ............ 25

Alabama Farm Bureau Mut. Cas. Co. V. American
Fidelity Life Ins. Co., 606 F.2d 602 (5th Cir.

1979), cert. denied, 449 U.S. 820 (1980) -........... 16
Allen v. W.H. Brady Co., 508 F.2d 64 (7th Cir.
| ES eae een anes ei eh NL SE Oe 15

American Hoist & Derrick Co. v. Manitowoc Co.,
Inc., 448 F. Supp. 1872 (E.D. Wisc. 1978), aff'd,

608 F.2d 6239 (7th Cir. 1979) ................................. 15
American Hoist & Derrick Co. v. Sowa & Sons,

Inc., 725 F.2d 1850 (Fed. Cir. 1984) —............... 15, 19
American Optical Corp. v. United States, 179

ok 4 6G | eee 14
Avnet, inc. v. Scope Industries, 499 F. Supp. 1121

I I es 16
Baginsky v. United States, 697 F.2d 1070 (Fed.

Cir.), cert. denied, 104 S.Ct. 423 (1983)................ 2, 25

Bose Corp. ¥. Consumers Union of the U.S., Inc.,

52 U.S.L.W. 4513 (U.S. April 30, 1984) (No.

Re EPA Es Ra a ea Lae ANE ee So SE 26
Brown-Bridge Mills, inc. v. Eastern Fine Paper,

Inc., 700 F.2d 759 (1st Cir. 1983)
Chevron Oil Co. v. Huson, 404 U.S. 97 (1971)......i, 19, 22
Citizens to Preserve Overton Park v. Volpe, 401

A i 19
CMI Corp. v. Barber-Greene Co., 683 F.2d 1061
CR a 28

Connell v. Sears, Roebuck & Co., 722 F.2d 1542

(Fed. Cir. 1983) ............. ec eG We Pe 24, 28
Digital Equipment Corp. v. Diamond, 653 F.2d 791

I Sa ....14, 21, 23
Driscoll v. Cebalo, 731 F.2d 878 (Fed. Cir. 1984).. 14
Edward Valves, Inc. v. Cameron Iron Works, Inc.,

286 F.2d 933 (5th Cir.), mod. on other grounds,

289 F.2d 355 (5th Cir.), cert. denied, 368 U.S.
833 (1961) 28

Vv

TABLE OF AUTHORITIES—Continued

Page
Garlock, Ine. v. W. L. Gore & Associates, 721 F.2d

i? Fi, Se | eee 24
Graver Tank & Manufacturing Co. v. Linde Air

Products Co., 336 U.S. 271 (1949) ............-.------ 26
Guzman Vv. Pichirilo, 369 U.S. 698 (1962) ........... 28
Hughes Aircraft Co. v. United States, 717 F.2d

Se. Cs I, IID macecccetetrennsenstenetieerentncsninainne 24
In re Certain Steel Rod Treating Apparatus

& Components Thereof, 215 U.S.P.Q. 237

og tA. Gh | EA eee ane mene 24
In re Clark, 522 F.2d 623 (C.C.P.A. 1975) ............ 24
Inwood Laboratorics, Inc. Vv. Ives Laboratories,

Pei: Ie My IN III socinencteeteesctnnncintanndiclensanices 26, 28
Kingsland v. Dorsey, 338 U.S. 318 (1949) ............ 17
Lefkowitz v. Cunningham, 431 U.S. 801 (1977) -... 17
Lefkowitz v. Turley, 414 U.S. 70 (1973) ............. 17
Litton Systems, Inc. v. Whirlpoel Corp., 728 F.2d

RR a oe ee 24
Lundy Elec. & Sys., Inc. Vv. Optical Recognition

Sys., Inc., 362 F. Supp. 180 (E.D. Va. 1973),

aff'd, 493 F.2d 1222 (4th Cir. 1974) 2.000022. 20
Minnesota v. Murphy, 104 S. Ct. 1186 (1984) ........ 17

Monsanto Co. v. Rohm and Haas Co., 312 F.Supp.
778 (E.D. Pa. 1970), aff'd, 456 F.2d 592 (3d
Cir.), cert. denied, 407 U.S. 934 (1972) ....... 5, 6, 7, 17,
18, 19, 20, 21, 27
Nicholson File Co. v. H.K. Porter Co., 341 F.
Supp. 508 (D.R.I. 1972), aff'd, 482 F.2d 421
Ee UOTE Sccuineccsicoiocn nace itinachednaiddatin oats 16
North Carolina v. Chas. Pfizer & Co., Inc., 384
F.Supp. 265 (E.D.N.C. 1974), aff’d, 537 F.2d 67
4th Cir.), cert. denied, 429 U.S. 870 (1976).... 19, 28
Norton Vv. Curtiss, 433 F.2d 779 (C.C.P.A. 1970).. 14, 27
Oetiker v. Jurid Werke GMBH, 671 F.2d 596
0 | Gg. Rg RRC eran OOD Mee ORO 14, 28
Orthopedic Equipment Co., Inc. v. All Orthopedic
Appliances, Inc., 707 F.2d 1876 (Fed. Cir.
TDINUEET scidnshcsscucttacenseinulshiieicesctidaais’tataibacebatiniaaianiinaniagtsecaiasiaa 14, 27

vi

TABLE OF AUTHORITIES—Continued
Page

Pfizer, Inc. v. International Rectifier Corp., 545
F.Supp. 486 (C.D. Cal. 1980), aff'd, 685 F.2d
357 (9th Cir. 1982), cert. denied, 103 S.Ct. 818
(1983) ....... sc cnieiaias itieesihieinihasitamaina dda ities 15, 20
Pfizer, Inc. v. International Rectifier Corp., 538
F.2d 180 (8th Cir. 1976), cert. denied, 429 U.S.
WORD CIC ED cevctenwecienenteeceeeaceties 14, 20, 28
Plastic Container Corp. v. Continental Plastics,
607 F.2d 885 (10th Cir. 1979), cert. denied,
Be Ee Saar 18, 19
Precision Instrument Mfg. Co. v. Automotive
Maintenance Mach. Co., 324 U.S. 806 (1945) ....6, 16, 17,
18, 19, 20, 21
Pullman Standard v. Swint, 456 U.S. 273 (1982).. 26, 28
RCA Corp. Vv. Applied Digital Data Systems, Inc.,

730 F.2d 1440 (Fed. Cir. 1984) .......................... 24
Rohm & Haas Co. v. Dawson Chemical Co., 448
oS a lt ee 2

Rohm and Haas Co. v. Thompson-Hayward Chemi-
cal Co., No. 1614 (E.D.La. Feb. 28, 1983), appeal
docketed, Nos. 83-981 and 83-1017 (Fed. Cir.
Ee Oe Fe vcecentieetenstetiinninatterntcernetncniinnn ii
Ronson Corp. Vv. Liquitin Aktiengesellschaft, 370
F.Supp. 597 (D.N.J. 1974), aff'd, 497 F.2d 394

(3d Cir.), cert. denied, 419 U.S. 870 (1974)........ 16
Rosenblatt v. Northwest Airlines, Inc., 485 F.2d

gh RISER A err co See ea 16
Santosky v. Kramer, 455 U.S. 745 (1982) ............. 22
Schnadig Corp. v. Gaines Mfg. Co., 494 F.2d 383 |

RRL ee EN CANES 14, 15, 28
Skil Corp. v. Lucerne Products, Inc., C84 F.2d 346

(6th Cir.), cert. denied, 459 U.S. 991 (1982) ...... 28

Sonesta International Hotels Corp. Vv. Wellington

Associates, 483 F.2d 247 (2d Cir. 1973) 2.0.0... 16
Spevak v. Klein, 385 U.S. 511 (1967) -...00-.00.. 17
Square Liner 360°, Inc. v. Chisum, 691 F.2d 362

OE RI RRR SS rk Ra See 15, 28

Stratoflex, Inc. v. Aeroquip Corp., 713 F.2d 1530
CHOG. CUR. BBG) cecceeccceweeesnss (isinalihinipaseidiaaindaadandiinetics 24

vii

TABLE OF AUTHORITIES—Continued
Page

TP Laboratories, Inc. v. Professional Positioners,

Inc., 724 F.2d 965 (Fed. Cir. 1984), petition

for cert. filed, No. 83-1939 (U.S. April 2, 1984) .. 24
Triumph Hosiery Mills, Inc. v. Alamance Indus-

tries, Inc., 299 F.2d 793 (4th Cir.), cert. denied,

ee .sscmmiennbanenaiangeen 19
United States v. American Bell Telephone Co.,

I I ttle 14
United States v. Chemical Foundation, Inc., 272

Ue a 19

United States v. Cold Metal Process Co., 62 F.
Supp. 127 (N.D. Ohio 1945), aff'd, 164 F.2d
754 (6th Cir. 1947), cert. denied, 334 U.S. 811
I ii a a 15
United States v. Pfizer, Inc., 498 F.Supp. 28 (E.D.
Pa. 1980), aff'd, 676 F.2d 51 (3d Cir. 1982)... 19, 28
United States v. National Association of Real

Estate Boards, 339 U.S. 485 (1950) 00000000000... 26
United States v. United States Gypsum Co., 333

I a 25
United States v. Yellow Cab, 338 U.S. 338

MERE EE eee eee RNC Tmo em 26

White v. Jeffrey Mining Mach. Co., 723 F.2d 1553
(2d Cir. 1984), petition for cert. filed, No. 83-
I a ae

Zenith Radio Corp. Vv. Hazeltine Research, Inc.,
3 8s Re en en enre

Statutes :

i ee
8 ARTS
40 63, Sa
Sra
“= = ee ceigieeeees
I 2, 14, 15, 16, 22

Regulations:

oy CPLR. $6 1.866-61 (1068) ..........-.......ccccccccccccrs

re Mr re eet

48 Fed. Reg. 36480 et seq. (1983) (to be codified
at 37 C.F.R. §§ 1.844-61) _....... .

viii

TABLE OF AUTHORITIES—Continued
Page

Congressional Materials:

Hearings on S.677 and S.678 Mar. 20, May 7, 9,

10 and June 18, 1979 Before the Subcommittee

on Improvements in Judicial Machinery of The

Senate Committee on The Judiciary, 96th Cong.,

ist Sess. 675-677, 698-700 (1979) ...................... 27
Hearings on H.R. 6033, H.R. 6934, H.R. 3806, H.R.

2414, April 3, 15, 17, 22, 24, May 8, and June 9,

1980 Before the Subcommittee on Courts, Civil

Liberties and the Administration of Justice of

The House Committee on The Judiciary, 96th

Cong., 2nd Sess. 771-772 (1980) ........................ 27
Hearings on H.R. 2405 April 2 & 8, 1981 Before

the Subcommittee on Courts, Civil Liberties, and

The Administration of Justice of The House

Committee on The Judiciary, 97th Cong., Ist

Ss I a emenianenieenan 27
H. Rep. No. 97-312, 97th Cong., Ist Sess. 37-38
RRS Se a aer SE AECE RP 26
Rules:
ns Ts I, I a eesuiineieioeniell i, 2, 24-26, 28, 29

Constitution :
7 i, ETE ceeereer 2, 16,17

IN THE

Supreme Court of the United States

OCTOBER TERM, 1983

No.

ROHM AND HAAS COMPANY,
Petitioner,
Vv.
CRYSTAL CHEMICAL COMPANY and JoE C. ELLER,
Respondents.

PETITION FOR A WRIT OF CERTIORARI TO THE
UNITED STATES COURT OF APPEALS
FOR THE FEDERAL CIRCUIT

Rohm and Haas Company respectfully prays that a
writ of certiorari issue to review the judgment entered
by the Court of Appeals for the Federal Circuit in this
case.

OPINIONS BELOW

The opinion of the District Court (1la-223a) is reported
at 557 F. Supp. 739. The opinion of the Court of Appeals
on the merits (224a-260a) is reported at 722 F.2d 1556.
The opinion of the Court of Appeals on attorneys’ fees
and costs (268a-279a) is not yet officially reported.

JURISDICTION

The judgment of the Court of Appeals is dated and
was entered December 7, 1983. Petitioner filed a timely
petition for rehearing on January 6, 1984, which was
denied on February 21, 1984. On May 3, 1984, the Chief
Justice granted petitioner’s motion to extend the time to

2

file this petition until July 5, 1984. The jurisdiction of
this Court is invoked under 28 U.S.C. §§ 1254(1) and
2101 (c).

CONSTITUTIONAL PROVISION,
STATUTE AND RULE INVOLVED

The Fifth Amendment to the Constitution of the
United States provides in pertinent part:

No person * * * shall be compelled in any crim-
inal case to be a witness against himself.

35 U.S.C. § 282 provides in pertinent part:

A patent shall be presumed valid * * *. The bur-
den of establishing invalidity of a patent or any
claim thereof shall rest on the party asserting such
invalidity.

Fed. R. Civ. P. 52(a) provides in pertinent part:

Findings of fact shall not be set aside unless
clearly erroneous, and due regard shall be given to
the opportunity of the trial judge to judge the credi-
bility of the witnesses.

STATEMENT

A. The Nature of the Case and Proceedings in the PTO

This case is the culmination of 25 years of litigation,
including a prior decision by this Court’, over patent
rights to the herbicidal use of a chemical compcund known
as propanil. The case now presents the Court with ques-
tions of substantial practical importance involving both
standards of conduct before the Patent and Trademark
Office (“PTO”) and the administration of justice by the
Court of Appeals for the Federal Circuit (“CAFC”).

Rohm and Haas Company (“R&H’’) owns the Wilson
and McRae patent at issue, which claims methods of

1 Rohm & Haas Co. v. Dawson Chemical Co., 448 U.S. 176 (1980).

3

using propanil as a herbicide to kill weeds in food crops
such as wheat and rice. Propanil itself is not patented.
Its only commercial use is in the methods claimed in
R&H’s patent. R&H commercialized propanil in 1961
after years of costly and painstaking research (11la-24a,
88a-89a). As found by the District Court, propanil is
truly a unique herbicide (89a).2 It tremendously in-
creased rice yield and virtually eliminated the need for
hand weeding and deep water flooding of rice, enabling
growers to supply the public with this staple at a lower
cost (24a-25a, 89a-90a) .?

R&H’s inventors, Drs. Wilson and McRae, filed three
patent applications, the first in 1958, the second in 1960,
and the third in 1961 (25a, 37a, 43a). During the period
1959-62, R&H filed nine affidavits in the PTO. The
CAFC bottomed its reversal for fraud on parts of two
of these filed by Dr. MeRae in 1961 and 1962 (252a-
253a). The criticized McRae affidavits were prepared by
Dr. Myers, an R&H patent agent who died in 1963 before
any question regarding the affidavits arose (58a).* Dr.
Myers prepared the affidavits based on tests which Dr.
McRae had conducted or directed.®

? For example. propanil kills weeds associated with rice but does
not kill the rice.

3 The benefit to growers and the public has been reflected in sales
figures. R&H’s sales of »ropanil in the United States for the
patented use have exceec :d $170 million, and its foreign sales
have exceeded $67 million (25a). Since the Wilson and McRae
patent issued in 1974, defendants’ combined sales for the patented
use have exceeded $40 million (CAFC App. 8429-30).

4A patent agent is a non-lawyer who is licensed to practi:e be-
fore the PTO.

5 Dr. McRae was the major witness at trial. He was extensively
questioned about his affidavits. The District Court found that
Dr. McRae believed his affidavits were accurate and correctly re-
flected his views as to the unique herbicidal properties of propanil
(72a).

4

The first of these criticized affidavits compared the
herbicidal activity of propanil to nine related compounds.
One table compared the activity of propauil with one of
these compounds called DCAA in the greenhouse, but did
not disclose that the data on propanil were obtained in
December while the data on DCAA were obtained the fol-
lowing May. As respondents’ expert agreed, plants grown
in May are hardier than those grown in December anc
thus more closely approximate field conditions (CAFC
App. 2714-15).° fod

The second affidavit compared the herbicidal activity
of propanil with two related compounds, DCIBA and
DCMVA, on various crops at different concentrations.
DCIBA and DCMVA were both shown to have high her-
bicidal activity against all the crops tested. At trial, re-
spondents charged that R&H had changed the data on
rice, one of the crops tested, and that the “actual” data
indicated that rice was not harmed by these compounds
at 2 lbs/acre, even though photographs attached to the
affidavit showed that both DCIBA and DCMVA at 2 lbs/
acre killed the rice. R&H admitted that ten years later it
could not find the original data sheet from which the rice
data had been taken. But Dr. McRae testified that his
practice was to compare the affidavit data with the orig-
inal raw data, and that he would never have executed
any affidavit if it was incorrect (CAFC App. 1009-11,
1278, 1282) .7

6 Dr. McRae testified at trial that he was aware of how propanil
behaved in the field and that the relative comparison between
propanil and DCAA shown in the affidavit was accurate (CAFC
App. 1009-11, 1217-18, 1292-93, 1376-77, 1502-03).

7 Dr. McRae explained at trial that the original raw data had not
been transcribed into a permanent notebook (CAFC App. 825, 830-
31, 1009-12). The trial court assessed all of the evidence “in light
of the arguments raised by defendants [respondents]"’ (137a) and
refused to find that any data had been falsified by R&H. See also
n.12 and n.14, infra.

5

In August 1963, the PTO allowed one process claim to
R&H, Monsanto Company and another applicant for in-
terference purposes (35 U.S.C. $185) to determine
which of them had first invented the claimed herbicidal
method of using propanil. Ten years later, in 1973, R&H
won the interference (48a-57a).

During the interference, Monsanto obtained a patent
on propanil itself and sued R&H. On February 17, 1970,
Monsanto’s patent was held invalid for fraud (67a-58a)
because Monsanto had filed affidavits which failed to dis-
close complete data on compounds related to propanil, and
it never supplied the PTO with the missing information.
The Monsanto court ruled that:

The patent applicant should be held to the same
standard of truthful disclosure to the patent office
that Congress has required of the seller of securities
to the public * * * [and] must not omit to state
* * * any material fact necessary to be stated in
order to make the communication taken as [a] whole,
not misleading. [Monsanto Co. v. Rohm and Haas
Co., 312 F. Supp. 778, 793 (E.D. Pa. 1970), aff’d,
456 F.2d 592 (8d Cir.), cert. denied, 407 U.S. 934
(1972) .°]

During the Monsanto litigation, Mr. Simmons, the new
head of R&H’s Patent Department, learned for the first
time of alleged deficiencies in the affidavits filed by R&H’s
patent agent, the deceased Dr. Myers. Although these
affidavits were not at issue in the Monsanto case, they
were attacked by Monsanto’s counse!, and the Monsanto
District Court stated on the record that both Monsanto
and R&H had been “equally disingenuous” in their pre-
sentation of data to the PTO (63a).

Prosecution of the Wilson and McRae application re-
sumed in 1973, after ten years of interference proceed-

8 Emphasis supplied in all quotations in this petition unless
otherwise indicated.

6

ings and litigation between R&H and Monsanto. The
Monsanto decision was the then-leading case on the re-
quirements for avoiding a charge of fraud. Following
the guidelines of that case and this Court’s decision in
Precision Instrument Mfg. Co. v. Automotive Mainte-
nance Mach. Co., 324 U.S. 806 (1945), R&H, under
Mr. Simmons’ direction, compared its voluminous data
on propanil and related compounds with the previously
filed McRae affidavits to determine the accuracy and suf-
ficiency of the affidavits (58a-59a). The District Court
here found that Mr. Simmons “wanted to ensure that
Rohm and Haas disclosed completely all operative facts
to the Patent Office” (58a).

On February 16, 1973, Dr. McRae and outside counsel
retained to assist in the renewed prosecution held an ex-
tensive conference in the PTO with the Examiner respon-
sible for this application, Mr. Thomas (60a). He was
the same Examiner who had initiated the interference
with Monsanto (id). The PTO was informed that a
purpose of this conference was fully to disclose and make
available to the PTO R&H’s existing records on the
herbicidal properties of propanil and related compounds
(CAFC App. 4146-48, 8482-84). R&H invited to the
conference representatives of the Department of Justice,
the PTO Solicitor’s Office (which was responsible for is-
sues of fraud), and the Chief of the Examining Group
for the PTO (60a). Examiner Thomas, along with
R&H’s outside counsel, was present throughout the con-
ference, and the Chief of his Division was present for
part of the time (60a). Dr. McRae was also present to
answer any questions raised by Mr. Thomas, and to ex-
plain any documents or test data in which the Examiner
expressed an interest (61a-68a).

At the time of the conference, Examiner Thomas was
the recognized PTO herbicide expert. He had examined
and was then examining numerous applications involv-
ing propanil and related subject matter. He was thor-

7

oughly familiar with the efforts of both R&H and Mon-
santo to obtain propanil patent rights and stated that he
had already reviewed the Wilson and McRae prosecution
files, which he brought with him to the conference (60a-
61a).°

During the conference, R&H explained the Monsanto
litigation (61la-62a) and specifically discussed with Mr.
Thomas Monsanto’s claim that R&H had withheld data
from the PTO, as well as the Monsanto District Court’s
comment that Monsanto and R&H had been “equally
disingenuous with respect to the comparison of the
herbicidal effects” of propanil and related compounds
(63a) .?°

Many of the documents present at the conference had
been prenumbered and included the test data from which
the criticized McRae affidavits had been prepared. These
base data records, numbering less than 100 pages, were
(1) especially singled out in the documents and specifi-
cally identified at the conference, (2) keyed to the prior
affidavits, (3) compared side by side with each of the

® When respondents finally took Mr. Thomas’ deposition nine
years after this conference, Mr. Thomas testified that he had vir-
tually no recollection of anything that transpired at the 21% hour
conference (258a). The trial judge specifically commented upon the
Examiner’s inability to recall most of what transpired during the
interview (CAFC App. 4536-37) and properly accorded little weight
to this testimony. The CAFC as well noted that Mr. Thomasg’ testi-
mony indicated that “he had forgotten nearly all of what happened
at the interview” (258a).

10 Key documents from the Monsanto case, appropriately marked
with items of particular concern to the Examiner, were left with
Mr. Thomas at his request. Dr. McRae’s testimony in Monsanto
concerning his affidavits was one of the items specifically marked
for the Examiner’s consideration. Mr. Thomas stated that he would
review these documents, and he acknowledged that he had done so
when he returned the documents several weeks later (62a).

8

affidavits, aud (4) discussed in detail with Examiner
Thomas (63a-67a) ."*

Following the conference, R&H filed an amendment to
its application in which it cancelled all existing claims
and introduced an entirely new set of claims. The amend-
ment summarized the conference, and R&H offered to sup-
ply more information and copies of any additional docu-
ments discussed at the conference, but the Examiner did
not request additional dccumentation (68a-70a).

After a series of rejections and further amendments,
the Examiner finally held the Wilson and McRae claims
patentable. The patent in suit thereafter issued on June
11, 1974 (73a-78a).

B. The Decision of the District Court

The tria! in this case lasted over two months. The Dis-
trict Court, sitting without a jury, heard the deposition
and trial testimony of over 40 witnesses, including the
patent applicant, Dr. McRae, whose affidavits before the
PTO were later the basis for the CAFC’s reversal. The
trial transcript exceeded 4900 pages, and over 3000 pages
of exhibits were introduced. Dr. McRae was examined
and cross-examined at length by respondents and the Dis-
trict Court about his affidavits and their background
tests. The District Court filed a 268-page opinion weigh-
ing the evidence, resolving conflicts, and making explicit
findings of fact and conclusions of law on all issues.

In its opinion, the District Court stated that the record
was “replete with inconsistencies.” It found, however,

11 The criticized McRae affidavits were filed by R&H after re-
jection of its claims by the PTO based on certain prior art. Ex-
aminer Thomas testified he was aware of these rejections (CAFC
App. 3879-80). Moreover, at the conference, R&H discussed not
only the McRae affidavits but also the prior art that precipitated
the rejections during the prosecution of the Wilson and McRae
applications (61a-66a).

9

after carefully reviewing all of the evidence, that “the
more credible evidence” supported its rejection of respond-
ents’ fraud defense (109a, 113a, 137a-138a).

On the issue of alleged wrongful intent—one of the
elements respondents had to prove to establish fraudulent
procurement of a patent—the District Court found as
a fact that Dr. McRae believed in good faith that his
affidavits were accurate (72a). The court further found
that R&H “was of the good faith belief that patent Ex-
aminer Thomas appreciated the information supplied and
its implications,” and that R&H reasonably believed he
“understood what he had been told and had taken the
disclosures into account when allowing the Wilson patent”
(70a-7la). The District Court therefore found that “the
patent in suit was procured by Rohm and Haas in good
faith and not through fraudulent or inequitable conduct”
(109a; see also 193a).

With respect to R&H’s alleged misrepresentation and
inadequate disclosure of propanil test data—other ele-
ments as to which respondents had the burden of proof—
the District Court found that during the interview, R&H
specifically informed Mr. Thomas: (1) “of the omissions
of herbicidal test data from the earlier filed affidavits”
(72a); (2) that R&H “had been unable to locate all of
the test data in its records corresponding to the data re-
cited in the affidavits” (67a); and (3) that R&H “sup-
plied to the extent possible the omitted data and all other
herbicidal data in Rohm and Haas’ possession” (72a).
The court also made the factual finding that R&H’s dis-
closures had “alerted the patent examiner to the im-
portance of comparative herbicidal data” (63a) and that
“all of the deficiencies which existed in the prosecution
* * * were corrected by the complete and detailed dis-
closure of herbicidal data and information to the Patent
Office in 1973” (72a).

10
The District Court explicitly held that:

[D]efendants have failed to carry the burden and
adduce sufficient probative evidence to establish that
Rohm and Haas procured the patent in suit by
fraud or inequitable conduct. The record * * * un-
equivocally indicates that the patent examiner was
fully informed of all of the factors material to the
patentability of the methods claimed in plaintiff's
patent. [137a.]

C. The Opinion of the CAFC

The CAFC reversed and invalidated the Wilson and
McRae patent because it found the McRae affidavits to
be fraudulent and the fraud not “cured.” The opinion
was bottomed on the assumption that “R&H intentionally
made material misrepresentations * * * the effects of
which were not eliminated prior to issuance” (224a-
225a). The CAFC did not hold that the District Court’s
contrary findings of fact were “clearly erroneous” or
lacking in record support. Instead, it treated all key
findings of fact by the trial court as either “irrelevant”
or “legal error,” and made its own contrary factual find-
ings based on “facts revealed by the arguments [of re-
spondents’ counsel] on appeal” (231la).”

The CAFC then, swa sponte, announced a new test
imposing novel and unprecedented requirements for al-
leviating or curing the presumed effect of the purported
misrepresentations. The test had not been advocated by
the prevailing party or discussed in any of the briefs

12 For example, the CAFC incorrectly assumed that certain data
in one of the McRae affidavits were “falsified” (252a). It based
this assumption on R&H’s alleged failure to deny the charge.
The record in this case unequivocally establishes, however, that
R&H consistently denied in both its briefs and at oral argument
any intentional misstatement or falsification (see, e.g., Brief for
Appellee in the CAFC at 12 n.18, 19 n.36; Transcript of Oral
Argument annexed to Hutz Affidavit filed in the CAFC on Feb. 3,
1984), and the trial court found that Dr. McRae believed his affi-
davits were accurate (72a). See also n.7, supra, and n.14, infra.

11

before the court. The CAFC cited no precedent for its
test.

Under the CAFC’s test, patent applicants, who are pre-
sumed to be “aware” of “intentional material misrepre-
sentations,” are required to: (1) “expressly advise the
PTO” in writing of the misrepresentations; (2) provide
the “actual facts” and, if “any PTO action has been
based on the misrepresentation,” request “further exami-
nation in light thereof”; and (3) establish patentability
“on the basis of the new and factuaily accurate record”
(255a-256a). The “complete cure must also be demon-
strated by clear, unequivocal, and convincing evidence”
(256a).

The CAFC applied its newly-announced test retroac-
tively, without affording R&H any opportunity to satisfy
it, and held that R&H had failed to comply with it as a
matter of law—a determination in direct conflict with
the numerous explicit findings of fact of the District
Court, including a direct finding that “all of the defi-
ciencies * * * were corrected” (72a). The CAFC thus
held that the Wilson and McRae patent was invalid be-
cause of fraud (258a).

REASONS FOR GRANTING THE PETITION

1. The CAFC’s Test For Cure. The defense of fraud
on the PTO is one of the most pervasive and vexing prob-
lems with which federal courts must currently cope. Wil-
ful infringers of valid patents almost invariably assert
this defense, and they then spend inordinate amounts of
time exploiting it during discovery, at trial, and on ap-
peal. Fraud is also being asserted with ever increasing
frequency in proceedings before the PTO. For example,
statistics provided by that office show that in January
1982, 78% of the protested reissue applications pending
in the PTO which were also in litigation involved issues
of fraud and candor. Less than two years later, in De-

iia

12

cember 1983, that figure had risen to 84%—more than
4 out of every 5 such protested reissue applications.

The case at bar thus presents the Court with questions
of national importance vital to the enforcement of the
patent law which are now shrouded in doctrinal uncer-
tainty by the unprecedented fraud-purging standards
adopted by the CAFC. These “new standards” will in-
terfere with the effective handling of patent cases by
District Courts throughout the United States. The de-
termination of the issues will have a direct, dramatic,
and immediate impact on the patent system.

It should be noted at the outset that the alleged “fraud”
dealt with here was not a misrepresentation or omission
which a party left uncorrected or that produced results.
To the contrary, R&H took the steps it then believed were
proper and sufficient to rectify any misrepresentation
that may have occurred well before the PTO made a
final decision on the merits of R&H’s patent application.
Indeed, the only data relied upon by respondents to sup-
port their fraud charges consisted of data R&H itself
independently discovered and voluntarily submitted to
the PTO (68a). Hence, the issue is: what must a party
do while its patent application is pending in order to
correct an earlier misrepresentation or omission?’

The CAFC’s decision formulated entirely new re-
quirements for curing fraud which no other court had
theretofore adopted. The CAFC has acknowledged the
unique and far-ranging nature of its decision. In deny-
ing respondents’ application for attorney fees, the court
stated that its previous holding on the merits “breaks
new ground on the subject of fraud in the PTO and sets
new standards in this area of the law” (277a) .¥

13 The court recognized that in prior cases, attorney fees had
been awarded where the patentee had committed fraud or engaged
in other inequitable conduct before the PTO (276a-277a). Never-
theless, it refused to award either attorney fees or costs in this

13

a. Under the CAFC’s “new standards,” it is not enough
for an applicant to inform the PTO fully and accurately
of all the material facts bearing on the application in
such a manner that the PTO could not be misinformed
about those facts. Instead, an applicant who is concerned
about the possibility of “intentional material misrepre-
sentations” (here an alleged failure to disclose**) must
“expressly advise the PTO” in writing that there has
been a misrepresentation. Only then is the applicant en-
titled to provide the “actual facts” (255a-256a).

Mechanical compliance with this unprecedented rule is
mandatory. In this case, its application by the CAFC has
resulted in the destruction of a pioneer herbicide patent
which the District Court held met all of the statutory
criteria for patentability.“ The District Court also found
that the patent had been infringed from the day it was
issued. Fraud was found de novo by the Court of Ap-
peals for nondisclosure or misstatement of facts even
though the District Court found that all the facts had
been disclosed long prior to final PTO action and within
ample time for the PTO to act (72a).

b. Until this decision, it was the well established rule
that the proponent of the defense of fraud had the bur-

case precisely because its prior holding “breaks new ground” and
“sets new standards” (277a).

14 The CAFC’s test as posited assumes the commission of “inten-
tional misstatements” and “misconduct.” R&H has steadfastly
maintained that no “intentional misstatements” or “misconduct”
occurred. See n.7 and n.12, supra. The District Court found that
R&H acted in good faith. R&H has admitted only that some avail-
able data, both favorable and unfavorable, were omitted from
affidavits during the early stages of the Wilson and McRae prosecu-
tion and that the reasons for this omission cannot be ascertained.

15 Both the Patent Examiner and the District Court, with all of
the “actual facts” before them, determined respectively that the
Wilson and McRae invention was unique and thus patentable and
that the R&H patent was valid. Respondents have repeatedly
acknowledged that propanil’s herbicidal activity is unique.

14

den of proving each of the traditional elements of fraud
(misrepresentation, materiality, reliance, and wrongful
intent) by clear, unequivocal and convincing evidence.”*
Contrary to all these authorities, in the case at bar the
CAFC made its own findings, and on the basis thereof,
under the guise of a test for cure, required the patentee
to admit in writing to the commission of misrepresenta-
tion, to the existence of materiality and reliance (e.g.,
that the PTO’s prior actions were based on the misrepre-
sentation), and, in effect, to wrongful intent—each of the
key elements of fraud.’ The required admissions plainly
force the patentee to carry the challenger’s burden of
proof on the elements of fraud, even though each ele-
ment is disputed.

ce. The CAFC presumed wrongful intent from the as-
sumed misrepresentation of “asserted material facts”
(258a-255a)—pivotal facts that R&H disputed and the
District Court found respondents had failed to prove.
By requiring the patentee to admit the elements of mis-
representation, materiality, and reliance, from which
wrongful intent was inferred, the CAFC effectively elimi-
nated scienter as an element of the challenger’s burden
of proof.* The Court of Appeals also totally failed to

16 See 85 U.S.C. § 282 (the burden of proving invalidity is on the
patent’s challenger) ; United States v. American Bell Tel. Co., 167
U.S. 224, 251 (1897); Orthopedic Equipment Co. v. All Orthopedic
Appliances, Inc., 707 F.2d 1876, 1883 (Fed. Cir. 1983); Oetiker
v. Jurid Werke GMBH, 671 F.2d 596, 600 (D.C. Cir. 1982) ; Digital
Equipment Corp. v. Diamond, 653 F.2d 701, 714-16 (1st Cir. 1981) ;
Pfizer, Inc. v. International Rectifier Corp., 538 F.2d 180, 187 (8th
Cir. 1976), cert. denied, 429 U.S. 1040 (1977); American Optical
Corp. v. United States, 179 U.S.P.Q. 682 (Ct. Cl. 1973) ; Norton v.
Curtis, 483 F.2d 779, 792-797 (C.C.P.A. 1970).

17{]t should be emphasized, however, that under prior case law
reliance was considered an element of fraud. In the case at bar, the
CAFC eliminated reliance as a separate element. See Driscoll Vv.
Cebalo, 731 F.2d 878 (Fed. Cir. 1984) (citing the instant case).

18In Schnadig Corp. Vv. Gaines Mfg. Co., 494 F.2d 3838, 392-394
(6th Cir. 1974), the Sixth Circuit expressly rejected utilization of

15

consider whether the PTO ever relied upon the allegedly
false or withheld test data in issuing the patent in suit.
The CAFC thereby eliminated the reliance element under
the pretext of a test for curing fraud.

d. In addition, the CAFC required the patentee, after
it had “expressly” admitted the key elemerts of the in-
fringer’s case, to demonstrate so-called curative disclo-
sures by the clear, unequivocal, and convincing evidence
standard of proof. The patentee must itself bear the
burden of disproving the asserted fraud. The CAFC’s
bifurcated procedure therefore clearly places the ulti-
mate burden of proof on the patentee. That result is
plainly at odds with 35 U.S.C. § 282, which unequivocally
mandates that the burden of proving invalidity rests on
the party asserting it. The CAFC’s decision is thus con-
trary not only to every prior case on the subject but to
the governing statute itself.

e. Under prior law, the courts did not examine an ap-
plicant’s multi-year prosecution at intermediate points;
rather, the patent application process was considered as
a whole."* By contrast, the CAFC concluded that there
was patent-defeating behavior due to interim omissions
or misstatements, and then separately evaluated the later
presentation of corrective information prior to issuance

“strict liability” in resolving patent fraud issues. In the instant
case the District Court found as a fact that R&H acted in good
faith (109a), but the CAFC ruled that this finding was irrelevant
(246a). The CAFC’s decision is therefore in conflict with the Sixth
Circuit’s decision in Schnadig Corp. See also Square Liner 860°,
Inc. V. Chisum, 691 F.2d 862, 874 (8th Cir. 1982).

19 See, e.g., Allen v. W. H. Brady Co., 508 F.2d 64, 67 (7th Cir.
1974) ; Pfizer, Inc. v. International Rectifier Corp., 545 F. Supp. 486,
522-524 (C.D. Cal. 1980), aff'd, 685 F.2d 857 (9th Cir. 1982), cert.
denied, 103 S. Ct. 818 (1983); American Hoist & Derrick Co. v.
Manitowoc Co., Inc., 448 F. Supp. 1872, 1884-85 (E.D. Wise.
1978), aff'd, 603 F.2d 629 (7th Cir. 1979); United States v. Cold
Metal Process Co., 62 F. Supp. 127, i140 (N.D. Ohio 1945), aff'd,
164 F.2d 754 (6th Cir. 1947), cert. denied, 884 U.S. 811 (1948).

16

of the patent under different standards of disclosure and
a different burden of proof. Prior cases followed an ap-
proach consistent with 35 U.S.C. § 282 and principles
developed in the securities laws.” Misstatements and
omissions could be rectified before final PTO action by
full disclosure of all material facts, thereby defeating
assertions of wrongful intent, misrepresentation, materi-
ality, and reliance. The patents’ challengers had the bur-
den of proving that these elements of fraud were not
nullified by corrective disclosures. Courts then assessed
the fraud defense at the eid of the patent prosecution,
when all of the bases of allowance could be accurately
determined. The District Court in the case at bar, fol-
lowing that procedure, thus found that R&H had made
a “complete and detailed disclosure” of all material facts
to the PTO “within sufficient time for the Patent Office
to take whatever action it deemed necessary” (72a). The
Court of Appeals erroneously rejected this approach.

f. The CAFC’s “cure” rule is fundamentally flawed for
another equally important reason. The rule is contrary
to the policies underlying the Fifth Amendment and to
public policy generally. In order to satisfy the rule for
cure and the concomitant burden and standard of proof,
the patent applicant, usually a corporation, will have to
force an individual, 7.e., the inventor, another affiant or

20 Under the securities laws, timely disclosure of the facts and
third-party allegations of wrongdoing are all that is required to
nullify a charge of fraud. See Alabama Farm Bureau Mut. Cas.
Co. v. American Fidelity Life Ins. Co., 606 F.2d 602, 610-611 (5th
Cir. 1979}, cert. denied, 449 U.S. 820 (1980) ; Sonesta International
Hotels Corp. v. Wellington Associates, 483 F.2d 247, 255 (2d Cir.
1973) ; Rosenblatt v. Northwest Airlines, Inc., 485 F.2d 1121, 1128
(2d Cir. 1970); Avnet, Inc. v. Scope Industries, 499 F. Supp.
1121, 1124-25 (S.D.N.Y. 1980); Ronson Corp. v. Liquifin Aktien-
gesellschaft, 370 F. Supp. 597, 602 (D.N.J. 1974), aff'd, 497 F.2d
394 (3d Cir.), cert. denied, 419 U.S. 870 (1974); Nicholson File
Co. v. H. K. Porter Co., 341 F. Supp. 508, 521 (D.R.I. 1972), aff'd,
482 F.2d 421 (1st Cir. 1973); Abramson v. Nytronics, Inc., 312
F. Supp. 519, 526 (S.D.N.Y. 1970).

17

an attorney-agent, to confess in writing to facts from
which, without more, the court holds that fraud can be
inferred. In this case, the patent was invalidated be-
cause the applicant had not characterized certain prior
disclosures as fraudulent misrepresentations and had not
made written admissions as to each element on which
the CAFC based its finding of fraud, even though the
facts were disputed, a key participant was dead, and in-
ferences were, at best, conflicting. Requiring, as a pre-
requisite to cure, that the applicant admit the elements
from which a court can find fraud, thereby compelling
the applicant to expressly admit facts which may tend
to incriminate the affiant or attorney-agent, directly con-
flicts with the policies underlying the Fifth Amendment
strictures against self-incrimination;* where the appli-
cant is an individual, these strictures are directly vio-
lated.

g. In adopting the “new standards,” the CAFC lost
sight of the most important policy considerations on
which the applicant’s duty of full disclosure is based.
These considerations, set forth by this Court in Precision
Instrument Mfg. Co. v. Automotive Maintenance Mach.
Co., supra, were interpreted by the Third Circuit in an
earlier chapter of this litigation, Monsanto Co. v. Rohm

21 Under 18 U.S.C. § 1001 the affiant or attorney-agent may be
subject to fines up to $10,000 and imprisonment up to five years.
See also 18 U.S.C. § 371. Under proposed amendments to 37 C.F.R.
§§ 1.344 et seq., any such admission of wrongdoing subjects the
involved attorney or agent to “suspension, disbarment or exclusion
from practice.” 48 Fed. Reg. 36480 et seq. (1983) (to be codified
at 37 C.F.R. §§ 1.344-61). Cf. Kingsland vy. Dorsey, 338 U.S. 318
(1949). See Lefkowitz v. Turley, 414 U.S. 70 (1973). See also
Lefkowitz v. Cunningham, 481 U.S. 801, 806 (1977) (“direct eco-
nomic sanctions and imprisonment are not the only penaities capable
of forcing the self-incrimination which the Amendment forbids’’) ;
Spevak v. Klein, 385 U.S. 511, 516 (1967) (threat of disbarment,
loss of professional standing, and loss of livelihood are sufficient
compulsion and violate the Fifth Amendment). See gene lly Minne-
sota Vv. Murphy, 104 8S. Ct. 1136, 1146 (1984).

18

& Haas Co., 456 F.2d at 600: a “failure to make total
disclosure” of test data, thereby making it “impossible
for the Patent Office fairly to assess * * * [the] applica-
tion against the prevailing statutory criteria,” constituted
a transgression of “equitable standards of conduct owed
the public by the applicant.” Precision Instrument and
Monsanto insure informed agency decision-making by re-
quiring that complete and reliable facts be provided to
the agency within time for the agency to act. In keeping
with this requirement, the decisions uniformly held, un-
til the CAFC’s decision in this case, that timely disclo-
sure of all material facts precluded a charge of fraud.”
The District Court below correctly followed the holdings
of these prior decisions.

The CAFC’s new rule is inconsistent with Precision
Instrument and Monsanto. Requiring a written admis-
sion of facts which may tend to prove criminal conduct
as a prerequisite to cure will deter disclosure. The
CAFC’s rule thus conflicts with the public interest in
full, fair, and timely disclosure of all material facts to
the affected agency. Moreover, the application of the
rule in this case resulted in the invalidation of an ob-
jectively meritorious patent. Viewed in this light, the
CAFC’s rule also conflicts with the underlying basis of
the patent system, which attempts to promote innovation
and full disclosure of inventions for the benefit of the
public.

h. In applying its rule for “cure”, the CAFC com-
mitted two additional errors. First, it concluded that
R&H’s good faith belief that the Patent Examiner “ap-
preciated the information supplied and its implications”
was “irrelevant” (257a). Second, the CAFC concluded
that R&H had no right to rely on the expertise of the
PTO or Examiner to assess the “actual” facts (which the
District Court had found were fully and fairly disclosed

22 See n.19 and n.20, supra.

Ses de Nes ae

ey en

19

in good faith) (256a-258a).2* These determinations also
run contrary to the decisions of this Court holding that a
government agency is presumed to do its job.

The CAFC was in error both in establishing its new
rule and in applying it in this case. But regardless of
the propriety of its decision, the rule is of such enormous
importance in the patent law, particularly in view of the
extraordinary and increasing use being made of fraud
claims, that the rule and its underlying rationale should:
be examined by this Court for adoption or rejection.
Absent such a review, there will be increasing turmoil
and litigation in this important area of law.

2. Retroactive Application Of The New Test For Cure.
The CAFC applied its new and unprecedented standards
on burden of proof and “cure” retroactively to a patent
prosecution which commenced 25 years before the deci-
sion was handed down and to a “cure” which occurred
ten years before that date. In so doing, the court ignored
the principles enunciated by this Court in Chevron Oil
Co. v. Huson, 404 U.S. 97, 106-107 (1971).

Gross unfairness has resulted from this retroactive ap-
plication. A party in good faith prosecuted a patent and

23 The CAFC’s ruling on these points is in conflict with estab-
lished law. See, e.g., Plastic Container Corp. v. Continentai Plastics,
607 F.2d 885, 901 (10th Cir. 1979), cert. denied, 444 U.S. 1018
(1980) ; United States v. Pfizer, Inc., 498 F. Supp. 28, 35-36 (E.D.
Pa. 1980), aff'd, 676 F.2d 51 (3d Cir. 1982); North Carolina v.
Chas. Pfizer & Co., Inc., 384 F. Supp. 265, 279 (E.D.N.C. 1974),
aff'd, 537 F.2d 67 (4th Cir.), cert. denied, 429 U.S. 870 (1976).

24 See Citizens to Preserve Overton Park v. Volpe, 401 U.S. 402,
413-416 (1971); United States v. Chemical Foundation, Inc., 272
U.S. 1, 14-15 (1926); American Hoist & Derrick Co. v. Sowa &
Sons, Inc., 725 F.2d 1350, 1859 (Fed. Cir. 1984) (recognizing “the
deference that is due to a qualified government agency presumed
to have properly done its job, which includes one or more examiners
who are assumed to have some expertise * * * and whose duty it is
to issue only valid patents”).

20

litigated its validity under then-existing standards, only
to be later instructed by the Court of Appeals that the
applicable iaw, including the controlling burden and
standard of proof and evidentiary rules, was materially
different from the rules upon which the litigant and the
District Court had reasonably relied.

In Precision Instrument, 324 U.S. at 818 (citation
omitted), the Court delineated the duty of disclosure to
the PTO as follows:

Those who have applications pending with the Patent
Office or who are parties to Patent Office proceedings
have an uncompromising duty to report to it all facts
concerning possible fraud or inequitableness under-
lying the applications in issue. * * * This duty is
not excused by reasonable doubts as to the sufficiency
of the proof of the inequitable conduct nor by resort
to independent legal advice. Public interest demands
that all facts relevant to such matters be submitted
formally or informally to the Patent Office, which
can then pass upon the sufficiency of the evidence.

This Court thus expressly stated that in cases involving
possible fraud, an applicant must “report * * * all facts,”
and this submission may be made “informally.” In Pfizer,
Inc. v. International Rectifier Corp., 538 F.2d at 193 n.27,
the Eighth Circuit construed this Court’s admonition in
Precision Instrument to provide that matters could be
brought “oraily or informally to the attention of the
Patent Office.” 2 Similarly, in Monsanto Co. v. Rohm and
Haas Co., supra, the Third Circuit held that, under Preci-
sion Instrument, it was a “failure to make total dis-
closure” of all material information and test data that

25 See also Triumph Hosiery Mills, Inc. v. Alamance Industries,
Inc., 299 F.2d 793, 796-797 (4th Cir.), cert. denied, 370 U.S. 924
(1962) ; Pfizer, Inc. v. International Rectifier Corp., 545 F. Supp.
at 535; Lundy Elec. & Sys., Inc. Vv. Optical Recognition Sys., Inc.,
362 F. Supp. 130, 142 (E.D. Va. 1973), aff'd, 493 F.2d 1222 (4th
Cir. 1974).

21

constituted a transgression of “equitable standards of
conduct.” 456 F.2d at 598-600.

In 1973, when R&H resumed prosecution of its appli-
cation after the Monsanto litigation, the PTO rules of
practice and precedent offered no guidance to an appli-
cant in R&H’s position.** R&H could find guidance only
in prior case law. In accordance with Precision Instru-
ment and Monsanto, R&H presented “all facts concern-
ing possible fraud or inequitableness” (inciuding all data
on propanil and related compounds) to the Examiner in
charge of the application. R&H also extended invitations
to the Justice Department, the PTO’s Solicitor’s Office,
and the Chief of the PTO’s Examining Group to review
the facts (60a).

The District Court carefully applied the tests set forth
in Precision Instrument and Monsanto, and ruled that
the “record * * * unequivocally indicates that the patent
examiner was fully informed of all of the factors mate-
rial to patentability” (137a). The District Court thus
held that respondents “failed to establish fraud or in-
equitable conduct” (id.).

In rejecting the traditional rules followed by the Dis-
trict Court and applying a new burden and standard of

26 As the First Circuit stated in Digital Equipment Corp. v.
Diamond, 653 F.2d at 715, “the only relevant codified administra-
tive standard governing the conduct of applicants before the PTO
was former Rule 56’s cryptic proscription of ‘fraud.’” This rule
simply provided:

Improper applications. Any application signed or sworn to in
blank, or without actual inspection by the applicant, and any
application altered or partly filled in after being signed or
sworn to, and also any application fraudulently filed or in
connection with which any fraud is practiced or attempted on
the Patent Office, may be stricken from the files. [37 C.F.R.
§ 1.56 (1949).]

In 1977, long after the Wilson and McRae prosecution, Rule 56 was
substantially revised to set forth detailed procedures for disclosures.

22

proof, the CAFC denied R&H any opportunity to comply
with the new standards. This Court has recognized that
such a result is fundamentally unfair. Cf. Santosky Vv.
Kramer, 455 U.S. 745, 757 (1982).27 The CAFC’s deci-
sion clearly meets the standard for wholly prospective
application set forth in Chevron Oil Co. v. Huson, 404
U.S. at 106-107: (a) it establishes new principles of law;
(b) retrospective application of the new principles will
not, given their purpose and effect, further their opera-
tion; and (c) retroactive application will produce “sub-
stantial inequitable results.’ The CAFC utterly dis-
regarded the Chevron standards.

(a) The CAFC sua sponte established new rules of
civil law, including procedure and evidence, and set new
standards of conduct before the PTO.%* The CAFC de-
cided an issue of first impression whose resolution was
not clearly foreshadowed.” Given that the CAFC’s rules
are inconsistent with 35 U.S.C. § 282, leading precedent,
and public policy, it is indisputable that they not only

27 The Court there stated:

[T]his Court never has approved case-by-case determination
of the proper standard of proof for a given proceeding. Stand-
ards of proof, like other “procedural due process rules[,] are
shaped by the risk of error inherent in the truth-finding proc-
ess as applied to the generality of cases, not the rare excep-
tions.” * * * Since the litigants and the fact-finder must know
at the outset of a given proceeding how the risk of error will
be allocated, the standard of proof necessarily must be cali-
brated in advance. Retrospective case-by-case review cannot
preserve fundamental fairness when a class of proceedings is
governed by a constitutionally defective evidentiary standard.
[Id.; emphasis in original; citation omitted.]

28 As noted above, the CAFC itself has stated that its decision
“breaks new ground on the subject of fraud in the PTO and sets
new standards in this area of law” (277a).

29 In the case at bar, none of the parties ever suggested a test
for cure or standard and burden of proof such as that announced
by the CAFC.

23

were entirely unexpected but also could not have been
foreseen.

(b) The rules in question were designed to ensure
“that inventions meeting the statutory requirements for
patentability be patented” (256a) and to encourage volun-
tary “expiation of wrongdoing where an applicant
chooses to take the necessary action on his own initia-
tive and to take it openly” (id.). Because the CAFC pro-
mulgated new standards of conduct, a new burden and
standard of proof, and new rules of evidence, retroactive
application to completed prosecutions and trials can
hardly further the goals of the rule. Indeed, here a pio-
neer patent has been invalidated notwithstanding the
applicant’s voluntary efforts taken on its own initiative
in compliance with existing standards to expiate any
asserted prior wrongdoing.

(c) Retroactive application will produce substantial
inequitable results. As the District Court found, R&H
acted reasonably and in good faith. R&H supplied all
the facts to the PTO in a timely fashion and did so volun-
tarily (see pp. 6-8, supra). It offered to file any docu-
ments, to answer any questions, and to take any action
deemed necessary by the PTO. Under these circum-
stances, retroactive application works a grave injustice
and unfairly punishes R&H,™ as well as any other party
similarly situated, for its good-faith disclosure of the
facts and reasonable corrective efforts consistent with
established cases and rules.*

%°It is estimated that retroactive application will deprive R&H
of $100 million in revenue. Moreover, respondents have argued
in their opposition to R&H’s motion for extension of time that
as a result of the CAFC’s decision they intend to press forward
with their antitrust counterclaims. Respondents further claim that
the decision by the CAFC in this case will necessitate the entry
of judgment against Rohm and Haas in two other cases.

$1 As the First Circuit said in Digital Equipment, 653 F.2d at
716 n.17: “It would obviously be improper * * * to judge the con-

24

8 The CAFC’s Pattern Of Fact-Finding. Ordinarily,
of course, petitioner would not present to this Court a
challenge to the Court of Appeals’ de novo review of the
facts, even if that review were egregiously erroneous.
The ruling below, however, is not an isolated one. It is
an integral part of a pattern that has developed whereby
this particular Court of Appeals has either ignored or
taken unto itself the task of reviewing and reweighing
facts found by the trial courts, and reversing these facts
without finding them clearly erroneous—all in violation
of Rule 52(a). This pattern has developed during the
first two years of the CAFC’s existence, and is presented
in at least two cases already pending before the Court
and in two others in which certiorari will be sought in
the near future.” We respectfully submit that ignoring

duct of these applicants retroactively in terms of a ‘duty’ created
by a regulation promulgated years after the events at issue.”
Accord, Connell v. Sears, Roebuck & Co., 722 F.2d 1542, 1551-52
(Fed. Cir. 1983); In re Clark, 522 F.2d 623, 633 (C.C.P.A. 1975)
(Miller, J., concurring) (“to retroactively apply a newly developed
standard and, at the same time, to deny appellant the opportunity
to correct the situation by reissue is manifestly unfair”) ; In re
Certain Steel Rod Treating Apparatus & Components Thereof, 215
U.S.P.Q. 237, 257 (U.S.I.T.C. 1981).

32 TP Laboratories, Inc. v. Professional Positioners, Inc., 724 F.2d
965 (Fed. Cir. 1984), petition for cert. filed, No. 83-1939 (April 2,
1984); White v. Jeffrey Mining Mach. Co., 723 F.2d 1553 (Fed.
Cir. 1984), petition for cert. filed, No. 83-1913 (May 22, 1984);
Garlock, Inc. v. W. L. Gore & Associates, 721 F.2d 1540 (Fed. Cir.
1983) ; RCA Corp. v. Applied Digital Data Systems, Inc., 730 F.2d
1440 (Fed. Cir. 1984). See Litton Systems, Inc. Vv. Whirlpool Corp.,
728 F.2d 1423 (Fed. Cir. 1984) (on Lanham Act question of likeli-
hood of confusion, CAFC treats evidence as “equivocal and eva-
sive” and reverses District Court finding); Hughes Aircraft Co.
v. United States, 717 F.2d 1351 (Fed. Cir. 1983) (CAFC reverses
trial court and finds patent infringement under the doctrine of
equivalents) ; Stratoflex, Inc. V. Aeroquip Corp., 713 F.2d 1530
(Fed. Cir. 1983) (District Court applies incorrect legal standard
but CAFC, instead of remanding, independently weighs the evi-
dence, makes findings of fact, and concludes that a patent is in-

25

of facts, reweighing of evidence, and independent fact-
finding by the Court of Appeals that now has exclusive
appellate jurisdiction over all patent cases has become so
pronounced and pervasive that it calls for intervention
by this Court in the exercise of its supervisory powers.

In this case, without once acknowledging the require-
ments or even the existence of Rule 52(a), the CAFC
itself reweighed the evidence, reversed the key findings of
the District Court, and made its own findings of fact
based upon “facts revealed by the arguments on appeal’
(231a). The CAFC did not rule that the District Court’s
findings were “clearly erroneous”; it simply dismissed
them as “legal error’ or “irrelevant” and then, instead of
remanding the case to the District Court, substituted its
own contrary findings.

The CAFC ruled, in direct conflict with the findings of
the District Court, that R&H “intentionally made mate-
rial misrepresentations * * * the effects of which were
not eliminated prior to issuance” of the Wilson and
McRae patent (224a-225a). The CAFC thus necessarily
held that respondents had met their burden of proving
fraud by clear, unequivocal, and convincing evidence,
even though the District Court, after a two-month trial
which included extensive live testimony, held that respond-
ents failed to carry their burden of proof on the fraud
issue (137a). The CAFC made no pretense of applying
the standard this Court has established for determining
whether the findings of the District Court were clearly
erroneous.* This critical error occurred with respect to

valid for obviousness); Aktiebolaget Karlstads Mekaniska Werk-
stad v. USITC, 705 F.2d 1565 (Fed. Cir. 1983) (CAFC evaluates
evidence, makes findings on obviousness issue, reverses USITC, and
invalidates patent). See also Baginsky v. United States, 697 F.2d
1070 (Fed. Cir.), cert. denied, 104 S. Ct. 423 (1983).

33In United States v. United States Gypsum Co., 333 U.S. 364,
395 (1948), the standard was set forth as follows: “A finding is
clearly erroneous when, although there is evidence to support it, the

26

at least three pivota! factual issues: (a) intent, (b) the
effectiveness of R&H’s cure, and (c) the ultimate finding
of fraud.

This Court has repeatedly held that Rule 52(a) “means
what it says.” * In Inwood, the Court pointed out that
“(djetermining the weight and credibility of the evi-
dence is the special province of the trier of fact.” 456
U.S. at 856. In Pullman, the Court observed that “[t] reat-
ing issues of intent as factual matters for the trier of
fact is commonplace” and that issues of intent are pure
questions of fact. 456 U.S. at 288. See also United
States v. Yellow Cab, 338 U.S. 388, 341 (1949).* The
decision of the CAFC is contrary to prior decisions of
this Court, the intent of Congress as expressed in the
legislative history of the Federal Courts Improvement
Act of 1982,* and the efficient administration of justice.

reviewing court on the entire evidence is left with a definite and
firm conviction that a mistake has been committed.”

84 Bose Corp. Vv. Consumers Union of the United States, Inc., 52
U.S.L.W. 4518, 4517 (U.S. April 30, 1984) (No. 82-1246). See also
Inwood Laboratories, Inc. v. Ives Laboratories, Inc., 456 U.S. 844
(1982); Pullman Standard v. Swint, 456 U.S. 273 (1982); Zenith
Radio Corp. Vv. Hazeltine Research, Inc., 395 U.S. 100, 128 (1969) ;
United States v. National Ass’n of Real Estate Boards, 339 U.S.
485, 495-496 (1950).

85 The Court has further observed that in no type of case are the
restraints of Rule 52(a) “more appropriately applicable” than to
trial court findings on scientific matters. Graver Tank & Mfg. Co.
v. Linde Air Products Co., 886 U.S. 271, 274 (1949). This case is
precisely the type that is governed by Rule 52(a).

86 The House Committee on the Judiciary admonished the CAFC
to adhere to “the settled practice of the circuit courts of appeals in
patent cases to honor and respect Rule 52(a).” H. Rep. No. 97-312,
97th Cong., lst Sess. 37-88 (1981). The Committee further cau-
tioned that “[t]he circuit courts have repeatedly held that it is not
their function to pass upon or consider de novo the evidence re-
ceived at the trial or to weigh controverted evidence.” Jd. This
report echoed the concerns expressed by many witnesses appearing
before Congress, including representatives of the Bar Association
of the Seventh Circuit and the American Bar Association. See

27

a. In this case, after a two-month trial, the District
Court found that Dr. McRae—the principal trial witness,
one of the inventors, and the person who signed the ac-
cused affidavits—believed in good faith that the affidavits
were accurate (7la-72a, 109a, 229a n.2). The District
Court also found that R&H had prosecuted the Wilson
and McRae patent in good faith (109a, 193a).*"

The CAFC’s predecessor court, the CCPA, held in
Norton v. Curtiss, supra, that “[t]he state of mind of
the one making the representations is probably the most
important of the elements to be considered in determin-
ing the existence of ‘fraud.’” 433 F.2d at 795. Indeed,
it is inconceivable that consideration of evidence of an
applicant’s actual state of mind is “legal error” on the
issue of scienter where his affidavits are the focal point
of a charge of fraud. Moreover, a finding of good faith
precludes a finding of fraud. See, e.g., Orthopedic Equip-
ment Co. Vv. All Orthopedic Appliances, 707 F.2d at 1383;

Hearings on H.R. 2405 April 2 and 8, 1981, Before the Subcommit-
tee on Courts, Civil Liberties, and the Administration of Justice of
the House Committee on the Judiciary, 97th Cong., Ist Sess. 485-
488 (1981); see also Hearings on S. 677 and S. 678 March 20,
May 7, 9, 10, and June 18, 1979, Before the Subcommittee on Im-
provements in Judicial Machinery of the Senate Committee on the
Judiciary, 96th Cong., Ist Sess. 675-677, 698-700 (1979) (quoting
in part the presentation on behalf of the Seventh Circuit by Judge
(now Justice) Stevens); Hearings on H.R. 6033, H.R. 6934, H.R.
8806, H.R. 2414, April 3, 15, 17, 22, 24, May 8 and June 9, 1980,
Before the Subcommittee on Courts, Civil Liberties and the Admin-
istration of Justice of the House Committee on the Judiciary, 96th
Cong., 2nd Sess. 771-772 (1980).

37 Dr. McRae submitted all available records to the PTO after
his affidavits were challenged in the Monsanto case. Respondents
herein were given access to all these records, and they deposed Dr.
McRae at length about these affidavits and all the background tests.
He was the major witness at the trial and was exhaustively ques-
tioned about every aspect of this issue. The District Court had
ample opportunity to judge his competence, his ability to recall and
explain the background tests, and his credibility. It thereupon
made the key findings of fact which should have been dispositive
of this issue.

s

28

Square Liner 360°, Inc. v. Chisum, 691 F.2d at 374;
Oetiker v. Jurid Werke GMBH, 671 F.2d at 600;
Schnadig Corp. v. Gaines Mfg. Co., 494 F.2d at 392-394.
But the CAFC held that this finding was irrelevant
(246a).

b. While acknowledging that the question of “cure”
was a “question of fact,” the CAFC also ignored all of
the key findings of the trial court on this issue, including
the express finding that “all of the deficiencies which
existed * * * were corrected” (72a), and the finding
that R&H reasonably and in “good faith” had made a
complete and timely disclosure of all the “facts” (70a-
73a).°° If the District Court failed to consider relevant
evidence or failed to make a finding because of an er-
roneous view of the law, the Court of Appeals should have
remanded for further proceedings. See Inwood, 456 U.S.
at 857 n.19; Pullman, 456 U.S. at 291-292. See also
Guzman Vv. Pichirilo, 369 U.S. 698, 701 (1962).

ce. Most courts of appeals have held that the ultimate
determination of fraud must be assessed under the clearly
erroneous standard of review,” and this Court in Pull-
man also held that such “ultimate facts” are subject to
the constraints of Rule 52(a). 456 U.S. at 286-287 n.16.
The CAFC, however, found fraud as a matter of law but

38 See n.9, supra.

39 See, e.g., Brown-Bridge Mills, Inc. v. Eastern Fine Paper, Inc.,
700 F.2d 759, 764 (1st Cir. 1983); United States v. Pfizer, Inc.,
676 F.2d 51, 52, 56 (3d Cir. 1982); North Carolina v. Chas. Pfizer
& Co., 537 F.2d 67, 76 (4th Cir.), cert. denied, 429 U.S. 870 (1976) ;
Edward Valves, Inc. v. Cameron Iron Works, Inc., 286 F.2d 933,
947-48 (5th Cir.), mcd. on other grounds, 289 F.2d 355 (5th Cir.),
cert. denied, 368 U.S. 833 (1961); Skil Corp. v. Lucerne Products,
Inc., 684 F.2d 346, 349 (6th Cir.), cert. denied, 459 U.S. 991 (1982) ;
CMI Corp. v. Barber-Greene Co., 683 F.2d 1061, 1063 (7th Cir.
1982); Pfizer, Inc. v. International Rectifier Corp., 5388 F.2d 180,
193 (8th Cir. 1976), cert. denied, 429 U.S. 1040 (1977) ; Oetiker
v. Jurid Werke GMBH, 671 F.2d 596, 599-600 (D.C. Cir. 1982).
But cf. Connell v. Sears, Roebuck & Co., 722 F.2d 1542, 1551 (Fed.
Cir. 1983) (fraud is a conclusion of law).

i at ais ls Loot whee wat le

29

did not rule that the District Court’s rejection of respond-
ents’ fraud defense was clearly erroneous.

The CAFC has therefore totally transgressed Rule
52(a). Its approach has injected a wave of uncertainty
and confusion into the law of fraud. Only an exercise of
this Court’s supervisory powers will stop this unwar-
ranted and improper pattern of independent fact-finding
by the CAFC.

CONCLUSION

The petition for a writ of certiorari should be granted

and the judgment below reversed.

Of Counsel:

JANUAR D. Bove, JR.
JEFFREY B. BOVE
CONNOLLY, Bove, LoDGE
& HuTz
1220 Market Building
1220 Market Street
Wilmington, Delaware 19899

E. BARRETT PRETTYMAN, JR.
HOGAN & HARTSON

815 Connecticut Avenue, N.W.

Washington, D.C. 20006

* Counsel of Record

Respectfully submitted,

RUDOLF E. Hutz *
1220 Market Building
1220 Market Street
Wilmington, Delaware 19899
(302) 658-9141

Counsel for Petitioner

PHILIP W. TONE
JENNER & BLOCK
One IBM Plaza
Chicago, Illinois 60611
GEORGE W. F. SIMMONS
Route 2
Box 3377
Lopez, Washington 98261
WILLIAM E. LAMBERT III
ROHM AND Haas COMPANY
Philadelphia, Pennsylvania
19105

---

Source: Frix Law Library, https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40385010_3075%3A1. Public record. Not legal advice.