Opposition Brief — Lex Tex Ltd. v. J. P. Stevens & Co.

Office-Supreme Court, U.S.

ee eo

JUN @@ 1985

No. 84-1858 | ALEXANDER L. STEVAS,

SESRrK

In The

Supreme Court of the United States

October Term, 1984

LEX TEX LTD., INC.,

Petitioner,

Vv.

J.P. STEVENS & CO., INC.,

BADISCHE CORPORATION, AND

BURLINGTON INDUSTRIES, INC.

Respondents.

OPPOSITION TO PETITION FOR

WRIT OF CERTIORARI

TO THE UNITED STATES COURT OF APPEALS

FOR THE FEDERAL CIRCUIT

D. DENNIS ALLEGRETTI

ROBERT C. RYAN

MARK T. BANNER

ALLEGRETTI, NEWITT, WITCOFF

& McCANDREWS, LTD.

125 South Wacker Drive

Chicago, Illinois 60606

(312) 372-2160

Attorneys for Respondent

BURLINGTON INDUSTRIES, INC.

June 20, 1985

CHAS. P. YOUNG COMPANY

BEST AVAILABLE COPY

TABLE OF CONTENTS

WU Peeee en CFP BOMQU ME oes cc ceevenns

I.

II.

III.

THERE IS NO FINDING OF FACT IM-

PROPERLY HELD TO BE CLEARLY ER-

ARS er eee ee ye ee ee

THE PATENT OFFICE MATERIALITY

STANDARD IS MERELY THE APPRO-

PRIATE STARTING POINT OF ANAL-

YSIS, CODIFIES GOVERNING CASE

LAW, AND IS REQUIRED BY SUPREME

CRUE BURMIIEPUNOUE os cc ce cc cecisnsouss

THE RULE OF ENTIRE UNENFORCE-

. ABILITY IS ESSENTIAL TO COMPLY

WITH SUPREME COURT PRECEDENT

AND TO ENSURE CANDID DIS-

CLOSURE, UNIFORMITY OF SANC-

TIONS, AND EQUITABLY PROCURED

ae, er eee a eer eee

IV. THE DECISION DID NOT SHIFT THE

BURDEN OF PROOF, WHICH RESTS

WITH AND WAS CARRIED BY

Lg Be ee, ee ee

POAT Pe Te TURE CE ETE Ree

STATEMENT UNDER RULE 28.1

Respondent Burlington Industries, Inc., does not have any

parent companies, subsidiaries that are not wholly owned, or

affiliates.

ii

TABLE OF AUTHORITIES

Cases

PAGE

Beckman Instruments, Inc. v. Chemtronics, Inc., 439 F.2d

1369 (5th Cir.), cert. denied, 400 U.S. 956 (1970) ... 7

Chicago Rawhide Manufacturing Co. v. Crane Packing Co.,

523 F.2d 452 (7th Cir. 1975) (per Justice, then Judge,

Stevens), cert. denied, 423 U.S. 1091 (1976) ........ 11, 13

Chromalloy American Corp. v. Alloy Surfaces Co., 339 F.

Soot. Tar Gs Ce Be is here Sek ee hesasys 8

Driscoll v. Cebalo, 731 F.2d 878 (Fed. Cir. 1984)... 6, 10, 11

E.I. duPont de Nemours & Co. v. Berkley and Co., 620 F.2d

pe Ee | er re he ee ee 12

Gemveto Jewelry Co. v. Lambert Bros., Inc., 542 F. Supp.

See Ra + ND boa Gas chu dea eee 8

Hazel-Atlas Glass Co. v. Hartford-Empire Co., 322 U.S.

Bee CH CES i oe eh wee aedeseeeueeassee 6, 8, 13

In re Clark, 522 F.2d 623 (C.C.P.A. 1975).......... 7, 8,9

In re Multidistrict Intigation Involving Frost Patent, 540

F.2e GOS G6 Ue. SBF) oct pore eae ees 9, 10

J. P. Stevens & Co. v. Lex Tex Ltd., 747 F.2d 1553 (Fed.

CAE, Re 2 ck ch UNG eee es oe eee Chee passim

Kangaroos U.S.A., Inc. v. Caldor, Inc., 585 F. Supp. 1516

CREA s Re bse cnn caneeeusseere ene 5

Kearney & Trecker Corp. v. Cincinnati Milacron Inc., 562

Pe Bee Ce GC. ROFT) vino cheers 8

Kearney & Trecker Corp. v. Giddings & Lewis, Inc., 452

F.2d 579 (7th Cir. 1971) (per Justice, then

Judge, Stevens), cert. denied, 405 U.S. 1066 (1972).. 8, 9

Keystone Driller Co. v. General Excavator Co., 290 U.S.

BOG LEGO 6 kines eecsclyeke nae ue 6, 8, 13

iil

PAGE

Kingsland v. Dorsey, 338 U.S. 318 (1949)............ 6, 7

Norton v. Curtiss, 433 F.2d 779 (C.C.P.A. 1970) ...... 9, 10

Pfizer & Co. v. F.T.C., 401 F.2d 574 (6th Cir. 1968), cert.

ee tt EE CRUDE ho Sick ccs e meanders 9

Precision Instrument Manufacturing Co. v. Automotive

Maintenance Machinery Co., 324 U.S. 806 (1945). .6, 7, 8, 10, 13

Reynolds Metal Co. v. Continental Group, Inc., 525 F. Supp.

ek ce pas dak enh ae kee rah ewes « 8

Rohm & Haas Co. v. Chrystal Chemical Co., 722 F.2d 1556

(Fed. Cir. 1983), cert. denied, 105 S.Ct. 172 (1984)... 5

Strong v. General Electric Co., 434 F.2d 1042 (5th Cir.

1970), cert. denied, 403 U.S. 906 (1971) ............ 8

True Temper Corp. v. CF&I Steel Corp., 601 F.2d 495 (10th

I rg ae boa he ped wea veo eS 6

U.S. Industries, Inc. v. Norton Co., 210 U.S.P.Q. (BN A) 94

i eC OYA -s Wie bs oo xa 5 08 ods 6

Statutes

te ea Us hs SUAle ceed eee aoe eke 9

er I COUN se issn Keds bose ne ene nees 9

Rules of Procedure

Rule 52, Feb. R. Civ. P. (1984) ..... ee re 3, 4

ee Gee, eee, Be. CAV. F. (AOGE) 2 we eee ees 2

Regulation

er eee 5, 6, 10

Other Authorities

4 D. CHIsuM, PATENTS § 19.03(6], at 19-85 (1984) .... 9

4 Patent and Trademark Office Official Gazette

ES tae Ae Sa psi 4 06, dcs 6 be tl 60 0° 6

In The

Supreme Court of the United States

October Term, 1984

LEX TEX LTD., INC.,

Petitioner,

v.

J.P. STEVENS & CO., INC.,

BADISCHE CORPORATION, AND

BURLINGTON INDUSTRIES, INC.

Respondents.

OPPOSITION TO PETITION FOR

WRIT OF CERTIORARI

TO THE UNITED STATES COURT OF APPEALS

FOR THE FEDERAL CIRCUIT

STATEMENT OF THE CASE

This Opposition is filed on behalf of respondent

Burlington Industries, Inc. (“Burlington”).' From the outset

of this litigation, Burlington has contended that the patent

in suit, U.S. Patent 3,091,912 (“the ’912 patent’), was

unenforceable because of fraud and inequitable conduct in

procuring the patent from the Patent Office.

In its opinion in this case, a five-judge panel of the US.

Court of Appeals for the Federal Circuit unanimously ruled

‘Burlington Industries, Inc., briefed and orally argued the

inequitable conduct issue to the Federal Circuit. The other

respondents joined therein. Counsel for respondent Burlington

is authorized to advise the Court that co-respondents, J.P.

Stevens & Co. and Badische Corp., join in this Opposition.

2

that the ’912 patent was unenforceable. Petitioner’s

Appendix (“Pet. App.”) at 45a. The Federal Circuit held

that those who had applied for the ’912 patent had

improperly withheld material information from the Patent

Office, and had twice misrepresented to the Patent Office

information they knew or should have known to be material.

Pet. App. at 35a-39a, 41a.

Respondents’ presentation of the inequitable conduct issue

to the Federal Circuit was based on controlling, unchal-

lenged documentary evidence and admitted testimonial

facts. Petitioner’s response before the Federal Circuit upon

the inequitable conduct issue was that it “respectfully

declined] to rebut or take issue with any of these control-

ling facts set forth by respondent Burlington. Petitioner’s

only contention was that the level of materiality for the

withheld and misrepresented information was not high. Lex

Tex Response Brief at 41.

The Federal Circuit rejected petitioner’s argument, con-

cluding the district court had erred by failing to give pri-

mary consideration to events that had occurred in a Patent

Office “Reissue” proceeding, conducted after the ’912 patent

had issued. Pet. App. at 36a. In the Reissue proceeding, the

Patent Office had: (i) determined that the withheld and

misrepresented information was the most material prior art

of record against the ’912 patent; and (ii) rejected the

majority of the 912 patent claims based on that information.

D.Ct. Ex’s 1, 2.

After the Federal Circuit’s decision holding the ’912

patent unenforceable for inequitable conduct in the Patent

Office, petitioner filed a Petition for Rehearing and Sugges-

tion for Rehearing en Banc presenting for the first time

conventions*® long known and available to petitioner but not

offered at trial or during the original submission on appeal.

*Such contentions were in no way based on any “newly

discovered” evidence as is required for relief from judgment

under Rule 60(b), Fep. R. Civ. P.

3

The Petition for Rehearing and Suggestion were denied.

The present Petition for Writ of Certiorari raises only those

same contentions, improperly presented here because previ-

ously waived by conscious failure of submission to the

Federal Circuit at the original appellate hearing.

SUMMARY OF ARGUMENT

In reaching its decision, the Federal Circuit correctly fol-

lowed Rule 52, Feb. R. Civ. P., the prior precedents of this

Court, and the considerable body of case law that has devel-

oped under those precedents. In so doing, the Federal Circuit

properly:

e reviewed the facts found by the district court under the

clearly erroneous standard of Rule 52;

® applied traditional equitable principals in reviewing all

aspects of the charge of inequitable conduct;

© followed Supreme Court, regional circuit, and Federal

Circuit precedents holding inequitably procured patents

unenforceable in their entirety; and

e allocated the burden of proof on respondents as required

by this Court’s precedents and the case law thereunder.

The present Petition for Writ of Certiorari raises no sound

issue of any consequence to the public interest for review by

this Court.

4

I. THERE IS NO FINDING OF FACT IMPROPERLY

HELD TO BE CLEARLY ERRONEOUS

The Federal Circuit followed the mandate of Rule 52 by

reviewing all findings of fact under the clearly erroneous

standard. The Federal Circuit correctly recognized:

Materiality and intent are factual issues subject to the

clearly erroneous standard of review. See, e.g., Hycor,

740 F.2d at 1539-40, 222 U.S.P.Q. at 557, American Hoist,

725 F.2d at 1361, 220 U.S.P.Q. at 772. Thus, this court

must affirm findings on materiality and intent unless it

is left with a definite and firm conviction that error has

occurred. See, e.g., Raytheon Co. v. Roper Corp., 724 F.2d

951, 956, 220 U.S.P.Q. 592, 596 (Fed. Cir.), cert. denied,

53 U.S.L.W. 3225 (1984). If the threshold of materiality

and intent is crossed, we must det.. nine, as a matter of

law, whether inequitable conduct occurred. American

Hoist, 725 F.2d at 1364, 220 U.S.P.Q. at 774.

Pet. App. at 35a.

Based on its review of the controlling, undenied facts, the

Federal Circuit correctly held that the critical findings of the

district court on materiality and intent were clearly errone-

ous. Pet. App. at 35a-45a. Petitioner has pointed to no

district court finding improperly held to be clearly erroneous

by the Federal Circuit.

Petitioner now criticizes the Federal Circuit for finding

error in the district court’s failure to consider a Patent Office

“Reissue” proceeding, conducted after the 912 patent had

issued, as “strong probative” evidence of materiality of

withheld and misrepresented information. Manifestly, there

can be no more pertinent evidence of what would have been

material during the orginal Patent Office proceeding than

evidence of what actually was determined to be material in a

subsequent Patent Office proceeding concerning the same

patent. Indeed, petitioner itself had urged below that the

Federal Circuit should consider the subsequent Reissue

proceeding in determining materiality. Lex Tex Response

5

Brief at 40. The Federal Circuit correctly held thai the

district court had erred in failing to consider as important

probative evidence the subsequent reissue proceeding

“wherein patentability is assessed in light of information not

originally disele.ed.” Pet. App. at 36a.

Il. THE PATENT OFFICE MATERIALITY STANDARD

IS MERELY THE APPROPRIATE STARTING POINT

OF ANALYSIS, CODIFIES GOVERNING CASE LAW,

AND IS REQUIRED BY SUPREME COURT

PRECEDENT

Patent Office Rule 1.56(a), 37 C.F.R. § 1.56(a) (1984), pro-

vides that information is materia] to the patent procurement

process if there is a substantial likelihood that a reasonable

patent examiner would have considered the information

important in deciding whether to allow the application to

issue as a patent. Pet. App. at 30a-3la. In the original

submission to the Federal Circuit, petitioner made no chal-

lenge to this “reasonable examiner” standard for assessing

materiality in this case. The Federal Circuit correctly

stated: “The {Patent Office reasonable examiner) standard is

the appropriate starting point because it is the broadest and

because it most closely aligns with how one ought to conduct

business with the PTO.” Jd. Petitioner now asserts that the

reasonable examiner standard did not apply in 1957-63.

Whether it did or not is irrelevant.

As the Federal Circuit explained, the reasonable examiner

standard is only a “starting point” for analysis. /d. In this

ease, however, the ’912 applicants not only withheld

information, but also repeatedly misrepresented what they

knew that very same withheld information disclosed. /d. at

4la. As petitioner’s patent law expert agreed (Tr. 5576-92),

such misrepresentations are material under any proper

standard. Rohm & Haas Co. v. Chrystal Chemical Co., 722 F.2d

1556, 1570-71 (Fed. Cir. 1983), cert. denied, 105 S.Ct. 172 (1984);

Kangaroos U.S.A., Inc. v. Caldor, Inc., 585 F.Supp. 1516,

1529-30 (S.D.N.Y. 1954). Thus, whether the reasonable

6

examiner standard applied in 1957-63 is not properly in issue

in this case.

Moreover, petitioner’s protest to the application of the

Rule 1.56 standard to the conduct in issue is unjustified, and

improper. In Driscoll v. Cebalo, 731 F.2d 878, 885 (Fed. Cir.

1984), the Federal Circuit noted:

the Official Gazette of the PTO (Vol. 955, No. 4, Feb. 22,

1977) states that regulation 1.56 ‘codifies the existing

Office policy on fraud and inequitable conduct, which is

believed consistent with the prevailing case law in the

federal courts.’

Accord, True Temper Corp. v. CF&I Steel Corp., 601 F.2d 495,

504 n.9 (10th Cir. 1979) (“rule [1.56] merely represented a

codification of existing case law”). Petitioner’s own patent

law expert testified at trial that the Rule 1.56 reasonable

examiner standard was merely a codification of the standard

that has always governed proceedings in the Patent Office.

Tr. 5569-74. See also, Tr. 4572-82 (per respondents’ expert).

Finally, as explained in U.S. Industries, Inc. v. Norton Co.,

210 US.P.Q. 94, 110 (N.D.N.Y. 1980), the cases that estab-

lished the reasonable examiner standard were this Court’s

decisions, such as Kingsland v. Dorsey, 338 U.S. 318, 319-20

(1949), and Precision Instrument Manufacturing Co. v. Automo-

tive Maintenance Machinery Co., 324 U.S. 806, 816-18 (1944):’

Defendant did present the expert testimony of the

former Commissioner of Patents, David Ladd, who testi-

fied that there was no duty or policy requiring the

citation of prior art to the Patent Office during the

period of the prosecution of the patent in suit—1961-65.

... In light of this Court’s earlier holding that the 1977

promulgation of a rule mandating disclosure of material

art was merely a codification of existing case law, extant

* See also, Keystone Driller Co. v. General Excavator Co., 290 US.

240, 244-47 (1933); Hazel-Atlas Glass Co. v. Hartford-Empire Co.,

322 U.S. 238, 246, 250-251 (1944),

7

since the Supreme Court decisions in Dorsey and Preci-

sion Instruments, this testimony to my mind is entitled

to little probative value. To accord such testimony more

probative value would effectively eviscerate holdings of

the Supreme Court.

Cf., Beckman Instruments, Inc. v. Chemtronics, Inc., 439 F.2d

1369, 1378-80 (5th Cir.), cert. denied, 400 U.S. 956 (1970) (under

Precision Instrument, in 1956 applicants had duty to bring

relevant references to the attention of the examiner); Jn re

Clark, 522 F.2d 623, 627 (C.C.P.A. 1975) (same). Since the

reasonable examiner standard was established by this Court

long before the inequitable conduct in issue in this case, the

applicability of the standard is well settled and not a ques-

tion for useful review.

III. THE RULE OF ENTIRE UNENFORCEABILITY IS

ESSENTIAL TO COMPLY WITH SUPREME COURT

PRECEDENT AND TO ENSURE CANDID DIS.

CLOSURE, UNIFORMITY OF SANCTIONS, AND

EQUITABLY PROCURED PATENTS

One of the fountainheads of the law of inequitable conduct

in patent matters is the decision of this Court in Precision

Instrument, 324 U.S. at 806. There this Court ruled:

The far reaching social and economic consequences of a

patent, therefore, give the public a paramount interest

in seeing that patent monopolies spring from back-

grounds free from fraud or other inequitable conduct

and that such monopolies are kept within their legiti-

mate scope.

Id. at 815-16.

Based upon this paramount interest, this Court in Precision

Instrument held three patents entirely unenforceable for

inequitable conduct before the Patent Office. Jd. at 819-20.

Similarly, in all other Supreme Court cases holding patents

unenforceable for inequitable conduct in procuring or enfore-

ing them, the Court has held nothing less than entire

8

unenforceability for the patents so procured or enforced.

Hazel-Atlas Glass Co. v. Hartford-Empire Co., 322 U.S. 238,

250-51 (1944); Keystone Driller Co. v. General Excavator Co., 290

U.S. 240, 244-47 (1933)*.

In conformance with these holdings by this Court, the

Federal Circuit in this case stated:

Once a court concludes that inequitable conduct

occurred, all the claims—not just the particular claims

to which the inequitable conduct is directly connected—

are unenforceable. ... In re Clark, 522 F.2d 623, 626, 187

USPQ 209, 212 (CCPA 1975).

Pet. App. at 34a. Accord, Kearney & Trecker Corp. v. Giddings

& Lewis, Inc., 452 F.2d 579, 594-96 (7th Cir. 1971) (per Justice,

then Judge, Stevens), cert. denied, 405 U.S. 1066 (1972) (relied

upon by the Federal Circuit; see Pet. App. at 35a); Strong v.

General Electric Co., 434 F.2d 1042, 1045 (5th Cir. 1970), cert.

denied, 403 U.S. 906 (1971) (failure to disclose prior art mate-

rial to some claims invalidates all claims in the patent);

Kearney & Trecker Corp. v. Cincinnati Milacron, Inc., 562 F.2d

365, 371-72 (6th Cir. 1977); Chromalloy American Corp. v. Alloy

Surfaces Co., 339 F. Supp. 859, 875 (D. Del. 1972); Reynolds

Metal Co. v. Continental Group, Inc., 525 F. Supp. 950, 971

(N.D. Ill. 1981); Gemveto Jewelry Co. v. Lambert Bros., Inc., 542

F. Supp. 933, 943 (S.D.N.Y. 1982).

Subsequently, by Petition for Rehearing to the Federal

Circuit and by the present Petition for Writ of Certiorari to

this Court, petitioner argues that the prior rulings of this

Court, the C.C.P.A., and other regional circuits are in error

because the so-called “all or nothing” rule is “obnoxious to

any equitable doctrine.” In support, petitioner points to

‘The present Petition cites neither Precision Instrument nor

any other Supreme Court decisions on the issue of inequitable

conduct before the Patent Office.

* Petitioner asserts that no inequitable conduct was charged

with respect to the so-called “product” claims of the ’912 patent,

as artificially distinguished by petitioner from the accompany-

(footnote continued on next page)

9

only one contrary ruling: In re Multidistrict Litigation Involv-

ing Frost Patent, 540 F.2d 601, 611 (3d Cir. 1976).°

In re Frost is the lone judicial exception to the sound

general rule that “[t|he effect of fraud or inequitable conduct

normally extends to the entire patent—not just those claims

as to which the misrepresentation or omission is material.”

4 D. Cu1suM, PATENTS § 19.03/6), at 19-85 (1984). The anamo-

lous In re Frost ruling of partial enforceability is contrary to

all other precedents of this Court, the C.C.P.A., and the

regional circuits (including the Seventh Circuit per Justice

Stevens, then Judge, in Giddings & Lewis). As admitted by

petitioner’s own patent law expert at trial (Tr. 5591), any-

thing less than a rule of entire unenforceability also would

be inconsistent with the long-standing, uniform, and

judicially approved Patent Office policy of striking or

(footnote continued from preceding page)

ing invalid “process” claims of the same patent. In fact, how-

ever, a major portion of the inequitable conduct charge was (and

still is) based on the ’912 patent applicants’ collusive settlement

of an interference proceeding in the Patent Office with another

patent applicant, Baebler. The purpose of the settlement was,

inter alia, to prevent the loss through unpatentability of certain

product claims. In addition, another major portion of the inequi-

table conduct charge was (and is) based on the withholding of

prior art with respect to product claims. The Federal Circuit’s

decision rendered these additional grounds moot.

* Petitioner also cites the C.C.P.A. decision in Norton v. Cur-

iss, 433 F.2d 779, 793 (C.C.P.A. 1970), and Second Circuit

decision in Pfizer & Co. v. F.T.C., 401 F.2d 574 (6th Cir. 1968), cert.

denied, 394 U.S. 920 (1969). Norton v. Curtiss merely held that

equitable principles should be applied in determining whether

wrongdoing occurred, not whether the sanction should be any-

thing less than entire enforceability, which the C.C.P.A. later

held to be the rule in Jn re Clark, 522 F.2d 623, 626 (C.C.P.A.

1975). Pfizer is also inapposite: it merely dealt with the issue of

compulsory licensing under section 5 of the F.T.C. Act, 15

U.S.C. §45, and not with unenforceability under 35 U.S.C.

§ 282(1) (1984).

10

rejecting the entire patent application for inequitable conduct

committed in connection with any part of the application.

See, 37 C.F.R. § 1.56(d) (1984); Norton v. Curtiss, 433 F.2d 779,

791-92 (C.C.P.A. 1970); Driscoll v. Cebalo, 731 F.2d 878, 882-885

(Fed. Cir. 1984).

If entire unenforceability were not the rule, a patent

applicant actually would have an incentive, during prosecu-

tion, to commit inequitable conduct and hide it from the

Patent Office, in the expectation of obtaining excessively

broad patent claims as a market threat and, after issuance,

still retaining at least partial enforceability of other, nar-

rower claims. Thus, the rule proposed by petitioner would

encourage inequitable conduct and its concealment from the

Patent Office, directly contrary to the mandate of this Court

in Precision Instrument, 324 U.S. at 818:

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 underlying

the applications in issue....Only in that way can the

Patent Office and the public escape from being classed

among the ‘mute and helpless victims of deception and

fraud.’

If the courts are to ensure that all patents do spring from

backgrounds free from inequitable conduct, then a patent

procured by inequitable conduct cannot be enforceable in any

way, even if some claims might be arguably separable from

others. The lone In re Frost decision is manifestly unwise

and contrary to all other precedent on point. Its long-past

and uniformly disregarded existence can create no mean-

ingful conflict of law for review by this Court.

IV. THE DECISION DID NOT SHIFT THE BURDEN OF

PROOF, WHICH RESTS WITH AND WAS CARRIED

BY RESPONDENTS

Just as this Court had held in Precision Instrument, 324

U.S. at 814-15, the Federal Circuit here stated: “Conduct

11

before the [Patent Office] that may render a patent unenforce-

able is broader than common law fraud.” Pet. App. at 30a.

Nevertheless, the Federal Circuit properly recognized that

the burden of proof of inequitable conduct rests solely with

respondents. Jd. at 30a-3la. That burden was to prove by

clear and convincing evidence the materiality of withheld or

misrepresented information and culpable intent. Jd.

After concluding that the district court had erred in fail-

ing to give primary consideration to actual Patent Office

“Reissue” proceedings as evidence of the materiality of the

information in issue, the Federal Circuit addressed the trial

court’s finding that it was possible that during the original

912 patent proceedings the Patent Office examiner otherwise

knew of the withheld and misrepresented prior art. Pet.

App. at 36a-39a. The Federal Circuit correctly held that the

mere possibility of knowledge, with no evidence of actual

knowledge, did not overcome the proof of materiality. Pet.

App. at 38a-39a. Accord Tr. 5595 (testimony of petitioner’s

patent law expert). The court said:

(The district court did not find actual knowledge [of the

withheld and misrepresented information] by the pri-

mary examiner—it merely noted possibilities and,

where inequitable conduct is at issue, mere possibilities

are insufficient. As stated in Driscoll v. Cebalo, 731 F.2d

at 885, 221 USPQ at 751: ‘It cannot be presumed, where

fraud or other egregious corduct is alleged, that the

PTO considered prior art of particular relevance if it

was not cited.’

Id. Accord, Chicago Rawhide Manufacturing Co. v. Crane Packing

Co., 523 F.2d 452, 461 & n.22 (7th Cir. 1975) (per Justice, then

Judge, Stevens), cert. denied, 423 U.S. 1091 (1976) (no

presumption of consideration where inequitable conduct is in

issue).

The Federal Circuit’s ruling here did not “shift” any

burden of proof to petitioner. At trial, respondents presented

clear and convincing proof of materiality, including the

12

undenied fact that during the original patent proceedings

the applicants withheld and misrepresented information

determined in the later Patent Office “Reissue” proceeding to

be the most material information of record to the determina-

tion of patentability of the 912 patent. Petitioner had full

opportunity and incentive to rebut respondents’ proofs of

materiality by, if possible, presenting evidence that during

the original Patent Office proceedings, the 912 patent

examiner had actual knowledge of the withheld, uncited, and

misrepresented information. Petitioner did not do so at trial’

(and cannot do so now, as no such evidence exists’).

Petitioner points to the statutory presumption of validity

for all patents and the maxim that, where patentability (not

unenforceability) is in issue, the Patent Office examiner is

presumed to have considered all prior art in classes searched

during prosecution. E.J. duPont de Nemours & Co. v. Berkley

and Co., 620 F.2d 1247, 1266-67 (8th Cir. 1970) (per Markey, J.,

author of the Federal Circuit decision in issue). In the

context of inequitable conduct, however, such a presumption

’The “Exhibit A” (and most of its contents) referred to by

petitioner us potential proof of “actual” knowledge was not

offered at trial, is outside the record, and appeared for the first

time in petitioner’s reply in support of its Petition for Rehearing

below. In addition, petitioner is incorrect in its representation

that a particular assistant examiner (Petrakes) handled the

prosecution in the Patent Office of the 912 patent. There is no

such evidence in this record; the prosecution history indicates

directly to the contrary (DX 1025); and petitioner’s trial counsel

admitted in court directly to the contrary, i.e., that a different

assistant examiner (Stein) was the only assistant examiner

involved in the 912 application. Tr. 5700-01. Thus, the Exhibit is

not only improperly presented, but also incompetent to prove any

actual knowledge of the withheld, uncited, and misrepresented

material information. Moreover, as revealed in the Federal Cir-

cuit’s opinion, the court was well aware of the actual record and

fully considered the relationship of the examiners of other patent

applications to the examination of the 912 patent application in

issue. See Pet. App. at 39a & n.10.

13

would render the duty of disclosure and candor a nullity, for

it would do away with a patent applicant’s obligation to

disclose or candidly represent information known to be more

material than that cited by the Patent Office examiner but

buried in, or missing from, the files searched by the

examiner.” Cf., Chicago Rawhide, 523 F.2d at 461 & n.22

(where inequitable conduct is in issue, a presumption of

consideration would be unfair to the Patent Office and illogi-

cal). This Court’s rulings of patent unenforceability have

imposed no such presumption. Precision Instrument, 324 U.S.

at 814-20; Hazel-Atlas, 322 U.S. 250-51; Keystone Driller, 290

U.S. at 244-47. Such a presumption would frustrate the

“paramount interest in seeing that patent monopolies spring

from backgrounds free from fraud or other inequitable con-

duct and that such monopolies are kept within their legiti-

mate scope.” Precision Instrument, 324 U.S. at 816.

*It has been estimated that as many as 28% of the prior art

references are missing from any given Patent Office files at any

given time. Tr. 4564.

14

CONCLUSION

The present Petition seeks to create a meritless conflict

with this Court’s prior precedents. The Court should deny

the Petition for lack of an issue proper for review in this

Court, and further as a procedural impropriety and imposi-

tion on the Court.

Respectfully submitted,

D. DENNIS ALLEGRETTI

ROBERT C. RYAN

MARK T. BANNER

ALLEGRETTI, NEWITT, WITCOFF

& McANDREWs, LTD.

125 South Wacker Drive

Chicago, Illinois 60606

(312, 372-2160

Attorneys for Respondent

BURLINGTON INDUSTRIES, INC.

June 20, 1985

A

A