`THE CHAMBERLAIN GROUP, INC.,
`
`
`
`
` Plaintiff,
`
`
`
`v.
`
`CO.,
`INDUSTRIES
`TECHTRONIC
`LTD., TECHTRONIC INDUSTRIES
`NORTH AMERICA, INC.,
`ONE
`WORLD TECHNOLOGIES, INC.,
`OWT INDUSTRIES,
`INC., ET
`TECHNOLOGY (WUXI) CO. LTD.,
`and RYOBI TECHNOLOGIES, INC.,
`
`
`
`
` Defendants.
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`Case No. 16 CV 6097
`
`Judge Harry D. Leinenweber
`
`Case: 1:16-cv-06097 Document #: 549 Filed: 08/14/17 Page 1 of 27 PageID #:21139
`
`IN THE UNITED STATES DISTRICT COURT
`FOR THE NORTHERN DISTRICT OF ILLINOIS
`EASTERN DIVISION
`
`
`
`MEMORANDUM OPINION AND ORDER
`
`
`
`Plaintiff The Chamberlain Group, Inc. (“Chamberlain”) filed
`
`this lawsuit alleging that certain models of Defendants’ Ryobi-
`branded garage door openers (“GDOs”) infringe two patents it
`holds on GDO technology. On March 22, 2017, the Court granted
`Defendants leave to amend their Answer with respect to one of
`these patents - U.S. Patent No. 7,635,966 (“the ’966 patent”) –
`and Defendants added associated factual allegations along with
`an inequitable conduct affirmative defense and counterclaim, an
`unclean hands affirmative defense, and monopoly counterclaims.
`The ’966 patent is directed to a GDO system including a battery
`charging station in electrical communication with at least one
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`rechargeable battery and with the head unit of a GDO to supply
`power to the head unit in the event of power failure, along with
`physically separate electrically powered equipment capable of
`being powered by the at least one rechargeable battery.
`
`Before the Court is Plaintiff The Chamberlain Group, Inc.’s
`Motion for Summary Judgment on Defendants’ Inequitable Conduct
`and Antitrust Claims [ECF No. 415]. For the reasons stated
`herein, the Court grants the Motion. As such, the testimony of
`Defendants’ antitrust expert will prove irrelevant at trial, and
`so the Court grants Plaintiff’s Motion to Exclude Dr. Anne
`Layne-Farrar’s Expert Opinions and Testimony [ECF No. 417].
`I.
`BACKGROUND
`The Court assumes familiarity with its decision granting
`
`Defendants leave to amend. The following facts are undisputed
`unless otherwise noted.
`
`Mr. James J. Fitzgibbon (“Fitzgibbon”) is an engineer who
`holds and at all relevant times held the position of “Director
`of Intellectual Capital” at Chamberlain. (ECF No. 511-1 (“Pl.’s
`Resp.”) ¶¶ 1-3.) His responsibilities include(d) maintaining
`the company’s patent portfolio, reviewing office actions issued
`by the United States Patent Office (“PTO”), and working with
`inventors and patent counsel during prosecution, including
`attorneys at the Chicago-based law firm Fitch Even Tabin &
`Flannery (“Fitch Even”). (Id. ¶ 6.) Instead of exploiting a
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`physical database of files or prior art, Fitzgibbon uses his
`knowledge and his “large memory of different patents” when
`determining what to send to Fitch Even during patent
`prosecution. (Id. ¶ 5.) During the relevant 2003-2010
`timeframe, Fitzgibbon was the only person at Chamberlain who
`received copies of the PTO’s office actions. (Id. ¶ 4.) As a
`general practice, Fitzgibbon looks up any prior art references
`cited therein. (Id. ¶ 9.)
`
`Fitzgibbon is a listed inventor of U.S. Patent No.
`7,786,619 to Crusius (“the ’619 patent”), the original assignee
`of which was Chamberlain. (Pl.’s Resp. ¶ 7.) The ’619 patent
`is directed to a backup source of DC power for a movable barrier
`operator (such as a GDO) in which a battery “in circuit at all
`times with the barrier movement operator power supply” utilizes
`“in part, the AC/DC conversion capability of the barrier
`movement system” to power the operator in the event of an AC
`outage. (’619 patent at 1:35-40 & Abstract.) According to
`Fitzgibbon, Chamberlain made a product called the “EverCharge”
`battery that embodied the ’619 patent invention, which Sears
`also sold under its “Craftsman” brand as a “DieHard” battery
`(“Craftsman”). (Pl.’s Resp. ¶ 8.) Fitzgibbon was also involved
`in prosecuting Chamberlain’s U.S. Patent App. No. 2003/0063715
`(“Peplinski”), which is directed to a GDO system that uses one
`or more batteries (maintained by one or more battery chargers)
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`to provide GDO backup power in case of electrical power outage.
`The system monitors backup batteries and other components and
`initiates a stored service call to a dealer or other individual
`when batteries or other components require replacement. (See,
`Peplinski at Abstract.)
`
`From approximately 1990 until his retirement in 2007, Mr.
`Kenneth
`Samples
`(“Samples”)
`was
`Chamberlain’s
`outside
`prosecution counsel at Fitch Even. (Pl.’s Resp. ¶ 12.) His
`primary contact at Chamberlain was Fitzgibbon, and “from time to
`time” the two discussed whether Chamberlain needed to conduct
`prior art searches. (Ibid.) Samples prepared and filed
`Peplinski, the application leading to the ’619 patent, and the
`application leading to the ’966 patent. (Id. ¶¶ 13-15.) On
`April 7, 2006, the PTO issued an office action rejecting certain
`claims of the ’619 patent application as anticipated by
`Peplinski’s disclosure of a battery backup apparatus for use
`with a barrier movement operator. (Id. ¶ 16.) Between April 19
`and June 14, 2006, Samples billed time to Chamberlain for
`prosecution work on the ’966 patent on five occasions and for
`prosecution work on the ’619 patent on three occasions. (Id. ¶¶
`18-19.) Specifically, on April 26, 2006, Samples billed time to
`the ’966 patent prosecution matter; one day later, he billed
`time to the ’619 patent prosecution matter. (Id. ¶ 20.) On
`October 10, 2006, Samples filed a response to the office action,
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`traversing the Examiner’s rejection of the ’619 patent claims by
`distinguishing the technology taught by Peplinski. (Id. ¶ 17.)
`
`Whereas Samples signed the communications with the PTO
`regarding the ’619 patent, Mr. Nicholas Peters (“Peters”) was
`the Fitch Even attorney in charge of submitting Chamberlain’s
`responses to office actions during prosecution of the ’966
`patent. Fitch Even billing records indicate that he performed
`no prosecution work on the ’619 patent prior the ’966 patent’s
`issuance on December 22, 2009, but as early as April 2009 he
`received emails concerning prosecution of a Canadian application
`related to the ’619 patent. (Compare, Pl.’s SOF ¶ 6; with,
`Defs.’ Resp. ¶ 6; see also, ECF No. 487 at Ex. 1 (“Defs.’
`Resp.”) ¶ 23.) Although he could not recall considering whether
`any art other than that cited by the Examiner was material to
`the ’966 patent application, Peters testified to his general
`practice of submitting “references that I know are material to a
`patent application.” (Defs.’ Resp. ¶ 7.)
`
`During prosecution of the ’966 patent, neither Fitzgibbon
`nor the Fitch Even attorneys disclosed the ’619 patent,
`Craftsman, or Peplinski to the PTO. (Indeed, Chamberlain did
`not file an information disclosure statement or otherwise
`disclose any prior art.) As a rationale for withholding these
`references, Fitzgibbon characterized the following sentences in
`the background section of the ’966 patent as “[f]ully
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`describ[ing] the important part of the operation of the
`product”:
`Some current barrier movement operators can be powered
`via a backup battery. These barrier movement
`operators receive power from the backup battery in the
`event of a power disruption from the electrical outlet
`and can be operated as long as the backup battery has
`a sufficient amount of electrical power stored. These
`battery backups are independent items which are
`typically used only for operating the barrier movement
`operator. These systems require some method to
`recharge the batteries either built into the operator
`or as an additional power supply for battery charging.
`
`(Pl.’s Resp. ¶ 11; ’966 patent at 1:31-42; see also, Defs.’
`Resp. ¶¶ 1-2, 17.) Chamberlain’s infringement expert, Dr.
`Rhyne, admitted during his deposition that the disclosures in
`Peplinski and the ’619 patent are more extensive than this terse
`summary of prior art backup battery systems, but opined that “in
`the ’966, the – the basic GDO is pretty much a given, and the
`point of novelty is the point that you have a battery that’s
`removably connectable to other electrical equipment.” (Pl.’s
`Resp. ¶¶ 26-27.)
`
`At his deposition, Samples had no recollection of any of
`the three references at issue, of any steps he may have taken to
`comply with his duty of candor to the PTO, or of his intent in
`2006 regarding prosecution of the ’966 patent. (Pl.’s Resp. ¶¶
`21-25.) However, he testified that he never knowingly withheld
`references from the PTO or did “nefarious things”; that, as a
`general matter, he and Fitzgibbon “submitted what we should”;
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`and that he had no knowledge of Fitzgibbon or Chamberlain
`seeking to withhold references or saying “anything dishonest in
`connection with the prosecution of Chamberlain patents.”
`(Defs.’ Resp. ¶¶ 8-11.)
`
`Finally, the factual predicates for Defendants’ monopoly
`counterclaims warrant a brief mention. Chamberlain does not
`practice and has never practiced the ’966 patent. (Defs.’ Resp.
`¶ 25.) Perhaps as a consequence, Defendants’ claims under
`Section 2 of the Sherman Act and under the Illinois Antitrust
`Act charge Chamberlain with monopolizing the U.S. market for
`residential GDOs by asserting the ’966 patent in this
`litigation. (Id. ¶¶ 27-28.) According to Defendants’ antitrust
`expert, Dr. Layne-Farrar, Defendants’ alleged antitrust injury
`consists solely of litigation expenses incurred in defending
`Chamberlain’s infringement suit – costs she pegs at $1.4
`million. (Id. ¶ 48.)
`
`II. LEGAL STANDARD
`
`Summary judgment is proper “if the movant shows that there
`is no genuine dispute as to any material fact and the movant is
`entitled to judgment as a matter of law.” FED. R. CIV. P. 56(a).
`A genuine dispute exists if “the evidence is such that a
`reasonable jury could return a verdict for the nonmoving party.”
`Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986). In
`evaluating summary judgment motions, courts must view the facts
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`and draw reasonable inferences in the light most favorable to
`the nonmovant. Scott v. Harris, 550 U.S. 372, 378 (2007). The
`Court may not weigh conflicting evidence or make credibility
`determinations. Omnicare, Inc. v. UnitedHealth Group, Inc., 629
`F.3d 697, 704 (7th Cir. 2011).
`III. DISCUSSION
`Defendants assert inequitable conduct and unclean hands as
`
`affirmative defenses to infringement of the ’966 patent,
`incorporating the allegations fully set forth in their
`inequitable conduct and monopoly counterclaims. The Court’s
`treatment of Chamberlain’s Motion thus proceeds in two parts –
`first, an analysis of whether Chamberlain is entitled to
`judgment as a matter of law on the inequitable conduct issues,
`and then an examination of Defendants’ monopoly counterclaims
`charging Chamberlain with asserting a fraudulently obtained
`patent to anticompetitive effect.
`A.
`Inequitable Conduct
`“Patent applicants have a duty to prosecute patent
`
`applications in the PTO with candor, good faith, and honesty.”
`Advanced Magnetic Closures, Inc. v. Rome Fastener Corp., 607
`F.3d 817, 829 (Fed. Cir. 2010) (internal quotation marks and
`alteration omitted); see also, 37 C.F.R. § 1.56(a). Breach of
`this duty – “including affirmative misrepresentations of
`material facts, failure to disclose material information, or
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`submission of false material information – coupled with an
`intent to deceive, constitutes inequitable conduct.” Honeywell
`Int’l Inc. v. Universal Avionics Sys. Corp., 488 F.3d 982, 999
`(Fed. Cir. 2007).
`
`For a defendant to succeed in proving inequitable conduct,
`it must adduce clear and convincing evidence that (1) “the
`patentee acted with the specific intent to deceive the PTO”; and
`(2) the undisclosed reference(s) were but-for material to
`patentability. Therasense, Inc. v. Becton, Dickinson & Co., 649
`F.3d 1276, 1290 (Fed. Cir. 2011) (en banc). To show that the
`patentee acted with the specific intent to deceive the PTO, a
`defendant must prove “that the applicant knew of the reference,
`knew that it was material, and made a deliberate decision to
`withhold it.” Id. at 1290. A failure of proof on any element
`precludes a finding of inequitable conduct, entitling the
`plaintiff to judgment as a matter of law. See, ibid. (“Proving
`that the applicant knew of a reference, should have known of its
`materiality, and decided not to submit it to the PTO does not
`prove specific intent to deceive.”) (emphasis added). To meet
`the “clear and convincing” standard, specific intent to deceive
`must be “the single most reasonable inference able to be drawn
`from the evidence.” Ibid. (quoting Star Scientific, Inc. v.
`R.J. Reynolds Tobacco Co., 537 F.3d 1357, 1366 (Fed. Cir.
`2008)). If more than one reasonable inference is possible,
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`“intent to deceive cannot be found.” Therasense, 649 F.3d at
`1290-91.
`
`Clearing away some residue, the Court first notes that
`Defendants have adduced no evidence concerning the role of
`ancillary Fitch Even figures mentioned in their amended answer,
`such as Timothy Levstik, Steven Parmelee, and Joshua Smith.
`They also appear to abandon any claim that Peters committed
`inequitable conduct. Indeed, in their brief opposing summary
`judgment, Defendants expressly limit their arguments to “Messrs.
`Fitzgibbon and Samples.” (ECF No. 415 (“Defs.’ Br.”) at 4.) As
`such, the Court grants summary judgment to Chamberlain in
`relevant part and restricts the ensuing analysis to the key
`players – Fitzgibbon and Samples.
`
`It is unclear whether Chamberlain disputes the materiality
`of the three withheld references, as it did when Defendants
`sought leave to amend their answer. But no matter: The Court
`need not engage in a detailed analysis of whether Peplinski, the
`’619 patent, and Craftsman were but-for material, because
`Defendants have failed to adduce evidence from which specific
`intent to deceive is the single most reasonable inference.
`1.
`Knowledge of the References
`
`With respect to the first Therasense prong, Defendants have
`
`adduced evidence sufficient to show that, during the crucial
`timeframe, Fitzgibbon knew of the three references and that
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`Samples knew of Peplinski and the ’619 patent. As a named
`inventor of the ’619 patent, Fitzgibbon was surely aware of that
`reference and testified that he was aware of the later Craftsman
`device embodying the patent. Through his position on
`Chamberlain’s Intellectual Capital Committee and involvement in
`reviewing office actions, Fitzgibbon also seems to have known of
`Peplinski and was involved in its prosecution. Similarly,
`Samples prosecuted the ’619 patent and Peplinski applications,
`making it clear and convincing that he knew of these two
`references. As such, Chamberlain is not entitled to judgment as
`a matter of law that its agents were unaware of the three
`withheld references.
`2.
`Knowledge of the References’ Materiality
`
`Moving to the second prong, things become more problematic
`
`for Defendants because they have not shown that Fitzgibbon or
`Samples knew the references were material to the ’966 patent.
`Instead, they adduce evidence only that, by virtue of
`Fitzgibbon’s role as an inventor and in prosecution as well as
`the proximity of Samples’s ’619 patent prosecution work to his
`’966 patent prosecution work, the two men knew of the references
`and were likely familiar with their disclosures. The case law
`mandates proof of something more than knowledge of and working
`familiarity with the subject references for a defendant to
`survive summary judgment on the second Therasense prong. For
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`example, none of the deposition testimony Defendants obtained
`suggests either individual’s actual recognition of the
`importance of the undisclosed information. Cf., Am. Calcar,
`Inc. v. Am. Honda Motor Co., 768 F.3d 1185, 1191 (Fed. Cir.
`2014) (finding that an inventor who helped develop the patent
`application “knew the information was material because he
`himself acknowledged the importance of the information he
`possessed”). What is more, Defendants adduce nothing to suggest
`that Fitzgibbon or Samples learned of key features of the
`invention from the undisclosed references. See, Aventis Pharma
`S.A. v. Hospira, Inc., 675 F.3d 1324, 1335 (Fed. Cir. 2012).
`
`Failing circumstantial evidence suggesting knowledge of
`materiality, might the references nevertheless so clearly and
`convincingly bear on the patentabilty of the ’966 patent that
`mere familiarity with them supports an inference of knowledge of
`their materiality? It is clear enough that Peplinski, the ’619
`patent, and Craftsman disclose GDOs with backup batteries that
`can be charged by the GDO power supply and used to power the GDO
`in the event of power failure. As an initial matter, the Court
`is not willing to countenance Defendants’ assertion that all
`“prior art related to ‘movable barrier operator’ batteries and
`battery charging apparatus would have been material to the
`patentability of the ’966 patent.” (Defs.’ Br. at 9.) Rather,
`there must be some nexus between the disclosures of the prior
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`art and the (claimed) point of novelty of the patented
`technology - use of such a GDO battery backup with other
`separate electrically powered equipment. With regard to such a
`nexus, Defendants point to an implicit teaching of the
`references and a structural feature of one of the ’966 patent’s
`independent claims, but it is difficult to conceive how either
`makes an inference of contemporaneous knowledge tenable.
`
`First, Defendants contend that the GDO-only backup
`batteries of the three undisclosed references could be removed
`and inserted into a second, separate GDO, thus rendering the
`references material to the ’966 patent’s claimed “other
`electrically powered equipment other than and physically
`separate or separable from” the GDO. (’966 patent at 7:48-50.)
`Although they furnish no evidence that Fitzgibbon or Samples
`subscribed to this contorted reading, Defendants offer the
`following testimony of Dr. Rhyne in support of this theory:
`Q.
`Do you agree that a garage door opener qualifies
`as electrically powered equipment?
`
`A.
`I can’t – yes, I – that’s simply put, yes, that’s
`electrically powered equipment.
`
`(Rhyne Dep. Tr. at 153:24-154:2.) To the extent this testimony
`– given in a vacuum without regard to the full wording of the
`limitation – supports Defendants’ argument at all, it comes
`nowhere close to establishing what they need to overcome their
`lack of evidence suggesting Fitzgibbon’s or Samples’s knowledge
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`of materiality: that the technology disclosed in the three
`references at issue was so clearly and convincingly material to
`a fair reading of the ’966 patent that familiarity with the
`references alone should suffice under Therasense. In this vein,
`Chamberlain notes that Defendants’ first expert conceded that
`Peplinski does not disclose “electrically powered equipment
`other than and physically separate or separable from” the GDO;
`it was only upon retaining a second expert that Defendants
`posited this second-GDO reading of the claim language.
`Moreover, the Court wonders what benefit would inhere in
`removing the ’619 patent’s, Peplinski’s, or Craftsman’s backup
`battery from one GDO and using it in a second, separate GDO.
`Each compatible other GDO would already have its own backup
`battery with coextensive capabilities. Perhaps, in the event
`that a power outage affecting GDO-2 follows on the heels of a
`malfunction in GDO-2’s charging capabilities, the backup battery
`of GDO-1 could be removed and used to power GDO-2. But this
`far-fetched scenario presupposes both misfiring charging
`technology – a situation on which the ’966 patent specification
`is mute - and a contiguous power outage that only selectively
`affects a user’s multiple GDOs. And, as the Patent Trial and
`Appeal Board indicated in declining to institute inter partes
`review of the ’966 patent, “removing the back-up battery from
`the first garage door opener to power the second garage door
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`opener likewise would defeat the principal purpose of
`Peplinski’s system for the first garage door opener and cause
`unwanted service calls from the first garage door opener.” One
`World Technologies, Inc. d/b/a Techtronic Indus. Power Equip. v.
`
`The Chamberlain Group, Inc., IPR2016-01846, Paper 8, at 15
`(P.T.A.B. Mar. 24, 2017). The mere potential for using the
`undisclosed references’ backup battery with a second, separate
`GDO does not clearly and convincingly establish an inference of
`contemporaneous
`knowledge
`of
`materiality
`vis-à-vis
`the
`“electrically powered equipment” limitation pervading the ’966
`patent claims.
`
`The second argument Defendants marshal to support an
`inference of knowledge of materiality invokes the technical
`structure of claim 9, which does not recite the “electrically
`powered equipment” construction as an express limitation (but
`nonetheless includes it as a functional condition of the
`rechargeable battery claimed in the battery charging station
`limitation). Absent that limitation, claim 9 only requires a
`battery charging apparatus comprising a battery charging station
`in communication with a rechargeable battery and a GDO head
`unit, and circuitry electrically connected to the battery
`charging station – features that the three undisclosed
`references indisputably teach. The Court feels that this facet
`of claim 9 bears more on the materiality of the references than
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`it does on the separate and distinct inquiry of whether
`Fitzgibbon or Samples had knowledge of their materiality.
`Indeed, it seems a stretch to prioritize this distinction in the
`language of one claim over other evidence suggesting with at
`least equal force that the two men would have regarded as the
`inflection point of patentability the GDO backup battery’s
`capability to power separate electrical equipment. For example,
`the first words of the specification disclose that the invention
`relates “particularly to a rechargeable battery backup for use
`with both a barrier movement operator and electrically powered
`equipment such as a power tool.” (’966 patent at 1:8-11
`(emphasis added).) Recall also Dr. Rhyne’s similar proposal
`that the point of novelty of the ’966 patent is a battery
`removably connectable to other electrical equipment. Neither
`alone nor in tandem with Defendants’ first argument does claim
`9’s technical structure furnish clear and convincing evidence of
`Fitzgibbon’s or Samples’s knowledge of materiality.
`3.
`Deliberate Decision to Withhold the References
`
`But even if Defendants sufficiently establish the first two
`
`Therasense prongs, there is a profound dearth of evidence
`concerning a deliberate decision to withhold the three
`references from the PTO. To the extent Defendants fault Samples
`for forgetfulness, this is legally insufficient: Courts cannot
`rely on a witness’s “inability to offer a good faith explanation
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`as a basis to infer a deliberate decision to withhold.” 1st
`Media, LLC v. Elec. Arts, Inc., 694 F.3d 1367, 1375-76 (Fed.
`Cir. 2012). Casting aspersions on Fitzgibbon’s failure to
`maintain paper files does not advance the ball either. Allowing
`experience and memory to drive disclosure is at best an
`equivocal factor in the deliberate-decision-to-withhold-known-
`material-information calculus. In any event, Defendants fail to
`cite any case law for the proposition that a patent applicant
`must run detailed prior art searches or maintain physical files
`prior to responding to office actions. What is more, despite
`the fact that Fitzgibbon “need not offer any good faith
`explanation unless the accused infringer first carried his
`burden to prove a threshold level of intent to deceive by clear
`and convincing evidence,” Star Scientific, Inc. v. R.J. Reynolds
`Tobacco Co., 537 F.3d 1357, 1368 (Fed. Cir. 2008), Fitzgibbon
`testified concerning his subjective good faith that the
`background section of the ’966 patent discloses the relevant
`teachings of the prior art.
`
`Defendants make much of the fact that the prior art
`contains richer and more extensive treatment of certain claimed
`limitations than does the background section’s terse summary.
`In particular, they urge that the summary’s silence on the prior
`art’s disclosure of a charging circuit, removable battery, and
`use with other electrically powered equipment inculpates
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`Chamberlain. (See, Defs.’ Br. at 14.) Yet there is at least a
`colorable case for inherent disclosure of a prior art charging
`circuit and removable battery, respectively, given the summary’s
`acknowledgment that existing “systems require some method to
`recharge the batteries either built into the operator or as an
`additional power supply for battery charging.” (’966 patent at
`1:39-41 (emphasis added).) And recall also the absence of any
`compelling reason to think Fitzgibbon or Samples knew that the
`three references disclose the “electrically powered equipment”
`limitation. The Court is therefore unconvinced that the two men
`were “intentionally selective” in their disclosures or that the
`detail otherwise absent from the ’966 patent background was
`material to patentability. Am. Calcar, 768 F.3d at 1190
`(“Partial disclosure of material information about the prior art
`to the PTO cannot absolve a patentee of intent if the disclosure
`is intentionally selective.”) (citations omitted). There is
`nothing in the record to elevate the inference that Fitzgibbon
`or Samples intentionally limited the background discussion at
`the expense of material information above any other inference of
`permissible conduct. Cf., Apotex, Inc. v. UCB, Inc., 763 F.3d
`1354, 1362 (Fed. Cir. 2014) (finding an inference of intent to
`deceive appropriate where the inventor testified that he “never
`performed the experiments described in the patent, and yet he
`drafted the examples in the specification entirely in past-tense
`
`- 18 -
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`Case: 1:16-cv-06097 Document #: 549 Filed: 08/14/17 Page 19 of 27 PageID #:21157
`
`those
`“bolster
`to
`counsel
`directed
`and
`language”
`misrepresentations”). Such permissible conduct includes even
`“gross negligence or negligence under a ‘should have known’
`standard,” which “does not satisfy the intent requirement.”
`Therasense, 649 F.3d at 1290; see also, 1st Media, 694 F.3d at
`1374-75 (holding that it is “not enough to argue carelessness,
`lack of attention, poor docketing or cross-referencing, or
`anything else that might be considered negligent or even grossly
`negligent”).
`
`Defendants will undoubtedly protest that the Court in
`granting them leave to assert inequitable conduct rejected the
`sufficiency of the disclosure in the ’966 patent’s background
`summary. But the Court’s holding at that stage was uniquely
`indebted to the case’s procedural posture – an Exergen appraisal
`of Defendants’ proposed allegations against Chamberlain’s Rule
`12(b)(6) futility challenge. See, The Chamberlain Group, Inc.
`v. Techtronic Indus. Co., Ltd., No. 16 C 6097, 2017 WL 1101092,
`at *9 (N.D. Ill. Mar. 22, 2017) (noting that the cases cited by
`Chamberlain were “inapposite because they all concern[ed] proof
`of inequitable conduct after the presentation of evidence”).
`Whereas deceptive intent at the pleading stage need only be
`plausible, proving it on the merits requires that it be the
`“single most reasonable” inference. Id. at *10 (citing Itex,
`
`- 19 -
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`
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`Case: 1:16-cv-06097 Document #: 549 Filed: 08/14/17 Page 20 of 27 PageID #:21158
`
`Inc. v. Westex, Inc., 2010 WL 2901793, at *2 (N.D. Ill. July 21,
`2010)).
`
`Similarly, while the Court at that stage drew the
`“reasonable inference that non-disclosure of the references was
`accompanied by deceptive intent” based on the fact that “no one
`from Chamberlain or Fitch Even filed an information disclosure
`statement or submitted any prior art whatsoever during
`prosecution,” it did so based on a case from a sister court
`decided on a motion to dismiss. See, id. at *13 (citing Weber-
`Stephen Prods. LLC v. Sears Holding Corp., No. 13 C 1686, 2014
`WL 656753, at *5 (N.D. Ill. Feb. 20, 2014)). In fact, when it
`comes to deciding inequitable conduct on the merits, wholesale
`failure to bring prior art to the PTO’s attention appears to
`forestall the sort of “affirmative conduct by the applicants
`showing not only specific awareness of materiality, but careful
`and selective manipulation of where, when, and how much of the
`
`most material information to disclose.” 1st Media, 694 F.3d at
`1375 (citing Aventis, 675 F.3d at 1335-36).
`
`In any event, the Court need not even reach the argument
`concerning the ’966 patent’s background section here, because
`Chamberlain has offered it as intent evidence concerning good
`faith and “the accused infringer has [not] first carried [its]
`burden to prove a threshold level of intent to deceive by clear
`and convincing evidence.” Star Scientific, 537 F.3d at 1368.
`
`- 20 -
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`
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`
`But it is worth mentioning that even a more granular review does
`not convince the Court that its prior analysis matters here.
`For example, in crediting Defendants’ allegations of materiality
`over Chamberlain’s assertion of cumulativeness, the Court noted
`that the allegedly withheld references contained disclosures
`that appeared to contradict those in the ’966 patent’s summary.
`But it could only find one such disclosure: a mention in U.S.
`Patent No. 6,923,676 (“the ’676 patent”) of using its
`rechargeable backup battery to power “any number of electronic
`devices,” which seemed to fly in the face of the summary’s
`statement that prior art “battery backups are independent items
`which are typically used only for operating the barrier movement
`operator.” Ibid. However, the Court went on to deny leave to
`amend with respect to the ’676 patent because of the lack of any
`allegations plausibly suggesting that it was deliberately
`withheld with deceptive intent. See, id. at *12 (“The Court
`finds, however, that Defendants’ intent allegations with respect
`to the ’676 patent are too weak to meet Exergen’s demands.”).
`As such, any contradiction of the ’966 patent’s prior art
`background summary must now flow from the three undisclosed
`references at issue. Defendants have pointed to no similar
`contradiction in Peplinski, Craftsman, or the ’619 patent, and
`the Court could find none on its own.
`
`- 21 -
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`
`To Defendants’ final salvo that credibility determinations
`
`preclude summary judgment, the Court ripostes that this case
`presents no need to resolve conflicting testimony. Instead, the
`testimony and evidence adduced is basically in accord; it simply
`falls short of yielding a single, most reasonable inference o
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