Case 6:21-cv-00642-ADA Document 72 Filed 08/22/22 Page 1 of 23
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`IN THE UNITED STATES DISTRICT COURT
`FOR THE WESTERN DISTRICT OF TEXAS
`WACO DIVISION
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`FLYPSI, INC. (D/B/A FLYP),
` Plaintiff
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`-vs-
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`DIALPAD, INC.,
` Defendant
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`6:21-CV-0642-ADA
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`ORDER ON PLAINTIFF FLYPSI, INC.’S MOTION TO DISMISS AND STRIKE
`DEFENDANT’S INEQUITABLE CONDUCT COUNTERCLAIM AND DEFENSE
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`Came on for consideration this date is Plaintiff Flypsi, Inc.’s (“Plaintiff” or “Flyp”)
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`Motion to Dismiss and Strike Defendant’s (“Defendant” Or “Dialpad”) Inequitable Conduct
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`Counterclaim And Defense. ECF No. 38 (the “Motion”). Plaintiff filed the Motion on February
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`8, 2022. Defendant filed its Response in Opposition to Plaintiff’s Motion on February 22, 2022.
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`ECF No. 39. Plaintiff filed its Reply on March 1, 2022. ECF No. 42. After careful consideration
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`of the briefing and arguments, the Court GRANTS Plaintiff’s Motion to Dismiss and Strike
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`Defendant’s Inequitable Conduct Counterclaim and Defense, ECF No. 38.
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`I.
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`BACKGROUND
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`Flyp, a Delaware corporation with its principal place of business in Bedford, Texas, filed
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`suit on June 21, 2021, against Dialpad, also a Delaware corporation with its principal place of
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`business in Austin, Texas. ECF No. 1 ¶¶ 1–2. Flyp’s Original Complaint alleged that Dialpad has
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`and continues to infringe, contribute to the infringement of, and/or induce infringement of Flyp’s
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`U.S. Patent Nos. 9,667,770 (the “’770 Patent”), 10,051,105 (the “’105 Patent”), 10,334,094 (the
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`“’094 Patent”), and 11,012,554 (the “’554 Patent”) (collectively, the “Asserted Patents”). Id. at
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`¶¶ 16, 26, 36, 49.
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`1
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`Case 6:21-cv-00642-ADA Document 72 Filed 08/22/22 Page 2 of 23
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`Dialpad filed its Original Answer and Counterclaims to Flyp’s Original Complaint on
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`August 13, 2021, denying the allegations and alleging counterclaims for declaratory judgment on
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`the ’770, ’105, ’094, and ’554 Patents. ECF No. 14 ¶¶ 16, 26, 36, 49, 12, 17, 25, 31, 38, 45, 52,
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`58. In each of its counterclaims, Dialpad asked the Court to declare that it had not infringed any
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`of the Asserted Patents and that each patent was invalid. Id. at ¶¶ C–J.
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`On November 5, 2021, Dialpad served Flyp with invalidity contentions in accordance
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`with the Court’s scheduling order. ECF No. 38 at 2. Two business days after receiving the
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`contentions, Flyp submitted a Request for Continued Examination of U.S. Patent No. 11,218,585
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`(the “’585 Patent”) along with an Information Disclosure Statement listing the invalidity
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`references cited by Dialpad. ECF No. 38 at 2; ECF No. 38-2. A few weeks later the examiner
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`issued a new Notice of Allowability and the patent was issued as the ’585 patent. ECF No. 38 at
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`2. Flyp filed its First Amended Complaint (“FAC”) on January 4, 2022, adding an allegation that
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`Dialpad has and continues to infringe, contribute to the infringement of, and/or induce
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`infringement of Flyp’s ’585 Patent. ECF No. 29 ¶ 70.
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`On January 18, 2022, Dialpad filed its Answer and Counterclaims to Flyp’s FAC (the
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`“Second Answer”) re-alleging its denials and counterclaims in its Original Answer and
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`Counterclaims and also denying infringement of the ’585 Patent. ECF No. 34 ¶ 70. Specifically,
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`Dialpad asked the Court to declare that it had not infringed the ’585 Patent and that the patent
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`was invalid. ECF No. 34 ¶¶ L, M. Additionally, in its Second Answer, Dialpad asserted an
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`affirmative defense that Flyp’s claims of infringement of the ’585 Patent are unenforceable due
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`to purported inequitable conduct by Flyp during the patent’s prosecution before the United States
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`Patent and Trademark Office (the “USPTO”). Id. at 49. Dialpad’s counterclaim for declaratory
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`judgment of unenforceability due to Flyp’s alleged inequitable conduct followed. Id. at ¶¶ 75–94.
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`2
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`According to Dialpad, Flyp failed to disclose the current litigation and invalidity claim charts to
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`the examiner of the ’585 Patent, violating its duties of disclosure, candor, and good faith. Id. at ¶
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`72.
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`Immediately after Flyp filed its Original Complaint, it filed a Notice of Filing of
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`Patent/Trademark Form AO 120 (the “First Notice”), putting the Court on notice that Flyp had
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`filed the required form with the USPTO the same day it filed suit against Dialpad. ECF No. 3.
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`And, immediately after Flyp filed its FAC, it filed a second Notice of Filing of Patent/Trademark
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`Form AO 120 (the “Second Notice”), putting the Court on notice that Flyp had once again filed
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`the required form with the USPTO just one day after it amended its Original Complaint. ECF
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`No. 31. In its first Notice, Flyp informed the USPTO that it was suing Dialpad in the Western
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`District of Texas concerning the ’770, ’105, ’094, and ’554 Patents. ECF No. 3. In the Second
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`Notice, Flyp informed the USPTO that it was now also suing Dialpad concerning the ’585
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`Patent. ECF No. 31.
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`Flyp filed the current Motion on February 28, 2022, claiming that it had properly
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`disclosed the current litigation to the USPTO and that it had no obligation to disclose the
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`invalidity claim charts to the USPTO because those charts were cumulative of the already
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`disclosed prior art. ECF No. 38 at 1. According to Flyp, Dialpad fails to state a plausible claim of
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`inequitable conduct because Flyp made the necessary disclosures and Dialpad’s pleadings are
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`conclusory and insufficient. Id. Further, Flyp claims that Dialpad reads the Manual of Patent
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`Examining Procedure § 2001.06(c) to be broader than it is and that the USPTO expressly
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`rejected a rule requiring applicants to disclose claim charts. Id. Defendant responded, alleging
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`that its pleadings were not conclusory and that Flyp misinterprets the requirements of MPEP
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`§ 2001.06(c). ECF No. 39.
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`3
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`II.
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`LEGAL STANDARD
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`A. 12(b)(6) Failure To State a Claim
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`When evaluating a motion to dismiss for failure to state a claim under Rule 12(b)(6), the
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`Court must liberally construe the complaint in favor of the plaintiff and must take as true all
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`well-pleaded facts. Leatherman v. Tarrant Cty. Narcotics Intelligence & Coordination Unit, 507
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`U.S. 163, 164 (1993); Baker v. Putnal, 75 F.3d 190, 196 (5th Cir. 1996). The pleading standard
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`demands more than unadorned accusations, “labels and conclusions,” “a formulaic recitation of
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`the elements of a cause of action,” or “naked assertion[s]” devoid of “further factual
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`enhancement.” Bell Atl. v. Twombly, 550 U.S. 544, 555–57 (2007). Rather, a complaint must
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`contain sufficient factual matter, accepted as true, to “state a claim to relief that is plausible on its
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`face.” Id. at 570. The Supreme Court has made clear that this plausibility standard is not simply a
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`“probability requirement,” but nonetheless must infer more than “a sheer possibility that a
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`defendant has acted unlawfully.” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009).
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`There are “[t]wo working principles” that a court must use in its pleading evaluations. Id.
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`First, although “a court must accept as true all of the allegations contained in a complaint,” that
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`tenet does not extend to legal conclusions or “[t]hreadbare recitals of the elements of a cause of
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`action, supported by mere conclusory statements, [as they] do not suffice.” Id. Second,
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`“[d]etermining whether a complaint states a plausible claim for relief will . . . be a context-
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`specific task that requires the reviewing court to draw on its judicial experience and common
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`sense.” Id. at 679. Thus, in considering a motion to dismiss, a court must initially identify
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`pleadings that are no more than legal conclusions not entitled to the assumption of truth, then
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`assume the veracity of well-pleaded factual allegations and determine whether those allegations
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`plausibly give rise to an entitlement to relief. Datascape, Ltd. v. Dell Techs., Inc., No. 1:19-CV-
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`00605-ADA, 2019 WL 5275533, at *1 (W.D. Tex. June 17, 2019).
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`B. Inequitable Conduct
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`Inequitable conduct bears on an issue unique to patent law. Cent. Admixture Pharmacy
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`Servs., Inc. v. Advanced Cardiac Sols., P.C., 482 F.3d 1347, 1356 (Fed. Cir. 2007). Thus, the
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`Court applies the law of the Federal Circuit when determining whether inequitable conduct has
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`been pleaded with particularity under Rule 9(b) of the Federal Rules of Civil Procedure. Exergen
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`Corp. v. Wal-Mart Stores, Inc., 575 F.3d 1312, 1326 (Fed. Cir. 2009). Rule 9(b) requires that
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`“[i]n all averments of fraud or mistake, the circumstances constituting fraud or mistake shall be
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`stated with particularity.” “[I]nequitable conduct, while a broader concept than fraud, must be
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`pled with particularity” under Rule 9(b). Ferguson Beauregard/Logic Controls, Div. of Dover
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`Resources, Inc. v. Mega Sys., LLC, 350 F.3d 1327, 1344 (Fed. Cir. 2003).
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`“[T]o plead the ‘circumstances’ of inequitable conduct with the requisite ‘particularity’
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`under Rule 9(b), the pleading must identify the specific who, what, when, where, and how of the
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`material misrepresentation or omission committed before the USPTO. Moreover, although
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`‘knowledge’ and ‘intent’ may be averred generally, a pleading of inequitable conduct under Rule
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`9(b) must include sufficient allegations of underlying facts from which a court may reasonably
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`infer that a specific individual (1) knew of the withheld material information or of the falsity of
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`the material misrepresentation, and (2) withheld or misrepresented this information with a
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`specific intent to deceive the USPTO.” Exergen, 575 F.3d at 1328–29.
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`The USPTO imposes a duty on “[e]ach individual associated with the filing and
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`prosecution of a patent application” to disclose information material to patentability. 37 C.F.R.
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`§ 1.56(a); see also M.P.E.P. § 2001.06(c). Specifically, each named inventor, “each attorney or
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`agent who prepares or prosecutes the application,” and “every other person who is substantively
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`involved in the preparation or prosecution of the application and who is associated with the
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`inventor, the applicant, an assignee, or anyone to whom there is an obligation to assign the
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`application” owes a duty of disclosure to the USPTO. 37 C.F.R. § 1.56(c). However, the Federal
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`Circuit rejected adopting materiality as it is defined in USPTO Rule 56 because it sets such a low
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`bar. Therasense, Inc. v. Becton, Dickinson & Co., 649 F.3d 1276, 1292, 1295 (Fed. Cir. 2011);
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`37 C.F.R. § 1.56. Instead, materiality is measured by a “but-for” analysis. Id. at 1291. To assess
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`materiality, “the court must determine whether the PTO would have allowed the claim if it had
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`been aware of the undisclosed reference.” Id. In determining patentability, courts should give
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`claims their broadest reasonable construction, using a preponderance of the evidence standard.
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`Id. at 1292. “Information cumulative of other information already before the Patent Office is not
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`material.” Honeywell Int’l Inc. v. Universal Avionics Sys. Corp., 488 F.3d 982, 1000 (Fed. Cir.
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`2007).
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`“A reasonable inference [of intent] is one that is plausible and that flows logically from
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`the facts alleged, including any objective indications of candor and good faith.” Exergen, 575
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`F.3d at 1329 n.5. The inference of deceptive intent must be reasonable and drawn from the
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`pleading’s allegations of underlying facts. Id. This pleading standard is lower than that required
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`to prevail on the merits. Id. (noting that to prevail on the merits, an accused infringer must prove
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`both materiality and intent by clear and convincing evidence, and that the inference must be the
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`single most reasonable inference to meet the clear and convincing standard). Importantly, “intent
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`and materiality are separate requirements.” Therasense, 649 F.3d at 1290 (citing Hoffmann-La
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`Roche, Inc. v. Promega Corp., 323 F.3d 1354, 1359 (Fed. Cir. 2003)). The two requirements
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`should not fall on a “sliding scale,” as a “court must weigh the evidence of intent to deceive
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`independent of its analysis of materiality.” Id.
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`III. ANALYSIS
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`Flyp argues that Dialpad fails to plead the “what,” “where,” “how,” or “why of any
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`alleged inequitable conduct. Additionally Flyp argues that Dialpad fails to plead any facts
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`supporting an inference of intent to deceive. Dialpad disputes any failure to plead and highlights
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`the non-cumulative materiality of the undisclosed invalidity claim charts and litigation to satisfy
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`the “what” and “where.” Dialpad also provides its reasons for why Flyp “intentionally hid the
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`litigation and invalidity claim charts from the PTO.” ECF No. 39 at 14. Dialpad further relies on
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`those same alleged facts to support the pleading requirements for intent. Underlying each of the
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`parties’ arguments is a preliminary question of materiality; specifically, whether the USPTO
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`would have allowed the claims of the ’585 Patent had Flyp disclosed the invalidity claim charts
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`or litigation. The Court begins with the preliminary questions of disclosure and materiality,
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`followed by an analysis of the who, what, when, where, and how of the undisclosed materials,
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`and ending with an assessment of the factual allegations that do not support an inference
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`knowledge or specific intent to deceive.
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`A. Failure to disclose the Litigation or Invalidity Claim Charts generally does not meet
`the but-for materiality test.
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`Dialpad alleges that the suit filed against it by Flyp on June 21, 2021 (the “Litigation”),
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`was not disclosed to the USPTO. ECF No. 34 ¶ 81. Flyp contends otherwise. It is undisputed that
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`Flyp filed an AO 120 Form with the USPTO the very same day it filed suit against Dialpad. ECF
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`No. 38 at 1; ECF No. 3. At the top of the form, a blank space is left for a party to fill in the court
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`where an action has been filed: “In Compliance with 35 U.S.C. § 290 and/or 15 U.S.C. § 1116
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`you are hereby advised that a court action has been filed in the U.S. District Court
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`____________________________ on the following . . .” ECF No. 38-1. Underneath this portion
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`of the form a party can check a box for “Trademarks” or “Patents.” Id. In the blank, Flyp typed
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`in “Western District of Texas” and then checked the box for “Patents.” Id. Flyp then goes on to
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`identify itself as the plaintiff in the suit and Dialpad as the defendant. Id. Flyp listed each of the
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`patents involved in the suit—the ’770, ’105, ’094, and ’554 Patents—and identifies itself as the
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`holder of these patents. Id. The form appears in the file histories of the ’770, ’105, and ’554
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`Patents. For one reason or another, it does not appear in the file history of the ’094 Patent. ECF
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`No. 38 at 7 n.2. Nor does the form appear in the prosecution history of the ’585 Patent. ECF No.
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`39 at 9–10.
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`Flyp maintains that because the same examiner, Nam Trung Huynh, was assigned to the
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`prosecution of the other four patents and to the ’585 Patent, he was surely aware of the ongoing
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`litigation. ECF No. 38 at 7–8. Despite Flyp’s contention, Flyp presents no concrete evidence that
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`the examiner was aware of the connection between this litigation and the ’585 Patent. In a
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`footnote of its Motion, Flyp claims that it informed the examiner of the ongoing litigation in at
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`least one phone call. Id. at n.4. But Flyp offers nothing to substantiate this claim and presents
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`nothing that would allow the court to definitively say the examiner knew of the litigation’s
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`relevance to the ’585 Patent. Thus, this is a disputed fact that must be resolved in the pleading
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`party’s favor. Leatherman, 507 U.S. at 164 (recognizing that a Court must take as true all well-
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`pleaded facts). As to the invalidity claim charts attached to Dialpad’s response, see ECF No. 39-
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`2 (the “Invalidity Claim Charts”), both parties agree the underlying prior art was disclosed while
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`the charts were not.
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`Upon reply, Flyp argues that Dialpad does not contend the mere existence of the
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`Litigation was material to patentability in this case. Thus, even if a factual dispute regarding
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`disclosure of the litigation remains, any alleged lack of disclosure is immaterial; or at the very
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`least, Dialpad fails to plead its materiality. Flyp similarly argues that Dialpad failed to identify
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`particularly specific portions of the Invalidity Claim Charts that were material to the ’585
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`Patent’s patentability. Dialpad relies on the language of the Manual of Patent Examining
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`Procedure, which states in part:
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`In particular, material information that is raised in trial proceedings
`that is relevant to related applications undergoing examination
`should be submitted on an Information Disclosure Statement for
`the examiner's consideration. Examples of such material
`information include evidence of possible prior public use or sales,
`questions of inventorship, prior art, allegations of “fraud,”
`“inequitable conduct,” and “violation of duty of disclosure.”
`Another example of such material information is any assertion that
`is made during litigation and/or trial proceeding which is
`contradictory to assertions made to the examiner. Environ Prods.,
`Inc. v. Total Containment, Inc., 43 USPQ2d 1288, 1291 (E.D. Pa.
`1997). Such information might arise during litigation and/or trial
`proceeding in, for example, pleadings, admissions, discovery
`including interrogatories, depositions, and other documents and
`testimony.
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`MPEP § 2001.06(c). Dialpad cites two cases for support that failure to disclose litigation is
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`material to patentability. ECF No. 39 at 6. Dialpad relies on Leviton Manufacturing Co. v.
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`Universal Security Instruments, Inc., 606 F.3d 1353 (Fed. Cir. 2010), and Nilssen v. Osram
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`Sylvania, Inc., 504 F.3d 1223 (Fed. Cir. 2007), each of which found inequitable conduct for
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`failure to disclose litigation.
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`Flyp argues that neither of the cases apply as they both predate Therasense “which
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`expressly limited inequitable conduct claims ‘in order to redirect a doctrine that has been
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`overused to the detriment of the public.’” ECF No. 42 (quoting Therasense, 649 F.3d at 1290).
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`Per Flyp, Nilssen used a “sliding-scale analysis” which was expressly overruled as Therasense
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`required an independent showing of intent and materiality; and Leviton is “distinguishable
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`because it involved the nondisclosure of litigation where there had been claims of
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`unenforceability,” whereas this case only has ordinary prior art invalidity claims at issue. Id. at
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`6–7.
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`The United States District Court for the District of Minnesota addressed similar facts
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`post-Therasense and Exergen, ultimately determining that the defendants adequately pleaded
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`inequitable conduct for failure to disclose the existence of prior litigation or claim charts. See
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`Cutsforth, Inc. v. LEMM Liquidating Co., LLC, No. 12-cv-1200, 2013 WL 2455979 (D. Minn.
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`June 6, 2013). The court reviewed Nilssen, Leviton, and Outside the Box Innovations, LLC v.
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`Travel Caddy, Inc., 695 F.3d 1285, 1290–92 (Fed. Cir. 2012), a case cited by the plaintiff for the
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`proposition that the Federal Circuit had rejected the existence of related litigation alone was
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`sufficient to support a claim of inequitable conduct. Cutsforth, 2013 WL 2455979, at *6. The
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`court concluded that Travel Caddy did not overrule Nilssen nor Leviton, specifically because the
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`Federal Circuit reversed the district court and found no inequitable conduct as litigation without
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`claims of invalidity alone is not material to patentability. Id. To reiterate, the Federal Circuit
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`noted that because no grounds of invalidity in the litigation existed during the pendency of the
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`application, nothing material to patentability was withheld. Id. Thus, Cutsforth determined that a
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`failure to disclose litigation could not be categorically denied as inequitable conduct.
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`Unlike Travel Caddy, in Cutsforth, invalidity claims existed at the time of the prosecution
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`of the allegedly unenforceable patents. Therefore, Cutsforth concluded that:
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`Defendants have alleged that during the prosecution of [the
`patents], [plaintiff] failed to disclose to the USPTO that the
`potential invalidity of the related [patents] had been asserted in the
`2007 Litigation. Defendants’ allegations are sufficient to state a
`claim under MPEP § 2001.06(c), Nilssen, Leviton, and Travel
`Caddy. MPEP § 2001.06(c) requires that “the existence of such
`[related] litigation and any other material information arising
`therefrom” to be brought to the attention of the USPTO.
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`Id. at 7. Ultimately, Cutsforth determined that failure to disclose litigation and claim charts
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`amounted to inequitable conduct at the pleading stage.
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`This Court believes that Cutsforth skipped a critical analytical step—determining whether
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`the litigation and claim charts meet the “but-for materiality” test. Cutsforth’s pleadings may have
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`incidentally met such a standard, but Cutsforth’s reliance on the language of MPEP § 2001.06(c)
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`seems to directly contradict the rationale and “but-for” test provided in Therasense. See
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`Therasense, 649 F.3d at 1296 (“On remand, the district court should determine whether the
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`USPTO would not have granted the patent but for Abbott’s failure to disclose the EPO briefs.”);
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`see also Prowess, Inc. v. RaySearch Lab’ys, AB, 953 F. Supp. 2d 638, 651 (D. Md. 2013) (“But
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`the MPEP is not binding on this Court, and the Federal Circuit has expressly declined to adopt
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`Rule 56 as a definition for inequitable conduct.”). Thus, the test is not simply if the objectionable
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`lack of disclosure is material under MPEP § 2001.06(c) or § 1.56(a), but “whether the PTO
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`would have allowed the claim if it had been aware of the undisclosed reference.” Id. at 1291; see
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`also Travel Caddy, 695 F.3d at 1291 (“However, the issue was not whether the ’992 litigation
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`was irrelevant; the issue was whether the existence of the ’992 litigation was material to
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`patentability of the ’104 application, when there was no citation of prior art, nor any pleading of
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`invalidity or unpatentability in the ’992 complaint as it existed during pendency of the ’104
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`application.”). Having found that a failure to disclose litigation or invalidity claim charts alone
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`does not automatically meet the threshold pleading standard for inequitable conduct, the Court
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`looks to the sufficiency of the pleadings for the “specific who, what, when, where, and how” of
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`material omission committed before the USPTO. Exergen, 575 F.3d at 1327.
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`B. Dialpad’s pleadings lack the necessary specificity.
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`“[T]o plead the ‘circumstances’ of inequitable conduct with the requisite ‘particularity’
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`under Rule 9(b), the pleading must identify the specific who, what, when, where, and how of the
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`Case 6:21-cv-00642-ADA Document 72 Filed 08/22/22 Page 12 of 23
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`material misrepresentation or omission committed before the PTO.” Exergen Corp. v. Wal-Mart
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`Stores, Inc., 575 F.3d 1312, 1328 (Fed. Cir. 2009). “Most pleadings successfully allege ‘who’
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`was responsible for misleading the USPTO and ‘when’ the alleged acts occurred. The ‘what’ and
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`‘where’ requirements pose the greater challenge.” Front Row Techs., LLC v. NBA Media
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`Ventures, LLC, 163 F. Supp. 3d 938, 981 (D.N.M. 2016). The same can be said in this case.
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`1. The “who” is properly pleaded.
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`Inequitable conduct pleadings must identify specific individuals that owed a duty of
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`candor to the PTO and breached that duty. See Exergen, 575 F.3d at 1329. Dialpad clearly
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`identifies at least two individuals who allegedly failed to make the proper disclosures to the
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`USPTO; namely, Peter Rinfret and Stuart West (the “Flypsi Patent Prosecutors”). ECF No. 34 ¶¶
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`75–79. According to Dialpad, as the inventor and prosecutor, respectively, these two individuals
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`are the individuals responsible for the inequitable conduct. Id.
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`First, Dialpad alleges that Peter Rinfret—Flyp’s CEO and inventor of the ’770, ’105,
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`’094, and ’554 patents—was aware of the litigation and, on information and belief, was also
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`aware of the claim charts that were produced during the course of this litigation. Id. ¶¶ 76, 78,
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`79. Next, Dialpad asserts that Stuart West, the prosecuting attorney for the ’585 patent was aware
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`of the ongoing litigation and the claim charts and had spoken with the USPTO on a number of
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`occasions about the ’585 patent without providing any context about this litigation or the
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`invalidity claim charts’ potential impact on the validity of the ’585 patent. Id. ¶¶ 77–79. Dialpad
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`has sufficiently pleaded the “who” element for its claim of inequitable conduct against Flyp.
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`2. The “when” is properly pleaded.
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`It is undisputed that the when is sufficiently pleaded. See generally ECF No. 38.
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`According to Dialpad, Flyp should have disclosed the litigation to the examiner of the ’585
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`patent while the prosecution of the patent was still ongoing. Id. ¶ 88. Dialpad contends that “the
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`activity that gave rise to the Flypsi Patent Prosecutors’ inequitable conduct began on June 21,
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`2021” because that is the date the suit was filed. Id. Dialpad alleges that “[a]fter this Litigation
`
`commenced, the Flypsi Patent Prosecutors could have alerted the USPTO to it during the
`
`prosecution of the ’585 Patent.” Id. Dialpad also alleges that Flyp should have disclosed the
`
`Invalidity Claim Charts it received in the litigation to the USPTO during prosecution of the ’585
`
`Patent. Id. ¶ 90. Dialpad has sufficiently pleaded the “when” of its inequitable conduct claim and
`
`defense.
`
`3. The “what” and “where” are inadequately pleaded.
`
`The “what” and “where” elements of the pleading require identification of “which claims,
`
`and which limitations in those claims, the withheld references are relevant to, and where in those
`
`references the material information is found.” Exergen, 575 F.3d at 1329. For reference,
`
`Dialpad’s pleadings state the following under the header, “Inequitable Conduct – What”:
`
`80.
`
`81.
`
`82.
`
`37 C.F.R. § 1.56 and specifically MPEP 2001.06(c)
`require: “Where the subject matter for which a patent is
`being sought is or has been involved in litigation and/or a
`trial proceeding, or the litigation and/or trial proceeding
`yields
`information material
`to
`currently pending
`applications, the existence of such litigation and any other
`material information arising therefrom must be brought to
`the attention of the examiner or other appropriate official at
`the U.S. Patent and Trademark Office.”
`The Flypsi Patent Prosecutors identified in paragraph 81
`above, individually or collectively, withheld material, non-
`cumulative
`information
`from
`the USPTO during
`prosecution of the ’585 Patent. Specifically, this Litigation
`and fact that the prior art references submitted to the
`USPTO were produced in litigation mere days earlier and
`were part of an extensive set of Invalidity Claim Charts
`associated with
`the
`the ongoing
`litigation
`involving
`members of the ’585 Patent family, namely the ’770, ’105,
`’094 and ’554 Patents should have been identified to the
`PTO.
`identified many patent
`The Invalidity Claim Charts
`references that were not of record, and laid out claim charts
`demonstrating where each element and limitation of the
`
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`
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`

`Case 6:21-cv-00642-ADA Document 72 Filed 08/22/22 Page 14 of 23
`
`’770, ’105, ’094, and ’554 Patent claims are found in the
`Invalidity Contention Prior Art. Below are references
`charted and cited in the claim charts and invalidity
`contentions, for the ’554 Patent showing anticipation and
`obviousness positions for the Invalidity Contention Prior
`Art that Flpysi disclosed without disclosing the Invalidity
`Claim Charts or the Invalidity Contentions. There are nine
`separate lengthy charts labeled D-1 through D-9 that were
`produced mapping all of the claim elements and limitations
`of claims 1-4 of the ’554 Patent to each of the references
`shown below in the first chart. None of these prior art
`references was previously before the USPTO, and all of the
`charted references below were disclosed in an IDS without
`the corresponding Invalidity Claim Charts.
`
`***
`
`84.
`
`
`85.
`
`The Invalidity Claim Charts were material and highly
`relevant to the claims of the ’585 Patent. The Flpysi Patent
`Prosecutors,
`individually or collectively withholding
`information about This Litigation and the Invalidity Claim
`Charts violates 37 C.F.R. § 1.56 and MPEP 2001.06(c) and
`constitutes inequitable conduct.
`
`The circumstances indicate that the intent of the Flypsi
`Patent Prosecutors, individually or collectively, was to file
`at the USPTO the Invalidity Contentions Prior Art with no
`context on the litigation or the Invalidity Charts, in order to
`quickly get the ’585 Patent to issue and then subsequently
`add the ’585 Patent into This Litigation.
`
`
`ECF No. 34 ¶¶ 80–82, 84–85.
`
`First and foremost, Dialpad’s materiality arguments are not directed towards but-for
`
`materiality, as required, but instead rely on the materiality standards referenced in 37 C.F.R. §
`
`1.56 and MPEP 2001.06(c). See Eon Corp. IP Holdings, LLC v. T-Mobile USA, Inc., No. 6:10-
`
`CV-379-LED-JDL, 2011 WL 13134896, at *3 (E.D. Tex. Dec. 13, 2011), report and
`
`recommendation adopted, No. 6:10-CV-379-LED-JDL, 2012 WL 12893881 (E.D. Tex. Jan. 18,
`
`2012) (“Thus, a pleading that does not show but-for materiality or that bases intent solely on the
`
`materiality of the withheld reference would be [sic] not survive the pleading stage.”). Still, the
`
`14
`
`

`

`Case 6:21-cv-00642-ADA Document 72 Filed 08/22/22 Page 15 of 23
`
`pleadings do not incidentally meet the but-for pleading threshold. For example, while failure to
`
`disclose litigation, with sufficient underlying facts, could potentially meet the requisite but-for
`
`materiality standard, Dialpad simply pleads that the Flypsi Patent Prosecutors “withheld
`
`material, non-cumulative information from the USPTO,” including “this Litigation” and “an
`
`extensive set of Invalidity Claim Charts associated with the the [sic] ongoing litigation.” This
`
`language alone is conclusory. See Rambus, Inc. v. STMicroelectronics N.V., No. C 10-05449,
`
`2013 WL 12343708, at *4 (N.D. Cal. Mar. 18, 2013) (finding that statements that the withheld
`
`references “are material to the patentability” of the asserted patents was insufficient because the
`
`pleadings “[did] not identify the particular claim limitations, or combination of claim limitations,
`
`that were supposedly absent from the information of record. Such allegations are necessary to
`
`explain both ‘why’ the withheld information is material and not cumulative, and ‘how’ an
`
`examiner would have used this information in assessing the patentability of the claims.”)
`
`(internal citations omitted).
`
`With more specificity, Dialpad alleges that the specific claim charts D-1 through D-9
`
`should have been disclosed to the USPTO because the charts mapped “all of the claim elements
`
`and limitations of claims 1–4 of the ’554 Patent to each of the references” contained in the
`
`corresponding chart. ECF No. 34 ¶ 82. Dialpad also provides a chart comparing the claims and
`
`limitations between the ’554 and ’585 Patents to note their similarity. However, despite
`
`Dialpad’s “specificity” as to the ’554 Patent, it fails to note the particular limitations within claim
`
`1 of the ’585 Patent, much less map the claims or limitations of claims 2–4 of the ’585 Patent.
`
`See Rambus, 2013 WL 12343708, at *4 (denying motion for leave to amend and add an
`
`inequitable conduct defense as futile); Prowess, 953 F. Supp. 2d at 651 (“Defendants have not
`
`identified which patent claims the references are relevant to, or which claim limitations are
`
`15
`
`

`

`Case 6:21-cv-00642-ADA Document 72 Filed 08/22/22 Page 16 of 23
`
`absent from the information of record.”); Mosaid Techs. Inc. v. Freescale Semiconductor, Inc.,
`
`No. 6:11-CV-00173, 2012 WL 1