Rehearing and Rehearing En Banc Denied Jan. 23, 2014.[*]
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Jeffrey S. Standley, Standley Law Group, LLP, of Dublin, OH, argued for plaintiff-appellant. With him on the brief
were James L. Kwak, F. Michael Speed, Jr., and Michael Stonebrook.
Ronald A. Christaldi, Shumaker, Loop & Kendrick, LLP, of Tampa, FL, argued for defendant-cross appellant. With him on the brief was Mindi M. Richter. Of counsel on the brief was David W. Wicklund, of Toledo, OH.
Before DYK, BRYSON, and REYNA, Circuit Judges.
REYNA, Circuit Judge.
This suit was filed by The Ohio Willow Wood Company (" OWW" ) against Alps South, LLC (" Alps" ) for infringement of United States Patent No. 5,830,237 (the " '237 patent" ). The United States District Court for the Southern District of Ohio granted summary judgment that: (1) OWW was collaterally estopped from challenging the invalidity of claims 1, 2, 4, 15, 16, and 20 of the '237 patent; (2) claims 18, 19, 21, 22, and 23 of the '237 patent were invalid for obviousness; and (3) Alps failed to raise a genuine issue of material fact with respect to inequitable conduct. We affirm on the issues of collateral estoppel and obviousness, but reverse and remand on the issue of inequitable conduct.
OWW is the owner of a family of related patents directed to cushioning devices that go over the residual stumps of amputated limbs to make the use of prosthetics more comfortable. A variety of these patents have been asserted in patent infringement suits and many have also been involved in reexamination proceedings before the Patent and Trademark Office (" PTO" ).
In the present suit, OWW filed its complaint against Alps for infringement of the '237 patent on December 27, 2004. The '237 patent, entitled " Gel and Cushioning Devices," lists Bruce G. Kania as the sole inventor and has an application date of March 5, 1996. The parties exchanged contentions, documents, and testimonial evidence related to invalidity and infringement and on March 31, 2006, the district court issued its claim construction order. Shortly after receiving the claim construction order, Alps initiated the first of two consecutive ex parte reexaminations of the '237 patent in the PTO. The district court stayed the litigation during these reexamination proceedings.
A. The First Reexamination of the '237 patent
Alps requested the first ex parte reexamination of the '237 patent on October 5, 2006. The primary reference submitted by Alps to support this reexamination was a prior art gel liner manufactured by Silipos, Inc. (" Silipos" ) called the " Silosheath." The Silosheath is a sock-shaped piece of nylon fabric that was turned inside out and dipped into a mineral oil-based polymeric gel material to create a coating on the interior of the sheath. The gel coating acts as a cushion and the mineral oil lubricates the skin when worn over a residual limb.
The examiner reviewing Alps' reexamination request for the '237 patent was also responsible for a parallel reexamination proceeding involving OWW's U.S. Patent No. 6,964,688 (the " '688 patent" ). The '688 patent is entitled " Tube Sock-Shaped Covering" and also lists Bruce G. Kania as the sole inventor. During reexamination of the '688 patent, the examiner issued a rejection of all challenged claims based on the Silosheath prior art. This same rejection applied equally against the similar claims of the '237 patent.
The examiner held an interview on July 16, 2007, to discuss the rejections. At the interview, OWW was represented by attorneys Mr. Eric M. Gayan and Mr. Jeff Standley, Mr. Jim Colvin, a representative of OWW, and Mr. Bruce Kania, the named
inventor. To overcome the rejections, a sample Silosheath was shown to the examiner and OWW pointed out that the polymeric gel bled through the permeable nylon fabric, which resulted in small amounts of residual gel material on the exterior of the Silosheath. According to OWW, these small amounts of gel on the outer surface of the Silosheath created points of friction between a prosthetic and the Silosheath. The friction points would be uncomfortable to the user and cause the nylon fabric to rip or tear prematurely.
OWW argued that the '688 and '237 patents claimed gel liners that excluded any gel on the exterior surface of the fabric, thereby distinguishing them from the Silosheath. Based on this distinction, the examiner allowed OWW to overcome the Silosheath prior art by amending the claims to clarify that the gel coating was only on the interior of the claimed gel liners and, accordingly, excluded any liners with fabric that allowed gel to bleed through to the exterior surface. The PTO issued the first reexamination certificate for the amended '237 patent claims on September 2, 2008.
B. The Second Reexamination of the '237 patent
On September 8, 2008, six days after completion of the first reexamination, Alps initiated a second ex parte reexamination of the '237 patent challenging the validity of the amended claims based on another Silipos product called the " Single Socket Gel Liner" (" SSGL" ). Alps argued that the SSGL was an invalidating prior art gel liner that did not have any gel on its exterior surface. Alps supported this assertion with a prior art advertisement of the SSGL and testimony from Mr. Jean-Paul Comtesse, who had been affiliated with Silipos and involved in the development and production of both the Silosheath and SSGL.
The prior art advertisement was published on January 1, 1995, in a prosthetics trade magazine called O & P Business News (the " 1995 COMFORT ZONE" reference). The advertisement included a photograph of an actual device being worn and bearing a graphical label identifying it as a " Silipos, Gel Liner, Made in USA," and the advertisement further indicated that the device in the photograph was the " Single Socket Gel Liner" :
The 1995 COMFORT ZONE reference further described the SSGL as a " [b]elow knee gel liner laminated with tri block copolymer."
In addition to the advertisement, Alps provided the PTO with testimony from Mr. Comtesse in the form of a declaration and deposition transcript. The deposition occurred in the present litigation prior to the court's issuance of the stay. According to Alps, Mr. Comtesse's testimony proved that the SSGL did not have the same gel bleed-through issues as the Silosheath since he testified that the SSGL was constructed using a proprietary DuPont fabric called " Coolmax," which was different from the nylon material used with the Silosheath. Mr. Comtesse testified that the Coolmax material was thicker and denser than nylon, making it impermeable so that gel did not bleed-through to the outer surface of the SSGL. Thus, Alps asserted that Mr. Comtesse's testimony, coupled with the disclosure of the SSGL advertisement, demonstrated that the amended claims from the first reexamination were invalid because the prior art SSGL had no gel on the exterior surface.
The examiner agreed with Alps and, ultimately, issued a final rejection that all
claims of the '237 patent were obvious in view of the SSGL and other undisputed prior art. The examiner concluded that the 1995 COMFORT ZONE reference substantially disclosed the limitations of independent claim 1 of the '237 patent, but conceded that the advertisement was not conclusive regarding whether the SSGL had gel only on the interior of the liner. To address this shortcoming of the reference, the examiner accepted the Comtesse declaration and deposition testimony as proof that the SSGL was manufactured using the proprietary DuPont Coolmax material as a fabric. The examiner also accepted Comtesse's testimony that the Coolmax material was thicker and less permeable than the nylon fabric of the Silosheath and, accordingly, that the SSGL would not allow the gel to bleed-through to the exterior surface.
Faced with the examiner's final rejection of the claims in view of the SSGL, OWW appealed to the Board of Patent Appeals and Interferences (" BPAI" ). OWW's arguments on appeal to the BPAI were entirely legal in nature. OWW asserted that the examiner's rejection was improper because it relied on the uncorroborated testimony of Mr. Comtesse, whom OWW characterized as a highly interested party. According to OWW, the uncorroborated testimony of a highly interested witness, such as Mr. Comtesse, was inadmissible and therefore could not be used to reject the claims. In its brief to the BPAI, OWW portrayed Mr. Comtesse as follows:
Mr. Comtesse admits that he is an interested party with respect to the outcome of this Reexamination and the related litigation. First, Mr. Comtesse is the owner and manager of Vorum Research Corporation ... a company that appears to sell products that compete with products offered by Patent Owner. Further, Mr. Comtesse has admitted that he continues to receive royalties on the Socket Gel Liner products he helped develop for Silipos. These Socket Gel Liner products would clearly compete with products of Patent Owner covered by the '237 patent. A party having a personal financial interest in the outcome of a patent suit is considered an interested party. It is well settled that issues of corroboration become more important and the amount of weight afforded to such testimony may be lessened when the witness is an interested party.
OWW also expressly denied the existence of any other evidence that would support Mr. Comtesse's testimony that SSGL was constructed using Coolmax fabric. According to OWW, the only evidence of record was the 1995 COMFORT ZONE advertisement, which was " wholly devoid of any mention of Coolmax." OWW asserted that there was " no other evidence of any sort in this regard" and because " the Comtesse testimony is not corroborated as required it cannot be properly used to cure the very deficiencies in the Comfort Zone Ad for which corroboration is lacking."
OWW's brief to the BPAI was submitted and signed by Mr. Gayan. During oral argument before the BPAI on July 20, 2011, Mr. Gayan reiterated OWW's position that Mr. Comtesse claimed to be the inventor of the SSGL, that he was still receiving royalties from Silipos for sales of the SSGL, and there was no corroborating evidence for his testimony concerning the construction of the SSGL.
The BPAI issued its decision regarding OWW's appeal on September 30, 2011. The BPAI characterized the appeal as involving a single dispositive issue: whether the examiner erred in crediting the uncorroborated testimony of Mr. Comtesse. The BPAI found that Mr. Comtesse did not provide any corroborating evidence to support his assertion that the SSGL depicted
in the COMFORT ZONE-SSGL reference used the Coolmax material. It also found that Mr. Comtesse " is an interested third party who is testifying regarding an alleged prior invention said to have been made by himself and others, namely Silipos's Single Socket Gel Liner with Coolmax, to demonstrate the claims of the '237 patent are unpatentable." Based on the evidence of record, the BPAI concluded that Comtesse's testimony was insufficient to sustain the examiner's rejection:
Here, we have not been directed to the requisite corroborating evidence. The statements in Comtesse's Declaration are largely conclusory, unaccompanied by credible factual support (e.g., details of experiments or tests performed) and/or other acceptable evidence (e.g., testimony of a credible corroborating witness).... Even if the Comfort Zone advertisement could be said to corroborate the Comtesse testimony that a Single Socket Gel Liner was made, we have not been directed to evidence sufficient to corroborate the Comtesse testimony indicating that the Liner was covered in fabric with no gel bleed-through. For these reasons, we conclude that the Examiner erred.
Thereafter, a second reexamination certificate for the '237 patent was issued on November 29, 2011.
C. The Thermo-Ply Litigation
While this case was stayed, OWW sued Thermo-Ply, Inc. (" Thermo-Ply" ) in the United States District Court for the Eastern District of Texas for infringement of United States Patent No. 7,291,182 (" the '182 patent" ). The '182 patent issued from a continuation application of the '237 patent, is entitled " Gel and Cushioning Devices," and lists Bruce G. Kania as the sole inventor.
On summary judgment, the Eastern District of Texas found the claims of the ' 182 patent invalid for obviousness. Ohio Willow Wood Co. v. Thermo-Ply, Inc., No. 9:07-CV-274, 2009 WL 6499349, at *1 (E.D.Tex. Nov. 20, 2009). The Thermo-Ply court based its obviousness determination on the combination of the Silosheath in view of U.S. Patent No. 4,923,474 (" the Klasson patent" ) and known techniques in the relevant field. The Thermo-Ply court rejected OWW's argument that gel bleeding through to the exterior surface of the Silosheath fabric rendered the '182 patent non-obvious because it would have been obvious to one of ordinary skill in the art to select an impermeable fabric. The obviousness determination was affirmed on appeal. Ohio Willow Wood Co. v. Thermo-Ply, Inc., 440 Fed.Appx. 926 (Fed.Cir.2011).
D. District Court Proceedings
The district court stayed the litigation from November 22, 2006, to November 3, 2011, pending completion of the reexaminations proceedings. After the stay was lifted, the parties filed motions for summary judgment. The district court granted summary judgment to Alps on issues of invalidity, finding claims 1, 2, 4, 15, 16, and 20 of the '237 patent invalid due to the collateral estoppel effect of the Thermo-Ply litigation and claims 18, 19, 21, 22, and 23 of the '237 ...