Law and Behavior Ethics in Deception Before the PTO, AIA Proceedings and Enforcement Presentations

The law and behavior of this presentation has to do with bad actions by patent applicants, both in the USPTO and examination, AIA, and litigation. You've gotten your warning that this is not advice. What do you have to understand when you start creating actions that were not exactly right. You stated incorrect information, you filed false affidavits, you've done something in proceedings outside the U.S. that will have effect on the U.S. So what happens? Your application is no longer enforceable. You're subject— you as the lawyer is subject to disciplinary proceedings for the USPTO. There are various remedies available to hinder or end your registration with the PTO. Doesn't matter if you've been practicing 45 years. You will have a full trial, if it comes to that, in the— before the Office of Enrollment and Discipline on enforceability. You will lose your rights to practice law before the USPTO. You can expect any decisions by the PTO concerning your actions will be sent as a domino to other state bars for further proceedings. This is, this is awful. The potential loss of all those rights as well. If you're in litigation on a patent, you could be sanctioned under Rule 11. Your client can lose all rights in the patent in dispute under an unenforceability decision. That could be your actions or the client's actions of which you're aware. The loss of rights can include your client's potential loss for patent rights in any patents that are in the family or in the chain of prosecution. and your client could lose any damages, their monetary jury award, if inequitable conduct is found. Did you jeopardize all that? I doubt it. You have to understand there are two standards. You're always dealing with a standard in the USPTO Rule 56, and you're also dealing with a standard in litigation known as the "but for" rule under Theracense. Rule 56 requires a duty to disclose information material to patentability. Under Rule 56, in determining whether the patent lawyer did not disclose information, you have to determine material. Material information is when it is not cumulative to the information already of record or being made of record in the application, and it establishes by itself or in combination with other information a prima facie case of unpatentability of a claim. If it refutes or is inconsistent with a position the applicant takes in opposing an argument of unpatentability relied on by the office or asserting an argument of patentability. You're looking here under the patent standards of the Patent Office of a prima facie case. Very different than "but for." The prima facie case is broader, established when the information compels a conclusion The claim is unpatentable under preponderance of the evidence standard. When you get to the But-For standard, which I will discuss with you later, the standard is really clear and convincing evidence. So you can see, if you're in the Patent Office, your problem can be very, very different than the problem you will have in litigation because the standard is different. And some of you might ask yourself, well, I'm in the Patent Office in a PTAB proceeding because I'm generally in a litigation and I move for a stay pending the PTO proceeding. Well, the PTO proceeding is gonna make a definition of inequitable conduct based on Rule 56. If you take this case to a district court after you don't like the result of the PTAB, the district court will apply what's known as stare decisis and a but-for rule. So you really have a problem as to different standards. And they have not coalesced. Although Ferris sense has been cited in 150 cases and 105 times in the Patent Office, the difference in the rules still exists. Under Rule 56, the rule applies to inventors, attorneys, agents, every other person who's substantively involved in the preparation or prosecution of the application. Or associated with the inventor or the applicant or an assignee, anyone whom there's an obligation to assign the application who has this knowledge. Under 56(e), the duty applies to CIP applications. Information known to such persons which become available between the filing— between the filing of the prior application and the national or PCT international filing date of the CIP. This was last amended in 2012. I've already indicated to you this standard is different from litigation. Inequitable conduct. I'm gonna go through 2 cases in the past 10 years, which are fairly significant. Theracense is very significant, and Gilead is recent, which shows you what can happen to you when you're in a litigation. I've done a history that you'll follow through with me from the early days, 1930s, through present time, and then I've emphasized about 12 cases in 2018 that you have to look at. I might not get to the end of this, but you'll have the full set of slides to look at at your leisure. First case is Theracense versus Becton Dickinson, Federal Circuit. It was a rehearing before the entire panel, and decision was 7 to 4 to 1. In other words, there are at least 4 dissenting judges and 1 judge who concurred and dissented. And the reason for the dissent in the case was those dissenters were not comfortable with the Buford rule. Many of them wanted the prima facie rule under Rule 56 and thought that was significant. And also, the main reason for the dissent was they didn't think the case had to go back to the district court because it was enough evidence of materiality and intent to render the decision then. The other case I mentioned to you is Merck v. Gilead. It says here, petition for cert November 28th. I will tell you now, that petition was denied. So when we get to what the ruling is in Merck, you'll see that is the ruling of the Federal Circuit, and it's final. And it has to do with eliminating damages because of misconduct. The inequity, the unclean hands caused not only typical remedies under inequitable conduct, like a patent that's unenforceable, but took away millions of dollars in damages. Now, Theracells, it's a case involving something you're very familiar with, those of you who are in medicine. It's a glucose strip for diabetics. Students' competitor ruling of non-infringement on the strips. Multiple cases were consolidated. Federal Circuit affirmed invalidity and non-infringement. And in respect to inequitable conduct, it determined it has to be an act which misrepresented or omitted material information with specific intent to deceive. So if you're practicing patent prosecution for the Patent Office and you do something accidentally or maybe even negligent, that's not going to be enough for what we're talking about. We're talking about deliberate plans, people who intend, specifically intend to deceive the Patent Office. And here you can see you need, as of Theracents, you need intent and materiality by clear and convincing evidence. And you weigh the equities. Now, the material— materiality intent has always been around for all the prior cases, but it was, it was applied differently. Now, here in Theracense, requirements of specific intent to deceive is the standard. Negligence, gross negligence, not enough. Non-disclosure has to be a deliberate decision to withhold. And as intent and materiality are separate, you don't use a sliding scale. In other words, the prior cases before Theracens said, oh, there's a lot of materiality, so you need a little intent. Some cases, a lot of intent, little materiality. No. Now you must prove each separately by clear and convincing evidence. You have to look at it in light of all the circumstances. Are there multiple reasonable inferences? If you have multiple reasonable inferences regarding intent to deceive, you can't find intent to deceive because if there's a reasonable inference that's not an intent to deceive, you're not going to be found to have met the criteria. Once a party claims inequitable conduct, Patentee's obligated to respond. Patentee does not offer a good faith explanation for withholding material reference. It does not prove intent to deceive. You have to prove it. You have— you're the person who is alleging it, and maybe the— maybe in court it's going to be your adverse litigant, but in the Patent Office it's going to be the Office of Office of OED, and they, of course, go by the Rule 56 standard of prima facie. One reason for finding a but-for materiality standard under unclean hands, that severe remedy following unenforceability exceeds removing the presumption of validity, and that means you go back to the standard clear and convincing evidence. If you can show clear and convincing evidence, you remove the presumption. Now, under this standard— back. I've not mentioned the case early on, which is called Coronacord versus Dovan Chemical. This was the first case, 1928, by the Supreme Court. It was the first balkanization of Rubber in a Patent, where the court found that the party who was trying to enforce its application could not do so because he was not the first inventor. Those are very kind words because he actually took the information from a publication from a man named Kratz who had invented it first. No mention of inequitable conduct in this case, but this is the beginning of a but-for standard. Notice, misrepresentation alone does not remove the presumption. You have to look as a court at basic fairness and unfair benefit. Remember those two concepts because they will apply to everything you do. Basic fairness, unfair advantage. Now, although but-for materiality must be proven, there will be situations of affirmative egregious misconduct. I'm talking about litigation where there's spurious activity, there's spoliation, there's fighting with the court for months and years. That will be found enough to find inequitable conduct, so you don't even have to go to the specific intent and materiality of what's been shown in a patent. You have to watch out for your own conduct as a lawyer. And by the way, that conduct can also lead you to a malpractice case. So generally looking for a deliberately planned and carefully executed scheme to defraud the Patent Office or defraud the court, such as filing an unmistakably false affidavit. This gets us into egregious misconduct and the the tri— triparties case of Keystone Drillers, Hazel Atlas, and Precision Instruments. These are the seminal cases in the area. More importantly, in Theracense, the court refused to adopt the standard of Rule 56(b), as I mentioned, and we're up— we're in a bet for in a litigation context. I will tell you though, because of the dissenters in Theracense, The 4 dissenters are still on the court, and one of the— there were about 30 amicus briefs. One of them was filed by Raymond Chen for the Patent Office. He's now on the court, and he likes the prima facie standard. You may have in the future, if you get the right panel, an attempt to overcome Theracense and go back so that you can unite the Rule 56 standard and the litigation standard, but right now, that's not the case. Merck versus Gilead is also very interesting because the Federal Circuit extended the inequitable conduct standard, the unclean hands of defense, to eliminate a $200 million verdict for Merck. They won the case, valid and infringed. Unfortunately, Merck in-house counsel prosecuting the applications exhibited dishonest and duplicitous behavior. As I said, the petition for cert has been denied. The argument by Merck was an equitable conduct award cannot include a legal, non-equitable remedy. That's not true. That was, that was not accepted. False statements by in-house counsel included denying he was at a meeting with a company named Pharmaset and describing a new compound. Notes of the meeting produced proved otherwise. Falsely stating his patent application later added claims to that compound and falsely maintaining he was firewalled. That was found to be egregious misconduct. Merck used this dishonesty to obtain patent protection. The league's position was interesting, and it's probably true. They felt that one would not be deterred if the misconduct was rewarded with the league remedy. So we go to— let's go back in history. I've been just— I introduced to you in Corona Court, 1928, but that really never cited unclean hands. It should have, but it didn't. And that goes to the history of the Supreme Court over 200 years. You would think that there were corruptors that didn't exist back then, but they existed. But because it was a public right and it required proof of the public right, and the discovery standards were not like we have today where you can get into a lot of information, the cases just don't exist. Keystone started something different. 5 patents. For a ditching machine. It was a suppression of a prior use which invalidated the patent. Equitable powers of the court can never be exerted on behalf of one who acted fraudulently or who by deceit or any unfair means who has gained an advantage. Pretty broad. Court stated to aid such a party would make the court a debtor of inequity. Very interesting. That's interesting because that language probably could be used in the Merck-Galead case, which is now essentially over. Keystone said, as I suggested to you in Galead, they were not bound by formula or restrained by any limitation that tends to trample the free and just exercise of discretion. That includes action in the court, action in the Patent Office, It's very broad. Hazel Atlas was the second of the trilogy. That is very unusual. A patent on a machine which utilized a method for pouring glass into mold-fashioned glass by machine known as a gob feeder. Well, unfortunately, there was substantial prior art. Precision had found the patent valid and infringed in 1932. but later evidence in 1939 showed that there was fraud as to inventorship and payoffs related to false affidavits. The court denied arguments that due diligence could have uncovered the fraud. That was considered irrelevant. The fraud occurred. There are issues of great moment, said the court, in protecting the public in a patent suit. The 1932 judgment was devitalized, and more interestingly, the court indicated— there was a lengthy dissent, and at that time there were a number of cases with such a dissent that said there was a finality of judgments, this happened 8 years ago, we can't go over this case. Court said no, we're not accepting what the dissent says. And the final case in the trilogy is Precision Instruments. Precision Instruments is one of those really bad cases where everybody gets together in an interference and creates false information. 3 patents relating to torque wrenches. Decision would give false dates as a conception, disclosure, drawing. Description, and reduction of practice. That's not enough. Then a settlement without a recognition of the false statement. At a later time, the patent was owned by— 1944, '45— by a company called Auto Maintenance Machine, and they tried to sue somebody. But the court said these patents are steeped in perjury and undisclosed knowledge of perjury. Such conduct does not conform to minimum ethical standards, doesn't justify an attempt to assert and enforce these perjury-tainted patents and contracts. Not just the patents, but the contracts as well. The court found both parties in the settlement of the interference had reason to believe seriousness of the perjurious statement. Now you have the classic language from Precision Instruments. Anybody dealing with the Patent Office has an uncompromising duty to report all facts concerning possible fraud or inequitableness underlying the applications as issued. Here, the outside settlement was illegal. Inequitable conduct impregnated Auto's, the present owner, entire cause. And justified this dismissal by resort to the unclean hands doctrine. So here you have set up from these three cases, that's the standard going forward. Court followed in precision the guiding doctrine: he who comes into equity must come with clean hands. Still true today. A self-imposed ordinance that closes the door of a court of equity to one tainted with inequitable or bad faith relevant relative to the matter in which he seeks relief, however improper may have been the behavior of his adversary. So you don't even get to look at what the adversary did, and you don't even get to look what the other parties to the settlement did. The patent's ruined. Now, you had those three cases going forward until the 1980s, when we had the Federal Circuit formed October 1982. What happened between 1944 and 1982? There were fraud cases, there were inequitable conduct cases, but the Federal Circuit tried in 1982, and first of all, in 1983, I think there's one case, Underwater, Underwater Covers or something, and then this case, Roman Haas, they began to try to define what inequitable conduct was. This is all new to the Federal Circuit, and the reason they're trying to do this They're trying to prevent all these cases being filed with inequitable conduct defenses. They want to set a standard. Didn't work at first. Here you have a case, Romanoff sued for patent infringement on herbicidal dichloranalogues. Court found, lower court, valid and infringed. But significant evidence of fraud, filing 6 false affidavits, and failure to provide relevant test data. Those are material misrepresentations to the PTO. There is an issue in this case which all of you should know about and think about if you have a problem. Voluntarily curing. This case allows you to voluntarily cure misstatements made if you bring it to the examiner's attention in a proper time period. Here, it was not done. The patent examiner was never shown any documentation that any misrepresentations have been made or precisely where they have been made. This express disclosure was necessary, and it wasn't done. So that's kind of the standard through Roman Haas, which you look— it's really talking about the inequitable conduct. It's not talking about Rule 56. It's not talking about but for. And you get to Kingstown in 1988, and Kingstown had to be decided because we were dealing with negligence. There's negligence, gross negligence. This is a patent for a two-piece ostomy appliance for patients with abdominal wall openings for release of waste. Here, court found negligence that existed did not rise to the level of intentional conduct. Materiality and intent has to be proven, and it was not proven by clear evidence under a clear, clear erroneous standard. Gross negligence by itself is not enough. This was a case of first impression. Because here the, um, the inequitable conduct held to reside in an incorrect inclusion in a continuation application of a whole raft of additional claims. And one of the claims had been rejected as indefinite in the parent. But to be guilty of inequitable conduct, one has to intend to act inequitably. Here was found a ministerial act, a transfer of numerous claims en masse from a parent to a continuing application went wrong because of a newly hired counsel. The fact that the application was amended in continued prosecution to cover competitor's product was not illegal as long as the statutes properly applied. So in Kingstown, We now know, don't argue gross negligence. But it didn't go to what you're gonna do with material and intent, how you're gonna weigh them. Also, the court resolved conflicting earlier opinions on the effect of gross negligence. You need sufficient culpability for intent to deceive. In Dicta, the court affirmed the position inequitable conduct If it's found, the entire patent is rendered unenforceable. So we get to Consul, 1990, a year later. Consul Aluminum Corp. Uh, go back one. Consul Aluminum Corp. And there, there were 6 patents relating to ceramic foam filters for molten metal. The best mode was not disclosed, and a fictitious inoperable mode Here, ah, Kingsdown. Court found this was a case of first impression. Whether inequitable conduct in procuring one's patent in suit required a holding that other patents in the suit are unenforceable. Court noted inequitable conduct in prosecuting one application had immediate and necessary relation to other applications. So anything in the chain, anything that was related, it might even be beyond the chain. Cited Keystone and they cited Precision Instruments. Fulfillment of a relevant flurry test from one application permeated the prosecution of other patents, rendering them unenforceable as well. So here, these were not only patents in the chain, but other patents that did not include this important prior application flurry text, or a flurry text that perhaps had misinformation or improper information. Patentee's attempt to convince the court that inequitable conduct only applied to wrongs before the court was not supported. This is an interesting case because magistrate below found all 3 other patents valid, even though with the addition of the prior art slurry information, which this particular court said would have invalidated. So once you have enforceability, it doesn't matter what happened below. This is a court that indicated it had its own view of the information presented to it. Such information Unimportant to consider since the decision did not ride on validity but enforceability. The court accepted the lower court finding of a pattern of inequitable conduct. Hard case, Mollins. Some of you might remember Mollins. This is a Lemelson-related invention, patent for a method of improving batch machining, the plurality of machine tools to accommodate manual transport of pallet-mounted workpieces. The patent owner did not reveal the most important prior art. Materiality standard is a reasonable examiner, not the specific examiner in the case. The non-disclosed reference was the most relevant prior art in foreign prosecution. And here we get into the interesting relationship between litigating in the U.S. or applying for application in the U.S. and what you do in other countries. What you say in other countries that is not the same as what you're saying in the Patent Office could possibly lead, depending on the importance of it, to inequitable conduct. You must always tell your European attorneys who are prosecuting, they must know what's going on in the U.S. You must know what they're saying. I appreciate the fact that the law is different in Europe than it is in the US, but some would argue, because I've been doing harmonization for years, they are different but they are similar. But more importantly, if they're different, you have to say in the European prosecution why you're making that argument and recognize you're making the argument differently in the US. If you don't do it, like here, prosecution in a foreign country, several foreign countries, most significant prior art was considered. Intent to deceive may be determined from inferences from circumstantial evidence, not gross negligence. This court cited Kingsdown. Does the content in its totality manifest sufficient culpable state to warrant an IC finding? And ethical conduct findings in this case? As the other prior art not disclosed were not supported, and those findings were reversed. Didn't help Mullins. This was an exceptional case warranting attorney's fees, but it was vacated and remanded for a proper factual analysis. You always have to worry if you're dealing with inequitable conduct, you may find that to be subject to an exceptional case, though you may not need You may not need your warnings to you about things that can happen to you, as I mentioned in the beginning, can now include paying the attorney's fees to the other side, and that may be applied to the company and its attorneys. Refact patent for converting source code to object code. Refact. There were— this is the problem of submitting affidavits. The Athenians had prior associations with the inventor's company and had pre-existing knowledge of a commercial embodiment. None of this was told to the patent office. Patent held unenforceable. And it wasn't that the language in the Affidavits was the reason. The reason was material omissions in the submission of the affidavits. One of the applicants had not included extensive experience with a related program. Prior self-serving affidavits had not been successful in overcoming rejection. So these were very important affidavits, and, uh, the result was The inference to mislead arises not from the materiality of the affidavits but the affirmative acts of submitting them. Interesting, uh, it's an interesting term, misleading character. The omission is just as important as the misrepresentation, or any misrepresentation. In this case, Refac used the balancing test to try to argue, uh, the case. Court used materiality and intent. How much materiality, how little intent can we do this? This is now wiped out by Theresian. But for Balding Sports Slide is another interesting case because some of you may not realize that invention record in certain instances is protected by the attorney-client privilege. And when the adversary wants to invade the privilege, Any argument of prima facie inequitable conduct is not enough. There must be a showing of fraud. That's very interesting. It's not a showing of inequitable conduct, a showing of fraud, standard related to the common law, all the elements of fraud under, like, a Walker process. Inclusion of closest prior art and invention disclosure is not evidence of fraud. So, the magistrate ordered to produce the invention disclosure was vacated. Now, in 2001, we have Brassler v. Stryker, patent for a saw blade for medical— there's a prior-on-sale bar. Case follows old case law on degree of intent measured by degree of materiality. So again, this is before Theracell, but still it's important to look at because the relevant persons knew the date was close to a year before, which would have been validating, but did nothing. It's more than gross negligence to not look at that issue, said this court, particularly when the inventors had strong concerns about the bar date. Suspicious circumstances may lead you to that conclusion. This holding on equitable conduct was a result of actions of the inventor and his attorneys. Exceptional case found and award of fees. And the sale was considered material because there were 3,250 patented blades, known as a sizable transaction by this court. Court refused to parse out the fee award to just include the on-sale bar issue, so you had to pay all the fees as an episode. 2008, RSCI v. RJ Reynolds, patent for curing tobacco to prevent the formation of nitrosamines. Here we have the theory of the unethical conduct was based on a conspiracy by the patentee and his inventor to deliberately prevent the inventor's attorney and his colleagues from disclosing a consultant's letter to the PTO. You can see we're a couple of inches removed here from clear and convincing. And replacing them with a different law firm and purposely keeping the new firm— this isn't enough. These are just considered by the court minor missteps by the inventor. Absence of good faith is not enough. There must be a finding of bad faith. Lower court's holding was based on witness credibility, aspect of the fact-finding that should rarely be reversed. However, significant gap in the adverse party showing any materiality. So here, even if you wanted to balance and weigh, you couldn't find materiality. No inference that could be drawn. There's no evidence, direct or indirect, that can support the inference. Allegations that files were tampered with could not be shown. So this is your typical case of a party claiming inequitable conduct and really having no proof to support it, and could be very damaging to him when it gets to the question of whether it's an exceptional case. Withheld letter was merely cumulative to evidence presented to the examiner. All right, now we get to 2018, and we're moving right along, and I think I've got about 20, 15, 20 minutes. In 2018, we had a number of cases. They all followed the Buck v. Standard. Fair Ascent is still the law, and they had different wrinkles. The first one is Serta-Sinning versus Kastner. Here, there was prior knowledge of non-disclosed prior art references. Counterclaim alleged who, what, when, where, and how of the material misrepresented. Court found, citing Therese, to meet the clear and convincing evidence standard, the specific intent to deceive must be the single most reasonable inference able to draw from the evidence. If there's another reasonable inference, you're not going to find inequitable conduct. And here, as as I state here, from the facts that were presented, a court could reasonably infer the adverse party withheld material information with intent to deceive the Patent Office. Regeneron, patent for modifying eukaryotic cells. Here, there was the particularity of the who, what, when, where, and how material misrepresentation Evidence of prior knowledge of non-disclosed prior art references. Slide presentations were made to the examiner, but they were false and known to be false at the time. The claim to a commercial product, a Velocimmune mouse, did not exist. The slide presentation suggested it did. A reference was not disclosed that undercut the value of the claim. The undisclosed art was shown to have been known to the inventors. Information not disclosed included but-for materiality information. Pregregious misconduct was found. Now, in Regeneron, the patentee's misconduct continued after the patent was issued. This is somebody who goes into court after having an issued patent and continues shenanigans throughout the discovery, indeed up to the eve of trial. Discovery and claim construction abuse was rampant. For failure to give proper discovery, 3 of the patent's technical legal experts were not allowed to testify. That was the sanction. You create this activity, you won't be able to present your case. And because the court understood the heavy burden on the party alleging inequitable conduct— remember, clear and convincing evidence— it imposed sanction on the patentee of an adverse inference as to the intent of two key witnesses. That's fairly significant, and it can happen. In Regeneron, the court further awarded expert witness fees against the patentee as sanctions. talking about hundreds of thousands of dollars for this misconduct, noting that before it can make such an award, it must find fraud or abuse of the judicial process. The court found misconduct began soon after the case was filed and continued until the court conducted an in-camera review of the patentee's privilege log on the eve of trial. Only then it was clear massive amounts of information had been withheld. This is a horrible situation. This happens at the court proceeding. Now we're not even dealing with but-for, we're also dealing with egregious misconduct. Rembrandt. Rembrandt is a company that's on multiple cases they filed, and in this case versus Comcast, patent infringement case, The question was whether it was an exceptional case or not in award of attorney's fees. Based in part on litigation misconduct by the owner of the patent, Rembrandt, relating to improperly paying witnesses contingent on the outcome of the litigation, engaging in failure to prevent widespread spoliation in documents, and should have known that the revised patents were unenforceable. Court followed the regional law on spoliation. You'll have this if in any case you're involved at a district court level, have to look at the local law on spoliation. Rembrandt knew of the risk of spoliation and did nothing to prevent it. That's a bad— no formal document retention notice. Evidence supported bad faith spoliation. There was failure to make maintenance payments, and it was very clear that Rembrandt didn't believe it had the right to even make maintenance payments. It was appropriate to find there was deception in claiming validity knowing the payments were abandoned. The payments were abandoned. The issue of revived patents was well known to Rembrandt. This case found exceptional fee award, $51 million. Court was required to find fee awarded had to bear some relation to the misconduct. And I guess it did. Core Wireless, very complicated case. It's a series of cases. It gets into what's known as the doctrine of implied waiver. Now, many of you may not have ever had the doctrine of implied waiver. That's when a company in its actions decides not to enforce its rights, and people have a right to rely on that. Here, implied waiver occurred when a patentee's conduct was so inconsistent with intent to enforce his rights as to induce a reasonable belief that the rights were infringed. Why did this occur? The patentee, Nokia in that case, or maybe the later one because it bought from Nokia, had a duty of disclosure to a standard-setting organization. This was Nokia. It had patents on wireless communications. It did not disclose its patents to the standard-setting organization. It breached that duty, misleading conduct that led to an alleged infringer to reasonably infer that the patentee does not intend to enforce its rights. That's the implied waiver. Here, the disclosure to the SSI was not followed. It didn't matter. Even though the disclosure, whatever they did for the disclosure, didn't result in anything, it didn't matter. The bad act had already occurred, and the implied waiver applies. The equitable defense is accepted if no inequitable consequences flow from Nokia's failure. So there, there the issue was one, and it had to go back. It said, what Nokia did hurt anybody? Was there a benefit to Nokia? That couldn't be decided by this court. The case had to go back. So you had to determine if the offending party did not gain a benefit. That's the present pending, apparently. You can see there was a— you're dealing with a breach of a disclosure duty, same equitable considerations of prejudice or egregious misconduct sufficient to justify sanction of patent unenforceability. And that's true even though the Nokia proposal to the friend organization was not accepted. So it had to go back. Here's another related case involving Apple Core Wireless. Here, the same issue. Federal Circuit affirmed, upending the $7.3 million verdict for the patentee denying conversion bid to reinstate patent damages because of misconduct by Nokia. The court found Nokia had waived the patent's ability to be enforced by the activity I just mentioned to you. That was 2 decades ago, the standard-setting organization, decades ago. The court said implied waiver turns on whether the patentee had a duty of disclosure to the standard-setting organization and breached that duty. That question does not require a subjective inquiry but an objective determination as to whether the patentee breached his duty of disclosure. Based on Apple's uncontradicted showing, the patent concluded— the panel concluded the patentee had such a duty and breached it. In addition, Nokia had failed to inform the SSO of a relevant Finnish patent application in this application while submitting a proposal to the SSO for inclusion, and the proposal to correct the problem and the type of communications network being addressed. Thus, the right to enforce had been waived. Federal Circuit noted failure to disclose created an unfair advantage to Nokia over other telecommunications companies, but the remand had to take place to determine whether those actions were, quote, sufficiently egregious. Nokia argued that the SACL only considered whether such technology was unavailable. And Nokia never intended that. That argument was rejected. Converse and Holding confirms related decision in Corp. Same facts as to implied waiver, same result. Request has now been outstanding since October for a rehearing. Um, bonk. Key issue, the proper application of waiver. Now, two of the most recent cases, Intel versus Tela, a motion to dismiss alleging requirements necessary under Federal Rule 9. But federal circuit law defines the requirement for inequitable conduct. Detailed pleadings must set out the specific who, what, when, where, and how of material misrepresentation or omission committed before the PTO. That is, who committed the allegations? Any required material false statement must be made to the PTO and expected knowledge by stated players. Court denied the motion to dismiss as all requirements were pleaded, including a patent misuse claim as well based on improper broadening of the scope of the patent. Anticompetitive harm, and underlying inequitable conduct with particularity. Last case I have for you is Gust. Gust, found December 19, 2018. Gust, whether the case that was found to be frivolously brought by a non-practicing entity would allow attorney's fees as a sanction and the sanction could be leveled against the attorneys, the MPE. The frivolous finding by the SDNY was under the Alice standard on patent eligibility and sanctioned the law firm $500,000 as jointly liable for vexatious litigation for an MPE. Pretty serious, and you gotta— if you're a client, you gotta tell your lawyer. If you're a lawyer, you gotta tell your client. Don't get involved in these situations. Probability will cost you money. But here, here it's interesting because, uh, the case has been dismissed at the SNY with a covenant by the NPE not to sue Gus. Federal Circuit held, to earlier reasoning, patents were not clearly invalid because the law on Alice on patent eligibility was still developing. I guess you can still make that argument today. Still developing. Further, Federal Circuit concluded the attorneys should not be punished or tarred with the action by the NPE. And the actions, of course, the NPEs are bringing cases, settling them in turorum for low amounts. The attorneys in this case, that's not gonna be a reason to make the attorneys pay attorneys' fees. All right, now, 12:22. I got 8 minutes, questions for whatever you want, and conclusions. Care is the watchword. Making sure all one does is reasonable steps the court would appreciate, not sanction. In other words, act the way you'd normally act as a responsible attorney. You should be able to get out of all problems. Do that. Be aware what actions you take have domino consequences. I've listed them all in the beginning. Loss of patent rights, loss of rights to related patents, your right to practice everywhere, sanctions, bar rights in all places, money. You'll lose money and your reputation. And you can subject yourself to malpractice charge from your ex-client, an exceptional case finding against your client for your adversary, then attorney's fees for the whole case. Not just the equitable part of it. Your client can also lose damages under the law if inequitable conduct is found against it. It's not just equitable relief now, it's legal relief. Still wanna practice? Think about all this. And by the way, I'm available by email or phone if you wanna talk to me about any particular issue. And thank you very much. We are done but for perhaps questions. Sylvia, do we have any questions? You'll notice, by the way, your CLE code is on the screen now. ethics_ramoncle29. Sylvia, we have questions?

We don't have any questions at this time, Matt.

What luck. As I say, available for any questions later on if they come to you after you have a chance to look at the slides. And thank you very much.

Thank you, everyone, for joining us today. We hope you found this webinar interesting. We will email you with the next steps on how to claim your credit shortly. And once again, the code for this CLE webinar is ethics_rimon_cle2019. Again, ethics_rimon_cle2019. Please make sure to write it down, as you will need it to claim your credits. Thank you for your participation.