Hughey on Exergen v. Wal-Mart: Heightened Pleading for Inequitable Conduct
Associate, Merchant & Gould, P.C.
In Exergen Corp. v. Wal-Mart Stores, Inc., 575 F.3d 1312 (Fed. Cir. 2009), the Federal Circuit articulated a high standard for pleading inequitable conduct when it affirmed a district court's decision denying a defendant’s motion to add an inequitable conduct defense. The Exergen court’s application of that law to the facts demonstrates that a high level of particularity is required for pleading inequitable conduct. This issue is analyzed by Rachel Hughey, an attorney with Merchant and Gould. She writes:
I. The District Court Denied SAAT's Motion to Amend
In the Exergen case, the plaintiff, Exergen, sued the defendant, SAAT, for infringement of three patents, the '813 patent, the '205 patent, and the '685 patent. SAAT sought to amend its answer to add an inequitable conduct defense against Exergen's '685 patent, which if successful would render the patent unenforceable. In its proposed amended pleading, SAAT articulated three specific instances of alleged inequitable conduct during the prosecution of the '685 patent-in-suit: (1) Exergen's previously filed '808 patent was material and not cumulative and intentionally withheld during prosecution with an intent to deceive; (2) the '998 patent cited in an IDS during the prosecution of the '205 patent was material and not cumulative and intentionally withheld with an intent to deceive; and (3) Exergen's statements to overcome rejections during prosecution were contradicted by specific statements from its own website, and the misrepresentation and omission was material and not cumulative and was made with an intent to deceive. The district court denied SAAT's motion to amend because SAAT failed to plead fraud with particularity pursuant to Federal Rule of Civil Procedure 9(b).
II. The Federal Circuit Points to Sufficient Identification of Who, What, Where, When, Why, and How
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Considering the specific facts of the case, the [Federal Circuit] court concluded that SAAT failed to adequately identify the who, what, where, why, and how of the representation and omissions and thus failed to plead inequitable conduct with the required specificity. With respect to who, the court explained that the pleading referred generally to Exergen, its agents and/or attorneys, but failed to adequately name the specific individual associated with the filing or prosecution of the application who both knew of the material information and deliberately withheld or misrepresented it. With respect to the what and where, the court explained that the pleading failed to identify which claims, and which limitations in those claims, the withheld references were relevant to, and where in those references the material information was found. With respect to the why and how, the court asserted that the pleading stated generally that the withheld references were material and not cumulative to the information already of record, but did not identify the particular claim limitations, or combination of claim limitations, that were absent from the prior art in the record. The court explained that such allegations are necessary to explain why the withheld information is material and not cumulative and how an examiner would have used it in assessing the patentability of the claims.
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