2007 WL 430195, Feb. 9, 2007
A holder of a patent for the process of making flash-frozen bead-shaped novelty ice cream brought action against corporations and individuals engaged in either the manufacture or distribution of competing product, alleging patent infringement, trade dress and trademark infringement. The court held the patent was unenforceable due to applicant’s inequitable conduct but that Walker Process intent (counter-claim based on violation of Sherman act due to allegation of patent infringement based on fraudulently acquired patent) could not be inferred from patentee’s failure to disclose to the Patent and Trade Office (‘PTO’) the public sale of goods produced by the process more than one year before patent was filed.
In 1988, over a year before plaintiffs filed for patents, plaintiffs sold and gave away samples to over 800 customers without forcing them to sign any confidentiality agreement. Plaintiffs also did not disclose the mall sales from 1988 when they filed for a patent with the PTO. The court ruled that the conduct made the patent unenforceable but did not establish an intent to commit fraud. The case highlights the possibility of a close case whose facts satisfy inequitable conduct but not fraud before the PTO. In this case, the defendant’s case rested mainly on plaintiff’s omission of the prior sales. The Walker court stated that fraud could not be established on a failure to cite. This does not mean that an omission always reduces to a failure to cite. In order to find fraud, there has to be evidence of intent separate from the omission; an omission could be a result of a good-faith belief that it was unnecessary or any other non-fraudulent reason. In this case, the court found no additional intent.