Inequitable Conduct for Pro Se Applicant's Failure to Disclose Relationship with Affiant

In Nilssen, et al. v. Osram Sylvania, Inc., et al. (October 10, 2007), the Federal Circuit held four patents unenforceable for failure to disclose an affiant's relationship with the applicant, even though those patents were withdrtawn shortly before trial:

We conclude that the district court did not abuse its discretion in holding that Nilssen engaged in inequitable conduct with respect to the ’345 and ’690 patents by submitting affidavits by Fiene in support of patentability, including points of distinction over prior art patents, without informing the examiner of the affiant’s ["personal and professional association with Nilssen and Fiene’s financial interest in Nilssen’s patents"] relationship to Nilssen. Even though the examiner did not raise a question concerning any such relationship, it is material to an examiner’s evaluation of the credibility and content of affidavits to know of any significant relationship between an affiant and an applicant, see Ferring B.V. v. Barr Labs., Inc., 437 F.3d 1181, 1187-88 (Fed. Cir. 2006); failure to disclose that relationship violated Nilssen’s duty of disclosure. As for the ’067 and ’342 patents, appellants do not contest the materiality of the prior art references the district court found were intentionally withheld during their prosecutions.

Because inequitable conduct with respect to one or more patents in a family can infect related applications, see, e.g., Consolidated Aluminum Corp. v. Foseco Int’l Ltd., 910 F.2d 804 (Fed. Cir. 1990), we find no abuse of discretion in the district court’s holding the ’345, ’690, ’067, and ’342 patents unenforceable prior to determining whether the inequitable conduct related to each of those four patents should render additional related patents unenforceable as well. Trial judges are entitled to arrange the priority of issues in a manner that they consider efficient. Cf. R.R. Dynamics, Inc. v. A. Stucki Co., 727 F.2d 1506, 1515 (Fed. Cir. 1984) ("District courts have broad authority and discretion in controlling the conduct of a trial."). Our conclusion to affirm the trial court’s holding with respect to the four patents is further supported by the fact that these four patents were withdrawn from the suit only shortly before trial at the last minute. It was not an abuse of discretion for the district court, when these patents were sued upon and maintained in the suit up until just before trial, to hold these four patents unenforceable, even though it did not include them in its entry of judgment.

. . . A few closing comments are in order. Each of the issues on which the district court found inequitable conduct generated defenses by Nilssen that were not per se unreasonable when considered in isolation. The CFLA was not beyond an interpretation contrary to what the district court adopted. Nilssen did pay some fees that were large entity fees. Failure to cite the Motorola litigation to the PTO may have been an oversight, as perhaps failure to cite prior art might have been. Perhaps Nilssen did not expressly assert an unjustified earlier priority date to obviate prior art.

However, this case presents a collection of such problems, which the district court evaluated thoroughly and considered, including making credibility findings, and it concluded that the record and testimony indicated repeated attempts to avoid playing fair and square with the patent system. Mistakes do happen, but inadvertence can carry an applicant only so far. Thus, we cannot find that the court’s holding of unenforceability was an abuse of discretion. Perhaps some of the errors were attributable to Mr. Nilssen’s representing himself during the prosecution of his patents. It surely was true that he knew more about the subject matter of his inventions than most, or even any, attorney. That is almost always the case with an invention, particularly one dealing with complex subject matter. However, the patent process is a complicated one, one that requires both technical and legal credentials in order to effectively prosecute patents for inventors. The same credentials are generally required to prosecute patents on one’s own inventions. Mr. Nilssen, while apparently gaining considerable knowledge of the patenting process, thought he didn’t need professional patent help. The result of this case, regrettably, proves that he was wrong.

Nilssen is the inventor on a large number of patents relating to compact fluorescent light bulbs and ballasts for gas discharge lamps such as fluorescent light bulbs. After initially relying on attorneys to prosecute his patents, in 1983 Nilssen began prosecuting his own patent applications, including those resulting in the patents in suit, because he felt that his understanding of the subject matter was better than that of any attorney. According to the opinion, "Nilssen was sufficiently knowledgeable of patent law and practice to cite the Manual of Patent Examining Procedure patent statutes and regulations, and case law during prosecution of his patent applications."

That's not enough for Professor Wegner:

What makes Nilssen a particularly harsh holding is that the errors were by a pro se applicant-prosecutor who obviously had little knowledge of patent law. While this does not have any impact on materiality, an argument could be made in favor of the patent applicant that no mens rea had been established in the case of a pro se prosecution of this nature. The panel sharply criticizes such pro se prosecution (see p. 19), and while mistakes may well lead to a denial of patentability or to a rejection keyed to a failure to meet other requirements, it goes one step further to find a sufficient mens rea to establish patent fraud.

Above all, Nilssen is a further lesson to the patent community concerning a tightening of standards and a judicial intolerance for marginal prosecution before the PTO.

"I don't know who Professor Wegner is, but his comment about the harshness of the decision given the pro se status of Mr. Nilssen is obviously uninformed," retorts a commentator identifying himself as John Mitchell, Chief IP Counsel for Osram Sylvania, Inc. "The professor should read the trial transcript before making such statements. I would be pleased to walk the professor through the case and/or debate him on the issue."

More about Mr. Nilssen and the decision of the lower court here.