Accused patent infringers may rely on a number of defenses such as asserting noninfringement and invalidity. Also available to accused infringers are a host of equitable defenses that include, for example, prosecution laches and unclean hands, the latter of which includes inequitable conduct. Inequitable conduct involves a breach of the duty of candor required of individuals associated with prosecution of a patent before the USPTO, rendering the underlying patent invalid and unenforceable.
A recent decision by the United States Court of Appeals for the Federal Circuit, Freshub, Inc. v. Amazon.com, Inc., Nos. 2022-1391, 2022-1425, 2024 WL 761779 (Fed. Cir. Feb. 26, 2024), sheds light on the defense of inequitable conduct with respect to intent behind the abandonment of a patent application during prosecution and its subsequent revival following certification by patent counsel that the applicant did not intentionally abandon the application, eventually leading to allowance and issuance into a patent.
Background
Freshub owns U.S. Patent No. 9,908,153 ('153 patent) directed to voice-processing technology that receives spoken words, translates the spoken words to text, identifies items from the text and adds the items to a list, such as a shopping list. Freshub sued Amazon for infringement of the '153 patent in the United States District Court for the Western District of Texas.
U.S. Patent Application No. 15/604,422, issued as the '153 patent, is a continuation application of U.S. Patent Application No. 11/301,291 ('291 application), which has an earliest priority date of December 10, 2004, based on the filing date of the corresponding provisional application.
During prosecution of the '291 application, the USPTO issued a final Office Action on June 6, 2011, rejecting all pending claims. The applicant failed to timely respond within the six-month statutory period and the USPTO mailed a Notice of Abandonment on January 3, 2012. Patent counsel for Ikan Holdings LLC, then the assignee of the '291 application, petitioned for revival of the application on January 20, 2017, certifying that:
The entire delay in filing the required reply from the due date for the required reply until the filing of a grantable petition under 37 CFR 1.137(a) was unintentional. [NOTE: The United States Patent and Trademark Office may require additional information if there is a question as to whether either the abandonment or the delay in filing a petition under 37 CFR 1.137(a) was unintentional (MPEP 711.03(c), subsections (III)(C) and (D)).]
The USPTO granted the petition on April 20, 2017, relying on the petitioner's duty of candor and good faith. The '291 application was ultimately issued as U.S. Patent No. 9,821,344 on November 21, 2017.
Although a jury returned a verdict of noninfringement on all asserted claims, Amazon alleged that patent counsel for Ikan engaged in inequitable conduct during prosecution of the '291 application from which the '153 patent descends. Amazon argued that Ikan had intentionally abandoned the application and counsel for Ikan had misrepresented to the USPTO that the abandonment was unintentional. Following a bench trial on the issue, the district court found that Amazon had failed to present clear and convincing evidence via the "single most reasonable inference" that Ikan had specifically intended to deceive the USPTO, ultimately granting a finding of no inequitable conduct.
The Federal Circuit's Decision
Freshub appealed, arguing that it is entitled to a judgment as a matter of law regarding Amazon's infringement of the '153 patent and a new trial based on allegedly prejudicial statements made during trial, both of which were denied by the Federal Circuit. Amazon sought reversal of the rejection of its inequitable conduct defense in a cross-appeal, arguing that the district court erred in its factual findings regarding the statements made by Ikan's counsel during prosecution seeking revival of the application.
To prevail on a finding of inequitable conduct, the accused infringer must demonstrate that the applicant misrepresented or omitted material information with the intent to specifically deceive the USPTO. See Therasense, Inc. v. Becton, Dickinson & Co., 649 F.3d 1276, 1287 (Fed. Cir. 2011) (en banc). Amazon argued that patent counsel for Ikan had made a false representation before the USPTO in denying that Ikan had intentionally abandoned the '291 application based on the 2012-2017 period of nonresponse via making the certification of unintentional abandonment for revival of the '291 application.
In its decision, the Federal Circuit focused on whether there was actually deceptive intent in Ikan's patent counsel making the certification that the abandonment was unintentional. The court indicated that the finding of deceptive intent―namely that the "single most reasonable inference" being that Ikan's patent counsel believed Ikan had intentionally abandoned the '291 application―must be shown by clear and convincing evidence. The court held that Amazon has not proven such.
Although evidence was sparsely available due to invocation of the attorney-client privilege, as noted by the Federal Circuit, Amazon drew from various sources in making a number of adverse inferences alleging that patent counsel for Ikan had made a misrepresentation regarding the unintentional abandonment before the USPTO. Amazon argued that, based on deposition testimony, Ikan's patent counsel was aware of correspondence received from the USPTO regarding prosecution of the '291 application, including that the Notice of Abandonment was ultimately communicated to Ikan. Amazon also relied on an assignment agreement executed by Ikan, which listed the '291 application as "Inactive/Abandoned/Expired." Amazon further relied on privilege log entries showing that patent counsel communicated prosecution status updates such as issuance of the outstanding final Office Action to which Ikan did not respond.
The court did not find this evidence persuasive, as the deposition testimony did not demonstrate that the requisite party at Ikan received and understood the USPTO communications or ultimately authorize the abandonment, the assignment agreement merely listed the '291 application among other patent interests and the triple alternative status indicator of "Inactive/Abandoned/Expired" rendered the ultimate status unclear, and the privilege log entries failed to show that a key principal at Ikan received the communications from patent counsel.
At best, the evidence relied on by Amazon demonstrated Ikan's patent counsel was aware of the abandonment but failed to show whether Ikan had the intent to intentionally abandon, and that Ikan's patent counsel ultimately misrepresented such intent in certifying that the abandonment was unintentional. However, whether the statement and certification at issue was made with deceptive intent turns on what patent counsel for Ikan believed in 2017 about the subject of the statement being made at that time, namely the intent behind abandonment. Here, patent counsel for Ikan did not believe that Ikan had the intent to abandon the application at the time of making the statement, arguing "[t]he intent does not go to my intent. It goes to intent of the applicant." Freshub, 2024 WL 761779, at *8. In finding that the district court did not clearly err, the Federal Circuit affirmed the finding of no inequitable conduct.
Conclusion and Practice Points
The revival of the '291 application and assertion of the child '153 patent appears suspiciously opportunistic. The '291 application first abandoned in 2012, prior to Amazon's introduction of its virtual assistant technology, Alexa, in 2014. Upon the success of Amazon's technology, the '291 application was revived as being unintentionally abandoned, and its child patent, the '153 patent, directed to voice-processing technology having the same December 10, 2004, priority date, was asserted against Amazon in the underlying case.
The Federal Circuit noted the lack of evidence, in part due to the attorney-client privilege, to demonstrate that the applicant's intent to abandon the application was intentional despite patent counsel certifying unintentional abandonment in reviving the application. However, there is no doubt that patent applicants and counsel involved in diligent prosecution before the USPTO are in constant communication with each other, often working together to formulate a viable prosecution strategy. While the details of communications between Ikan and its patent counsel regarding its prosecution strategy are privileged information, it is important to emphasize that it is the intent of the applicant that is determinative of whether an application is abandoned intentionally or unintentionally.
Thus, practitioners should use caution and choose the appropriate language in communications. For example, at times, patent examiners give a courtesy phone call to patent counsel following the expiration of the statutory six-month deadline for replying to an Office Action in which no response was received to inquire as to the status of any filed response ahead of preparing a Notice of Abandonment. It is accurate to confirm that no response to the Office Action has been filed as the statement made is a neutral, factual statement supported by the application file history, which reflects the absence of a filed response; it is not necessarily accurate to confirm that there is abandonment or any intent to abandon.
In short, knowledge of a lack of response to a USPTO Office Action in a patent application or knowledge of an abandonment of a patent application is not evidence of an intent to abandon the patent application. The practitioner, before asserting a revival of an abandoned application was improper because the abandonment was intentional, should fully investigate whether relevant decision-makers of the applicant knew of the abandonment and affirmatively took the decision to abandon the application, and thus actually and hence, the applicant itself had an intent to abandon a patent application—again, the fact of abandonment or failure to respond to an Office Action is not an intent to abandon.
For More Information
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