Free Motion for Attorney Fees - District Court of Arizona - Arizona

1 Cir. 198 I) (reversing the district court’s dismissal of a declaratory judgment action for lack
2 of jurisdiction and holding that the plaintiff made a prima facie showing of a case or
· 3 controversy).
4 II. The Motions for Summary Judgment.
5 A. Plaintiffs Motion for Partial Summary Judgment.
6 Plaintiff seeks summary judgment on its eleventh cause of action on the ground that
7 the ‘20l Patent is invalid as a matter of law due to the applicants’ inequitable conduct before
8 the Patent and Trademark Office ("PTO"). Mot. at l (Doc. #84). Plaintiff contends that the
9 applicants failed to disclose material prior art to the PTO by not disclosing certain True
10 Center gates that had been fabricated by K-Zell since 1997. Plaintiff further contends that
I 1 the applicants intended to deceive the PTO by withholding the True Center gates.
12 Plaintiff must prove inequitable conduct by clear and convincing evidence. See GFL
13 Inc, v. Franklin Corp., 265 F.3d l268, 1273 (Fed. Cir. 2001). "[nequitable conduct entails
‘ I4 a two-step analysis: first, a detennination of whether the withheld reference meets a
15 threshold level of materiality and intent to mislead, and second, a weighing ofthe materiality
I6 and intent in light of all the circumstances to determine whether the applicant’s conduct is
17 so culpable that the patent should be unenforceable? Ia'. Both materiality and intent are
18 questions of fact. See id.; Paragon Podiatry Lab., Inc. v. KLM Labs., Inc., 984 F .2d 1 182,
19 l 190 (Fed. Cir. 1993) ("‘Ifthe facts ofmateriality or intent are-reasonably disputed, the issue
20 is not amenable to summary judgmer1t."’) (citation and emphasis omitted). "‘The more
21 material the omission, the less culpable the intent required, and vice versa."’ GFI, 265 F.3d
22 at 1273 (citation omitted). Materiality does not presume intent, however, because intent "is a
23 separate and essential component of inequitable conduct."’ Id. at 1274 (citation omitted).
24 Indeed, "[t]he challenged conduct must be sufficient to require a finding of deceitful intent
25 in light of all the circumstances? Id. at 1273. Because the facts "rare1y include direct
26 evidence of admitted deceitful conduct," intent is usually "pr0ven by inferences drawn from
27 the facts, with the collection of inferences permitting a confident judgment that deceit has
28 occurred." Id.
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I Plaintiff states that the applicants had intimate knowledge of the True Center gates
2 and "the only reason not to reveal that highly material prior art was to deceive the PTO."
3 Mot. at I4- I 5. Plaintiff contends that the applicants intended to deceive the PTO as a matter `
4 of law because Donald Kammerzell participated in determining the prior art to be disclosed,
5 he unsuccessfully attempted to buy True Center, he knew that the horse racing industry
6 regarded the fotmder of True Center, the late Clay Puett, as the inventor of the closed starting
7 gate, and he has testified that he did not disclose the features of the True Center gates
8 because he believed that those features were already disclosed by the patents before the PTO.
9 Id. at I5-I6; Pl.’s SOF im] [7, 25, 33-35. Plaintiff concludes that "[t]hese ‘complete1y
I0 insuppoitable, specious, and conflicting explanations or excuses will not suffice to raise a
ll genuine issue of fact.”’ Id. at 16 (quoting Paragon, 984 F .2d at 1190).
l2 Drawing all reasonable inferences from the evidence in K-Zell’s favor, as the Court
t3 must at the summary judgment stage, the Court finds that there are genuine issues of material
14 fact as to whether the applicants intended to deceive the PTO even if the True Center gates
15 were highly material. See Broxt0n—Secret v. Robins Co., 769 F.2d 528, 531 (9th Cir. 1985)
I6 (stating that a party’s state of mind is generally a factual issue that must be resolved by the
l7 jury); Mendocino Envt!. Ctr. v. Mendocino County, 192 F.3d 1283, 1302-04 (9th Cir. l999)
o 18 (reversing summary judgment for the defendants because issues of fact existed regarding
19 their intent) (citing Braxton-Secret, 769 F.2d at 531). As Plaintiff acknowledges,
20 Kamrnerzell has testified that he did not disclose the prior True Center gates because he
21 believed they were cumulative to the patents already before the PTO and, thus, not material.
22 Mot. at 15-16; Pl. ’s SOF1] 25; see Defs.’ SOF 1[ 8 (listing the eleven disclosed patents),1| I7,
23 Ex. D (Kammerzell Decl.).’ The fact that Kammerzell unsuccessfully attempted to buy
24 True Center and was aware of Clay Puett’s reputation in the horse racing industry does not
25 make his testimony unbelievable as a matter of law. At the summary judgment stage, the
26 —·————·—··i U
27 ’ Under the governing regulation, information is material to patentability only if
"it is not cumulative to information already of record or being made of record in the [patent]
28 application? 37 c.1=.n. § 1.56(b).
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1 "evidence of the non-movant is to be believed" and "[c]redibility determinations, the
2 weighing of evidence, and the drawing of inferences from the facts are jury fi1nctions."
3 See Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 255 (1986).
4 Plaintiff s reliance on Paragon is misplaced. In that case, the applicant tiled
5 deceptive affidavits with the PTO and concealed commercial sales information regarding the
6 patented device. 984 F .2d at 1 190-93. In addition, the applicant’s patent attomey offered
7 inconsistent justifications for the concealment that "[did] not raise a genuine issue of good
8 faith." Id The undisputed "overri ding pattern of misconduct" made Paragon one ofthe rare
9 cases amenable to summary judgment. Id. ("[O]ur precedent urges caution in the grant of
l0 summary judgment respecting a defense of inequitable conduct[.]")."
1 1 The Court will deny Plaintiff' s motion for partial summary judgment on its eleventh
12 cause of action.
I3 C. Defendants’ Motions for Summary Judgment}
14 1. The First Cause of Action: False Advertising.
15 Plaintiff alleges that Defendants engaged in false advertising in violation of
16 Lanham Act § 43, 15 U.S.C. § I 125. 2nd Supp. C0mpl.1l1] 51-57. The elements of a false
17 advertising claim are:
18 (1) a false statement of fact by the defendant in a corrnnercial advertisement
19 about its own or another’s product; (2) the statement actually deceived or has
20
‘ The other cases Plaintiff relies on are inapposite because inequitable conduct was
21 determined at trial, not on summary judgment. See GFI, 265 F.3d at 1272 (“The defense[]
22 of inequitable conduct . . . [was] tried to the court in a non-jtu·y trial."); Semiconductor
` Energy Lab. Co. v. Samsung Elecs. Co., 204 F.3d 1368, l372 (Fed. Cir. 2000) (denying
23 motion for summary judgment and finding inequitable conduct after seven-day bench trial);
24 Critikon v. Becton Dickinson Vascular Access, Inc., 120 F.3d1253, 1254 (Fed. Cir. 1997)
(ruling on the inequitable conduct issue after a bench trial).
25
5 K-Zell and Donald and Barbara Kammerzell filed a motion for summary judgment
g 26 on the ten claims alleged against them in the second supplemental complaint. Doc. #90-2.
27 O‘Connor joined the motion and filed a supplemental memorandum and a statement of facts
- I regarding the eight claims alleged against him. Docs. ##92-93. As already noted, Sonoran
28 joined the motions with respect to the first, second, third, and eighth causes of action.
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