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Reversed Inequitable Conduct Case Reassigned Where District Judge Evinced Strong Convictions Against Patentee

Aug.06.2008

In Research Corp. Tech. v. Microsoft Corp. (No. 2006-1275; August 1, 2008), the Federal Circuit reverses the district court judge's finding of inequitable conduct against RCT, vacates the related award of attorney fees, and vacates summary judgment grants of non-infringement and invalidity to Microsoft. The Court also remands with instructions to reassign the case to another judge. At issue are RCT's patents for digital halftoning "blue noise" masks.

The district court judge conducted a short bench trial on the inequitable conduct issue, barring RCT from presenting expert testimony on materiality. Microsoft's presentation in support of its inequitable conduct case lasted only an hour and involved no witnesses. In ruling against RCT, the district court noted that "I am not trying a patent case[.] I am trying a particular matter that has been presented to me having to do with candor and good faith." The Federal Circuit notes that the district court committed legal error by failing to consider the materiality prong of the inequitable conduct analysis; it further concludes that the inventors' post-filing K factor tests, the nondisclosure of which was the basis of the district court's inequitable conduct determination, were not material to the patents, which did not even mention the K factor.

Acknowledging that a transfer may require a new judge to learn the case and may cause some "duplicative judicial effort," the Federal Circuit nonetheless remands with instructions to reassign the case to another judge. Even though transfer requests are considered with "great caution," and in the absence of personal bias are granted only in "unusual circumstances," the Court applies Ninth Circuit law and concludes that the "strongly expressed convictions" of the district court "may not be easily and objectively reconsidered."

[http://www.cafc.uscourts.gov/opinions/06-1275.pdf]

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Mark Supko
Partner – Washington, D.C.
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Email: msupko@crowell.com