Cargill v. Cambra Foods.

A reasonable examiner would certainly want to consider test data that is directly related to an important issue of patentability, along with the applicant’s interpretation of that data.

(Fed. Cir. 2007, 06-1265)

Cargill appealed from a final judgment of the district court (D. Or.) concerning four patents owned by Cargill, namely U.S. Patents No. 5,969,169 (the “’169 patent”), No. 6,201,145 (the “’145 patent”), No. 6,270,828 (the “’828 patent”), and No. 6,680,396 (the “’396 patent”).  The district court granted Cargill’s summary judgement that the ‘169 and ‘145 patents were infringed by Cambra et al., but entered judgment that the ’169 and ’145 patents were unenforceable due to inequitable conduct.  In reaching these decisions, the district court relied on two documents that contained the applicant’s internal testing data but that were not disclosed to the examiner during prosecution. Upon appeal, the CAFC affirmed the judgement of invalidity.

The technology at issue relate to a non-hydrogenated canola oil that possesses superior oxidative stability and fry stability, and is useful for food applications. Ordinary canola oil is unstable and easily oxidized during cooking, which creates an off-flavor in the food. It also develops an undesirable odor when being stored.  The oxidative stability of canola oil can be measured in at least two ways: in terms of AOM (Active Oxygen Method) hours, or in terms of peroxide and para-anisidine values.  Generic commercial canola oil typically has an oxidative stability of about 22 AOM hours, whereas the claimed oil has an oxidative stability of about 35 to 40 AOM hours.  During prosecution, Cargill argued successfully (based on data in the specifications of the applications) that two canola oils with similar fatty acid compositions have strikingly different oxidative stability values, and therefore a similar fatty acid composition as described by the prior art could not anticipate.

For the sake of simplicity, only the inequitable conduct issue is discussed herein.  To hold a patent unenforceable due to inequitable conduct, there must be clear and convincing evidence that the applicant (1) made an affirmative misrepresentation of material fact, failed to disclose material information, or submitted false material information, and (2) intended to deceive the U.S. Patent and Trademark Office (“PTO”).  If a misstatement or omission is material under the new Rule 56, it is material.  Similarly, if a misstatement or omission is material under the ‘reasonable examiner’ standard, it is also material.

Upon reviewing the district court’s findings on the threshold issues of materiality and intent for clear error,  the CAFC held that the district court findings that the applicant “unilaterally withheld information that unquestionably would have been viewed as worthy of serious consideration by the PTO, and might have resulted in the patents not being issued” was not clearly erroneous.   Given that a crucial issue during prosecution was whether the claimed oil possessed strikingly superior oxidative stability, it is quite certain that a “reasonable examiner” would consider such test data to be important in deciding whether to allow the patents to issue.  Materiality is determined from the viewpoint of a reasonable patent examiner, and not the subjective beliefs of the patentee.

The district court also found an intent to deceive based on several circumstantial factors: the repeated nature of the omission, the applicant’s motive to conceal, and the high materiality of the undisclosed information. The CAFC noted that the district court found that there were multiple occasions that called for disclosure of the omitted data.  An applicant should know information is material when the examiner repeatedly raises an issue to which the information relates.  Additionally, when an applicant knows or obviously should know that information would be material to the examiner, as was true here, but the applicant decides to withhold that information, “good faith” does not negate an intent to manipulate the evidence.  Thus, there is no error in the district court’s finding of intent.

Affirmed.