Case Nos. 3:10–cv–954–MO (lead). Case Nos. 3:12–cv–1500–MO. Case Nos. 3:13–cv–579–MO.
2014-04-9
MENTOR GRAPHICS CORPORATION, an Oregon Corporation, Plaintiff/Counter-defendant, v. EVE–USA, INC., a Delaware corporation; and Synopsys Emulation and Verification S.A., formed under the laws of France, Defendants/Counter-claimants. EVE–USA, Inc., a Delaware corporation; and Synopsys Emulation and Verification S.A., formed under the laws of France, Plaintiffs/Counter-defendants v. Mentor Graphics Corporation, an Oregon corporation, Defendant/Counter-claimant.
Elysa Q. Wan, Geoffrey H. Yost, Nick Janda, George Riley, Luann Simmons, Robin M. Wall, Mark E. Miller, Michael Sapoznikow, O'Melvany & Myers LLP, San Francisco, CA, James E. Geringer, Patrick M. Bible, Andrew M. Mason, Kristin L. Cleveland, Mark W. Wilson, Salumeh R. Loesch, Klarquist Sparkman, LLP, Portland, OR, for Plaintiff/Counter-defendant. Aseem Saran Gupta, M. Patricia Thayer, Philip W. Woo, Sidley Austin LLP, San Francisco, CA, David T. Dezern, Sidley Austin LLP, Dallas, TX, David T. Pritikin, Sidley Austin LLP, Chicago, IL, Gino Cheng, Orrick, Herrington & Sutcliffe LLP, Irvine, CA, Indra Neel Chatterjee, Jesse Y. Cheng, Scott D. Lindlaw, Scott Lonardo, Travis Jensen, Vickie L. Feeman, Orrick, Herrington & Sutcliffe LLP, Menlo Park, CA, James C. Brooks, William H. Wright, Orrick Herrington & Sutcliffe, LLP, Los Angeles, CA, Julia E. Markley, Scott D. Eads, Stephen F. English, Perkins Coie, LLP, Portland, OR, for Defendants/Counter-claimants and Plaintiffs/Counter-defendants.
MOSMAN
Motion denied.
Elysa Q. Wan, Geoffrey H. Yost, Nick Janda, George Riley, Luann Simmons, Robin M. Wall, Mark E. Miller, Michael Sapoznikow, O'Melvany & Myers LLP, San Francisco, CA, James E. Geringer, Patrick M. Bible, Andrew M. Mason, Kristin L. Cleveland, Mark W. Wilson, Salumeh R. Loesch, Klarquist Sparkman, LLP, Portland, OR, for Plaintiff/Counter-defendant. Aseem Saran Gupta, M. Patricia Thayer, Philip W. Woo, Sidley Austin LLP, San Francisco, CA, David T. Dezern, Sidley Austin LLP, Dallas, TX, David T. Pritikin, Sidley Austin LLP, Chicago, IL, Gino Cheng, Orrick, Herrington & Sutcliffe LLP, Irvine, CA, Indra Neel Chatterjee, Jesse Y. Cheng, Scott D. Lindlaw, Scott Lonardo, Travis Jensen, Vickie L. Feeman, Orrick, Herrington & Sutcliffe LLP, Menlo Park, CA, James C. Brooks, William H. Wright, Orrick Herrington & Sutcliffe, LLP, Los Angeles, CA, Julia E. Markley, Scott D. Eads, Stephen F. English, Perkins Coie, LLP, Portland, OR, for Defendants/Counter-claimants and Plaintiffs/Counter-defendants.
OPINION AND ORDER
MOSMAN, District Judge.
In case no. 12–1500, the second of the three consolidated patent actions captioned above, EVE–USA, Inc., and Synopsys Emulation and Verification S.A. (collectively “Synopsys”) move [461] to amend their answer to Mentor Graphics Corporation's (“Mentor Graphics”) complaint. Synopsys seeks to add an affirmative defense and counterclaim accusing Mentor Graphics of inequitable conduct in the prosecution of U.S. Patent No. 6,947,882 (“'882 patent”). Mentor Graphics filed a response in opposition [467], and Synopsys replied [476]. For the reasons set forth below, I DENY the motion.
All docket numbers refer to the lead case, no. 10–954.
B. Specific Intent To Deceive the PTO The parties disagree initially concerning whether the Federal Circuit's recent en banc decision in Therasense heightened the standard for judging the sufficiency of an allegation of intent to deceive. I do not understand the Therasense opinion to disturb the pleading standard. Under the applicable standard, I conclude that Synopsys's proposed amended answer does not allege sufficient facts to permit a plausible inference that any specific person intended to deceive the PTO. 1. Pleading Standard In Exergen, the Federal Circuit set forth the standard for pleading intent to deceive as follows: [A] pleading of inequitable conduct under Rule 9(b) must include sufficient allegations of underlying facts from which a court may reasonably infer that a specific individual (1) knew of the withheld material information or of the falsity of the material misrepresentation, and (2) withheld or misrepresented this information with a specific intent to deceive the PTO.
575 F.3d at 1328–29. The court defined “reasonable inference” as “one that is plausible and that flows logically from the facts alleged, including any objective indications of candor and good faith.” Id. at 1329 n. 5. Two years later, sitting en banc, the court reiterated that a district court may find that the defendant intended to deceive the PTO only if that conclusion is “ ‘the single most reasonable inference able to be drawn from the evidence.’ ” Therasense, 649 F.3d at 1290–91 (quoting Star Sci., Inc. v. R.J. Reynolds Tobacco Co., 537 F.3d 1357, 1366 (Fed.Cir.2008)). The court did not address whether this heightened standard of proof of intent to deceive affected the pleading standard announced in Exergen. Months after the Therasense opinion issued, a three judge panel of the Federal Circuit again cited Exergen for the standard to apply at the pleading stage. See Delano Farms Co. v. Cal. Table Grape Comm'n, 655 F.3d 1337, 1350 (Fed.Cir.2011) (holding that an inequitable conduct claimant must allege facts allowing the court to “reasonably infer” that a specific person intended to deceive the PTO). Synopsys points out two district courts that have continued to apply Exergen at the pleading stage, among them the District of Oregon. See Cyber Acoustics, LLC v. Belkin Int'l, Inc., No. 13–1144, 988 F.Supp.2d 1236, 1242, 2013 WL 6842755, at *4 (D.Or. Dec. 27, 2013) (quoting the Exergen standard); Wyeth Holdings Corp. v. Sandoz, Inc., No. 09–955, 2012 WL 600715, at *7–8 (D.Del. Feb. 3, 2012) (determining that Therasense did not affect the Exergen pleading standard), adopted by 2012 WL 749378. Mentor Graphics, on the other hand, cites three district courts for the proposition that, in light of Therasense, a claim of inequitable conduct must allege facts from which the “single most reasonable inference” is intent to deceive. See VDF FutureCeuticals, Inc. v. Sandwich Isles Trading Co., Inc., No. 11–288, 2011 WL 6820122, at *6 (D.Haw. Dec. 27, 2011) (concluding that Therasense “tightened” the pleading standard); Hansen Mfg. Corp. v. Enduro Sys., Inc., No. 11–4030, 2011 WL 5526627, at *4 (D.S.D. Nov. 14, 2011) (same); Quest Software, Inc. v. Centrify Corp., No. 10–859, 2011 WL 5508820, at *2–3 (D.Utah Nov. 9, 2011) (applying the Therasense standard in a motion to dismiss). I read Therasense as setting forth the standard of proof at trial, not the standard for weighing the sufficiency of the factual allegations in the pleading. Three months elapsed between the Federal Circuit's opinions in Therasense and Delano Farms. The Delano Farms panel therefore had plenty of time to determine whether the en banc court's opinion in Therasense required any revision of the pleading standard. The court's restatement of the Exergen standard demonstrates that it judged no revision to be necessary. I will therefore apply Exergen's “reasonable inference” standard to the facts Synopsys alleges in support of its assertion that specific persons at Mentor Graphics intended to deceive the PTO. 2. Sufficiency of the Allegations A court “cannot assume that an individual, who generally knew that a reference existed, also knew of the specific material information contained in that reference.” Exergen, 575 F.3d at 1330 (emphasis omitted). A pleading that alleges only that a patentee was aware of a prior art reference therefore does not support a reasonable inference that the patentee knew that any specific information within the reference was material to its patent application. See id. Synopsys argues that its proposed amended answer permits a court reasonably to infer that Mr. Porter and the “attorneys at Banner & Witcoff” intended to deceive the PTO by withholding Yishay and the '348 family. (Mem. in Supp. [462] at 17.) It asserts that these actors' roles in prosecuting the '504 application and the '882 patent support an inference that they knew that the '348 family and Yishay disclosed “independent clocking.” Id. (citing Mot. Ex. A [461–1] at ¶¶ 63–66.) It argues in turn that this inference of knowledge of the '348 family and Yishay's materiality supports an inference that Mr. Porter and Banner & Witcoff intentionally withheld the prior references from the Patent Office. Id. (citing Mot. Ex. A [461–1] at ¶¶ 67–70). Finally, it argues that Mr. Porter's power to direct abandonment of applications suggests that he decided to abandon the '504 application in this case in order to favor the later priority date of the '882 patent. Id. (citing Mot. Ex. A [461–1] at ¶¶ 69–70.) Squeeze as it might, Synopsys has extracted no blood from this turnip. That Mr. Porter supervised prosecution of the '504 application supports an inference only that he was generally aware of its existence. Under Exergen, that fact is insufficient to allow a court to infer that Mr. Porter knew of any particular material information contained within the application. The same reasoning applies to Mr. McKee and the other attorneys at Banner & Witcoff. Because Mr. Porter's supervisory role at most permits an inference that he was generally aware of the '504 application, his decision to direct its abandonment also may not reasonably be assigned any nefarious meaning. Synopsys's proposed amended answer offers one final allegation in support of Mentor Graphics's alleged intent to deceive the PTO in prosecuting the '882 patent. The answer observes that the Northern District of California found Mentor Graphics to have engaged in inequitable conduct in a previous action. (Mot. Ex. A [461–1] at ¶ 71 (citing Mentor Graphics Corp. v. Quickturn Design Sys., No. 00–1030 (lead case), 2003 U.S. Dist. LEXIS 16197, at *12, *20 (N.D.Cal. July 30, 2003)).) It also alleges that Mentor Graphics failed to alter its policies “in order to avoid similar instances of inequitable conduct in the future.” Id. at ¶ 72. That Mentor Graphics was found to have acted inequitably in prosecuting an unrelated set of patents has no bearing on whether it did so in this case. Synopsys has offered no evidence suggesting that the Quickturn case bears any “close relation” to the prosecution of the '882 patent, as would be required to consider it as evidence of intent under Rule 404(b) of the Federal Rules of Evidence. See McNeil–PPC, Inc. v. Perrigo Co., 516 F.Supp.2d 238, 258 n. 9 (S.D.N.Y.2007). Further, its allegation that Mentor Graphics failed to implement any policy changes after the Quickturn inequitable conduct finding does not support the inference that, on this specific occasion, some specific person knew of specific material information within the '504 application or any other undisclosed reference. Synopsys's proposed amended answer fails to allege any facts from which a court may reasonably infer that Mr. Porter, the attorneys at Banner & Witcoff, or any other agent of Mentor Graphics knew of any specific information within the '348 family or Yishay. The proposed amendment therefore does not support an inference of specific intent to deceive. CONCLUSION Even if Synopsys diligently pursued the facts it needed in support of its affirmative defense and counterclaim of inequitable conduct, the proposed amendment is futile for two independent reasons: the undisclosed references are not material to the claims in the '882 patent, and the facts alleged do not support a reasonable inference of intent to deceive. Synopsys's Motion [461] for Leave To File an Amended Answer and Counterclaim is therefore DENIED. IT IS SO ORDERED.
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