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LEAVING FRAUDULENT PATENT
PROCUREMENT TO THE REALM OF
ANTITRUST LIABILITY IN DIPPIN’
DOTS, INC. V. MOSEY
Trace W. Rakestraw*
Abstract: Curt Jones, the owner of Dippin’ Dots, Inc., invented an ice cream
product called Dippin’ Dots and obtained a patent on the invention. After a
few years of marketing and selling this popular product, Dippin’ Dots, Inc.
brought an action for patent infringement against a handful of Dippin’ Dots,
Inc.’s prior distributors and manufacturers—namely, Mini Melts, Inc. and
Frosty Bites Distribution (collectively, “MMI”). MMI used the patent
infringement defense of inequitable conduct and counterclaimed under
section 2 of the Sherman Act due to the fact that Mr. Jones had
misrepresented crucial patent application information—the date that Mr.
Jones first started selling his invention before he had obtained a patent.
Under 35 U.S.C. § 102 (b) (2006), an inventor is barred from obtaining a
patent if the product was “on sale . . . more than one year prior to the date of
the application for patent . . . .” Curt Jones did just that; he sold his invention
prior to the critical date. Even worse, he lied about this fact while trying to
obtain a patent. The patent system is based on furthering the science and
useful arts, but the system has been carefully constructed so as to prevent
inventors from benefiting from a longer than statutorily allowable time frame
to exclude others from making, using, or selling the invention. These policy
considerations both promote ingenuity and act as a safeguard against unfair
monopolies. Specific to this case, Mr. Jones should be liable under MMI’s
Sherman Act section 2 counterclaim—typically called a Walker Process
counterclaim in patent law—for using prior sales to his advantage in
obtaining a patent and then subsequently denying the sales in order to protect
the validity of his patent during litigation. The United States Court of
Appeals for the Federal Circuit affirmed the District Court’s holding as to
MMI’s inequitable conduct defense, however, the Federal Circuit reversed a
jury finding of Walker Process liability for treble damages. The Federal
Circuit reasoned that the requisite intent to defraud the United States Patent
and Trademark Office under the Sherman Act was not present. This
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Comment analyzes how the Federal Circuit erred in reversing the Walker
Process counterclaim by disregarding important policy considerations
behind the on-sale bar and the experimental use doctrine. Further, this
Comment analyzes the history of Walker Process counterclaims to identify
exactly where the Federal Circuit strayed from the facts of the case and
controlling precedent.
INTRODUCTION
From the time the Constitution was drafted, there has been tension
between intellectual property laws and antitrust laws. 1 In Dippin’ Dots, Inc.
v. Mosey, the United States Court of Appeals for the Federal Circuit (the
“CAFC”) applied both sets of laws. 2 In this patent infringement lawsuit,
the CAFC held that the patentee, Dippin’ Dots, Inc. (“DDI”), demonstrated
conduct which would subject itself to liability under intellectual property
laws, but not antitrust laws. 3 The CAFC was created to promote
uniformity, 4 yet its holding in this case undermines the purpose of its
creation. 5
* Candidate for Juris Doctor, New England School of Law (2009). B.S., Industrial and
Systems Engineering; Minor, Business, Virginia Polytechnic Institute and State University
(Virginia Tech) (2005). I would like to thank my family and friends for their continued
support. I would also like to thank the New England Law Review Staff for all of their hard
work.
1. See ABA SECTION OF ANTITRUST LAW, INTELLECTUAL PROPERTY AND
ANTITRUST HANDBOOK 34-35 (2007) [hereinafter ABA HANDBOOK] (explaining the debate
over which set of laws—intellectual property laws or antitrust laws—are more appropriate
for intellectual property-based lawsuits). While both sets of laws “seek to increase consumer
welfare through greater competition and innovation,” intellectual property laws promote
innovation by awarding inventors with an exclusionary period in which to practice their
invention. Id. at 1. Antitrust laws promote innovation in a different way. See id. Antitrust
laws limit the monopolistic powers of competitors by “restricting exclusionary behavior and
limiting rivals’ ability to coordinate their conduct.” Id. at 1-2.
2. See 476 F.3d 1337, 1349 (Fed. Cir. 2007).
3. Id.
4. S. REP. NO. 97-275, at 5 (1981), reprinted in 1982 U.S.C.C.A.N. 11, 15 (“The
creation of the Court of Appeals for the Federal Circuit will produce desirable uniformity in
this area of the law.”).
5. See infra Part IV.
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Dippin’ Dots are a “unique ice cream product.” 6 The “novelty ice
cream” is “cryogenically prepared.” 7 Dippin’ Dots come in many different
flavors and it is a favorite among adults and children of all ages. 8
Currently, Dippin’ Dots are packaged and shipped all around the world. 9
Curt D. Jones (“Jones”) is the inventor of Dippin’ Dots ice cream and, at
the initiation of this lawsuit, held the patent for the process of creating
Dippin’ Dots ice cream. 10
DDI brought suit against the alleged patent infringers, Mini Melts,
Inc. and Frosty Bites Distribution (collectively, “MMI”), for violating
DDI’s patent rights. 11 MMI denied the claims of infringement and
defended on the grounds that DDI fraudulently acquired the Dippin’ Dots
patent and was thus liable for inequitable conduct. 12 In addition, MMI
counterclaimed under section 2 of the Sherman Act. 13 Specifically, section
2 states that “[e]very person who shall monopolize, or attempt to
monopolize, or combine or conspire with any other person or persons, to
monopolize any part of the trade or commerce . . . shall be deemed guilty
of a felony.” 14
The sale of an invention, made prior to the critical date, 15 can be
grounds for patent application rejection. 16 As a basis for unenforceability,
MMI argued that DDI misrepresented information in front of the United
States Patent and Trademark Office (the “PTO”) relating to when the initial
6. Dippin’ Dots, 476 F.3d at 1339. Dippin’ Dots are made from “super-cold freezing
methods to make little beads of ice cream.” Dippin’ Dots, About Dippin’ Dots . . .,
http://www.dippindots.com/company/ (last visited Jan. 9, 2010).
7. Dippin’ Dots, 476 F.3d at 1340. “The mixture is frozen almost instantly in liquid
nitrogen, a common element in the atmosphere used commercially for flash freezing.”
Dippin’ Dots, supra note 6. This type of “flash-freezing . . . lock[s] in flavor and freshness.”
Id.
8. Dippin’ Dots, supra note 6.
9. Id.
10. U.S. Patent No. 5,126,156 (filed Sept. 18, 1991); Dippin’ Dots, supra note 6.
11. See Dippin’ Dots, 476 F.3d at 1341 & n.1.
12. Id. “A patent may be rendered unenforceable for inequitable conduct if an applicant,
with intent to mislead or deceive the examiner, fails to disclose material information or
submits materially false information to the PTO during prosecution.” Digital Control, Inc. v.
Charles Mach. Works, 437 F.3d 1309, 1313 (Fed. Cir. 2006).
13. 15 U.S.C. § 2 (2006); Dippin’ Dots, 476 F.3d at 1341.
14. 15 U.S.C. § 2.
15. See DONALD S. CHISUM ET AL., PRINCIPLES OF PATENT LAW: CASES AND MATERIALS
336 (3d ed., Found. Press 2004). The critical date is marked at exactly one year before the
patent application is filed. Id.
16. See 35 U.S.C. §§ 102(b), 132(a) (2006).
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product sales took place. 17 Jones told the PTO, during prosecution, 18 that
“[t]he initial sales were in March of 1988” when it was undisputed that the
product, or some form thereof, was first sold “on July 24, 1987.” 19
A jury in the United States District Court for the Northern District of
Texas found that the patent was unenforceable due to inequitable
conduct. 20 In addition, the jury found that DDI was liable for MMI’s
antitrust counterclaim under section 2 of the Sherman Act. 21 On appeal, the
CAFC affirmed the jury’s finding of inequitable conduct but reversed the
Sherman Act counterclaim, 22 reasoning that the requisite intent to defraud
the PTO under the Sherman Act was not present. 23 The CAFC should not
have made this reversal.
This Comment will analyze the level of intent needed for antitrust
liability under section 2 of the Sherman Act and why the CAFC reasoned
that the level of intent was not sufficient in Dippin’ Dots. This Comment
will further discuss how the CAFC erred in its reversal of MMI’s antitrust
counterclaim. In this context, this Comment will argue that DDI did in fact
have the requisite intent required under section 2 of the Sherman Act.
Part I of this Comment will provide a modern perspective on the law
of inequitable conduct and antitrust liability. Part II will lay out the
procedural posture, facts, and holding of Dippin’ Dots. Part III will
examine what is actually needed to prove deceptive intent—under the
second prong of the test in a Walker Process claim 24 —and why the CAFC
reasoned that the misrepresentation and omission of facts in this case were
not enough. 25 Finally, Part IV will analyze how the CAFC erred. 26
17. Dippin’ Dots, 476 F.3d at 1340-41.
18. CHISUM ET AL., supra note 15, at 73. “The process of obtaining a patent is called
patent prosecution.” Id. (emphasis omitted).
19. Dippin’ Dots, 476 F.3d at 1340-41 (alteration in original).
20. Id. at 1341-42. There were other reasons that the patent was invalid, such as
obviousness, but these other reasons are not important for the purposes of this Comment. Id.
at 1343.
21. Id. at 1342.
22. Dippin’ Dots, 476 F.3d at 1349.
23. See id. at 1346-49; see also Nobelpharma AB v. Implant Innovations, Inc., 141 F.3d
1059, 1068 (Fed. Cir. 1998) (“A patentee who brings an infringement suit may be subject to
antitrust liability for the anti-competitive effects of that suit if the alleged infringer (the
antitrust plaintiff) proves . . . that the asserted patent was obtained through knowing and
willful fraud . . . .”).
24. See Walker Process, 382 U.S. at 175-78 (holding that a patent applicant can be
subject to § 2 Sherman Act antitrust liability given the requisite deceptive intent and
materiality of the fraud); infra Part III.
25. See Dippin’ Dots, Inc. v. Mosey, 476 F.3d 1337, 1349 (Fed. Cir. 2007).
26. See infra Part IV.
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ANALYSIS
I. Status of the Law
The CAFC has exclusive jurisdiction over all United States District
Court appeals in patent law. 27 In order to obtain a patent, there are certain
requirements that one must satisfy. 28 There are also certain statutory bars,
which can nullify a patent issuance. 29 The Patent Act states that a patent
will not be issued if the claimed invention was put on sale prior to one year
before the date of the patent filing. 30 This is called the “on-sale bar.”
It can be very hard for the PTO to investigate the detailed
ramifications of each patent application pertaining to the on-sale bar;
therefore, the PTO must rely on the disclosures that the patentee makes to
the PTO examiner. 31 To ensure that the goals of the U.S. patent system 32
are being carried out, the consequences for misrepresenting information in
front of the PTO can be rather harsh. 33 The penalty for such
misrepresentation is liability under the law of inequitable conduct. 34 In
27. Rochelle Cooper Dreyfuss, The Federal Circuit: A Case Study in Specialized
Courts, 64 N.Y.U. L. REV. 1, 3 (1989) (“The new court . . . hears patent appeals from
United States District Courts and from the Patent and Trademark Office (PTO).”).
28. CHISUM ET AL., supra note 15, at 72-73 (“[Patent] [e]xamination is conducted to
ensure that the claimed invention is adequately disclosed, new, nonobvious, useful, and
within at least one of the statutory classes of patentable subject matter.”) (internal citations
omitted).
29. Id. at 363 (“[35 U.S.C.] § 102(b) prevents one from obtaining a patent on an
invention that was ‘on sale’ for more than one year before the patent application filing
date.”).
30. 35 U.S.C. § 102(b) (2000). The fact pattern in Dippin’ Dots deals with the on-sale
bar in 35 U.S.C. § 102(b) (2000). See Dippin’ Dots, 476 F.3d at 1341.
31. See Dippin’ Dots, 476 F.3d at 1346 (“The concealment of sales information can be
particularly egregious because, unlike the applicant’s failure to disclose, for example, a
material patent reference, the examiner has no way of securing the information on his
own.”). The “material patent reference” is also called “prior art,” which can prohibit a patent
from being granted. See id.; 35 U.S.C. §§ 102(b), 301 (2007).
32. U.S. CONST. art. I, § 8 (“[t]o promote the Progress of Science and useful Arts, by
securing for limited Times to Authors and Inventors the exclusive Right to their respective
Writings and Discoveries”).
33. See Nobelpharma AB v. Implant Innovations, Inc., 141 F.3d 1059, 1069 (Fed. Cir.
1998) (“Inequitable conduct in fact is a lesser offense than common law fraud, and includes
types of conduct less serious than ‘knowing and willful’ fraud.”).
34. Digital Control, Inc. v. Charles Mach. Works, 437 F.3d 1309, 1313 (Fed. Cir. 2006).
“A patent may be rendered unenforceable for inequitable conduct if an applicant, with intent
to mislead or deceive the examiner, fails to disclose material information or submits
materially false information to the PTO during prosecution.” Id. The future of fraudulent
patent procurement is changing with pending legislation. See H.R. 1908, 110th Cong. (as
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certain circumstances, a patentee may be subject to antitrust liability for
defrauding the PTO. 35 The type of antitrust liability that MMI
counterclaimed with in Dippin’ Dots is called Walker Process liability,
which received its name from the seminal case, Walker Process Equipment,
Inc. v. Food Machinery & Chemical Corp. 36 Depending on the type of
remedy that a patent infringer seeks, “relief is meant to undo existing
violations, prevent future specific violations, or deter violations which are
difficult to detect.” 37 The Dippin’ Dots fact pattern exemplifies the type
that is “difficult to detect.” 38
There are two prongs that a party asserting inequitable conduct must
prove. 39 The first prong, materiality, is satisfied if the misrepresentation
consists of “any information that a reasonable examiner would substantially
likely consider important in deciding whether to allow an application to
issue as a patent.” 40 To prove the second prong, deceptive intent, an
passed by House, Sept. 7, 2007). If made into law, this legislation will insert an inequitable
conduct provision into 35 U.S.C. § 282. Compare H.R. 1908, with 35 U.S.C. § 282 (2000).
35. Dippin’ Dots, 476 F.3d at 1346 (“Proof that a patentee has ‘obtained the patent by
knowingly and willfully misrepresenting facts to the Patent Office . . . [is] sufficient to strip
[the patentee] of its exemption from the antitrust laws.’”) (quoting Walker Process Equip.,
Inc. v. Food Mach. & Chem. Corp., 382 U.S. 172, 177 (1965)); Nobelpharma, 141 F.3d at
1070 (“[O]missions, as well as misrepresentations, may in limited circumstances support a
finding of Walker Process fraud.”).
36. Walker Process, 382 U.S. at 174 (holding that fraudulent patent procurement can be
a basis for antitrust liability).
37. WARD S. BOWMAN, JR., PATENT AND ANTITRUST LAW: A LEGAL AND ECONOMIC
APPRAISAL 239 (1973) (emphasis added).
As with other legal obligations, the effectiveness of patent law and
antitrust law, or the effectiveness of the resolutions of conflict between
these laws, depends in very large measure upon the sanctions imposed
for their violation. Clarity, coherence, and consistency of the legal rules
to which these sanctions are applied are of course preconditions to
effective relief. This is so whether the relief is meant to undo existing
violations, prevent future specific violations, or deter violations which
are difficult to detect.
Id.
38. See supra note 31.
39. See Digital Control, Inc., 437 F.3d at 1313 (stating that inequitable conduct is
proven “by balancing the levels of materiality and intent”).
40. Dayco Prod., Inc. v. Total Containment, Inc., 329 F.3d 1358, 1363 (Fed. Cir. 2003)
(quoting Akron Polymer Container Corp. v. Exxel Container, Inc., 148 F.3d 1380, 1382
(Fed. Cir. 1998) (emphasis omitted)).
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infringer must show an actual or implied intent to defraud the PTO. 41 To
establish inequitable conduct, both prongs are necessary, but a stronger
showing of one can substitute for a weaker showing of the other. 42
For a patentee to be subjected to a Walker Process antitrust claim, the
same two prongs, materiality and deceptive intent, are required, as in an
inequitable conduct defense; however, Walker Process liability has stricter
damage implications and is thus harder to prove. 43 Walker Process claims
require a higher showing of both prongs to determine liability. 44 Further,
Walker Process liability is used as an offensive claim rather than a
defensive claim. 45
The first obstacle that a Walker Process claimant must overcome is
the first element of Walker Process liability, which encompasses the two
prongs: materiality and deceptive intent. 46 To complete the Walker Process
inquiry, such that the fraudulent party will be liable for treble damages
41. Paragon Podiatry Lab., Inc. v. KLM Labs., Inc., 984 F.2d 1182, 1189-90 (Fed. Cir.
1993) (“‘[S]moking gun’ evidence is not required in order to establish an intent to deceive . .
. . Rather, this element of inequitable conduct, must generally be inferred from the facts and
circumstances surrounding the applicant’s overall conduct.”).
42. Digital Control, Inc., 437 F.3d at 1313 (Fed. Cir. 2006) (“The court must . . .
determine whether the questioned conduct amounts to inequitable conduct by balancing the
levels of materiality and intent, ‘with a greater showing of one factor allowing a lesser
showing of the other.’”) (quoting Union Pac. Res. Co. v. Chesapeake Energy Corp., 236
F.3d 684, 693 (Fed. Cir. 2001)).
43. See Nobelpharma AB v. Implant Innovations, Inc., 141 F.3d 1059, 1070-71 (Fed.
Cir. 1998) (“Simply put, Walker Process fraud is a more serious offense than inequitable
conduct.”); see 15 U.S.C. § 2 (2006).
44. Dippin’ Dots, Inc. v. Mosey, 476 F.3d 1337, 1346 (Fed. Cir. 2007).
A party who asserts such a fraudulently obtained patent may be subject
to an antitrust claim. If a patentee asserts a patent claim and the
defendant can demonstrate the required fraud on the PTO, as well as
show that “the other elements necessary to a § 2 case are present,” the
defendant-counterclaimant is entitled to treble damages under the
antitrust laws.
Id. (quoting Walker Process Equip., Inc. v. Food Mach. & Chem. Corp., 382 U.S. 172, 174
(1965)).
45. See Nobelpharma, 141 F.3d at 1070 (“Inequitable conduct is thus an equitable
defense in a patent infringement action and serves as a shield, while a more serious finding
of fraud potentially exposes a patentee to antitrust liability and thus serves as a sword.”).
46. ABA HANDBOOK, supra note 1, at 325. The first element that must be proven in a
Walker Process claim, is that “the patentee intentionally committed fraud on the PTO by
misrepresenting or omitting material facts in the course of prosecuting the patent
application.” Id.
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under the Clayton Act, 47 the claimant must prove elements other than
materiality and deceptive intent. The remaining elements that must be
proven in a Walker Process claim are:
(2) [T]he patentee utilized the fraudulently procured patent to
exercise monopoly power in a properly defined relevant antitrust
market; (3) the party asserting the Walker Process fraud claim
suffered or is threatened with injury to its business or property,
and otherwise has standing to sue under Section 4 or 16 of the
Clayton Act; and (4) the party asserting the claim suffered
reasonably quantifiable damages. 48
The first element—which is comprised of the two sub-elements, deceptive
intent and materiality—is only “the beginning, not the end, of the
inquiry.” 49
II. Dippin’ Dots, Inc. v. Mosey
A. Facts and Procedural History
Dippin’ Dots, Inc., was the holder of U.S. Patent No. 5,126,156 50 (the
“‘156 Patent”) for the process of making frozen novelty ice cream sold in
amusement parks, stadiums, and malls. 51 DDI brought an action against
MMI for infringing upon DDI’s patent by using and selling a product made
by the same process. 52 MMI counterclaimed under Walker Process
antitrust
47. See Unitherm Food Sys., Inc. v. Swift-Eckrich, Inc., 375 F.3d 1341, 1345 n.2 (Fed.
Cir. 2004).
Private antitrust suits, including this one, technically proceed under
Section 4 of the Clayton Act, which states, again in pertinent part:
“[A]ny person who shall be injured in his business or property by reason
of anything forbidden in the antitrust laws may sue therefor in . . .
district court of the United States . . . and shall recover threefold the
damages by him sustained, and the cost of suit, including a reasonable
attorney’s fee.”
Id. (quoting 15 U.S.C. § 15(a) (2000)); see Walker Process, 382 U.S. at 176; see infra note
124.
48. ABA HANDBOOK, supra note 1, at 325-26.
49.See Dippin’ Dots, 476 F.3d at 1348.
50. U.S. Patent No. 5,126,156 (filed Sept. 18, 1991).
51. Dippin’ Dots, 476 F.3d at 1340; Dippin’ Dots, Inc., supra note 6.
52. Dippin’ Dots, 476 F.3d at 1341.
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liability, 53 arguing that DDI fraudulently acquired its patent. 54 MMI argued
that Jones sold and gave out free samples of Dippin’ Dots before the
critical date and misrepresented this information to the PTO. 55
Jones testified that when he sold the ice cream prior to one year
before the critical date, he was only practicing the first three steps in claim
one of the patented method. 56 Further, Jones stated that his purpose in
selling his product was to “get . . . test-marketing information” from the
Festival Market, “and not to further develop technical aspects of his
product such as particular temperature ranges for storage and service.” 57
Initially, Jones’s patent application did not include the serving step—
the last step in the claimed method. 58 Because of this, the initial patent
application was rejected. 59 The Board of Patent Appeals affirmed the
rejection and in response, Jones amended his application to include the
serving step. 60
After a jury trial, the United States District Court for the Northern
District of Texas held that DDI’s patent was invalid for obviousness,
unenforceable due to DDI’s inequitable conduct, and that DDI was liable
under MMI’s Walker Process liability counterclaim. 61 The CAFC upheld
the jury’s invalidity for obviousness and unenforceability due to inequitable
conduct findings; however, the CAFC reversed the jury’s finding of Walker
Process liability. 62 As reasoning for its reversal regarding Walker Process
liability, the CAFC noted its disagreement with the district court’s finding
that there was a high level of intent. 63
53. See Walker Process Equip., Inc. v. Food Mach. & Chem. Corp., 382 U.S. 172, 174
(1965).
54. Dippin’ Dots, 476 F.3d at 1341.
55. Id. at 1340, 1342.
56. Id. at 1341. The issued patent included six steps in claim one: (1) preparing
composition; (2) dripping composition into chamber; (3) freezing into beads; (4) storing; (5)
bringing beads to edible temperature; and (6) serving beads. Id. at 1340; see also U.S. Patent
No. 5,126,156 (filed Sept. 18, 1991).
57. Dippin’ Dots, 476 F.3d at 1340.
58. Answer to Petition for Rehearing of Defendants-Cross Appellants at 2, Dippin’
Dots, Inc. v. Mosey, 476 F.3d 1337 (Fed. Cir. 2007) (Nos. 05-1330, -1582), 2007 WL
928767 (Mar. 14, 2007) [hereinafter Defendants-Cross Appellants Answer]; see ’156 Patent.
59. Defendants-Cross Appellants Answer, supra note 58, at 2.
60. Id.; see ’156 Patent.
61. Dippin’ Dots, 476 F.3d at 1342; see Dippin’ Dots, Inc. v. Mosey, No. Civ.A.3:96CV-1959L, 2005 WL 475262, at *1 (N.D. Tex. Feb. 18, 2005), rev’d, 476 F.3d 1337 (2007).
62. See Dippin’ Dots, 476 F.3d at 1346, 1348.
63. Id. at 1346 & n.4.
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B. The Reasoning and Law
In its holding, the CAFC examined the deceptive intent prong and the
materiality prong, which was necessary for the inequitable conduct defense
and Walker Process claim. 64 The CAFC, in affirming the inequitable
conduct finding, held that materiality was shown and the requisite intent to
deceive the PTO was present, which invalidated the patent. 65 However, the
level of intent fell short of what was needed for a Walker Process
counterclaim. 66
A Walker Process claimant cannot balance the two prongs; rather, the
claimant must prove each prong with independent evidence. 67 The CAFC
reversed the jury’s finding of liability under the Walker Process claim and
held that a claimant should prove that both prongs are satisfied,
independent of each other (without balancing). 68 The court held that more
than an omission of facts is required to prove the deceptive intent prong for
a Walker Process claim. 69 The court also held that a “false or clearly
misleading prosecution statement may permit an inference that the
statement was made with deceptive intent,” and reasoned that DDI’s
conduct did not have such an effect in this case. 70
III. What Is Needed to Prove Walker Process Liability and the
Court’s Reasoning as to Why DDI’s Conduct Was Not Sufficient
The CAFC’s reasoning as to why DDI’s conduct did not reach the
level of intent needed for a Walker Process claim was that the “fraud . . .
[was] built only upon DDI’s omission of the Festival Market sales from the
prosecution record.” 71 Dippin’ Dots examines Nobelpharma and Walker
64. Id. at 1346-48.
65. Id. at 1346 n.4 (“[I]n light of the high materiality of the nondisclosure, inequitable
conduct can still be found here even though the evidence reveals less than an egregiously
willful intent to deceive.”).
66. Id. at 1346 & n.4.
67. Nobelpharma AB v. Implant Innovations, Inc., 141 F.3d 1059, 1071 (Fed. Cir. 1998)
(stating that Walker Process liability “must be based on independent and clear evidence of
deceptive intent together with a clear showing of reliance, i.e., that the patent would not
have issued but for the misrepresentation or omission”).
68. Dippin’ Dots, Inc. v. Mosey, 476 F.3d 1337, 1348 (Fed. Cir. 2007).
69. Id. at 1347; see, e.g., Precision Instrument Mfg. Co. v. Auto. Maint. Mach. Co., 324
U.S. 806, 815 (1945); Hazel-Atlas Glass Co. v. Hartford-Empire Co., 322 U.S. 238, 245
(1944); Keystone Driller Co. v. Gen. Excavator Co., 290 U.S. 240, 247 (1933).
70. See Dippin’ Dots, 476 F.3d at 1347-48.
71. Id. at 1347. “The difference in breadth between inequitable conduct and Walker
Process fraud admits the possibility of a close case whose facts reach the level of
inequitable conduct, but not of fraud before the PTO. This is such a case.” Id.
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Process in great detail. 72 To explain what level of omission and
misrepresentation is needed to prove a Walker Process claim, a summary
of this analysis is necessary.
A. Walker Process and Its Application
The holding in Walker Process Equip., Inc. v. Food Mach. & Chem.
Corp. was essential in developing the idea that patentees can be subjected
to antitrust liability. 73
1. Walker Process Facts and Procedure
In Walker Process, the United States Supreme Court established that
fraudulent patent procurement can be a basis for antitrust liability. 74 The
alleged patent infringer counterclaimed, arguing that the patentee
“knowingly and willfully misrepresent[ed] facts to the Patent Office” 75
should subject the patentee to “a violation of the antitrust laws and . . . [a]
recovery of treble damages.” 76 The Court held that the alleged infringer
should have the chance “to prove the alleged fraud, and to establish the
necessary elements of the asserted [15 U.S.C.] § 2 violation.” 77
2. Application of Walker Process to Dippin’ Dots
The CAFC, in effect, did not allow MMI the chance “to prove the
alleged fraud.” 78 The court stated that the evidence did not show the
requisite level of intent for DDI to be liable under Walker Process. 79 MMI
did not produce enough evidence “affirmatively show[ing] DDI’s
fraudulent intent.” 80
B. Nobelpharma and Its Application
Nobelpharma discusses Walker Process fraud and is an example of an
alleged patent infringer successfully proving that the patentee was liable
under a Walker Process antitrust counterclaim. 81
72.
73.
74.
75.
76.
77.
78.
79.
80.
81.
1998).
See id. at 1347-48.
See 382 U.S. 172, 178 (1965).
See id.
Id. at 177.
Id. at 174.
Id. at 178.
Id.; see Dippin’ Dots, Inc. v. Mosey, 476 F.3d 1337, 1348-49 (Fed. Cir. 2007).
Dippin’ Dots, 476 F.3d at 1348.
Id.
See Nobelpharma AB v. Implant Innovations, Inc., 141 F.3d 1059, 1073 (Fed. Cir.
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1. Facts and Procedure of Nobelpharma
In Nobelpharma, the patentee deleted references in a patent
application to a book which contained an explanation of the invention. 82
When the patentee brought suit for patent infringement, the alleged
infringer defended on the grounds of invalidity, unenforceability, and noninfringement. 83 The alleged infringer also counterclaimed with Walker
Process liability, based on the fact that the patentee “attempted to enforce a
patent that it knew was invalid and unenforceable.” 84 The CAFC affirmed
the Walker Process antitrust liability based on “the jury’s factual findings
that the patent was obtained through ‘ . . . knowing fraud upon, or
intentional misrepresentations to, the [PTO]’ . . . with the intent of
interfering directly with [the alleged infringer’s] ability to compete in the
relevant market.” 85 The CAFC, in Nobelpharma, stated that “a fraudulent
omission can be just as reprehensible as a fraudulent misrepresentation” 86
and affirmed the alleged infringer’s Walker Process counterclaim. 87
The CAFC stated that, in some circumstances, omissions and
misrepresentations can support a finding of Walker Process liability. 88 The
CAFC said that “an omission such as a failure to cite a piece of prior art . . .
must show evidence of fraudulent intent” in order to claim Walker Process
fraud. 89 The jury was instructed that a finding of fraud could be based on a
few different things: “a knowing, willful and intentional act”; a
“misrepresentation” before the PTO; or an “omission” of fact before the
PTO. 90 The court noted that the jury instruction was not inconsistent with
previous opinions. 91
82.
83.
84.
85.
Id. at 1062; see 35 U.S.C. § 112 (2006).
Nobelpharma, 141 F.3d at 1062.
Id.
Id. at 1066 (quoting Nobelpharma AB v. Implant Innovations, Inc., 930 F. Supp.
1241, 1257 (N.D. Ill. 1996)) (emphasis added).
86. Id. at 1070.
87. Id. at 1073.
88. Id. at 1070.
89. See Nobelpharma, 141 F.3d at 1071.
90. Id. at 1070.
91. Id.
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2. Application of Nobelpharma to Dippin’ Dots
The CAFC distinguished Dippin’ Dots from Nobelpharma by holding
that, in Dippin’ Dots, there was no evidence to support the jury’s finding of
Walker Process fraud. 92 The court said “[t]hat intent cannot be shown
merely from the absence of evidence which would come about from the
jury’s discounting DDI’s explanation.” 93
C. Misrepresentation and Omission
Proving that there was a “misrepresentation or omission” can be
enough to satisfy the two-pronged test for Walker Process fraud.. 94 The
misrepresentation or omission must show a clear intent to deceive the
examiner in addition to a clear showing of reliance on the issuance of the
patent—in other words, “but for the misrepresentation or omission” the
patent would not have issued. 95 In Dippin’ Dots, MMI “established
materiality even under this strict threshold, since the evidence supports a
finding that the patent would not have issued if DDI had disclosed the
Festival Market sales to the PTO.” 96 Thus, only the intent prong will be
discussed below.
1. The Intent Required of Misrepresentation and Omission
Intent “is the most difficult element to prove” in a Walker Process
fraud case. 97 As to intent, “[a] mere failure to cite a reference to the PTO
will not suffice.” 98 This does not mean that an omission is always the same
thing as a failure to cite a reference. 99 Omissions and misrepresentations
can, however, have qualities of deceptive intent. 100 In Dippin’ Dots, the
92. Dippin’ Dots, Inc. v. Mosley, 476 F.3d 1337, 1348 (Fed. Cir. 2007) (“[T]he
defendants submitted no evidence of their own—aside from the absence of the Festival
Market sales from the prosecution record—which affirmatively shows DDI’s fraudulent
intent . . . . There is no similarly strong evidence that the omission in this case was
fraudulent.”).
93. Id.
94. See Nobelpharma, 141 F.3d at 1070-71.
95. Id. at 1071.
96. Dippin’ Dots, 476 F.3d at 1347.
97. See Unitherm Food Sys., Inc. v. Swift-Eckrich, Inc., 375 F.3d 1341, 1360 (Fed. Cir.
2004); see also ABA HANDBOOK, supra note 1, at 325-26.
98. See Nobelpharma, 141 F.3d at 1071.
99. Dippin’ Dots, Inc. v. Mosley, 476 F.3d 1337, 1347 (Fed. Cir. 2007).
100. See cases cited supra note 69.
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court said that for the omission of the Festival Market sales to rise to the
level of Walker Process fraud, there must have been separate evidence
proving this intent. 101
Sometimes, omissions and misrepresentations satisfy the level of
intent required for Walker Process fraud. 102 The CAFC, in Dippin’ Dots
explains that “[a] false or clearly misleading prosecution statement may
permit an inference that the statement was made with deceptive intent.” 103
There are many cases in which a misrepresentation was of the requisite
caliber to prove fraud. 104 The CAFC, in Dippin’ Dots, distinguished Walker
Process, Nobelpharma, and other cases, holding that the level of intent was
not sufficient. 105
IV. The CAFC Erred in Their Decision
The CAFC erred in two ways. First, the court, in justifying the
affirmation of the inequitable conduct defense, said that the “combination
of action and omission” 106 was sufficient intent for inequitable conduct, but
failed to see that this “action” was really a misrepresentation. Second, the
court disregarded important policy considerations favoring the affirmance
of the Walker Process counterclaim.
A. Jones’s Action was Really a Misrepresentation
Jones not only initially omitted the Festival Market sales in patent
prosecution, but he also misrepresented the sales when using them to prove
patent validity. 107 As noted, under 35 U.S.C. § 102(b), a patent will be
unenforceable if a defendant can prove that the patentee sold the product
prior to the critical date, which is marked at one year before the filing of
the patent application. Jones omitted from his initial prosecution statements
that he sold his product prior to one year before his patent application
filing; and he also told the PTO that he sold his product “on or after the
critical date.” 108 This was a completely false statement and thus, it
101. Dippin’ Dots, 476 F.3d at 1347.
102. Nobelpharma, 141 F.3d at 1070.
103. Dippin’ Dots, 476 F.3d at 1347 (“[E]vidence may establish that a patent applicant
knew one fact and presented another, thus allowing the factfinder to conclude that the
applicant intended by the misrepresentation to deceive the examiner.”).
104. See cases cited supra note 69.
105. Compare Walker Process Equip., Inc. v. Food Mach. & Chem. Corp., 382 U.S. 172,
178 (1965), and Nobelpharma, 141 F.3d at 1070, 1073, with cases cited supra note 69.
106. Dippin’ Dots, Inc. v. Mosley, 476 F.3d 1337, 1346 (Fed. Cir. 2007).
107. Dippin’ Dots, 476 F.3d at 1340-41.
108. Id. at 1341 (“It is undisputed that the Festival Market sales were never disclosed to
the Patent and Trademark Office (“PTO”) during prosecution of the ’156 patent.”). Id. at
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amounted to a misrepresentation. 109 MMI clearly evidenced the requisite
level of intent by demonstrating the omission of the Festival Market sales
in conjunction with the misrepresented declaration that the sales began in
March of 1988. 110
Jones argued that the first time he sold the “commercially exploited
method” was in March of 1988. 111 As such, he argued that what he sold
prior to March of 1988 did not include all of the steps in the first claim of
the patent, because he had not acquired two freezers that “allowed him to
work within the specific temperature ranges.” 112 This is not a valid
argument in light of what the last three steps of claim one of the patent
were: storing, bringing, and serving. 113 Jones did practice the last three
1340-41.
109. See Defendants-Cross Appellants Answer, supra note 58, at 4 (“Jones thus
knowingly made an affirmative, highly material false statement to the patent examiner in a
sworn declaration during the prosecution of DDI’s patent.”). Silence itself does not
constitute fraud, although one who misrepresents a material fact is guilty of fraudulent
concealment. 37 C.J.S. Fraud § 218 (1943).
110. See Dippin’ Dots, Inc. v. Mosley, 476 F.3d 1337, 1340-41 (Fed. Cir. 2007).
It is undisputed that the Festival Market sales were never disclosed to
the Patent and Trademark Office ("PTO") during prosecution of the
’156 patent. The declaration of commercial success which ultimately
persuaded the examiner to grant the patent contained a sworn statement
by Jones that “[t]he initial sales were in March of 1988,” which was on
or after the critical date.
Id.
111. Answer to the Petitions for Rehearing of Appellee Frosty Bites Distribution LLC
and Defendants-Cross Appellants Thomas R. Mosey, Dots of Fun, Int’l Laser Expressions,
Inc. (Also Known as I.L.E., Inc.), Defendant/Counterclaimant-Cross Appellant Nicholas
Angus, and Counterclaim Defendant-Cross Appellant Frosty Bites, Inc. (Now Known as
Mini Melts, Inc.) by Plaintiffs-Appellants at 3, Dippin’ Dots, Inc. v. Mosey, 476 F.3d 1337
(Fed. Cir. 2007) (Nos. 2005-1330, -1582), 2007 WL 928768 [hereinafter PlaintiffsAppellants Answer]. “[S]ome inventors may commercially exploit their inventions
relatively early in the development process by advertising or arranging to sell a new
invention even before it is ready to appear on the market.” Patrick J. Barrett, Note, New
Guidelines for Applying the On Sale Bar to Patentability, 24 STAN. L. REV. 730, 745 (1972).
112. Plaintiffs-Appellants Answer, supra note 111, at 3; see U.S. Patent No. 5,126,156
(filed Sept. 18, 1991).
113. Pfaff v. Wells Elecs., Inc., 525 U.S. 55, 62 (1998).
“The law does not require that a discoverer or inventor, in order to get a
patent for a process, must have succeeded in bringing his art to the
highest degree of perfection. It is enough if he describes his method
with sufficient clearness and precision to enable those skilled in the
matter to understand what the process is, and if he points out some
practicable way of putting it into operation.”
Id. (quoting The Telephone Cases, 126 U.S. 1, 536 (1888)). There are six total steps in claim
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steps: storing, bringing, and serving because customers were purchasing
and receiving free samples before the critical date. 114 In so many words,
Jones is trying to escape liability by saying that he did not practice these
steps, when in reality, he functionally did so.
Jones claims that the Festival Market sales did not amount to
practicing the last three steps because they did not embody the claimed
“commercially exploited method.” 115 However, this argument goes against
the definition and purpose of the on-sale bar. 116 The purpose of the on-sale
bar is to prohibit the patentee from gaining an:
undue advantage over the public by delaying to take out a patent,
inasmuch as he thereby preserves the monopoly to himself for a
longer period than is allowed by the policy of the law . . . . Any
attempt to use it for a profit, and not by way of experiment, for a
longer period than [one year] before the application, would
deprive the inventor of his right to a patent. 117
Therefore, DDI should be liable for antitrust liability under MMI’s Walker
Process counterclaim because Jones’s actions were in contravention of that
purpose.
Further, the CAFC, in Dippin’ Dots, contradicted itself. The court
held that the combination of an omission and a misrepresentation did not
rise to the level of intent needed for Walker Process antitrust liability. 118
one of the patent. Storing, bringing, and serving are the last three. See U.S. Patent No.
5,126,156 (filed Sept 18, 1991).
114. See Dippin’ Dots, 476 F.3d at 1340.
115. Plaintiffs-Appellants Answer, supra note 111, at 3. “[S]ome inventors may
commercially exploit their inventions relatively early in the development process by
advertising or arranging to sell a new invention even before it is ready to appear on the
market.” Barrett, supra note 111, at 745.
116. Under Pfaff:
the on-sale bar applies when two conditions are satisfied before the
critical date. First, the product must be the subject of a commercial offer
for sale. . . . Second, the invention must be ready for patenting. Th[e
ready for patenting] condition may be satisfied in at least two ways: by
proof of reduction to practice before the critical date; or by proof that
prior to the critical date the inventor had prepared drawings or other
descriptions of the invention that were sufficiently specific to enable a
person skilled in the art to practice the invention.
525 U.S. at 67-68. The first method of proving “ready for patenting” is what Dippin’ Dots
concerns. “A process is reduced to practice when it is successfully performed.” Id. at 57 n.2
(quoting Corona Cord Tire Co. v. Dovan Chem. Corp., 276 U.S. 358, 383 (1928)).
117. Pfaff, 525 U.S. at 64-65 (quoting Elizabeth v. Pavement Co., 97 U.S. 126, 137
(1877)).
118. Dippin’ Dots, Inc. v. Mosey, 476 F.3d 1337, 1346-48 (Fed. Cir. 2007). The omission
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This level of intent is defined by proof of independent evidence, “separable
from the simple fact of the omission.” 119 The court acknowledged this
independent evidence in the prior section of its opinion, analyzing
inequitable conduct, when it noted the “action.” 120 This “action,” of telling
the PTO, in “a sworn statement . . . that ‘[t]he initial sales were in March of
1988’” was really a misrepresentation. 121 The PTO relied on the
misrepresentation to its detriment, because, but for the sworn statement, the
PTO would not have issued the patent. 122 This misrepresentation meets the
requisite level of intent needed for a Walker Process claim. 123
1. Jones’s Misrepresentation Should Have Been Subjected to
Antitrust Law
The court would better promote the purpose of the U.S. patent system
by allowing a fact pattern such as the one in Dippin’ Dots to be analyzed
under the remaining elements of the Walker Process liability inquiry. 124
Allowing the claim to stand against the initial Walker Process two-pronged
test would allow the real fraud fact patterns to be separated from the ones
that do not rise above the level of inequitable conduct. 125 Dippin’ Dots is
and misrepresentation combination was enough intent for inequitable conduct, but not
enough intent for Walker Process liability. Id.
119. Id. at 1347.
120. See id. at 1346.
121. Id. at 1341, 1346. “[F]raudulent misrepresentation” is defined as “[a] false statement
that is known to be false or is made recklessly . . . and that is intended to induce a party to
detrimentally rely on it.” BLACK’S LAW DICTIONARY 838-39 (8th ed. 2005).
122. Dippin’ Dots, 476 F.3d at 1341 (“The declaration of commercial success . . .
ultimately persuaded the examiner to grant the patent . . . .”).
123. Id. at 1346. “Proof that a patentee has ‘obtained the patent by knowingly and
willfully misrepresenting facts to the Patent Office . . . [is] sufficient to strip [the patentee]
of its exemption from the antitrust laws.’ A party who asserts such a fraudulently obtained
patent may be subject to an antitrust claim.” Id. (citations omitted) (quoting Walker Process
Equip., Inc. v. Food Mach. & Chem. Corp., 382 U.S. 172, 177 (1965)).
124. See ABA HANDBOOK, supra note 1, at 325-26. The remaining elements that must be
proven in a Walker Process claim are:
(2) [T]he patentee utilized the fraudulently procured patent to exercise
monopoly power in a properly defined relevant antitrust market; (3) the
party asserting the Walker Process fraud claim suffered or is threatened
with injury to its business or property, and otherwise has standing to sue
under Section 4 or 16 of the Clayton Act; and (4) the party asserting the
claim suffered reasonably quantifiable damages.
Id. “Fraudulent acquisition of the asserted patent strips the Walker Process defendant of its
antitrust immunity, but that is the beginning, not the end, of the inquiry.” Dippin’ Dots, 476
F.3d at 1348.
125. See generally ABA HANDBOOK, supra note 1, at 342-51 (explaining situations—
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an example of such a case. The rest of the Walker Process antitrust liability
inquiry would provide a perfect medium to distinguish cases that should
and should not be decided under the theories of antitrust law. 126 The
CAFC’s reversal has the effect of prohibiting fact patterns, such as the type
in Dippin’ Dots, from ever reaching the rest of the antitrust inquiry. 127
The other elements in a Walker Process claim would “appraise the
exclusionary power of the illegal patent claim in terms of the relevant
market for the product involved.” 128 In other words, the true test of whether
there should be antitrust liability—assuming materiality and fraudulent
intent have been established—is to analyze such a fact pattern under the
entire Walker Process paradigm, not just the first part. Allowing this case
to pass the initial two-pronged test of a Walker Process claim would
subject it to the types of inquiries that should govern antitrust claims. 129
These inquiries are rooted in the policy behind restricting unfair
monopolies. 130
predatory or exclusionary conduct, monopoly power, and standing/antitrust injury—in
which antitrust law is used to decide such fact patterns).
126. See David A. Balto & Andrew M. Wolman, Intellectual Property and Antitrust:
General Principles (2003), reprinted in INTELLECTUAL PROPERTY ANTITRUST 9, at 14-15
(Practising Law Institute 2006) (“The economic rationale behind a free market economy is
that freely operating competitive markets will result in the most efficient allocation of a
nation’s scarce resources and will bring consumers the widest variety of choices and the
lowest possible prices.”).
127. See Dippin’ Dots, 476 F.3d at 1348-49.
128. Walker Process Equip., Inc. v. Food Mach. & Chem. Corp., 382 U.S. 172, 177
(1965).
129. See ABA HANDBOOK, supra note 1, at 34-35, 325-26 (“[T]he purpose of the antitrust
laws is to protect and encourage competition between rivals.”).
130. See James B. Kobak, Jr., Standard Setting, IP and Antitrust, in INTELLECTUAL
PROPERTY ANTITRUST, supra note 126, at 194 (“The antitrust laws are designed to maximize
consumer welfare by prohibiting anticompetitive business practices.”) (emphasis added); cf.
Balto & Wolman, supra note 126, at 14-15 (“The economic rationale behind a free market
economy is that freely operating competitive markets will result in the most efficient
allocation of a nation’s scarce resources and will bring consumers the widest variety of
choices and the lowest possible prices.”). The United States Supreme Court held that:
[P]rivate suits may be instituted under § 4 of the Clayton Act to recover
damages for Sherman Act monopolization knowingly practiced under
the guise of a patent procured by deliberate fraud, cannot well be
thought to impinge upon the policy of the patent laws to encourage
inventions and their disclosure. Hence, as to this class of improper
patent monopolies, antitrust remedies should be allowed room for full
play.
Walker Process, 382 U.S. at 179-80.
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B. Missing Policy Considerations
In Dippin’ Dots, the Walker Process antitrust claim was based on a
misrepresentation in patent prosecution relating to the on-sale bar. 131 There
are four main polices behind the on-sale bar. 132 The four policies are: (1)
preventing the removal of inventions from the market—via the
exclusionary rights granted to a patent owner—to which the public has
become accustomed; 133 (2) that it is favorable, in order “[t]o promote the
[p]rogress of [s]cience and useful [a]rts[]” 134 to encourage “prompt and
widespread disclosure of new inventions to the public”; 135 (3) preventing
the inventor from exercising his ability to exclusively sell the invention for
longer than the allowable period; 136 and finally, (4) giving the “inventor a
reasonable amount of time . . . to determine whether a patent is a
worthwhile investment.” 137 The first three policies—harm from public
reliance, prompt disclosure, and restricting the exclusionary period—
comport with the idea that it is unfair to others if an inventor sells his
product longer than the allowable period. 138 The fourth policy balances the
public’s interests with the inventor’s interests—developing and perfecting
131. See Dippin’ Dots, 476 F.3d at 1344, 1346-48.
132. Gen. Elec. Co. v. United States, 654 F.2d 55, 61 (Ct. Cl. 1981) (predecessor Court to
the CAFC, along with the United States Court of Customs and Patent Appeals). “This set of
four policies that federal courts use to resolve on sale issues is lifted from a student law
review note.” Thomas K. Landry, Certainty and Discretion in Patent Law: The On Sale Bar,
The Doctrine of Equivalents, and Judicial Power in the Federal Circuit, 67 S. CAL. L. REV.
1151, 1164 (1994); see also Barrett, supra note 111, at 732-33.
133. Gen. Elec. Co., 654 F.2d at 61. “[T]here is a policy against removing inventions
from the public which the public has justifiably come to believe are freely available to all as
a consequence of prolonged sales activity.” Id.
134. U.S. CONST. art. I, § 8.
135. Gen. Elec. Co., 654 F.2d at 61.
136. Id. “The ‘on sale’ bar forces the inventor to choose between seeking patent
protection promptly following sales activity or taking his chances with his competitors
without the benefit of patent protection.” Id. (quoting Barrett, supra note 111, at 734).
137. Id. “This benefits the public because it tends to minimize the filing of inventions of
only marginal public interest.” Id.
138. See Barrett, supra note 111, at 733-34. Selling a product longer than the allowed
time frame creates an unfair monopoly which allows the patentee the “power to control
prices to the public harm.” 54A AM. JUR. 2D Monopolies, Restraints of Trade, and Unfair
Trade Practices § 781 (2007).
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the invention. 139 At first glance, the value of the fourth policy outweighs
the first three in terms of value to the patentee; however, in Dippin’ Dots
that was not the case. 140
1. Jones Extended the Period of Exclusive Patent Rights in
Violation of the On-Sale Bar Policy Considerations.
It was Jones’s purpose to “get . . . test-marketing information” from
the Festival Market sales, “and not to further develop technical aspects of
his product such as particular temperature ranges for storage and
service.” 141 In patent law, there is an exception to the on-sale bar, called the
“experimental use doctrine.” 142 Jones did not satisfy this exception nor
does he claim the exception. 143 The Festival Market sales were not
experimental, according to the boundaries of the experimental use
doctrine. 144 The court stated the following:
The customers were permitted to leave with the product and
were not restricted by any kind of confidentiality agreement.
Jones later testified that his main goal at the Festival Market was
to ‘get . . . test-marketing information’ and not to further develop
technical aspects of his product such as particular temperature
ranges for storage and service. 145
139. Barrett, supra note 111, at 736. “The 1-year grace period provided for by Congress
in [35 U.S.C.] § 102(b) represents a balance between these competing interests.” Gen. Elec.
Co. v. United States, 654 F.2d 55, 61 (Ct. Cl. 1981).
140. See infra notes 141-153 and accompanying text. The fourth policy would be the
inventor’s strongest argument because, in the end, developing and perfecting the invention
promotes the progress of the science and arts. See Barrett, supra note 111, at 733; see also
U.S. CONST. art. I, § 8.
141. Dippin’ Dots, Inc. v. Mosey, 476 F.3d 1337, 1340 (Fed. Cir. 2007).
142. CHISUM, supra note 15, at 349. The experimental use doctrine provides an exception
to the on-sale bar implications. Id. This exception provides that, “[s]o long as [the inventor]
does not voluntarily allow others to make it and use it, and so long as it is not on sale for
general use, he keeps the invention under his own control, and does not lose his title to a
patent.” Elizabeth v. Pavement Co., 97 U.S. 126, 135 (1877). This was not the case in
Dippin’ Dots.
143. See Dippin’ Dots, 476 F.3d at 1340.
144. See Elizabeth, 97 U.S. at 135.
145. Dippin’ Dots, 476 F.3d at 1340.
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This type of conduct was not experimental. 146 As such, the Festival Market
sales did not further the science and useful arts, 147 but rather, they extended
the period that Jones could enjoy his patent rights. 148 In doing so, the
holding of Dippin’ Dots does not align with the goals of the United States
patent system: “To promote the Progress of Science and useful Arts.” 149
Not only did the Festival Market sales go against the thrust of the
U.S. patent system, 150 but they also violated the theory behind the
restriction of unfair monopolies. 151 The policy behind restricting the time
period that inventors can exclude others from making, using, or selling 152
the patented product is to eliminate the creation of unfair monopolies. 153
Patent laws are designed to give the inventor the exclusive right to
make, use, and sell 154 the patented product for a period starting on the
patent issue date and ending twenty years after the filing date. 155 By
wrongfully extending the period of exclusive patent rights—by
misrepresenting the Festival Market sales–Jones ensured that he was able
to exclusively sell Dippin’ Dots for longer than the allowable time. 156
146. See CHISUM, supra note 15, at 349.
147. See U.S. CONST. art. I, § 8.
148. The purpose of the on-sale bar is to prohibit the patentee from gaining:
“[A]n undue advantage over the public by delaying to take out a patent,
inasmuch as he thereby preserves the monopoly to himself for a longer
period than is allowed by the policy of the law . . . . Any attempt to use
it for a profit, and not by way of experiment, for a longer period than
two years before the application, would deprive the inventor of his right
to a patent.”
Pfaff v. Wells Elecs., Inc., 525 U.S. 55, 64-65 (quoting Elizabeth, 97 U.S. at 137).
149. Compare Dippin’ Dots, 476 F.3d at 1338, with U.S. CONST. art. I, § 8, cl. 8.
150. See Kobak, Jr., supra note 130, at 194 (“Intellectual property laws strive to promote
innovation and development . . . [by] confer[ring] exclusionary rights to intellectual
property owners.”); see also U.S. CONST. art. I, § 8.
151. See supra note 130; cf. ABA HANDBOOK, supra note 1, at 34-35 (“The antitrust laws
. . . encourage competition-including competition to innovate-by restricting exclusionary
behavior and limiting rivals’ ability to coordinate their conduct.”).
152. See 35 U.S.C. § 271(a) (2000).
153. See ABA HANDBOOK, supra note 1, at 1-2. “The antitrust laws act as a competitive
governor on the exercise of . . . intellectual property rights . . . . Section 2 of the Sherman
Act makes it unlawful . . . (1) to monopolize, (2) to attempt to monopolize, or (3) to
conspire to monopolize a relevant market.” Id. “[A] monopoly is the practical suppression
of effective business competition which thereby creates a power to control prices to the
public harm.” 54A AM. JUR. 2D Monopolies, Restraints of Trade, and Unfair Trade
Practices § 781 (1996).
154. See 35 U.S.C. § 271(a).
155. 60 AM. JUR. 2D Patents § 698 (2003).
156. See Dippin’ Dots, Inc. v. Mosey, 476 F.3d 1337, 1340-41 (Fed. Cir. 2007). If this
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The CAFC should not have reversed the jury’s Walker Process
finding because misrepresenting this type of sales information during
patent prosecution, like Jones did, is the exact type of conduct that Walker
Process claims were designed to protect against. 157
CONCLUSION
The CAFC erred in their reversal of MMI’s Walker Process
counterclaim. The court, in justifying the affirmation of the inequitable
conduct defense, said that the “combination of action and omission” 158 was
at a sufficient level of intent for inequitable conduct, but failed to see that
this “action” was really a misrepresentation. In reversing MMI’s Walker
Process counterclaim, the court opined that this conduct, as analyzed under
Walker Process, did not satisfy the level of intent needed for an antitrust
claim. 159 The court’s analysis had no basis because Jones’s statement did
satisfy the level of intent needed for Walker Process claims. 160 By
reversing MMI’s counterclaim, the court is opposing the purpose of the
patent law system and antitrust laws. The CAFC’s reversal restricts similar
fact patterns from ever reaching an antitrust inquiry. 161
Further, the court disregarded important policy considerations behind
the on-sale bar and the experimental use doctrine, instead favoring the
affirmation of the Walker Process counterclaim. DDI should not have been
allowed to use the Festival Market sales to its advantage 162 and then
lawsuit was never brought, and MMI or another party never brought an antitrust lawsuit or
declaratory judgment alleging that the Dippin’ Dots patent was invalid, then DDI would
have been able to sell his product for 227 days—almost two-thirds of an entire year—
longer, than if this information was disclosed. See id. While the author understands the
approach discussed in this Comment is a bright-line approach to enforcement of patent
rights, a clear, defined approach is necessary for consistency and integrity of the patent
system.
157. See id. The alleged infringer in the Walker Process case claimed—and won—based
on the idea that the patentee misrepresented information in front of the PTO and thus,
should be subject to the liability under section 4 of the Clayton Act for “any monopolistic
action taken under the fraudulent patent claim.” Walker Process Equip., Inc. v. Food Mach.
& Chem. Corp., 382 U.S. 172, 176 (1965).
158. Dippin’ Dots, 476 F.3d at 1346.
159. Id. at 1348.
160. Id. at 1347 (“[E]vidence may establish that a patent applicant knew one fact and
presented another, thus allowing the factfinder to conclude that the applicant intended by the
misrepresentation to deceive the examiner.”); see supra Part I.
161. See supra notes 124-130 and accompanying text.
162. See Graham v. John Deere Co. of Kan. City, 383 U.S. 1, 17-18 (1966). A frequently
invoked method of proving nonobviousness, which is an element that must be proven in
order to successfully prosecute a patent, is to show commercial success. Id. (“[C]ommercial
success . . . might be utilized . . . [a]s indicia of obviousness or nonobviousness.”).
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subsequently deny that disclosure of the sales was required. 163 The patent
system is based on furthering the science and useful arts, 164 but the system
has been carefully constructed so as to prevent inventors from benefiting
from a longer than statutorily allowable time frame to exclude others from
making, using, or selling 165 their product. 166 These policy considerations
both promote ingenuity and act as a safeguard against unfair monopolies.
In this situation, the antitrust law inquiry begins with the two-pronged
test—deceptive intent and materiality—but, by no means does it end
there. 167 To prove Walker Process liability, a claimant must prove the other
elements of the antitrust inquiry. 168 DDI misrepresented the Festival
Market sales, and thus, the CAFC should have allowed MMI the chance to
prove these other elements of fraud. That was where the real inquiry should
have been.
163.
164.
165.
166.
Dippin’ Dots, 476 F.3d at 1341.
U.S. CONST. art. I, § 8.
See 35 U.S.C. § 271(a) (2000).
Pfaff v. Wells Elecs., Inc., 525 U.S. 55, 63 (1998).
[T]he patent system represents a carefully crafted bargain that
encourages both the creation and the public disclosure of new and useful
advances in technology, in return for an exclusive monopoly for a
limited period of time. The balance between the interest in motivating
innovation and enlightenment by rewarding invention with patent
protection on the one hand, and the interest in avoiding monopolies that
unnecessarily stifle competition on the other, has been a feature of the
federal patent laws since their inception.
Id.
167. Dippin’ Dots, 476 F.3d at 1348. “Fraudulent acquisition of the asserted patent strips
the Walker Process defendant of its antitrust immunity, but that is the beginning, not the
end, of the inquiry.” Id.
168. See supra note 124.