Impact of Therasense: Defendant Denied Motion to Plead Inequitable Conduct

In Pixion, Inc. v. Citrix Systems, Inc., No. C 09-03496 (N.D. Cal. April 16, 2012), the court denied Citrix’s motion for leave to amend its Answer to plead the affirmative defense of inequitable conduct because Citrix could not “show that the USPTO would have rejected the” patents-in-suit even if the allegedly withheld reference had been disclosed.

Pixion’s patents allegedly covered “online conferencing and collaboration systems.”  Citrix alleged “that Pixion failed to disclose references to software named ‘CU-SeeMe’ in any patent applications to which the Patents-in-Suit claim priority or in the prosecutions of” two of the four patents-in-suit.  According to Citrix, deposition testimony of an inventor established that the CU-SeeMe software “incorporated all the claims in the patents-in-suit,” and “was material” and “not cumulative.”  Pixion responded that Citrix’s motion was futile because CU-SeeMe was disclosed to the USPTO in two of the patents-in-suit, and the same examiner had handled all four of the patents-in-suit.

The court agreed with Pixion.  Under Therasense, Inc. v. Becton, Dickinson and Co., 649 F.3d 1276 (Fed. Cir. 2011) (en banc), “Citrix would have to prove that “submission of the withheld item would have led to a rejection.'”  Here, Citrix could not make that proof with respect to the ’515 and ’191 patents, in which CU-SeeMe had not been disclosed.

The court noted that CU-SeeMe actually was disclosed in the ’515 and ’191 patents, “albeit not in an Information Disclosure Statement;” Pixion disclosed CU-SeeMe when it “swore behind a reference to prior art.”  And “[m]ore importantly, Pixion disclosed CU-SeeMe to the USPTO in its prosecution of the child patents,” the other two patents-in-suit.  Additionally, “in its prosecution of the child patents, Pixion submitted to the USPTO Citrix’s invalidity charts, which included CU-SeeMe.”  Further, “the child patents are derivative of the parent patents,” and Citrix had conceded that the children were “substantially similar” to their parents.

Thus, the court concluded that “Citrix will not be able to prove that CU-SeeMe was but-for material to the ’515 and ’191 Patents.”  Moreover, having found “the issue of but-for materiality dispositive,” the court stated that “it need not address intent to deceive.”  Citrix’s motion for leave to amend its Answer was denied.

In considering the impact of Therasense, this case is an interesting contrast to Touchtunes Music Corp. v. Rowe International Corp., in which allegations that the patent owner lied about prior art were so egregious that inequitable conduct could be plead, Therasense’s “but-for materiality” requirement notwithstanding.

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