United States: Misstatement in Prosecution? No Matter; Silence During Standard-Setting? That’s OK, Too!

Over a vigorous dissent, the U.S. Court of Appeals for the Federal Circuit has ruled that the plain meaning of a claim trumps even directly contradictory statements in the prosecution history of the patent and withholding information concerning one’s own patent portfolio from others in a standard-setting body is not necessarily actionable fraud. Rambus v. Infineon Technologies AG, Case Nos. 01-1449, -1583, -1604, -1641, 02-1174, -1192 (Fed. Cir. January 29, 2002).

Rambus develops and licenses memory technologies to companies that manufacture semiconductor memory devices and was a participant in the Joint Electron Device Engineering Council (JEDEC). As such, Rambus was in a position to influence the development of technical standards for synchronous dynamic random access memory (SDRAM) chips. Although it attended meetings and provided input into the standard-setting process, Rambus never disclosed that it had pending patent applications for claims that might cover devices designed to meet standards and that it was seeking to amend its applications to add claims to increase the scope of its patent coverage. The jury took a dim view of this behavior and found against Rambus on a fraud count, a verdict the district court declined to overturn.

Also, when adding certain claims during the prosecution of the patent in suit, the patent attorney representing Rambus characterized the claims as all containing particular limitations. In fact, it is plain from the wording of the claims themselves that only one of the several newly offered claims contained each of the recited limitations. In construing the claims, however, the district court accepted Infineon’s invitation to read the missing limitations into the claims based on the patent attorney’s representations to the U.S. Patent and Trademark Office. Based on the claim construction, the district court entered a judgment of non-infringement.

On the claim construction issue, the Federal Circuit held that the district court was incorrect as a matter of law to adopt a claim construction inconsistent with the plain meaning of the claim language, the attorney argument during prosecution notwithstanding: "The claim language itself controls the bounds of the claim, not a facially inaccurate remark during prosecution." The majority noted its belief that "a reasonable competitor would not rely on an untrue statement in the prosecution history over the express terms of the claims."

The Federal Circuit also reversed the district court’s denial of a motion to set aside the jury verdict of fraud, finding that "substantial evidence does not support the implicit jury finding that Rambus breached the relevant disclosure duty during its participation in the standards committee." The Court held that the evidence was not sufficient to find that Rambus acted fraudulently when it failed to disclose patent and patent application information to a standard-setting body.

In fact, the Court noted "a staggering lack of defining details" in the body’s patent policy.

Practice Note: Rambus is still the subject of an administrative complaint by the U.S. Federal Trade Commission (FTC) that alleged anti-competitive behavior in violation of Section 5 of the FTC Act. It remains to be seen what effect, if any, this decision will have on the FTC proceeding. The ruling of "no fraud" in this case is highly fact-specific, based on the particular rules governing the JEDEC. Companies involved in such standard-setting bodies should take away two lessons. First, look to the written patent policy for guidance as to what duty you may have to disclose your own patent position and conduct yourself accordingly. Second, consider what the policy should be and make sure you are comfortable with the level of duty imposed on you and others to disclose patent positions.