In a case analyzing the intent requirement for proving inequitable conduct after Therasense, the U.S. Court of Appeals for the Federal Circuit reversed a district court ruling of inequitable conduct, emphasizing that an applicant's knowledge of a reference's materiality cannot prove by itself that any subsequent non-disclosure was based on a deliberate decision.  1st Media LLC v. Electronic Arts Inc., Case No. 10-1435 (Fed. Cir., Sept. 13, 2012) (Linn, J.).

The patent-at-issue covered an entertainment system for use in purchasing and storing songs, videos and karaoke information.  Joseph Sawyer was the attorney who filed the patent application, and Scott Lewis was the named inventor who subsequently assigned the patent to 1st Media.  After receiving a notice of allowance but before paying the issue fee, Sawyer and Lewis received a search report for a corresponding European application that listed a category "Y" reference (meaning it was particularly relevant if combined with another category "Y" reference), and Office Actions for related U.S. cases that cited two additional references that were alleged to disclose similar elements as those recited in the claims of the patent-at-issue.  None of the three references had been cited by the examiner of the patent-at-issue, and Sawyer and Lewis did not disclose any of three references to the U.S. Patent and Trademark Office (PTO).

1st Media subsequently filed a patent infringement lawsuit against several defendants, including Electronic Arts Inc.  The defendants asserted a defense of inequitable conduct on the basis that Sawyer and Lewis did not disclose the three references to the PTO.  Sawyer and Lewis testified that they did not appreciate the materiality of any of the references and that their failure to disclose the references was due to an oversight with regard to the search report, and due to the fact that they believed that the technology of the related cases was distinct from the patent-at-issue with regard to the Office Actions.  The district court found that their explanations for non-disclosure were not credible and that it was appropriate to infer that they intended to deceive the PTO.  Accordingly, the district court concluded, prior to the Federal Circuit's en banc ruling in Therasense, that the patent was unenforceable because Sawyer and Lewis had committed inequitable conduct.  1st Media appealed.

On appeal, the Federal Circuit reviewed the district court's ruling under Therasense.  The Court stated that under Therasense, a defendant must prove that "(1) the patentee acted with the specific intent to deceive the PTO; and (2) the non-disclosed reference was but-for material."  The Court explained that intent to deceive from non-disclosure of a reference can not be inferred solely from knowledge of the reference and its materiality, but rather by showing that the applicant knew of the reference, knew that it was material and made a deliberate decision to withhold it.  The Court stated that it was not enough to argue carelessness, lack of attention, poor docketing or cross-referencing, or anything else that might be considered negligent or even grossly negligent. 

The Court reversed the district court and held that Sawyer and Lewis did not commit inequitable conduct because even if the record supported that Sawyer and Lewis "(1) knew of the references, (2) may have known they were material ... and (3) did not inform the PTO of them," it would still not be enough to prove that Sawyer and Lewis made a deliberate decision to withhold the references from the PTO.  Since the intent requirement of Therasense was not met, the Court did not address the materiality requirement.

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