In an appeal from the United States District Court for the District of Delaware, the Federal Circuit affirmed the district court’s finding that Belcher Pharmaceuticals, LLC (“Belcher”) engaged in inequitable conduct by withholding prior art from the Patent and Trademark Office (the “PTO”) during the prosecution of Belcher’s patent. This is a rare case since Therasense in which the Federal Circuit has affirmed a finding of inequitable conduct for failure to disclose prior art during prosecution of the relevant patent.
Lubby Holdings LLC v. Henry Chung, Appeal No. 2019-2286 (Fed. Cir. Sept. 1, 2021)
In an appeal from a district court judgment, the Federal Circuit reversed the damages award, finding there was insufficient evidence to establish compliance with the marking statute. The defendant, Chung, argued that the plaintiffs had sold unmarked products practicing the patented invention. The majority found: (i) Chung satisfied his initial burden of production—a low bar according to the majority—by identifying an unmarked product that was sold by plaintiffs, and alleged not to practice the patented invention; and (ii) the plaintiffs failed to satisfy their own burden of proof, failing to rebut with evidence that the identified unmarked product did not practice the patented invention. Unable to benefit from their products being deemed “marked” under § 287(a) to recover damages prior to the complaint being filed, the plaintiffs had to show they gave Chung actual notice under § 287(a) prior to the filing date. The majority determined that the plaintiffs had only ever previously said that Chung could not use the patented technology, but never previously notified Chung of any allegedly infringing activity. Because the plaintiffs did not previously notify Chung of any allegedly infringing activity, the majority determined that the plaintiffs failed to give Chung actual notice. Thus, the majority reversed the district court on damages, remanding for the district court to determine how many infringing products were sold since the complaint was filed and a reasonable royalty rate at which to calculate damages.
Judge Newman dissented, arguing that the jury’s findings regarding notice and damages should not have been overturned.