LIIBULLETIN-Patent

Semiconductor Energy Lab. Co. v. Samsung Elecs. Co., No. 98-1377, 99-1103, 2000 U.S. App. LEXIS 3164 (Fed. Cir. Mar. 2, 2000).

INEQUITABLE CONDUCT - MATERIALITY - INTENT TO MISLEAD - SEMICONDUCTORS - PRESUMPTION OF HAVING READ AND UNDERSTOOD - FAILURE TO DISCLOSE - INFORMATION DISCLOSURE STATEMENT - RICO

ISSUE & DISPOSITION

Issue(s)

Whether the district court clearly erred in finding that Semiconductor Energy Lab. Co., Ltd. ("SEL") engaged in inequitable conduct by intentionally failing to properly disclose the content of two material references in the Information Disclosure Statement (IDS) submitted during prosecution of the allegedly infringed patent's parent application.

Disposition

SUMMARY

SEL, a Japanese semiconductor company and owner of U.S. Patent No. 5,543,636 ("the '636 patent"), sued Samsung for infringement, alleging that Samsung's active matrix displays and computers infringe their patent. The '636 patent claims a non-single crystal silicon thin film transistor, a semiconductor technology that can be used to switch the pixels in an active matrix display unit on and off. During patent prosecution, SEL submitted an IDS to the PTO that included as a reference the Japanese Laid-Open Application No. 56-135968, assigned to Canon K.K. ("the Canon reference"). SEL submitted the 29-page Canon reference in its original Japanese with only a one-page, partial translation that failed to reveal that the reference taught the same technology SEL was attempting to patent. After a bench trial, the federal district court found the '636 patent unenforceable because of SEL's inequitable conduct in front of the PTO.

On appeal, the Federal Circuit affirmed the district court's holding. "[I]nequitable conduct includes affirmative misrepresentation of a material fact, failure to disclose material information, . . . coupled with an intent to deceive." Molins PLC v. Textron, Inc., 48 F.3d 1172, 1178 (Fed. Cir. 1995). The Federal Circuit reviews findings of inequitable conduct on a clearly erroneous standard.

The Court found that the district court did not clearly err in finding the Canon reference material indicated that SEL had engaged in inequitable conduct. The untranslated portions of the Canon reference presented a more complete combination of the elements claimed in the '636 patent than anything else SEL submitted to the PTO in SEL's IDS.

Second, the district court did not clearly err in finding that SEL willfully misrepresented the Canon reference. The Court held that proof of high materiality and the fact that the applicant should have known it was material makes it difficult to overcome an inference of intent to mislead by a showing of good faith. Furthermore, the Court clarified that in reviewing a finding of deceitful intent, the Court examines whether the lower court overlooked mitigating factors. In this case the Federal Circuit felt the district court had properly concluded that SEL consciously decided not to translate certain sections of the Canon reference in order to increase the likelihood that the PTO would issue that '636 patent. The Court held that an applicant cannot overcome a finding of deceitful intent merely by pointing to the things it did properly when other, improper acts had occurred as well.

Finally, the Federal Circuit held that the district court did not clearly err in concluding that SEL effectively failed to disclose the Canon reference by submitting only a one-page, partial translation of the Japanese reference. By its actions, SEL constructively withheld the reference from the PTO and affirmatively misled the patent examiner to believe the reference did not teach technology identical to what SEL was attempting to patent. The Court also refuted SEL's contention that, along with the presumption that an examiner has done his or her job correctly, he or she is also presumed to have read and understood an untranslated reference. The Court recognized the presumption that an examiner has done a proper job in reviewing the patent. The Court, however, clarified that there is no support in the law for a presumption that an examiner will understand foreign languages.

In a separate part of the opinion, the Federal Circuit also affirmed the district court's dismissal of Samsung's federal and New Jersey RICO counterclaims on summary judgment.

Prepared by the liibulletin-patent Editorial Board.