Prepared by Cislo & Thomas LLP Attorney Mark D. Nielsen, Ph.D.
1. In the case of Xitronix Corp. v. KLA-Tencor Corp., the Federal Circuit recently issued a Rule 36 Affirmance of a 2016 ruling out of the Western District of Texas concerning Walker Process fraud. The district court opinion is here. In essence, Walker Process fraud is an antitrust violation based on fraudulent procurement of a patent, and is often raised as a counterclaim in patent litigation. To prevail on a Walker Process claim, a plaintiff must show: (1) a false representation or deliberate omission of a fact material to patentability, (2) made with the intent to deceive the patent examiner, (3) on which the examiner justifiably relied in granting the patent, (4) but for which misrepresentation or deliberate omission the patent would not have been granted (“but-for” materiality), and, (5) the “necessary additional elements” of an underlying antitrust violation. In the case, Xitronix asserted that KLA fraudulently obtained a patent from a child application, not by failing to disclose applicable prior art per se, but by failing to describe the litigation history of a parent patent in the chain, which was invalidated and the absence of an appeal of the invalidity ruling. In connection with the child application, counsel for KLA disclosed prior art as well as a judgment from a prior litigation on a related patent. Because there was no non-disclosure of prior art per se, and because the Examiner considered the materials presented, the evidence was insufficient to meet the high standard for Walker Process fraud, including the fraud element and the “but for” element. This case is interesting in that it allows attorneys some leeway in characterizing the prior art without it being fraudulent. Furthermore, it reaffirms the high standard for Walker Process fraud.
2. In a recent case out of the Northern District of Illinois that included, among other things, a design patent infringement claim, the Court denied the plaintiff’s motion for summary judgment on the defendant’s “functionality” defense, and ruled that whether or not a design patent covering the beveled ends of a tourniquet product used for emergency medical situations was functional had to be decided by a jury. The opinion is here. Basically, functionality is a doctrine in design patent law that prevents a design feature that is primarily functional (and not ornamental) from being claimed as part of a design patent. The general rule in design patent law is that the availability of alternative designs that perform the same function renders the element non-functional. Ethicon Endo-Surgery, Inc. v. Covidien, Inc., 796 F. 3d 1312, 1329-30 (Fed. Cir. 2015) (“We have often focused, however, on the availability of alternative designs as an important – if not dispositive – factor in evaluating the legal functionality of a claimed design.”). In the case out of Illinois, the district court seemed to somewhat misinterpret the Federal Circuit in Ethicon by citing Ethicon and then stating that, “The existence of alternative designs is an important but not dispositive factor.” As a result, despite determining that “there is also evidence that supports the view that beveling the handle ends is not the only way to facilitate the function of inserting the handle into the locking device,” the Court passed the case on to a jury, rather than finding the design non-functional. Time will tell if there is an appeal, and if this ruling is reversed.
3. In a recent unregistered trade dress infringement case out of the Eastern District of Texas pertaining to the overall, decorative look and feel of a wedding venue east-northeast of Dallas called the “White Sparrow,” Judge Mazzant in the Sherman Division granted a motion for preliminary injunction regarding the defendant’s wedding venue, “The Nest.” The opinion is here. Judge Mazzant determined that the White Sparrow’s look was inherently distinctive, had secondary meaning, was non-functional, and, among other likelihood of confusion factors, was the subject of actual confusion and the apparent intent of the defendant to copy the look and feel of the White Sparrow for its own wedding venue. The defendant’s choice of “The Nest” for its name does not appear coincidental, either, but that is speculation on the author’s part.
