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While the intellectual property bar awaits the U.S. Court of Appeals for the Federal Circuit’s en banc decision regarding when a lawyer’s conduct can disqualify a patent or its claims, three-judge panels are still churning out contentious rulings about the issue. In a 2-1 ruling on May 28, a Federal Circuit panel vacated a District of Maryland summary judgment ruling in Leviton Manufacturing Co. Inc. v. Shanghai Meihao Inc. The trial court had awarded more than $1 million in attorney fees and costs to Shanghai because of the “inequitable conduct and vexatious litigation” of lawyers who worked for Leviton. The panel remanded the case for a bench trial to resolve “genuine issues of material fact” about the inequitable conduct. At issue was the standard for when a lawyer’s conduct before the U.S. Patent Office and Trademark office (PTO) can disqualify a patent or some of its claims. The lower court ruling came in a consolidated patent case that includes Leviton’s suit against Universal Security Instruments Inc. over Universal’s alleged infringement of a ground fault circuit interruptor. Shanghai sought a declaratory judgment, asking the court to make three rulings: that it didn’t infringe Leviton’s patent; that Leviton’s patent was invalid; and that Leviton’s patent is unenforceable because of Leviton’s lawyers’ conduct before the PTO. The inequitable conduct ruling involved three former Greenberg Traurig lawyers: Barry Magidoff, Claude Narcisse and Paul Sutton. In one of his last opinions before his May 31 retirement, Chief Judge Paul Michel wrote for the majority that “the district court inferred an intent to deceive based on Narcisse’s failure to advise the PTO of the Germain application and related litigation, which is an omission, not an affirmative misrepresentation.” He continued: “We have not previously affirmed a grant of summary judgment based on a failure to disclose a commonly owned application or related litigation, and we decline to do so on the facts of this case.” Judge Sharon Prost wrote an impassioned 26-page dissent calling Leviton the “rare case” that calls for a finding of inequitable conduct on summary judgment. “The majority overlooks the disturbing facts of this case in which an experienced patent prosecutor withheld critical information with which he was intimately familiar, despite his awareness of reasons that the PTO would want to be made aware of the information and lack of a credible reason for the omissions,” Prost wrote. “In overturning the district court’s finding of deceptive intent on these facts, the majority’s legal standards and reasoning take the burden to establish deceptive intent to an unprecedented level.” Shanghai is “very pleased the court found that the withheld information was material,” said Gary Hnath, a Washington intellectual property litigation partner at Chicago’s Mayer Brown, one of its lawyers in the case. “We’ll continue to pursue the case vigorously.” The case was Leviton’s third against Universal Security, said William Bradley, a partner at Washington intellectual property firm Cahn & Samuels. “It was a never-ending battle to continue to drive USI out of business,” Bradley said. “At the end, Leviton wound up suing their own lawyers for malpractice because of what happened in the court below,” he continued. “Judge Prost clearly understood the facts of the case and what really happened in the prosecution of the patent. It was an attempt by Leviton to keep a cloud on competing products.” Michael Jakes, a partner at Washington’s Finnegan, Henderson, Farabow, Garrett & Dunner and Leviton’s Federal Circuit lawyer, declined to comment. Through a spokeswoman, Greenberg Traurig declined to comment because it is not a party and the case is still pending. Two of the former Greenberg lawyers — Paul Sutton and Barry Magidoff of New York-based Sutton Magidoff — also did not respond. The third former Greenberg lawyer — Claude Narcisse, now of Patent Analytic Strategies in Hackensack, N.J. — said he “did not want to make any comments whatsoever.” On April 26, the Federal Circuit vacated its own January ruling in another case on point, Therasense Inc. v. Becton, Dickinson & Co., and ordered an en banc rehearing. On April 27, in Avid Identification Systems Inc. v. Crystal Import Corp., a panel affirmed a lower court’s ruling that a company’s patent was unenforceable because of the company president’s misconduct toward the PTO. Sheri Qualters can be contacted at [email protected].

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