National Diamond Syndicate, Inc. v. Flanders Diamond USA, Inc.
N.D. Ill.3/31/2003
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MEMORANDUM OPINION AND ORDER ST. EVE, District Judge. National Diamond Syndicate and Lewy Friedrich, N.V. have moved for summary judgment on the issues of invalidity, infringement and inequitable conduct relating to design patent no. 338,851 (âthe â851 patentâ). Flanders Diamond USA and Kuwayama Europe, N.V. have moved to exclude and strike certain materials included with the motion for summary judgment. For the reasons discussed below, the motion for summary judgment and the motion to exclude and strike are both denied. LEGAL STANDARD Summary judgment is proper when âthe pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law.â Fed. R.Civ.P. 56(c). A genuine issue of triable fact exists only if âthe evidence is such that a reasonable jury could return a verdict for the nonmoving party.â Pugh v. City of Attica, 259 F.3d 619, 625 (7th Cir.2001) (quoting Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 , 106 S.Ct. 2505, 2510 , 91 L.Ed.2d 202 (1986)). The party seeking summary judgment has the burden of establishing the lack of any genuine issue of material fact. Celotex Corp. v. Catrett, 477 U.S. 317, 322-23 , 106 S.Ct. 2548, 2552 , 91 L.Ed.2d 265 (1986). The party that bears the burden of proof on a particular issue, however, may not rest on its pleadings but must affirmatively demonstrate that there is a genuine issue of material fact. Id. at 324 , 106 S.Ct. at 2553. A mere scintilla of evidence in support of the non-movantâs position is insufficient. See Anderson, 477 U.S. at 252, 106 S.Ct. at 2512. A party will be successful in opposing summary judgment only if it presents âdefinite, competent evidence to rebut the motion.â EEOC v. Sears, Roebuck & Co., 233 F.3d 432, 437 (7th Cir.2000). The Court âconsiders the evidentiary record in the light most favorable to the non-moving party, and draws all reasonable inferences in his favor.â Lesch v. Crown Cork & Seal Co., 282 F.3d 467, 471 (7th Cir.2002). The Court accepts the non-moving partyâs version of any disputed facts but only if it is supported by relevant, admissible evidence. Bombard v. Fort Wayne Newspapers, Inc., 92 F.3d 560, 562 (7th Cir.1996). FACTUAL BACKGROUND A. The Parties Plaintiff and Counterclaim Defendant National Diamond Syndicate is an Illinois corporation. {See R. 47, Defs.â L.R. 56.1(b)(3) Resp., ¶ 1.) Counterclaim Defendant Lewy Friedrich, N.V. is a Belgian corporation. {Id. ¶2.) Collectively, Na *635 tional Diamond Syndicate and Lewy Fried-rich are referred to herein as âPlaintiffs.â Defendant, Counterclaim Plaintiffs, and Third-Party Plaintiffs Flanders Diamond USA and Kuwayama Europe, N.V. are, respectively, a New York corporation and a Belgian corporation. (See R. 47, Defs.â L.R. 56.1(b)(3) Resp., ¶¶ 3-4.) Kuwayama Europe is the owner of the â851 patent, and Flanders Diamond USA is an authorized licensee of the â851 patent. (See R. 30-1, Pis.â Exs. re Mot. for Summary Judgment, Ex. 23 at p. 53; id., Ex. 6 at pp. 54-57.) Collectively, Flanders Diamond USA and Kuwayama Europe are referred to herein as âDefendants.â B. Diamond Cutting Terminology Diamonds discovered in nature are commonly referred to as ârough diamondsâ and must be cut and polished before they can be used in jewelry. (See R. 30-1, Pis.â Exs. re Mot. for Summary Judgment, Ex. 1 at pp. 7-13.) A cut or polished diamond is made up of a number of individual facets and typically includes two main sections â the crown (the top of the diamond) and the pavilion (the bottom of the diamond). (See R. 30-1, Pis.â Exs. re Mot. for Summary Judgment, Ex. 1 at p. 6.) Generally, the top surface of the crown includes a single flat facet known as the table facet. (Id.) The crown and the pavilion are divided by a narrow row of additional facets called the girdle. (Id.) Viewed from the top, the girdle defines the shape of the diamond. In other words, a diamond with a round girdle is referred to as a round cut diamond, and a diamond with an octagonal girdle is referred to as an octagonal diamond. (Id.) One popular gemstone design is the Round Brilliant Cut, which typically features a round girdle, an octagonal table facet, and a total of 58 facets on the crown and pavilion. (See R. 30-1, Pis.â Exs. re Mot. for Summary Judgment, Ex. 1 at p. 108.) C. The â851 Patent and the Flanders Brilliant Cut In 1986, Johan dâHaene and Hirmoi Inui started Nippon Marketing Partners (âNMPâ) to market diamonds to the Japanese market. (See R. 48-1, dâHaene Dec., ¶3; R. 44-1, Inui Dec., ¶3.) NMP purchased diamonds and then cut and polished them for the Japanese market. (See R. 48-1, dâHaene Dec., ¶ 3.) In 1987, NMPâs Japanese customers requested a new gemstone with a cut similar to the Round Brilliant Cut. (See R. 48-1, dâHaene Dec., ¶ 4; R. 44-1, Inui Dec., ¶ 6.) In response to this request, Mr. dâHaene worked on several potential new diamond designs, including one design for a square diamond referred to as the Flanders Brilliant Cut. (See R. 48-1, dâHaene Dec., ¶¶5-6.) According to Mr. dâHaene, he developed the Flanders Brilliant Cut when he conceived of using the faceting from the Round Brilliant Cut on the pavilion of a square diamond â a concept he referred to as âsquaringâ the Round Brilliant Cut. (Id. ¶¶ 6-7.) Because the Round Brilliant Cut facet design could not be imported exactly to a square diamond, Mr. dâHaene added four additional facets to the pavilion. (Id. ¶ 6.) Mr. dâHaene insists that he completed the design of the Flanders Brilliant Cut prior to March of 1988. (See R. 48-1, dâHaene Dec., ¶ 7. See also R. 44-1, Inui Dec., ¶¶ 6-7.) On March 28, 1990, Mr. dâHaene filed a patent application for the Flanders Brilliant Cut with the United States Patent and Trademark Office (âthe PTOâ). (See R. 47, Defs.â L.R. 56.1(b)(3) Resp., ¶ 8.) Mr. dâHaene did not disclose any prior art to the PTO in connection with his patent application. (Id. ¶34.) On August 31, *636 1993, the PTO issued the â851 patent for the Flanders Brilliant Cut. {Id. ¶ 9.) Mr. dâHaene assigned the â851 patent to NMP, and Kuwayama Europe acquired the â851 patent when it bought NMP. {See R. 30-1, Pis.â Exs. re Mot. for Summary Judgment, Ex. 23 at p. 53; id., Ex. 6 at pp. 54-57.) 1 D. The â293 Patent and the Petar Cut In 1983, Milan Tankosic, of Petarâs Jew-ellery, Ltd. in St. Catharines, Ontario, Canada, developed a design for an octagonal gemstone referred to as the Petar Cut. {See R. 47-1, Defs.â L.R. 56.1(b)(3) Resp., ¶ 11.) Mr. Tankosic filed a Canadian patent application for the Petar Cut design, and on September 16, 1986, the Canadian Patent Office issued Canadian patent no. 1,211,293 (âthe â293 patentâ). {Id. ¶12.) In 1984, Mr. Tankosic filed a United States counterpart to his Canadian patent application, but the PTO rejected the application as unpatentable in view of existing prior art. {See R. 47-1, Defs.â L.R. 56.1(b)(3) Resp., ¶ 16.) Specifically, the patent examiner rejected Mr. Tankosicâs United States patent application under 35 U.S.C. § 103 as obvious in light of several earlier gemstone designs. {See R. 30-2, Pis.â Exs. re Mot. for Summary Judgment, Tankosic Dec., Ex. D.) Further, the patent examiner rejected Mr. Tankosicâs application under 35 U.S.C. § 112 on the grounds that the claims were indefinite. {Id.) The parties dispute the precise nature of Mr. Tankosicâs Petar Cut design. Defendants suggest that the Petar Cut design calls for elongated or emerald cut diamonds and is, therefore, different than the square Flanders Brilliant Cut. Plaintiffs contend that the Petar Cut design may be used with both square and elongated or emerald cut diamonds. E. Marketing of the Petar Cut and the Flanders Brilliant Cut In March 1987, Mr. Tankosic contacted the civil authorities in Antwerp, Belgium seeking contacts that might assist Petarâs Jewelleryâs efforts to purchase and cut rough diamonds using the Petar Cut design. {See R. 47-1, Defs.â L.R. 56.1(b)(3) Resp., ¶ 18.) In April 1987, Dirk Obbers, Director of Diamant Obbers G. & ZN (âDiamant Obbersâ), responded to Mr. Tankosic and expressed interest in supplying Petar Cut diamonds. {Id. See also R. 30-2, Pis.â Exs. re Mot. for Summary Judgment, Tankosic Dec., ¶ 5; id., Obbers Dec., ¶2.) Ultimately, Diamant Obbers agreed to purchase rough diamonds in Belgium on behalf of Petarâs Jewellery and cut them according to the Petar Cut design. {See R. 47-1, Defs.â L.R. 56.1(b)(3) Resp., ¶ 20.) Beginning in April 1988 â after Mr. dâHaene insists he completed his design of the Flanders Brilliant Cut â Mr. Obbers showed Petar Cut diamonds to various potential customers, including Mr. dâHaene and NMP. {See R. 47-1, Defs.â L.R. 56.1(b)(3) Resp., ¶ 23.) The parties agree that during this period Mr. Obbers showed Mr. dâHaene and NMP elongated Petar Cut stones, but it is disputed whether Mr. Obbers showed any square versions of that diamond design. {Id.) Plaintiffs suggest that Mr. Obbers also showed Mr. dâHaene drawings of both square and elongated Petar Cut diamonds during the period from 1988 to 1990. Plaintiffs cite drawings that it claims Mr. *637 Obbers provided to Mr. dâHaene, and these drawings do contain both square and elongated Petar Cut diamonds. (See R. 30-2, Pis.â Exs. re Mot. for Summary Judgment, Obbers Dec., Ex. D.) Defendants admit that Mr. dâHaene learned about the elongated Petar Cut design, but they deny that he ever saw any drawings or examples of square Petar Cut diamonds. (See R. 47-1, Defs.â L.R. 56.1(b)(3) Resp., ¶26. See also R. 48-1, dâHaene Dec., ¶ 61.) Mr. Obbers hoped to sell Petar Cut diamonds to NMP and, together with Jan Storms, he formed a new company, Antwerp Diamond Services (âADSâ), for that purpose. (See R. 47-1, Defs.â L.R. 56.1(b)(3) Resp., ¶23.) On October 23, 1988, ADS signed a one year contract to supply Petar Cut diamonds to NMP for eventual distribution in Asia and Australia. (Id. ¶ 24.) 2 The parties dispute, however, whether ADS ever supplied any Petar Cut diamonds to NMP. Plaintiffs suggest that Mr. dâHaene, Mr. Obbers, and Mr. Storms decided to market Petar Cut diamonds under the name âFlanders Brilliantâ and they point to various invoices showing that ADS supplied NMP with diamonds bearing that moniker from November 1988 to at least September 1989. (See, e.g., R. 30-2, Pis.â Exs. re Mot. for Summary Judgment, Obbers Dec., Ex. K; see also id., Obbers Dee., ¶ 9.) Defendants deny that these were in fact Petar Cut diamonds, and they deny that ADS manufactured any Petar Cut diamonds pursuant to the agreement with NMP. (See R. 47-1, Defs.â L.R. 56.1(b)(3) Resp., ¶¶ 24-25; see also R. 45-1, Storms Dec., ¶¶ 32-33, 35.) Instead, Defendants maintain that the âFlanders Brilliantâ diamonds referred to in the ADS-NMP invoices were diamonds cut according to Mr. dâHaeneâs own Flanders Brilliant Cut design. (Id., ¶¶ 32-33, 35; R. 48-1, dâHaene Dec., ¶¶ 47-48.) During 1988 and 1989, ADS placed advertisements in various trade industry publications for diamonds under the name âFlanders Brilliant.â Mr. Tankosic saw one such advertisement placed by ADS in the 1989-90 issue of Kompass Diamonds, a diamond industry trade publication. (See R. 47-1, Defs.â L.R. 56.1(b)(3) Resp., ¶ 30; see also R. 30-2, Pis.â Exs. re Mot. for Summary Judgment, Tankosic Dec., ¶ 14.) Believing that the âFlanders Brilliantâ was an unauthorized copy of his own Petar Cut design, Mr. Tankosic wrote a complaint letter to Europa Star Diamond Intelligence Briefs, another industry publication, which published the letter in its October 27, 1989 issue. (See R. 47-1, Defs.â L.R. 56.1(b)(3) Resp., ¶ 30.) On November 22, 1989, Mr. dâHaene sent a letter to the editor of the Europa Star Diamond Intelligence Briefs responding to Mr. Tankosicâs allegations. (See R. 47-1, Defs.â L.R. 56.1(b)(3) Resp., ¶31.) In that letter, Mr. dâHaene suggested that he developed the Flanders Brilliant Cut after he learned of Mr. Tankosicâs Petar Cut: Flanders Diamond Exporters has been searching to develop a square brilliant form for well over two years.... We carefully studied the old cuts and the present day alternative cuts currently polished (princess, radian, quadrillion). We came across the Petar Cut mentioned in your article ... We finally decided to try to fit the modern brilliant cut into a square shape.... *638 The new Flanders Brilliant Cut was registered on September 22,1988. (R. 30-1, Pis.â Exs. re Mot. for Summary Judgment, Ex. 4.) Nonetheless, Mr. dâHaene denied that he had copied the Petar Cut design when he developed the Flanders Brilliant Cut: [W]e agree with Mr. Tankosic that his Petar Cut looks similar to the Flanders Brilliant in its elongated shape, but simple inspection will reveal that in reality we have here two different models with different angles, facets and brilliance (the table and culet are different, the stone has 4 more facets, and the angles of the halves of the crown side are different). In the search for new cuts, the laws governing the physics of diamond polishing are bound to lead to similar results.... We strongly object against [sic] any accusation that we have infringed patent or copyright laws and we shall take the appropriate legal action against further defamation. (R. 30-1, Pis.â Exs. re Mot. for Summary Judgment, Ex. 4. See also R. 47-1, Defs.â L.R. 56.1(b)(3) Resp., ¶ 31.) On November 25, 1989, Mr. Tankosic wrote to Mr. Obbers directly, accusing him of breaching Diamant Obbersâ agreements with Petarâs Jewellery. (See R. 47-1, Defs.â L.R. 56.1(b)(3) Resp., ¶32.) Mr. Obbers responded to Mr. Tankosicâs letter on December 12, 1989, denying that Diam-ant Obbers had produced any Petar Cut diamonds without authorization from Pe-tarâs Jewellery. (Id.) Mr. Obbers now suggests that he was lying and that ADS was in fact producing Petar Cut diamonds under the name âFlanders Brilliant.â (See R. 30-2, Pis.â Exs. re Mot. for Summary Judgment, Obbers Dec., ¶ 11.) Defendants deny this. They contend that the âFlanders Brilliantâ diamonds produced by ADS were diamonds cut according to Mr. dâHaeneâs own Flanders Brilliant Cut design. (See R. 45-1, Storms Dec., ¶¶ 32-33, 35; R. 48-1, dâHaene Dec., ¶¶ 47-48.) On January 2, 1990, Mr. Tankosic wrote NMP directly, advising them of his past relationship with Diamant Obbers and suggesting that the diamonds supplied by ADS were unauthorized copies of his Petar Cut design. (See R. 47-1, Defs.â L.R. 56.1(b)(3) Resp., ¶ 33.) Mr. dâHaene requested that NMPâs attorney prepare the response to Mr. Tankosicâs letter. (Id.) At the attorneyâs request, Mr. dâHaene obtained information concerning the Petar Cut design from Mr. Obbers at ADS. (Id. 126.) Mr. Obbers supplied Mr. dâHaene with a page describing the Petar Cut design taken from Mr. Tankosicâs Canadian patent application. (Id.; see also R. 48-1, dâHaene Dec., 139.) Mr. dâHaene claims that at the time he was unaware that this description of the Petar Cut design was taken from a patent application. (Id.) F. Procedural History On October 16, 2000, after receiving several letters from the Defendants accusing it of infringement and threatening legal action, National Diamond Syndicate filed the instant action, seeking a declaratory judgment that the â851 patent is invalid and unenforceable or, in the alternative, that National Diamond Syndicate has not infringed the â851 patent. (See R. 1-1, Pis.â Complaint.) On November 15, 2000, Defendants filed their answer and counterclaim as well as a third-party complaint against Lewy Friedrich, N.V. (See R. 5-1, Defs.â Answer and Counterclaim and Third-Party Complaint.) On April 1, 2002, Plaintiffs filed their motion for summary judgment on the issues of invalidity, infringement and inequitable conduct. (See R. 30-1, Pis.â Mot. for Summary Judgment.) Defendants filed a motion to exclude and strike certain materials included with Plaintiffsâ motion for *639 summary judgment (see R. 34-1, R. 34-2, Defs.â Mot. to Exclude and Strike), which Judge Guzman elected to take under advisement and decide in connection with the motion for summary judgment. (See R. 35-1, May 6,2002 Order.) On June 7, 2002, Defendants filed their opposition to Defendantsâ motion for summary judgment, which included a âcounter-motionâ for summary judgment. (See R. 42-1, Defs.â Opp. to Mot. for Summary Judgment and Countermotion for Summary Judgment; see also R. 43-1, Defs.â Opp. to Mot. for Summary Judgment on Inequitable Conduct.) Plaintiffs moved to strike Defendantsâ âcountermotionâ for summary judgment and related portions of its response brief. (See R. 50-1, Pis.â Mot. to Strike.) Judge Guzman granted Plaintiffsâ motion to strike but gave Defendants one week to file a motion for summary judgment and a separate response to the Plaintiffsâ motion for summary judgment. (See R. 52-1, June 20, 2002 Order.) Pursuant to Judge Guzmanâs order, Defendants filed a motion for summary judgment, (see R. 58-1, Defs.â Mot. for Summary Judgment), and a brief in opposition to the Plaintiffsâ motion for summary judgment on June 27, 2002. (See R. 59-1, Defs.â Opp. to Mot. for Summary Judgment.) On July 9, 2002, Plaintiffs again moved to strike the Defendantsâ motion for summary judgement because Defendants failed to comply with Local Rule 56.1 and failed to properly notice the motion. (See R. 61-1, Pis.â Mot. to Strike.) Judge Guzman granted Defendantsâ motion to strike. (See R. 65-1, July 11, 2002 Order.) Thus, Plaintiffsâ motion for summary judgment is the only such motion currently pending before this Court. 3 LEGAL ANALYSIS I. CONSTRUCTION OF THE â851 PATENT A design patent protects the novel, ornamental features of the design but not the functional features. See OddzOn Products, Inc. v. Just Toys, Inc., 122 F.3d 1396, 1405 (Fed.Cir.1997). Thus, a design patent protects the overall ornamental visual impression of the design, rather than the broader general design concept. See Contessa Food Products, Inc. v. Conagra, Inc., 282 F.3d 1370, 1376 (Fed.Cir.2002). The Federal Circuit has held that design patents have a narrow scope, limited to what is shown in the drawings accompanying the patent application. See Goodyear Tire & Rubber Co. v. Hercules Tire & Rubber Co., Inc., 162 F.3d 1113, 1116 (Fed.Cir.1998); Elmer v. ICC Fabricating, Inc., 67 F.3d 1571, 1577 (Fed.Cir.1995) see also 37 C.F.R. § 1.153 (a) (âNo description, other than a reference to the drawing, is ordinarily requiredâ for design patents). In construing the claims of a design patent, however, the Court may also consider other intrinsic evidence such as the patent specification and the patent prosecution history. See Hsin Ten Enterprise USA, Inc. v. Clark Enterprises, 149 F.Supp.2d 60, 63 (S.D.N.Y.2001). In this case, the claim language is unhelpful. It reads simply: âThe ornamental design for a gemstone, as shown.â (See R. 30-1, Pis.â Exs. re Mot. for Summary Judgment, Ex. 9, at p. FLA 000825.) Likewise, the patent prosecution history offers little insight. The patent examiner issued two separate office actions, both requiring the applicant to provide shading to the design drawings (see id., Ex. 17, pp. *640 NDS 000045-52, NDS 000065-67), but did not cite any prior art as affecting the patentability of the design. Thus, the Court is left with the design drawings to perform the claim construction. The parties propose competing claim constructions for the â851 patent. Plaintiffs suggest that the Court should construe the â851 patent as covering â[t]he illustrated eight-sided design for a faceted, transparent gemstone, having the particular facet configuration shown in the drawings, both with and without slight âflared deviationsâ in the facet edges.â (R. 30-1, Pis.â Mem. in Support of Mot. for Summary Judgment, at p. 30.) Defendants contend that the Court should construe the â851 patent as covering âan ornamental [square cut-cornered] design for a [brilliant faceted] gemstone, as shown.â (R. 59-1, Defs.â Opp. to Mot. for Summary Judgment, at p. 7) (bracketed text in original; citation omitted). Further, Defendants urge that the â851 patent should cover gemstones with âsubstantially straight facet edge[s],â as opposed to perfectly straight facet edges. (See id., at pp. 4-7.) The Court construes the claims of the â851 patent as follows: The design drawings that accompany the â851 patent show a gemstone with an octagonal girdle. Viewed from above, the gemstone is a square with the corners cut off, rather than a rectangle with the corners cut off. The gemstone incorporates 61 total facets as shown, including 33 facets on the crown and 28 facets on the pavilion. The facet edges are straight and not visibly curved or flared. II. PRIOR INVENTORSHIP Section 102(f) provides that â[a] person shall be entitled to a patent unless ... he did not himself invent the subject matter sought to be patented.â 35 U.S.C. § 102 (f). In order to prevail under Section 102(f), âthe party asserting invalidity must prove both prior conception of the invention by another and communication of that conception to the patentee.â Gambro Lundia AB v. Baxter Healthcare Corp., 110 F.3d 1573, 1576 (Fed.Cir.1997). The party asserting invalidity must prove these elements by clear and convincing evidence. Id. In this case, Plaintiffs suggest that summary judgment is appropriate under Section 102(f) because they contend that Mr. dâHaene has admitted that he developed the Flanders Brilliant Cut after seeing the Petar Cut design and because the two gemstone designs are so similar. In particular, Plaintiffs rely on Mr. dâHaeneâs November 22, 1989 letter to the editor of the Europa Star Diamond Intelligence Briefs where he suggested that he developed the Flanders Brilliant Cut after he learned of Mr. Tankosicâs Petar Cut. (See R. 30-1, Pis.â Exs. re Mot. for Summary Judgment, Ex. 4.) Defendants have pointed to evidence, however, that Mr. dâHaene conceived of the Flanders Brilliant Cut independently, before he knew that the Petar Cut even existed. Indeed, Mr. dâHaene may have completed the design by March of 1988 â before Mr. Obbers started showing Petar Cut diamonds to potential customers. (See R. 47, Defs.â L.R. 56.1(b)(3) Resp., ¶¶ 10, 23; R. 48-1, dâHaene Dec., ¶¶ 5-7; R. 44-1, Inui Dec., ¶¶ 6-7.) Plaintiffs complain that Mr. dâHaeneâs testimony is insufficient to create a genuine issue of material fact concerning the timing of his purported conception of the Flanders Brilliant Cut, citing Price v. Symsek, 988 F.2d 1187 (Fed.Cir.1993). Defendants, however, do not rely solely on Mr. dâHaeneâs testimony. They also cite the testimony of Mr. Inui who supports Mr. dâHaeneâs claim that he conceived of *641 the Flanders Brilliant Cut sometime prior to March of 1988. (See R. 44-1, Inui Dec., ¶¶ 6-7.) Because there is a genuine issue of material fact concerning whether Mr. dâHaene conceived of the Flanders Brilliant Cut independently before running across Mr. Tankosicâs Petar Cut design, Plaintiffs are not entitled to summary judgment under Section 102(f). See M. Eagles Tool Warehouse, Inc. v. Fisher Tooling Co., Inc., 68 F.Supp.2d 494, 600-01 (D.N.J.1999) (denying summary judgment under Section 102(f) where the testimony of the inventor listed in the patent application was inconsistent on the question of inventorship). III. ANTICIPATION Sections 102(a) and 102(b) provide that a patent is anticipated and, therefore, invalid if the claimed invention was patented or described in a printed publication (1) before the invention by the applicant, or (2) more than one year prior to the filing of the patent application. 35 U.S.C. §§ 102 (a) and 102(b). 4 Anticipation requires âthe four corners of a single, prior art document describe every element of the claimed invention, either expressly or inherently, such that a person of ordinary skill in the art could practice the invention without undue experimentation.â Advanced Display Systems, Inc. v. Kent State University, 212 F.3d 1272, 1282 (Fed.Cir.2000). See also Atlas Powder Co. v. Ireco Inc., 190 F.3d 1342, 1347 (Fed.Cir.1999) (âTo invalidate a patent by anticipation, a prior art reference normally needs to disclose each and every limitation of the claim.â). Anticipation is a question of fact, and thus, the Court may grant summary judgment on anticipation only when there is no genuine issue of fact that the prior art describes every element of the claimed invention. See Trintec Industries, Inc. v. Top-U.S.A. Corp., 295 F.3d 1292, 1294 (Fed.Cir.2002); see also In re Schreiber, 128 F.3d 1473, 1477 (Fed.Cir.1997); In re Graves, 69 F.3d 1147, 1151 (Fed.Cir.1995). In this case, it is undisputed that the â293 patent could serve as the basis for anticipation under Sections 102(a) and 102(b) because Mr. Tankosic obtained the â293 patent before March 1988 when Mr. dâHaene invented the Flanders Brilliant Cut (see R. 48-1, dâHaene Dec., ¶ 7), and more than a year before March 1990 when Mr. dâHaene filed his own patent application. (See R. 47, Defs.â L.R. 56.1(b)(3) Resp., ¶ 8.) The question, however, is whether there is a genuine issue of fact concerning whether the â293 patent describes every element of the â851 patent. Plaintiffs suggest that there is no genuine issue of material of fact on this issue, but this Court disagrees. Defendants have pointed to evidence suggesting that there are several differences between the design of the â293 patent and the design of the â851 patent and that, therefore, the former does not describe every element of the latter. In particular, Defendants emphasize that the design drawings that accompany the â293 patent depict a rectangular, Emerald cut gemstone rather than a square shaped *642 gemstone with the corners cut off. (See R. 30-1, Pis.â Exs. re Mot. for Summary-Judgment, Ex. 2, at p. LF 000139.) Indeed, Defendants suggest that the â293 patent specifically disclaims a square shaped gemstone with the corners cut off â âthe girdle comprising a set of girdle facets forming a straight-edged polygon the sides of which are not all equidistant to a common central point.â (Id., Ex. 2, at p. LF 000137 (emphasis added).) In addition, the design drawings depict facet edges with visible flaring or arcing rather than the straight facet edges shown in the â851 patent. (Compare id., Ex. 2, at p. LF 000139, with id., Ex. 9, at p. FLA 000826.) Finally, although the number of facets is apparently the same for the â293 patent and the â851 patent, the design drawings that accompany the two patents show that the pattern of facets on the pavilion is different for each design. (Compare id., Ex. 2, at p. LF 000139, with id., Ex. 9, at p. FLA 000826.) In light of these differences, the Court concludes that there is a genuine issue of fact whether the â293 patent describes every element of the â851 patent, and thus, Plaintiffs are not entitled to summary judgment under Sections 102(a) and 102(b). See Schumer v. Laboratory Computer Systems, Inc., 308 F.3d 1304, 1315-16 (Fed.Cir.2002) (reversing summary judgment on grounds of anticipation where fact issue existed as to whether prior art disclosed each and every claim of the patent). IV. INEQUITABLE CONDUCT Because of the ex parte nature of the patent application process, applicants have an express âduty of candor and good faithâ that governs their dealings with the PTO. See 37 C.F.R. § 1.56 (a) (âEach individual associated with the filing and prosecution of a patent application has a duty of candor and good faith in dealing with the [PTO]â). See also Fox Indus., Inc. v. Structural Pres. Sys., Inc., 922 F.2d 801, 804 (Fed.Cir.1990) (âThe duty of candor extends throughout the patentâs entire prosecution history.â). This duty of candor and good faith requires that the applicant disclose to the PTO all information âmaterial to patentability.â See 37 C.F.R. § 1.56 (a) (the âduty of candor and good faith ... includes a duty to disclose to the [PTO] all information known to that individual to be material to patentability as defined in this section.â). When the duties set forth in Section 1.56 are breached, the patent is said to have been procured through inequitable conduct and is, therefore, unenforceable. Molins PLC v. Textron, Inc., 48 F.3d 1172, 1182 (Fed.Cir.1995). Where the inequitable conduct alleged is the failure to disclose relevant prior art to the PTO, the alleged infringer must prove that: (1) the prior art at issue is material; (2) the applicant had knowledge of the prior art and its materiality; and (3) the applicant failed to disclose the prior art with the intent to mislead the PTO. FMC Corp. v. Manitowoc Co., Inc., 835 F.2d 1411, 1415 (Fed.Cir.1987); Videojet Sys. Int'l, Inc. v. Inkjet, Inc., No. 91 C 6284, 1996 WL 556740 , at *4 (N.D.Ill. Sep.27, 1996). The alleged infringer must establish the elements of inequitable conduct by clear and convincing evidence. Manville Sales Corp. v. Paramount Sys., Inc., 917 F.2d 544, 551 (Fed.Cir.1990). If either materiality or intent are lacking, then no further analysis need be performed and Plaintiffsâ motion for summary judgement on inequitable conduct must be denied. See Critikon, Inc. v. Becton Dickinson Vascular Access, Inc., 120 F.3d 1253, 1256 (Fed.Cir.1997). *643 This Court concludes that Plaintiffsâ summary judgment must be denied because there is a genuine issue of material fact on the question whether Mr. dâHaene acted with an intent to deceive the PTO. Plaintiffs argue that the high level of materiality of the â293 patent and the evidence that Mr. dâHaene was aware of the Petar Cut (if not the â293 patent itself) together are sufficient to create an inference of intent to deceive the PTO and entitle them to summary judgment. This Court disagrees. Plaintiffs are correct that the courts must balance materiality and intent when weighing a claim of inequitable conduct and that, as a general principle, a lesser showing of intent is sufficient when the omission is highly material. See GFI, Inc. v. Franklin Corp., 265 F.3d 1268, 1273 (Fed.Cir.2001); Halliburton Co. v. Schlumberger Tech. Corp., 925 F.2d 1435, 1439 (Fed.Cir.1991). At the same time, however, the courts have held that there must be some threshold showing of intent to be balanced. See Amgen Inc. v. Hoechst Marion Roussel, Inc., 314 F.3d 1313 , (Fed.Cir.2003) (â[W]e will not find inequitable conduct on an evidentiary record that is completely devoid of evidence of the patenteeâs intent to deceive the PTO.â); Allen Engâg Corp. v. Bartell Indus., Inc., 299 F.3d 1336, 1352 (Fed.Cir.2002) (âMateriality does not presume intent, which is a separate and essential component of inequitable conduct.â). Direct evidence of intent or proof of deliberate scheming is rarely available in instances of inequitable conduct, but intent may be inferred from the surrounding circumstances. See Merck & Co. v. Danbury Pharmacal, Inc., 873 F.2d 1418, 1422 (Fed.Cir.1989) (âIntent need not, and rarely can, be proven by direct evidence.â). At the summary judgment stage, the Court must decide whether the evidence relating to intent makes the facts reasonably inferable either way, or whether the evidence is so one-sided that the factual issue of intent may be decided as a matter of law. See Anderson, 477 U.S. at 252 , 106 S.Ct. at 2512 . Significantly, there is evidence that supports dâHaeneâs contention that he believed that the Petar Cut design and the â293 patent were not material to the application for the â851 patent. First, although it is undisputed that Mr. dâHaene was familiar with elongated Petar Cut diamonds, it is unclear whether he ever saw drawings or examples of square Petar Cut diamonds. (See R. 47-1, Defs.â L.R. 56.1(b)(3) Resp., ¶26. See also R. 48-1, dâHaene Dec., ¶ 61.) Second, there is evidence that Mr. dâHaene believed that there were significant differences between his Flanders Brilliant Cut and the Petar Cut design. Mr. dâHaene wrote to the editor of the Europa Star Diamond Intelligence Briefs that, although the Petar Cut resembled his own Flanders Brilliant Cut, the two designs were âdifferent models "with different angles, facets and brilliance (the table and culet are different, the stone has 4 more facets, and the angles of the halves of the crown side are different).â (See R. 30-1, Pis.â Exs. re Mot. for Summary Judgment, Ex. 4. See also R. 47-1, Defs.â L.R. 56.1(b)(3) Resp., ¶ 31.). Third, it is disputed whether Mr. dâHaene was aware that Mr. Tankosic held any patent protection over the Petar Cut design. Mr. dâHaene claims that at the time he was unaware that this description of the Petar Cut design was taken from a patent application. (R. 48-1, dâHaene Dec., ¶ 39.) Finally, there is evidence that suggests that Mr. dâHaene conceived of the design for the Flanders Brilliant Cut independently, before he learned of Mr. Tankosicâs Petar Cut design. Indeed, Mr. Obbers began showing the Petar Cut diamond design to *644 customers beginning in April 1988 â after Mr. dâHaene insists he completed his design of the Flanders Brilliant Cut. (See R. 47, Defs.â L.R. 56.1(b)(3) Resp., ¶¶ 10, 23; R. 48-1, dâHaene Dec., ¶¶5-7; R. 44-1, Inui Dec., ¶¶ 6-7.) Taking all reasonable inferences in the light most favorable to Defendants, the Court concludes that Plaintiffs have shown at most that Mr. dâHaene acted with negligence in failing to disclose the Petar Cut and â293 patent to the PTO. As the courts have recognized, even a finding of gross negligence is insufficient to support an inference of intent to deceive the PTO. See Kingsdown Med. Consultants, Ltd. v. Hollister, Inc., 863 F.2d 867, 876 (Fed.Cir.1988) (â[P]articular conduct [that] amounts to âgross negligenceâ does not of itself justify an inference of intent to deceive; the involved conduct, viewed in light of all the evidence, including evidence indicative of good faith, must indicate sufficient culpability to require a finding of intent to deceive.â). Ultimately, after an opportunity to weigh the credibility of the witnessesâ including, in particular, Mr. dâHaene himself â the trier of fact may conclude that Plaintiffs have proved that Mr. dâHaene acted with the requisite intent to deceive the PTO. At the summary judgment stage, however, the Court concludes that Defendants have raised a genuine issue of material fact on this issue, and, therefore, Plaintiffs are not entitled to summary judgment on the issue of inequitable conduct. See Baker Oil Tools, Inc. v. Geo Vann, Inc., 828 F.2d 1558, 1566 (Fed.Cir.1987) (disputed question of intent to deceive is not appropriate for summary resolution); KangaROOS U.S.A., Inc. v. Caldor, Inc., 778 F.2d 1571, 1573 (Fed.Cir.1985) (same). V. INFRINGEMENT The test of infringement in a design patent case is whether the accused product deceives the ordinary user, rather than an expert. See Goodyear Tire & Rubber Co., 162 F.3d at 1117 . The courts take into account similarities and differences in determining â âif in the eye of an ordinary observer, giving such attention as a purchaser usually gives, two designs are substantially the same, if the resemblance is such as to deceive such an observer, inducing him to purchase one supposing it to be the other.â â FMC Corp. v. Hennessy Industries, Inc., 836 F.2d 521 (Fed.Cir.1987) (citation omitted). See also Unette Corp. v. Unit Pack Co., Inc., 785 F.2d 1026, 1028 (Fed.Cir.1986) (âTherefore, to find infringement, the accused [product] must be compared to the claimed design to determine whether the two designs are substantially the same.â). Plaintiffs do not contend that the diamonds they sell would appear different to the ordinary observer than the â851 patent design; instead, Plaintiffs suggest that there can be no infringement of the â851 patent because it is impossible to cut a diamond with âperfectly straight facet edge lines.â (R. 30-1, Pis.â Mem. in Support of Mot. for Summary Judgment, at p. 45.) According to Plaintiffs, infringement is impossible because perfectly straight facet edge lines are merely theoretical and cannot be achieved in practice. (Id. at pp. 45-46.) Plaintiffs suggest, for example, that even diamonds sold by Defendants under the name âFlanders Brilliantâ have flared facet edge lines. (See R. 30-2, Pis.â Exs. re Mot. for Summary Judgment, Zimmerman Dec., ¶¶ 5, 7.) The scope of the â851 patent as construed by this Court, however, is not limited only to those diamonds with perfectly straight facet edge lines. As explained in Section I, supra, the â851 patent describes *645 a gemstone with facet edges that are straight and not visibly curved or flared. Contrary to Plaintiffsâ suggestion then, infringement of the â851 patent is possible if Plaintiffs sell diamonds whose facet edges are not visibly curved (and otherwise appear to the ordinary observer to be substantially the same as the â851 patent design). Accordingly, Plaintiffs are not entitled to summary judgment on the issue of infringement. CONCLUSION Plaintiffsâ motion for summary judgment (R. 30-1) is denied. Defendantsâ motion to exclude and strike (R. 34-1, R. 34 â 2) is denied as moot. 1 . Mr. d'Haene filed a second patent application for an elongated, emerald cut design the same day that he filed the application for the '851 patent. The patent for an elongated, emerald cut design, U.S. design patent no. 337, 742 ("the '742 patentâ), was issued on July 27, 1993. {See R. 30-1, Pis.â Exs. re Mot. for Summary Judgment, Ex. 10.) The '742 patent is not directly at issue in this lawsuit. 2 . After ADS reached the agreement with NMP, Mr. Obbers decided to end his arrangement with Petarâs Jewellery. Sometime in June 1989, Mr. Tankosic sent a proposed written contract between Petar's Jewellery and Diamant Obbers, but Mr. Obbers refused to sign it. (See R. 47-1, Defs.â L.R. 56.1(b)(3) Resp., ¶ 29.) 3 . The case was reassigned from Judge Guzman to this Court on August 30, 2002 pursuant to the mass reassignment order. 4 . Section 102(a) provides that "[a] person shall be entitled to a patent unless ... the invention was known or used by others in this country, or patented or described in a printed publication in this or a foreign country, before the invention thereof by the applicant for patent.â 35 U.S.C. § 102 (a). Section 102(b) provides that "[a] person shall be entitled to a patent unless ... the invention was patented or described in a printed publication in this or a foreign country or in public use or on sale in this country, more than one year prior to the date of the application for patent in the United States.â 35 U.S.C. § 102 (b). Case Information
- Court
- N.D. Ill.
- Decision Date
- March 31, 2003
- Status
- Precedential