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Johnsonville Sausage LLC v. Klement Sausage Co. Inc.

United States District Court, E.D. Wisconsin

September 15, 2017

JOHNSONVILLE SAUSAGE LLC, Plaintiff,
v.
KLEMENT SAUSAGE CO. INC., Defendant.

          DECISION AND ORDER

          LYNN ADELMAN, District Judge

         Johnsonville Sausage LLC brings this action against Klement Sausage Co. Inc. alleging infringement of its patent on “[t]he ornamental design for a sausage tray.” U.S. Patent No. D633, 754. Klement moves for summary judgment.

         I. BACKGROUND

         In January 2010, Johnsonville applied for a utility patent and a design patent on a sausage tray with curved end walls, which looks as follows:

         (Image Omitted)

         Johnsonville's utility patent application claimed that a sausage tray with curved end walls keeps nested sausages from shifting and eliminates empty space. See U.S. Patent Application No. 12/685, 717. Patent examiner Bryon Gehman rejected Johnsonville's utility claims as anticipated by and obvious in light of prior art disclosing sausage trays with similar features that achieve the same purposes. See U.S. Patent Nos. 5, 770, 249 & 5, 393, 539. Johnsonville later abandoned its utility patent application.

         Johnsonville's design patent application claimed the appearance of a sausage tray with curved end walls extending up and out from its base, as shown ("[t]he broken line[s]. . . are for purposes of illustration only, and form no part of the claimed design"):

         (Image Omitted)

         U.S. Patent Application No. 29/353, 610. Patent examiner Dana Sipos allowed Johnsonville's design claim, and the U.S. Patent and Trademark Office (PTO) granted its design patent. Johnsonville never disclosed to Sipos its utility patent application, Gehman's rejection of its utility claims, or the specific prior art that Gehman cited.

         II. SUMMARY JUDGMENT

         Klement argues that when Johnsonville withheld information about its utility patent application from Sipos, it breached its duty of candor and good faith in dealing with the PTO, "which includes a duty to disclose ... all information known ... to be material to patentability.” See 37 C.F.R. § 1.56(a). According to Klement, Johnsonville's breach amounts to inequitable conduct, rendering Johnsonville's design patent unenforceable and entitling Klement to judgment as a matter of law.

         “Inequitable conduct is an equitable defense to patent infringement that, if proved, bars enforcement of a patent.” Therasense, Inc. v. Becton, Dickinson & Co., 649 F.3d 1276, 1285 (Fed. Cir. 2011) (en banc). “To prevail on the defense of inequitable conduct, the accused infringer must prove that the applicant misrepresented or omitted material information with the specific intent to deceive the PTO.” Id. at 1287. Because the remedy for inequitable conduct is unenforceability, the “atomic bomb” of patent law, “[t]he accused infringer must prove both elements-intent and materiality- by clear and convincing evidence.” Id. at 1287-88 (quoting Aventis Pharma S.A. v. Amphastar Pharm., Inc., 525 F.3d 1334, 1349 (Fed. Cir. 2008) (Rader, J., dissenting)).

         A. Materiality

         Klement fails to prove materiality. For the most part, it applies the wrong materiality standard, arguing that Johnsonville withheld information “material to patentability” as the PTO defines it. The PTO's definition of materiality does not apply in patent cases where inequitable conduct is raised, as it is “overly broad, ” “encompass[ing] anything that could be considered marginally relevant to patentability.” Id. at 1293-95. “[S]uch a low bar for materiality” does not reflect the seriousness and “far-reaching consequences” of a finding of inequitable conduct. See Id. at 1289, 1294. Rather, “the materiality required to establish inequitable conduct is ...


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