CertainTeed Gypsum, Inc. v. Pacific Coast Building Products, Inc.

Background

CertainTeed Gypsum, Inc. sought declaratory judgments that U.S. Patent Nos. 10,125,492 and 10,132,076 were unenforceable because of inequitable conduct and that CertainTeed had not infringed those patents. Pacific Coast Building Products, Inc. owned both patents, and PABCO Building Products, LLC was their exclusive licensee. The patents concerned sound-damping drywall.

CertainTeed alleged that information from related patent litigation and patent proceedings was not disclosed to the Patent and Trademark Office (PTO) during prosecution of the two patents. The alleged information included the Hirata prior-art reference, filings and contentions from related Northern District of California litigation, and a declaration by Dr. Paul Miller concerning indefiniteness in the parent patent. CertainTeed alleged that Galyn Gafford and Jason Mueller were listed as attorneys or agents for the patent applications.

In earlier related litigation, the court held that claim 21 of the parent patent was invalid as indefinite, and the Federal Circuit affirmed that finding. The related patent-infringement case in the Western District of Arkansas was stayed pending resolution of this case.

Motion and governing standards

The defendants moved to dismiss under Federal Rule of Civil Procedure 12(b)(6), arguing that CertainTeed had failed to state inequitable-conduct claims. Inequitable conduct is a claim that someone involved in obtaining a patent misrepresented or withheld material information from the PTO with a specific intent to deceive it. Under Rule 9(b), allegations of inequitable conduct must identify the specific who, what, when, where, and how of the alleged omission or misrepresentation.

The court applied the Federal Circuit’s pleading standards. The complaint had to allege facts supporting both materiality—meaning the PTO would not have allowed a claim if it had known the information—and a specific intent to deceive. The withheld information also had to be non-cumulative of information already before the patent examiner.

Court’s analysis

The court held that CertainTeed identified only Gafford as an individual who was adequately alleged to owe a duty of candor to the PTO. References to Pacific Coast and its outside counsel did not identify specific individuals. Although CertainTeed named Mueller, the complaint did not allege that he participated in or was substantively involved in preparing or prosecuting the relevant patent applications. The court therefore found that CertainTeed had not adequately alleged that Mueller owed a duty of candor regarding those applications.

As to Hirata, the court found that the reference had been disclosed during prosecution of the parent patent. CertainTeed therefore had not adequately alleged that Hirata itself was withheld or that it was material and non-cumulative. The court also rejected the allegation that contentions about Hirata were improperly withheld because those contentions would have been cumulative of the reference itself.

The court found the allegations concerning Dr. Miller’s declaration insufficient because the complaint did not explain why the declaration was material and non-cumulative or how a patent examiner would have used it in assessing patentability. CertainTeed supplied additional explanations in its opposition brief, but the court could consider only the complaint and materials incorporated into it when evaluating a Rule 12(b)(6) motion.

The court recognized that the existence of related litigation can potentially be material information. However, CertainTeed did not allege why the PTO would not have allowed the patent claims had it known about the related litigation. The complaint also referred generally to “filings, contentions, and correspondence” without identifying the particular documents allegedly withheld. The court stated that any amended complaint would need to identify those documents specifically and explain why they were material and non-cumulative.

Disposition

The court granted the defendants’ requests for judicial notice of court records and PTO filings. It then granted the defendants’ motion to dismiss Counts I and II, which were CertainTeed’s inequitable-conduct claims concerning the two patents. The court granted leave to amend because amendment would not be futile, cause undue delay, or unduly prejudice the defendants, and the court found no bad faith. CertainTeed had 30 days to amend. The order stated that failure to amend, or failure to cure the identified deficiencies, would result in dismissal of the deficient claims with prejudice. CertainTeed could not add new claims or parties without a stipulation or court permission.

Judge Lucy H. Koh signed the order.