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

Background

CertainTeed sought declarations that Pacific Coast’s U.S. Patent Nos. 10,125,492 and 10,123,076 were unenforceable because of inequitable conduct and that CertainTeed’s SilentFX QuickCut product did not infringe those patents. Pacific Coast owned the patents, and PABCO Building Products, LLC was their exclusive licensee. The motion addressed only certain inequitable-conduct allegations in CertainTeed’s First Amended Complaint.

CertainTeed alleged that Jason Mueller and Galyn Gafford owed duties of candor to the U.S. Patent and Trademark Office during prosecution of the patents. It alleged that they failed to disclose the earlier Northern District of California litigation involving the related ’568 patent, a declaration by CertainTeed’s expert Paul Miller, and CertainTeed’s invalidity contentions based on the Hirata reference. The court had previously dismissed the inequitable-conduct claims without prejudice because CertainTeed had not adequately pleaded Mueller’s duty of candor, materiality, or intent to deceive.

Legal standard

The court applied Federal Rule of Civil Procedure 12(b)(6), which allows dismissal when a complaint does not plead enough facts to state a plausible claim. Because inequitable conduct involves intentional deception of the Patent Office, Rule 9(b) also required CertainTeed to plead the alleged misconduct with particularity, including the specific person involved, what was omitted or misrepresented, and when, where, and how it occurred.

The court explained that a person associated with patent prosecution has a duty of candor only if the person was substantively involved in preparing or prosecuting the application. It also explained that an inequitable-conduct claim requires allegations that the omitted information was material and that the person acted with a specific intent to deceive. Information is not material if it merely duplicates information already before the Patent Office.

Court’s analysis

The court held that the First Amended Complaint still did not adequately allege that Mueller owed a duty of candor. The allegations that Mueller managed the client relationship, reviewed bills, submitted patent-application assignments, and had initials on prosecution-related folders did not identify specific work involving the applications’ substance or patentability arguments. The court therefore rejected CertainTeed’s attempt to base inequitable-conduct claims on Mueller’s conduct.

The court also held that the Hirata invalidity contentions were cumulative of the Hirata reference itself, which had already been disclosed to the Patent Office. Although CertainTeed alleged that the contentions provided a limitation-by-limitation explanation and additional technical information, the court found that these allegations did not plausibly show that the Patent Office would have rejected the claims if it had received the contentions. The court therefore did not need to address whether CertainTeed adequately alleged an intent to deceive concerning those contentions.

The court further held that CertainTeed had not adequately alleged that knowledge of the earlier Northern District of California action would have been material. The specific information CertainTeed identified as potentially significant was the Miller Declaration and the Hirata invalidity contentions. Because the Hirata contentions were cumulative, and because CertainTeed separately stated a viable claim based on the alleged failure to disclose the Miller Declaration, knowledge of the earlier lawsuit did not provide an additional inequitable-conduct claim.

Disposition

The court found that CertainTeed had failed to cure the deficiencies identified in its original complaint. It concluded that allowing another amendment would be futile and cause undue delay, and that requiring another motion to dismiss would prejudice the defendants. The court therefore granted the defendants’ motion to dismiss with prejudice. It stated that CertainTeed’s inequitable-conduct claims could proceed only insofar as they relied on allegations that Gafford failed to disclose the Miller Declaration. The opinion was signed by Judge Lucy M. Koh.