Leviton Manufacturing Co. v. Shanghai Meihao Electric, Inc.

Citations: 613 F. Supp. 2d 670; 2009 U.S. Dist. LEXIS 42630; 2009 WL 1308376Docket: Civil AMD 05-889

Court: District Court, D. Maryland; May 12, 2009; Federal District Court

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In the case of Leviton Manufacturing Company, Inc. v. Shanghai Meihao Electric, Inc., the U.S. District Court for Maryland addressed objections raised by Leviton against a Report and Recommendation by Magistrate Judge Susan K. Gauvey, which recommended awarding attorney fees and costs to Meihao. The litigation originated when Leviton filed a patent infringement suit concerning U.S. Patent No. 6,864,766. Meihao, the accused infringer, sought a declaratory judgment of non-infringement, invalidity, and unenforceability of the patent. After extensive discovery issues, Leviton voluntarily dismissed its claims, with the court preserving Meihao's right to seek fees and costs.

Judge Gauvey's subsequent 128-page report identified exceptional circumstances under 35 U.S.C. § 285, citing Leviton's inequitable conduct before the Patent and Trademark Office and vexatious litigation tactics. She recommended awarding Meihao $84,080.20 in costs and $726,579.15 in attorney fees, as well as fees related to the motion for fees and costs. Leviton objected to these findings, but the district judge, following Rule 72(b)(3), determined to overrule the objections and adopt Judge Gauvey's recommendations.

The district judge has the authority to accept, reject, or modify a magistrate judge's recommended disposition, obtain additional evidence, or send the matter back to the magistrate with instructions. Following a thorough de novo review of Judge Gauvey's Report and Recommendation and Leviton's objections, the court concludes that Judge Gauvey made no errors in fact or law. Her findings accurately identified relevant legal principles and applied them to the undisputed facts.

Under 35 U.S.C. § 285 and Fed. R. Civ. P. 54(d), prevailing parties are entitled to attorneys' fees and costs. Meihao is identified as the prevailing party since Leviton voluntarily dismissed its claims with prejudice, which constitutes a judgment on the merits. Meihao may be awarded attorneys' fees if it proves the existence of an "exceptional case," defined as involving inequitable conduct before the PTO or litigation misconduct. Judge Gauvey's findings justified the awarding of fees and costs based on these criteria.

Leviton's objections largely consist of misinterpretations of legal standards and irrelevant arguments, failing to provide valid reasons for rejecting the Report and Recommendation. Notably, Leviton claims that there was "no evidence" to support Judge Gauvey's factual findings, but these claims do not undermine the report. Leviton also argues that Judge Gauvey ruled without a factual basis and that genuine disputes of fact require an evidentiary hearing. However, these claims lack merit, as federal law allows for decisions on attorneys' fees following a dismissal with prejudice. Judge Gauvey's analysis of inequitable conduct was both procedurally and substantively appropriate, relying on undisputed facts and legal principles. The court notes that a litigant cannot claim a right to an evidentiary hearing if it did not request one.

Unconstitutional deprivation cannot occur regarding something that was never sought. An exceptional case arises when a party exhibits (1) inequitable conduct before the PTO or (2) litigation misconduct, such as vexatious tactics. Leviton's claims of inequitable conduct not being proven are incorrect; it stems from an applicant's duty of candor in interactions with the PTO. An attorney's actions are attributed to the applicant. A patent may be deemed unenforceable if it is shown by clear and convincing evidence that material information was withheld or misrepresented with intent to deceive the PTO. Material information is defined as that which a reasonable examiner would find crucial for deciding on patent approval. Intent to deceive can be inferred from the applicant's overall conduct and does not require direct evidence. After establishing materiality and intent, courts perform a balancing test to determine if inequitable conduct is present. Litigation misconduct can also influence attorney fee awards and may render a case exceptional under 35 U.S.C. § 285. Judge Gauvey found Leviton guilty of both inequitable conduct and litigation misconduct but deemed a detailed analysis of the latter unnecessary due to the former finding. Leviton contended that the Germain application, another patent application related to GFCI technology, was not material to the '766 Patent's patentability because of different effective filing dates and inventors. However, the Magistrate Judge concluded that Leviton had an obligation to disclose the Germain application under the duty of candor, as stipulated in 37 C.F.R. § 1.604(b).

The '766 Patent and the Germain application have numerous claims that are identical or nearly identical, indicating they claim the same subject matter. Judge Gauvey found by clear and convincing evidence that the claims in the '766 Patent were copied from the Germain application, which a reasonable examiner would have considered crucial in assessing the '766 Patent. Both documents were filed by Leviton and prosecuted by the same attorney, Claude Narcisse, but have different inventors. Consequently, the Germain application raised significant questions regarding the '766 Patent's inventorship, the sufficiency of its specification, and the potential for double patenting.

Leviton contends there is no evidence linking the inventors of both applications or supporting claims for the '766 Patent. However, Judge Gauvey did not need to address these specific issues to conclude that the Germain application was material. The existence of the Germain application was deemed material as it could lead a reasonable examiner to question the '766 Patent's compliance with legal standards. Notably, the term "movable bridge" appears extensively in the Germain application but is absent from the '766 Patent's specification, raising concerns about the latter's claim support.

Judge Gauvey’s conclusion that the Germain application should have been disclosed to the PTO was grounded in its materiality, as it provoked questions about inventorship, compliance with 35 U.S.C. § 112, and double patenting. Leviton's assertion that only prior art is material for inequitable conduct does not align with Federal Circuit precedents, emphasizing the broader implications of materiality beyond just prior art.

Materiality in patent law encompasses any information a reasonable examiner would likely find important for determining whether to grant a patent, not just prior art. The Germain application, despite being filed after the effective filing date of the '766 Patent, is deemed material because it falls within the relevant timeframe for patent examination. Patent examiners must consider all material prior art that has an effective filing date after the parent application but before the actual filing date of the application under review. The '766 application claims priority from its parent, establishing its effective filing date as August 20, 1999, while the actual filing occurred on April 19, 2004, after the Germain application.

Judge Gauvey determined that the Germain application was withheld with intent to deceive the PTO. Intent is assessed through circumstantial evidence, as direct proof is often lacking. An inference of deceptive intent arises when (1) highly material information is withheld, (2) the applicant knew or should have known its materiality, and (3) no credible explanation for the withholding is provided. In this case, attorney Narcisse withheld the Germain application, was aware of its materiality, and failed to offer a credible justification for not disclosing it. His claims of not needing disclosure contradict his familiarity with relevant regulations and procedures, leading the court to affirm Judge Gauvey's conclusion of intentional deception in the prosecution of the '766 Patent.

Judge Gauvey correctly identified inequitable conduct due to the high materiality of undisclosed prior art and strong circumstantial evidence of intent to deceive. The determination of intent requires less proof when the misrepresented information is highly material, whereas more evidence is needed for less material information. Leviton's claim that the accused Meihao GFCIs do not infringe the '766 Patent is deemed irrelevant to the case since Leviton voluntarily dismissed its infringement claims with prejudice, designating Meihao as the prevailing party eligible for attorneys' fees in this exceptional case. Leviton’s assertion that there is no evidence of invalidity regarding the '766 Patent does not negate the obligation to disclose prior art, as materiality is separate from validity. Even a valid patent can be rendered unenforceable due to inequitable conduct or misuse. 

Leviton contested Judge Gauvey's description of its lawsuit as "frivolous," arguing that a lack of findings on non-infringement or invalidity undermines this characterization. While not agreeing with the assertion that the '766 Patent should not have been asserted, the conclusion of Leviton’s egregious misconduct during litigation is endorsed. Judge Gauvey observed significant discovery issues, including Leviton's refusal to cooperate, the filing of frivolous motions, and failure to respond to subpoenas. Notably, Leviton’s patent prosecutor missed depositions without justification and raised numerous unsupported objections during depositions aimed at obstructing discovery. After facing a likely unfavorable ruling on a motion to compel, Leviton dismissed the case with prejudice. Judge Gauvey concluded that these tactics were designed to delay proceedings and obstruct the key inequitable conduct defense, and her findings on Leviton’s litigation misconduct are fully adopted. The inference is that resistance to discovery was partly due to the involvement of Leviton’s counsel in the inequitable conduct.

Many law firms refrain from litigating cases where their transactional advice forms the basis for claims against their clients due to potential conflicts of interest. The court has granted the motion for attorneys' fees and costs, as detailed in Magistrate Judge Susan K. Gauvey's Memorandum Opinion, which is adopted by the court. The court will review the request for fees and costs related to this motion shortly. Shanghai Meihao Electric, Inc. (Meihao) seeks to recover costs and attorneys' fees following a case dismissal with prejudice, though it was granted leave to apply for fees. The motion, categorized as case-dispositive, is treated as a "report and recommendation" to the district judge. A hearing was conducted on September 3, 2008, and it was recommended that Meihao's motion be granted due to exceptional circumstances under 35 U.S.C. § 285, with an award of costs totaling $84,080.02 and fees amounting to $726,579.15, deemed necessary to prevent a gross injustice.

Meihao manufactures GFCIs with reverse wiring protection, selling them in the U.S., including to USI. Leviton Manufacturing Co. Inc. owns multiple U.S. patents, including the '766 patent, which pertains to GFCI technology and is part of a series of patents developed by the same inventors. The '766 patent, filed as a continuation application in April 2004, claims priority from earlier patents and includes new claims drafted by attorney Narcisse. Leviton’s counsel previously requested expedited prosecution of the '766 application due to infringing activities, and the patent issued on March 8, 2005.

On March 31, 2005, Leviton initiated a lawsuit against USI for infringing the '766 patent, claiming that USI engaged in activities related to GFCI products produced by Meihao that infringed upon this patent (Case No. 05-889). In response, on May 5, 2005, Meihao filed a declaratory judgment action (Case No. 05-1243), asserting that the '766 patent was not infringed by its products, was invalid, and was unenforceable due to Leviton's alleged inequitable conduct. Meihao contends that Leviton’s attorneys failed to disclose a pending patent application (U.S. Patent Application Serial No. 10/690, 776, known as the Germain application) during the prosecution of the '766 patent, which may constitute inequitable conduct as defined by patent law. 

The Germain application, filed on October 22, 2003, shares claims similar to those in the '766 patent but has no common inventors. Meihao alleges that Leviton's attorney, Claude Narcisse, copied claims from the Germain application into the '766 application without notifying the PTO, violating PTO regulation 37 C.F.R. 10.23(c)(7). Additionally, USI and Meihao claim that relevant litigation details regarding the '766 patent were also withheld from the PTO.

Inequitable conduct can render a patent unenforceable and serves as a defense against infringement claims, as established in case law. Meihao subsequently moved to recover attorneys' fees and costs under Federal Rule of Civil Procedure 54(d)(1) and 35 U.S.C. 285, which allows courts to award reasonable attorney fees in exceptional cases. Leviton acknowledged Meihao's status as the prevailing party, which is supported by relevant case law. Furthermore, the early stage of litigation or dismissal with prejudice does not preclude an award for fees, and the court is permitted to decide on the attorneys' fees without reopening discovery if no genuine disputes of material fact exist.

The district court has sole discretion to award attorney fees, following a two-step process: first, it assesses whether clear and convincing evidence indicates the case is exceptional; second, it decides whether to award fees to the prevailing party if the case is deemed exceptional. The burden of proof lies with the prevailing party to demonstrate exceptional circumstances through misconduct, which may occur during litigation (e.g., vexatious tactics) or relate to the underlying misconduct that gave rise to the litigation (e.g., inequitable conduct). Evidence must be concrete and not based on unproven allegations. The court is required to articulate specific factual findings leading to its determination of exceptional circumstances. Both patentees and infringers are subject to the same standards regarding misconduct. A plaintiff's bad faith in asserting patent infringement can be inferred from the circumstances, especially if there is clear evidence of a baseless suit. Additionally, a finding of inequitable conduct in patent procurement can also render a case exceptional. However, there is a presumption that patents issued by the Patent and Trademark Office (PTO) are valid and that infringement claims are made in good faith. Ultimately, even if a case is exceptional, it does not necessitate a fee award; such awards should only be made to prevent gross injustice.

In determining whether to award attorneys' fees in exceptional cases, the Federal Circuit empowers trial judges to consider various factors, such as the case's closeness, counsel tactics, and party conduct. Meihao must establish by clear and convincing evidence that the case is exceptional, which would then allow the court to consider an award of attorney fees and costs. Meihao argues that exceptionality is demonstrated through three claims: Leviton's inequitable conduct in obtaining the '766 patent, its pursuit of frivolous infringement claims, and vexatious litigation conduct, including resistance to discovery related to inequitable conduct.

Before assessing exceptionality, the court must evaluate Meihao's allegations of inequitable conduct. Although the case was dismissed early in litigation, this does not preclude an award of fees. The court can make factual findings based on existing records without needing a trial unless there are genuine disputes over material facts that require further evidence or witness credibility assessments. Mere conclusory statements or unsupported explanations do not raise genuine issues of material fact.

For a finding of inequitable conduct, the plaintiff must provide plausible justifications rather than vague assertions of intent. Meihao contends that Leviton's counsel engaged in inequitable conduct before the PTO by withholding a material U.S. patent application during the prosecution of the '766 patent. A finding of such inequitable conduct is sufficient to classify the case as exceptional under 35 U.S.C. § 285.

Meihao alleges that Leviton engaged in inequitable conduct by failing to disclose the Germain application and related litigation concerning the '766 patent during its prosecution. To succeed in its claims, Meihao must demonstrate, with clear and convincing evidence, that: (1) the Germain application was material to the patentability of the '766 patent; (2) Leviton did not disclose the Germain application; and (3) Leviton's nondisclosure was intentional. Similarly, for the second claim regarding related litigation, Meihao must prove these same elements. Leviton does not contest that it failed to disclose either the Germain application or the related litigation, but argues that such nondisclosure was not material to the patentability of the '766 patent.

The Court's review will focus on whether Leviton's admitted failures rise to levels of materiality and intent. If these thresholds are met, the Court will then conduct a balancing test, considering the materiality of the nondisclosures and Leviton’s intent to determine whether inequitable conduct occurred. The more material the nondisclosure, the less intent is needed to establish inequitable conduct. The Court will also examine relevant PTO regulations, which impose a duty of disclosure and good faith on all parties involved in patent prosecution.

Individuals involved in the filing and prosecution of a patent application are obligated to act with candor and good faith towards the Patent and Trademark Office (PTO). This duty includes disclosing all material information pertinent to patentability, ensuring that the PTO can effectively evaluate applications. Specifically, 37 C.F.R. § 1.604(b) requires applicants to identify any pending applications claiming the same invention, unless responding to an examiner's suggestion. Misconduct is defined by 37 C.F.R. § 10.23(c)(7) as knowingly withholding information about patents or applications from which claims have been copied, potentially leading to reprimand or exclusion.

The Manual of Patent Examining Procedure (MPEP) elaborates on these duties, emphasizing that individuals must disclose all information relevant to patentability, which encompasses details about inventorship, prior inventions, co-pending applications, and litigation related to the invention. The MPEP advises patent attorneys not to assume that examiners are aware of other applications and encourages them to submit information when there is any question of its materiality. When in doubt, it is safest to disclose to avoid complications, as decisions on materiality should not be made solely by the attorney. Overall, patent regulations and MPEP provisions outline a clear duty to disclose comprehensive information to facilitate the patent examination process.

Meihao contends that Leviton neglected its obligation to disclose crucial information during the prosecution of the '766 patent, impairing the patent examiner's ability to assess the patent's patentability. The record shows that Leviton did not disclose the Germain application, related litigation, or its "copying" of claim language, although there is a legal dispute regarding what Leviton was required to disclose and the materiality of the undisclosed information. The Court determined that Leviton failed to disclose information required by patent law, which a reasonable patent examiner would have deemed significant. Consequently, Meihao has met the first requirement of the inequitable conduct doctrine. 

Meihao asserts that the omission of the Germain application was material, suggesting that a reasonable patent examiner would find it relevant to the patentability decision. Various tests for materiality exist, with the Federal Circuit adopting the "reasonable examiner" test, which is broader and assesses whether the omitted information would be deemed important by a reasonable examiner. This standard serves as the threshold for determining materiality in claims of inequitable conduct, regardless of whether the withheld information could invalidate the patent. Leviton, however, relies on the narrower "but for" test, which has been rejected by both the PTO and courts, as it does not ensure that the Office receives necessary information for evaluating patentability.

Meaningful examination of patent applications will occur in district court infringement cases if the Office lacks necessary information, potentially eroding courts' confidence in the Office's decisions. The "but for" test, advocated by Leviton, is criticized as a results-oriented standard that allows practitioners to determine patentability on their own, which contradicts PTO guidance. The Court rejects this test in favor of the reasonable examiner standard.

Under PTO regulations, particularly 37 C.F.R. 10.23(c)(7), it is deemed misconduct to knowingly withhold information about copying claims from another patent application, establishing an absolute duty to disclose. Leviton attempts to downplay the significance of claimed copying in its defense, asserting that having similar claims in different applications is not inherently problematic and claiming a lack of intent to deceive the PTO. However, evidence indicates that Leviton's counsel, Narcisse, did copy claim language from the Germain application for the '766 application.

The Court establishes that the duty to disclose information on copying is unequivocal, and Leviton fails to provide a valid justification for not notifying the PTO. The Germain application is deemed highly material as it raises essential questions about the inventorship of the '766 patent, the sufficiency of its specification, and the potential for double patenting rejections.

Meihao contends that the PTO rules mandate the disclosure of the Germain application, referencing 37 C.F.R. 1.56, 1.604(b), 10.23, and MPEP 2001.06(b). Although Meihao acknowledges similarities in claim language between the Germain and '766 applications, it argues that such similarities are not unusual for applications from the same assignee. Leviton counters by asserting that the Germain application is not material to the patentability of the '766 patent because its priority date is three years after that of '766. Meihao argues that Leviton's stance assumes key disputed issues regarding whether the claim copying affects '766's priority date and whether the Germain inventors are distinct from those of '766. These issues, according to Meihao, should be clarified by the patent examiner, especially since the PTO requires applicants to disclose copied claims. 

Leviton also insists that Meihao’s claims regarding inventorship and double patenting misinterpret patent law. However, the Court finds Leviton’s arguments legally unsound, concluding that the Germain application could raise important questions about inventorship, the support of the '766 patent's specification for its claims, and potential double patenting concerns, all of which are highly material. Even if these legal issues are debatable, withholding the information from the patent examiner is inappropriate. The law asserts that only true inventors may obtain patents, emphasizing that inventors must appreciate the features of their inventions at the time of conception. If they fail to recognize such features during conception, they cannot later rectify this oversight to claim a patent, underscoring the material nature of inventorship in the patent process.

Materiality, as defined in 37 C.F.R. 1.56(b), encompasses information such as prior inventions and inventorship conflicts. The Federal Circuit has ruled that misrepresentations or omissions regarding inventorship to the PTO are highly material under both the reasonable examiner standard and the newer Rule 56 test, as established in PerSeptive Biosystems, Inc. v. Pharmacia Biotech, Inc. Specifically, misinformation about inventorship is deemed highly material, irrespective of the actual correctness of the inventorship of the issued patents. 

In the case examined, the Germain application raised significant questions about inventorship due to its identical or nearly identical claim language with the '766 patent, despite both being owned by Leviton. Leviton maintains that the identical claim language is permissible due to common ownership, yet acknowledges that the patents have no common inventors. Each patent must be credited to its true and original inventors, as mandated by 35 U.S.C. 102(f).

Leviton has conceded similarities in claims between the Germain application and the '766 patent but asserts that each was invented by its respective listed inventors. The court does not need to decide whether the listed inventors are correct; rather, it must assess whether the Germain application raises significant questions about inventorship that could lead to a prima facie case of unpatentability. The court concludes that the Germain application indeed raises such questions, indicating potential misrepresentation of inventorship related to the '766 patent, which is materially significant to patentability.

Additionally, Leviton argues that the '766 claims are supported by the same patent specification filed in 1999, asserting that this predates the Germain application.

The Germain application does not constitute prior art against the '766 patent, as the PTO found the specification of the '766 patent fully supported its claims, indicating it was invented prior to the Germain application. While the specification did not change and predates Germain’s filing, the claims in the '766 patent were revised to address newly identified infringing GFCI products. Meihao's argument of inequitable conduct is based on the assertion that the new claims in the '766 patent were actually invented by Germain's inventors and were included in an effort to broaden the claims to encompass Meihao's products. Meihao contends that Leviton copied claims from Germain to retroactively benefit from an earlier priority date, thus rendering the claims more valuable by eliminating prior art that could invalidate them. Legal precedents establish that claims cannot be retroactively added if the inventor did not appreciate them at the time of the invention's conception. The claims define the patent's protective scope, and an inventor cannot expand this scope to cover features not originally conceived. The revised claims of the '766 patent incorporate specific terms not found in its specification or parent patents but are present in the Germain application, suggesting potential issues regarding the adequacy of the specification's support for these claims. The patent examiner did not reject the claims based on this support.

Leviton's duty to disclose information related to the '766 patent application under 35 U.S.C. § 112 is not clearly established. It remains uncertain what analysis the examiner performed regarding the written description requirement. The court agrees with Meihao's assessment that the examiner lacked critical information, particularly the Germain application, which could have prompted questions about the '766 patent's compliance with the statute. The court does not determine the correctness of the examiner's conclusion that the patent specification supports the claims; rather, it focuses on whether the Germain application could have raised compliance questions significant enough to suggest potential unpatentability.

Additionally, there is a dispute over whether disclosing the Germain application was legally required due to its potential relevance for double patenting rejections. Leviton did not provide substantive factual arguments against the Germain application being a basis for such a rejection. Instead, they relied on legal arguments, which the court rejected. The court noted that the disclosure of a co-pending patent application with similar claims is mandatory, as such applications are material for assessing patentability, particularly in preventing double patenting. The court emphasized the fundamental principle of patent law that prevents claiming the same invention in multiple patents and highlighted that the PTO must be informed of potentially conflicting applications to fulfill its examination responsibilities.

Congress has emphasized the necessity of rejecting patent applications that could lead to multiple patents with differing expiration dates for similar inventions. The Federal Circuit has established that an application is highly material if it could potentially support a double patenting rejection. In this case, Leviton acknowledged that the Germain application and the '766 application share similar claims and identical language, which the Court found significant. The similarities indicate that the Germain application is highly material to the '766 patent's prosecution, potentially serving as a basis for a double patenting rejection. The Court referenced prior decisions confirming this principle, noting that the '766 patent had previously formed the basis for a double patenting rejection in the Germain application, with the PTO finding substantial overlap in their disclosures. Consequently, the Court concluded that the Germain application was critical to patentability and should have been disclosed to the PTO.

Additionally, there is a dispute regarding the requirement to disclose related litigation and its materiality to the '766 application. The Manual of Patent Examining Procedure (MPEP) mandates the disclosure of ongoing or past litigation concerning the patent's subject matter, including any material information that may arise from such litigation, such as evidence of prior public use, issues of inventorship, prior art, and allegations of inequitable conduct.

Information regarding prior litigation related to the parent patents of the '766 patent is considered material for evaluating patentability, as established in court cases such as Nilssen v. Osram Sylvania, Inc. and Critikon, Inc. v. Becton Dickinson Vascular Access, Inc. Meihao alleges that Leviton failed to disclose that the parent patents had been involved in at least twelve lawsuits prior to the issuance of the '766 patent, with validity and enforceability challenged in eight of those cases. Leviton does not deny these allegations but argues they are not material, claiming that none of the litigations resulted in findings of invalidity for the '766 patent and that a reexamination confirmed its patentability over prior art. However, the patent manual does not limit the requirement for disclosure to only successful litigations; it mandates disclosure of all litigation related to an original patent when assessing later patents. The court emphasizes that it is not required to determine whether such litigation would have influenced the issuance of the '766 patent; rather, it acknowledges that a reasonable examiner would find the existence of litigation challenging the validity of the parent patent significant. Consequently, Leviton’s failure to disclose this information was material, and it did not provide a valid explanation for the omission. Leviton's argument that the examiner considered litigation information during re-examination and still affirmed the patentability of the '766 patent does not negate the obligation to disclose prior related litigation.

The submission includes a letter from Claude Narcisse to the Commissioner on Patents, dated August 7, 2007, which encloses a 17-page Information Disclosure Statement (IDS) and a PTO Form PTO/SB/08a. Meihao contends that any late disclosures do not rectify Leviton's inequitable conduct nor affect the current court issues, a view supported by case law. In *Molins PLC v. Textron*, the Federal Circuit held that withholding material information during original examination constituted inequitable conduct, even when the information was later considered during reexamination. The court emphasized that materiality is judged by what a "reasonable examiner" would find significant, rather than the subjective views of the examiner who eventually reviewed the application. 

The court agrees with Meihao that the re-examination results do not contribute to the materiality determination in this case, which involves different patents than those directly linked to the Germain application. Meihao argues that the Germain application and related litigation were not properly presented to the patent examiner, as they were not included in the IDS. According to regulations, the examiner is not obligated to consider non-compliant information. Narcisse, as an experienced patent prosecutor, should know that the examiner relies on the IDS list for document review. 

While Narcisse's memorandum mentions the Germain application among numerous other references, the official IDS does not include it. Additionally, while Leviton submitted some litigation documents, they were among over 200 disclosed, highlighting the inefficiency of submitting extensive document lists. The court notes that clarity in disclosures is preferable to avoid overwhelming the examiner.

A long list of documents should be submitted, with particular emphasis on those highlighted as significant or specifically noted to the applicant. The patent examiner did not indicate consideration of the Germain application or its related litigation in the IDS form, which lists references considered. The examiner's August 21, 2008 response fails to acknowledge these documents or their relevance to patentability, focusing instead on rejecting claims based on other patents. Given that the Germain application and related litigation are deemed highly material and were not disclosed by Leviton, the court must evaluate whether Leviton intended to deceive the PTO. 

Intent to deceive is typically inferred from the surrounding facts and circumstances, rather than direct evidence, and is established when the conduct suggests a deliberate decision to withhold material references. A finding of gross negligence alone does not imply intent to deceive; it requires consideration of the overall circumstances and presence of good faith evidence. The Federal Circuit has differentiated between simple errors due to inattention and more serious omissions that may indicate deceitful intent. The court will assess whether evidence of intent is sufficiently clear to resolve the issue as a matter of law or if further inquiry is necessary.

Intent to deceive the Patent and Trademark Office (PTO) can be inferred when a patent attorney, aware of their duty to disclose relevant information, fails to cite highly material references. In contrast, a lack of intent was found in Kingsdown when an attorney mistakenly copied an unamended claim into a continuing application. In Critikon, the Federal Circuit emphasized that close cases should be resolved through disclosure rather than unilateral decisions by the applicant. A prima facie case of inequitable misconduct can be established by demonstrating a violation of the duty of candor, while a patentee may counter this by providing facts indicating that no wrongful intent should be inferred, such as a good faith mistake or mere negligence. Summary judgment on equitable conduct may be granted if the patentee's explanations lack evidentiary support, but if a non-frivolous explanation exists, it may prevent summary judgment. In the case at hand, the court found that Leviton intended to deceive the PTO, largely due to the actions of Mr. Narcisse, an experienced patent lawyer who failed to disclose the Germain application and related litigation despite his knowledge of the obligation to do so. His explanations for this omission were deemed unconvincing given his expertise.

Leviton's explanations regarding the similar claim language in the Germain and '766 patent applications, along with his failure to notify the PTO of this similarity, were deemed unconvincing given his extensive experience in patent law. Narcisse, a highly experienced patent attorney with a background in patent prosecution and a history of working on applications for Leviton, filed the Germain application on October 22, 2003, and the '766 application on April 19, 2004. Both applications contained substantially identical language in their claims, with only minor differences. Narcisse admitted knowledge of the Germain application during the prosecution of the '766 patent but chose not to disclose it, believing it did not qualify as prior art. Despite acknowledging the legal obligation to disclose relevant information to the PTO, he failed to comply with this duty, which raises concerns about his intent to deceive. The document emphasizes the importance of disclosing potentially material information to the PTO, as outlined in patent law and the MPEP.

Submitting information is crucial when there is uncertainty, as what may seem non-material to an attorney, agent, or applicant could be deemed significant by others, potentially preventing awkward inquiries. The determination of relevance in ambiguous situations is best left to the examiner rather than the applicant. Under 37 C.F.R. 10.23(c)(7), there is an obligation to disclose any information that identifies a patent or patent application from which claims have been copied. Mr. Narcisse acknowledged awareness of this duty but denied having "copied" claims from the Germain application into the '766 application, despite admitting to drafting both sets of claims independently. He recognized that the claim language between the two applications was similar but did not consider this similarity coincidental. The court inferred that the identical language suggested actual copying, as no credible explanation was provided by Narcisse or Leviton regarding the lack of disclosure to the PTO. Leviton’s legal arguments attempted to sidestep the copying issue, focusing instead on the examiners' review of the applications under Section 112, which did not address the necessity of reporting the copying as mandated by 37 C.F.R. 10.23(c)(7). Ultimately, despite being aware of the disclosure requirements, Narcisse failed to inform the PTO about the Germain application.

Narcisse did not disclose the Germain application to the Patent and Trademark Office (PTO) during the prosecution of the '766 patent. He admitted to using language from another Leviton-owned patent application in drafting the Germain application but refused to acknowledge any technical copying of the Germain claims into the '766 application, despite admitting to de facto copying. A comparison of the claims between the two applications undermines his credibility. When questioned about the decision not to disclose the similarities to the PTO, Narcisse claimed it was not a conscious determination, asserting it was not material to the patentability of the '766 application. However, regulations require disclosure of relevant information, regardless of its perceived materiality, and he acknowledged that both applications were co-pending at the time. Narcisse also understood his duty to disclose related applications but questioned whether the regulations applied since both applications were owned by Leviton. His tentative view on this matter did not lead him to disclose the Germain application, and he did not seek clarification from others. Despite his reservations, he conceded that it is generally better to disclose unclear information to the PTO for them to determine its materiality. The Court determined that the interpretation of the disclosure regulations should be aligned with Meihao's understanding, which views the language as referring to applications by different applicants.

Only inventors can be applicants for patent applications, and the inventors in the Germain and '766 applications are different, necessitating disclosure to the Patent and Trademark Office (PTO) as per 37 C.F.R. 1.604(b). Narcisse's claim that disclosure was unnecessary due to Leviton’s ownership of both patents lacks regulatory support. Case law affirms that common ownership does not preclude double patenting rejections, as evidenced by Akron and Dayco cases. Narcisse, when questioned about the potential for a double patenting rejection, expressed uncertainty about examiner actions but acknowledged the possibility of such a rejection if different inventive groups submitted similar claims owned by Leviton. He did not consider the Germain application material to the '766 application and justified its non-disclosure by stating it was not a prior art reference due to the '766 application’s earlier priority date. However, materiality extends beyond prior art to any information likely to influence an examiner’s decision, as outlined in Bristol-Myers Squibb and Dayco cases, indicating Narcisse's understanding of materiality was flawed. It is undisputed that Leviton failed to disclose related litigation involving the parent patents of '766, despite Narcisse's awareness of his obligation to do so under MPEP 2001.06. He acknowledged knowledge of litigation concerning the '558 patent, the parent patent of '766, but provided no justification for failing to disclose this information to the PTO. Leviton's legal arguments regarding these issues have been determined to be without merit.

Leviton failed to provide a good faith explanation for its nondisclosure of litigation, leading to an inference of intent to mislead. Narcisse's justifications for nondisclosure were deemed unconvincing, and Leviton's lack of plausible explanations violated patent law requirements. The court noted that intent to deceive can be inferred from a party's failure to disclose relevant information when no credible reasons are provided. Leviton did not explain its failure to inform the PTO about the copying of claims from the Germain application to the '766 patent application. Narcisse's denial of copying was contradicted by logical inferences from the facts. The withholding of the Germain application was justified by a mistaken belief regarding its materiality, but this gross negligence still supported an inference of intent to mislead. Narcisse's narrow interpretation of what constituted material information was incorrect, and his familiarity with patent law, combined with his lack of due diligence, indicated a high level of culpability. Overall, the court concluded that the circumstances surrounding Leviton and Narcisse's actions suggest a deliberate intent to deceive the PTO during the '766 patent prosecution.

Leviton had a substantial incentive to mislead the Patent and Trademark Office (PTO) by withholding the Germain application from the examiner of the '766 patent application. This concealment was likely to avoid scrutiny regarding inventorship, the sufficiency of specifications, and potential issues of double patenting, which could jeopardize the issuance of the '766 patent. The '766 patent, claiming an earlier priority date of August 20, 1999, is significantly more valuable to Leviton than the Germain patent, which only claims priority from February 3, 2003. Meihao's counsel pointed out that the earlier priority date of the '766 application enhances its claims by eliminating three and a half years of prior art that could invalidate them. Meihao's product, linked to a new UL standard and shipped between the two priority dates, could anticipate the claims of the '766 patent unless Leviton provides supporting specifications from earlier patents. Meihao argued, and the court acknowledged, that the potential for questioning inventorship between two applications filed by different inventors within six months creates a strong motive for Leviton to hide the Germain application.

The court also recognized that while obtaining patents to exclude competitors is not illegal or improper, all amendments or claims must adhere to relevant statutes and regulations. Meihao's allegations of inequitable conduct stem from Leviton's attorneys' failure to maintain the necessary candor and disclosure obligations during the patent application process. Furthermore, there is no evidence of good faith in Leviton's interactions with the PTO. The court cited a precedent, highlighting that the absence of a disclosure regarding the co-pendency of applications could lead to a finding of intent to deceive, aligning with the notion that such conduct undermines the integrity of the patent system.

In Akron, the plaintiff asserted that Container misled the Patent and Trademark Office (PTO) during the prosecution of the '829 patent (Katz application) by not disclosing the later-filed Venus application, which addressed similar subject matter. Both applications were handled by the same law firm, and the Federal Circuit noted that the attorneys were aware of the similarities and potential implications for patentability. Unlike Akron, in this case, Leviton's attorneys did disclose the Katz application to the Venus application examiner after it was allowed but before the patent was issued. In contrast, Leviton's attorneys failed to inform the patent examiner of the Germain application before the '766 patent was issued. Leviton claimed it disclosed the Germain application during re-examination, citing parts of the re-examination file and asserting that references to the Germain application were submitted to the patent re-examiner. However, the Court rejected this assertion as evidence of good faith, noting that the re-examination did not address the Germain application or its similar claim language. The re-examination focused on the validity of the '766 patent in light of other patents, with the examiner confirming the patentability of the '766 claims and distinguishing them from those of the cited patents.

The Appellant's June 6, 2007 Redrafted Brief on Appeal contests the Examiner's decision, asserting that the claim construction was excessively narrow and that the '766 patent was anticipated by four referenced patents: Echtler, Sherman, Dufresne, and Bereskin. Leviton's Brief on Appeal reiterates that these four patents were the sole focus under 35 U.S.C. § 102(b) during the reexamination. Leviton claims that its disclosure of the Germain application demonstrates good faith; however, patent reexamination is limited to substantial new questions of patentability and prior art not previously considered. The reexamination's scope is confined to the claims for which it was requested and specifically to the four patents in question. Leviton's argument regarding the Germain application lacks persuasive power regarding materiality. The original and appellate decisions by Examiner Barrerra addressed only the patentability of the '766 claims in relation to the four patents, not establishing a general patentability standard. Furthermore, Barrerra's findings do not reflect on Leviton's adherence to its duty of disclosure, as the PTO does not allow inequitable conduct as a basis for claim rejection during any patent examination process.

The Court finds that Leviton's late disclosure of the Germain application to the PTO, occurring on August 7, 2007, during the appeal phase of reexamination proceedings, indicates bad faith. Leviton's representative, Mr. Narcisse, downplayed the Germain application as non-material among numerous other references. Furthermore, the references cited in the memorandum differ from those listed in the Information Disclosure Statement (IDS), which includes 196 patents or applications and 13 non-patent documents but omits Germain. The memorandum does not meet the content requirements of an IDS, leading to confusion about whether the examiner considered it, particularly regarding the Germain application and related litigation. The Court notes that burying significant references among many others can indicate bad faith. Leviton's disclosure appears more strategic for litigation than for genuinely informing the PTO. The Court concludes that Leviton's failure to disclose the Germain application was materially significant to the prosecution of the '766 patent, raising issues around inventorship misrepresentation and potential double patenting. Additionally, failing to disclose related litigation was also materially significant, as it could have prompted further inquiry from the examiner. The Court's findings suggest that Leviton's conduct was sufficiently culpable to warrant a conclusion of inequitable conduct, which undermines the patent's enforceability.

Leviton’s conduct has been deemed sufficiently culpable to establish intent to deceive, leading to a finding of inequitable conduct. The court identified clear and convincing evidence of high materiality and intent, categorizing Leviton’s actions as exceptional under the relevant statute. Inequitable conduct is recognized as an offense against the U.S. Patent and Trademark Office (PTO) and the public interest. The court emphasized the importance of candid and honest communication during ex parte proceedings, noting that Leviton’s counsel acted unethically by prioritizing client interests over the integrity of the judicial system.

Additionally, Meihao claims that Leviton pursued frivolous infringement claims for nearly a year, acknowledging that the allegations were without merit. The court concluded that Leviton initiated litigation with knowledge of the patent's likely invalidity due to inadequate disclosure. Such conduct potentially violates Federal Circuit law and Federal Rule of Civil Procedure 11, which governs frivolous litigation. The court noted that litigation misconduct and unprofessional behavior are relevant factors in determining the award of attorney fees and can render a case exceptional. It cited that a frivolous infringement suit is one where the patentee knew or should have known it was baseless, and bad faith can be inferred if the patentee acts unreasonably in asserting infringement.

Leviton was found to have engaged in inequitable conduct regarding the prosecution of the '766 patent by failing to disclose the Germain application and related litigation, indicating that Leviton was aware its infringement suit was unfounded when filed. Consequently, Leviton may be responsible for the expenses incurred by Meihao in defending against what could be deemed a frivolous lawsuit. Meihao ceased manufacturing the accused product in 2007 after revising its GFCI design, informing Leviton of this change on February 2, 2007. By May 2007, Leviton acknowledged that Meihao had stopped producing the original infringing products. Despite this, Leviton continued its legal action for nearly a year, ultimately dismissing the case on December 17, 2008, after attempting to settle. Meihao disputes that the lawsuit prompted its design change and contends that Leviton wrongfully accused the modified products of infringement and sought discovery related to them. The reasonableness of Leviton's persistence in the suit post-February 2007 is contested, with Leviton claiming the need for review and settlement discussions. However, the Court remains unable to determine if Leviton's actions against the modified products were frivolous or warrant sanctions, given the ongoing litigation activity following the product revision. It suggests that a stay of proceedings might have been more appropriate to assess infringement issues regarding the new product and manage dismissal negotiations, potentially avoiding unnecessary costs for Meihao.

The initial prosecution of the lawsuit was deemed improper, warranting an imposition of fees due to exceptionality. Meihao's assertion of exceptionality is based on Leviton's refusal to provide discovery, including failure to produce documents and appear for depositions, alongside making unfounded objections. Prior to the lawsuit's dismissal, the discovery judge had reviewed two motions to compel by Meihao and was about to issue an opinion favoring these motions. The judge's insights into the discovery process led to the conclusion that Leviton engaged in misconduct, contributing to the case's exceptional nature.

Litigation misconduct is relevant for awarding attorney fees and can establish a case as exceptional. This includes late document production, withdrawal of patents, and misleading responses. Leviton's actions were characterized as exceeding reasonable litigation tactics, aimed at maximizing delay and obstructing discovery related to a key defense. Specific instances of misconduct include failing to comply with deposition subpoenas served on Leviton’s patent prosecutors and filing a late motion to quash the subpoenas without merit.

The legal standard requires that any party seeking to avoid deposition must obtain a court order before the scheduled date, which Leviton failed to do, resulting in unnecessary delays and expenses.

A protective order for depositions should typically be sought before the scheduled discovery date. The deponent is responsible for obtaining a postponement if unable to attend. A party cannot ignore a properly-noticed deposition without a court order, and filing a motion for a protective order does not exempt attendance. Courts generally require a motion to quash to be both filed and granted prior to the deposition to avoid compliance. Some courts may allow a deponent to apply for a protective order before the deposition date. A party cannot unilaterally choose not to attend a deposition without at least applying for such an order beforehand. In the case at hand, Leviton failed to secure a judicial order or apply for a protective order before the deposition time.

Furthermore, companies cannot impede discovery related to patent prosecution by retaining their patent prosecution counsel as litigation counsel. Leviton’s motion to quash lacked specific references to patent law, which supports the right to depose patent prosecutors. Courts routinely allow depositions of these counsel when a defense of inequitable conduct is raised, as this information is deemed relevant. Various cases illustrate that depositions of patent prosecution attorneys and trial counsel are permitted to uncover necessary information regarding inequitable conduct, as their insights may be crucial to the case. A party can seek relevant, non-privileged information from any individual with access to it, including opposing trial counsel.

In Amicus Communications L.P. v. Hewlett-Packard Co. Inc., the court addressed the permissibility of deposing patent prosecution counsel in the context of inequitable conduct claims in patent litigation. The court noted that several jurisdictions have permitted such depositions, emphasizing that Leviton's arguments lacked support from relevant patent infringement cases. Leviton's reliance on the Shelton precedent from a product liability case was deemed inappropriate, as it did not apply to patent cases or the specific context at hand. The court clarified that the Shelton ruling was not intended to offer heightened protection to attorneys involved in both completed and pending cases. It highlighted a consensus among courts that alleged infringers are entitled to depose patent prosecution counsel when inequitable conduct is alleged. The commentary referenced indicated that courts generally require prosecuting attorneys to be available for deposition under these circumstances, with one exception noted in ResQNet, where the deposition was denied due to insufficient pleading of the inequitable conduct defense.

The court concluded that Leviton failed to cite any cases where depositions of patent prosecution counsel were denied under similar conditions, reinforcing that such counsel cannot avoid deposition simply because they also serve as trial counsel. The relevance of the depositions to Meihao’s defense of inequitable conduct was clear, as Meihao needed factual information about Leviton's patent prosecution to substantiate its claims. Leviton's argument that Meihao must prove elements of its inequitable conduct claim prior to obtaining discovery was rejected, as it imposed an unwarranted requirement not found in federal rules. The court maintained that without access to the deposition of Leviton's patent counsel, Meihao would be unable to establish the necessary facts for its claim, particularly regarding the alleged failure to disclose the Germain application during the prosecution of the '766 patent.

Leviton acknowledged in its motion to quash that depositions of trial counsel could proceed if the requesting party demonstrated that there were no alternative means to obtain the needed information. This standard, albeit stricter than necessary, was met by Meihao, who showed that depositions of Leviton’s patent counsel were essential to uncover relevant facts regarding the prosecution of the '766 application. Leviton's motion to quash was deemed untimely and unjustified, leading to unnecessary legal expenses and delays for Meihao in its inequitable conduct defense.

Despite Leviton’s initial resistance, its patent prosecutors, Messrs. Narcisse and Magidoff, were eventually deposed on April 4 and May 3, but they faced significant obstruction from Leviton's counsel, who directed them to refrain from answering numerous inquiries. This included questions regarding the relationship between the Germain application and the '766 patent, decisions not to disclose the Germain application to the PTO, and discussions with inventors about relevant facts. The refusal to answer these questions, primarily cited under the work product doctrine, hindered Meihao's ability to explore critical aspects of its defense, particularly concerning the similarities in claim language between the two applications.

The excerpt addresses concerns regarding potential violations of the PTO rule against knowingly withholding information about patents or applications from which claims may have been copied. Narcisse acknowledged he could explain the similarities in claim language across two applications, but was instructed by counsel not to do so during questioning. Meihao subsequently filed a motion to compel further depositions of Narcisse and Magidoff to answer questions they had previously refused on counsel's instructions.

The court found Leviton's conduct in resisting these depositions to be manifestly unreasonable and vexatious. Meihao identified numerous questions that were not answered, and Leviton failed to justify its objections or provide specific reasons for instructing witnesses not to answer. This lack of justification and the reliance on general work product claims without addressing the relevance of the questions raised concerns about Leviton's intentions to obstruct discovery related to Meihao's inequitable conduct defense. 

Moreover, Leviton did not meet its burden to demonstrate that the asserted privileges applied, which would have been necessary to support its refusal to answer. The excerpt highlights the legal principle that the party claiming privilege must prove all elements of that privilege, including the existence of the attorney-client relationship and the confidentiality of the communications. The court's findings suggest that Leviton's actions were aimed at delaying or preventing the disclosure of crucial information pertinent to the case.

The proponent must clarify the significance of cryptic documents, potentially through ex parte submissions to preserve confidentiality. When a requesting party contests the validity of a privilege claim, the producing party must provide an evidentiary basis, such as affidavits, to substantiate each element of the claimed privilege for each document. Failure to establish this basis necessitates the production of the documents. If the assertion of privilege is challenged, the asserting party must similarly demonstrate a valid evidentiary basis for each document or category of documents. The excerpt highlights that Leviton did not adequately defend its position during depositions related to claims of obstruction. Additionally, Leviton's reliance on the inequitable conduct defense based on work product grounds was deemed unmeritorious, as it misapplied legal standards from a relevant case regarding attorney-client privilege to the work product doctrine. It clarifies that, unlike attorney-client privilege, work product immunity can also be overcome by demonstrating substantial need and undue hardship, independent of the crime-fraud exception.

Attorney-client privilege cannot be directly applied to work product immunity, as argued by Leviton. Leviton asserts that in patent cases, work product immunity is only overcome by demonstrating a prima facie case of common law fraud, citing several cases including Spalding. However, many of these cited cases predate Spalding and focus solely on the crime-fraud exception concerning attorney-client privilege rather than work product immunity. The court clarifies that the standards for overcoming attorney-client privilege differ from those for work product immunity, emphasizing that substantial need and undue hardship are sufficient to overcome fact work product immunity.

Leviton's argument is deemed novel and meritless, as it overlooks consistent rulings in patent cases that allow for production of fact work product upon showing substantial need. Cases such as Softview, McCook Metals, and Handgards establish that factual material may be ordered produced when substantial need and inability to obtain equivalent information without undue hardship are demonstrated. Leviton fails to establish substantial need or undue hardship for any opinion work product inquiries, although the court suggests that Meihao's request for opinion work product might be justified due to its relevance to its inequitable conduct defense.

Mental impressions of patent counsel typically enjoy strong protection from discovery; however, they may be discoverable in limited circumstances, particularly when directly at issue due to claims of inequitable conduct. In this case, the court agrees that Meihao can access Leviton's patent counsel's mental impressions because they relate to Meihao's defense of inequitable conduct. Leviton acknowledges that some courts permit limited discovery in such contexts but incorrectly asserts that work product protection is absolute when the work was done in anticipation of litigation.

The court clarifies that if the work was not intended for litigation, it does not qualify for work product immunity. Although patent prosecution documents may be protected if litigation was a primary motivation, defendants can challenge this immunity when they require access to prove an inequitable conduct defense. The Hercules case illustrates that work product immunity is not absolute and may be overcome if substantial need or undue hardship is demonstrated.

Moreover, the court notes that an exception to opinion work product immunity exists when counsel's mental impressions are directly relevant and necessary for the litigation. This perspective aligns with both Fourth Circuit precedent and broader legal principles, allowing Meihao to discover Leviton's counsel's opinions related to the inequitable conduct defense. The court finds Leviton's refusal to comply with discovery requests unjustified, indicating that its actions were aimed at delaying the proceedings, and concludes that most of the documents requested by Meihao are discoverable.

Leviton's approach to document production and dispute resolution in litigation is criticized as unacceptable, particularly regarding its objections to the relevance of certain documents. Leviton claims that Meihao has failed to demonstrate relevance for specific documents; however, relevance under Rule 26 requires only a connection between the claim and the evidence sought. Leviton raised its discovery objections too late, waiving its rights. The documents in question pertain to the Germain application and parent patents, which are relevant to the dispute. Leviton's resistance to produce these documents is deemed ineffective and obstructive.

Leviton issued four privilege logs over several months, with the last log identifying sixty-five previously unlisted allegedly privileged documents. This omission could constitute a waiver of privilege. Leviton did not adequately substantiate its privilege claims when challenged by Meihao, failing to demonstrate the necessary elements of attorney-client or work product privilege for each document. Affidavits provided by Leviton representatives referenced some withheld documents but lacked sufficient factual context or connection to their creation and use. Ultimately, after in camera review, only 17 documents were deemed validly protected by privilege, while many others were not. In total, the latest privilege log listed 80 documents as privileged or protected.

Leviton's assertion of privilege over a majority of documents was found not to be "substantially justified," warranting an award of attorney fees under the relevant rule and as an illustration of vexatious litigation conduct. The court identified Leviton's litigation misconduct as a basis for an exceptional case under 35 U.S.C. § 285. While attorney fees could be awarded based solely on this misconduct, the court noted that the award also reflects Leviton's inequitable conduct during patent prosecution, making such limitations unnecessary.

Meihao demonstrated clear and convincing evidence of two bases for exceptionality: Leviton's inequitable conduct concerning the '766 patent and its discovery conduct, which included a vexatious litigation strategy aimed at obstructing Meihao's discovery efforts related to Leviton's inequitable actions. The court highlighted that Leviton intentionally withheld the Germain application from the PTO while prosecuting the '766 patent, which could have raised significant issues affecting patent validity.

Leviton's litigation strategy involved pursuing infringement claims without full disclosure to the PTO and ultimately dismissing the case before any negative rulings could occur. This was not Leviton's first instance of causing undue burden, as it previously filed a related patent infringement suit against Meihao that ended in summary judgment favoring Meihao. Additionally, Leviton has initiated twelve lawsuits concerning patents related to the '766 patent, with five on the '766 patent itself, yet has not achieved a favorable judgment on the merits.

The court acknowledged that while Congress did not intend for attorney fee recovery in patent cases to be common, § 285 was designed to prevent gross injustices to alleged infringers.

Leviton's conduct in the patent infringement case was deemed extraordinary, warranting an award of attorneys' fees to Meihao to prevent injustice. The judge has considered various factors, including the case's closeness, counsel tactics, and party conduct, to ensure a fair distribution of litigation burdens. Meihao requested a total of $1,016,926.32 for attorneys' fees and costs, which includes $238,894.30 from Andrews Kurth and $759,168.52 from Bingham McCutchen, plus $18,863.50 in costs. After reviewing the application and arguments, the Court recommends awarding Meihao $810,659.17. Leviton did not challenge Meihao's costs or attorneys' fees, which the Court interprets as an admission of their reasonableness. However, the Court is mandated to independently assess the fee petition. The lodestar method, which involves multiplying reasonable hours by reasonable hourly rates, is utilized to determine the attorneys' fees under 35 U.S.C. 285. While the lodestar approach is standard, some courts in the District also consider the twelve-part Johnson test to assess reasonableness, which includes various factors such as results obtained, attorney experience, and customary fees. Historically, the Fourth Circuit adjusted the lodestar calculation based on these factors.

The Fourth Circuit has updated its stance on fee calculations in light of the Supreme Court's ruling in Blum v. Stenson, which criticized previous methodologies. In Daly v. Hill, the court highlighted that while the Johnson factors for fee awards remain endorsed, adjustments to the lodestar figure should be approached cautiously to avoid double counting. The focus has shifted to determining the reasonableness of the hourly rate, which, when multiplied by reasonable hours, typically yields an appropriate attorney's fee. 

The court is tasked with evaluating the fee petition based on the reasonableness of both the rates and the hours billed, considering only relevant Johnson factors: the novelty and difficulty of the legal questions, the skill required, customary fees for similar work, and the attorney's experience and reputation. 

Further simplifications indicate that complexity, skill, and community rates are crucial in calculating fees. The plaintiff must demonstrate that the requested rates align with prevailing market rates for comparable legal services. The relevant community is typically where the court is situated, although fees from attorneys outside this area may be awarded if local expertise is insufficient. The law firms representing Meihao, Andrews and Bingham, are based in Washington D.C., and Meihao is seeking specified rates for their attorneys and personnel.

The document provides a detailed breakdown of the hourly rates charged by various legal professionals at two firms, Bingham and Andrews. Key personnel include partners, associates, and paralegals, with rates varying based on experience and title. For example, partners' rates range from $385 to $600, while associates earn between $255 and $360, and paralegals' rates range from $140 to $240. 

Meihao counsel asserts that their rates are fair and competitive, consistent with those of their peers. The court must evaluate whether these rates align with standard market rates, relying on affidavits from other attorneys or its own market knowledge if documentation is insufficient. Bingham asserts that its rates have been at or below the median over the past five years and tracks its billing against a select group of leading firms, although it did not provide comprehensive evidence to support this claim. 

The document mentions a report from the American Intellectual Property Law Association to bolster the comparability of the firms' rates in the marketplace, though it lacks a detailed breakdown by years of experience. Overall, there is acknowledgment of the complexity of the litigation and the reputation of the attorneys involved, underscoring the importance of the court's analysis of the reasonableness of the fees charged.

In 2006, the average hourly billing rate for partners in the Washington, D.C. CMSA was $435.00, compared to $512.00 in Boston, $453.00 in New York City, and $405.00 in Philadelphia. While there was no average rate provided for Baltimore, the "Other East" category reported $306.00. The billing rate for associates in Washington, D.C. was $297.00, with Boston at $310.00, New York City at $341.00, and Philadelphia at $242.00; again, no rate was reported for Baltimore. 

Billing rates for specific firms showed that Bingham's partners charged between $450.00 and $500.00 from 2005 to 2007, slightly above the AIPLA average for Washington, D.C., except for one attorney with less experience. Andrews' partners ranged from $500.00 to $600.00, also above the AIPLA average. Bingham associates generally billed higher than the AIPLA average, with only two associates billing slightly below the median at $270.00. Andrews associates were charged $275.00 and $345.00, both exceeding the D.C. AIPLA average.

For paralegal rates, Bingham's were noted to be higher than peer firms, supported by affidavits and a Private Bank Study. However, given the lack of specific justification for rates above standard paralegal guidelines, the Court decided to reduce all paralegal rates by 10%. The Court found that the attorney rates for Bingham and Andrews were reasonable for the D.C. area, but noted that Meihao did not provide evidence justifying the use of D.C. rates over Baltimore rates or that there were no capable Baltimore firms for the patent infringement defense.

The Court has determined to reduce the hourly rates for Bingham and Andrews by 10% to align with the lower prevailing rates in the Baltimore market compared to Washington, D.C. The 2008 presumptive rate range for attorneys with 15 years of experience in Baltimore is $275-$400, while paralegals range from $95-$115. The mean billing rates for Washington, D.C. attorneys exceed those in Philadelphia and other eastern regions by significant margins. 

The lodestar method, which involves multiplying reasonable hourly rates by reasonable hours, is the standard for calculating fee awards. Although a detailed analysis of Meihao counsel's time was not feasible due to the complexity and volume of records, the Court found that the hours billed were generally reasonable, as Leviton did not contest the reasonableness of the time spent. Appellate courts do not mandate exhaustive line-by-line analysis for complex fee applications, provided the trial court explains its reasoning for any adjustments.

The Court noted challenges in segregating various litigation tasks to assess time spent accurately, especially without input from the opposing party to identify instances of over-lawyering. However, a review of the time records indicated no significant issues, with Meihao deploying only one attorney at depositions and not overstaffing writing projects. For instance, Susan Baker Manning billed 22.5 hours for preparing a complex 23-page Motion to Compel, reflecting efficient use of time.

Furthermore, the Court evaluated the adequacy of documentation supporting the fee request, emphasizing that the burden rests on Meihao to provide detailed records specifying the date, hours expended, and task nature for each attorney involved. Inadequate documentation could result in a reduction of the awarded fees.

In CoStar Group, Inc. v. LoopNet, Inc., the court addressed a nearly $1 million fee award that required substantial documentation. Meihao's counsel submitted contemporaneous billing records, which were reviewed to confirm that reimbursement requests were limited to time devoted to this case between April 2005 and December 2006. Most entries were identifiable as related to the litigation, although some entries lacked specificity regarding their relevance. Consequently, the court implemented reductions in the fee award due to minor billing deficiencies, focusing on three issues: block-billing, insufficient detail, and potential duplicative work.

Block-billing, where multiple tasks are lumped together in a single time entry, raised concerns over the potential for duplicative or unnecessary work, making it difficult for the court to assess the efficiency of billed time. Courts typically reduce fee awards due to block-billing practices. Additionally, the billing records lacked sufficient detail, hindering the court's ability to conduct a thorough review. The court emphasized the importance of clear and precise timekeeping records to instill confidence in the documentation submitted. Although Meihao's counsel attempted to organize time according to litigation phases, the entries remained vague and did not significantly enhance clarity. Despite these issues, counsel's diligent review of the billing records aimed to exclude improperly documented time relevant to the case.

Meihao's counsel made a deliberate reduction in billed hours to address concerns of excessive billing for work performed. From April 2005 to December 2006, a single billing number was utilized for this case and the related appeal (Case No. 03-1701). Counsel confirmed that they would not seek recovery for overlapping attorney and non-attorney time entries when the records did not clearly delineate the time attributed solely to this case. After May 11, 2006, Meihao only claimed specific costs due to difficulties in distinguishing expenses between the two cases. The Court found that Meihao's counsel's time records were properly documented and reasonable. 

The involvement of multiple law firms raised potential concerns over duplication of work; however, the Court did not reduce the fee award for inefficiencies associated with the transition between firms. Notably, attorney Dr. Chao transitioned from the Bingham firm to the Andrews firm, later returning to Bingham. A 10% discount on fees was agreed upon due to new attorneys being added when the case moved firms. 

Additionally, various non-attorney personnel, including librarians and research specialists, were employed and billed for their time. Although this approach aims to reduce costs and enhance work quality, courts have historically viewed such services as overhead that should not be separately recoverable in attorney fee awards. This practice is supported by case law indicating that non-legal tasks typically fall within the overhead costs of an attorney's practice and are generally excluded from lodestar calculations.

In the case of Michigan v. United States EPA, the court determined that recovery for clerical and administrative work, as well as staff overtime, is classified as "overhead" and is not compensable. While fee awards can include work performed by law clerks and paralegals, work by librarians, clerical staff, and support personnel is generally excluded unless evidence shows that their fees align with community standards. Meihao failed to provide such evidence regarding the reasonableness of the hourly rates charged. The court adopted a functional approach, analyzing time entries of non-legal personnel to distinguish between compensable legal work and non-reimbursable overhead. 

Certain specialists, such as research specialists, performed work akin to paralegals and were eligible for fee awards, while others like litigation technology specialists and administrative coordinators were not. Specifically, the time of individuals whose work was deemed administrative (Wardell, DeVore, and Dippery) would not be compensated, while the time of other librarians and specialists would be. The hourly rates for specialists ranged from $175 to $210, comparable to paralegal rates, and adjustments were made based on the level of education and experience. The reference librarians’ rate was set at $130, less than paralegal rates, but recognized as comparable due to the nature of their legal work.

The court's fee award calculation included reductions: a 10% adjustment to hourly rates reflecting lower local rates, and a 10% reduction to the lodestar amount for block billing and documentation issues. Appendix A of the ruling details the fee award calculation.

Hourly fees for non-traditional timekeepers performing administrative tasks have been eliminated, resulting in a recommended attorneys' fee award of $726,579.15. Costs, distinct from attorney's fees, should be awarded to the prevailing party under Federal Rule of Civil Procedure 54(d)(1). Recoverable costs include fees for clerks, court reporters, printing, witnesses, exemplification, docket fees, and court-appointed experts, as outlined in 28 U.S.C. § 1920. The court approves Meihao's request for costs, including printing, postage, and faxing, which are deemed appropriate under the law, supported by case law such as Central Soya Co. Inc. v. Geo A. Hormel Co. and Trimper v. City of Norfolk. After reviewing and adjusting for hours expended and hourly rates, the court recommends a total award of $810,659.17 to Meihao. Specifically, Leviton is to pay Meihao $84,080.02 in costs and $726,579.15 in attorneys' fees. 

Appendix A details the attorneys' fee calculations, starting with a requested amount of $690,367.00 from Bingham, which is adjusted by eliminating non-legal personnel hours totaling $16,971.50. This leaves a reduced figure of $673,395.50, which is then decreased by 10% to reflect market rates, resulting in $606,055.95. A further 10% reduction is applied to address block-billing and documentation deficiencies, culminating in a final adjusted fee of $545,450.35.

The total amount of fees and costs calculated is $810,659.17, which consists of $614,251.87 from Bingham expenses and $196,407.30 from Andrews’ expenses. 

Andrews originally requested $223,615.80 in fees, which was reduced by 10% to $201,254.22, reflecting standard rates in the Baltimore legal community. Subsequently, this amount was again reduced by 10% due to block-billing and documentation deficiencies, resulting in a final fee of $181,128.80. This sum is combined with Andrews' expenses of $15,278.50 to reach the total of $196,407.30.

The excerpt also notes that the legal analyses and claims are based on various court documents, highlighting that all disputed facts are viewed favorably towards Leviton. Additionally, it discusses the nature of continuation and continuation-in-part applications in patent law, emphasizing that a continuation must reference prior applications to benefit from their filing date. The excerpt mentions that Leviton’s case against USI and Meihao's case against Leviton were consolidated, and addresses the implications of inequitable conduct in this litigation, specifying that it is governed by Federal Circuit law and is determined by the judge, not the jury. The MPEP is acknowledged as an authoritative interpretation of statutory regulations, provided it does not conflict with the law.

The MPEP serves as a crucial reference for patent attorneys and examiners regarding procedural issues. The "new Rule 56" test, while not intended to be the sole test, adds an additional measure of materiality. Under this test, information is deemed material if it is not cumulative and either establishes a prima facie case of unpatentability or contradicts an applicant's position regarding unpatentability or patentability. A prima facie case is established when evidence suggests a claim is unpatentable under a preponderance of the evidence standard, using the broadest reasonable interpretation of claim terms.

The "but for" standard also plays a role in evaluating materiality, indicating that while withheld information may be material, it may not be deemed highly material. This determination is significant in the later stages of an equitable misconduct analysis. Furthermore, the definition of materiality extends beyond prior art; it includes any information a reasonable examiner would likely consider important in deciding on a patent application. This broader view has been upheld by various court rulings, emphasizing that materiality encompasses a wider range of information than just prior art.

Comparative analysis shows that certain claims in the '766 patent differ minimally from those in the Germain application, indicating a close relationship between the two sets of claims.

Meihao contests that the patent examiner explicitly found the specification of the '766 patent supports its claims, indicating that no such finding is present in the prosecution history. The court does not need to address whether any implicit finding exists, as the examiner's conclusion is not decisive regarding the disclosure duty. Leviton asserts that a copending patent application can lead to provisional double patenting rejections but not statutory ones under 35 U.S.C. § 101. Despite this, such a claim does not diminish the materiality of the Germain application. Federal Circuit rulings affirm that a copending application could significantly impact patent prosecution by potentially causing double patenting rejections. Leviton’s argument that the PTO cannot issue a double patenting rejection due to a later-filed application is also refuted by precedent. Furthermore, since the '766 application has an earlier effective filing date than the Germain application, no double patenting rejection is warranted. Leviton previously questioned the similarity of the '766 patent’s subject matter to related patents, a position that Meihao effectively countered. The '766 patent, being a continuation of previously litigated patents, must only disclose subject matter from the parent application, as stipulated by 35 U.S.C. § 120. The specifications of the '766 and '558 patents are identical, which Leviton acknowledges, suggesting that they share the same subject matter. Leviton filed terminal disclaimers for the '766 patent to prevent double patenting rejections, indicating that any claims in the '766 patent that differ from its predecessors would render the patent improperly issued.

Leviton did not reiterate a prior argument and referenced a September 17, 2007 motions hearing as evidence of Meihao's concession on a specific point. During the hearing, Ms. Manning indicated the need to verify the applicability of certain sections to patents owned by the same assignee. Leviton dismissed additional arguments from the Appellant, emphasizing they were not raised during the Reexamination process. Leviton defended the Examiner's original decision, noting the Appellant attempted to expand the issues beyond those initially presented, which the Examiner confirmed were limited. 

Rule 11 mandates that attorneys certify a reasonable inquiry into the facts and legality of documents filed with the court, ensuring they are not submitted for improper purposes. This duty is ongoing, requiring attorneys to reassess their reliance on prior facts as circumstances evolve, without necessarily dismissing a case deemed baseless. 

Leviton acknowledged receiving a revised product from Meihao on February 2, 2007, but did not confirm the cessation of the original product's sale until May 10-11, 2007, following depositions. The trial judge did not rule on a motion to quash, which was rendered moot due to Greenberg Traurig's withdrawal as counsel. Meihao's cross-motion to compel compliance with subpoenas sought depositions of Leviton's patent prosecutors and was held sub curia before being referred for discovery.

Out of 37 questions posed by Narcisse, 32 were met with work product objections, 3 with attorney-client privilege, and 2 with both. For Magidoff's 38 questions, 36 faced work product objections, and 2 faced both types of objections. Meihao also requested an order for Mr. Sutton to appear for deposition, but a ruling on this matter occurred after Leviton's case dismissal. The distinction between attorney-client privilege and work product immunity indicates that Leviton cannot replace work product law with attorney-client privilege standards.

The attorney-client privilege is a fundamental legal protection for confidential communications, historically significant and essential for promoting open communication between attorneys and clients, thereby supporting the administration of justice. There are five key exceptions to this privilege: (1) communications made in furtherance of a crime or fraud (crime-fraud exception); (2) communications from a deceased client; (3) communications relevant to a breach of duty between attorney and client; (4) communications related to documents where the attorney is a witness; and (5) a joint client exception. 

The Supreme Court first recognized work product immunity in 1947 (Hickman v. Taylor), which was later codified in Rule 26(b)(3) of the Federal Rules of Civil Procedure. Unlike the absolute nature of attorney-client privilege, work product protection is qualified and may be overcome if a party demonstrates substantial need for the information and inability to obtain it without undue hardship. Courts have differentiated between the attorney-client privilege and work product immunity, clarifying that the latter requires a showing of good cause for disclosure rather than being a privilege in itself.

Defendant Novozymes seeks to compel the production of documents withheld by plaintiff Danisco, asserting that attorney-client and work product privileges do not apply due to alleged fraud on the patent office. To invoke the crime-fraud exception and obtain opinion work product, Novozymes must demonstrate a prima facie case of common law fraud, as courts require more than mere inequitable conduct. Communications typically protected by attorney-client privilege may be discoverable if they are made in furtherance of a crime or fraud, necessitating proof that the withholding party was engaged in or planning such wrongdoing when seeking legal advice, and that the communications were related to the fraud. The standard for assessing whether the privilege can be pierced is the traditional fraud standard, and a prima facie case must be established for the privilege to be overridden. Supreme Court rulings assert that opinion work product is shielded from discovery unless the requesting party provides substantial justification beyond the need for the documents.

Work product protection under Rule 26 and Hickman is not easily waived; a stronger showing of necessity is required for opinion work product than for ordinary work product. In the Fourth Circuit, opinion work product is generally immune from discovery, only subject to disclosure in extraordinary circumstances, such as the crime-fraud exception. Key cases, including In re Doe and Chaudhry v. Gallerizzo, emphasize the rarity of circumstances that justify such disclosures. The Supreme Court has yet to clarify when attorney files and mental impressions may be subject to inquiry.

Following a fees hearing, Meihao's counsel reduced their fee request by approximately $150,000, with supporting affidavits explaining the discrepancies. This re-evaluation enhances the Court’s confidence in the fee applications. Comparatively, it's reasonable to assume that Leviton's counsel's rates and hours are similar or higher than Meihao's. The Johnson factors, which assess various elements related to attorney fees, were referenced but not directly applicable under the current guidelines. Additionally, the report on typical litigation costs suggests that Meihao's fees align with median costs in patent infringement cases. Notably, Meihao's counsel, Hnath and Chao, had their rates frozen at 2005 levels per agreement.

"Fees paid to other counsel" is a significant consideration in adjusting the lodestar amount, with multiple Johnson factors supporting the applicable rates. Counsel for Chao and Hnath charged rates frozen at 2005 levels, which were lower than their normal rates. The Andrews firm provided Meihao with a 10% discount on fees after the case transfer from Bingham. Some courts opt to reduce hours billed by a percentage to address deficiencies, while others reduce the final award amount instead. Due to the complexity of various timekeepers and their differing rates, it is often more manageable to reduce the overall award rather than the hours billed.

Courts must require adequate documentation, and when submitted documentation is vague or incomplete, reductions in awarded hours may be warranted. In Louisiana Power & Light Co. v. Kellstrom, the court acknowledged a failure to require sufficient documentation, leading to a reduced fee award by the appellate court.

The guidelines for presumptively reasonable hourly rates have been established, with specific ranges based on years of experience for both attorneys and paralegals. Meihao's request for costs under Federal Rule of Civil Procedure 54 is unopposed by Leviton, affirming that Meihao, as a prevailing party, is entitled to recover such costs, as supported by Power Mosfet Tech. L.L.C. v. Siemens AG, which recognized a prevailing party's entitlement under Rule 54(d)(1) when all claims are dismissed with prejudice.