In Freshub, Inc. v. Amazon.com, Inc., [2022-1391, 2022-1425] (February 26, 2024), the Federal Circuit affirmed the jury verdict that Amazon did not infringe U.S. Patent No. 9,908,153, and the district court’s finding that it failed to prove inequitable conduct in reviving a patent application five years after it abandoned.  The ’153 patent claims a voice-processing system that receives “user spoken words” and adds items to lists based on those words.

The district court found that, while the parties did not dispute the materiality of the representation that the application had been unintentionally abandoned, Amazon had not offered clear and convincing evidence that the representation was actually false—i.e., that Ikan had in fact intentionally abandoned the ’291 application. Id. at 9–10. The district court also found that, even if the representation had actually been false (i.e., even if Ikan had intentionally abandoned the application), Amazon had not offered clear and convincing evidence that the “single most reasonable inference” from the evidence, as required by Therasense, Inc. v. Becton, Dickinson and Co., 649 F.3d 1276, 1290 (Fed. Cir. 2011) (en banc), was that either Ikan or its attorney had specifically intended to deceive the PTO with the STATEMENT in the petition to revive the application in 2017.

To prevail on the defense of inequitable conduct, the accused infringer must prove that the applicant misrepresented or omitted material information with the specific intent to deceive the PTO.  The proof must be by clear and convincing evidence.  Amazon asserted that the false and material statement was the denial by Ikan’s counsel that  Ikan abandoned the ’291 application intentionally during the 2012–17 non-response period.  The district court also found, however, that Amazon did not prove, by clear and convincing evidence, that the statement was a misrepresentation made with the required deceptive intent.

The Federal Circuit noted that it cannot disturb the district court’s rejection of the inequitable-conduct defense unless we have the definite and firm conviction that the evidence required the district court to find that Amazon proved, clearly and convincingly, that the “single most reasonable inference” from the record, was that Ikan’s counsel, when making his 2017 statement to the PTO, in fact believed that Ikan had intentionally abandoned the ’291 application for the 2012–17 period of nonresponse to the PTO. The Federal Circuit did not so find.

The Federal Circuit noted that for various reasons, including the passage of time and the limited testimonial and documentary evidence available—the latter due in part to invocations of attorney-client privilege not challenged on appeal—the record of what actually occurred at relevant times was thin. On that record, the district court found that Amazon did not clearly and convincingly prove Ikan’s intentional abandonment.

The Federal Circuit said that counsel’s statement itself can weigh in the evidentiary calculus even when it is not backed up affirmatively with a more granular and concrete account of how the five-year non-response to the PTO occurred— an account that might detail, for example, whether communications from counsel in 2012 failed to reach or inform the relevant decisionmaker at Ikan and whether years of inattention to this particular matter ensued because the attention of the company and counsel was elsewhere. Of course, the absence of such an account, due to unavailability of witnesses or invocations of attorney-client privilege or other reasons, might well lead a factfinder to find false, or even knowingly false, the assertion that the abandonment was unintentional on Ikan’s part. The Federal Circuit said the evidence clearly shows that Ikan’s counsel knew that the application had been abandoned, as he testified, but whether he made his statement with deceptive intent depends on what he believed about the subject of his statement, namely, the intent behind the abandonment.  The district court could find that counsel genuinely so believed, whether or not the belief was legally correct, and that counsel did not think that Ikan had the intent to abandon during the 2012–17 non-response period.  The Federal Circuit said that finding was not clearly erroneous, in light of the facts, and the district court could therefore reasonably hold deceptive intent not proven under the governing legal standard.