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GS CleanTech Corp. v. Adkins Energy LLC

Inventor and Attorney Misconduct Leads to Inequitable Conduct Holding

GS CleanTech Corp. v. Adkins Energy LLC, __ F.3d __, 2020 WL ___ (Fed. Cir. Mar. 2, 2020) (Reyna, WALLACH, Hughes) (S.D. Ind.: McKinney) (3 of 5 stars)

Fed Cir affirms judgment that CleanTech’s patents are unenforceable due to inequitable conduct. The patents relate to recovering oil from “thin stillage” (a byproduct of certain ethanol production). The district court did not abuse its discretion in finding inequitable conduct. It did not abuse its discretion in determining that CleanTech had offered to sell the claimed invention before its critical date. The opinion is fact-based. CleanTech waived its principal argument to the contrary by not presenting it to the district court.

The district court also did not abuse its discretion by determining that the claimed invention was ready for patenting at that time. Again it discusses the facts, finding no abuse of discretion in the district court’s rejection of CleanTech’s argument that further testing “under actual conditions of use” was still needed at the relevant time.

The district court also did not abuse its discretion in finding specific intent to withhold material information from the PTO, i.e., the offer for sale/reduction to practice. The opinion again discusses the facts, noting the district court’s finding that CleanTech’s lawyers (the firm of Cantor Colburn LLP) knew of the offer of sale, and the state of the invention at that time, and the evidence suggesting that a decision was made not to disclose these facts to the PTO. The relevant evidence included efforts by CleanTech and Cantor Colburn to extract from one defendant support for CleanTech’s validity case in exchange for a royalty-free license, and Cantor Colburn filing with the PTO a declaration reciting facts concerning the offer for sale that was “patently false.”

KEYWORDS: INEQUITABLE CONDUCT (YES)