American Calcar, Inc. v. American Honda Motor Co.

United States Court of Appeals
for the Federal Circuit
______________________
AMERICAN CALCAR, INC.,
Plaintiff-Appellant,
v.
AMERICAN HONDA MOTOR CO., INC., AND
HONDA OF AMERICA MANUFACTURING, INC.,
Defendant-Appellee.
______________________
2013-1061
______________________
Appeal from the United States District Court for the
Southern District of California in No. 06-CV-2433, Judge
Dana M. Sabraw.
______________________
Decided: September 26, 2014
______________________
ROBERT L. MAIER, Baker Botts L.L.P. of New York,
New York, argued for the plaintiff-appellant. With him
on the brief was JENNIFER C. TEMPESTA.
ROBERT E. HILLMAN, Fish & Richardson P.C., of Bos-
ton, Massachusetts, argued for defendant-appellee. With
him on the brief was JOHN T. JOHNSON, of New York, New
York. Of counsel was MICHAEL F. AUTUORO.
______________________
2 AMERICAN CALCAR, INC. v. AMERICAN HONDA MOTOR CO.
Before PROST, Chief Judge, * NEWMAN and WALLACH,
Circuit Judges.
Opinion for the court filed by Chief Judge PROST.
Dissenting opinion filed by Circuit Judge NEWMAN.
PROST, Chief Judge.
American Calcar Inc. (“Calcar”) appeals from the
judgment of the U.S. District Court for the Southern
District of California finding that U.S. Patent Nos.
6,330,497 (“’497 patent”), 6,438,465 (“’465 patent”), and
6,542,795 (“’795 patent”) were unenforceable due to
inequitable conduct. For the reasons stated below, we
affirm.
I
This appeal arises from Calcar’s suit against defend-
ant-appellees American Honda Motor Co., Inc. and Honda
of America Manufacturing, Inc. (collectively “Honda”),
asserting the infringement of fifteen patents—of which
three remain at issue. All share a common specification
and are derived from a priority application filed on Janu-
ary 28, 1997, which since issued as U.S. Patent No.
6,009,355 (“’355 patent”). The patents describe and claim
aspects of a multimedia system for use in a car to access
vehicle information and control vehicle functions.
Calcar accused computerized navigation systems in-
stalled in Honda vehicles of infringing its patents. Calcar
claimed that the accused systems included additional
infringing features beyond providing the driver with
travel directions. Honda responded with various defens-
es, including non-infringement, invalidity, and inequita-
ble conduct. The case was transferred to the district court
* Sharon Prost assumed the position of Chief Judge
on May 31, 2014.
AMERICAN CALCAR, INC. v. AMERICAN HONDA MOTOR CO. 3
from the Eastern District of Texas in 2006. Over the
course of the proceedings thereafter, Calcar dropped
certain patents, summary judgment was granted finding
others to be invalid or non-infringing, and finally, in 2008,
four patents went to trial.
Before trial, Honda moved for a finding of inequitable
conduct. Honda’s motion was based on the actions of
Calcar’s founder, Mr. Obradovich. Among the three co-
inventors, Mr. Obradovich was the one primarily respon-
sible for preparing the patent application. Honda alleged
that he deliberately withheld prior art that was material
to patentability from the U.S. Patent and Trademark
Office (“PTO”). Specifically, Honda argued that while Mr.
Obradovich disclosed the existence of the 1996 Acura RL
(“96RL”) navigation system, he intentionally did not
disclose additional information that would have led the
PTO to deny the patent as anticipated or rendered obvi-
ous by the system.
In 1996, Honda added the navigation system as an op-
tion for the Acura RL. At the time, Calcar was publishing
“Quick Tips” guides: booklets with condensed information
from a car’s owner’s manual. During the course of devel-
oping a QuickTips guide for the 96RL, Mr. Obradovich
drove the car and operated the navigation system, and
Calcar personnel took photographs of the navigation
system and owner’s manual. Subsequently, Mr. Obra-
dovich began working on the parent application that
ultimately issued as the ’355 patent. The application
explicitly referred to the 96RL system as prior art, and
Mr. Obradovich acknowledged that the system was used
as the basis of Calcar’s inventions. Honda alleged that
Mr. Obradovich knew that the owner’s manual and pho-
tographs were in Calcar’s possession and deliberately
withheld them during prosecution. Honda argued that
the operational details that he did not disclose were
precisely those that were the claimed in the patents at
issue—the use of the system to display the status of
4 AMERICAN CALCAR, INC. v. AMERICAN HONDA MOTOR CO.
vehicle functions (claimed by the ’497 patent) and to
search for information about the vehicle (claimed by
the ’465 and ’795 patents).
The jury ultimately found the ’497 patent invalid, and
it found the ’465 and ’795 patents valid. After the trial
ended and the jury rendered its verdict, the district court
granted Honda’s inequitable conduct motion and, there-
fore, held the patents at issue unenforceable. Am. Calcar,
Inc. v. Am. Honda Motor Co., No. 06-cv-02433 (S.D. Cal.
Nov. 3, 2008), ECF No. 577 (“Calcar I”). Calcar then
appealed to this court.
While the appeal was pending, this court established
a revised and narrower test for inequitable conduct in
Therasense, Inc. v. Becton, Dickinson & Co., 649 F.3d
1276 (Fed. Cir. 2011) (en banc). In light of Therasense, we
affirmed the district court’s finding of the materiality of
the prior art with respect to the ’497 patent, and vacated
the district court’s other determinations of materiality
and intent. Am. Calcar, Inc. v. Am. Honda Motor Co., 651
F.3d 1318 (Fed. Cir. 2011) (“Calcar II”). On the question
of the materiality of the prior art as to the ’465 and ’795
patents, we remanded for the district court to determine
whether the patents would have been granted “but for”
the information that the applicant did not disclose, follow-
ing the test for materiality set forth in Therasense. Id. at
1335. With respect to the applicant’s specific intent to
deceive the PTO, we vacated as to all three patents and
remanded to the district court to “make a specific finding
on whether any of the three inventors knew that the
withheld information was material and whether they
made a deliberate decision to withhold it.” Id. at 1335-36.
On remand, the district court asked the parties for
additional briefing and held a hearing in March 2012.
The district court again found that the three patents at
issue were obtained through inequitable conduct, detail-
ing its findings of fact and conclusions of law in an opin-
AMERICAN CALCAR, INC. v. AMERICAN HONDA MOTOR CO. 5
ion spanning over twenty pages. Am. Calcar, Inc. v. Am.
Honda Motor Co., No. 06-cv-2433, 2012 WL 1328640 (S.D.
Cal. Apr. 17, 2012) (“Calcar III”).
The district court found that but for the information
about the prior art withheld by Mr. Obradovich, the PTO
would not have granted the ’465 and ’795 patents. Id. at
*8. It made further findings as to all three patents re-
garding Mr. Obradovich’s specific intent to deceive the
PTO, concluding that the only reasonable inferences from
the evidence were that Mr. Obradovich knew that the
prior art was material to his invention and that he made
a deliberate decision to withhold material information.
Id. at *9-10. It also found that evidence of Mr. Obra-
dovich’s good faith did not overcome this other evidence,
nor did it create a reasonable inference that Mr. Obra-
dovich may have been merely negligent or grossly negli-
gent. Id. at *11. Having made findings on each prong of
the Therasense standard, the district court once again
concluded that the patents are unenforceable due to
inequitable conduct.
Calcar appealed. We have jurisdiction pursuant to 28
U.S.C. § 1295(a)(1).
II
Inequitable conduct is an equitable defense to patent
infringement. Therasense, 649 F.3d at 1285. The defend-
ant proves inequitable conduct “by clear and convincing
evidence that the patent applicant (1) misrepresented or
omitted information material to patentability, and (2) did
so with specific intent to mislead or deceive the PTO.”
Ohio Willow Wood Co. v. Alps S., LLC, 735 F.3d 1333,
1344 (Fed. Cir. 2013). Intent and materiality must be
separately established. Therasense, 649 F.3d at 1290. On
appeal, we review the district court’s findings of material-
ity and intent for clear error. Intellect Wireless, Inc. v.
HTC Corp., 732 F.3d 1339, 1342 (Fed. Cir. 2013). We
review the district court’s ultimate finding of inequitable
6 AMERICAN CALCAR, INC. v. AMERICAN HONDA MOTOR CO.
conduct based on those underlying facts for abuse of
discretion. Id.
A. MATERIALITY
This court held in Therasense that the standard for
“the materiality required to establish inequitable conduct
is but-for materiality.” 649 F.3d at 1291. In particular,
undisclosed prior art is “but-for material if the PTO would
not have allowed a claim had it been aware of” it. Id.
This means that to assess materiality, the court must look
to the standard used by the PTO to allow claims during
examination. To wit: “The court should apply the pre-
ponderance of the evidence standard and give claims their
broadest reasonable construction.” Id. at 1291-92. Dis-
trict courts and the PTO employ different evidentiary
standards and rules for claim construction. Therefore,
“even if a district court does not invalidate a claim based
on a deliberately withheld reference, the reference may be
material if it would have blocked patent issuance under
the PTO’s different evidentiary standards.” Id. The jury’s
verdict finding the patents at issue non-obvious thus does
not weigh on the determination of materiality for inequi-
table conduct, and indeed, Calcar does not make any
arguments on appeal that rely on the jury’s determina-
tion.
As an initial matter, we have already held that the
prior art “96RL search function is substantially similar to
the system described in the ’465 and ’795 patents.” Cal-
car II, 651 F.3d at 1335. The case was remanded because
the district court had not made a specific finding that the
“withheld information would have blocked issuance of the
claims” of said patents. Id.
Claim 1 of the ’465 patent is representative of the pa-
tents for which materiality is at issue on appeal (empha-
sis added):
1. A system for use in a vehicle comprising:
AMERICAN CALCAR, INC. v. AMERICAN HONDA MOTOR CO. 7
a memory for storing a plurality of displays
having predetermined contents, the plurality of
displays being associated with a plurality of as-
pects of the vehicle;
an interface for entering a query to conduct a
search concerning an aspect of the vehicle;
an input device for selecting a result of the
search;
a processor responsive to the selected result
for identifying at least one of the plurality of dis-
plays which is associated with the aspect of the
vehicle; and
a display element for showing thereon the at
least one display.
The highlighted text shows the only difference be-
tween the prior art and the claim—as even Calcar con-
cedes. As the district court noted, Calcar does not dispute
that the 96RL navigation system “includes an interface
for entering a query to conduct a search, an input device
for selecting a result of the search, a processor that identi-
fies a display associated with the selection, and an ele-
ment that allows that display to be shown to the user.”
Calcar III, at *8. Therefore, the only limitation that
Calcar claims as novel is that the object of the user’s
search has to be “an aspect of the vehicle.” Claim 1 of the
’765 patent similarly includes only the limitation of
searching for and displaying information about an “aspect
of the vehicle.”
Calcar’s principal argument is that the district court
improperly failed to account for the inventive differences
between the prior art 96RL navigation system and the
claims of the ’465 and ’795 patents. Calcar points to
examples listed in the patent’s specification, such as the
ability to retrieve such features as climate control func-
tions, “the radio, the engine, and other aspects of the
vehicle.” Appellant’s Br. 52. Calcar argues that the
search for information regarding such aspects of the
8 AMERICAN CALCAR, INC. v. AMERICAN HONDA MOTOR CO.
vehicle is a non-obvious invention that was merely based
on the 96RL system. The district court did address the
differences between the 96RL system and what Calcar
actually claimed. It found that the only difference was
“the nature of the information contained in the systems”:
navigational details (destinations, addresses, directions)
in the 96RL system and information about the vehicle
itself in the ’465 and ’795 patents. Calcar III, at *8. The
district court found that the PTO would have not allowed
the patents as “it would have been obvious to a person of
ordinary skill in the art to include different information in
the 96RL navigation system.” Id.
As the district court stated, the 96RL and Calcar’s pa-
tented system “perform the same function, i.e., delivery of
information, in the same way, i.e., through an interactive
display screen, to achieve the same result, namely provid-
ing information to the vehicle user.” Id. Calcar argues
that by using the language “same function” “same way”
“same result,” the district court improperly applied a
doctrine of equivalents analysis to the question of obvi-
ousness. We find this argument unavailing. That sen-
tence just summarizes why the mere substitution of one
kind of information as the object of the search—which,
under a broadest reasonable interpretation of the claim,
could be anything about the car—would be an obvious,
and thus unpatentable, invention.
Because the district court did not commit clear error
in its finding of materiality, we affirm the district court’s
determination that the undisclosed operational details of
the 96RL navigation system are material to the patenta-
bility of the ’465 and ’795 patents. We note that this court
previously affirmed the finding of materiality as to the
’497 patent. Calcar II, 651 F.3d at 1334.
AMERICAN CALCAR, INC. v. AMERICAN HONDA MOTOR CO. 9
B. INTENT
Calcar provided a limited disclosure of the 96RL navi-
gation system in the patents’ specification, and it also
submitted a New York Times article describing the system
during prosecution. As the district found, however, these
disclosures exclude material information about the 96RL
system, such as the manner in which the prior art system
provided notifications to the user and displayed search
results. See Calcar III, at *8; Calcar II, 651 F.3d at 1332-
34. Partial disclosure of material information about the
prior art to the PTO cannot absolve a patentee of intent if
the disclosure is intentionally selective. Aventis Pharma
S.A. v. Hospira, Inc., 675 F.3d 1324, 1335-36 (Fed. Cir.
2012); see also Semiconductor Energy Lab. Co. v. Sam-
sung Elecs. Co., 204 F.3d 1368, 1376 (Fed. Cir. 2000)
(finding intent where the patentee disclosed a complete
reference in Japanese but did not provide translations of
that part which was material to patentability); Apotex Inc.
v. UCB, Inc., No. 13-1674, 2014 WL 3973498, at *8 (Fed.
Cir. Aug. 15, 2014) (finding intent on the basis of an
inventor misrepresenting material information about
disclosed prior art).
We recognize instead that “[b]ecause direct evidence
of deceptive intent is rare, a district court may infer
intent from indirect and circumstantial evidence,” provid-
ed that such intent is the single reasonable inference.
Therasense, 649 F.3d at 1290-91. We further review “the
district court’s factual findings regarding what reasonable
inferences may be drawn from the evidence for clear
error.” Id. at 1291.
In the previous appeal, we noted that based on its re-
view of the record, the district court found that Mr. Obra-
dovich’s testimony lacked credibility. Calcar II, 651 F.3d
at 1335. It had inferred intent based on contradictory
assertions made by Mr. Obradovich in both this proceed-
ing and a previous suit. Id. at 1332. It also found that
10 AMERICAN CALCAR, INC. v. AMERICAN HONDA MOTOR CO.
Mr. Obradovich was not candid about the inventors’
possession of photographs of the 96RL system. Id. at
1332. We held, however, that in light of Therasense, the
finding of materiality and Mr. Obradovich’s lack of credi-
bility were insufficient grounds to find intent. Id. at 1335.
We thus remanded for the district court to determine
whether the single reasonable inference of the factual
record would be that any of the inventors possessed
undisclosed information about the 96RL system, knew it
was material, and deliberately decided to withhold that
information from the PTO. Id.
On remand, the district court reviewed the record and
made the findings of fact required under Therasense. The
district court found that Mr. Obradovich possessed mate-
rial information based on his own testimony about his
personal knowledge of the 96RL system, test drives of the
96RL with the system, and use of figures from the 96RL
owner’s manual in the patent application he drafted.
Calcar III, at *9. It further found that Mr. Obradovich
knew the information was material because he himself
acknowledged the importance of the information he
possessed about how the 96RL system was used to access
information and present it to the user. Id. at *10. The
district court also found that the single reasonable infer-
ence based on the facts regarding Mr. Obradovich’s role in
developing the patent application was that Mr. Obra-
dovich deliberately decided to withhold the information
from the PTO. Id.
The district court expressly rejected Calcar’s sugges-
tion that it would have been equally reasonable for the
district court to infer that Mr. Obradovich’s actions were
merely negligent or grossly negligent. In Calcar’s view,
Mr. Obradovich’s inexperience may have contributed to a
mistaken or accidental failure to disclose. The district
court found, however, that any such suggestion was
unsupported by the evidence. It found that the evidence
showed that Mr. Obradovich had “ample time and oppor-
AMERICAN CALCAR, INC. v. AMERICAN HONDA MOTOR CO. 11
tunity” for a comprehensive disclosure, and yet he only
disclosed the mere existence of the 96RL system without
providing its operational details. Calcar III, at *10. It
concluded, therefore, that his failure to disclose other
information that would have prevented his patent appli-
cation from succeeding “demonstrates a deliberative
process, not an accident or mistake.” Id. The district
court noted in particular that Calcar’s positions and Mr.
Obradovich’s testimony regarding his knowledge and
possession of documents lacked credibility. Id. at *10 n.3;
see also FilmTec Corp. v. Hydranautics, 982 F.2d 1546,
1553 (Fed. Cir. 1992) (“We will not invade the province of
the district court to judge matters of credibility.”). Over-
all, we do not find any clear error in the district court’s
inference—based on its careful and comprehensive review
of the record and eight years of experience with the case—
of Mr. Obradovich’s specific intent to deceive the PTO.
Finally, while Calcar points to the jury’s advisory ver-
dict in 2008 that there was no inequitable conduct, we
find this argument unavailing. As we have held, inequi-
table conduct is “inequitable in nature,” and thus the
“district court was in no way bound by the jury’s finding of
no inequitable conduct in this case.” Calcar II, 651 F.3d
at 1334. In any event, after the jury submitted its adviso-
ry verdict, the district court requested thousands of pages
of testimony from Calcar’s previous litigation. Order
Requesting Supplemental Briefing, Am. Calcar, Inc. v.
Am. Honda Motor Co., No. 06-cv-2433 (S.D. Cal. Sept. 24,
2008), ECF No. 566. This testimony included assertions
by Mr. Obradovich that contradicted those made in these
proceedings, which led the district court to its determina-
tion that Mr. Obradovich lacked credibility. This was
evidence that the jury did not see. Therefore, we see no
reason why the jury’s advisory verdict suggests a reason-
able alternative to the district court’s inference.
In sum, on remand, the district court did not clearly
err in its underlying factual findings of materiality and
12 AMERICAN CALCAR, INC. v. AMERICAN HONDA MOTOR CO.
intent. Its thorough analysis was fully consistent with
the standards and tests set forth in Therasense. The
district court, therefore, did not abuse its discretion in
determining that the patents were unenforceable due to
inequitable conduct.
III
For the aforementioned reasons, we affirm the district
court’s judgment that the ’497, ’465, and ’795 patents
were obtained through inequitable conduct and are thus
unenforceable.
AFFIRMED
United States Court of Appeals
for the Federal Circuit
______________________
AMERICAN CALCAR, INC.,
Plaintiff-Appellant,
v.
AMERICAN HONDA MOTOR CO., INC., AND
HONDA OF AMERICA MANUFACTURING, INC.,
Defendant-Appellee.
______________________
2013-1061
______________________
Appeal from the United States District Court for the
Southern District of California in No. 06-CV-2433, Judge
Dana M. Sabraw.
______________________
NEWMAN, Circuit Judge, dissenting.
American Calcar, Inc. was founded by Michael Obra-
dovich as a business that creates “Quick Tips” booklets
with “everything you want to know about your new car in
ten seconds or less.” Am. Calcar, Inc. v. Am. Honda Motor
Co., No. 06-cv-2433, 2012 WL 1328640, at *1 (S.D. Cal.
April 17, 2012) (“Dist. Ct. Op.”). The Quick Tips booklets
are based on information obtained from the manufactur-
er’s Owner’s Manual and Calcar observation of the vehicle
itself.
2 AMERICAN CALCAR, INC. v. AMERICAN HONDA MOTOR CO.
The only issue is whether Mr. Obradovich committed
inequitable conduct by not providing the PTO, when the
parent patent application was filed, with the Acura Own-
er’s Manual and the photographs that the Calcar employ-
ees took of the Acura display. These materials were
provided to the PTO on reexamination of the ’497 patent,
and patentability was confirmed by the PTO in light of
that additional information.
The factual premises of “inequitable conduct” were
not established, for there was not “but-for” materiality
and no evidence of intent to deceive. The panel majority
distorts the Therasense standards, ignores the PTO
reexamination, casts the jury aside, and generally disre-
gards the safeguards that this court adopted en banc. I
respectfully dissent, for the criteria of inequitable conduct
are plainly not met.
DISCUSSION
The patents at issue are for a computer-implemented
system for searching, display and control of vehicle func-
tions, presented in a user-friendly form, as in the Quick
Tips booklets. The inventors testified that they observed
and photographed the Acura 1996 RL navigation system,
planning to produce a Quick Tips booklet, and that this
system was a “platform” for the patented system.
The patents describe the Acura 96RL navigation sys-
tem as prior art:
Recently, navigation systems based on military
global positioning system (GPS) technology have
emerged. One such navigation system is commer-
cially available as an option for the latest model of
the ACURA 3.5 RL automobile. This ACURA nav-
igation system receives signals from a constella-
tion of satellites which is part of the GPS. In
response to these signals, the navigation system
AMERICAN CALCAR, INC. v. AMERICAN HONDA MOTOR CO. 3
pinpoints the automobile's location (in latitude and
longitude). It also detects the automobile's speed
and direction. With geographic information stored
on a hard disk in an onboard computer, the navi-
gation system is capable of verbally and visually
communicating to the user instructions for reach-
ing the destination.
’355 patent, col.1 ll.51–63; ’497 patent, col.1 l.57 to col.2
l.2; ’465 patent, col.1 l.58 to col.2 l.3; ’795 patent, col.1 l.61
to col.2 l.6.
The patents state that they are directed to an im-
proved system that provides quick access to and display of
information about multiple vehicle functions. E.g., ’497
patent, col.3 ll.23–33. The information may include
operational instructions, maintenance procedures, and
safety measures. Id. at col.5 ll.5–7. The functions that
may be controlled include climate control, audio, mirrors,
windows, cruise control, lights, and security functions. Id.
at col.5 ll.45–52. The system may “realize not only AUTO
DIRECTOR functions to be described, but also the well-
known navigation function.” Id. at col.5 ll.29–31. The
patents state the objective of incorporating a centralized
control system in a multifunction display interface. Id. at
col.6 ll.15–33.
Patentability is not at issue in this appeal. Validity
and infringement were tried, appealed, and finally decid-
ed in earlier phases of this eight-year litigation. In the
trial phase, the jury found that there was not inequitable
conduct in the failure to initially provide the Owner’s
Manual and photographs to the patent examiner. My
colleagues do not agree with the jury, although they do
not discuss whether there was substantial evidence to
support the jury’s findings. On the principles established
in Therasense, Inc. v. Becton Dickinson & Co., 649 F.3d
4 AMERICAN CALCAR, INC. v. AMERICAN HONDA MOTOR CO.
1276 (Fed. Cir. 2011) (en banc), inequitable conduct did
not lie.
Nonetheless, my colleagues rule that the patents are
unenforceable based on the initial failure to send the
Owner’s Manual and photographs to the PTO. The ineq-
uitable conduct with which Mr. Obradovich is charged is
that he “did not tell Mr. Yip [his patent attorney] about
his experience with the 96RL, nor did he provide Mr. Yip
with the Owner’s Manual or the photos of the navigation
system display screens.” Dist. Ct. Op. at 11. However,
the PTO established, on reexamination of the ’497 patent,
that the purportedly withheld information was not mate-
rial to patentability. In accordance with Therasense this
ended the inequitable conduct inquiry, for the PTO sus-
tained patentability in view of this information.
In addition, there was no evidence of intent to deceive
the PTO. The panel majority impugns Mr. Obradovich’s
credibility, although they do not say what is disbelieved.
The jury heard and saw Mr. Obradovich, on examination
and cross-examination, and did not find deceptive intent.
My colleagues “infer” clear and convincing evidence of
deceptive intent from Mr. Obradovich’s initial failure to
send his patent attorney the Owner’s Manual and the
photographs of the Acura display. They postulate that a
savvy inventor and businessman such as Mr. Obradovich
would have known the information was material to pa-
tentability and would therefore withhold it in order to
deceive the PTO. However, a more likely inference is that
a savvy inventor and businessman would know that a
patent obtained through concealment of a material refer-
ence is not a reliable commercial asset.
I summarize the majority’s flawed application of the
law of inequitable conduct:
AMERICAN CALCAR, INC. v. AMERICAN HONDA MOTOR CO. 5
Materiality
A “material” reference in the context of inequitable
conduct law is a reference that negates patentability:
that is, “but-for” the reference the claim would be patent-
able. The rule of “but-for materiality” is that if the refer-
ence would not have prevented the grant of the patent, it
cannot render the patent unenforceable. Therasense, 649
F.3d at 1291 (“[P]rior art is but-for material if the PTO
would not have allowed a claim had it been aware of the
undisclosed prior art.”); In re Rosuvastatin Calcium
Patent Litig., 703 F.3d 511, 519 (Fed. Cir. 2012) (“To
establish materiality, it must be shown that the PTO
would not have allowed the claim but for the nondisclo-
sure or misrepresentation.”).
We need not speculate about whether the PTO would
have granted the Calcar patents “but-for” the information
in the Owner’s Manual and the photographs, for the
PTO’s reexamination of the ’497 patent provides the
answer: the PTO confirmed patentability. Reexamination
was conducted in full view of not only the targeted infor-
mation, but also Honda’s Preliminary Invalidity Conten-
tions. The purpose of reexamination is to provide PTO
expertise in determining patentability. This procedure
was followed, and established that the challenged infor-
mation was not “material” to patentability as determined
by the PTO. That ruling was not appealed. My col-
leagues’ contrary holding is not available.
Nonetheless, the panel majority finds that Calcar de-
liberately withheld the Owner’s Manual and photographs
from the PTO. However, it cannot be said that the Acura
96RL system was concealed. The Calcar patents all state
that their system’s hardware and control panel are “de-
rived from a prior art navigation system,” citing the Acura
system and describing its contribution to a flowchart for
the Calcar system:
6 AMERICAN CALCAR, INC. v. AMERICAN HONDA MOTOR CO.
Display interfaces 102 include, inter alia, AUTO
DIRECTOR display interface 102a, which is illus-
trated in FIG. 2, together with control panel 205
in FIG. 1. By way of example, but not limitation,
the hardware of interface 102a and control panel
205 are derived from a prior art navigation sys-
tem of the type of the ACURA navigation system.
In fact, interface 102a and control panel 205 are
used in this illustrative embodiment to realize not
only AUTO DIRECTOR functions to be described,
but also the well-known navigation function.
’355 patent, col.5 ll.18–27; ’497 patent, col.5 ll.22–31; ’465
patent, col.5 ll.23–32; ’795 patent, col.5 ll.27–36.
The panel majority dismisses the Calcar patent dis-
closure, stating that “he [Mr. Obradovich] only disclosed
the mere existence of the 96RL, without operational
details.” Maj. Op. at 11. The panel majority finds that
there are “undisclosed operational details” in the Acura
Owner’s Manual, although we are not told what those
details are, or how they constitute “but-for” materiality.
In contrast, the PTO, reviewing all of the challenged
information, concluded that the omitted information is
not material to patentability.
Although validity was previously finally decided and
is not before us, the panel majority sua sponte declares
the Calcar patents “obvious, and thus unpatentable.”
Maj. Op. at 8. In so doing, the majority discards the
statutory requirement of consideration of “the invention
as a whole,” 35 U.S.C. §103.
For Calcar’s ’465 patent, the panel majority plucks out
a single claim term, as follows:
1. A system for use in a vehicle comprising:
a memory for storing a plurality of displays
having predetermined contents, the plurality of
AMERICAN CALCAR, INC. v. AMERICAN HONDA MOTOR CO. 7
displays being associated with a plurality of as-
pects of the vehicle;
an interface for entering a query to conduct a
search concerning an aspect of the vehicle;
an input device for selecting a result of the
search;
a processor responsive to the selected result
for identifying at least one of the plurality of dis-
plays which is associated with the aspect of the
vehicle; and
a display element for showing thereon the at
least one display.
(emphasis in Maj. Op.). This is an incorrect legal analy-
sis. In KSR International Co. v. Teleflex Inc., 550 U.S.
398, 418 (2007) the Court explained that “a patent com-
posed of several elements is not proved obvious merely by
demonstrating that each of its elements was independent-
ly known in the prior art.” The invention must be consid-
ered as a whole; it is improper to select components or
elements of a claimed system for isolated analysis. My
colleagues take that flawed path.
My colleagues also incorrectly state that Calcar “con-
cedes” that its invention is no more than the single step of
a “search concerning an aspect of the vehicle,” see claim 1,
supra. Calcar stressed the novelty of its system as a
whole, with its plurality of aspects and displays. The
panel majority improperly segregates the claim into what
it deems to be new and old elements, reducing Calcar’s
invention to a single isolated element. The Court reiter-
ated in KSR that it is the entirety of the claimed system
that is analyzed, not separate components in isolation.
550 U.S. at 418. Calcar’s invention is not merely the
search for an aspect of the vehicle; it is a computer-
implemented system for searching and controlling aspects
of the vehicle. This system was not described in the prior
art, which includes the Acura 96RL Owner’s Manual.
8 AMERICAN CALCAR, INC. v. AMERICAN HONDA MOTOR CO.
On the correct law, “but-for materiality” of the Own-
er’s Manual and photographs was not shown by clear and
convincing evidence. This alone negates a ruling of ineq-
uitable conduct. See Therasense, 649 F.3d at 1287 (hold-
ing that both materiality and intent to deceive must be
shown; each must be established by clear and convincing
evidence).
Intent to deceive
The panel majority also finds that Mr. Obradovich in-
tended to deceive the PTO, again on reasoning that is
unsupported by fact and contrary to law. The majority
ignores that the Acura navigation system was identified
as prior art in all of the patent specifications, that any
omission was remedied with reexamination, and that the
jury, viewing the witnesses and hearing the charges and
arguments, found that intent to deceive the PTO had not
been shown.
My colleagues agree that there was no evidence of in-
tent to deceive. Thus they devise an “inference” of decep-
tive intent from the initial omission of the Owner’s
Manual and the photographs. In Therasense the court
stressed the need for rationality and proof, not guess and
sentiment; thus the court held that “when there are
multiple reasonable inferences that may be drawn, intent
to deceive cannot be found.” 649 F.3d at 1290–91. In
Kingsdown Medical Consultants, Ltd. v. Hollister, Inc.,
863 F.2d 867, 873 (Fed. Cir. 2012) the court held that “the
involved conduct, viewed in light of all the evidence,
including evidence indicative of good faith, must indicate
sufficient culpability to require a finding of intent to
deceive.”
In the absence of any evidence, the panel majority
slips into “inference,” citing Mr. Obradovich’s purported
lack of credibility. The majority appears to reason that if
“credibility” can be challenged in any way, adverse infer-
AMERICAN CALCAR, INC. v. AMERICAN HONDA MOTOR CO. 9
ences on all aspects can be drawn. The defendants at-
tempted to target Mr. Obradovich’s credibility throughout
the trial, for he was a principal witness. The briefs de-
scribe two areas in which credibility was attacked. First,
there was uncertainty of recollection about who in the
Calcar study team took the photographs of Acura’s navi-
gation system in 1996, a dozen years before trial. The
district court found that Mr. Obradovich knew of the
photos, although his recollection was vague. Second, his
recollection was vague regarding the extent to which he
“played with” Acura’s navigation system during the test
drive in 1996. The Honda briefs state that in 2005 Mr.
Obradovich stated by deposition that he “played with” the
Acura 96RL navigation system in 1996; at a 2007 deposi-
tion he did not remember whether he “operated” the
Acura system in 1996; and at trial in 2008 he said that he
thought he “played with” it in 1996. Whether or not this
is an inconsistency of recollection, it is not clear and
convincing evidence of intent to deceive the PTO.
The jury presence is of particular relevance to ques-
tions of credibility. Mr. Obradovich was examined and
cross-examined as to his role in preparation of the patent
applications, and the jury found that inequitable conduct
had not been shown. The panel majority states that it can
ignore the jury verdict because there was evidence that
the jury did not see. Honda tells us it provided the court
with over a thousand pages of testimony, but does not
identify what might affect this issue. My colleagues’
reliance on unsupported speculation outside of the record
as grounds for destroying valuable property rights is not
an appropriate adjudicatory process.
The court in Therasense recognized the complexities of
the patent application process, where every action taken
or not taken is fair game for loose accusation and satellite
litigation. The Therasense court sought to temper the
litigation game of “inequitable conduct,” by “tighten[ing]
10 AMERICAN CALCAR, INC. v. AMERICAN HONDA MOTOR CO.
the standards for finding both intent and materiality in
order to redirect a doctrine that has been overused to the
detriment of the public.” 649 F.3d at 1290. To bring
stability and uniformity to patent law, it is imperative
that the law is consistently and correctly applied. I
respectfully dissent.