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Pleading Precedent

The problem is well known. Academics, attorneys and businesses involved in patent infringement suits have complained about it for decades. Even the courts have acknowledged the gravity of the situation.

The problem, as the Federal Circuit wrote in the 1988 case Burlington Industries v. Dayco Corp., is "the habit of charging inequitable conduct in almost every major patent case." The court went on to describe this problem as an "absolute plague." And the plague has not abated since the court penned those words 21 years ago.

In 2002, SAAT moved to amend its pleading in order to allege that Exergen obtained the patents at issue through inequitable conduct. The federal district court in Massachusetts denied this request, saying the allegations of inequitable conduct were too vague.

A jury subsequently found SAAT guilty of willful infringement and determined it should pay more than $2.5 million in damages. Exergen appealed, seeking greater damages and prejudgment interest. SAAT appealed, too, asserting that it had not infringed Exergen's patents and that the lower court had acted incorrectly when it refused to allow SAAT to amend its claims with allegations of inequitable conduct.

In order to hunt for all this detailed information, accused infringers will seek discovery early in litigation. "[They] will accelerate discovery plans--depose inventors and patent prosecuting attorneys sooner than in the past," Midgley says. "This will have the effect of accelerating costs earlier in proceedings. ... Right off the bat, you are racking up
significant legal bills."

Costly Scenario


Steven Seidenberg

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