Judge Rakoff Refuses to “Ice” Diamond Patent Inequitable Conduct Allegations

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On August 31, 2020, United States District Court Jed S. Rakoff denied plaintiffs Carnegie Institute of Washington and M7D Corporation (“Carnegie”)’s motion to dismiss the defendants’ counterclaims for inequitable conduct, holding that the allegations state with particularity a plausible claim.

The two patents-in-suit are directed to methods for growing synthetic diamonds, such as through chemical vapor deposition (“CVD”).  The defendants, Pure Grown Diamonds, Inc. and IIA Technologies, allege that U.S. Patent No. RE41, 189 (the “’189 Patent”) is unenforceable because the patentees intentionally deceived the Patent Office regarding the inventorship of the patent during reissuance.

The ’189 Patent is a reissue of U.S. Patent No. 6,811,610 (the “’610 Patent”), which was issued in November 2004 to named inventors Drs. Frushour and Li.  Prior to the ’610 Patent being issued, three scientists at Carnegie filed a patent application covering the same subject matter.  Although Carnegie requested an interference proceeding, it was ultimately dismissed and Carnegie’s application abandoned.  However, Carnegie acquired an interest in the ’610 Patent in September 2008.

In 2009, Carnegie filed an application seeking reissue of the ’610 Patent, which sought to remove Dr. Frushour as an inventor and add the Carnegie scientists named as inventors of the now abandoned application.  The Defendants allege that either in the initial application or in the reissue application, someone deliberately deceived the Patent Office.

Judge Rakoff held that the allegations stated a claim for inequitable conduct. 

First, Judge Rakoff held that the allegations that Dr. Frushour and Li, and not the Carnegie scientists, were the proper inventors was plausible.  Although Carnegie argued that their scientists conveyed the claimed invention to Drs. Frushour and Li, the testimony from Dr. Frushour and his laboratory notebook (both incorporated by reference into the pleadings) supported a “particularized enough” and “plausible inference” that Drs. Frushour and Li themselves invented the patented material.

As such, Judge Rakoff held that it was plausible that the statements made by the Carnegie scientists to the Patent Office and another Carnegie employee during the reissue application were deliberate misrepresentations.  And finally, if these statements misled the Patent Office, they would be “plainly material”: “If Carnegie had instead said that Frushour and Li were the inventors, then the PTO certainly would not have reissued the patent.”

The cases are Carnegie Institute of Washington et al. v. Pure Grown Diamonds, Inc. et al., No. 20-cv-189 (JSR) (S.D.N.Y.), and Carnegie Institute of Washington et al. v. Fenix Diamonds, LLC, No. 20-cv-200 (JSR) (S.D.N.Y.).

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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