Federal Circuit Rules on Inequitable Conduct in Toddler Mat Patent Case

The Federal Circuit has ruled on a district court finding that a plaintiff in a patent infringement case was barred from seeking relief due to unclean hands.

The appeal arose from a lawsuit between two rival manufacturers of dining mats for toddlers: Luv n’ care, Ltd. and Nouri E. Hakim (collectively, “LNC”), on one side, and Lindsey Laurain and Eazy-PZ, LLC (collectively, “EZPZ”), on the other.

In June 2016, LNC filed a complaint against EZPZ, seeking injunctive and monetary relief due to EZPZ’s alleged “acts of unfair competition.” LNC’s claims were brought under the Lanham Act, 15 U.S.C. § 1125(a), and the Louisiana Unfair Trade Practices and Consumer Protection Law (“LUTPA”).

On October 11, 2016, the United States Patent and Trademark Office (USPTO) issued U.S. Patent No. 9,462,903 to Ms. Laurain, who assigned her rights to EZPZ.

As the court noted,

Many parents have experienced the “inconvenience of having to clean up after their children’s mealtimes,” especially when those meals involve their children “dislodging and upturning their plates and bowls to spill foodstuffs and beverages everywhere.” … The ’903 patent provides a solution to this problem by introducing a surface contact self-sealing dining mat integrated with tableware, thereby preventing the separation of tableware from the dining mat while also preventing the lateral displacement and overturning of the dining mat.

LNC also sought a declaratory judgment that EZPZ’s U.S. Design Patent No. D745,327 was invalid, unenforceable, and not infringed.

For example, one prior art reference (Bass) for the ‘903 patent disclosed

“a plate mat for use in restaurants and homes,” having “an adhesive backing so it can be securely affixed to a table top or tray.”

Another prior art publication (Webb) disclosed

a mat “arranged to grip a support surface on which the mat portion is laid, in use, by formation of at least a partial vacuum between the mat portion and the support surface upon deformation of the mat portion.”

The district court acknowledged that “Bass does not disclose or specify a material for its integrated tableware and dining mat” but found it would have been “common sense to a person of ordinary skill in the art” to make “the integrated tableware and dining mat disclosed in Bass out of the rubberlike, nontoxic material disclosed in the Webb Publication.”

After years of litigation, a district court judge in Louisiana held a bench trial and issued an opinion, finding that LNC failed to prove EZPZ’s ‘903 patent was unenforceable due to inequitable conduct.

However, at the same time, the judge found that LNC succeeded in proving that EZPZ was barred from obtaining relief due to its “unclean hands.”

The district court also granted LNC’s motion for partial summary judgment that the claims of the ’903 patent were invalid as obvious in light of prior art, including prior patents.

In 2021, the district court issued its post-trial opinion that LNC did not meet its burden of proving that the ’903 patent was unenforceable due to inequitable conduct:

Specifically, the district court found that although Ms. Laurain and her patent agent, Benjamin Williams (“Williams”), made misrepresentations to the PTO – namely, that the prior art Platinum Pets mat did not exhibit self-sealing functionality – that misrepresentation was not but-for material to the patentability of the ’903 patent, given that the Platinum Pets mat itself had been disclosed to the PTO. The district court further found that several other prior art references Ms. Laurain and Mr. Williams withheld from the PTO were also not material because they were cumulative of the Platinum Pets mat. Additionally, the court found that Ms. Laurain’s and Mr. Williams’ misrepresentation of the Platinum Pets mat, as well as their submission of declarations containing false or misleading information, did not demonstrate a specific intent to deceive the PTO.

Also, the district court determined that unclean hands barred EZPZ from obtaining relief on its counterclaims because EZPZ

engaged in litigation misconduct, including by failing to disclose certain patent applications during discovery, attempting repeatedly to block LNC from obtaining Ms. Laurain’s prior art searches, stringing LNC along during settlement negotiations, and providing evasive and misleading testimony.

The court concluded that EZPZ “by deceit and reprehensible conduct attempted to gain an unfair advantage” and, thus, “[was] not entitled to the relief it seeks.”

Both sides appealed.

The Federal Circuit:

(1) affirmed the district court’s judgment for LNC on unclean hands;

(2) vacated the judgment for EZPZ of no inequitable conduct; and

(3) vacated the grant of partial summary judgment of invalidity.

The court noted that

A court may find unclean hands when the misconduct of a party seeking relief “has immediate and necessary relation to the equity that he seeks in respect of the matter in litigation . . . for such violations of conscience as in some measure affect the equitable relations between the parties in respect of something brought before the court for adjudication.”

Here, the court noted that “In finding unclean hands, the district court thoroughly analyzed EZPZ’s misconduct.”

The court concluded that

The evidence in the record … supports the district court’s finding that EZPZ “by deceit and reprehensible conduct attempted to gain an unfair advantage” in seeking the relief it requested in the litigation.

On the inequitable conduct issue, the court stated:

When a person having a duty of candor and good faith has engaged in serial misconduct during the prosecution of the same or related patents, it is not enough for a court to consider each individual act of misconduct without also considering the collective whole….

Here, the district court did not apply this legal standard and, thereby, abused its discretion. The district court considered each of Ms. Laurain’s and Mr. Williams’ individual acts of misconduct in isolation and failed to address the collective weight of the evidence regarding each person’s misconduct as a whole.

Thus, the Federal Circuit vacated the district court’s findings on deceptive intent and directed the district court to reevaluate Ms. Laurain’s deceptive intent based on her misconduct in the aggregate and to do the same with respect to Mr. Williams.