Patent unenforceable due to inequitable conduct; no attorneys fees awarded
eSpeed, Inc. et al. v. Brokertec USA, L.L.C., et al., No. 03-612-KAJ, Feb. 22, 2006.
Jordan, J. Post-trial rulings finding inequitable conduct. No attorneys’ fees awarded despite exceptional case.
The patent in suit relates to a computer system used to support securities trading activities. The Court found that the patentees committed inequitable conduct during the prosecution of the patent application by failing to disclose to the PTO the existence of a system previously used in house. The Court found the system material and unquestionably known to the applicants. Regardless of whether anyone other than eSpeed’s employees ever saw the system, its use was commercial. Deceptive intent was found by the high materiality and significant effort expended on the previous system. Inference of intent was found by the fact that applicants referred to their development efforts as the SuperSystem, but told the PTO it did not occur to them to cite to the SuperSystem as prior art. Disclosure of the SuperSystem during prosecution of subsequent patent did not cure the inequitable conduct and subsequent patent was also found unenforceable. Suit was not barred by laches. Attorneys' fees were not awarded despite finding of exceptional case because the case was hard fought and conduct of eSpeed’s counsel was professional in the face of hyper-aggressive defense tactics.
