Matsushima v. H.A.

Paper No. 45
THIS OPINION IS BINDING PRECEDENT OF THE INTERFERENCE TRIAL SECTION.
Trial Section Motions Panel
BOX INTERFERENCE
WASHINGTON DC 20231
Telephone: 703-308-9797
Facsimile: 703-305-0942
UNITED STATES PATENT AND TRADEMARK OFFICE
_______________
BEFORE THE BOARD OF PATENT APPEALS
AND INTERFERENCES
_______________
KOUJI MATSUSHIMA,
TEIZO YOSHIMURA, EDWARD J. LEONARD, JOOST OPPENHEIM,
ETTORE APPELLA, and STEPHEN D. SHOWALTER
(5,652,338 and 0_/___,___),
Junior Party,
v.
H.A.
(0_/___,___),
Senior Party.
_______________
Interference No. 104,354
_______________
Entered: May 2, 2000
_______________
Before McKELVEY, Senior Administrative Patent Judge, and SCHAFER,
LEE, and TORCZON, Administrative Patent Judges.
TORCZON, Administrative Patent Judge.
DECISION
(PURSUANT TO 37 CFR § 1.640)
INTRODUCTION
Matsushima has filed, with its preliminary motions, a motion
for additional testimony (Paper No. 35) and a motion to postpone
the filing of a preliminary motion (Paper No. 36). The motion

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for additional discovery is dismissed without prejudice. The
motion to postpone is granted.
FINDINGS OF FACTS
1. The United States of America is Matsushima's real
party-in-interest (Paper No. 6).
2. H.A.'s real parties-in-interest are a foreign
corporation and a foreign government (Paper No. 11).
3. Matsushima has filed a preliminary motion arguing that
H.A.'s invention is not patentable in view of a third-party
publication as well as publications and a presentation by
Matsushima inventors (Paper No. 34).
4. Matsushima purports to have overcome the third-party
reference by filing a declaration under 37 CFR § 1.131 (Paper
No. 34 at 12 (¶40)).
5. H.A. has been accorded benefit of a foreign
application, making it senior party by thirteen days (Paper
No. 1).
6. H.A. has moved for benefit of another foreign
application which would make H.A. senior by nearly four months
(Paper No. 37).
7. Matsushima has alleged dates of conception and
reduction to practice over nine months before the benefit date
H.A. seeks (Paper No. 32).

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8. Both parties have effective filing dates before
1 January 1996.
9. In its motion for additional testimony, Matsushima
alleges that it possesses evidence that H.A. knew of some of the
prior art (Paper No. 35).
10. Matsushima alleges that H.A. may not have complied with
its duty of candor toward the United States Patent and Trademark
Office (Paper No. 35 at 4).
11. There are disputes (Paper No. 44) about the material
facts underlying Matsushima's motion for additional testimony.
12. In a telephone conference with the parties and
Administrative Patent Judge Torczon,
a. Matsushima indicated that it had sufficient
evidence of inequitable conduct to warrant discovery on the
question of intent;
b. Matsushima agreed that the inequitable conduct and
unpatentability issues were closely related; and
c. H.A. indicated no opposition to the motion to
postpone.
DISCUSSION
Interferences should be administered to be just, speedy, and
inexpensive. 37 CFR § 1.601. The primary purpose of an
interference is the resolution of questions of priority, although

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other issues when properly raised may also need to be decided.
35 U.S.C. § 135(a); Perkins v. Kwon, 886 F.2d 325, 327-29,
12 USPQ2d 1308, 1310-11 (Fed. Cir. 1989). Consequently, there
are two major phases to most interferences: a preliminary
motions phase which sets the stage for a priority phase. The
focus of the preliminary motions will ordinarily be defining the
count or counts to be used in determining priority. This basic
structure does not mean, however, that alternative procedures
cannot be used. Indeed, efficient administration of an
interference may warrant taking up other issues or taking up an
issue out of turn. Cf. 37 CFR § 1.617 (providing a "summary
judgment" proceeding against junior party applicants with
insufficient proofs under 37 CFR § 1.608).
Inequitable conduct has been described as a "plague" prone
to spawning satellite litigation. Multiform Desiccants Inc. v.
Medzam, Ltd., 133 F.3d 1473, 1482, 45 USPQ2d 1429, 1436 (Fed.
Cir. 1998). By their very nature, the allegation of inequitable
conduct impugns the reputation of counsel, often the same counsel
involved in the interference, or of the inventor. Burlington
Indus., Inc. v. Dayco Corp., 849 F.2d 1418, 1422, 7 USPQ2d 1158,
1161 (Fed. Cir. 1988). As a consequence, the issue tends to
raise the stakes--and the acrimony--in the proceeding. An
assertion of inequitable conduct, however, rarely contributes to

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determining the proper scope of a count or to determining
priority within the scope of the count. Unlike a holding of
unpatentability, which may prompt modification of claims and
hence the count to exclude unpatentable subject matter, a holding
of unenforceability provides little basis for altering the count.
Although the policing of inequitable conduct is important to the
integrity of the patent system, inequitable conduct is rarely
central to a priority determination.
In the present interference, most of the issues relating to
materiality of the allegedly undisclosed information are also
present in Matsushima's unpatentability motion. Consequently, a
decision on the unpatentability motion should significantly
assist in determining whether and to what extent any question of
intent is relevant. If the unpatentability motion is granted
based on the allegedly withheld information, then that
information will have been highly material. Conversely, if no
claim is held unpatentable based on the allegedly withheld
information, the threshold for intent may be extremely high.
Akzo N.V. v. International Trade Comm'n, 808 F.2d 1471, 1481-82,
1 USPQ 1241, 1247 (Fed. Cir. 1986) (The more material the
omission or misrepresentation, the lower the level of intent
required, and vice versa). If either the unpatentability issue

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The cost of testimony is ordinarily borne by the party	1
seeking to introduce the testimony, in this case the United
States.
Nothing in this decision bars the parties from stipulating	2
to (or moving for leave to obtain) such additional testimony from
a witness who otherwise become available during discovery during
the preliminary motion or priority phases of this interference.
or priority are decided against H.A., it may be unnecessary to
reach the acrimonious question of inequitable conduct.
Although the inequitable conduct issue is not necessary to
decide priority, it might still be necessary to reach it after
priority has been decided. The delay in reaching inequitable
conduct is justified in the present case on several grounds.
First, the chance that decisions on patentability or priority
might moot the issue is good enough in view of the advantages of
avoiding the issue to justify the delay. Moreover, intervening
decisions and discovery should help to improve the focus of the
arguments and the scope of discovery. Finally, the cost of
discovery involving foreign witnesses is substantial. It would	1
be a great advantage to avoid that cost wherever possible.2
The parties in this interference are to be commended for
agreeing to a procedure that should save both parties a good deal
of expense and acrimony while preserving the issue for such time
as it might become necessary to reach it. This procedure
highlights the advantages of identifying issues early in the

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proceeding and bringing unusual issues to the attention of the
Board promptly. The ideal mechanism for this is the motions list
and initial telephone conference required in the declaration
(Paper No. 1, ¶ 17). Even when, as in this case, the issue is
not recognized in time for the initial telephone conference,
parties are encouraged to notify the Board promptly of issues
requiring special procedures to secure a speedy, inexpensive, and
just determination.
ORDER
Upon consideration of the record of this interference, it
is—
ORDERED that Matsushima's miscellaneous motion 3 for
additional discovery (Paper No. 35) be dismissed without
prejudice to refile after priority has been decided;
FURTHER ORDERED that Matsushima's miscellaneous motion 4 to
postpone the filing of a preliminary motion alleging inequitable
conduct be granted to the extent that Matsushima may raise the
issue again after priority has been decided;
FURTHER ORDERED that Matsushima shall, if it wishes to
pursue the issue of inequitable conduct, raise the issue within
the time for requesting reconsideration of the priority decision
(37 CFR § 1.658(b)); and

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FURTHER ORDERED that this interference be remanded to the
administrative patent judge designated to handle the interference
for further proceedings consistent with this order.
FRED E. McKELVEY, Senior
Administrative Patent Judge
RICHARD E. SCHAFER
Administrative Patent Judge
JAMESON LEE
Administrative Patent Judge
RICHARD TORCZON
Administrative Patent Judge
BOARD OF
PATENT
APPEALS AND
INTERFERENCES

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Counsel for Matsushima Counsel for Aschauer
(real party-in-interest, (real party-in-interest,
the United States of Novartis AG and the
America): Canton of Berne,
William Feiler
Israel Blum Melvyn M. Kassenoff
MORGAN & FINNEGAN, L.L.P. David E. Wildman
345 PARK AVE NOVARTIS CORPORATION
NEW YORK NY 10154-0053 Patent and Trademark
Fax: 212-751-6849 564 MORRIS AVE
Switzerland):
Department
SUMMIT NJ 07901-1027
Fax: 908-522-6955