UV Curable Coatings: No Exergen, but PTAB Decision Leads to Stricken Inequitable Conduct Defense

Fiber optic cableIn a recent decision in UV Curable Coatings for Optical Fibers, Inv. No. 337-TA-1031, Judge MaryJoan McNamara struck a respondent’s inequitable conduct defense, which the respondent based on the complainants’ conduct during IPRs of the asserted patents. Two things make this decision noteworthy. First, Judge McNamara declined to apply the Federal Circuit’s Exergen pleading standard and instead relied exclusively on the Commission Rules applicable to pleadings. Second, Judge McNamara’s decision rested heavily on the PTAB’s IPR decision upholding validity to conclude that the respondent could not prove but-for materiality, an element of inequitable conduct.


The Commission instituted UV Curable Coatings based on a complaint filed by DSM Desotech, Inc. and DSM IP Assets N.V. alleging patent infringement by respondents, including Momentive UV Coatings (Shanghai) Co., Ltd. In response to the complaint, Momentive alleged inequitable conduct by DSM during IPRs initiated by a third party. The IPRs focused on a claim limitation concerning the dose of radiation needed to cure compositions for optical fiber coating; the petitioner argued that certain of DSM’s prior art compositions inherently disclosed the required cure dose. DSM and the petitioner submitted competing expert testimony regarding cure dose testing. In its final decision, the PTAB credited DSM’s expert, concluded that the petitioner did not carry its burden, and upheld the patents’ validity.

Momentive alleged that DSM misrepresented to the PTAB the process by which its expert analyzed the cure dose. Specifically, Momentive averred that DSM submitted testing data from a sample measuring twice the thickness of the samples identified in the patents at issue, with the thicker sample artificially slowing the prior art sample’s cure speed. Momentive claimed this amounted to a material misrepresentation and, on information and belief, alleged that DSM intended to deceive the PTAB.

The Decision

In resolving DSM’s motion to strike Momentive’s inequitable conduct defense, Judge McNamara first considered whether to apply the Federal Circuit’s Exergen decision, which provides that inequitable conduct allegations must satisfy the heightened pleading standard of Federal Rule of Civil Procedure 9(b). As Judge McNamara acknowledged, the ITC Judges have split on the pleading standard for inequitable conduct. Despite a recent decision from Judge Lord applying the Exergen standard (see Certain Krill Oil Prods. and Krill Meal Production of Krill Oil Prods., Inv. No. 337-TA-1019, Order No. 8 at 2-7 (Feb. 7, 2017)), Judge McNamara declined to apply the Exergen standard to Momentive’s allegations. She explained that the Commission Rules do not require respondents to plead with a degree of specificity that may be unavailable at the time of their complaint responses and provide ITC Judges “some discretion” to assess a pleading’s sufficiency.

Although Judge McNamara ruled that Momentive’s inequitable conduct allegations provided adequate specificity, she nevertheless granted DSM’s motion and struck the defense. Judge McNamara relied heavily on the PTAB’s IPR decision. Noting the PTAB judges’ “uncommon quantum of technical and legal expertise,” she reasoned that Momentive could not prove but-for materiality because the PTAB stated that it had upheld validity due to the IPR petitioner’s failure to prove its case, not because of DSM’s expert evidence. Judge McNamara also observed that, because the PTAB found that DSM’s expert had given his evidence and opinions “in good faith,” Momentive would have a difficult time proving the intent element of inequitable conduct. This decision provides another illustration of the influence that related IPR proceedings may have on ITC 337 investigations.