American Calcar, Inc. v. American Honda Motor Co., Inc.

Undisclosed prior art is but-for material if the PTO would not have allowed a claim had it been aware of the undisclosed prior art.

Michael Obradovich owned American Calcar, Inc. (“Calcar”), and was in the business of creating summaries of vehicle owner manuals, called “Quick Tip” manuals, for various vehicles, including the Acura RL. As part of its business, Calcar was required to use and summarize various vehicle features, including the GPS systems. Sometime in the mid-90s, Calcar pursued a patent for a particular navigation system layout based on the Acura design. In many instances, Calcar simply used drawings and photos of the Acura system with the word “Acura” replaced with “Car” or “Cars.” Honda accused Calcar of inequitable conduct for not disclosing their prior art when pursuing its patent of the visual layout. While this claim was on appeal, the Federal Circuit decided Therasense, Inc. v. Becton, Dickinson and Co., which readdressed the standard for inequitable conduct. Previously, claiming inequitable conduct required both the intent to deceive and materiality, and was based on a gross negligence standard. The Federal Circuit tightened the intent and materiality standard in Therasense, requiring that the accused infringer prove that the patentee acted with the specific intent to deceive the PTO, and that undisclosed prior art was but-for material if the PTO would not have allowed a claim had it been aware of the undisclosed prior art. Thus, as a result of Calcar’s failure to disclose the prior art as the basis of their own patent applications, they had committed inequitable conduct, and Calcar’s patents were UNENFORCEABLE.