United States District Court, W.D. Louisiana
TOTAL REBUILD, INC.
PHC FLUID POWER, L.L.C.
RULING AND ORDER
BRIAN A. JACKSON UNITED STATES DISTRICT COURT
the Court is Total Rebuild, Inc.'s Motion for
Partial Summary Judgment (Doc. 170) against PHC
Fluid Power, L.L.C. Total Rebuild seeks dismissal of PHC
Fluid Power's counterclaim for a declaratory judgment
invalidating one of Total Rebuild's patents due to the
inequitable conduct of Total Rebuild's founder and
director, Terry Lavergne. For the reasons that follow, Total
Rebuild's Motion (Doc. 170) is
dispute arises from PHC Fluid Power's sale of a device
that Total Rebuild contends infringes one of its patents. At
issue is whether PHC Fluid Power can offer facts to support a
finding, by clear and convincing evidence, that Lavergne
intentionally withheld prior art from the United States
Patent and Trademark Office (PTO). The Court holds that it
Rebuild sells "safety system[s] for testing
high-pressure devices." (Doc. 22 at ¶ 7). Lavergne
claims to have invented one such system. (Id.). He
applied for a patent in August 2008 and obtained one in April
2012. (Doc. 1-4 at 1). The patent is United States Patent No.
8, 146, 428; its critical date is August 7, 2007.
(Id. at 7).
assigned the patent to Total Rebuild. (Doc. 148 at 2). Armed with
the assignment, Total Rebuild sued PHC Fluid Power for
infringing the patent and engaging in unfair and deceptive
trade practices. (Docs. 1, 22). PHC Fluid Power responded by
counterclaiming against Total Rebuild for a declaration that
the patent is invalid due to Lavergne's inequitable
conduct. (Doc. 75 at ¶¶ 264-285). In its
counterclaim, PHC Fluid Power alleges that Lavergne failed to
disclose material prior art that, if disclosed, would have
prevented him from obtaining the patent. (Id.). The
material prior art includes sales of a "millennium
system" for testing high-pressure devices.
Rebuild moves for partial summary judgment on PHC Fluid
Power's inequitable-conduct counterclaim. (Doc. 170). PHC
Fluid Power opposes. (Doc. 251).
Court will grant partial summary judgment if Total Rebuild
shows that there is no genuine dispute as to any material
fact and that it is entitled to judgment as a matter of law.
See FED. R. Civ. P. 56(a). In deciding if Total
Rebuild has made that showing, the Court views facts and
draws reasonable inferences in PHC Fluid Power's favor.
See Midwest Feeders v. Bank of Franklin, 886 F.3d
507, 513 (5th Cir. 2018).
conduct is a "defense to patent infringement that, if
proved, bars enforcement of a patent." Therasense,
Inc. v. Becton, Dickinson and Co., 649 F.3d 1276, 1285
(Fed. Cir. 2011) (en banc). It "has two separate
requirements: materiality and intent." Regeneron
Pharm., Inc. v. Merus N.V., 864 F.3d 1343, 1350 (Fed.
Cir. 2017). Only intent is at issue.
establish intent, PHC Fluid Power must show that Lavergne
acted with the specific intent to deceive the PTO. See
Therasense, 649 F.3d at 1290. It need not point to
direct evidence; the Court may infer from circumstantial
evidence that Lavergne intended to deceive the PTO. See
Regeneron, 864 F.3d at 1350. Still, Lavergne's
intent to deceive must be the "single most reasonable
inference able to be drawn from the evidence."
Network Signatures, Inc. v. State Farm Mut. Auto. Ins.
Co., 731 F.3d 1239, 1242 (Fed. Cir. 2013) (citation
omitted). An inference is "reasonable" if
it is "plausible . . . and flows logically from the
facts alleged[.]"Exergen Corp. v. Wal-Mart Stores,
Inc., 575 F.3d 1312, 1329 n.5 (Fed. Cir. 2009).
Rebuild argues that PHC Fluid Power cannot prove that
Lavergne acted with deceptive intent. (Doc. 170-1). But it offers
scant support for the argument: it points to Lavergne's
testimony that he did not intend to deceive the PTO and
invites the Court to find, based on that testimony alone,
that PHC Fluid Power cannot prove inequitable conduct.
(Id. at 11-12). The Court declines the invitation.
Total Rebuild notes, Lavergne testified that he did not
intentionally fail to disclose the millennium system to the
PTO. (Doc. 170-8 at 2). He testified that "[w]e
disclosed what we thought we w[ere] supposed to
disclose." (Doc. 170-10 at 2). He explained that his
office manager, Tara Benoit, was supposed to provide the
disclosures to his patent-prosecution attorney but failed to
do so. (Id. at 3). In short, he delegated to his
office manager responsibility for making disclosures that
bear directly on the validity of a lucrative patent.
(Id.; Doc. 170-1 at 12). And he now blames that
office manager for disobeying his order to disclose. (Doc.