## Facts

- Exergen owned three patents covering infrared thermometers that measure surface temperature and calculate internal body temperature.
- Exergen sued Wal-Mart and other sellers and suppliers, including S.A.A.T. Systems Application of Advanced Technology, Ltd. and Daiwa Products, Inc. (collectively, SAAT), alleging infringement of U.S. Patent Nos. 5,012,813; 6,047,205; and 6,292,685.
- SAAT defended on noninfringement and invalidity and sought leave to amend its answer to add inequitable conduct, alleging withholding of material prior art and misleading statements during patent prosecution.
- A jury found infringement of all asserted claims, willful infringement, and awarded Exergen lost-profits damages.
- The district court denied SAAT’s JMOL motions on invalidity and infringement, denied SAAT leave to amend to plead inequitable conduct for lack of specificity under Rule 9(b), and denied Exergen enhanced damages and prejudgment interest despite the willfulness finding.
- SAAT appealed the denial of JMOL and denial of leave to amend; Exergen cross-appealed the denial of enhanced damages and prejudgment interest.

## Issues

1. Whether substantial evidence supported the jury’s finding that the ’205 patent was not anticipated under 35 U.S.C. § 102.
2. Whether substantial evidence supported the jury’s findings that SAAT’s products infringed the ’813 and ’685 patents.
3. Whether the district court abused its discretion by denying SAAT leave to amend to plead inequitable conduct for failure to satisfy Rule 9(b).
4. Whether Exergen’s cross-appeal for enhanced damages and prejudgment interest remained viable after the appellate resolution of liability.

## Decision

- Reversed the judgment upholding validity of the ’205 patent; held all asserted claims of the ’205 patent anticipated.
- Reversed the infringement judgments on the ’813 and ’685 patents for lack of substantial evidence that the accused products met required claim limitations.
- Affirmed the denial of leave to amend to add inequitable conduct because the proposed pleading failed to satisfy Rule 9(b)’s particularity requirement.
- Reversed the damages award and did not reach Exergen’s cross-appeal on enhanced damages and prejudgment interest because the liability findings could not stand.

## Legal Principles

- Anticipation under 35 U.S.C. § 102 requires a single prior-art reference to disclose every claim limitation, expressly or inherently; a jury verdict cannot stand without substantial evidentiary support.
- Infringement requires proof that the accused product or method meets each and every claim limitation; functional similarity is insufficient without element-by-element proof.
- Inequitable conduct must be pleaded with particularity under Federal Rule of Civil Procedure 9(b).
- A sufficient inequitable conduct pleading must state the “who, what, when, where, and how” of the alleged misconduct before the PTO, including:
  - the specific individual(s) involved (not collective references to “assignees, agents, and/or attorneys”);
  - the specific information or prior art allegedly withheld or misrepresented;
  - where and when in the prosecution history the omission or misrepresentation occurred; and
  - facts supporting a reasonable inference of materiality and specific intent to deceive the PTO.

## Conclusion

The Federal Circuit set aside the jury’s liability and damages determinations by holding the ’205 patent anticipated and the ’813 and ’685 patents not proven infringed, and it affirmed that inequitable conduct allegations must satisfy Rule 9(b) by pleading with particularity the specific actors, acts, timing, locations in the prosecution record, and facts supporting materiality and intent.


Exergen Corp. v. Wal-Mart Stores, Inc., 575 F.3d 1312 (Fed. Cir. 2009)