Inequitable conduct defense fails after PTAB denies IPR institution based upon allegedly “but-for” material reference


Concurrent with the litigation it filed in the Eastern District of Virginia, Bentley Motors (“Bentley”) filed a petition for IPR with the PTAB based on certain prior art referred to by the Court as “the Porsche 959 prior art.”  The day before its reply brief was due in the litigation, PTAB denied institution of the IPR, holding that Bentley had failed to show with a reasonable likelihood that the claims of the patent at issue were obvious over the Porsche 959 prior art.  PTAB also declined Bentley’s subsequent request for rehearing on the issue.

The Court denied Bentley’s motion to amend, stating:

In light of the PTAB’s decision denying IPR, assuming all other factual allegations as true, and assuming that Bentley pleaded such factual allegations with the requisite particularity, Bentley’s inequitable conduct counterclaim does not “plausibly give rise to an entitlement to relief.  [citation omitted] Under the but for materiality standard required to demonstrate an inequitable conduct claim, Bentley’s allegations do not plausibly give rise to an entitlement to relief because Bentley cannot show that “but for” the Prosche 959 prior art, the PTO would not have issued JLR the ‘828 patent…In fact, the opposite is true because the PTAB expressly reviewed “the exact same material” while considering Bentley’s petition for IPR and determined that the Porsche 959 prior art would not render the patent at issue unpatentable.

The Court elaborated:

…even assuming JLR withheld the Porsche 959 prior art with the requisite intent, Bentley cannot demonstrate that but for JLR’s omission, the Examiner would not have issued the patent, and therefore cannot demonstrate materiality.