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American Hoist & Derrick Co. v. Sowa & Sons, Inc.

725 F.2d 1350, 220 U.S.P.Q.2d 763 (1984)

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American Hoist & Derrick Co. v. Sowa & Sons, Inc.

United States Court of Appeals for the Federal Circuit

725 F.2d 1350, 220 U.S.P.Q.2d 763 (1984)

Facts

American Hoist & Derrick (AmHoist) (plaintiff) sued Sowa & Sons, Inc. (Sowa) (defendant) for infringing a patent on a heavy-duty shackle. Sowa counterclaimed for a declaratory judgment of patent invalidity. Sowa directed AmHoist’s attention to pertinent prior-art references that had not been included in the original patent application, prompting AmHoist to apply for a reissue of the patent. Sowa then argued that AmHoist had committed fraud by failing to disclose the prior art to the United States Patent and Trademark Office (PTO). The jury was instructed that patent applicants were under a duty to disclose all pertinent prior art of which they reasonably should have been aware. The jury found that AmHoist’s failure to disclose the prior art discovered by Sowa constituted fraud. The court held that the fraud was of a sufficient degree to warrant AmHoist paying Sowa’s attorney fees. AmHoist appealed to the United States Court of Appeals for the Federal Circuit, contending that it had no intent to deceive the PTO examiner. AmHoist argued that, in the absence of any evidence that it had acted in bad faith, the district court’s finding of fraud was unjustified.

Rule of Law

Issue

Holding and Reasoning (Rich, J.)

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