Network Signatures, Inc. v. State Farm Mutual Automobile Insurance Company

United States Court of Appeals
for the Federal Circuit
______________________
NETWORK SIGNATURES, INC.,
Plaintiff-Appellant,
v.
STATE FARM MUTUAL AUTOMOBILE
INSURANCE COMPANY,
Defendant-Appellee.
______________________
2012-1492
______________________
Appeal from the United States District Court for the
Central District of California in No. 11-CV-0982, Judge
James V. Selna.
______________________
Decided: September 24, 2013
______________________
P ETER R. AFRASIABI, One LLP, of Newport Beach, Cal-
ifornia, argued for plaintiff-appellant. With him on the
brief was N ATHANIEL L. D ILGER.
ASHLEY C. P ARRISH , King & Spalding, LLP, of Wash-
ington, DC, argued for defendant-appellee. With him on
the brief were R. WILLIAM BEARD, J R. and T RUMAN H.
F ENTON, of Austin, Texas; and ADAM M. C ONRAD of Char-
lotte, North Carolina. Of counsel was D ARYL L. J OSEFFER ,
of Washington, DC.

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NETWORK SIGNATURES , INC. v. STATE FARM MUTUAL AUTO 2
HOWARD S. SCHER , Attorney, Appellate Staff, Civil Di-
vision, United States Department of Justice, of Washing-
ton, DC, argued for amicus curiae. With him on the brief
were S TUART F. D ELERY , Acting Assistant Attorney Gen-
eral, and SCOTT R. MCI NTOSH , Attorney.
______________________
Before N EWMAN, CLEVENGER , and WALLACH , Circuit
Judges.
Opinion for the court filed by Circuit Judge N EWMAN.
Dissenting opinion filed by Circuit Judge C LEVENGER .
N EWMAN, Circuit Judge.
U.S. Patent No. 5,511,122 (the ’122 patent), entitled
“Intermediate Network Authentication,” pertains to
internet security, and is assigned to the United States of
America represented by the Secretary of the Navy. The
technology was developed by a scientist at the Naval
Research Laboratory (NRL). The NRL permitted the
patent to lapse for nonpayment of the 7.5-year mainte-
nance fee. Two weeks after the lapse became effective,
the NRL received an inquiry from the predecessor to
Network Signatures, Inc. about licensing the patent. The
NRL then petitioned the Patent and Trademark Office
(PTO) to accept delayed payment of the fee; the PTO
granted the petition. The ’122 patent was duly licensed.
Network Signatures sued State Farm Mutual Auto-
mobile Insurance Company for infringement of the ’122
patent. In defense, State Farm asserted that the patent
was permanently unenforceable on the ground that the
NRL patent attorney, John Karasek, had engaged in
inequitable conduct by “falsely representing” to the PTO
that the NRL’s non-payment of the maintenance fee was
“unintentional.” The district court granted summary
judgment of inequitable conduct, and held the patent

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NETWORK SIGNATURES, INC. v. STATE FARM MUTUAL AUTO 3
unenforceable.1 We conclude that the PTO Director acted
in accordance with law and within his discretion in excus-
ing the delayed payment, and that inequitable conduct
was not established.
BACKGROUND
Mr. Karasek and his staff were responsible for man-
aging the NRL’s patent portfolio, which “is typically
around 700 patents at any given time.” The ’122 patent
was issued on April 23, 1996, and the period for paying
the 7.5-year maintenance fee ended on April 23, 2004.
See 37 C.F.R. §1.362. Mr. Karasek explained that the
NRL made maintenance fee payment decisions once or
twice a year, and that “if there is an expression of inter-
est, the NRL will pay the nominal maintenance fee,” but
will “allow the patent to go abandoned” as a matter of
“routine practice” absent any “identified commercial
interest.” Karasek Decl. ¶12 (Apr. 26, 2012).
Mr. Karasek stated that for the ’122 patent, the NRL
did not know of any commercial interest, and the 7.5-year
fee was not paid. On May 10, 2004—two weeks after the
final payment date—Mr. Hazim Ansari of Network Signa-
tures’ predecessor company telephoned Ms. Jane Kuhl at
the NRL Technology Transfer Office, and inquired about
licensing the ’122 patent. Mr. Ansari told Ms. Kuhl that
he had been trying to contact the NRL, but had been
unable to reach anyone. Mr. Ansari later specified that
he left a voicemail message with the Technology Transfer
Office on April 5, 2004, and that he sent e-mails to that
office on April 12 and 14, both of which “bounced back.”
Ms. Kuhl promptly told Mr. Karasek of the inquiry,
and that same day, May 10, 2004, Mr. Karasek filed a
1 Network Signatures, Inc. v. State Farm Mut. Auto.
Ins. Co., No. 11-cv-0982, 2012 WL 2357307 (C.D. Cal.
June 13, 2012) (D. Ct. Op.).

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NETWORK SIGNATURES , INC. v. STATE FARM MUTUAL AUTO 4
petition with the PTO for delayed payment of the mainte-
nance fee in accordance with 37 C.F.R. §1.378(a). The
petition was on the PTO’s standard form, which was pre-
populated with the statement that “[t]he delay in pay-
ment of the maintenance fee to this patent was uninten-
tional.” 37 C.F.R. §1.378(c)(3). The petition provided for
payment of the $2,090 maintenance fee and the $1,640
late payment surcharge. The PTO approved the delayed
payment for the ’122 patent during the week of May 17,
2004, see n.2, infra, the week after Mr. Karasek filed the
petition. The NRL duly licensed the patent to Network
Signatures.
In June 2011 Network Signatures brought this in-
fringement suit against State Farm Mutual Automobile
Insurance Company. State Farm moved for summary
judgment of unenforceability of the ’122 patent, on the
ground that Mr. Karasek committed inequitable conduct
in his request for delayed payment of the maintenance
fee, because the delay was not “unintentional” in that the
NRL paid the fee only after learning of Mr. Ansari’s
interest.
Mr. Karasek testified that the late payment was in-
deed unintentional, for it resulted from a “mistake of
fact.” The PTO has explained that “A distinction must be
made between a mistake in fact, which may form the
basis for a holding of unintentional abandonment . . . ,
and the arrival at a different conclusion after reviewing
the same facts a second time.” In re Maldague, 10
U.S.P.Q.2d 1477, 1478 (Comm’r Pat. 1989). Mr. Karasek
stated that there was indeed a mistake of fact, for the
NRL would have routinely paid the maintenance fee had
it known of this commercial interest. Mr. Karasek stated:
It is . . . a mistake of fact where a patent applicant
learns of previously unknown facts that—had
they been known previously and which were not
unknown because of neglect of a legal duty—

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NETWORK SIGNATURES, INC. v. STATE FARM MUTUAL AUTO 5
would have altered the decision to abandon. Here,
the NRL was faced with previously unknown
facts—Mr. Ansari’s earlier attempts to contact the
NRL prior to abandonment to obtain a license to
the ’122 patent—facts that were unknown and
unknowable at the time of April 23, 2004 due to
the . . . circumstances with the phone system and
the gravely ill head of the TTO. These facts—had
they been known—would have altered the NRL’s
decision to abandon the ’122 patent.
Karasek Decl. ¶19.
The district court held that this circumstance did not
amount to a “mistake of fact,” citing the ruling of the
Commissioner in In re Carlson that “[t]he discovery of
additional information after making a deliberate decision
to withhold a timely action is not the ‘mistake in fact’ that
might form the basis for acceptance of a maintenance fee .
. . under the reasoning of Maldague.” Carlson, 2003 WL
25523657, at *6 (Comm’r Pat. Jan. 24, 2003) (reconsider-
ing 2002 decision). In Carlson the patentee had allowed
the patent to lapse, and three months later learned of
possible infringement and sought to revive the patent by
late payment of the fee.
The district court found Carlson “to be most on point,”
and held that the omission of “any evidence or explana-
tion of why the delay was considered unintentional was
but-for material.” D. Ct. Op. at *10. The court concluded
that “there is no genuine issue of fact that Karasek with-
held material information from the PTO with the specific
intent to deceive it,” and ruled that the criteria of inequi-
table conduct were met. Id. at *12. This appeal followed.
D ISCUSSION
“To prove inequitable conduct, the challenger must
show by clear and convincing evidence that the patent
applicant (1) misrepresented or omitted information

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NETWORK SIGNATURES , INC. v. STATE FARM MUTUAL AUTO 6
material to patentability, and (2) did so with specific
intent to mislead or deceive the PTO.” In re Rosuvastatin
Calcium Patent Litig., 703 F.3d 511, 519 (Fed. Cir. 2012)
(citing Therasense, Inc. v. Becton, Dickinson & Co., 649
F.3d 1276, 1287 (Fed. Cir. 2011) (en banc)). “Materiality
and intent must be separately established.” Id.
The facts of materiality and intent must be estab-
lished by clear and convincing evidence, for, as stated in
Burlington Industries, Inc. v. Dayco Corp., 849 F.2d 1418,
1422 (Fed. Cir. 1988), “summary judgment that a reputa-
ble attorney has been guilty of inequitable conduct, over
his denials, ought to be, and can properly be, rare indeed.”
On appeal, we exercise plenary review of the district
court’s grant of summary judgment. Astrazeneca Pharms.
LP v. Teva Pharms. USA, Inc., 583 F.3d 766, 770 (Fed.
Cir. 2009).
The district court stated that “While a close issue, the
Court cannot conclude that Karasek’s statement rises to
the level of affirmative egregiousness of the cases The-
rasense references.” D. Ct. Op. at *8. However, the
district court found that Mr. Karasek intended to deceive
the PTO, apparently by using the PTO’s standard form
petition for “unintentional” delay without setting forth the
details of how or why the delay occurred. We do not agree
that this action constituted material misrepresentation
with intent to deceive. “To establish materiality, it must
be shown that the PTO would not have allowed the claim
but for the nondisclosure or misrepresentation. To estab-
lish intent, intent to deceive the PTO must be the single
most reasonable inference able to be drawn from the
evidence.” Rosuvastatin, 703 F.3d at 519 (citations and
internal quotation marks omitted).
Acceptance of late payment of maintenance fees is au-
thorized by statute, 35 U.S.C. §41(c)(1), and implemented
by 37 C.F.R. §1.378(a), which states that the Director

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NETWORK SIGNATURES, INC. v. STATE FARM MUTUAL AUTO 7
may accept the payment of any maintenance fee
due on a patent after expiration of the patent if,
upon petition, the delay in payment of the
maintenance fee is shown to the satisfaction of the
Director to have been unavoidable (paragraph (b)
of this section) or unintentional (paragraph (c) of
this section) and if the surcharge . . . is paid as a
condition of accepting payment of the mainte-
nance fee.
The PTO provides a standard form for late payment.
After legislative change enacted in 1992, the statute
states that “unintentional” delay is sufficient ground for
acceptance of late payment. See Late Payment of
Maintenance Fees, Pub. L. No. 102-444, 106 Stat. 2245
(1992). Before 1992, §41(c) required the petitioner to
show that the late payment was “unavoidable,” and the
pre-1992 regulation, 37 C.F.R. §1.378, required the peti-
tioner to “enumerate the steps taken to ensure timely
payment.” The statute was amended on legislative recog-
nition that “[t]he ‘unavoidable’ standard has proved to be
too stringent in many cases. Many patentees have been
deprived of their patent rights for failure to pay the
maintenance fees for reasons that may have been unin-
tentional yet not unavoidable.” H.R. Rep. No. 102-993, at
2 (1992).
The current regulation, 37 C.F.R. §1.378(c)(3), re-
quires only a statement that the delay was “unintention-
al.” The standard PTO form requires no details for
“unintentional” delay, and contains the preprinted
“statement” that: “The delay in payment of the mainte-
nance fee to this patent was unintentional,” without
requesting further detail.
Mr. Karasek acted promptly upon learning of com-
mercial interest in the ’122 patent, after only two weeks of
delay. The record shows no irregularity in Mr. Karasek’s
actions. He submitted the NRL petition on the form

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NETWORK SIGNATURES , INC. v. STATE FARM MUTUAL AUTO 8
provided by the PTO; the form does not require a state-
ment of the reasons for the initial non-payment and for
the changed position. In Field Hybrids, LLC v. Toyota
Motor Corp., No. 03-4121, 2005 WL 189710 (D. Minn. Jan.
27, 2005) the court held that there was not inequitable
conduct in representing that the delay was unintentional,
for the attorney “simply used the standard language
required by federal regulations.” Id. at *9.
Mr. Karasek’s compliance with the standard PTO pro-
cedure for delayed payment, using the PTO form for
delayed payment, does not provide clear and convincing
evidence of withholding of material information with the
intent to deceive the Director. On matters unrelated to
the substantive criteria of patentability, but within the
authority of the Director, “it is almost surely preferable
for a reviewing court not to involve itself in the minutiae
of Patent Office proceedings and to second-guess the
Patent Office on procedural issues at every turn.”
Laerdal Med. Corp. v. Ambu, Inc., 877 F. Supp. 255, 259
(D. Md. 1995) (citation and internal quotation marks
omitted).2 We have recognized an “unwillingness to
2 Our colleague in dissent argues that Mr. Karasek
committed inequitable conduct by not explaining to the
PTO the factual circumstances of the “unintentional”
delay, although the PTO procedure and standard form do
not require such explanation. 37 C.F.R. §1.378(c) requires
only “(3) A statement that the delay in payment of the
maintenance fee was unintentional.” Mr. Karasek used
the official form for delayed payment, and the Director
accepted the payment. The PTO record lists the grant of
such petitions; see, e.g., USPTO Official Gazette Notice of
Delayed Payment of Maintenance Fee, 1283 OG 24 (June
15, 2004) (listing thirty-four patents including the ’122
patent approved for delayed payment during the week of
May 17, 2004); 1283 OG 23 (June 8, 2004) (listing thirty
patents approved for delayed payment the week before

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NETWORK SIGNATURES, INC. v. STATE FARM MUTUAL AUTO 9
extinguish the statutory presumption of validity” where
the patentee’s conduct “did not affect the issuance of the
patent.” Therasense, 649 F.3d at 1291.
the ’122 patent); 1283 OG 25 (June 22, 2004) (listing
twenty-six patents approved for delayed payment the
week after the ’122 patent). An examination of recently
approved petitions confirms that such petitions are rou-
tinely filed and granted without explanation for the
“unintentional” delay. The Official Gazette of August 13,
2013 lists thirty-six petitions, 1393 OG 85, twenty-one of
which were available for our review. None of the re-
viewed petitions include a substantive discussion of
“unintentional” delay by either the petitioner or the
Director. The other fifteen petitions were not accessible
electronically. The PTO grants petitions to excuse “unin-
tentional” delay “automatically,” and in “real-time.” EFS-
Web, Petition Under 1.378(c) Quick Start Guide, available
at
http://www.uspto.gov/ebc/portal/efs/petition_1378c_quicks
tart.pdf. Contrary to the dissent’s assertion, Mr. Ka-
rasek’s adherence to standard, well-established PTO
procedure is not evidence of intent to deceive the Office.
The dissent also states that the “materiality” compo-
nent of inequitable conduct need be shown by only a
preponderance of the evidence when the information
relates to patentability. However, the en banc court in
Therasense stated that “[t]he accused infringer must
prove both elements—intent and materiality—by clear
and convincing evidence.” 649 F.3d at 1287. The court
did not distinguish among issues, when the charge was
that the lawyer had committed inequitable conduct. The
court in Therasense sought to ameliorate the opportunistic
plague of personal attack and satellite litigation, by
establishing a consistent standard.

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NETWORK SIGNATURES , INC. v. STATE FARM MUTUAL AUTO 10
The district court’s summary judgment of inequitable
conduct cannot stand. The judgment is reversed. The
case is remanded for proceedings on the merits of the
complaint.
REVERSED AND REMANDED

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United States Court of Appeals
for the Federal Circuit
______________________
NETWORK SIGNATURES, INC.,
Plaintiff-Appellant,
v.
STATE FARM MUTUAL AUTOMOBILE
INSURANCE COMPANY,
Defendant-Appellee.
______________________
2012-1492
______________________
Appeal from the United States District Court for the
Central District of California in No. 11-CV-0982, Judge
James V. Selna.
______________________
CLEVENGER , Circuit Judge, dissenting.
I respectfully dissent from the majority’s reversal of
summary judgment of inequitable conduct. I believe the
district court was correct in granting summary judgment
to State Farm on materiality, but should not have granted
summary judgment on intent. Because there are material
facts regarding Mr. Karasek’s intent to deceive the Patent
and Trademark Office (PTO) in dispute, I would remand
the issue of intent to the district court for a trial on the
merits.
I. MATERIALITY

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NETWORK SIGNATURES , INC. v. STATE FARM MUTUAL AUTO 2
“The materiality required to establish inequitable
conduct is but-for materiality.” Therasense, Inc. v. Becton,
Dickinson & Co., 649 F.3d 1276, 1291 (Fed. Cir. 2011) (en
banc). The majority states that “the PTO Director acted in
accordance with law and within his discretion in excusing
the delayed payment,” Maj. Op. at 3, but the PTO direc-
tor’s past action is not in question. The correct question on
materiality is whether the PTO would have granted
Karasek’s revival petition if he had disclosed the circum-
stances surrounding the revival. Therasense, 649 F.3d at
1291-92. Because I believe that State Farm has shown1
1 There is some dispute in our post-Therasense case
law over the correct standard of proof on materiality.
Compare Aventis Pharma S.A. v. Hospira, Inc., 675 F.3d
1324, 1334 (Fed. Cir. 2012) (applying the preponderance
standard) with In re Rosuvastatin Calcium Patent Litig.,
703 F.3d 511, 519 (Fed. Cir. 2012) (applying a clear and
convincing standard). In Therasense we faced a situation
involving the withholding of prior art, and adopted a
preponderance standard to accord with the PTO’s hypo-
thetical review of the prior art during patent prosecution.
Therasense, 649 F.3d at 1291-92 (“[I]n assessing the
materiality of a withheld reference, the court must deter-
mine whether the PTO would have allowed the claim if it
had been aware of the undisclosed reference. In making
this patentability determination, the court should apply
the preponderance of the evidence standard . . . .”). The-
rasense also addressed our older unclean hands doctrine,
which required “[t]he accused infringer [to] prove both
elements—intent and materiality—by clear and convinc-
ing evidence.” Id. at 1287. In this case, we are not evalu-
ating withheld prior art, but rather information withheld
post-issuance. At least two post-Therasense cases involv-
ing inequitable conduct not related to patentability used a
clear and convincing evidence standard. Outside the Box
Innovations, LLC v. Travel Caddy, Inc., 695 F.3d 1285,

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NETWORK SIGNATURES , INC. v. STATE FARM MUTUAL AUTO 3
that the PTO would have denied Karasek’s petition, I
would affirm the grant of summary judgment on material-
ity.
The relevant facts on materiality are not in dispute.
The Navy made a deliberate decision not to pay the 7.5
year maintenance fee for the ’122 Patent, and the ’122
Patent expired on April 23, 2004. Several days later,
Karasek learned that Hazim Ansari had attempted to
contact the Naval Research Laboratory (NRL) about
licensing the patent. No one at the NRL received or
appreciated these messages. On the same day that Ka-
rasek received this second-hand information, he filed a
revival petition with the PTO stating that the ’122 Patent
was unintentionally abandoned. Karasek did not include
any information about Mr. Ansari’s contacts with the
NRL or inform the PTO of the NRL’s original intentional
decision to abandon the patent. Over one month later,
Karasek received a letter from Mr. Ansari stating that
“[o]n April 5th, we called the general number of the NRL
Office of Technology Transfer and asked to speak to a
person about the ’122 Patent” and “[o]n April 12th, we
sent an email expressing interest in the ’122 Patent to
[the NRL’s general email address] . . . .” J.A. 443.
1294 (Fed. Cir. 2012) (false declaration of small entity
status); Powell v. Home Depot U.S.A., Inc., 663 F.3d 1221,
1235 (Fed. Cir. 2011) (failure to update Petition to Make
Special). I would clarify that where inequitable conduct
involves withheld prior art, it is correct to apply the
preponderance standard. In cases such as this one, involv-
ing information not related to patentability, I would apply
a clear and convincing evidence standard to materiality.
Regardless, I would find for State Farm on materiality
under either standard.

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NETWORK SIGNATURES , INC. v. STATE FARM MUTUAL AUTO 4
Network Signatures, relying on cases such as In re
Patent No. 6,118,582, 2006 WL 4926249 (Comm’r Pat.
June 13, 2006) and In re Maldague, 10 U.S.P.Q.2d 1477,
1478 (Comm’r Pat. 1988), argues that the above facts
present a “mistake of fact” scenario and the PTO would
have granted the revival petition had Karasek disclosed
them to the PTO. State Farm disagrees, and argues that
this situation is indistinguishable from cases such as In re
Patent of Carlson, 2003 WL 25523657 (Comm’r Pat. Jan.
24, 2003) and In re Patent No. 5,181,974, 2007 WL
4974450 (Comm’r Pat. Aug. 17, 2007), where the PTO
denied revival under a mistake of fact theory.
The PTO’s cases do suggest that a petitioner can rely
on a mistake of fact to revive an expired patent, but
Network Signatures cannot cite to any case where the
PTO actually granted revival under this theory. In Carl-
son, the PTO denied a revival petition because
[t]he discovery of additional information after
making a deliberate decision to withhold a timely
action is not the “mistake in fact” that might form
the basis for acceptance of a maintenance fee . . . .
The discovery of additional, other information is
simply a change in circumstances that occurred
subsequent to the expiration of the patent.
2003 WL 25523657, at *6.
In re ’974 also reaches the same conclusion. In that
case, the patentee allowed the patent to go abandoned
when he failed to recognize that the patent was the sub-
ject of a pre-existing license agreement. In re ’974, 2007
WL 4974450, at *3. The PTO denied revival, holding that
“intentional action or inaction [in paying a maintenance
fee] precludes a finding of unintentional delay, even if the
agent-representative made his decision not to timely take
the necessary action in a good faith error.” Id. at *4.

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NETWORK SIGNATURES , INC. v. STATE FARM MUTUAL AUTO 5
The regulatory history of the unintentional revival
rules also supports the rejection of Karasek’s petition. In
its Final Rule notice, the PTO explained when a petition
for unintentional abandonment of a patent application
will not be granted:
Where the applicant deliberately permits an
application to become abandoned (e.g., due to a
conclusion that the claims are unpatentable, that
a rejection in an Office action cannot be overcome,
or that the invention lacks sufficient commercial
value to justify continued prosecution), the aban-
donment of such application is considered to be a
deliberately chosen course of action, and the re-
sulting delay cannot be considered as “uninten-
tional” within the meaning of § 1.137(b). . . . An
intentional delay resulting from a deliberate
course of action chosen by the applicant is not af-
fected by: (1) The correctness of the applicant’s (or
applicant’s representative’s) decision to abandon
the application or not to seek or persist in seeking
revival of the application; (2) the correctness or
propriety of a rejection, or other objection, re-
quirement, or decision by the Office; or (3) the dis-
covery of new information or evidence, or other
change in circumstances subsequent to the aban-
donment or decision not to seek or persist in seek-
ing revival.
See Changes to Patent Practice and Procedure, 62 Fed.
Reg. 53132, 53158-59 (Oct. 10, 1997) (to be codified at 37
C.F.R. pt. 1) (discussing the meaning of “unintentional”
delay in the context of the revival of an abandoned appli-
cation) (emphasis added); see also
MPEP § 711.03(c)(II)(C)(1) (8th ed. Rev. 9, Aug. 2012).
The PTO treats unintentional revival of a patent applica-
tion in the same manner as unintentional revival of an
issued patent. See In re ’974, 2007 WL 4974450, at *3-4.

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NETWORK SIGNATURES , INC. v. STATE FARM MUTUAL AUTO 6
The case before us today is no different from Carlson
or In re ’974—the ’122 Patent was the subject of a pre-
existing indication of commercial interest, which the NRL
failed to appreciate. Network Signatures attempts to
distinguish these cases by arguing that the unappreciated
facts in Carlson and In re ’974 were available to the
petitioner at the time of the decision to abandon, but here
the NRL could not know about Mr. Ansari’s interest in the
patent. I would not excuse the NRL’s ignorance on the
basis of a malfunction of its phone system and the illness
of an employee at the time of Mr. Ansari’s contact with
the office. Maj. Op. at 4. Mr. Ansari left messages with
the NRL’s general number and email address, and the
NRL’s failure to receive or act on those messages cannot
negate its deliberate decision to abandon the ’122 Patent.
Essentially, the NRL would like to invoke a mistake
of fact defense when the reason it failed to learn of Mr.
Ansari’s commercial interest in the ’122 Patent was of
their own making. In In re ’974 the PTO chose not to
excuse a lawyer’s failure to appreciate the existence of a
license. Similarly, in In re ’582 the PTO would not excuse
a patentee’s failure to “investigate all patent matters in
which [the patentee] had a stake before making a decision
thereabout.” In re ’582, 2006 WL 4926249, at *5. Network
Signatures has not found a single case where the PTO
granted a revival petition based on a mistake of fact, and
nothing in the PTO’s cases suggest that it would have
excused the NRL’s neglect of multiple phone and email
messages.
Network Signatures cannot distinguish itself from the
PTO’s clear line of revival decisions, and I would affirm
the district court’s finding that Karasek’s failure to dis-
close the facts surrounding the revival petition was mate-
rial. While the majority believes that Karasek complied
“with the standard PTO procedure for delayed payment,”
Maj. Op. at 8, the cases above demonstrate that the
appropriate procedure is to disclose the petitioner’s basis

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NETWORK SIGNATURES , INC. v. STATE FARM MUTUAL AUTO 7
for believing a deliberate abandonment was unintention-
al. The PTO’s practice of granting unintentional revival
petitions as a matter of course is not the issue. Maj. Op. at
8 n.2. The problem is that Karasek knew the NRL patent
was intentionally abandoned and did not alert the PTO to
that fact. The PTO’s practice of granting such petitions
automatically cuts against Karasek on the issue of intent
to deceive; it does not negate the materiality of his ac-
tions. If the PTO had known the true facts, I have no
doubt whatsoever that Karasek’s revival petition would
have been denied.
II. I NTENT
To prevail on summary judgment of intent to deceive
the PTO, State Farm must prove by clear and convincing
evidence that (1) Karasek knew of the withheld infor-
mation, (2) knew that the information was material, and
(3) made a deliberate decision to withhold it. To meet the
clear and convincing evidence standard, a specific intent
to deceive must be “the single most reasonable inference
able to be drawn from the evidence.” Therasense, 649 F.3d
at 1290.
In this case, the parties do not dispute that Karasek
knew of the withheld information. The parties hotly
dispute whether Karasek knew the information was
material and made a deliberate decision to withhold it
from the PTO.
While I do not believe that these issues cannot be re-
solved against Karasek on summary judgment, I cannot
foreclose the possibility that State Farm could produce
evidence sufficient to meet the Therasense standard at a
merits trial. For example, Karasek’s statement that he
never considered filing a supplemental statement with
the revival petition rings hollow in light of his review of
several PTO cases which included supplemental state-
ments. See J.A. 344. The evidence that Karasek knew the
PTO granted revival petitions as a matter of course also

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NETWORK SIGNATURES , INC. v. STATE FARM MUTUAL AUTO 8
suggests that he deliberately decided to withhold infor-
mation. Id. at 17-18.
However, at the summary judgment stage we must
take the facts in the light most favorable to Network
Signatures. State Farm has not shown that the “single
most reasonable inference” to be drawn is that Karasek
intended to deceive the PTO. At the summary judgment
stage, another reasonable inference is that Karasek
honestly, although misguidedly, believed that the PTO
would grant his revival petition even if he did disclose the
surrounding circumstances. This would make Karasek
negligent, but negligence does not rise to the level of
deliberately deceiving the PTO under Therasense. 649
F.3d at 1290.
III
The correct result in this appeal is a remand to the
trial court on intent and an affirmance on materiality. I
see nothing within the PTO’s cases on unintentional
revival suggesting that the PTO would excuse NRL’s
deliberate decision to abandon the ’122 Patent simply
because the NRL failed to check its messages. I also see
disputed facts suggesting that the NRL’s lawyer deliber-
ately withheld information from the PTO, knowing that
the PTO would grant his revival petition if he remained
silent. Because the majority does not agree with me, I
respectfully dissent.

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