Inequitable Conduct and the Duty to Disclose

Tonya DrakeMarch 2, 2010

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Inequitable conduct

Defense to patent infringement– A finding of inequitable conduct will render a patent

unenforceable– Claims may still be valid, but be unenforceable

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Inequitable conduct allegations

Inequitable Conduct litigation “has become an absolute plague.” –Dickson Indus. (Fed. Cir. 2009)

Percentage of cases including an allegation of inequitable conduct

0.00%5.00%

10.00%15.00%20.00%25.00%30.00%35.00%40.00%45.00%

2000 2001 2002 2003 2004 2005 2006 2007 2008

Source: Christian E. Mammen, Controlling the “Plague”: Reforming The Doctrine of Inequitable Conduct, Berkeley Technology Law Journal, 2009

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Federal Circuit decisions

02468

1012141618

2000

2001

2002

2003

2004

2005

2006

2007

2008

Num

ber o

f dec

isio

ns Inequitable Conduct

No Inequitable Conduct

Finding Vacated(remanded to districtcourt)

Source: Christian E. Mammen, Controlling the “Plague”: Reforming The Doctrine of Inequitable Conduct, Berkeley Technology Law Journal, 2009

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Inequitable conduct and the duty to disclose

Breach of the duty to disclose is the foundation of many inequitable conduct allegationsRule 56 sets out the duty to disclose

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Rule 56 – the duty to disclose

Who? – Each individual associated with the filing and prosecution of

a patent application

What? – Material information - information a reasonable examiner

would consider important

Why?– Examination is more effective when the examiner is aware

of and evaluates all information material to patentability

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Two part test – materiality and intent

Requires proof of:1) an affirmative misrepresentation of material fact, failure to

disclose material information, or submission of false material information

2) by that act intended to deceive the patent office

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Balancing of materiality and intent

Equitable balancing of materiality and intent– “when balanced against high materiality, the showing of

intent can be proportionally less” Bristol-Meyers Squibb Co. (Fed. Cir. 2003)

Was conduct was so culpable that the patent should be held unenforceable?

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Materiality

Reasonable examiner standard – What would a reasonable examiner consider important in

deciding whether to allow the application?

Rule 56 standard– Establishes a prima facie case of unpatentability or – Refutes, or is inconsistent with positions taken by the

applicant

Not cumulative

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Examples of possibly material information

Highly relevant prior art Information that contradicts statements to the patent officeInformation of prior salesCo-pending applicationsRejections of substantially similar claimsReferences and office actions from related applicationsRelated litigation information

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Intent to deceive

Evidence must show intent to deceive– Gross negligence alone is not sufficient– Intent to withhold a reference is not sufficient

However, intent to deceive may be proven by circumstantial evidenceGood faith should be considered

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Dayco v. Total Containment – 2003

Overview: A contrary decision of another examiner can be material even when included in an office action in a co-pending application in a separate family

– The office action was from an application with no priority relationship to the patent in suit

– The applicant had not disclosed either the co-pendency or the adverse office action

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McKesson v. Bridge Medical – 2007Overview: An office action in a substantively related (not by priority) co-pending application can be material

– Examiner was aware of the fact of the co-pendent prosecution, but was not specifically notified of the office action

BUT - the district court characterized the prosecuting attorney’s testimony as “not credible,” contradicted by the evidence, and undermined by his own prior testimony

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Larson v. Aluminart - 2009

Overview: Actions from related co-pending applications can be material even when co-pendency has been disclosed and the office actions discuss only cumulative art

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Larson v. Aluminart

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Larson: Materiality

Why were the 3rd and 4th office actions material?– Not simply “boilerplate reiterations of previous rejections”– The 3rd Office Action was the first to convey a specific

explanation about a reference – Later withdraw of 3rd rejection did not change materiality

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Larson - Guidance on intent

Instructed the district court to "take into account any evidence of good faith, which militates against a finding of deceptive intent" Directed the district court to consider that the patentee had disclosed the co-pending application and the 1st and 2nd office actions

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Larson - Summary

Office actions from related, co-pending applications can be material to prosecution even where:

– the fact of the co-pendency has been disclosed, and – the office actions discuss only cumulative art

Notifying the examiner of related prosecution and disclosing earlier documents from that related prosecution evinces good faith

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Practice Tips

Doubts about whether information, including office actions, should be disclosed should be resolved in favor of disclosureIf applications are co-pending, notify the examiner of their co-pendency

– However, merely disclosing the existence of co-pending applications or related proceedings is not necessarily sufficient

Keep close track of ongoing prosecution in US and foreign counterparts

– Consider citing references and office actions from related cases

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Therasense v. Becton, Dickinson - 2010

Overview: statements made to the European Patent Office during a proceeding involving the European counterpart of another patent family were material

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Therasense v. Becton, Dickinson

‘551 Patent

EPO Counterpart

Revocation Proceeding“optionally, but

preferably”

‘382 Patent

Com

mon

Inventors

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Therasense

The statements made to the EPO were material– The statements made to the EPO contradicted the

statements made to the USPTO

The attorney read the EPO decision and “knew or should have known that the withheld information would have been highly material to the [USPTO] examiner”Federal Circuit affirmed findings of both materiality and intent

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Therasense - inequitable conduct should be rare

Although the court affirmed the finding of inequitable conduct, it noted that such a finding should be “rare”Judge Linn, Dissent: “…the individuals subjectively believed that the withheld information was immaterial when they withheld it”

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Practice Tips

Be particularly vigilant when submitting affidavits – Carefully review relevant documents and publications to

ensure that any affidavit is complete and accurate

Keep close track of continuations, divisionals, and foreign counterparts

– Do not take inconsistent positions in different jurisdictions– Consider centralized prosecution of patent families

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Can you disclose too much?

Over citation can also result in allegations of inequitable conduct Burying a material reference is unlikely to satisfy the intent prong

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Guidance for prosecutors

Resolve doubts in favor of disclosureSet up a standard procedureDon’t rely on the procedure to avoid citing artConsider consolidating patent prosecution or having someone responsible for distribution of informationOnly file patent applications in jurisdictions of value

Thank YouTonya Drake

AssociateFish & Richardson P.C.

Special Thanks To

Frank Gerratana and Proshanto Mukherjifor their help preparing this presentation