Inequitable Conduct-Therasense,
Inc. v. Beckton, Dickinson & Co.
University of Rochester For Inventors, Researchers, and
Entrepreneurs Series
April 14, 2011
J. Gibson Lanier, Ph.D.
Patent Attorney
Ballard Spahr LLP
678-420-9300
lanierg@ballardspahr.com
Agenda
•
Inequitable conduct state of the law
•
Dayco and McKesson review
•
New case law – Larson and Therasense
•
But wait – here comes Therasense en banc!
•
Summary and considerations
•
Best practices
2
Inequitable Conduct Law
•
Affirmative misrepresentations of a material fact, failure to
disclose material information, or submission of false
material information, coupled with intent to mislead or
deceive
•
Materiality and intent are questions of fact
•
Proven by clear and convincing evidence
3
Inequitable Conduct Law
Two step analysis:
•
First, a determination of whether the withheld reference
meets a threshold level of materiality and intent to mislead
•
Second, a weighing of the materiality and intent in light of
all of the circumstances to determine whether the
applicant’s conduct is so culpable that the patent should be
unenforceable
4
Inequitable Conduct Law
Materiality:
•
Materiality embraces any information that a reasonable
examiner would substantially likely consider important in
deciding whether to allow the application to issue as a
patent. Digital Control Inc. v. Charles Mach. Works, 437
F.3d 1309 (Fed. Cir. 2006)
•
Can be material even though it would not invalidate the
patent
•
Not material if cumulative to the art of record
5
Inequitable Conduct Law
Intent:
•
Not intent to withhold, but intent to deceive
•
Intent mainly proven by circumstantial evidence and
inferences drawn from facts
•
Inference of intent appropriate
-
Highly material information withheld
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Applicant knew of the information
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Applicant knew or should have known of the materiality
-
Applicant has not provided a credible explanation for the
withholding
6
Inequitable Conduct Law
Intent (cont’d):
•
The inference of deceptive intent must be the single most
reasonable inference able to be drawn from the evidence to
meet the clear and convincing standard. Star Scientific,
Inc. v. R.J. Reynolds Tobacco Co., 537 F.3d 1357 (Fed.
Cir. 2008)
•
Where only evidence of intent is absence of a credible
good faith explanation for non disclosure ─ not enough to
meet burden
•
Gross negligence alone not enough to infer intent to
deceive
7
Inequitable Conduct Law
•
A rare case but a plague
•
Penalty is entire patent rendered unenforceable
8
Chronology of Case Law
May 2003
Dayco Products, Inc. v. Total Containment, Inc., 329 F.3d 1358 (Fed.
Cir. 2003)
May 2007
McKesson Information Solutions, Inc. v. Bridge Medical, Inc., 487
F.3d 897 (Fed. Cir. 2007)
March 2009
Larson Manufacturing Co. of South Dakota, Inc. v. Aluminart
Products, Ltd., 559 F.3d 1317 (Fed. Cir. 2009)
January 2010
Therasense, Inc. v. Becton, Dickinson & Co., 593 F.3d 1325 (Fed.
Cir. 2010), vacated and rehearing en banc granted, 2010 U.S. App.
LEXIS 9549, April 26, 2010
9
Dayco Products
Facts:
•
Four patents-in-suit (“A” patents)
•
Related family of three copending applications (“B”
applications)
•
B1 claims “substantially similar” and “in some respects
substantially identical” to A claims
•
A and B assigned different examiners
•
A and B had same prosecuting attorney
10
Dayco Products
Facts (cont’d):
•
B specifications referenced members of the A family
•
A examiner not made aware of B applications
•
A examiner not made aware of B1’s three §103 rejections
over Wilson i.v.o. Oetiker
•
A examiner not made aware of Wilson reference cited in
B1
11
Dayco Products
District Court:
•
Summary Judgment of unenforceability for inequitable
conduct
•
All four A patents
•
Reasons
1. Failure to disclose to A the existence of copending B
2. Failure to cite Wilson to A from B
3. Failure to cite to A office action rejections in B
12
Dayco Products
Federal Circuit:
1. Failure to disclose to A the existence of copending B
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Cross-citation of related cases required (MPEP § 2001.06(b))
-
B is highly material to A because B could have served as a basis for an
obviousness double patenting rejection
-
Meets materiality
-
Does not meet threshold intent
-
A disclosed to B
-
Even though B not disclosed to A
-
Similar facts to Akron Polymer
-
Summary Judgment overturned
13
Dayco Products
2. Failure to cite Wilson to A from B
-
Cannot decide materiality on SJ
-
Intent not met (cannot be inferred)
-
Prosecuting attorney provided plausible, unrebutted reason for
not submitting Wilson
-
Wilson “far afield” from A claims
-
Summary Judgment overturned
14
Dayco Products
3. Failure to cite to A office action rejections in B
-
Issue of first impression at CAFC
-
Meets materiality test
-
“We hold that a contrary decision of another examiner reviewing
a substantially similar claim meets the . . . threshold materiality
test of ‘any information that a reasonable examiner would
substantially likely consider important in deciding whether to
allow an application to issue as a patent.’” (Underlining added.)
15
Dayco Products
3. Failure to cite to A office action rejections in B (cont’d)
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Policy
•
-
“Patent disclosures are often very complicated, and different
examiners with different technical backgrounds and levels of
understanding may often differ when interpreting such documents.
Although examiners are not bound to follow other examiners’
interpretations, knowledge of a potentially different interpretation is
clearly information that an examiner could consider important
when examining an application.”
District court did not address intent – remanded for trial
16
McKesson
Facts:
•
“A” patent-in-suit
•
Related family of copending “B” application
•
“C” continuation-in-part off of and copending with “A”
•
B claims substantially similar to/substantially overlapped
with A claims
•
A and B assigned different examiners
•
A and C assigned the same examiner
17
McKesson
Facts (cont’d):
•
A, B, and C had same prosecuting attorney
•
Existence of B application disclosed to A examiner
•
Existence of C application disclosed to A examiner
•
A examiner not made aware of Baker reference cited in B
•
A examiner not made aware of B’s various §103 rejections
•
A examiner not made aware of notice of allowance in C
18
McKesson
District Court:
•
Bench trial ruling of unenforceability for inequitable
conduct for A patent
•
Reasons
1. Failure to cite Baker to A from B
2. Failure to disclose to A the office action rejections in
copending B
3. Failure to cite to A the notice of allowance in C
19
McKesson
Federal Circuit:
1. Failure to cite Baker to A from B
-
Highly material and not cumulative
-
A and B were so similar that attorney initially disclosed the same body
of prior art to both cases
-
Cancelled a claim in the B case in response to Baker
-
No memo to file (MPEP § 2004(18))
-
17 days after arguing to A examiner, examiner B brought Baker to
attorney’s attention
-
Speculative reasons at trial found incredible
-
Inequitable conduct found
20
McKesson
2. Failure to disclose to A the office action rejections in
copending B
-
Reaffirms Dayco
-
If the rejected claims in B are substantially similar to the claims
in A, then rejection is material
-
But substantial similarity not necessary to prove materiality!
-
Found materiality
•
Claims in B amended in response to rejection and then claims in A
were amended
21
McKesson
2. Failure to disclose to A the office action rejections in copending B
(cont’d)
-
-
Found intent to deceive
•
Dayco applied to 1989 cases
•
MPEP defines information broadly – “all,” “any”
•
MPEP applies this to copending applications
•
A and B closely related
•
Art commonly cited to both A and B but rejection was not cited to A
•
Applicant made statements to examiner A directly contrary to examiner
B’s findings
•
Citation of case B to case A not enough – must cite the rejection itself
Inequitable conduct found
22
McKesson
3. Failure to cite to A the notice of allowance in C
-
Material to a possible obvious double patenting rejection
-
Even though same examiner on A and C
•
Not cumulative
-
Intent found even though citation of existence of case C made in
case A
-
Inequitable conduct found
23
McKesson
•
Not a case of mistake or negligence
•
Prosecuting attorney testified he would do the same thing
again
•
Prosecuting attorney testified his practice was to be “over
inclusive” in submissions
•
Weighing found pattern of material nondisclosures
24
Larson
•
Dayco/McKesson in the reexamination context
•
Larson failed to submit copies of two office actions from a
co-pending continuation application to a PTO
reexamination proceeding
25
Larson
Filing scenario:
•
A application issues
•
A put into reexamination by Aluminart (“B”)
•
C continuation filed before A issues
•
B reexamination and C continuation are copending
26
Larson
Facts:
•
Continuation application had “similar” claims to B reexam
claims
•
Same patent attorney on B reexam and C continuation
prosecution
•
Aluminart cites to reexam
-
C Continuation 1st OA
27
Larson
Facts (cont’d):
•
Larson cites to reexam:
-
IDS with 200 references
-
District Court pleadings
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C continuation application
-
C continuation application 2nd OA
-
3 references cited in C continuation application prosecution
28
Larson
•
•
Larson does not cite to reexam:
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C continuation application 3rd and 4th OAs
-
One reference cited in C continuation application 4th OA
-
Two other references
Note that 4th OA was after intent to issue a reexam
certificate but before issuance of R.C.
29
Larson
Larson argues:
•
Third and fourth office actions cumulative to first and
second OAs; and
•
All material prior art from OAs submitted
30
Larson
Materiality:
•
Non-submitted 3rd and 4th OAs material
•
Each OA had new information in their rejections
•
Even though 3rd OA discussed same reference in the
submitted 1st and 2nd OAs
•
3rd OA material even though the rejections were factually
wrong
31
Larson
Materiality (cont’d):
•
3rd OA material even though the rejections were later
withdrawn
•
4th OA material because of new, contrary reasoning over
newly cited art even though that art already considered by
the B reexam
•
Non-submitted prior art cumulative
32
Larson
Intent:
•
Original inference of deceptive intent based on five
material items
•
District Court on remand must redo intent analysis and
balancing analysis
33
Larson
Intent (cont’d):
•
District Court must consider evidence of good faith
-
Citation to B reexam of C continuation
•
•
Compare to McKesson and Dayco
-
Citation of litigation pleadings
-
Citation of 2nd OA
Seems to hint at no deceptive intent
34
Therasense
•
Dayco/McKesson based upon a foreign opposition
•
Therasense (now Abbott) failed to submit to application A
copies of statements made to the EPO during an
opposition proceeding of the EP counterpart to patent B
(“EP-B”) (filed by one of Abbott’s predecessors)
35
Therasense
•
The district court found that statements made by Abbott's
predecessor to the EPO in B-EP were highly material to
the prosecution of A
•
Statements in A contradicted representations Abbott made
to the EPO regarding the membraneless sensor disclosed
in the B-EP
36
Therasense
The Statement:
•
Abbott’s predecessor argued in an affidavit by Abbott’s
Director of R&D in application A that patent B’s use of
the language “optionally, but preferably contained a
protective membrane” must be interpreted to mean
necessarily included such a protective membrane.
•
In an earlier opposition hearing in the EPO, Abbott had
stated the exact opposite regarding the teaching of B-EP.
It had stated that the protective membrane was optional.
37
Therasense
CAFC Materiality:
•
Attorney argument statements are clearly relevant for
materiality
•
Not even a close case here
38
Therasense
Intent to deceive:
•
In concluding that Abbott's representatives ─ Pope and
Dr. Sanghera ─ intended to deceive the PTO by
withholding the EPO documents, the district court made
five findings:
1) that the statements made to the PTO concerning the prior art
B were absolutely critical in overcoming the examiner's
earlier rejections of the claims in A;
2) that the EPO statements would have been very important to
an examiner because they contradicted the representations
made to the PTO;
39
Therasense
Intent to deceive (cont’d):
3) that Pope and Dr. Sanghera both knew of the EPO
statements and consciously withheld them from the PTO;
4) that neither Pope nor Dr. Sanghera provided a credible
explanation for failing to submit the EPO documents to the
PTO; and
5) that Pope's and Dr. Sanghera's explanations for withholding
the EPO documents were so incredible that they suggested
intent to deceive.
40
Therasense
Intent to deceive (cont’d):
•
CAFC agrees with District Court on all five points.
•
In fact, an Abbott inventor common to both application A and
patent B disagreed with the statements in the affidavit.
41
Therasense
•
CAFC concludes:
-
EPO submissions were highly material
-
Intent to deceive the USPTO by the withholding of those
submissions
-
Patent unenforceable due to inequitable conduct
42
Therasense – Round Two at the CAFC
• En banc Order’s six questions:
1) Should the materiality-intent-balancing framework for
inequitable conduct be modified or replaced?
2) If so, how? In particular, should the standard be tied directly
to fraud or unclean hands? See Precision Instrument Mfg.
Co. v. Auto. Maint. Mach. Co., 324 U.S. 806 (1945);
Hazel-Atlas Glass Co. v. Hartford-Empire Co., 322 U.S.
238 (1944), overruled on other grounds by Standard Oil Co.
v. United States, 429 U.S. 17 (1976); Keystone Driller Co.
v. Gen. Excavator Co., 290 U.S. 240 (1933). If so, what is
the appropriate standard for fraud or unclean hands?
43
Therasense – Round Two at the CAFC
• En banc Order’s six questions (cont’d):
3) What is the proper standard for materiality? What role
should the United States Patent and Trademark Office’s
rules play in defining materiality? Should a finding of
materiality require that but for the alleged misconduct, one
or more claims would not have issued?
4) Under what circumstances is it proper to infer intent from
materiality? See Kingsdown Med. Consultants, Ltd. v.
Hollister Inc., 863 F.2d 867 (Fed. Cir. 1988) (en banc).
44
Therasense – Round Two at the CAFC
• En banc Order’s six questions (cont’d):
5) Should the balancing inquiry (balancing materiality and
intent) be abandoned?
6) Whether the standards for materiality and intent in other
federal agency contexts or at common law shed light on the
appropriate standards to be applied in the patent context.
45
Examples of Submission Requirements
•
Assuming material and non-cumulative
•
Identification of related US applications
•
Prior art cited in related US applications
•
Office Actions from related US applications
•
Applicant’s own responses in related US applications
•
US litigation documents from related US patents
46
Examples of Submission Requirements
•
Prior art cited in counterpart and related foreign
applications and oppositions
•
Search reports and office actions from counterpart and
related foreign applications and oppositions (MPEP §§
2001.04 and 2001.06 and McKesson @ 923)
•
Applicant’s own responses in counterpart and related
foreign applications
•
Foreign litigation documents
47
Do We Really Have To Do This?
•
Negligence, even gross negligence, cannot lead to a
finding of deceptive intent. Kingsdown Med. Consultants,
Ltd. v. Hollister Inc., 863 F.2d 867 (Fed. Cir. 1988) (en
banc in relevant part)
•
“There is no need for an attorney to pursue a fishing
expedition to obtain information.” Brasseler v. Stryker
Sales Corp., 267 F.3d 1370 (Fed. Cir. 2001)
•
However, where counsel knows of information and may
readily determine the materiality of that information,
he/she cannot intentionally avoid learning of its
materiality. FMC Corp. v. Hennessy Indus., Inc., 835 F.2d
1411 (Fed. Cir. 1987)
48
Do We Really Have To Do This?
•
For example, upon receiving notice that potential material
information exists, one under the duty of candor and good
faith is obligated to conduct an investigation and to
disclose any information reasonably believed to be
material. Brasseler v. Stryker Sales Corp., 267 F.3d 1370
(Fed. Cir. 2001).
•
CAFC does not consider the burden on the applicant to
comply with these requirements
•
CAFC does not consider the cost to comply with such
tasks
49
Considerations
•
Issued portfolios
•
Due diligence on third party patent portfolios
•
Current pending applications
•
What else do we have to cite?
•
Best practices
1161539
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