Inequitable Conduct
   HOME

TheInfoList



OR:

In
United States patent law Under United States law, a patent is a right granted to the inventor of a (1) process, machine, article of manufacture, or composition of matter, (2) that is new, useful, and non-obvious. A patent is the right to exclude others, for a limited ...
, inequitable conduct is a breach of the applicant's duty of candor and good faith during
patent prosecution Patent prosecution describes the interaction between applicants and their representatives, and a patent office with regard to a patent, or an application for a patent. Broadly, patent prosecution can be split into pre-grant prosecution, which i ...
or similar proceedings by misrepresenting or omitting
material Material is a substance or mixture of substances that constitutes an object. Materials can be pure or impure, living or non-living matter. Materials can be classified on the basis of their physical and chemical properties, or on their geolo ...
information with the specific
intent Intentions are mental states in which the agent commits themselves to a course of action. Having the plan to visit the zoo tomorrow is an example of an intention. The action plan is the ''content'' of the intention while the commitment is the ''a ...
to
deceive Deception or falsehood is an act or statement that misleads, hides the truth, or promotes a belief, concept, or idea that is not true. It is often done for personal gain or advantage. Deception can involve dissimulation, propaganda and sleight ...
the
United States Patent and Trademark Office The United States Patent and Trademark Office (USPTO) is an agency in the U.S. Department of Commerce that serves as the national patent office and trademark registration authority for the United States. The USPTO's headquarters are in Alex ...
. A claim of inequitable conduct is a defense to allegations of patent infringement. Even in an instance when a valid patent suffers infringement, a court ruling on an allegation of infringement may exercise its power of equitable discretion not to enforce the patent if the patentee (the patent owner) has engaged in inequitable conduct.


Duty of candor

The U.S. Patent and Trademark Office's Rule 56 explains that patents are "affected with a public interest. The public interest is best served, and the most effective patent examination occurs when, at the time an application is being examined, the Office is aware of and evaluates the teachings of all information material to
patentability Within the context of a national or multilateral body of law, an invention is patentable if it meets the relevant legal conditions to be granted a patent. By extension, patentability also refers to the substantive conditions that must be met fo ...
." Accordingly, each individual person "associated with the filing and prosecution of a patent application has a duty of candor and good faith in dealing with the Office, which includes a duty to disclose to the Office all information known to that individual to be material to patentability."37 CFR § 1.56 (1977, revised 2012)
commonly referred to as Rule 56.


Specifics

Inequitable conduct occurs when a patent applicant misrepresents or omits
material Material is a substance or mixture of substances that constitutes an object. Materials can be pure or impure, living or non-living matter. Materials can be classified on the basis of their physical and chemical properties, or on their geolo ...
information with the specific
intent Intentions are mental states in which the agent commits themselves to a course of action. Having the plan to visit the zoo tomorrow is an example of an intention. The action plan is the ''content'' of the intention while the commitment is the ''a ...
to
deceive Deception or falsehood is an act or statement that misleads, hides the truth, or promotes a belief, concept, or idea that is not true. It is often done for personal gain or advantage. Deception can involve dissimulation, propaganda and sleight ...
the
United States Patent and Trademark Office The United States Patent and Trademark Office (USPTO) is an agency in the U.S. Department of Commerce that serves as the national patent office and trademark registration authority for the United States. The USPTO's headquarters are in Alex ...
. In other words, the elements of inequitable conduct are materiality and deceptive intent. Deceptive intent may be inferred from indirect or circumstantial evidence but not from materiality. Information is material if "the PTO would not have allowed a claim had it been aware of the undisclosed prior art" or if "affirmative egregious misconduct" has happened. See ''Therasense, Inc. v. Becton''.Therasense, Inc. v. Becton
Dickinson and Co., 649 F.3d 1276 (Fed. Cir. 2011) (en banc).
In response to ''Therasense,'' the USPTO rewrote its definition of materiality to say that information is material if :(1) It establishes, by itself or in combination with other information, a '' prima facie'' case of unpatentability of a claim; or :(2) It refutes, or is inconsistent with, a position the applicant takes in: ::(i) Opposing an argument of unpatentability relied on by the Office, or ::(ii) Asserting an argument of patentability. The misrepresentation or omission can include: :(a) failure to submit material
prior art Prior art (also known as state of the art or background art) is a concept in patent law used to determine the patentability of an invention, in particular whether an invention meets the novelty and the inventive step or non-obviousness criteria ...
known by the applicant; :(b) failure to explain references in a foreign language or submit pre-existing full or partial translations of the references; :(c) misstatements of fact, including misstatements in
affidavits An ( ; Medieval Latin for "he has declared under oath") is a written statement voluntarily made by an ''affiant'' or '' deponent'' under an oath or affirmation which is administered by a person who is authorized to do so by law. Such a statemen ...
concerning
patentability Within the context of a national or multilateral body of law, an invention is patentable if it meets the relevant legal conditions to be granted a patent. By extension, patentability also refers to the substantive conditions that must be met fo ...
; and :(d) mis-description of inventorship (authorship). The party asking the court to decline to enforce the patent, usually the alleged infringer, bears the burden of proving inequitable conduct to the court. The moving party must show by
clear and convincing evidence In a legal dispute, one party has the burden of proof to show that they are correct, while the other party had no such burden and is presumed to be correct. The burden of proof requires a party to produce evidence to establish the truth of facts ...
that the patentee intentionally withheld or misrepresented information, and that the information was
material Material is a substance or mixture of substances that constitutes an object. Materials can be pure or impure, living or non-living matter. Materials can be classified on the basis of their physical and chemical properties, or on their geolo ...
. Proven inequitable conduct in any claim can expose the entire patent to unenforceability.


History

The unclean hands cases of ''Keystone Driller v. General Excavator'', ''Hazel-Atlas v. Hartford'', and ''Precision v. Automotive'' formed the basis for the doctrine of inequitable conduct that developed and evolved over time.


''Keystone'' case

In the 1933 ''Keystone'' case, the patentee manufactured and suppressed evidence in a patent application and its subsequent defense in two different infringement actions: the patentee paid the prior art user to perjure himself by signing a false affidavit that his use was an abandoned experiment, and bought the prior art user's agreement to keep secret the prior use details and to suppress that evidence. Unsurprisingly, the patentee also did not disclose those facts to the PTO or to co-litigants in the infringement actions. The defendants in the second action discovered and presented evidence of the malfeasance, and while the trial court refused dismissal on that ground, on appeal the Sixth Circuit reversed the trial court and remanded for dismissal, and the Supreme Court affirmed.Keystone Driller Co. v. General Excavator Co.
290 US 240 at 243-47, 54 S.Ct. 146, 1933.


''Hazel-Atlas'' case

In the 1944 ''Hazel-Atlas'' case, a patentee's attorneys also manufactured and suppressed evidence in support of a patent application by hiring an expert to publish an article in a trade journal under his own name praising the invention as a remarkable advance in the art. After the patent was approved and issued on that basis, the patentee brought an infringement action against Hazel-Atlas but was unsuccessful in the trial court, so the patentee then appealed the matter to the Third Circuit where the patentee introduced the procured trade journal article. That appellate court reversed the trial court and ruled for the patentee, after which Hazel-Atlas settled on the infringement claim, and the patentee then paid the expert more money. The patentee's lies were discovered, however, in ''US v. Hartford-Empire'',United States v. Hartford-Empire Co.
46 F.Supp. 541 (N.D.Ohio 1942).
whereupon Hazel-Atlas petitioned the Third Circuit to reconsider its prior decision, and although it refused, the Supreme Court didn't and reversed, vacating the appellate court's decision and the judgment against Hazel-Atlas, and reinstating the trial court's original judgment dismissing the patentee's case.Hazel-Atlas Co. v. Hartford Co.
322 U.S. 238 at 240 at 243-251, 64 S.Ct. 997, 1944.


''Precision'' case

In the 1945 ''Precision'' case, the patentee suppressed evidence of perjury before the PTO and attempted to enforce the perjury-tainted patent. In the application to the PTO the patentee claimed false dates of conception, disclosure, drawing, description, and reduction to practice, and then testified to the veracity of the same lies in an interference proceeding. The competing patentee discovered the truth, but procured rights to the patent by private settlement, complicit in the scheme, and then sought to enforce the patent against others. In a later enforcement action, a trial court learned of the facts and ruled against the patentee based on the patentee having unclean hands, but the Seventh Circuit appellate court reversed, and on further appeal, the Supreme Court reversed, reinstating the trial court's decision.Precision Co. v. Automotive Co.
324 U.S. 806 at 807-20, 65 S.Ct. 993, 1945.


Landmark court cases


''McKesson'' case

In the 2007 case ''McKesson v. Bridge Medical'',"McKesson Info. Sols., Inc. v. Bridge Med., Inc., 487 F.3d 897, 902 (Fed. Cir. 2007). the Federal Circuit Court of Appeals found inequitable conduct because a patent attorney failed to provide to
patent examiner A patent examiner (or, historically, a patent clerk) is an employee, usually a civil servant with a scientific or engineering background, working at a patent office. Major employers of patent examiners are the European Patent Office (EPO), the Un ...
s information from an
office action In the United States, an Office action is a document written by an examiner in a patent or trademark examination procedure and mailed to an applicant for a patent or trademark. The expression is used in many jurisdictions. Formally, the "O" is ...
in a related case. ''McKesson'' is a cautionary tale for patent applicants: be overly inclusive with patent submissions to ensure no omission will jeopardize a patent.Stickevers, John
Vague Allegations No Longer Acceptable When Asserting Inequitable Conduct Defense
Sunstein IP Update, 2009-08.


''Exergen'' case

However, a subsequent CAFC decision seems to directly contradict the standard used in ''McKesson''. In the 2009 case ''Exergen Corp. v. Wal-Mart Stores Inc. and S.A.A.T. Systems'',Exergen Corp. v. Wal-Mart Stores
575 F. 3d 1312, Ct. App. (Fed. Cir.) Aug. 2009. Nos. 2006-1491, 2007-1180.
SAAT attempted to defend with a claim of inequitable conduct, alleging Exergen was aware of two earlier patents that it did not cite to the examiner during prosecution. The district court denied SAAT's motion for inequitable conduct as a defense, however, holding that SAAT's allegations were not specific enough to meet the particularity requirement of FRCP 9(b). The Federal Circuit Court of Appeals upheld this ruling, and ruled that such allegations must specify who engaged in inequitable conduct, what precisely that person knowingly withheld or misstated to the PTO, and how the omission or misstatement affected the patentability of individual claims. The court opined that inequitable conduct is not a "magic incantation to be asserted against every patentee" by a "mere showing that art or information having some degree of materiality was not disclosed".


''Therasense'' case

In a further development, in the 2011 case of ''Therasense, Inc. v. Becton, Dickinson and Co'', the same Federal Circuit Court of Appeals sitting
en banc In law, an en banc session (; French for "in bench"; also known as ''in banc'', ''in banco'' or ''in bank'') is a session in which a case is heard before all the judges of a court (before the entire bench) rather than by one judge or a smaller p ...
limited this defense to (a) occasions when patent-holders' acts are related directly to the patent, and (b) when it can be proved that patent holders engaged in deceitful intent.Zebley, Julia
Federal appeals court restricts inequitable conduct defense for patent law
Jurist, 2011-05-26.


References


See also

*
Patent misuse In United States patent law, patent misuse is a patent holder's use of a patent to restrain trade beyond enforcing the exclusive rights that a lawfully obtained patent provides. If a court finds that a patent holder committed patent misuse, the ...
* Legal ethics {{DEFAULTSORT:Inequitable Conduct Ethics Codes of conduct Law of the United States United States patent law