News Item
Inequitable Conduct Reform(08/23/10)
On April 26, 2010, the Court of Appeals for the Federal Circuit ordered rehearing en banc of the Therasense, Inc v. Becton, Dickinson and Co. case. This action means that all active judges of the Federal Circuit will consider six issues stated in the order to grant en banc review, including “[s]hould the materiality-intent-balancing framework for inequitable conduct be modified or replaced?” The en banc hearing will take place on November 9, 2010. Recent cases illustrate why patent applicants and owners may well hope that the court will clarify its inequitable conduct law, the application of which appears to depend at times on the composition of the panel.
Applicants and their attorneys have a duty to supply all known information to the patent examiner that is material and to not misrepresent information. Inequitable conduct currently is defined to consist of a patent applicant’s or attorney’s intentional withholding or misrepresentation of material information during prosecution of a patent application. A court can hold all claims of the patent to be unenforceable even if the claims were patentable over the withheld or misrepresented information and even if only one claim was affected. “Material,” in one definition used by the court, means information that a reasonable patent examiner would consider important in deciding whether to allow an application to issue as a patent. The issues of materiality and intent, however, usually are determined years after the events in question, and the patentee may have to provide a plausible explanation after so much time has passed for why certain information was not made available or was represented in a certain way when the court decides that the information or misrepresentation was material. Inequitable conduct is a common affirmative defense used by accused infringers and leads applicants to cite many more references than necessary in order to avoid being second-guessed later, and will likely not be cited by the examiner.
In Ring Plus, Inc. v. Cingular Wireless Corp. (Federal Circuit, August 6, 2010) the court agreed with the district court’s finding that a description of two prior art references in the background section of the patent in suit was a material misrepresentation but did not agree that the accused infringer had provided clear and convincing evidence that the applicants had an intent to deceive, because an alternative explanation concerning the applicants’ understanding of the prior art references was just as plausible. In this case, the court considered events that occurred eight years earlier and references that the examiner could have reviewed and did not cite in rejecting the claims of the application in the first office action.
The patent owner dodged the inequitable conduct bullet in Ring Plus (after much expense) but not yet in another case. In Golden Hour Data Systems, Inc. v. emsCharts, Inc. (Federal Circuit August 9, 2010), the court held that an undated brochure concerning another company’s system was material because a reasonable examiner would have inquired as to whether it was prior art and it contradicted other statements made by the applicant. This brochure was not submitted to the examiner although the applicant’s attorney did submit an information disclosure statement that restated the information on the front page of the brochure but not the fuller description of the system in the other pages of the brochure. The Federal Circuit remanded to the lower court to make findings concerning whether the attorney or the inventor had read the entire brochure, whether they deliberately concealed it, or whether they deliberately refused to read the entire brochure. These findings must be made at least eleven years after the information disclosure statement was filed. Judge Newman dissented on the ground that a reference that the jury did not consider anticipatory was not material, that the defendant had had the chance to establish intent to withhold material information and had failed, and that the case should be stayed for the resolution of conflicting precedent en banc in the Therasense case.
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