The Court of Appeals for the Federal Circuit recently released its long-awaited decision in Therasense, Inc. v. Becton Dickinson and Co., in which it raised the standard for proving inequitable conduct and rendering a patent unenforceable. The decision makes it more difficult for accused infringers to prove the two elements required for inequitable conduct, namely (i) that the patent applicant withheld “material” information (i.e., important or relevant information) from the patent examiner, or the applicant submitted material information that was false or misleading, and (ii) the applicant intended to deceive the Patent Office by withholding material information or submitting the material information that was false or misleading.
The defense of inequitable conduct also applies to design patents. Last year, we reported on a design patent litigation where this defense was raised.
With respect to the first element of materiality, the Court of Appeals redefined the type of information that can potentially support a defense of inequitable conduct if it is withheld, misleading, or incorrect -- i.e., what constitutes “material” information. Under the new standard, information is material only “if the PTO would not have allowed a claim had it been aware of the undisclosed prior art.” The Federal Circuit refers to this as the “but-for” standard.
With respect to the second element of intent, the Federal Circuit generally adopted the intent standard from Star Scientific Inc. v. R.J. Reynolds Tobacco Co., 537 F.3d 1357, 1365 (Fed. Cir. 2008), and clarified that an accused infringer must prove by clear and convincing evidence that the applicant:
a) knew of the reference;
b) knew that it was material; and
c) made a deliberate decision to withhold it.
The Court’s adoption of a “but-for” standard for materiality is most noteworthy, and is consistent with the Court’s ongoing efforts to curb the “plague” of inequitable conduct allegations in patent litigation, and their negative effects on the PTO, courts, parties, and patents.
Of the eleven judges who decided this case, six supported the majority opinion, one submitted an opinion concurring-in-part and dissenting-in-part, and four dissented. Accordingly, it is possible that the U.S. Supreme Court will further address the issues raised in this case. From a practical point of view, therefore, it is not recommended to change procedures with regard to design patent prosecution. All U.S. Patent and Trademark Office rules still must be followed, including disclosing material information from domestic and foreign prosecution that is related by family or subject matter, as well as related litigation.
Please click here for a more detailed reporting on this decision.