Patentees Rejoice — But Will Therasense Stand?



The following post comes courtesy of Brandon Baum, of Baum Legal and Practice Center Contributor.

The Federal Circuit’s split decision in Therasense is being hailed by some as the end to the “absolute plague” of inequitable conduct claims in patent cases. After all, the decision raises the bar for proving inequitable conduct. But before the champagne goes flat and the confetti is swept away, the Therasense case may prove to have been exactly the wrong horse for patentees to ride.

The problem with the majority decision in Therasense is that it is long on policy, short on the facts. In the ivory towers of the Federal Circuit (which does not have the usual diet of criminal cases, fraud cases, and other bad conduct), the fact that patent prosecutors are frequently accused of acting inequitably to obtain patents is unseemly. To the rest of the world, of course, the news that lawyers and/or inventors might try to “game the system” for financial advantage is purely “dog bites man.”

District court judges, on the other hand, deal with criminal cases, securities fraud, RICO, etc., and have no trouble understanding that *sometimes* people do not act purely equitably. Nor do district court judges struggle with the concept that in some cases, the allegation of inequitable conduct is unwarranted — just as the allegations of fraud in a 10b-5 case might be unwarranted — and they are ready to toss or ignore such allegations in appropriate cases. This is part and parcel of the legal system; the motivations and truthfulness of the party saying the light was red may be questioned by the party saying the light was green. In those cases, we don’t call that a “plague,” we call it the right to confront and cross-examine witnesses. But I digress.

The reason the Therasense case might be the wrong case for patentees is because it is not the iconic case in which some stray reference, arguably cumulative, was not not submitted and the accused infringer is seeking to leverage the fact that many years later, no one can recall why that decision was made. Rather, the Therasense case proceeded before Judge Alsup in the Northern District of California.

In his findings of fact, Judge Alsup found that, at the time Abbott took over the patent prosecution following an acquisition, the patent stood rejected after 14 years of prosecution at the PTO. Abbott was thus motivated to eke out some claim, and worry about enforceability later. Abbott brought in its in-house prosecutor to “brainstorm” a way to obtain allowance. They came up with the idea that they would argue that the prior art required membranes, despite the fact that the prior art referred to membranes as “optional, but preferable” was and submit claims that did not require a membrane.








However, in a European patent application that was never disclosed to the PTO, Abbott (actually its predecessor in interest Medisense) had argued just the opposite; that “optionally, but preferably” meant a membrane was not required:




So Judge Alsup was faced with a case in which the patentee argued that the phrase “optionally, but preferably” meant “not required” in a European prosecution, and argued (and Dr. Sanghera declared) that it meant “required” in the US prosecution, and not disclosing the conflict.

Judge Alsup has an uncanny nose for smelling that something is rotten (just ask Amr Mohsen). In this case, after Becton began to make headway with its inequitable conduct claim, Judge Alsup decided mid-trial that he wanted to hear directly from the patent prosecutor. The prosecutor took the stand and was extensively questioned about the inconsistency, both by counsel and by Judge Alsup. Judge Alsup then issued his ruling including credibility findings.










Thus, if the Supreme Court grants cert, it will be presented with facts in which underlying conduct and district court determinations would pass muster under either standard — the new higher bar or the prior lower bar. That is not the vehicle you want if you are asking the court to find that the prior bar was set too low, thereby sweeping in potentially innocent conduct. For this reason, the patentee’s victory in Therasense may prove to be pyrrhic.




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