I recently tuned in to a One-Hour Audio Briefing- Therasense: Reshaping the Inequitable Conduct Doctrine 2011 featuring Elaine Herrman Blais and Robert D. Carrol of Goodwin Procter to get a handle on the Therasense decision.  Blais and Carrol  discussed the key disputes in the case, summarized the majority decision, Judge O’Malley’s concurrence and Judge Bryson’s dissent and suggested possible future developments of the Inequitable Conduct Doctrine.  Here are some highlights:

Key Disputes:

1. How do the Supreme Court decisions constrain what the Federal Circuit may do?
2. Is but for the appropriate standard for materiality?  Abbott and many amici, including AIPLA & ABA say yes.  Becton,Dickinson, Bayer and a number of amici, including the PTO say “no”.
3. Is materiality relevant to intent?  The Newman view v. the Prost View
4. What should be the remedy for inequitable conduct?

“But-For” Materiality – the New Standard

1. Majority requires “but-for” materiality.  Prior art is “but for” material “if the PTO would not have allowed a claim had it been aware of the undisclosed prior art.”
2. Majority found that increasing the intent standard “standing alone, did not reduce the number of inequitable conduct cases… and did not cure the problem of overdisclosure of marginally relevant prior art to the PTO.”  The majority “adjusts as well the standard for materiality.”
3. Invalidity is sufficient to prove “but for,” but is not required because the PTO’s evidentiary standard (preponderance of the evidence) is lower than required for invalidity (clear and convincing evidence) and the PTO and the Court may apply different constructions.
4. Majority recognizes an exception for “affirmative egregious misconduct” based on the three “unclean hands” decisions (discussed during the briefing)
5. Majority finds authority for the “but for” standard in Corona Cord Tire Co. v. Donovan Chemical Corp.)

Judge O’Malley’s Concurrence – Equity Requires Flexibility

1. Both the “but-for” standard and the Rule 56 standard for materiality are overly restrictive
2. The Federal Circuit should provide guidance to the district courts and patent applicants that is consistent with Supreme Court precedent without “disregarding the equitable nature of the inquiry at hand or unnecessarily restricting the discretion of the district courts.”
3. Conduct should be deemed material where: (1)but for the conduct the patent would not have issues, (2) the conduct constitutes a false or misleading representation of fact or (3) the district court finds that the behavior is so offensive that the court is left with a firm conviction that the integrity of the PTO process as to the application at issue was wholly undermined.

The Dissent

1. Judge Bryson, joined by Judges Gajarsa, Dyk and Prost
2. Dissent argues that the “appropriate cure for departures from the principles of inequitable conduct that were put in place at the time of Kingsdown would be to reaffirm those principles,” including by adoption of the PTO’s Rule 56 standard for materiality.
3. The “but-for” standard “is not a tweak to the doctrine of inequitable conduct; it is a fundamental change” that has been “repeatedly rejected” by the PTO and the Federal Circuit “as too restrictive in light of the policies served by the inequitable conduct doctrine.”

What are possible future developments of the Inequitable Conduct Doctrine?

1. May evidence of materiality be considered in determining intent?
2. Does the majority opinion require that intent to deceive be the only reasonable inference that could be drawn from the evidence?
3. How broadly will the “affirmative egregious misconduct” exception to the “but for” materiality requirement will be interpreted?
4. Will the “affirmative egregious misconduct” exception create a new sliding scale?
5. Will the “but for” standard create a 7th Amendment issue?
6. Will Becton-Dickinson and Brayer petition for cert?

Click here for the PLI briefing Therasense: Reshaping the Inequitable Conduct Doctrine 2011.

 

 

 

 

 

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