Patent Law Practice Center

Court Finds Navy Committed Inequitable Conduct Under Therasense

By Brandon Baum and Mary T. Nguyen[i]

In Therasense, Inc. v. Becton, Dickinson & Co., 649 F.3d 1276 (Fed. Cir. 2011),an en banc Federal Circuit raised the standard to prove inequitable conduct, holding that an accused infringer must prove by clear and convincing evidence that (1) the applicant misrepresented or omitted material information, (2) with the specific intent to deceive the PTO. This heightened standard was intended to limit inequitable conduct to instances “where the patentee’s misconduct resulted in the unfair benefit of receiving an unwarranted claim.”

In one of the first decisions to apply Therasense, the district court in Network Signatures, Inc. v. State Farm Mutual Automobile Insurance Co., declared that a U.S. Government-owned patent was unenforceable because an attorney at the U.S. Naval Research Laboratory (“NRL”) committed inequitable conduct.[ii] Although Network Signatures is only a district court opinion, the facts underlying the decision are instructive.

In early 2004, the NRL conducted its review of IP assets and decided to allow the patent-in-suit to expire rather than pay the 7.5 year maintenance fee that was coming due. Shortly after the patent expired, the NRL was contacted by Hazim Ansari of Metrix Services, a patent procurement company. Ansari expressed interest in licensing the patent and claimed that he had attempted to contact the NRL before the patent expired but was unsuccessful due to problems with the NRL’s email. Ansari offered to “take the lead” on pursuing a petition to revive the patent and promised the NRL 15% of all revenue generated from enforcing the patent.

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