The shadow of inequitable conduct in the US patent application

abstract

Inequitable conduct regarding any single claim can render the entire patent unenforceable and further damage other related patents and applications in the assignee's patent portfolio. The adverse impact of inequitable conduct significantly became a litigation strategy. The US Federal Circuit (CAFC) observed that inequitable conduct as a patent litigation strategy had become a plague and thus tightened the standard for finding inequitable conduct in a case with full court judges. However, under the shadow of previous adverse impact of inequitable conduct, patent applicants may still submit many marginal related references. This study demonstrates that an applicant even prepared an information disclosure statement (IDS) as many as 50 pages. Actually, under the new standard, inequitable conduct would not further produce significant impact in the US patent system. Thus, a patent applicant need not submit marginal references but should distinguish the prior art from the current application, especially for those listed in the IDS, to avoid the novelty rejection.

Keywords:

• inequitable conduct
• information disclosure statement
• intent
• materiality
• patent portfolio

Patent system is organized to encourage innovation. A government grants the patentee the right to exclude others from practicing the technical development for a certain amount of time in return for fully disclosing the innovation. The government hopes that other inventors will learn from the disclosure, and use this knowledge as the basis for further innovation. To be issued as a patent, an application must meet the patentability requirements, including subject matter, utility, novelty, nonobviousness^1-2 and written description.³ Furthermore, the US common law also requires the applicant to disclose any information that is substantial to the issuance of the application under consideration to the patent examiner. A failure to meet the requirement is known as inequitable conduct.⁴

Inequitable conduct regarding any single claim can render the entire patent unenforceable⁵ and further damage other related patents and applications in the assignee's patent portfolio.⁶ Moreover, a charge of inequitable conduct can conveniently expand fact discovery into patentee's practices before patent filing and disqualify the patent prosecuting attorney from the litigation team.⁷ The prevailing on inequitable conduct often makes the case in suit exceptional; and thus the judge may possibly award attorney fee to the defendant. The adverse impact of inequitable conduct significantly became a litigation strategy. Around eighty percent of patent infringement cases included allegations of inequitable conduct.⁸

The influence of inequitable conduct is not only in patent litigation but also in prosecution. To avoid the possibility of inequitable conduct charge, the patent prosecutors may even submit many marginal related references to the US Patent Office. This flood of information would harm the effectiveness of the patent examination process and directly contribute to the backlog.⁷

While honesty during patent prosecution is required, the US Federal Circuit (CAFC) also observed that inequitable conduct as a patent litigation strategy had become a plague.⁹ A Federal Judge further described the threat of inequitable conduct with its atomic bomb remedy of unenforceability.¹⁰ Following the long time dispute, the CAFC with full court judges decided to rehear the case.⁷

The CAFC full court judges' inequitable conduct case

The technology of the case was a disposable blood glucose test strips for diabetes management. The patent prosecutor failed to disclose some information to US Patent Office that the assignee argued in the European Patent Office for the counterpart European application. An US district court held the patent unenforceable for inequitable conduct because of the failure of disclosure. A panel of CAFC affirmed the ruling of unenforceability, but one of 3 judges dissented.¹¹ However, the CAFC reheard the case with full court judges and vacated the patent unenforceable for inequitable conduct.

In the CAFC full court judges case,⁷ a majority of the judges tightened the standard for finding inequitable conduct. The new doctrine of inequitable conduct requires both intent and materiality. To prevail on inequitable conduct, the accused infringer must prove that the patentee acted with the specific intent to deceive the Patent Office. A finding of misrepresentation or omission to negligence does not satisfy this intent requirement. In other word, the accused infringer must prove by clear and convincing evidence that the applicant “made a deliberate decision to withhold a known material reference”.¹² Thus, the fact by itself, that information later found material and not disclosed by the assignee, cannot satisfy the deceptive intent requirement of inequitable conduct.¹³

Furthermore, the CAFC full court case stressed that intent and materiality are separate requirements of inequitable conduct. A court cannot only infer intent for inequitable conduct. Nor can a court find inequitable conduct based on evidence of weak intent but strong materiality, and vice versa. The material requirement of inequitable conduct is a “but-for” standard.⁷ A reference is “but-for” material if the patent examiner would not have allowed a claim when she/he had been aware of the undisclosed reference.

In this glucose test strips case, because the district court did not find intent to deceive under the new knowing and deliberate standard, the CAFC thus vacated the ruling of intent. On remand, the district court should determine whether there is clear and convincing evidence demonstrating that patent prosecutors knew the material information of the European counterpart application and made the willful decision not to disclose them in order to deceive the Patent Office. Furthermore, the district court should also determine whether the Patent Office would not have granted the patent but for assignee's failure to disclose the information.

A case study

The CAFC full court case⁷ has tightened the standard for finding inequitable conduct. Consequently, the patent prosecutors should no longer fear inequitable conduct charge and thus may not submit marginal related references to the US Patent Office. It is of interesting to know the status of references submitted in a recent patent application. The case we investigate is related to vascular endothelial growth factor (VEGF).

VEGF is one of the key regulators of both normal and abnormal angiogenesis. The recognition of VEGF as a primary regulator of angiogenesis in pathological conditions has led to numerous attempts to block VEGF activities in conditions that involve pathological angiogenesis. Thus, solid tumors with pathological angiogenesis may be treated by the molecules that inhibit VEGF signaling pathways. Actually, targeting the VEGF pathway has been considered a standard option in the first line treatment of metastatic colon cancer.¹⁴

Other than advanced cancer, an invention further discovered that VEGF specific antagonists would be used as vaccines for solid tumor, such as colon cancer. The inventors filed an US patent application on the day 9 months after the CAFC full court judges' inequitable conduct decision. However, the applicant still submitted 50 pages of information disclosure statement (IDS), including 95 US patent documents, 26 foreign patent documents and 450 non patent literature documents.

One of the patent documents listed in the IDS revealed that adding anti-VEGF antibody to a standard chemotherapy can significantly benefit to cancer patients. This VEGF antibody invention further claimed a method of treating a human patient susceptible to colorectal cancer. It should be mentioned that the same applicant applied the VEGF antibody 8 y earlier than VEGF antagonist one. However, the applicant just listed previous patent application in the IDS but did not distinguish these 2 inventions in the specification later applied. Thus, the US patent examiner rejected the VEGF antagonist patent application as being anticipated or obvious by the VEGF antibody one.

Conclusion

Inequitable conduct used to be an atomic bomb remedy of unenforceability in the US patent system.¹⁰ The powerful influence may still stamp on a patent applicant's mind, even though the CAFC has tightened the standard for finding the inequity.⁷ For example, 9 months after the new standard, a patent applicant still submitted many references, such as 50 pages of IDS. Moreover, the applicant just listed these references in the IDS without any discussion in the specification. Indeed, this is a shadow of previous adverse impact of inequitable conduct.

Actually, the current doctrine of inequitable conduct requires the accused infringer must prove that the patentee acted with the specific intent to deceive the Patent Office. Furthermore, the material requirement of inequitable conduct is a “but-for” standard if the patent examiner would not have allowed a claim when she/he had been aware of the undisclosed reference. Under these 2 requirements, inequitable conduct would not produce any significant impact in the US patent system. Therefore, a patent applicant should not submit marginal related references. Moreover, we do encourage an applicant should distinguish the prior art from the current application, especially for those listed in the IDS, to avoid the novelty rejection.¹⁵

Disclosure of potential conflicts of interest

No potential conflicts of interest were disclosed.