Post on 03-Jan-2016
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Inequitable Conduct in the Prosecution of Pharmaceutical
and Biotechnology Patents
Stephen D. Harper, Ph.DRatnerPrestiaApril 1, 2011
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Inequitable Conduct
Patents are enforced through equitable relief (e.g., injunctions)
Equitable principles can also preclude enforcement of patent rights (“unclean hands”)
Judicially created equitable defenses to charge of infringement include inequitable conduct before Patent Office
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Inequitable Conduct
Inequitable conduct defense originally arose from cases involving common law fraud (deliberate falsehood)
However, conduct short of actual fraud may justify sanction of unenforceability
Applicants have duty to prosecute patents with candor, good faith & honesty
Patent Office rules impose a “duty of disclosure”
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Inequitable Conduct
Why is the inequitable conduct doctrine so important?
Proof of inequitable conduct as to any claim renders all claims unenforceableDefense may extend to other related patents that are otherwise
“clean” Defense is pled in nearly every patent case
Ca. 40% of all appeals since 1988 on issue of inequitable conduct involved biotech, drug, medical diagnostic or medical device patents
Patent owners must commit significant resources during litigation to respond to inequitable conduct allegations
If inequitable conduct found, attorney fees may be awarded to accused infringer
Creates substantial burden (cost) during prosecution
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Inequitable Conduct
What constitutes inequitable conduct? 1) Misrepresentation of material fact
Failure to disclose material informationSubmission of false/misleading material informationMisrepresentation need not bear directly on patentability
of claim 2) Intent to deceive the Patent Office
Can be (& usually is) inferred from circumstantial evidenceMere intent to withhold is not sufficientIntent prong cannot be met by “gross negligence”
At least a threshold level of each element must be established by clear and convincing evidence
Materiality and intent are then weighed to assess whether applicant’s conduct is so culpable that patent should be held unenforceable
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Inequitable Conduct
When is information “material”?
No single standard applies
Courts have looked to Patent Office rules for guidance
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Inequitable Conduct
Current Rule 56:Information is material when it is not cumulative to
information already before Patent Office andestablishes, by itself or in combination with other information, prima facie unpatentability of claim, orrefutes or is inconsistent with position applicant is taking
Other materiality standards“But For” standards (objective/subjective)“Reasonable Examiner” standard
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Inequitable Conduct
Intent Prong - Recent Federal Circuit cases have not been entirely consistent
High materiality plus lack of a credible explanation for failure to disclose may be sufficient
Intent to deceive may be inferred where applicant knew or should have known of information’s materiality
Deceptive intent must be the single most reasonable inference able to be drawn from evidence
Evidence of “good faith”
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Inequitable Conduct
Common scenarios where inequitable conduct is alleged:
Failure to disclose known material prior art reference
Failure to disclose unfavorable test data or all relevant test parameters
Failure to disclose material prior commercial activity or public disclosures
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Inequitable Conduct
Failure to disclose relationship of declarant (technical expert) to applicant/owner
Failure to disclose Office Actions and responses thereto in related US and foreign applications
Falsely claiming small entity status Failure to disclose ongoing litigation
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Inequitable Conduct
What can patentees do to protect their patents from being found unenforceable?
If in doubt as to the materiality of information, err on the side of disclosure
If volume of disclosed information becomes overwhelming, consider highlighting or summarizing key documents
Be careful in selecting experimental results to present
Consider submitting relevant information/documents generated in prosecution of related cases
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Inequitable Conduct
Have the courts gone too far in expanding the doctrine of inequitable conduct?
Are the boundaries which define inequitable conduct sufficiently clear and consistently applied?
Federal Circuit has taken on a case en banc to reconsider (& possibly reform) this area of the law
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Inequitable Conduct
Therasense, Inc. v. Becton, Dickinson & Co.
Claimed invention involved technology for measuring glucose levels in blood
District court held that patentee committed inequitable conduct
Representations made to European Patent Office that were (according to the DC) directly contradictory to those made to US Patent Office
These contradictory representations were not disclosed to US Patent Office
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Inequitable Conduct
Initially, 3 judge Federal Circuit panel upheld district court decision
Federal Circuit then vacated the panel decision and agreed to hear the case en banc
Oral arguments November 2010 – decision should be rendered soon
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Inequitable Conduct
Federal Circuit asked the parties to address several questions:
Should materiality-intent balancing framework be modified or replaced?
Should standard be tied directly to fraud or unclean hands?
What is proper standard for materiality? Patent Office rules or “but for” test?
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Inequitable Conduct
Therasense (Abbott) petition for en banc rehearing raised the following questions:
Can intent to deceive be inferred from evidence that applicant “should have known” of materiality of information?
Can intent be inferred solely from court’s conclusion that applicant’s view of immateriality is “implausible”?
Can attorney arguments about prior art be material when that prior art is already of record?
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Inequitable Conduct
Biotechnology Industry Organization (BIO) has filed amicus brief in Therasense case
Urges adoption of “more certain framework” Biotech patents are “particularly attractive”
targets for inequitable conduct charges Procured against a backdrop of fast-moving
science and competing business needs that make it virtually impossible to monitor all potentially relevant information that may be circulating into and out of a company
BIO proposes a “but for” standard of materiality
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Inequitable Conduct
Questions?