Nos. 2008-1511, -1512, -1513, -1514, -1595

IN THE United States Court of Appeals

for the Federal Circuit

THERASENSE, INC. (now known as Abbott Diabetes Care, Inc.) and ABBOTT LABORATORIES,

Plaintiffs-Appellants v.

BECTON, DICKINSON AND COMPANY, and NOVA BIOMEDICAL CORPORATION,

Defendants-Appellees, and

BAYER HEALTHCARE LLC, Defendant-Appellee.

Appeals from the United States District Court for the Northern District of

California in consolidated case nos. 04-CV-2123, 04-CV-3327, 04-CV-3732, and 05-CV-3117, Judge William H. Alsup

ABBOTT DIABETES CARE, INC. AND ABBOTT LABORATORIES’

REPLY BRIEF ON REHEARING EN BANC

Rohit K. Singla Counsel of Record Peter A. Detre MUNGER, TOLLES & OLSON LLP 560 Mission Street, 27th Floor San Francisco, CA 94105 Telephone: 415.512.4000 Jeffrey I. Weinberger MUNGER, TOLLES & OLSON LLP 355 South Grand Avenue, Suite 3500 Los Angeles, CA 90071 Telephone: 213.683.9100

John M. Whealan 12 Sunnyside Road Silver Spring, MD 20910 Telephone: 202.994.2195 Jeffrey A. Lamken Michael G. Pattillo Jr. MOLOLAMKEN LLP 600 New Hampshire Avenue, N.W. Suite 660 Washington, D.C. 20037 Telephone: 202.556.2000

Counsel for Plaintiffs-Appellants Abbott Diabetes Care, Inc. and Abbott Laboratories

i

TABLE OF CONTENTS

Page Argument....................................................................................................................3

I. Kingsdown’s Specific-Intent-To-Deceive Standard Should Govern ..............3

II. Inequitable Conduct Should Require Causation .............................................6

A. Causation Is Required for Fraud and Unclean Hands...........................6

1. The Foundational Supreme Court Cases Require Fraud or Fraud-Like Conduct ....................................................................6

2. “Unclean Hands” Requires But-For Causation Where Important Rights Will Be Invalidated.......................................10

B. But-For Causation Is Required in Related Contexts ...........................13

C. The Proposal To Adopt Rule 56 Is Contrary to Law ..........................15

D. Defendants’ Policy Arguments Lack Merit ........................................19

III. “Materiality-Intent Balancing” Should Be Abandoned or Reformed ...........22

IV. The Finding of Inequitable Conduct Must Be Reversed...............................23

A. The District Court’s Use of an Erroneous Standard Precludes Affirmance...........................................................................................23

B. The Evidence of Intent To Deceive Falls Short ..................................25

C. Materiality Was Absent.......................................................................28

Conclusion ...............................................................................................................29

ii

TABLE OF AUTHORITIES

Page(s) CASES

Acumed LLC v. Stryker Corp., 483 F.3d 800 (Fed. Cir. 2007)................................24

Adams Fruit Co. v. Barrett, 494 U.S. 638 (1990) ...................................................16

Advanced Magnetic Closures, Inc. v. Rome Fastener Corp., 607 F.3d 817 (Fed. Cir. 2010).........................................................................................3, 20, 21

Aventis Pharma S.A. v. Amphastar Pharms., Inc., 525 F.3d 1334 (Fed. Cir. 2008) ...............................................................................................................2, 23

Baginsky v. United States, 697 F.2d 1070 (Fed. Cir. 1983) ....................................25

Buckman Co. v. Plaintiffs’ Legal Comm., 531 U.S. 341 (2001)..............................19

Citronelle-Mobile Gathering, Inc. v. Edwards, 669 F.2d 717 (Temp. Emer. Ct. App. 1982).....................................................................................................17

Corona Cord Tire Co. v. Dovan Chemical Corp., 276 U.S. 358 (1928)...................8

Critikon, Inc. v. Becton Dickinson Vascular Access, Inc., 120 F.3d 1253 (Fed. Cir. 1997).....................................................................................................4

Dippin’ Dots, Inc. v. Mosey, 476 F.3d 1337 (Fed. Cir. 2007) .................................23

Dura Pharms., Inc. v. Broudo, 544 U.S. 336 (2005).................................................8

eBay Inc. v. MercExchange L.L.C., 547 U.S. 388 (2006) .................................14, 15

Eckes v. Card Prices Update, 736 F.2d 859 (2d Cir. 1984) ..............................11, 14

Farmer v. Brennan, 511 U.S. 825 (1994)..................................................................4

Gaudiosi v. Mellon, 269 F.2d 873 (3d Cir. 1959)....................................................17

Hazel-Atlas Glass Co. v. Hartford-Empire Co., 322 U.S. 238 (1944) ................6, 12

In re Seagate Technologies, LLC, 497 F.3d 1360 (Fed. Cir. 2007) ........................14

iii

Keystone Driller Co. v. General Excavator Co., 290 U.S. 240 (1933) ........... passim

Kingsdown Medical Consultants v. Hollister, Inc., 863 F.2d 867 (Fed. Cir. 1988) .......................................................................................................1, 3, 4, 16

Konstantinidis v. Chen, 626 F.2d 933 (D.C. Cir. 1980) ..........................................21

Kungys v. United States, 485 U.S. 759 (1988) ........................................................15

Larson Mfg. Co. v. Aluminart Prods. Ltd., 559 F.3d 1317 (Fed. Cir. 2009).............5

Lorillard v. Pons, 434 U.S. 575 (1978) ...................................................................18

M. Eagles Tool Warehouse, Inc. v. Fisher Tooling Co., 439 F.3d 1335 (Fed. Cir. 2006) ..............................................................................................................5

Metro Motors v. Nissan Motor Corp., 339 F.3d 746 (8th Cir. 2003)......................17

Morton Salt Co. v. G.S. Suppiger Co., 314 U.S. 488 (1942).......................11, 12, 14

Norton v. Curtiss, 433 F.2d 779 (C.C.P.A. 1971) ........................................... passim

Norwegian Nitrogen Prods. Co. v. United States, 288 U.S. 294 (1933) .................17

Optium Corp. v. Emcore Corp., 603 F.3d 1313 (Fed. Cir. 2010)............................22

Precision Instrument Manufacturing Co. v. Automotive Maintenance Machinery Co., 324 U.S. 806 (1945)..........................................................7, 9, 12

R.F.M.A.S., Inc. v. Mimi So, 619 F. Supp. 2d 39 (S.D.N.Y. 2009) .........................13

Sheldon v. Metro-Goldwyn Pictures Corp., 309 U.S. 390 (1940).....................15, 20

Shinsaku Nagano v. McGrath, 187 F.2d 753 (7th Cir. 1951)..................................12

Sony Corp. of Am. v. Univ. City Studios, Inc., 464 U.S. 417 (1984).......................14

Star Scientific, Inc. v. R.J. Reynolds Tobacco Co., 537 F.3d 1357 (Fed. Cir. 2008) ........................................................................................................... passim

United States v. Gladish, 536 F.3d 646 (7th Cir. 2008) ..........................................15

United States v. Latchin, 554 F.3d 709 (7th Cir. 2009)...........................................15

iv

Walker Process Equip., Inc. v. Food Mach. & Chem. Corp., 382 U.S. 172 (1965) ..............................................................................................................7, 12

Young v. Lumenis, Inc., 492 F.3d 1336 (Fed. Cir. 2007).........................................29

STATUTES

18 U.S.C. § 1505 ......................................................................................................19

REGULATORY MATERIALS

37 C.F.R. § 1.56 (1949)........................................................................................7, 17

37 C.F.R. § 1.56(a) (1977) .......................................................................................17

37 C.F.R. § 1.56 (2009).................................................................................... passim

§ 1.56(b) ........................................................................................................17, 21

§ 1.56(b)(1)..............................................................................................18, 19, 22

§ 1.56(b)(2)........................................................................................19, 21, 22, 28

57 Fed. Reg. 2024 ....................................................................................................16

MISCELLANEOUS

2 Nimmer on Copyright (2009) ...............................................................................13

Hon. Randall R. Rader, Always at the Margin: Inequitable Conduct in Flux, 59 Am. U. L. Rev. 777 (2010) ..............................................................................7

Restatement (Second) of Torts (1977)

§ 537 ......................................................................................................................8

§ 538(2) .................................................................................................................8

§ 940 ..............................................................................................................10, 15

v

TABLE OF ABBREVIATIONS

ABA Br. Brief and Appendix of the American Bar Association as Amicus Curiae

Abbott Br. Abbott Diabetes Care, Inc. and Abbott Laboratories’ Brief on Rehearing En Banc (Corrected Copy)

AIPLA Br. Brief of Amicus Curiae the American Intellectual Property Law Association in Support of Neither Party

ACPPPI Br. Brief of Amicus Curiae the Association of Citizens for Patent Protection in the Public Interest in Support of Defendants-Appellees and Affirmance

Bayer Br. Defendant-Appellee Bayer Healthcare LLC’s Brief on Rehearing En Banc

Becton Br. En Banc Brief of Defendants-Appellees Becton, Dickinson and Company and Nova Biomedical Corporation

Fed.Cir.Bar. Ass’n Br.

Brief of the Federal Circuit Bar Association as Amicus Curiae in Support of No Party

Intel Br. Brief of Amicus Curiae Intel Corporation in Support of the Appellees

PTO Br. Brief for the United States as Amicus Curiae on Rehearing En Banc in Support of Neither Party

Teva Br. Brief of Amici Curiae Teva Pharmaceuticals USA, Inc., Cisco Systems, Inc. and Generic Pharmaceutical Association in Support of Appellees and in Favor of Affirmance

1

This case is striking for the degree of consensus among the parties, the PTO,

and amici. There is near-universal agreement that the inequitable conduct

doctrine:

Has strayed beyond its origins in “egregious case[s],” Bayer Br. 1, where the patentee “procured a patent by essentially lying, cheating, or stealing,” PTO Br. 5;

“[H]arms . . . the [patent] examination process” by causing applicants to bury the PTO in prophylactic disclosures while commenting as little as possible, PTO Br. 1, 20; ABA Br. 10-11; Bayer Br. 34;

Has spawned a plague of inequitable conduct claims with a “dramatic and deleterious effect on litigation practice,” ABA Br. 8; and

Diminishes “respect for the legal profession and the patent system itself ” because counsel and applicants are so often called liars. Id.

There is, moreover, agreement on how to restore the doctrine to sensible

boundaries.

Intent. The parties, the PTO, and almost all amici agree that this Court

should return to the en banc standard of Kingsdown Medical Consultants v.

Hollister, Inc., 863 F.2d 867 (Fed. Cir. 1988). Under Kingsdown, the conduct

“must indicate sufficient culpability to require a finding of intent to deceive.” Id.

at 876. Thus, the “knew or should have known” formulation should be rejected.

Specific intent to deceive the PTO must be proved by clear-and-convincing

evidence; it must be “the single most reasonable inference able to be drawn from

the evidence.” Star Scientific, Inc. v. R.J. Reynolds Tobacco Co., 537 F.3d 1357,

1366 (Fed. Cir. 2008).

2

Materiality. Almost everyone urges the Court to reject the overbroad

“reasonable examiner” standard. It “fails to provide meaningful guidance” and

causes applicants to “file mounds of information with questionable materiality.”

PTO Br. 17; ABA Br. 8.

Balancing. Virtually everyone agrees that “materiality-intent balancing”

should be abandoned or revamped. After inequitable conduct has been established

through clear-and-convincing proof of intent and materiality, then the district court

may balance all the equities when deciding whether to impose the remedy of

unenforceability. But, before inequitable conduct is found, balancing is inapposite.

The Court should therefore retire the suggestion that, “[t]he more material the

omission or misrepresentations, the less intent that must be shown to elicit a

finding of inequitable conduct.” Aventis Pharma S.A. v. Amphastar Pharms., Inc.,

525 F.3d 1334, 1344 (Fed. Cir. 2008).

Disagreements. The principal disagreement on the issues raised by this

Court’s en banc questions concerns the standard for materiality or causation.

Abbott (Br. 32-41), the ABA (Br. 16), AIPLA (Br. 14-17), and other amici urge

this Court to return to a “but-for” test—to require proof that, “if the Patent Office

had been aware of the complete or true facts, the challenged claims would not have

been allowed.” Norton v. Curtiss, 433 F.2d 779, 794 (C.C.P.A. 1971). That

standard reflects Supreme Court precedent, historic practice, and the standards in

3

other areas of intellectual property. By contrast, much of the standard contained in

PTO’s current Rule 56 has no basis in law and would continue the deleterious

practices everyone urges the Court to remedy. Under any viable intent and materi-

ality standard, the finding of inequitable conduct in this case cannot stand.

ARGUMENT

This Court should reverse “the transformation of inequitable conduct from

the rare exceptional cases of egregious fraud that results in the grant of a patent

that would not otherwise issue to a rather automatic assertion in every infringement

case.” Advanced Magnetic Closures, Inc. v. Rome Fastener Corp., 607 F.3d 817,

835 (Fed. Cir. 2010) (Rader, C.J., concurring) (“AMC”). By returning the require-

ments for intent and materiality to the traditional standards used in other areas of

intellectual property law, this Court can “put the doctrine back into the exception

category.” Id.

I. Kingsdown’s Specific-Intent-To-Deceive Standard Should Govern

Almost without exception, everyone supports Kingsdown’s intent standard:

The “conduct, viewed in light of all the evidence, including evidence indicative of

good faith, must indicate sufficient culpability to require a finding of intent to

deceive” the PTO. 863 F.2d at 876. See Abbott Br. 17-20; Bayer Br. 38-39; PTO

Br. 18-20; ABA Br. 16-19; AIPLA Br. 13-19; Fed.Cir.Bar Ass’n Br. 13-19. Near-

universal agreement on several corollaries follows:

4

First, the Court should abandon the “knew or should have known” standard

that resurfaced in cases like Critikon, Inc. v. Becton Dickinson Vascular Access,

Inc., 120 F.3d 1253, 1256 (Fed. Cir. 1997). That formulation cannot be reconciled

with Kingsdown’s rejection of “gross negligence,” Bayer Br. 38; Becton Br. 32;

PTO Br. 21—a rejection that likewise encompasses civil “recklessness,” see Bayer

Br. 3; Farmer v. Brennan, 511 U.S. 825, 836-37 & n.4 (1994) (“should have

known” civil recklessness “little different” from “gross negligence”). Instead,

“specific intent to deceive” is required. Star Scientific, 537 F.3d at 1366.

Second, Kingsdown’s subjective specific-intent-to-deceive standard can be

satisfied only by clear-and-convincing proof that, at the time of the alleged misrep-

resentation, the applicant (1) knew of the information, (2) knew it was material to

issuance, (3) deliberately decided to withhold or misrepresent it, and (4) intended

to deceive the PTO to obtain the patent. Star Scientific, 537 F.3d at 1366; Bayer

Br. 38-39; PTO Br. 19, 22. Clear-and-convincing evidence is absent unless decep-

tive intent is “the single most reasonable inference able to be drawn from the

evidence.” Star Scientific, 537 F.3d at 1366; Bayer Br. 3, 41-42; Becton Br. 32;

PTO Br. 24. Critically, that standard cannot be met merely by showing that “infor-

mation later found material” in litigation “was not disclosed.” Star Scientific, 537

F.3d at 1366. Instead, the applicant must have had “actual knowledge” of—i.e.,

subjectively appreciated—the information’s materiality at the time. Bayer Br. 38.

5

Third, because the party alleging inequitable conduct bears the burden of

proof, the “patentee need not offer any good faith explanation unless the accused

infringer first” proves “intent to deceive by clear and convincing evidence.” Star

Scientific, 537 F.3d at 1368. Thus, “lack of a good faith explanation” cannot

establish “culpable intent.” M. Eagles Tool Warehouse, Inc. v. Fisher Tooling Co.,

439 F.3d 1335, 1341 (Fed. Cir. 2006). But a sufficiently plausible explanation

should defeat the charge. See Abbott Br. 22.

Finally, Abbott agrees that intent “can be inferred from circumstantial

evidence,” Larson Mfg. Co. v. Aluminart Prods. Ltd., 559 F.3d 1317, 1340 (Fed.

Cir. 2009), and that “facts regarding materiality” can support intent—although

“materiality alone cannot establish intent,” Becton Br. 33 (emphasis altered); see

Bayer Br. 40-41; PTO Br. 22-23. “Intent” is the applicant’s contemporaneous sub-

jective mental state; “materiality” is the information’s objective importance or

impact. Abbott Br. 42. Given the recent tendency of materiality to overwhelm

intent inquiries, see Abbott Br. 41-48; PTO Br. 23; p. 23, infra, this Court should

reaffirm that even a high level of materiality is not probative of intent unless “the

patentee appreciated the materiality of the information contemporaneous to the

time of the alleged misconduct” and knowingly withheld it to obtain the patent.

PTO Br. 22; Bayer Br. 41.

6

II. Inequitable Conduct Should Require Causation

No one disputes that, in every other area of intellectual property law, mis-

conduct before the agency will not invalidate property rights unless it was the but-

for cause of the agency’s decision. See Abbott Br. 11-12, 35. That standard

derives from the doctrine’s origins in fraud. It reflects the causation principles

embodied in the unclean hands doctrine. And it is sound policy. Defendants’

proposal that the Court instead incorporate the 638-word materiality standard from

current PTO Rule 56, by contrast, is legally unfounded and practically unsound.

A. Causation Is Required for Fraud and Unclean Hands

Defendants oppose but-for causation on the theory that it “embodi[es] the

reliance, causation, and injury requirements of common law fraud.” Bayer Br. 35.

They insist that inequitable conduct derives not from fraud, but from “unclean

hands.” But the three Supreme Court cases that gave birth to the inequitable con-

duct doctrine all involved egregious frauds. And “unclean hands” does require

proof of causation before property rights will be destroyed, as the Restatement

makes clear.

1. The Foundational Supreme Court Cases Require Fraud or Fraud-Like Conduct

Defendants deny that inequitable conduct has its origins in fraud. But the

“trilogy of Supreme Court cases that spawned the doctrine”—Keystone Driller Co.

v. General Excavator Co., 290 U.S. 240 (1933); Hazel-Atlas Glass Co. v.

7

Hartford-Empire Co., 322 U.S. 238 (1944); and Precision Instrument Manu-

facturing Co. v. Automotive Maintenance Machinery Co., 324 U.S. 806 (1945)—

all concerned patents obtained or enforced through fraud: They were “clear-cut

scenarios where a witness was paid to suppress or falsify information without

which the applicant would not have had a chance to obtain a patent.” Hon. Randall

R. Rader, Always at the Margin: Inequitable Conduct in Flux, 59 Am. U. L. Rev.

777, 779 (2010). Those cases speak for themselves. Abbott Br. 5-9. The Supreme

Court has specifically cited that trilogy as authorizing challenges based on “fraud-

ulent procurement.” Walker Process Equip., Inc. v. Food Mach. & Chem. Corp.,

382 U.S. 172, 176 (1965). And this Court has long recognized that unenforce-

ability was “originally applied only in cases of ‘fraud on the Patent Office.’” Star

Scientific, 537 F.3d at 1365, 1367; see Norton, 433 F.2d at 792 n.12 (trilogy

involved patents “procured by fraud practiced on the Patent Office”).1 The doc-

trine’s origin in fraud is reflected in the version of PTO Rule 56 in existence when

Congress enacted the 1952 Patent Act. 37 C.F.R. § 1.56 (1949) (fraud-based

standard). And it can be traced back in patent law more than a century. Abbott Br.

34.

____________________________ 1 Even defendants characterize those cases as involving fraud. See Bayer Br. 7-8. Defendants and the PTO insist that Keystone did not involve but-for causation. PTO Br. 13-14; Bayer Br. 35. But Keystone involved suppression of a “prior use,” which is ordinarily disqualifying.

8

Defendants and the PTO do not contend otherwise. Nor do they deny that

“fraud” and “procured-by-fraud” standards require causation, Bayer Br. 12—

whether that is called “transaction causation,” “reliance,” or (as in patent law) “ma-

teriality,” Abbott Br. 9, 33-35. Thus, the first decision of this Court’s predecessor

addressing the issue, while expanding the types of covered misconduct, expressly

invoked fraud’s causation standard: “In patent cases,” Norton held, “‘materiality’

. . . mean[s] that, if the Patent Office had been aware of the complete or true facts,

the challenged claims would not have been allowed.” 433 F.2d at 794. The PTO

(Br. 8) endorses Norton as “harmoniz[ing] the doctrine with Supreme Court prece-

dent,” but inexplicably resists Norton’s but-for causation requirement.2 Finally,

the Supreme Court required but-for proof in Corona Cord Tire Co. v. Dovan

Chemical Corp., 276 U.S. 358 (1928), refusing to lift even the presumption of

validity based on false affidavits that were not “the basis for” or “indispensible to

the granting of the patent.” Id. at 373-74. Corona may not invoke “unclean

____________________________ 2 Some amici urge the Court to adopt the “reasonable examiner” test or something similar, noting that the term “materiality” in fraud contexts refers to whether “‘a reasonable man would attach importance’” to the information. ACPPPI Br. 9 (quoting Restatement (Second) of Torts § 538(2) (1977) (“Restatement”)); see Intel Br. 9-10. But amici ignore the fact that, for fraud, but-for causation—called “reliance” or “transaction causation”—is also required. Abbott Br. 9; Restatement § 537; Dura Pharms., Inc. v. Broudo, 544 U.S. 336, 341-42 (2005). That fraud law labels the element “transaction causation” or “reliance,” while patent law has labeled it “materiality” since Norton, is irrelevant. In both areas, proof of an actual impact is required.

9

hands,” PTO Br. 14; Bayer Br. 34-36, but the notion that the Supreme Court would

not only have set aside the presumption of validity, but also rendered the patent

unenforceable—if only the words “unclean hands” had been uttered—is fanciful.

Seeking to avoid fraud’s but-for causation standard (and thereby impose the

severe penalty of unenforceability for misconduct with no impact on the patent’s

issuance), defendants repeatedly assert that Precision “held” that the doctrine in-

cludes “fraud and other inequitable conduct.” Bayer Br. 11, 16; Becton Br. 17.

But Precision merely notes the public’s “interest” in “seeing that patent mon-

opolies spring from backgrounds free from fraud or other inequitable conduct.”

324 U.S. at 816. That statement hardly defines the required showing, much less

“holds” that courts should impose unenforceability for misconduct that had no

impact. See Norton, 433 F.2d at 792-93. Defendants would read the phrase “fraud

or other inequitable conduct” to mean “fraud” and “anything else unfair, whether it

resembles fraud or not.” But words are known by the company they keep—

noscitur a sociis. The reference to “fraud and other inequitable conduct” means

“fraud” and inequitable conduct similar to fraud—“fraud-like” misconduct.

Abbott Br. 5, 10.

Whatever one labels the doctrine, each of the foundational Supreme Court

cases involved unambiguous fraud—perjury, fabricated evidence, and bribery.

The Supreme Court has never rendered a patent unenforceable based on lesser mis-

10

conduct, much less nuanced decisions about whether to submit legal briefs

addressing fully disclosed prior art. Supreme Court precedent cannot be read to

extend unenforceability to misconduct with no effect on the patent’s issuance.

2. “Unclean Hands” Requires But-For Causation Where Important Rights Will Be Invalidated

Defendants insist that the standard should come not from fraud but from

“unclean hands,” a doctrine the PTO describes as “not hav[ing] any specific ele-

ments,” PTO Br. 4 n.2 (emphasis added), and Bayer characterizes as “not bound by

any formula” beyond the need for intentional misconduct related to the patent,

Bayer Br. 12. Defendants’ plea that this Court tether inequitable conduct to a doc-

trine with no defined boundaries cannot be reconciled with their plea for certainty

and predictability.

Besides, unclean hands does require but-for causation before property rights

will be destroyed. The Restatement is clear:

Since the rationale of the doctrine of unclean hands is that equity will not aid a person to reap the benefits of his misconduct, a misdeed is regarded as ‘collateral’ in this context when the right for which the plaintiff seeks protection in the injunction did not accrue to him because of his misdeed.

Restatement § 940 cmt. c (emphasis added). “Collateral misdeeds . . . are not

presently material” and will not bar relief. Id. For that reason, in trademark and

copyright, only misconduct that would support an application’s rejection “consti-

11

tute[s] reason for . . . denying enforcement on the ground of unclean hands.” Eckes

v. Card Prices Update, 736 F.2d 859, 861-62 (2d Cir. 1984); Abbott Br. 11-12, 35.

Ignoring that, Bayer urges (Br. 13) that Morton Salt Co. v. G.S. Suppiger

Co., 314 U.S. 488 (1942), “foreclose[s]” the argument that unclean hands “requires

injury to the defendant.” If enforcement will injure the public, Bayer asserts, that

will support unclean hands. Id. Yet Bayer nowhere explains how enforcing a

patent that would have been issued absent any misconduct injures the public.

Unclean hands prevents courts from “aid[ing] a party” who has “gained an

advantage” by “fraud[ ]” or “deceit.” Keystone, 290 U.S. at 245 (emphasis added).

But a patentee gains no “advantage” from misconduct if the patent would have

issued anyway. Abbott Br. 15-16. Enforcement of an otherwise valid patent does

not injure the public merely because of misconduct, lurking somewhere in the

patent prosecution, that was immaterial to the patent’s issuance.

Morton Salt supports that conclusion. There, the Supreme Court observed

that courts “may appropriately withhold their aid where the plaintiff is using the

right asserted contrary to the public interest.” 314 U.S. at 492 (emphasis added).

The Court invoked patent misuse to decline enforcement against a defendant who

was not a victim of that misuse, but only after determining that judicial enforce-

ment would be a “powerful aid” to ongoing misuse affecting the public. Id. at 493.

The success of the misuse was “dependent . . . upon persuading the public of the

12

validity of the patent, which the infringement suit is intended to establish. Equity

may rightly withhold its assistance from such a use of the patent by declining to

entertain a suit for infringement” until “the improper practice has been aban-

doned.” Id. If no effect on anyone were required, that analysis would have been

unnecessary. Bayer cannot cite a single case suggesting that misconduct with no

effect on the agency’s decision (or anyone else) is sufficient.3

Finally, defendants never reconcile their proposal to destroy patents based

on misconduct that was immaterial to their issuance with the equitable principle

that “the remedy imposed” must be “commensurate with the violation,” and “no

broader than necessary to cure the effects of the harm.” Abbott Br. 16 (quoting

cases). Nor could they. And unclean hands should rarely be invoked if the effect

“would be to work a forfeiture of property.” Shinsaku Nagano v. McGrath, 187

F.2d 753, 759 (7th Cir. 1951). “[B]illion-dollar investments in innovative tech-

____________________________ 3 Bayer’s assertion that but-for causation distinguishes Walker Process antitrust claims from inequitable conduct defies Walker Process itself. Walker Process un-derstood “fraudulent procurement” of the patent to be required for both antitrust and unenforceability. 382 U.S. at 176-77 (characterizing Precision, Hazel-Atlas, and Keystone as “fraudulent procurement” cases). That distinction first appeared in this Court’s cases after the Court abandoned Norton’s requirement of but-for causation for inequitable conduct. See pp. 7-9, supra. Besides, what distinguishes Walker Process antitrust claims from inequitable conduct is the requirement that, in addition to fraudulent procurement, the elements of an antitrust violation must be proved. See 382 U.S. at 174.

13

nologies should not be wiped out because of transgressions that had no causal role

in the patent’s issuance.” Abbott Br. 41. Defendants offer no response.

B. But-For Causation Is Required in Related Contexts

No one disputes that, in other areas of intellectual property law, but-for

causation is required. Misconduct before the Copyright Office is immaterial un-

less, but for the misconduct, the agency would have denied registration: A “plain-

tiff’s failure to inform the Copyright Office of given facts is without substance, to

the extent that the Office would have registered the subject work even if it had

known of those facts.” 2 Nimmer on Copyright § 7.20[B][1], at 7-211 (2009); see

R.F.M.A.S., Inc. v. Mimi So, 619 F. Supp. 2d 39, 53-54 (S.D.N.Y. 2009) (“willful”

misstatement precludes enforcement “only” if “knowledge of the truth would have

caused” the Copyright Office “to reject [the] application”). The same rule applies

to trademarks. Abbott Br. 11, 35.

Despite the Court’s request for briefing on related areas of law, defendants

scarcely address the issue. Urging that patent law is “different,” they argue that the

Court should “as a matter of policy” adopt a standard unique to patent law—PTO’s

Rule 56. Bayer Br. 22, 45-46; Becton Br. 11, 55; PTO Br. 8-12, 26-27. But their

supposed “differences” are, in fact, similarities.4 Bayer also asserts (Br. 45-46)

____________________________ 4 Becton claims that patents are different because patent prosecution is ex parte. Becton Br. 55. But copyright and trademark registration are also ex parte. Becton suggests that “misconduct in patent prosecution is more deleterious to the public.”

14

that the Lanham Act and the Copyright Act contain an express fraud or but-for

standard. But, as Bayer concedes (see id.), the Copyright Act had no such standard

before 2008, yet courts nonetheless adopted the but-for standard, whether under

“unclean hands” or “fraud on the Copyright Office.” See, e.g., Eckes, 736 F.2d at

861-62; pp. 10-11, supra. Congress’s later codification of that standard confirms

its correctness.

In any event, the Supreme Court has held it “appropriate to refer” to copy-

right and trademark law when construing patent law, and vice-versa, “because of

the[ir] historic kinship,” even when the statutes differ. Sony Corp. of Am. v. Univ.

City Studios, Inc., 464 U.S. 417, 439 (1984) (importing “contributory infringe-

ment” from patent law into copyright law); eBay Inc. v. MercExchange L.L.C., 547

U.S. 388, 391-93 (2006) (injunctive standards); Morton Salt, 314 U.S. at 494

(borrowing patent misuse “equity” standard from trademarks). When this Court

reformed the decades-old standard of “willfulness” en banc in In re Seagate Tech-

_________________________________________________________________

Id. at 21. But that is unfounded. See http://www.whitehouse.gov/omb/intellectual-property/ipec/. Copyright and trademark withdraw valuable forms of expression from the public—imagine the harm if a fraudulent copyright withdrew Shakes-peare’s works from the public domain. Besides, where misconduct had no effect on the patent’s issuance, the public loses nothing it should retain. By contrast, excessive invocation of inequitable conduct undermines innovation by devaluing patents. Abbott Br. 31. Amici also assert that canceling copyright or trademark registration is less draconian than rendering a patent unenforceable. ACPPPI Br. 27-28. But the fact that the remedy in the patent context is more severe supports a more demanding standard.

15

nologies, LLC, 497 F.3d 1360 (Fed. Cir. 2007), it likewise invoked copyright

principles, Supreme Court cases, and related areas of law. To ignore copyright and

trademark standards here, in favor of a PTO test that applies nowhere else, would

defy the Supreme Court’s directive to avoid establishing “equitable principles” that

are “unique to patent disputes.” eBay, 547 U.S. at 393.5

C. The Proposal To Adopt Rule 56 Is Contrary to Law

PTO’s and defendants’ arguments for adopting PTO’s Rule 56 are all

variations on the same theme—“[T]he PTO knows best what information enables it

____________________________ 5 ACPPPI’s reliance on materiality standards in unrelated governmental enforce-ment contexts proves why causation is necessary here. ACPPPI invokes criminal law, Br. 14-15, but criminal law does not require causation because it “aims at taking dangerous people out of circulation before they do harm”; even un-successful attempts are punishable. United States v. Gladish, 536 F.3d 646, 648 (7th Cir. 2008). By contrast, equitable doctrines like inequitable conduct seek to ensure courts do not assist a wrongdoer who has “gained an advantage” through misconduct. Keystone, 290 U.S. at 245; Restatement § 940 cmt. c. Equity pro-vides relief “for actual, not for possible” harms. Sheldon v. Metro-Goldwyn Pictures Corp., 309 U.S. 390, 399-400 (1940). ACPPPI reads Kungys v. United States, 485 U.S. 759 (1988), a denaturalization case, as interpreting “materiality” to require only “a natural tendency to influence the [agency’s] decisions.” ACPPPI Br. 8, 14-15. But the statute there also required causation—“the naturalized citizen must have procured citizenship as a result of the misrepresentation.” 485 U.S. at 767 (emphasis added). It is now settled that “the government only wins if it is ‘fair to infer that the citizen was actually ineligible’” and thus would not have obtained citizenship absent the misrepresentation. United States v. Latchin, 554 F.3d 709, 714 (7th Cir. 2009). Finally, ACPPPI admits that several circuits require causation in False Claims Act and goods-importation cases. Br. 15-16. Besides, whatever the required proof for the government to cancel a patent, courts sitting in equity cannot destroy property rights at the behest of private parties based on misconduct with no impact.

16

to fulfill its mission” in “conduct[ing] effective [patent] examinations.” PTO Br.

9; Bayer Br. 25; Becton Br. 11. But the question here is not whether this Court

should, through APA-style notice-and-comment rulemaking, adopt a particular

standard for the PTO to govern proceedings before it. The question is the legal

standard that courts should apply when deciding whether to render an otherwise

valid patent unenforceable under § 282. PTO rules do not, and should not, govern

that issue.

1. The PTO lacks substantive rulemaking authority and thus cannot de-

fine “unenforceability” under § 282. Abbott Br. 37. When the PTO issued current

Rule 56 in 1992, it stated that its new rules “do not define fraud or inequitable con-

duct.” 57 Fed. Reg. 2024. On this issue, “no delegation” of authority “is evident

in the statute.” Adams Fruit Co. v. Barrett, 494 U.S. 638, 650 (1990). “Under

such circumstances, it would be inappropriate to consult executive interpretations

. . . to resolve ambiguities surrounding the scope of” the Act’s “judicially enforce-

able remedy.” Id. This Court has never deemed PTO rules controlling. Abbott Br.

37-38. The Supreme Court did not mention PTO rules in the foundational trilogy

of cases. PTO Br. 4-7. And defendants’ proposal would lead to the absurd result

that, if the PTO amended its rules—for example, to replace Kingsdown with a

negligence standard—this Court’s precedent would have to change too.

17

Bayer purports (Br. 28) to identify three cases where courts treated viola-

tions of statutory standards as evidencing sufficient wrongfulness to support “un-

clean hands.” But none involved causation. None concerned the destruction of

property rights. None involved an agency without substantive rulemaking author-

ity. And none suggested that any statutory or regulatory violation—no matter how

lacking in impact—is sufficient to support “unclean hands.” To the extent those

cases address that issue, they require causation.6

The PTO, moreover, has articulated at least 3 different materiality standards

over the last 60 years. See 37 C.F.R. § 1.56(b) (1992-present) (“prima facie case of

unpatentability” or “inconsistent with” applicant’s patentability arguments); 37

C.F.R. § 1.56(a) (1977) (“reasonable examiner”); 37 C.F.R. § 1.56 (1949) (fraud-

based standard). The standard articulated closest in time to the foundational

Supreme Court decisions and the 1952 Act’s passage—and which persisted for 25

years thereafter—was fraud-based. 37 C.F.R. § 1.56 (1949). If one of PTO’s

constructions deserves weight, it is that one. See Norwegian Nitrogen Prods. Co.

____________________________ 6 Applying Minnesota law, Metro Motors v. Nissan Motor Corp., 339 F.3d 746 (8th Cir. 2003), required and found “injury-in-fact” as well as evidence that, absent the litigation, the defendant “would have benefited from its violation.” Id. at 751. In Citronelle-Mobile Gathering, Inc. v. Edwards, 669 F.2d 717 (Temp. Emer. Ct. App. 1982), the court found the statutory and regulatory violation resulted in “the sale of over-priced oil” (a “demonstrated injury”) and “unjustly enriched” the wrongdoer. Id. at 723-24. And Gaudiosi v. Mellon, 269 F.2d 873, 881 (3d Cir. 1959), merely mentions that the misconduct there—“‘deliberate and malicious’ wrongdoing with intent to ‘intimidate’”—was a violation of SEC rules.

18

v. United States, 288 U.S. 294, 315 (1933) (courts give “peculiar weight” to

“contemporaneous construction” given by an agency when statute was “yet untried

and new”); Lorillard v. Pons, 434 U.S. 575, 580-81 (1978). The notion that

Congress intended “unenforceability” under § 282 to incorporate PTO’s current

Rule 56—a standard found nowhere else in the law that was first articulated dec-

ades after the 1952 Act’s adoption—defies credulity.

In one respect, PTO’s Rule 56 is not wholly divorced from the but-for

standard used elsewhere. Under Rule 56(b)(1), non-cumulative information is

“material” if it “establishes, by itself or in combination with other information, a

prima facie case of unpatentability of a claim.” 37 C.F.R. § 1.56(b)(1). A “prima

facie case of unpatentability” exists “when the information compels a conclusion

that a claim is unpatentable.” Id. § 1.56(b) (emphasis added). The primary differ-

ence between Rule 56(b)(1) and but-for causation seems to be that, under Rule

56(b)(1)’s prima facie test, the PTO examines whether the information “compels a

conclusion” of unpatentability under the “preponderance standard . . . [b]efore any

consideration is given” to contrary evidence. Id. Because examiners use that

standard to reject applications, id., it approaches the but-for standard when prima

facie proof is not rebutted: It reflects the circumstances where, if the examiner had

the information, he would have issued a rejection. But, for the reasons given

19

below, the rest of Rule 56—Rule 56(b)(2)—defies settled law and good policy

alike. If adopted, it would swallow Rule 56(b)(1) whole.

D. Defendants’ Policy Arguments Lack Merit

Defendants offer various arguments for rejecting but-for causation and

adopting Rule 56 wholesale. None are persuasive. And Rule 56(b)(2) is more

problematic than even the “reasonable examiner” standard the PTO and defendants

decry.

1. The PTO urges that but-for causation leaves applicants “free to

engage in a wide-variety of misconduct . . . so long as it cannot be proven later that

the patent would not have issued ‘but for’ the misconduct.” PTO Br. 13; Bayer Br.

36. Not so. The but-for standard prevailed for years before and after Norton; there

is no indication that lawlessness ensued. The PTO can enforce its broader

standards, and an array of civil and criminal penalties confront those who mislead

the PTO. Abbott Br. 39. It is the agency’s “responsibility to police fraud consis-

tently with [its] judgment and objectives” using those tools—not the role of federal

courts crafting judicial doctrines. Buckman Co. v. Plaintiffs’ Legal Comm., 531

U.S. 341, 350 (2001). The PTO’s putative concern about the 5-year limitations

period (Br. 15) ignores DOJ’s authority. Abbott Br. 39; 18 U.S.C. § 1505.

Besides, this Court must respect the limits Congress established—not tailor private

remedies to maximize circumvention.

20

Bayer urges (Br. 37) this Court to adopt a broader standard “as a

prophylactic” to “provid[e] a deterrent.” But the proposal to destroy otherwise

valid patents “prophylactic[ally]” because of misconduct with no impact—for the

purpose of “deterring”—is divorced from principles of equity. See p. 15, n.5,

supra. The “principles governing equity jurisdiction” provide relief “not to inflict

punishment” but to remedy wrongs. Sheldon, 390 U.S. at 399.

The claims that but-for causation would “effectively jettison” inequitable

conduct, Bayer Br. 2, 37, leave it “little work” to perform, PTO Br. 13, or “essen-

tially make inequitable conduct co-extensive with invalidity,” Bayer Br. 37, are

equally mistaken. The patent at issue here was invalidated for reasons apart from

inequitable conduct. Yet the parties are battling over inequitable conduct because

such a finding could result in a multi-million-dollar fee award while irreparably

harming the reputations of a lawyer and a scientist with formerly impeccable

credentials. Inequitable conduct, moreover, remains a broader weapon than

invalidity: Proof that a misrepresentation caused the PTO to grant a single claim

renders the entire patent unenforceable. Abbott Br. 2, 16-17; ABA Br. 6-7;

AIPLA Br. 17-18. And patents that otherwise meet the criteria for patentability

can be rendered unenforceable. See AMC, 607 F.3d at 830-32.

Besides, reducing inequitable conduct’s role is a virtue. Once reserved for

“rare exceptional cases of egregious fraud that results in the grant of a patent,” the

21

defense is now an “automatic assertion in every infringement case,” assuming

pandemic proportions. AMC, 607 F.3d at 835 (Rader, C.J., concurring); see Abbott

Br. 1, 4, 18, 24. Retreat from the pandemic should be welcomed, not resisted.

2. Moreover, while Rule 56(b) is broader than but-for causation, one part

of it—Rule 56(b)(2)—blatantly defies traditional boundaries and good policy.

Under Rule 56(b)(2), information is “material” so long as it is “inconsistent with” a

position the applicant has taken in urging or defending patentability. 37 C.F.R.

§ 1.56(b)(2). That standard has no foundation anywhere else in the law.7 And it

would swallow the primary Rule 56 standard—prima facie evidence of unpatent-

ability—whole. Any prior art, internal document, test result, pleading, or memor-

andum that arguably weighs against the claim of patentability could support

inequitable conduct.

That standard would continue precisely the distortions now blamed on the

reasonable-examiner standard. Inequitable conduct claims would simply shift

from asserting a failure to disclose unfavorable information (which a reasonable

examiner would want to know) to asserting a failure to disclose information “in-

consistent” with the arguments for patentability. Applicants would over-disclose,

____________________________ 7 By contrast, equitable doctrines based on inconsistent positions, like equitable and judicial estoppel, traditionally require causation—proof that someone “acted in reliance upon his opponent’s prior position” and “face[s] injury if a court were to permit his opponent to change positions.” Konstantinidis v. Chen, 626 F.2d 933, 937 (D.C. Cir. 1980).

22

filing “mounds of information with questionable materiality” to avoid being

accused of omitting something inconsistent, PTO Br. 17, while simultaneously

declining “to say anything of substance about the materials they disclose” for fear

of it being “characterized as” inconsistent with something else, ABA Br. 11. Amici

concede that Rule 56(b)(2) is indistinguishable from the “reasonable examiner”

standard. See Teva Br. 10 n.6. For that reason alone, it is suspect. Even if the

Court relies on Rule 56(b)(1) when crafting a materiality standard, Rule 56(b)(2)’s

novel standard, found nowhere else in the law, should be rejected.

III. “Materiality-Intent Balancing” Should Be Abandoned or Reformed

Almost everyone agrees that the “materiality-intent balancing test” should be

abandoned or revamped. See Bayer Br. 43; PTO Br. 24-26; ABA Br. 7-8.

Properly understood, “balancing” occurs only after “both materiality and intent

have been established” by clear-and-convincing evidence and inequitable conduct

has been proved. Optium Corp. v. Emcore Corp., 603 F.3d 1313, 1320 (Fed. Cir.

2010). At that point, the district court can “balance”—not materiality against

intent—but all “the equities [to] determine whether the applicant’s conduct . . . was

egregious enough to warrant holding the entire patent unenforceable” under the

circumstances. Id.; Bayer Br. 43; PTO Br. 25-26. Thus, after finding inequitable

conduct, district courts may exercise remedial discretion when deciding whether to

23

render the patent unenforceable given the totality of the “proven facts.” Star

Scientific, 537 F.3d at 1367.

This Court, however, has sometimes suggested that balancing can precede

the finding of inequitable conduct, stating that “[t]he more material the omission or

misrepresentations, the less intent that must be shown to elicit a finding of inequit-

able conduct.” Aventis, 525 F.3d at 1344 (emphasis added). That description has

been construed to permit a “‘sliding scale’ where intent to deceive may be inferred

from materiality” or proof of one may substitute for the other. PTO Br. 25; see

Abbott Br. 41-48; Bayer Br. 45. That tends to dilute the threshold requirements for

both materiality and intent, leading to imprecision and unpredictability. Bayer Br.

43; ABA Br. 7-8; Abbott Br. 41-48. In practice, courts end up balancing “rela-

tively weak evidence” of one element against “strong evidence” of the other to

“find that on balance, inequitable conduct had occurred.” Dippin’ Dots, Inc. v.

Mosey, 476 F.3d 1337, 1346 (Fed. Cir. 2007). Accordingly, this Court should

clarify that courts balance the equities only when deciding whether to impose the

unenforceability remedy, after all elements of inequitable conduct are shown.

IV. The Finding of Inequitable Conduct Must Be Reversed

A. The District Court’s Use of an Erroneous Standard Precludes Affirmance

Defendants cannot dispute that the trial court invoked the standards that they

now disavow. On intent, the court ruled that attorney Pope “knew or should have

24

known that the withheld information would have been highly material to the

examiner,” JA92 (emphasis added)—precisely the intent standard that “should not

be relied upon,” Bayer Br. 38. The court “balanc[ed] the levels of materiality and

intent, with a greater showing of one factor allowing a lesser showing of the

other,” JA94; JA90, an approach virtually everyone disavows, see pp. 22-23,

supra. And the district court inferred intent almost exclusively from materiality.

There was no contemporaneous evidence—no document, no e-mail, no memoran-

dum—indicating that, when Pope and Sanghera made the disclosure determination,

they believed the EPO briefs inconsistent with their position before the PTO but

withheld those public-record briefs to trick the PTO. Instead, the factors identified

by the trial court all concern materiality, the trial court’s after-the-fact disagree-

ment with Sanghera and Pope on materiality, or an effort to shift the burden of

proof. See 593 F.3d at 1306; Abbott Br. 50-52. Bayer insists (Br. 50-52) that the

intent finding rested on “credibility” determinations, but the credibility findings

likewise reflected the court’s disagreement with Pope’s and Sanghera’s views on

materiality.

Because the district court applied the wrong standard, this Court cannot

affirm. This Court cannot impose its own “discretion as if [it] were the first-line

court of equity.” Acumed LLC v. Stryker Corp., 483 F.3d 800, 811-12 (Fed. Cir.

2007). But to the extent finding inequitable conduct would necessarily be an

25

abuse of discretion under the proper standard, the Court can reverse and remand

for entry of judgment. Baginsky v. United States, 697 F.2d 1070, 1074 (Fed. Cir.

1983). For the reasons given in Judge Linn’s dissent and Abbott’s opening brief,

the Court should do that here.

B. The Evidence of Intent To Deceive Falls Short

Deceptive intent cannot be inferred here because it is not the “single most

reasonable inference.” As Judge Linn (593 F.3d at 1316 n.9) and Abbott (Br. 53)

explain, Sanghera and Pope reasonably understood the EPO briefs involving the

prior art ’382/’636 patent to address the type of membrane used with blood, not

whether the membrane was necessary with blood. The EPO briefs explained that

the membrane used with blood did not limit glucose diffusion (which would slow

glucose measurement) but protected sensors from fouling by larger blood constitu-

ents. Abbott Br. 53-56. That did not “denigrate[ ]” the need for a membrane in

blood but rather explained its “important ‘filtering function’ in blood.” 593 F.3d at

1314 (Linn, J., dissenting). By emphasizing the need for the membrane “to

prevent” larger blood constituents “from interfering with the electrode,” the filings

supported the necessity of a membrane with blood under the ’382/’636. Id. at

1316; Abbott Br. 54-55. That was consistent with conventional understandings at

the time. Abbott Br. 55-56. It was error to draw “one meaning from the EPO

submissions” to infer bad intent where there was an “equally reasonable (if not

26

more reasonable) inference [that] renders them immaterial.” 593 F.3d at 1313

(Linn, J., dissenting).

Defendants largely decline to respond to Judge Linn’s dissent and Abbott’s

brief. Instead, Bayer urges (Br. 49) that the EPO briefs went beyond the issue

before the EPO and contradicted Abbott’s claim that “prior art sensors required a

membrane.” The EPO briefs, Bayer urges, “stated that the ’382 membrane was

optional” and made clear “that ‘optional’ in [the ’382/’636] patent meant option-

al.” Id. But Bayer omits the key words “preferably” and with “live blood” when

characterizing the EPO briefs. No one disputed that membranes were “optional”

for interstitial and non-blood fluids. The question for the U.S. examiner on the

’551 was whether the phrase “optionally, but preferably when being used on live

blood” in the ’382/’636 patent would have been understood by those learned in the

art in 1984—the priority date of the ’551—to teach a sensor for use in blood

without a membrane where (1) it was generally understood at the time that mem-

branes were needed in blood, and (2) the examples in the ’382/’636 always used a

membrane in blood. Abbott Br. 52-56.

On that issue, the EPO filings were mostly cumulative: They repeated or

paraphrased the ’382/’636 language the examiner had before him—“[o]ptionally,

but preferably when being used on live blood, a protective membrane surrounds

both the enzyme and the mediator layers, permeable to water and glucose

27

molecules.” JA6508. When the EPO briefs went beyond that, they reinforced the

membrane’s function for all blood—“to prevent the larger constituents of the blood

. . . from interfering with the electrode sensor,” JA6585—and thus underscored the

need for a membrane in blood. We invite the Court to read the EPO briefs

(JA6530-31; JA6584-86) to decide for itself.

Bayer also manufactures (Br. 48-49) the illusion of a nefarious scheme to

revive a meritless patent. But the PTO granted 3 other valid patents from the same

family. See U.S. Patent Nos. 5,509,410, 5,682,884, and 5,727,548. There is

nothing wrong with Abbott’s decision, upon acquiring Medisense in 1996, to

rethink pending applications. And while Pope knew of the EPO briefs, he “had

read those documents as part of [his] responsibilities [of ] being familiar with the

patent matters” after “the May 1996 acquisition”—not in connection with prose-

cuting the ’551 two years later. JA2980 (Tr. 635). It is unfair to impugn the integ-

rity of a patent attorney registered for 37 years by finely parsing the words of a

brief involving a different patent, written by another lawyer on another continent,

that he had reviewed years earlier. Finally, despite defendants’ effort to vilify Dr.

Sanghera, there was no finding that his affidavit, stating his opinion of how a

person of ordinary skill in the art would have understood the ’382/’636 in 1984,

was knowingly false; the only problem the district court identified was the failure

28

to submit the EPO briefs with it. Even Bayer’s key witness agreed that Dr.

Sanghera’s conclusions “[we]re perfectly reasonable.” JA3760.

C. Materiality Was Absent

The EPO briefs were not material. Even apart from the above analysis, it is

unlikely that disclosing the EPO briefs would have led the examiner to reach a

different conclusion. The question before the U.S. examiner on the ’551 was

whether, in 1984, prior art taught membraneless sensors for usage in blood. A

foreign lawyer’s patent brief cannot change the then-existing state of knowledge.

While Bayer asserts the ’551 was invalidated “over the very reference that was the

subject of the inequitable conduct,” Br. 47, that is misleading. The EPO briefs did

not establish ’551’s invalidity. The plain language of the ’382/’636 patent, which

was fully disclosed to the PTO, did.

Finally, the allegedly withheld documents were legal briefs—by definition,

the lawyer-argument that this Court has long held not material. Abbott Br. 58-59.

Bayer asserts that “this case is not solely about lawyer argument” because Pope

“submitted a declaration from Dr. Sanghera.” Bayer Br. 53. But the inequitable

conduct finding rested on nondisclosure of the EPO briefs. Because those briefs

were lawyer-argument, they are immaterial as a matter of law. Bayer contends the

EPO briefs became material under Rule 56(b)(2) because they contradicted

Sanghera’s affidavit. Bayer Br. 53-55. But there was no contradiction. And PTO

29

rules cannot overturn this Court’s holdings that lawyer-argument is immaterial.

Lawyer-argument about prior art is not material because the examiner has the prior

art before him and is “free to reach his own conclusions.” Young v. Lumenis, Inc.,

492 F.3d 1336, 1349 (Fed. Cir. 2007). That rationale applies here: The prior art

was fully disclosed; the state of that prior art was what it was; and undisclosed

attorney-argument in an EPO brief cannot change that.

Upholding an inequitable conduct finding under these facts—a failure to

disclose another lawyer’s legal argument in a foreign proceeding about a prior art

patent—would send the message that this Court has changed nothing, and the

plague of inequitable conduct claims would continue. Practitioners would continue

to inundate the PTO with materials (including briefs in foreign proceedings on

prior art) to avoid being accused of hiding anything, while saying as little as

possible to avoid claims of inconsistency. That is how the bar responded to the

panel decision here. See Abbott Br. 29. That would likewise be the result of

affirming en banc.

CONCLUSION

For the foregoing reasons and those stated in Abbott’s opening brief, the

finding of inequitable conduct should be reversed.