Saturday, December 17, 2016

From U . S . WATER SERVS ., INC . v. NOVOZYMES A /S on "inequitable conduct"

U.S. Water did not withhold or misrepresent information to the USPTO.
See Fiskars, nc. v. Hunt Mfg. Co., 221 F.3d 1318, 1327 (Fed. Cir.
2000) (“An applicant is not required to tell the [US]PTO
twice about the same prior art, on pain of loss of the
patent for inequitable conduct.”).


From the law review article by Taylor in 27 Berkeley Tech. L.J. 349 (2012) :

Under the new materiality test, announced in Therasense and adopted by the PTO in its proposed revision to Rule 56, prior art is but-for material if [p. 366] the PTO would not have allowed a claim had it been aware of the undisclosed prior art. n153 Thus in applying the Federal Circuit's new materiality test, a judge must recreate the conditions of a PTO examination to determine the materiality of a withheld reference. The inquiry is whether, by a preponderance of the evidence, given the broadest reasonable construction of the claim, the claim would not have issued if the PTO examiner had seen the withheld information. It has been suggested that, similar to the way many courts now hold Markman hearings, courts may begin to hold "Therasense hearings" in which the court will find the broadest reasonable construction for a particular claim and then determine whether under a preponderance of the evidence standard that the claim would not have been allowed by the PTO had it been aware of the undisclosed information. n154

The Federal Circuit previously raised the intent standard Kingsdown in an attempt to reduce the flood of inequitable conduct allegations. n155 However, the high standard quickly eroded, and inequitable conduct allegations continued. n156 A significant amount of time has passed since the Federal Circuit's Kingsdown decision in 1988 and the inequitable conduct doctrine continues to be a problem for the courts and PTO. n157 Although Kingsdown failed, Therasense may have a significantly better chance for success as it comprehensively reformed the doctrine. Rather than just raising the intent standard or the materiality standard, the Federal Circuit in Therasense clearly dictated standards for both of these key elements of the inequitable conduct defense, as well as specifically pointed to standards that were henceforth abolished. The Federal Circuit created a set of coherent standards in Therasense that provide substantial direction in comparison to the continuously vacillating inequitable conduct standards prior to Therasense. n158 The court's holistic approach may well prove more effective and enduring that its predecessor, Kingsdown.


In Pfizer, Inc. v. Teva Pharmaceuticals USA, Inc., a Virginia district court held that an attorney's failure to produce a Statement of Claim to the PTO did not constitute inequitable conduct under the new Therasense standard. n203 The patentee alleged imminent infringement of a certain pharmaceutical [p. 374] compound patent (the '012 patent), by its competitor. n204 The competitor defended the allegation by claiming that the patent was invalid because of inequitable conduct committed by the patentee during prosecution. n205 During prosecution of the patent, the patentee's attorney received a Statement of Claim from another competitor, suing under the patentee's Canadian version of the U.S. application and alleging invalidity. n206 The patentee's attorney withheld this Statement of Claim from the PTO during prosecution. n207

In coming to a decision regarding the inequitable conduct allegation, the court looked to the Federal Circuit's Therasense decision. n208 The court noted that under Therasense, "in order to substantiate a claim of inequitable conduct, "the accused infringer must prove by clear and convincing evidence that the applicant knew of the references, knew that it was material, and made a deliberate decision to withhold it.' " n209 Looking to the facts of the case, the court determined that the information withheld, "hardly approaches" the Therasense but-for materiality. n210 Similarly, the court found that there was no evidence to suggest that the patentee's attorney had any intent to deceive the PTO in failing to disclose the statement of claim because (1) he had no such duty in the first place and (2) such intent is hardly the single most likely inference from his actions. n211 Consequently, the court held that the [p. 375] competitor had failed to make a showing of inequitable conduct by clear and convincing evidence. n212 The district court noted that the present case was the "archetype of the action" the Federal Circuit was targeting with its Therasense decision. n213 The court described Therasense as a "bulwark against the waste of resources by both the judiciary and litigants." n214


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