Federal Circuit Makes Inequitable Conduct Harder to Prove
The specter of inequitable conduct has increased the costs of patent prosecution
and the costs of patent litigation.
A recent en banc decision by the
Federal Circuit in Therasense Inc. v.
Becton has made it more difficult for a defendant to successfully mount a
defense on the grounds of inequitable conduct for failure to cite a reference to
To prevail on such a claim, the
party alleging inequitable conduct must prove by clear and convincing evidence
that the applicant knew of the reference, knew that it was material, and made a
deliberate decision to withhold it.
In other words, the two separate requirements for inequitable conduct are 1)
specific intent to deceive and 2) materiality.
The party alleging inequitable conduct must prove with clear and convincing
evidence that the patentee acted with the specific intent to deceive the USPTO. The Federal Circuit noted that
although intent can be inferred from indirect and circumstantial evidence, if
multiple reasonable inferences can be drawn from the evidence, specific intent
is absent. The Federal Circuit also
noted that lack of a good faith explanation for failing to submit a reference to
the USPTO does not prove specific intent to deceive. The Federal Circuit will review the
factual findings of the district court regarding the reasonable inferences that
can be drawn from the evidence for clear error.
For the element of materiality, the Federal Circuit rejected using PTO Rule 56
to determine materiality and instead adopted a “but-for materiality” test. In other words, a withheld reference
is but-for material if the USPTO would not have allowed the claim if it knew
about the withheld reference. For
this element, the court is to use a preponderance of the evidence standard and
give the claims their broadest reasonable construction, like an Examiner does
during patent prosecution. The
Federal Circuit noted that if a claim is invalidated with the withheld
reference, the reference is necessarily material.
An exception to the requirement of but-for materiality is when the patentee has
engaged in affirmative acts of egregious misconduct. One non-limiting example of an
affirmative act of egregious misconduct is the filing an unmistakenly false
affidavit. In contrast, “mere
nondisclosure” of a reference or “failure to mention prior art references in an
affidavit” do not constitute affirmative egregious conduct and require proof of
In conclusion, it is possible that the more stringent requirements to prove an
allegation of inequitable conduct could decrease the number of inequitable
conduct allegations presented in patent infringement cases, thereby decreasing
the costs of patent litigation.
However, it does not appear that the decision in
Therasense will decrease the cost of
patent prosecution because patent prosecutors are still required to observe PTO
Rule 56, described by the Federal Circuit as being a “low bar for materiality.”
This update was
prepared by Jennifer Buss. Jennifer is an intellectual property lawyer at Vidas,
Arrett & Steinkraus. For more information about this update, please contact
Jennifer at 952-563-3018 or via email.
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advice. Your receipt of this update does not establish an Attorney-Client
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