Best Practices Patent Prosecution and Accusations of Inequitable Conduct
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1 PRESENTATION TITLE Best Practices Patent Prosecution and Accusations of Inequitable Conduct David Hall, Counsel Megan Chung, Senior Associate Thomas Franklin, Partner
2 Overview Ethical genesis of inequitable conduct (IC) & policy Prosecutor perspectives Litigator best practices Likelihood of rendering a patent unenforceable due to IC America Invents Act Post-Allowance Art Submissions 2
3 Genesis of Inequitable Conduct Inequitable conduct (IC) is an equitable remedy that is an absolute defense to a finding of patent infringement IC invalidates a patent procured by fraud Supreme Court derived the defense from the equitable doctrine of unclean hands Policy motivation was to discourage misconduct Intertwined with duty of disclosure Foreign patent offices have no such duty 3
4 Common Inequitable Conduct Failure to comply with duty of disclosure Fabrication of evidence Applicant deception, misrepresentation or other misconduct committed during prosecution of a patent Willful inventorship deception Fraud in obtaining a temporary injunction to stop infringement 4
5 Prosecutor Perspectives David Hall Patent Prosecution & Counseling Team 5
6 The Duty to Disclose Information to the USPTO Current Rule 56: Each individual associated with the filing and prosecution of a patent application has a duty to disclose all known information that is material to patentability (37 C.F.R. 1.56). Duty continues throughout prosecution until patent is granted There is no affirmative duty or obligation to search for material information 6
7 What is Material Information (current Rule 56)? Material Information is any information that is not cumulative and: (1) establishes... a prima facie case of unpatentability; or (2) refutes, or is inconsistent with, a position the applicant takes in (i) opposing an argument of unpatentability or (ii) asserting an argument of patentability. Such information can include: Documents such as technical publications and patents Prior art cited in related foreign applications and information relating to or from co-pending US applications Information from related litigation See MPEP (current Rule 56) 7
8 Therasense (nka Abbott Labs) v Becton Dickinson in 2011 Changes the Materiality Standard District Court said statements to PTO were inconsistent with statements made in prosecution of a counterpart European patent application to a cited US prior art patent also owned by Abbott (i.e., the statements were material under Rule 56). District Court found that Abbott acted with intent to deceive. District Court s conclusion: inequitable conduct per Rule 56. 8
9 Therasense Opinion Clarifies Materiality The Federal Circuit (en banc) says materiality is not so broad: Information is material if the PTO would not have granted the patent but for Applicant s failure to disclose the information. "Intent" must be knowing and deliberate, proved by clear and convincing evidence. Therasense, Inc. v. Becton, Dickinson and Co., _ F.3d _ (Fed. Cir., May 25, 2010). 9
10 USPTO Proposes a new materiality standard for Rule CFR 1.56(b) is amended to read: Information is material to patentability if it is material under the standard set forth in Therasense. Information is material under Therasense if: (1) the Office would not allow a claim if it were aware of the information, applying the preponderance of the evidence standard and giving the claim its broadest reasonable construction; or (2) the applicant engages in affirmative egregious misconduct before the Office as to the information. Notice of Proposed Rulemaking, 76 Fed. Reg., No. 140, (July 21, 2011)(written public comments accepted to September 19, 2011). 10
11 Tips for Satisfying the Duty of Disclose under Rule 56 and the Standards Applied by the CAFC There is currently no safe harbor practice for fulfilling the Duty of Disclosure under Therasense and proposed revised Rule 56. Suggested approach: All of the opinions (majority, concurrence, dissent) agree that materiality as defined in the existing Rule 56 is more stringent than materiality as defined in Therasense. Establish a rule for consistent treatment of information, first on related-invention basis then on item relevancy (intent). Follow existing Rule 56 and consider but-for materiality as a tie-breaker. Make a record about your review when you must make a decision on withholding information. 11
12 Litigator Perspectives Megan Chung, IP Litigation Team 12
13 IC Issues in Litigation Once considered a plague Still common but on the decline Requirement to plead with specificity Adds cost to litigation, especially early in the case 13
14 IC Issues in Litigation Rarely successful as a defense Significant consequences atomic bomb Render unenforceable the entire patent; Get attorney s fees; Taint related patents and applications; Spawn antitrust (Walker-process), unfair competition and tort claims Break attorney-client privilege with the fraud exception 14
15 Checklist Before Pleading IC What is the client s goal and budget? Who is the plaintiff/patent owner? NPE v. Fortune 100 company Does the patent-in-suit have related patents and applications? What court and who is the judge? Varying standards as officers of the court 15
16 Must Plead With Particularity Under Rule 9(b) Identify the specific who, what, when, where, and how of the material misrepresentation or omission committed before the PTO. But-for materiality: the PTO would not have allowed a claim if it had been aware of the undisclosed prior art Intent: the applicant (1) knew of the prior art information, (2) knew that the information was material and (3) made a deliberate decision to withhold it. 16
17 Best Practices Investigate early and remember to check for public use and sale Look for pattern of misconduct: individual part is insufficient, but totality is sufficient Plead only when have sufficient basis and meets goals Plead when judge is likely to allow the issue to go to jury 17
18 Likelihood IC will be found for Duty of Disclosure Problem Failure to disclose references cited against a foreign equivalent application Sister case that was part of a double patenting rejection not fully cross-cited including office actions Related case by priority claim with material references/rejections/arguments Unrelated case with material references/rejections/arguments 18
19 2011 Patent Reform Legislation America Invents Act Post-grant supplemental examination procedure (S. 23 and H.R. 1249) Allows submission of art not presented during prosecution to eliminate IC 3 months for decision Where art raises a substantial new question of patentability, the Office orders reexam House version prevents use where fraud in the original prosecution is found by PTO 19
20 Questions? 20
21 Firm Profile Kilpatrick Townsend & Stockton LLP ("Kilpatrick Townsend") formed through merger at the beginning of this year Kilpatrick Townsend is an AmLaw 100 firm that has one of the world s largest IP practices with a 150 year history and about 650 attorneys Our IP attorneys have technical degrees to complement their legal education, and many have advanced degrees and/or industry experience Eighteen offices across the United States and the World 21
22 Presenters David Hall Kilpatrick Townsend & Stockton LLP Suite High Bluff Drive San Diego, CA office fax Megan Chung Kilpatrick Townsend & Stockton LLP Suite High Bluff Drive San Diego, CA office fax Thomas D. Franklin Kilpatrick Townsend & Stockton LLP Suite Wewatta Street Denver, CO office fax
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