Proving and Avoiding Inequitable Conduct in Patent Prosecution and Litigation

Transcription

1 Presenting a live 90-minute webinar with interactive Q&A Proving and Avoiding Inequitable Conduct in Patent Prosecution and Litigation Leveraging Court Treatment Post-Therasense and the AIA s Answer to Inequitable Conduct Issues THURSDAY, JANUARY 8, pm Eastern 12pm Central 11am Mountain 10am Pacific Today s faculty features: Thomas L. Irving, Partner, Finnegan Henderson Farabow Garrett & Dunner, Washington, D.C. Jennifer M.K. Rogers, Partner, Shumaker & Sieffert, St. Paul, Minn. Margaret J. Sampson, Partner, Vinson & Elkins, Palo Alto, Calif. The audio portion of the conference may be accessed via the telephone or by using your computer's speakers. Please refer to the instructions ed to registrants for additional information. If you have any questions, please contact Customer Service at ext. 10.

2 FOR LIVE EVENT ONLY Sound Quality If you are listening via your computer speakers, please note that the quality of your sound will vary depending on the speed and quality of your internet connection. If the sound quality is not satisfactory, you may listen via the phone: dial and enter your PIN when prompted. Otherwise, please send us a chat or sound@straffordpub.com immediately so we can address the problem. If you dialed in and have any difficulties during the call, press *0 for assistance. Viewing Quality To maximize your screen, press the F11 key on your keyboard. To exit full screen, press the F11 key again.

3 FOR LIVE EVENT ONLY For CLE purposes, please let us know how many people are listening at your location by completing each of the following steps: In the chat box, type (1) your company name and (2) the number of attendees at your location Click the SEND button beside the box If you have purchased Strafford CLE processing services, you must confirm your participation by completing and submitting an Official Record of Attendance (CLE Form). You may obtain your CLE form by going to the program page and selecting the appropriate form in the PROGRAM MATERIALS box at the top right corner. If you'd like to purchase CLE credit processing, it is available for a fee. For additional information about CLE credit processing, go to our website or call us at ext. 35.

4 FOR LIVE EVENT ONLY If you have not printed the conference materials for this program, please complete the following steps: Click on the ^ symbol next to Conference Materials in the middle of the lefthand column on your screen. Click on the tab labeled Handouts that appears, and there you will see a PDF of the slides for today's program. Double click on the PDF and a separate page will open. Print the slides by clicking on the printer icon.

5 The Post-Therasense Inequitable Conduct Battles Continue January 8, 2015 Tom Irving Jennifer M. K. Rogers Margaret Sampson 5

6 Disclaimer These materials are public information and have been prepared solely for educational and entertainment purposes to contribute to the understanding of U.S. intellectual property law and practice. These materials reflect only the personal views of the joint authors and are not individualized legal advice. It is understood that each case is fact-specific, and that the appropriate solution in any case will vary. Therefore, these materials may or may not be relevant to any particular situation. And not all views expressed herein are subscribed to by each joint author. Thus, the joint authors, Finnegan, Henderson, Farabow, Garrett & Dunner, LLP (including Finnegan Europe LLP, and Fei Han Foreign Legal Affairs Law Firm), SHUMAKER SIEFFERT, and VINSON & ELKINS LLP, cannot be bound either philosophically or as representatives of various present and future clients to the comments expressed in these materials. The presentation of these materials does not establish any form of attorney-client relationship with the joint authors, Finnegan, Henderson, Farabow, Garrett & Dunner, LLP (including Finnegan Europe LLP, and Fei Han Foreign Legal Affairs Law Firm), SHUMAKER SIEFFERT, or VINSON & ELKINS LLP. While every attempt was made to insure that these materials are accurate, errors or omissions may be contained therein, for which any liability is disclaimed. 6

7 The AIA deals only indirectly with inequitable conduct through the new supplemental examination procedure. USPTO Proposed Rule changing the standard of materiality, presently suspended indefinitely. For now, the main guide for U.S. Patent practitioners on inequitable conduct remains case law, and, in particular, the en banc Federal Circuit decision in Therasense and its progeny. 7

8 DUTY OF DISCLOSURE Everyone involved in drafting and prosecuting US patent application owes a duty of disclosure to the USPTO Intent to deceive 37 C.F.R. 1.56: Each individual associated with the filing and prosecution of a patent application has a duty of candor and good faith in dealing with the Office, which includes a duty to disclose to the Office all information known to that individual to be material to patentability[.] M.P.E.P material 8

9 WHO HAS A RULE 56 DUTY? Individuals associated with the filing or prosecution of a patent application are: Inventors attorney or agent and every other person who is substantively involved in the preparation or prosecution of the application and who is associated with the inventor, with the assignee or with anyone to whom there is an obligation to assign the application. 9

10 INCLUDING DECLARANTS! 37 C.F.R or 1.68 Everything in declaration or oath is true. 37 C.F.R. 1.63(b) (1) Identify the application; (2) Declarant has reviewed and understands the contents of the application, including the claims, (3) acknowledges the duty to disclose to the Office all information known to the person to be material to patentability as defined in

11 DUTY OF DISCLOSURE ACKNOWLEDGED IN DECLARATIONS USPTO Notice, 1327 OG 112 (Feb. 12, 2008) The United States Patent and Trademark Office (Office) will no longer accept as complying with 37 CFR 1.63(b)(3) an oath or declaration that does not acknowledge a duty to disclose information material to patentability as defined in 37 CFR All oaths or declarations filed on or after June 1, 2008, will be required to include the language expressly set forth in 37 CFR 1.63, including that in 37 CFR 1.63(b)(3). This notice applies to oaths or declarations filed in all nonprovisional patent applications, including reissue applications. 11

12 HOW LONG DOES DUTY LAST? Through issuance (unless put it back it reexam/ipr/pgr or reissue). But not during patent term extension - See Schering Corp. v. Mylan Pharmaceuticals, Inc., Slip Copy, 2011 WL (D.N.J. May 17, 2011) (unpublished) in view of the specific allegations at issue in this motion, the Court does not interpret the duty of candor and good faith identified in to require the disclosure of potentially invalidating prior art relating to the '721 patent. The Court therefore concludes that the Schering's alleged failure to disclose such information during the term extension proceedings would not support a finding of inequitable conduct[.] 12

13 PRE-THERASENSE STANDARDS FOR MATERIALITY Objective but for standard (misrepresentation was so material that the patent should not have issued). Subjective but for test (misrepresentation actually caused the examiner to approve the patent application when he would not otherwise have done so). But it may have standard (misrepresentation may have influenced the parent examiner in the course of prosecution). Reasonable examiner standard. Rule 56 (amended in 1992): material if not cumulative and establishes prima facie case of unpatentability or is inconsistent with a position taken by the applicant during prosecution. 13

14 Evolving Standards PRE-THERASENSE STANDARDS FOR INTENT TO DECEIVE 70 s and 80 s: Gross negligence 1988: sufficient culpability Kingsdown Med. Consultants, Ltd. v. Hollister Inc., 863 F.2d 867, 876 (Fed. Cir. 1988) (en banc) Early 2000 s: knew or should have known materiality Bristol-Myers Squibb Co. v. Rhône-Poulenc Rorer, Inc., 326 F.3d 1226, 1229 (Fed. Cir. 2003) [W]here withheld information is material and the patentee knew or should have know [sic] of that materiality, he or she can expect to have great difficulty in establishing subjective good faith sufficient to overcome an inference of intent to mislead. 14

15 MATERIALITY AND INTENT MUST BE SHOWN Clear and convincing evidence of materiality and intent must be shown before patentee has any burden to show no inequitable conduct. Star Scientific, Inc. v. R.J. Reynolds Tobacco Co., 537 F.3d 1357 (Fed. Cir. 2008), cert. denied (2009) Courts must ensure that an accused infringer asserting inequitable conduct has met his burden on materiality and deceptive intent with clear and convincing evidence before exercising its discretion on whether to render a patent unenforceable. 15

16 Therasense, Inc. v. Becton, Dickinson & Co., 649 F.3d 1276 (Fed. Cir. 2011) (en banc) STANDARDS FOR INTENT AND MATERIALITY Abbott s statements in US prosecution found to be inconsistent with statements made to the EPO. Statements made to the EPO found to be not disclosed to USPTO examiner. District court: Unenforceable for inequitable conduct. Withheld information was material, and neither Pope nor Dr. Sanghera provided a credible explanation for failing to submit the EPO documents to the PTO 16

17 Therasense: STANDARD FOR MATERIALITY Therasense Majority (6-5) on Rehearing En Banc: but for materiality = if the PTO would not have allowed a claim had it been aware of the undisclosed prior art. affirmative egregious misconduct exception = no but-for materiality but it would otherwise be unjust to allow the patentee to enforce the patent. Example: filing of an unmistakably false affidavit. Does not include mere nondisclosure of prior art references. That majority was lost when Judge Rader departed. 17

18 Therasense: STANDARD FOR INTENT Therasense Majority on Rehearing En Banc: specific intent to deceive = single most reasonable inference that one with a Rule 56 duty "knew of the reference, knew that it was material, and made a deliberate decision to withhold it. No more should have known standard for intent (no disagreement from dissent or concurring opinions). Absence of a good faith explanation for failure to disclose a material reference (which was the case in Therasense) does not, by itself, constitute intent to deceive. Explicitly forbade inferring intent solely from materiality and abandoned the sliding scale. (No disagreement in the dissenting or concurring opinions). 18

19 Therasense: WHAT EXACTLY HAPPENED? During Abbott s U.S. prosecution (13 years), argued: the [o]ptionally, but preferably language [of the prior art patent] was mere patent phraseology that did not convey a clear meaning. prior art patent taught that active electrodes designed for use with whole blood require a protective membrane. There is no teaching or suggestion of unprotected active electrodes for use with whole blood specimens in this patent or the other prior art of record in this application. Meanwhile, to the EPO, Abbott argued that the [o]ptionally, but preferably language [of the prior art patent] was unequivocally clear, and the EPO documents clearly explained that membranes were merely preferred for live blood and that a membrane was not necessary for testing whole blood in vitro. 19

20 Therasense: WHAT EXACTLY HAPPENED? Federal Circuit: Affirmed judgment of inequitable conduct. Abbott failed to disclose statements made to the European Patent Office ( EPO ) during a revocation proceeding of the European counterpart to the prior art patent. Statements made to the EPO were highly material because they contradicted representations made to the U.S. PTO regarding the disclosure of the prior art patent. To deprive an examiner of the EPO statements-statements directly contrary to Abbott's representations to the PTO-on the grounds that they were not material would be to eviscerate the duty of disclosure. Moreover, if this could be regarded as a close case, which it is not, we have repeatedly emphasized that the duty of disclosure requires that the material in question be submitted to the examiner rather than withheld by the applicant. 20

21 Therasense: REVIEW OF CASES CITED BY FEDERAL CIRCUIT Precision Instrument Mfg. Co. v. Auto. Maint. Mach. Co., 324 U.S. 806 (1945) the equitable maxim that he who comes into equity must come with clean hands. necessarily gives wide range to the equity court's use of discretion in refusing to aid the unclean litigant. It is not bound by formula or restrained by any limitation that tends to trammel the free and just exercise of discretion. quoting Keystone Driller public policy against the assertion and enforcement of patent claims infected with fraud and perjury Knowing purchase of perjured application and failure to disclose perjury to Patent Office -> not the standard of conduct requisite to the maintenance of this suit in equity. 21

22 Therasense: REVIEW OF CASES CITED BY FEDERAL CIRCUIT Hazel-Atlas Glass Co. v. Hartford-Empire Co., 322 U.S. 238 (1944), overruled on other grounds by Standard Oil Co. v. United States, 429 U.S. 17 (1976) Every element of the fraud here disclosed demands the exercise of the historic power of equity to set aside fraudulently begotten judgments. This is not simply a case of a judgment obtained with the aid of a witness who, on the basis of afterdiscovered evidence, is believed possibly to have been guilty of perjury. Here, even if we consider nothing but Hartford's sworn admissions, we find a deliberately planned and carefully executed scheme to defraud not only the Patent Office but the Circuit Court of Appeals. The total effect of all this fraud, practiced both on the Patent Office and the courts, calls for nothing less than a complete denial of relief to Hartford for the claimed infringement of the patent thereby procured and enforced. 22

23 Therasense: REVIEW OF CASES CITED BY FEDERAL CIRCUIT Kingsdown Med. Consultants, Ltd. v. Hollister Inc., 863 F.2d 867 (Fed. Cir. 1988) (en banc) Court noted that it did not discuss materiality because of its decision on intent. Whether the intent element of inequitable conduct is present cannot always be inferred from a pattern of conduct that may be described as gross negligence. That conduct must be sufficient to require a finding of deceitful intent in the light of all the circumstances. We are not convinced that deceitful intent was present in Kingsdown's negligent filing of its continuation application or, in fact, that its conduct even rises to a level that would warrant the description gross negligence. Kingsdown's counsel may have been careless, but it was clearly erroneous to base a finding of intent to deceive on that fact alone. It is not possible to counter the I didn't know excuse with a should have known accountability approach when faced with a pure error, which by definition is done unintentionally. 23

24 Therasense: DR. SANGHERA: DECLARATION TRIGGERED DUTY Once Dr. Sanghera disclosed the inconsistent EPO information to Attorney Pope, he ordinarily would have done all that Rule 56 required. A specific Rule 56 proviso stated that [i]ndividuals other than the attorney, agent or inventor may comply with this section by disclosing information to the attorney, agent or inventor. Dr. Sanghera did so. The problem is that he then made direct representations to the PTOrepresentations that were materially misleading by omission. He did not have to take this extra step. Having done so, he was obligated to avoid intentional deception. His sworn statements to the PTO about the meaning of the optionally, but preferably sentence were known by him to be inconsistent with his own company's statements to the EPO-statements he had himself helped craft. In sum, given the fact that Dr. Sanghera made a positive submission to the PTO, he was himself duty-bound to avoid making an intentionally misleading submission, whether or not he told Attorney Pope about the inconsistency. 24

25 REMAND: Therasense, Inc. v. Becton, Dickinson and Co., 2012 WL (N.D.Cal. Mar. 27, 2012) Patents procured through inequitable conduct. Withheld EPO Briefs Were But For Material the examiner would not have finally allowed the 551 patent had the EPO briefs been submitted. The evidence is clear and convincing on this point[.] the representations would have been proven false by the EPO briefs. Knew of Materiality The evidence is clear and convincing that Dr. Sanghera and Attorney Pope knew the content of the EPO briefs and knew that the EPO briefs, standing alone, would so seriously undermine their submission that the examiner would have reverted to unpatentability. 25

26 REMAND: Therasense, Inc. v. Becton, Dickinson and Co., 2012 WL (N.D.Cal. Mar. 27, 2012) Did Pope and Sanghera intend to deceive the USPTO? three elements together are enough to establish a threshold case of specific intent to defraud: (i) actual knowledge of the withheld item, (ii) actual knowledge of its materiality (using the but-for standard), and (iii) a deliberate decision to withhold it. then consider whether, in combination and viewed in light of all the trial evidence, specific intent to deceive is clear and convincing. This is the point where explanations (or lack of) is considered. Sanghera and Pope knew of the EPO briefs, they knew that the EPO briefs were material (using the but-for standard), they made a conscious decision to withhold, and intent to deceive is the single most reasonable inference. 26

27 MOVE TO SINGLE MOST REASONABLE INFERENCE STARTED PRE-THERASENSE Lazare Kaplan Intern., Inc. v. Photoscribe Technologies, Inc., 628 F.3d 1359 (Fed. Cir. 2010) LINN, Lourie, Friedman No inequitable conduct mistake or exercise of poor judgment does not support an inference of intent to deceive. Ring Plus, Inc. v. Cingular Wireless Corp., 614 F.3d 1354 (Fed. Cir. 2010) Cancer Research Technology Ltd. v. Barr Laboratories, Inc., 625 F.3d 724 (Fed.Cir. 2010) MOORE, Lourie, Gajarsa LOURIE, Newman, Prost)(Prost dissenting No inequitable conduct No inequitable conduct If multiple reasonable inferences, error to overlook one in favor of another equally reasonable inference. Without direct evidence of intent to deceive, then intent to deceive satisfied if it is the "only reasonable inference. 27

28 SINGLE MOST REASONABLE INFERENCE Ring Plus, Inc. v. Cingular Wireless Corp., 614 F.3d 1354 (Fed. Cir. 2010)(MOORE, Lourie, Gajarsa) Basis for inequitable conduct allegation: misrepresentation of two references in both the Background of the Invention and in an amendment. Background: identified references and stated there is no algorithm or software proposed for operating the telephone system. Amendment: claimed system different from references because it only generates [a] message when the phone line between the caller and the recipient is not busy. DC: references disclose software-based algorithms and playing a sound presentation only when the recipient line is not busy. -> material misrepresentations. Single most reasonable inference was intent to deceive. 28

29 Ring Plus (con t) SINGLE MOST REASONABLE INFERENCE FC: Any inference of deceptive intent must be the single most reasonable inference able to be drawn from the evidence to meet the clear and convincing standard. Star Scientific, 537 F.3d at Whenever evidence proffered to show either materiality or intent is susceptible of multiple reasonable inferences, a district court clearly errs in overlooking one inference in favor of another equally reasonable inference. [quoting Scanner Techs.] Mr. Schaap's testimony gives rise to the inference that applicants believed that Strietzel and Sleevi did not disclose software for operating a telephone system. Based on the evidence of record, this inference is as reasonable as the court's inference of deceptive intent, particularly in view of the references' ambiguity as to operating software. Thus, the district court clearly erred in finding clear and convincing evidence of deceptive intent. 29

30 A NON-FRAUDULENT REASON FOR NON-DISCLOSURE? Cancer Research Technology Ltd. v. Barr Laboratories, Inc., 625 F.3d 724 (Fed.Cir. 2010) FC: Reversed judgment of inequitable conduct. an equally reasonable inference to draw from the evidence is that Stevens viewed publication of all the data as important to his career as a scientist but did not appreciate their potential importance to the patentability of the tetrazine derivatives patent claims. 30

31 CASES WHERE COURT FOUND INEQUITABLE CONDUCT BUT MIGHT HAVE COME OUT DIFFERENTLY IF ONLY REASONABLE INFERENCE APPLIED Cargill, Inc. v. Canbra Foods (Fed. Cir. 2007): Patentee argued nondisclosed test results not comparable. Pharmacia Corp. v. Par Pharmaceutical, Inc. (Fed. Cir. 2005): Patentee argued mistake in verb tense was accidental, and declarant had good faith belief in statements made in declaration even though not based on actual tests. Bristol-Myers Squibb v. Rhône-Poulenc Rorer (Fed. Cir. 2003) : Attorney testified believed nondisclosed article was irrelevant. Aventis v. Amphastar (Fed. Cir. 2008). Patentee explained why comparison at different dosages reasonable. Taltech Ltd. v. Esquel Enterprises Ltd. (Fed. Cir. 2010). Gajarsa, dissenting: district court drew an inference of bad faith despite an equally plausible, and likely more reasonable, inference of good faith. Onstar, LLC v. Micral, Inc. (N.D.Ohio April 7, 2010). Patentee believed that citing to the 389 application in the 663 Rule 47(b) Petition was sufficient to disclose the material information to the Patent Office. 31

32 INEQUITABLE CONDUCT: POST-THERASENSE Inequitable Conduct Withholding material information Concealing third party s involvement in claimed invention Submission of false declaration Affirmative misrepresentations of prior art and test results No Inequitable Conduct Failure to disclose prior art references was a mistake that was corrected upon discovery Disclosure of prior art reference buried in an IDS; good faith explanation Compliance with standard PTO procedure for delayed payment, though delay may not have been unintentional 32

33 Aventis Pharma S.A. v. Hospira, Inc., 675 F.3d 1324 (Fed. Cir. 2012) FEDERAL CIRCUIT: INEQUITABLE CONDUCT POST-THERASENSE PROST, Linn, Dyk Affirmed inequitable conduct Withheld references material No credible explanation why disclosed to FDA but not PTO Apotex Inc. v. Cephalon, Inc., 2011 WL (E.D. Pa. 2011), aff d without opinion (Fed. Cir. April 8, 2013) Intellect Wireless, Inc. v. HTC Corp., 732 F.3d 1339 (Fed. Cir. 2013) PER CURIAM (Rader, Lourie, O Malley MOORE, Prost, O Malley Affirmed inequitable conduct Affirmed inequitable conduct Concealed supplier s involvement in claimed invention Submission of false declaration = affirmative egregious misconduct No alternative explanation why told PTO it modified Lafon s modafinil when it did not. Query whether decided same way if claims subject to AIA 102 (secret sale not prior art) Pattern of conduct showed intent to deceive: similar false statements in related patents; never notified examiner of error in the declaration or attempted to correct it. Ohio Willow Wood Co. v. Alps South, LLC, 735 F.3d 1333 (Fed. Cir. 2013) REYNA, Bryson, Dyk Reversed SJ of no inequitable conduct Failure to disclose material information = submitting a false affidavit OWW withheld various pieces of material information and had no reasonable explanation for the several misrepresentations it made to the PTO. 33

34 FEDERAL CIRCUIT: INEQUITABLE CONDUCT POST-THERASENSE (con t) Apotex, Inc. v. UCB, Inc., 763 F.3d 1354 (Fed. Cir. 2014) REYNA, Wallach, and Hughes Affirmed inequitable conduct Affirmative misrepresentations of prior art and test results Pattern of conduct showed intent to deceive. American Calcar, Inc. v. American Honda Motor Co., Inc., 768 F.3d 1185 (Fed. Cir. 2014) PROST, Wallach Dissent - Newman Affirmed inequitable conduct Failure to disclose material information Mr. Obradovich deliberately decided to withhold the information from the PTO. 34

35 DISTRICT COURT: INEQUITABLE CONDUCT POST-THERASENSE Worldwide Home Prods., Inc. v. Time, Inc., 1:11-cv (S.D.N.Y. Sept. 30, 2013)(SUMMARY JUDGMENT) Swain Misrepresentation about prior art was basis for overcoming prior art rejection ( but for materiality) Defendants counsel alerted applicant of inaccurate description prior to the Notice of Allowance, but applicant did not correct ->specific intent to deceive is single most reasonable inference Ohio Willow Wood Co. v. Alps South LLC, 2:04-cv (S.D.Ohio Sept. 24, 2014) Frost Withheld material information and did not correct misrepresentation the most reasonable inference to be drawn from the evidence is that OWW acted with deceptive intent in misrepresenting the existence of evidence corroborating the [expert] testimony. Graphics Properties Holdings, Inc. v. Google, Inc., 2014 WL (D.Del. Nov. 20, 2014) Stark Withheld a Federal Circuit decision on the disclosure of a parent patent specification undisputed that the examiner was not given actual notice of the Federal Circuit's subsequent decision. Therefore, the court allowed amendment of the complaint to allege inequitable conduct. 35

36 FEDERAL CIRCUIT: NO INEQUITABLE CONDUCT POST-THERASENSE Network Signature, Inc. v. State Farm Mut. Auto. Ins. Co., 731 F. 3d 1239 (Fed. Cir. 2013) 1st Media, LLC v. Electronic Arts, Inc., 694 F. 3d 1367 (Fed. Cir. 2012) Cordis Corp. v. Boston Scientific Corp., 658 F.3d 1347 (Fed. Cir. 2011) Outside the Box Innovations, LLC v. Travel Caddy, Inc., 695 F.3d 1285 (Fed. Cir. 2012) AstraZeneca v. Aurobindo Pharma Ltd., 703 F. 3d 511 (Fed. Cir. 2012) NEWMAN, Dissent - Clevenger LINN, Wallach, Rader GAJARSA, Bryson, Mayer PER CURIAM, Newman, Prost, O Malley Concurring-inpart/dissentingin-part - Newman Reversed SJ of inequitable conduct Reversed SJ of inequitable conduct Affirmed no inequitable conduct Reversed inequitable conduct finding No inequitable conduct affirmed Use of PTO form to pay maintenance fee despite intentional decision to abandon Withholding 3 material references from related prosecution Initially failed to disclose prior art; disclosed later without emphasis Failure to disclose litigation of related patent; incorrect claim of small entity status Failure to disclose prior art references; disclosed upon discovery in reissue Patent owner acted promptly upon learning of commercial interest and standard form does not require explanation No intent - no evidence of deliberate decision to withhold references intent to deceive was not the single most reasonable inference Validity not at issue in litigation at the time; good faith mistake on small entity status; no evidence of deceptive intent No deceptive intent, only genuine mistakes that did not negate patentability 36

37 POST-THERASENSE: Aventis Pharma S.A. v. Hospira, Inc., 675 F.3d 1324 (Fed. Cir. 2012) Inequitable conduct upheld District court: Inequitable conduct. References were material to patentability and the inventor intentionally withheld them with the intent to deceive the USPTO. Sanofi s appeal: Inventor explained why he did not disclose the references, so intent to deceive was not the single most reasonable inference. Inventor testified he believed failed experiments did not have to be disclosed. References were not material to patentability because they were duplicative of references before the PTO. Federal Circuit: Affirmed. Withheld references were material. Inventor testimony as to why did not disclose references (experimental failures) was found not credible. Inventor made sure reference disclosed in an article and gave to FDA, but failed to disclose to the PTO. Specific intent to deceive. 37

38 POST-THERASENSE: Apotex Inc. v. Cephalon, Inc., 2011 WL (E.D. Pa. 2011), aff d w/o op. (Fed. Cir. April 8, 2013) Inequitable conduct upheld District Court: Inequitable conduct. Cephalon RE 516 patent for modafinil (Provigil ) Cephalon never disclosed to the PTO about Lafon s small particle modafinil (Batch 003) : (1) Lafon was the manufacturer of Batch 003; (2) Lafon measured the particle size of that batch prior to providing it to Cephalon (would have demonstrated derivation); (3) Lafon manufactured and tested several modafinil API batches and tablet lots that fell within the claim limitations; or (4) that the two companies, Lafon and Cephalon, had both supply and license agreements (would have established anticipation and on-sale bar). 38

39 POST-THERASENSE: Apotex Inc. v. Cephalon, Inc., 2011 WL (E.D. Pa. 2011), aff d w/o op. (Fed. Cir. April 8, 2013) Inequitable conduct upheld Materiality: Established by finding of invalidity based on Lafon. Cephalon failed to disclose to the PTO any of the information relating to Lafon's substantial role in Cephalon's claimed invention. Had the PTO been aware of this information, it would not have allowed the patent to issue. Intent: Established by concealment and misrepresentations the complete concealment of another company's extensive involvement in the product which is the subject of the claimed invention definitively establishes Cephalon's deception by clear and convincing evidence. Affirmative misrepresentation: told PTO it modified Lafon s modafinil when it did not. In response to obviousness rejections, Cephalon asserted that the prior art and studies on that art would not have motivated one of ordinary skill in the art to modify or manipulate the particle size of the drug substance like Cephalon's inventors had done. This response not only served to further conceal Lafon's role... but was an affirmative misrepresentation.... Without a logical explanation for making such misrepresentations... Cephalon made those unsupported claims with the intention of convincing the patent examiner to change his mind and issue the patent. 39

40 POST-THERASENSE: Apotex Inc. v. Cephalon, Inc., 2011 WL (E.D. Pa. 2011), aff d w/o op. (Fed. Cir. April 8, 2013) Inequitable conduct upheld Intent (con t) concern over Lafon's confidential information does not explain Cephalon's decision to omit any mention of Lafon's role in its application. No alternative explanation for these misrepresentations and omissions. given the unmistakable importance of the Lafon information, the inexplicable concealment of that information from the PTO, even after the examiner's obviousness challenge unequivocally alerted Cephalon to its importance, as well as the direct misrepresentations made by Cephalon to the PTO, the only reasonable inference to be drawn is that Cephalon made a deliberate choice to deceive the PTO... and justifies rendering the patent unenforceable. 40

41 POST-THERASENSE: Intellect Wireless, Inc. v. HTC Corp., 732 F.3d 1339 (Fed. Cir. 2013) Inequitable conduct upheld District Court: Unenforceable for inequitable conduct. Materiality: declaration containing false statements Said actually reduced to practice but never did affirmative egregious misconduct Intent: inventor had specific intent to deceive the PTO. pattern of false and misleading statements during prosecution of related patents Inventor s explanations for the misrepresentations during prosecution of the asserted patents were not credible. Intellect s appeal: misrepresentations were corrected and no specific intent to deceive. Federal Circuit: affirmed 41

42 POST-THERASENSE: Intellect Wireless, Inc. v. HTC Corp., 732 F.3d 1339 (Fed. Cir. 2013) Inequitable conduct upheld Federal Circuit: Materiality Cited Rohm & Haas Co. v. Crystal Chem. Co., 722 F.2d 1556, 1572 (Fed. Cir. 1983): must expressly advise the PTO of [the misrepresentation s] existence, stating specifically wherein it resides what the actual facts are and the applicant must take the necessary action... openly. It does not suffice that one knowing of misrepresentations in an application or in its prosecution merely supplies the examiner with accurate facts without calling his attention to the untrue or misleading assertions sought to be overcome, leaving him to formulate his own conclusions. In this case, [a]t best, the revised declaration obfuscated the truth. the declaration nowhere expressly stated the actual facts, which are that neither [Mr. Henderson] nor Intellect Wireless actually reduced to practice the inventions claimed in the asserted patents. Nowhere did the declaration openly advise the PTO of Mr. Henderson s misrepresentations We note that Therasense in no way modified Rohm & Haas s holding that the materiality prong of inequitable conduct is met when an applicant files a false affidavit and fails to cure the misconduct. Therasense expressly cited Rohm & Haas with approval and made clear that filing a false affidavit is exactly the sort of affirmative act[] of egregious misconduct that renders the misconduct material. 42

43 POST-THERASENSE: Intellect Wireless, Inc. v. HTC Corp., 732 F.3d 1339 (Fed. Cir. 2013) Inequitable conduct upheld Federal Circuit: Intent Submission of an affidavit containing fabricated examples of actual reduction to practice in order to overcome a prior art reference raises a strong inference of intent to deceive. See Rohm & Haas, 722 F.2d at Further, Mr. Henderson engaged in a pattern of deceit, which makes the inference stronger. the district court s finding of intent could be affirmed based on the content of the two declarations. The completely false statements in a first declaration were followed by a replacement declaration that, rather than expressly admitting the earlier falsity, dances around the truth. Thus, the district court did not clearly err in concluding that specific intent to deceive the PTO was the most reasonable inference from Mr. Henderson s conduct. The district court also did not err when it decided not to credit Mr. Henderson s explanations for the repeated submission of false affidavits. The pattern of deceit supports the court s finding that Mr. Henderson s explanations for making false statements during prosecution of the asserted patents are not credible. 43

44 POST-THERASENSE: Ohio Willow Wood Co. v. Alps South, LLC, 735 F.3d 1333 (Fed. Cir. 2013) Fact issue precluded summary judgment of no inequitable conduct Alleged inequitable conduct of OWW counsel: failing to list all inventors on the patent application; withholding disclosure of prior art; and affirmative misrepresentations about prior art and deposition testimony. District Court: Summary judgment of no inequitable conduct. Federal Circuit: Reversed and remanded Failure to disclose material information tantamount to submitting a false affidavit. OWW withheld various pieces of material information and had no reasonable explanation for the several misrepresentations it made to the PTO. 44

45 POST-THERASENSE: Ohio Willow Wood Co. v. Alps South, LLC, 2014 WL (S.D. Ohio Sept. 24, 2014) Unenforceable for inequitable conduct On Remand at the District Court: unenforceable for inequitable conduct. OWW withheld or misrepresented but-for material information misrepresentations about corroborating evidence Misrepresentations were intentional. OWW employee s explanations not credible: It is inconceivable that the OWW employee responsible for its patent litigation did not have access to confidential information that could cause the Court to invalidate one of OWW s most important patents simply because he did not sign the Protective Order. That testimony is particularly not credible in this instance because the material at issue was not marked Confidential or Confidential Attorney s Eyes Only. In allowing Mr. Gayan [OWW s attorney] to repeatedly argue (on OWW s behalf) that Mr. Comtesse was confused and isolated in his position that the pre-critical date SSGL did not allow gel bleed-through, when in fact other individuals shared and corroborated that position, OWW went beyond any good faith defense the Protective Order provides. 45

46 POST-THERASENSE: Apotex, Inc. v. UCB, Inc., 763 F.3d 1354 (Fed. Cir. 2014) Inequitable conduct upheld District Court: Unenforceable for inequitable conduct. Misrepresentations Dr. Sherman was aware that Univasc was made according to his claimed process, concealed this knowledge from the PTO, and misrepresented the nature of Univasc and the prior art. Withheld relevant prior art and submitted results of experiments that he never conducted (written in past tense). Materiality Examiner adopted Dr. Sherman s repeated misrepresentations verbatim and would not have allowed the claims had he been aware that Univasc contained moexipril magnesium. Falsification of examples alone not sufficiently material, it nonetheless added to the materiality determination when viewed in conjunction with other misrepresentations and omissions. Egregious misconduct Dr. Sherman abused the patent system by targeting a competitor s existing and widely available product and seeking to obtain a patent on it through lies and deception for the purpose of suing that competitor. Intent: single most reasonable inference that could be drawn from the evidence was that Dr. Sherman intended to deceive the PTO. 46

47 POST-THERASENSE: Apotex, Inc. v. UCB, Inc., 763 F.3d 1354 (Fed. Cir. 2014) Inequitable conduct upheld Federal Circuit: Affirmed No abuse of discretion Materiality: Dr. Sherman responsible. Affirmative misrepresentations of material facts. but-for materiality: rejections were based on the very same prior art that is the subject of Dr. Sherman s misrepresentations. Intent: Deceptive intent is single most reasonable inference [Dr. Sherman] knew enough to recognize that he was crossing the line from legitimate advocacy to genuine misrepresentation of material facts. 47

48 POST-THERASENSE: American Calcar, Inc. v. American Honda Motor Co., Inc., 768 F.3d 1185 (Fed. Cir. 2014) Inequitable conduct upheld Inequitable conduct allegation: Co-inventor and Calcar s founder, Mr. Obradovich, disclosed the existence of the 1996 Acura RL ( 96RL ) navigation system, [but] he intentionally did not disclose additional information [owner s manual and photographs] that would have led the PTO to deny the patent application. District Court: unenforceable for inequitable conduct. but-for material: it would have been obvious to a person of ordinary skill in the art to include different information in the 96RL navigation system. Intent: Mr. Obradovich knew the information was material [and] the single reasonable inference was that Mr. Obradovich deliberately decided to withhold the information from the PTO. expressly rejected Calcar s suggestion that it would have been equally reasonable for the district court to infer that Mr. Obradovich s actions were merely negligent or grossly negligent. 48

49 POST-THERASENSE: American Calcar, Inc. v. American Honda Motor Co., Inc., 768 F.3d 1185 (Fed. Cir. 2014) Inequitable conduct upheld Federal Circuit: Affirmed. affirm the district court s determination that the undisclosed operational details of the 96RL navigation system are material to the patentability of the 465 and 795 patents. Partial disclosure of material information about the prior art to the PTO cannot absolve a patentee of intent if the disclosure is intentionally selective. District court did not abuse discretion. Newman dissented because materials at issue were provided to the PTO during reexamination, and patentability was confirmed. 49

50 POST-THERASENSE: Worldwide Home Prods., Inc. v. Time, Inc., 1:11-cv (S.D.N.Y. Sept. 30, 2013) Unenforceable for inequitable conduct Inequitable conduct allegation: Patent counsel knowingly provided false information about the prior art to the examiner. Submitted low-resolution photo rather than physical sample of prior art; could not tell from photo that hangers had claimed feature. Before patent allowed, defendant sent patent counsel high-resolution photograph of prior art hanger and suggested disclosure to the PTO. 50

51 POST-THERASENSE: Worldwide Home Prods., Inc. v. Time, Inc., 1:11-cv (S.D.N.Y. Sept. 30, 2013) Unenforceable for Inequitable conduct Summary judgment of inequitable conduct granted Materiality: It cannot reasonably be argued that the Merrick Hangers would not have been material to the PTO's decision on the Application, because it is undisputed that the Merrick Reference depicted the Merrick Hangers and the patent examiner initially rejected the Application on the basis of the Merrick Reference. Intent: the only reasonable inference to be drawn from the undisputed facts is that [the attorney] intended to deceive the PTO examiner about a reference he knew was material and that he in fact did so. he filed the Amended Application which distinguished the Application from the Merrick Reference on the basis of non-abutment of the cascade hooks of the hangers portrayed in the Merrick Reference. It is also undisputed that the top and bottom surfaces of the cascade hook members of the Merrick Hangers do in fact abut when nested, and that Mr. Sonnabend had Merrick Hangers in his possession at the time he spoke to the PTO examiner. His sophistry concerning the logic underlying his behavior is completely inconsistent with that behavior and is thus insufficient, in light of the compelling circumstantial evidence that he provided false information to the examiner, to frame a genuine issue of material fact regarding his intent to deceive the examiner. 51

52 POST-THERASENSE: Graphics Properties Holdings, Inc. v. Google, Inc., 2014 WL (D.Del. Nov. 20, 2014) Motion to Amend Complaint to assert inequitable conduct granted District court granted Google s motion for leave to amend their answer to add a defense of unenforceability due to GPH's inequitable conduct. Silicon Graphics, Inc. v. ATI Techs., Inc., 2007 WL , at *6 7 (W.D. Wis. Oct. 15, 2007) construed scan conversion in U.S. Pat. No. 6,650,327 to mean a process that specifies which pixels of the display screen belong to which primitives on an entirely floating point basis. Federal Circuit affirmed in Silicon Graphics, Inc. v. ATI Techs., Inc., 607 F.3d 784, (Fed.Cir. June 4, 2010): specification did not disclose or support scan conversion in any format except floating point. Patent at issue is a continuation of the 327 patent. 52

53 POST-THERASENSE: Graphics Properties Holdings, Inc. v. Google, Inc., 2014 WL (D.Del. Nov. 20, 2014) Motion to Amend Complaint to assert Inequitable Conduct Granted Google alleges that GPH and its attorneys withheld the Federal Circuit Order with the intent to deceive the PTO during the prosecution of the continuation. Application claimed a scan converter being configured to scan convert data received at the input, at least a portion of the data received at the input being in floating point format. Had the PTO known about the Federal Circuit Order, it would have concluded (i) the claims lacked written description support, or (ii) the claims were not entitled to the priority date of the 327 patent (June 16, 1998) but rather could claim priority only to the effective filing date of their application (January 11, 2011), which would have led the PTO to consider an expanded range of prior art systems and publications (dated after June 16, 1998 but before January 11, 2011), which would in turn have then compelled the PTO to reject the claims. 53

54 POST-THERASENSE: Graphics Properties Holdings, Inc. v. Google, Inc., 2014 WL (D.Del. Nov. 20, 2014) Motion to Amend Complaint to assert Inequitable Conduct Granted GPH argued amendment futile because it provided the examiner with notice of the District Court Order. District Court: undisputed that the examiner was not given actual notice of the Federal Circuit's subsequent decision. According to Google, Federal Circuit Order contains adverse statements not contained in the District Court Order. 54

55 POST-THERASENSE: Network Signatures, Inc. v. State Farm Mut. Auto. Ins. Co., 731 F. 3d 1239 (Fed. Cir. 2013) Reversed MSJ of inequitable conduct District Court: Granted summary judgment of inequitable conduct: Owner s standard practice not to pay maintenance fees if no commercial interest at 7.5 years; Intentionally abandoned; Learned of commercial interest and petitioned for late payment of maintenance fees, stating the delay was unintentional without setting for the details of how the delay occurred; Material and Intentional. Federal Circuit: Reversed and remanded: No requirement for explanation on standard form; Mr Karasek acted promptly; Mr. Karasek's compliance with the standard PTO procedure for delayed payment, using the PTO form for delayed payment, does not provide clear and convincing evidence of withholding of material information with the intent to deceive the Director. On matters unrelated to the substantive criteria of patentability, but within the authority of the Director, it is almost surely preferable for a reviewing court not to involve itself in the minutiae of Patent Office proceedings and to second-guess the Patent Office on procedural issues at every turn. 55

56 POST-THERASENSE: 1st Media, LLC v. Electronic Arts, Inc., 694 F. 3d 1367 (Fed. Cir. 2012) Reversed MSJ of inequitable conduct District Court: inequitable conduct (decision before Therasense). Inventor and attorney withheld 3 material references and information about PTO rejections in 2 related prosecutions. Following pre-therasense precedent, district court did not discuss or consider whether any deliberate decision was made to withhold the references from the PTO. Federal Circuit: Reversed (decision after Therasense) Intent: No evidence of deliberate decision to withhold references. Knowledge of the reference and knowledge of materiality alone are insufficient after Therasense to show an intent to deceive. Moreover, it is not enough to argue carelessness, lack of attention, poor docketing or cross-referencing, or anything else that might be considered negligent or even grossly negligent. 56

57 POST-THERASENSE: Cordis Corp. v. Boston Scientific Corp., 658 F.3d 1347 (Fed. Cir. 2011) No inequitable conduct upheld District Court: not unenforceable for inequitable conduct. Patentees failed to disclose prior art reference, and when finally did disclose, buried it. BUT, concluded that intent to deceive was not the single most reasonable inference. Federal Circuit: Affirmed based on Therasense standard ( specific intent to deceive is the single most reasonable inference ). Patentee relied on communication from attorney; once found out about importance of prior art reference, disclosed it (albeit without emphasis). Threshold level of intent to deceive met, but that proof rebutted by good faith explanation. 57

58 POST-THERASENSE: Outside the Box Innovations, LLC v. Travel Caddy, Inc., 695 F.3d 1285 (Fed. Cir. 2012) Inequitable conduct reversed District Court: unenforceable for inequitable conduct. Failure to disclose litigation of related patent although only infringement of the 992 patent had been placed at issue, it was clear that the issue of validity would likely arise in the litigation. The court inferred deceptive intent from the fact of non-disclosure[.] Incorrect claim of small entity status Travel Caddy met criteria for small entity, but could not claim status because of commercial arrangement with large entity. Travel Caddy's false claim of small entity status was undoubtedly material, and intent to deceive found because Nelson, an experienced patent attorney, is responsible for being familiar with such standards. Under these circumstances, the Court finds that an inference of Travel Caddy's intent to deceive the PTO has been established. 58

59 POST-THERASENSE: Outside the Box Innovations, LLC v. Travel Caddy, Inc., 695 F.3d 1285 (Fed. Cir. 2012) Inequitable conduct reversed Federal Circuit: Reversed. Failure to disclose litigation not material there was no citation of prior art, nor any pleading of invalidity or unpatentability in the 992 complaint as it existed during pendency of the 104 application. There was no evidence on which to base an inference of deceptive intent. Small entity status no evidence that small entity status was deliberately falsely claimed. 37 C.F.R provides that good faith mistakes can be remedied by making a deficiency payment. 59

60 POST-THERASENSE: In re Rosuvastatin Calcium Patent Litigation, AstraZeneca v. Aurobindo Pharma Ltd, 703 F. 3d 511 (Fed. Cir. 2012) No inequitable conduct upheld District Court: Not unenforceable for inequitable conduct. Case involved Crestor (rosuvastatin). Two in-house patent staff did not disclose prior art references. Patentee filed reissue application as soon as discovered error. Federal Circuit: Affirmed. Reference compounds were sufficiently similar in structure to warrant citation, even though they did not negate the patentability of rosuvastatin. No deceptive intent: no more than a string of mishaps, mistakes, misapprehensions and misjudgments on the part of inexperienced and overworked individuals. equally plausible that Mr. Shibata believed the requirements of the United States patent prosecution had been met. 60

61 SUPPLEMENTAL EXAMINATION: BASIS OF SNQP REMOVED AS BASIS FOR ALLEGATION OF INEQUITABLE CONDUCT: THE EFFECT IN GENERAL. A patent shall not be held unenforceable on the basis of conduct relating to information that had not been considered, was inadequately considered, or was incorrect in a prior examination of the patent if the information was considered, reconsidered, or corrected during a supplemental examination of the patent. The making of a request under subsection (a), or the absence thereof, shall not be relevant to enforceability of the patent under section 282. [ 257(c)(1), 125 STAT. 326] Is this a holy grail of a pre-lit purge of inequitable conduct under a but-for materiality standard? 61

62 Allows submission of prior art in your own patents Restrictions: SUPPLEMENTAL EXAMINATION ( shall apply to any patent issued before, on, or after [Sept. 16, 2012]) Does not apply against allegations already raised in district court or ANDA notice para. IV before date of filing request ( 257(c)(2)(A)), or Shall not apply to any defenses raised in ITC litigation/district court litigation unless SE and any reexam ordered there from is finished before the date on which the action is brought ( 257(c)(2)(B)). Patent owners: think very carefully about the timing of any effort at supplemental examination if there is a desire to enforce the patent in the foreseeable future. A reexamination may need to be appealed to get the patent out. Thus, it may mean delaying any effort to enforce the patent for one or more years. 62

63 SUPPLEMENTAL EXAMINATION ( shall apply to any patent issued before, on, or after [Sept. 16, 2012]) New 257(a): A patent owner may request supplemental examination of a patent in the Office to consider, reconsider, or correct information believed to be relevant to the patent[.] Prior art? Inconsistent positions? Errors? Therasense: Rule 56? Importantly, uses term relevant not material. Request does not mean admission of materiality. 63

64 SUPPLEMENTAL EXAMINATION: HEADING SOUTH 257(f): Nothing in this section shall be construed (1) to preclude the imposition of sanctions based upon criminal or antitrust laws ; (2) to limit the authority of the Director to investigate issues of possible misconduct and impose sanctions for misconduct in connection with matters or proceedings before the Office; or (3) to limit the authority of the Director to promulgate regulations under chapter 3 relating to sanctions for misconduct by representatives practicing before the Office. 64

65 SUPPLEMENTAL EXAMINATION: THE SOUTH POLE? Fraud exception [ 257(e)] (e) FRAUD. If the Director becomes aware, during the course of a supplemental examination or reexamination proceeding, that a material fraud on the Office may have been committed in connection with the patent that is the subject of the supplemental examination the Director shall also refer the matter to the Attorney General for such further action as the Attorney General may deem appropriate. 65

66 SUPPLEMENTAL EXAMINATION FINAL RULES Request cannot have more than 12 items believed to be relevant to the patent. May file more than one supplemental examination request at a time (b) A request for supplemental examination must include: (5) A separate, detailed explanation of the relevance and manner of applying each item of information to each claim of the patent for which supplemental examination is requested (e) No interviews. (f) No amendments. 66

67 SUPPLEMENTAL EXAMINATION STATS SO FAR Source: 67

68 Supp Exam Stats from USPTO Annual Report (as of Sept. 30, 2014)

69 Supp Exam Stats from USPTO Annual Report (as of Sept. 30, 2014)