Inequitable Conduct Judicial Developments
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1 Inequitable Conduct Judicial Developments Duke Patent Law Institute May 16, 2013 Presented by Tom Irving Copyright Finnegan 2013
2 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. 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. Thus, the author and Finnegan, Henderson, Farabow, Garrett & Dunner, LLP cannot be bound either philosophically or as representatives of their 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 author and Finnegan, Henderson, Farabow, Garrett & Dunner, LLP. While every attempt was made to ensure that these materials are accurate, errors or omissions may be contained herein, for which any liability is disclaimed.
3 The AIA deals only indirectly with inequitable conduct through the new supplemental examination procedure. US PTO Proposed Rule changing the standard of materiality (discussed infra), presently suspended indefinitely. For right 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.
4 Withheld References Aventis Pharma S.A. v. Hospira, Inc., 675 F.3d 1324 (Fed. Cir. 2012) District court: Inequitable conduct. 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. Ergo, inventor had specific intent to deceive. 4
5 Apotex Inc. v. Cephalon, Inc., 2011 WL (E.D. Pa. 2011), aff d without opinion (Fed. Cir. April 8, 2013) Cephalon RE 516 patent for modafinil (Provigil ) DC: Inequitable conduct. Withheld Information 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). 5
6 Withheld Information Apotex (con t) Finding of invalidity based on Lafon establishes materiality. 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 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. 6
7 Apotex (con t) Withheld Information 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. 7
8 Withheld Information Apotex (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. Apotex proved that Cephalon acted with the specific intent to deceive the PTO. 8
9 Apotex (con t) Withheld Information 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. 9
10 False Rule 131 Declaration Intellect Wireless, Inc. v. HTC Corp., (ND Ill Sept. 6, 2012) Allegation: inventor submitted false Rule 131 declarations to swear behind prior art; allegedly false statements relate to actual reduction to practice, a demonstration of the device that allegedly performed the invention and false statements in support of proof of diligence. 10
11 False Rule 131 Declaration Intellect Wireless (con t) Patents unenforceable declarations falsely describe actual reduction to practice, a demonstration, and false statements in support of diligence. No proper action was ever taken to correct the misrepresentations made to the PTO. 11
12 False Rule 131 Declaration Intellect Wireless (con t) Patents unenforceable Intent: The evidence strongly supports the existence of an intent to deceive, rather than truth or an inadvertent mistake, as the single most reasonable inference to be drawn from the facts. Material: The declarations and the contents of the declarations were clearly intended to overcome the prior art references cited The declarations were required to obtain the allowance of the patents-in-suit The declarations and the false statements were material. 12
13 USPTO PROPOSED RULE CHANGE 76 Fed. Reg. 43,631 (July 21, 2011), Revision of the Materiality to Patentability Standard for the Duty To Disclose Information in Patent Applications 1.56 Duty to disclose information material to patentability. (b) Information is material to patentability if it is material under the standard set forth in Therasense, Inc. v.becton, Dickinson & Co., F.3d (Fed. Cir. 2011). Information is material to patentability 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. 13
14 USPTO PROPOSED RULE CHANGE 76 Fed. Reg. 43,631 (July 21, 2011), Revision of the Materiality to Patentability Standard for the Duty To Disclose Information in Patent Applications Information material to patentability in ex parte reexamination and inter partes reexamination proceedings. (b) Information is material to patentability if it is material under the standard set forth in Therasense, Inc. v. Becton, Dickinson & Co., F.3d (Fed. Cir. 2011). Information is material to patentability under Therasense if: (1) The Office would not find a claim patentable 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 patent owner engages in affirmative egregious misconduct before the Office as to the information. 14
15 WHAT SHOULD A PRACTITIONER DO? Note also, USPTO Rule (c) A practitioner shall disclose to the Office information necessary to comply with applicable duty of disclosure provisions. Rule 56 change suspended while USPTO deals with all the rule-making of the AIA. Probably most practitioners won t change Rule 56 disclosure practices very much for now. 15
16 Thank you. Tom Irving Finnegan, Henderson, Farabow, Garrett & Dunner, LLP 901 New York Avenue, NW Washington, DC
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