Inequitable Conduct: Evolution and Considerations

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1 Inequitable Conduct: Evolution and Considerations By Kirstin Stoll-DeBell and Rachel Hammond Inequitable conduct is a breach of a patent applicant's, or attorney s, duty of candor and good faith during patent prosecution before the U.S. Patent and Trademark Office ( Patent Office ). It is an affirmative defense against a charge of patent infringement and carries with it very harsh consequences, including rendering all claims of the patent unenforceable (even if they are found to be valid and infringed) and the potential for professional sanctions against an attorney who is found to have committed inequitable conduct. Over time, the Federal Circuit raised the pleading standard and legal standard for inequitable conduct claims to limit this defense, however, several cases still succeed every year. The following remarks aim to summarize and explain aspects and impacts of inequitable conduct claims. The discussion is divided into the following sections: history, the current rule, case law applications, and considerations for avoidance. The Origins of Inequitable Conduct History The emergence of inequitable conduct is attributed to three Supreme Court cases: Keystone, Hazel-Atlas, and Precision. Precision Instrument Manufacturing Co. v. Automotive Maintenance Machinery Co., 324 U.S. 806 (1945); Hazel-Atlas Glass Co. v. Hartford-Empire Co., 322 U.S. 238 (1944) (abrogated on other grounds by Standard Oil Co. v. United States, 429 U.S. 17 (1976)); Keystone Driller Co. v. General Excavator Co., 290 U.S. 240 (1933). In all three of these cases, the patentees performed egregious conduct when dealing with the Patent Office. Precision, 324 U.S. 806; Hazel-Atlas, 322 U.S. 238; Keystone, 290 U.S. 240.These cases resulted with the Supreme Court founding the doctrine of unclean hands, which eventually evolved into the inequitable conduct defense. See Precision, 324 U.S. at 818; Therasense Inc. v. Becton, Dickinson & Co., 649 F.3d 1276, 1285 (Fed. Cir. 2011). However, because the three founding cases all involved egregious conduct, the Supreme Court did not formulate a governing rule for a finding of inequitable conduct. Swanson, Robert D. The Exergen and Therasense effects. Stanford Law Review, Mar. 2014, p (citing Robert J. Goldman, Evolution of the Inequitable Conduct Defense in Patent Litigation, 7 Harv. J.L. & Tech. 37, (1993)). Due to a lack of guidance, district courts began broadening the scope of the inequitable conduct defense over time. Goldman, supra note 30, at 52, Eventually, leading up to Therasense, the inequitable conduct doctrine engulfed conduct up to and including nondisclosure of information during prosecution. Therasense, 649 F.3d at 1287, By the 1990s, the habit of charging inequitable conduct in almost every major patent case ha[d] [become] an absolute plague in patent litigation. Burlington Indus., Inc. v. Dayco Corp., 849 F.2d 1418, 1422, 7 U.S.P.Q.2d 1158, 1161 (Fed. Cir. 1988). 1

2 A New Era: The Exergen and Therasense Heightened Standards Two Federal Circuit cases sought to limit the inequitable conduct defense: Exergen and Therasense. Therasense, 649 F.3d 1276; Exergen Corp. v. Wal-Mart Stores, Inc., 575 F.3d 1312 (Fed. Cir. 2009). While Exergen heightened the pleading standard for inequitable conduct, Therasense raised the legal standard. Therasense, 649 F.3d at 1287, (citing Star Scientific Inc. v. R.J. Reynolds Tobacco Co., 537 F.3d 1357, 1365 (Fed.Cir.2008)); Exergen, 575 F.3d at Although some believe that the Federal Circuit overstepped their bounds in Exergen and Therasense, the heightened standards remain to be good law. See Regeneron Pharms., Inc. v. Merus N.V., 864 F.3d 1343 (Fed. Cir. 2017); Swanson, supra; Schneider, James J. Therasense-less: How The Federal Circuit Let Policy Overtake Precedent in Therasense, Inc. v. Becton, Dickinson & Co. 53 B.C. L. Rev. E-Supplement 223, In addition to a change in common law, Therasense prompted a change in Rule 56: Duty to Disclose Information Material to Patentability. Proposed Revision, 76 Fed. Reg. 43,631 (July 21, 2011). Rule 56 was changed to adopt the but-for materiality standard established by Therasense. 37 C.F.R. 1.56; Therasense, 649 F.3d at Consequences of a Finding of Inequitable Conduct The consequences associated with a finding of inequitable conduct are quite harsh, being referred to as the atomic bomb of patent law. Therasense, 649 F.3d at 1288 (quoting Aventis Pharma S.A. v. Amphastar Pharms., Inc., 525 F.3d 1334, 1349 (Fed. Cir. 2008) (Rader, J., dissenting)). The central consequence of an inequitable conduct charge is unenforceability of the entire patent, even if only a single claim was attributable to inequitable conduct. 35 U.S.C. 288; Therasense, 649 F.3d at 1288; Kingsdown Med. Consultants, Ltd. v. Hollister Inc., 863 F.2d 867, 877 (Fed. Cir. 1988). This consequence cannot be cured by reissue or reexamination. Therasense, 649 F.3d at 1288; Aventis, 525 F.3d at 1341, n. 6; Molins PLC v. Textron, Inc., 48 F.3d 1172, 1182 (Fed. Cir. 1995). The additional consequences associated with a finding of inequitable conduct are equally as daunting. A finding of inequitable conduct for one patent can spread to related patents, putting the entire patent family at risk. E.g., Therasense, 649 F.3d at ( the taint of a finding of inequitable conduct can spread from a single patent to render unenforceable other related patents and applications in the same technology family ). Moreover, a patent invalidated for inequitable conduct may allow the patent to be subject to antitrust violations under the Sherman Act, as the patent exemption does not apply to an unenforceable patent. See Walker Process Equip., Inc. v. Food Mach. & Chem. Corp., 382 U.S. 172, 177 (1965) (noting proof of a claim that a patentee obtained the patent by knowingly and willfully misrepresenting facts to the Patent Office... would be sufficient to strip [the patentee] of its exemption from the antitrust laws ). Furthermore, the patentee s reputation is tarnished, as inequitable conduct charges cast a dark cloud over the patent's validity and paint the patentee as a bad actor. Because the doctrine 2

3 Inequitable Conduct Cases focuses on the moral turpitude of the patentee with ruinous consequences for the reputation of his patent attorney, it discourages settlement and deflects attention from the merits of validity and infringement issues. Therasense, 649 F.3d at 1288 (quoting Committee Position Paper, The Doctrine of Inequitable Conduct and the Duty of Candor in Patent Prosecution: Its Current Adverse Impact on the Operation of the United States Patent System, 16 AIPLA Q.J. 74, 75 (1988)). Frequency Although the impact of Exergen and Therasense can be speculated, Figure 1, below, has been included to provide insight into this question. Figure 1 provides a graphical representation of data compiled in Docket Navigator related to inequitable conduct cases from 2008 to The graphical data in Figure 1 shows a decrease in the number of inequitable conduct claims brought since 2013, with less than 40 claims brought in Patent Trial and Appeal Board International Trade Commission U.S. District Courts Year Figure 1. A graph depicting the number of inequitable conduct cases brought per year since The graphical data was compiled using Docket Navigator with a legal filter for cases: inequitable conduct involving (1) false or misleading statement or omission, (2) materiality, or (2) intent to deceive. Current Rule Inequitable conduct is an equitable defense to patent infringement that, if proved, bars enforcement of a patent. Therasense, 649 F.3d at While other patent validity defenses require claim-specific invalidity arguments, inequitable conduct of even a single claim renders the entire patent unenforceable. Id. at To show inequitable conduct, the accused infringer must prove the following two elements: (1) materiality and (2) specific intent to deceive the Patent Office. Id. at Each of these elements are addressed, in turn: 3

4 (1) Materiality. In general, to satisfy the materiality prong, the accused infringer must show but-for materiality: that but-for the misrepresented or omitted material information, the Patent Office would not have allowed a claim. Id. at When evaluating materiality of the misrepresented or omitted information, the court gives claims their broadest reasonable interpretation and applies the preponderance of the evidence standard. Id. at A court may assume but-for materiality, without requiring an express showing, if the accused infringer can show that the patentee affirmatively engaged in egregious conduct, such as perjury, bribery, or manufacturing evidence. See Rohm & Haas Co. v. Crystal Chem. Co., 722 F.2d 1556, 1571 (Fed. Cir. 1983) (involving filing a mistakenly false affidavit); see also Precision, 324 U.S. at (involving perjury); see also Hazel Atlas, 322 U.S. at (involving deliberate manufacture of evidence and bribery); see also Keystone, 290 U.S. at 243 (involving bribery). Alternatively, misrepresented or omitted information is not considered but-for material if the patentee previously informed the examiner of the information, or if the information would be merely cumulative to the information considered by the examiner. See Dig. Control Inc. v. Charles Mach. Works, 437 F.3d 1309, 1319 (Fed. Cir. 2006); see Fiskars, Inc. v. Hunt Mfg. Co., 221 F.3d 1318, 1327 (Fed. Cir. 2000). A reference is considered to be cumulative when it teaches no more than what a reasonable examiner would consider to be taught by the prior art already before the PTO. Regents of the Univ. of Calif. v. Eli Lilly & Co., 119 F.3d 1559, 1575 (Fed. Cir. 1997). Additionally, omitted information is not material if it can be rendered irrelevant in light of subsequent argument or explanation by the patentee. See Therasense, 649 F.3d at (2) Specific Intent. When evaluating whether the patentee acted with specific intent to deceive the Patent Office, a court must weigh the evidence of intent to deceive independent of its analysis of materiality. Proving that the applicant knew of a reference, should have known of its materiality, and decided not to submit it to the PTO does not prove specific intent to deceive. Id. at 1290 (citing Star Sci., 537 F.3d at 1366). In a case involving nondisclosure of information, clear and convincing evidence must show that the applicant made a deliberate decision to withhold a known material reference. Id. (quoting Molins PLC, 48 F.3d at 1181) (internal quotation marks omitted) (emphasis added). Thus, the standard of review for the intent element is clear and convincing evidence, requiring that the court identifies that intent is the single most reasonable inference able to be drawn from the evidence. Id. at Although clear and convincing evidence of intent is required, a direct showing of intent is not, and instead may be inferred from circumstantial evidence. Id. Intent may be inferred from circumstantial evidence if the patentee shows a pattern of lack of candor, for example, when the patentee makes multiple factual representations contrary to the true information he had in his possession. Apotex Inc. v. UCB, Inc., 763 F.3d 1354, 1362 (Fed. Cir. 2014). On appeal, the Federal Circuit review[s] the district court s findings of materiality and intent for clear error, while reviewing the district court s ultimate decision regarding inequitable conduct for abuse of discretion. Am. Calcar, Inc. v. Am. Honda Motor Co., 768 F.3d 1185, 1189 (Fed. 4

5 Cir. 2014); Star Sci., 537 F.3d at Additionally, the Federal Circuit [w]hen reviewing the imposition of sanctions under a district court's inherent powers, [applies] the law of the regional circuit in which the district court sits. Monsanto Co. v. E.I. Du Pont de Nemours & Co., 748 F.3d 1189, 1196 (Fed. Cir. 2014). Factual disputes may not be resolved on appeal. See 3M Co. v. Avery Dennison Corp., 673 F.3d 1372, 1378 (Fed. Cir. 2012). Case Law Applications The cases referenced below include Federal Circuit cases in the last five years involving a substantial discussion of alleged inequitable conduct: Federal Circuit Cases Finding Inequitable Conduct: Regeneron Pharms., Inc. v. Merus N.V., 864 F.3d 1343 (Fed. Cir. 2017). Regeneron s patent teaching a genetically modified mouse was held unenforceable due to inequitable conduct for omitting references during patent prosecution. Regeneron, 864 F.3d at When evaluating the but-for materiality prong, the Court determined that the examiner would have rejected the claims during prosecution if he was made aware of the omitted references, thus satisfying the materiality prong. Id. at Additionally, the Court affirmed the district court s finding of specific intent by inferring an adverse inference of specific intent during prosecution from its litigation misconduct, thereby assuming that the applicant had specific intent to deceive the Patent Office during prosecution because of misconduct during litigation. Id. at The Federal Circuit justified the application of the adverse inference doctrine to satisfy the intent element by highlighting the following three types of litigation misconduct made by Regeneron: 1) filing inadequate infringement contentions, 2) providing limited and incomplete evidence of conception and reduction to practice, 3) refusing to provide initial claim constructions, and 4) failing to disclose three different categories of documents that otherwise should have been disclosed. Id. at 1357, Regarding the first type of litigation misconduct, the local district court s patent rules required Regeneron to disclose and provide infringement contentions, broken down by element, to the accused infringer. Id. at However, rather than breaking down the infringement contentions into an element-by-element analysis, Regeneron provided the infringer with a claim chart addressing each claim as a single limitation. Id. Regeneron refused to correct the contentions even after given an opportunity to do so by the district court. Id. At a later hearing to address the refusal to correct the contentions, an experienced Regeneron attorney asserted that he did not understand how to break down the claims into elements. Id. The district court reasoned that the attorney s argument was senseless and that the assertion was actually a tactic by Regeneron to shift the burden of defining the claim elements onto the infringer. Id. 5

6 Regarding the second type of litigation misconduct, rather than providing complete evidence of reduction to practice, Regeneron argued that very few documents were actually in its possession and failed to disclose the inventor s reduction to practice documents. Id. Regarding the third type of litigation misconduct, Regeneron refused to provide an initial claim construction, taking the position that no terms required construction. Id. The Court reasoned that Regeneron was again attempting to tactically shift the burden to the infringer. Id. Regarding the fourth type of litigation misconduct, there were three categories of documents that Regeneron failed to disclose: i) non-privilege documents that were not produced and remained on the privilege log, ii) previously privileged documents for which privilege was waived by disclosure, and iii) documents on the privilege log relating to topics waived by Regeneron. Both courts emphasized that category iii) was the most egregious omission, preventing the district court from determining the full extent of Regeneron s failure to disclose documents. Id. at The Federal Circuit gave broad discretion to the district court in sanctioning parties for violating discovery violations, including an unlimited application of the adverse inference doctrine against evidence that was missing, destroyed, or untimely produced. Id. at The Court relied on a Second Circuit case to show that bad faith is not required for this sanction, noting that discovery sanctions, including an adverse inference instruction, may be imposed where a party has breached a discovery obligation not only through bad faith or gross negligence, but also through ordinary negligence. Id. at (quoting Residential Funding Corp v. DeGeorge Fin. Corp., 306 F.3d 99, 101 (2d Cir. 2002)). Of note, the Court emphasized that the adverse inference doctrine applied in this instance only because Regeneron was accused of both prosecution misconduct and postprosecution misconduct: courts may not punish a party s post-prosecution misconduct by declaring the patent unenforceable. Id. at Ohio Willow Wood Co. v. Alps South, LLC, 813 F.3d 1350 (Fed. Cir. 2016). An Ohio Willow Wood (OWW) patent teaching prosthetic limb cushioning devices was held unenforceable due to inequitable conduct during reexamination for failure to correct a known misrepresentation made by litigation counsel to the PTAB. Ohio Willow Wood, 813 F.3d at In particular, OWW placed a middle man between litigation proceedings and reexamination proceedings, and the middle man failed to correct the misrepresentation made by litigation counsel that the inventor s testimony was not uncorroborated, and should have been corroborated by letters concerning timing of the date of the first offer to sell. Id. at

7 The omission of corroborating evidence was the dispositive issue during reexamination, and thus the Federal Circuit held that district court s determination that the corroborating evidence was material to patentability was not clearly erroneous. Id. at Furthermore, the middle man understood from his counsel and from his experience before the PTO that he had a duty of candor separate and apart from his attorney's duty; that he had the opportunity to correct the representations that OWW made to the Board regarding [the inventor s] testimony; and that he took no action to correct those misrepresentations. Based on those subsidiary findings, the district court found that deceptive intent was demonstrated by clear and convincing evidence. Id. at TransWeb, LLC v. 3M Innovative Properties Co., 812 F.3d 1295 (Fed. Cir. 2016). 3M s patented method of producing filtration membranes for respirators was held unenforceable due to inequitable conduct during prosecution regarding misrepresentation of the applicability of prior art. TransWeb, 812 F.3d at During prosecution, the examiner initially allowed all claims. Id. However, when 3M notified the examiner of omitted prior art (a TransWeb sample obtained during an expo prior to filing) the examiner rejected all claims as obvious. Id. After 3M told the examiner that the TransWeb samples were received only after signing a confidentiality agreement and were thus not prior art, the examiner allowed the claims. Id. However, the TransWeb samples were actually prior art, and were misrepresented by 3M. Id. Because the misrepresentation was but-for material, the materiality prong was satisfied. Id. Additionally, the Court held that there was no clear error made by the district court when satisfying the intent prong, emphasizing the following facts: information-gathering communications made by 3M; 3M awareness of the TransWeb samples at expo; evidence of past meetings to receive information and non-production samples from TransWeb; sub-par demeanor of a 3M witness on witness stand; 3M s race to patent after receiving the TransWeb samples; 3M attempting to hide prior art with a confidentiality agreement; and 3M waiting until a notice of allowance to submit TransWeb sample prior art. Id. American Calcar, Inc. v. Amer. Honda Motor Co., Inc., 768 F.3d 1185 (Fed. Cir. 2014). Calcar s patent involving automobile navigational systems was held unenforceable due to inequitable conduct by omission of prior art during prosecution. Calcar, 768 F.3d at Specifically, Calcar provided only a limited disclosure of the prior art. Id. at However, if a partial disclosure of material information about the prior art is intentionally selective, the patentee is not absolved of the intent element of inequitable conduct. Id.; Aventis Pharma S.A. v. Hospira, Inc., 675 F.3d 1324, (Fed.Cir.2012); see 7

8 also Semiconductor Energy Lab. Co. v. Samsung Elecs. Co., 204 F.3d 1368, 1376 (Fed.Cir.2000) (finding intent where the patentee disclosed a complete reference in Japanese but did not provide translations of that part which was material to patentability); Apotex Inc. v. UCB, Inc., 763 F.3d 1354, 1362 (Fed.Cir. Aug. 15, 2014) (finding intent on the basis of an inventor misrepresenting material information about disclosed prior art). Furthermore, the court determined that the only reasonable explanation for the partial disclosure was to deceive the Patent Office. Calcar, 768 F.3d at The partially disclosed prior art was material because the inventor acknowledged the importance of the information he possessed about how the [prior art] was used to show the distinguishing claim element. Id. Apotex Inc. v. UCB, Inc., 763 F.3d 1354 (Fed. Cir. 2014). Apotex s patent teaching a process of synthesizing a drug was held unenforceable due to inequitable conduct during prosecution by concealing prior art. Apotex, 763 F.3d at In particular, the inventor was aware that a drug already on the market was made according to his claimed process, concealing the process from the Patent Office, and misrepresenting the prior art through statements made by counsel and misrepresentations in the declaration. Id. at Additionally, the patentee omitted other relevant prior art and submitted results of experiments that were never conducted. Id. The Court relies on the fact that the inventor instigated the misrepresentations made by counsel on his behalf during prosecution. Id. Furthermore, the inventor affirmatively misrepresented his claimed invention by asserting that the process of this patent did not involve a reaction that would produce moexipril magnesium, even though the inventor later confirmed that the process contains more than 80% moexipril magnesium. Id. at The misrepresentation was but-for material because the examiner relied upon a lack of reaction to moexipril magnesium to allow the claims, which otherwise would not have been allowable. Id. at The Court indicated that the inventor knew enough to recognize that he was crossing the line from legitimate advocacy to genuine misrepresentation of material facts. Id. at Intellect Wireless, Inc. v. HTC Corp., 732 F.3d 1339 (Fed. Cir. 2013). HTC s wireless transmission of caller identification patent was held unenforceable due to inequitable conduct during prosecution for submitting false statements in the declarations. Intellect Wireless, 732 F.3d at The false statements made by the inventor in the declaration asserted that the invention was reduced to practice prior to the prior art, even though the invention was never actually reduced to practice. Id. 8

9 Additionally, the false statements in the declaration were never withdrawn, called to the attention of the Patent Office, or corrected. Id. Even though the prosecuting attorney attempted to cure the false statements in the declaration by filing a revised declaration that omitted the facts supporting actual reduction to practice with an explanation that the inventor intended to say constructive reduction to practice, the Court still found inequitable conduct. Id. The Court held that the attorney s attempt to correct the declaration, by omitting previously included statements, was not enough, stating [w]hen an applicant files a false declaration, we require that the applicant expressly advise the PTO of [the misrepresentation s] existence, stating specifically wherein it resides. Id.; Rohm & Haas Co. v. Crystal Chem. Co., 722 F.2d 1556, 1572 (Fed.Cir.1983). Additionally, if the misrepresentation is of one or more facts, the PTO [must] be advised what the actual facts are. Rohm, 722 F.2d at Furthermore, the patentee must go beyond merely suppl[ying] 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. Id. Thus, the patentee was held to have specific intent to deceive the Patent Office. Intellect Wireless, 732 F.3d at Federal Circuit Cases Not Finding Inequitable Conduct: Everlight Elecs. Co., Ltd. v. Nichia Corp., 2018 WL (Fed. Cir. Jan. 4, 2018). Nichia s white LED emitting device patent was not found to have inequitable conduct in a declaratory judgment action brought by Everlight. Everlight, 2018 WL , *2. The district court evaluated that the intent prong was not satisfied without addressing the materiality prong. Id. at *6. Everlight argued that the declarations falsely stated that the device s peak wavelengths were near 600 nm. Id. However, the Court concluded that Everlight did not sufficiently question the inventors to establish a record that the statement was actually false. Id. Additionally, the Court held that the most reasonable inference was not specific intent to deceive, but rather that the inventors should have been more careful in keeping a record of this information and documenting their findings. Id.; Everlight Elecs. Co. v. Nichia Corp., 143 F.Supp.3d 644, 662 (E.D. Mi. 2015) (emphasis in original). The Court held that there was no reversible error in the district court's finding that a mere showing that documents should have been submitted to the USPTO but have been lost, without a showing of additional facts probative of intent to deceive, does not rise to the level of specific intent under this court's precedent. Everlight, 2018 WL at *6; see Therasense., 649 F.3d at 1290 ( In a case involving nondisclosure of information, clear and convincing evidence must show that the applicant made a deliberate decision to withhold a known material reference. ) (emphasis in original). 9

10 Intercontinental Great Brands LLC v. Kellogg North Amer. Co., 869 F.3d 1336 (Fed. Cir. 2017). Kraft s patent detailing a re-sealable food package to keep food fresh was not charged with inequitable conduct. Intercontinental, 869 F.3d at Kellogg argued that Kraft s counsel did not tell the Patent Office that a prior art article reference was actually a misprint. Id. at However, the district court noted that Kraft s counsel merely restated the contents of the misprinted article and [t]here is no evidence that the attorney knowingly failed to identify the inconsistency between the two articles. Intercontinental, 118 F.Supp.3d 1022, 1045 (N.D. III. 2015). Thus, Kellogg did not satisfy the requisite specific intent prong of inequitable conduct under Therasense. Intercontinental, 869 F.3d at 1342; Therasense, 649 F.3d at The Court held that Kraft had no specific intent to deceive the Patent Office based on a copied, mistyped sentence because there was no evidence that Kraft was aware of the misprint. Intercontinental, 869 F.3d at UUSI, LLC v. United States, 133 Fed. Cl. 263 (2017). UUSI s patent for an electrical starting system for diesel engines was held to have no inequitable conduct. UUSI, 133 Fed. Cl. at 266, 273. The original claim for inequitable conduct stemmed from UUSI misrepresenting the expiration date of two of its claims in filings during the institution stage of IPR. Id. at 266. The Court held that this misrepresentation was not material because the decision to institute IPR is not a decision as to materiality for claim construction. Id. at 271. Furthermore, the Court held that the misrepresentation was not egregious enough to assume but-for materiality. Id. at 270; see Rohm, 722 F.2d at U.S. Water Services, Inc. v. Novozymes A/S, 843 F.3d 1345 (Fed. Cir. 2016). U.S. Water s patented method of using an enzyme to reduce deposits that build up in ethanol equipment was not charged with inequitable conduct. U.S. Water, 843 F.3d at A patent from the same family was granted because the examiner relied on a claim element differentiating the timing of adding an enzyme to the system. Id. at However, during litigation the patentee argued that the timing was actually equivalent to the prior art because the enzyme was recycled. Id. The patent at issue, a continuation in the same family, included a broader claim that had no reference to the timing of the enzyme in the system. Id. The claim for inequitable conduct arose from U.S. Water withholding litigation documents of the related prior 10

11 patent when pursing the continuation at issue. Id. at However, the Court held that the examiner was already aware of the relevant prior art in the litigation due to the examiner s past experience with the related patent and thus the litigation documents were cumulative and not but-for material. Id. Network Signatures, Inc. v. State Farm Mut. Auto. Ins. Co., 731 F.3d 1239 (Fed. Cir. 2013). A patent portfolio holder missed paying the 7.5-month patent maintenance fee deadline by two weeks, only paying the fee after a third party inquired into licensing the patent. Network Signatures, 731 F.3d at Although the district court found inequitable conduct, the Federal Circuit reversed, pushing back on the intent element. Id. at The patentee submitted a petition form for unintentional delay, using the standard form with the standard language, which does not require a statement of reasons for the delay. Id. at Thus, there was no evidence of intent to deceive for omitting the reason of the delay. Id. Acceptance of the late payment is determined by the Patent Office, taking into account whether the delay was unavoidable or unintentional and whether or not the surcharge was paid. Id. at Novo Nordisk A/S v. Caraco Pharmaceutical Laboratories, Ltd., 719 F.3d 1346 (Fed. Cir. 2013). The Federal Circuit reversed the district court s finding of inequitable conduct for Novo s patented method of achieving an improvement in glycemic control. Novo, 719 F.3d at 1346, The inequitable conduct claim arose from Novo s omission of opinions regarding its own study and a third party study, in addition to s, that refuted clear evidence of synergy in humans, as claimed. Id. at The Court held that the omission was not but-for material because a reasonable examiner would know that a rat study was not conducted on humans, thus not indicating synergy in humans. Id. at Moreover, the statements made in the declaration did not affirmatively indicate synergy in humans. Id. Furthermore, even considering the omitted information, there is no showing that the synergy would be false. Id. The Court relied on the rule that non-material omissions can be rendered irrelevant in light of subsequent argument or explanation by the patentee. Id.; see Therasense, 649 F.3d at Avoiding Inequitable Conduct Claims: Considerations The following sections contain suggestions to minimize the chances of a finding of inequitable conduct based on the above recited case law, but are not guaranteed ways of avoiding inequitable conduct claims. 11

12 Prosecution Conduct Although Regeneron broadens the intent element of inequitable conduct claims to allow an adverse inference of prosecution misconduct based on litigation misconduct, Regeneron did not change or overrule the standard established in Therasense for prosecution misconduct. See Regeneron, 864 F.3d at 1356; Therasense, 649 F.3d This standard for inequitable conduct was reaffirmed recently by the case law summarized above. Regeneron, 864 F.3d The following considerations are broken down into the two elements required to show inequitable conduct: (1) materiality, and (2) intent. (1) Materiality. When deciding whether or not to disclose information to an examiner with regard to the materiality prong, use the broadest reasonable interpretation of the claim language to determine if the information could be used to prevent allowance of any claim being prosecuted. See Therasense, 649 F.3d at If there is a chance that the information could be used to disallow any claim, then it is best to assume that the information would meet the materiality prong of inequitable conduct. See id. If information is potentially material, disclose the entirety of the information to the examiner. See Calcar, 768 F.3d at Beware of partial disclosures, as they may result in an inequitable conduct charge. See id. However, if the examiner was previously informed about the potentially material information, or if the information is cumulative, there is no need to resubmit the information because it is not material. See U.S. Water, 843 F.3d at Additionally, misrepresentations or omissions made during the institution phase of IPR are not necessarily material under the inequitable conduct standard because the decision to institute is not the same inquiry as claim allowance. See UUSI, 133 Fed. Cl. at 266, 271, 273. When in doubt about the possible materiality of a reference, it is likely better to disclose it. This may lead to an over-disclosure information to the Patent Office, which might itself lead to a charge of inequitable conduct for burying the relevant information in a voluminous amount of irrelevant information. Therasense, 649 F.3d at ; see Molins PLC v. Textron, Inc., 48 F.3d 1172, 1184 (Fed. Cir. 1995); see also Kimberly-Clark Worldwide, Inc. v. First Quality Baby Prods. LLC, 2016 WL , *5 (E.D. Wis. 2016). However, mere burying is not inequitable conduct without some other misdirection. Kimberly-Clark, 2016 WL at *5 (citing Molins, 48 F.3d at 1184). Because Certification Statements do not require any explanation of the relevance of information submitted, a submission of a Certification Statement containing many references by itself does not equate to some other misdirection. See Molins, 48 F.3d at 1184; 37 C.F.R. 1.98(a)(2)(i). Thus, to avoid over-disclosure leading to a finding of inequitable conduct, ensure that if a large amount of references is disclosed that the references are not accompanied by other misdirection. Furthermore, patentees should avoid making false statements about the crux of their invention in declarations, as the false statement will likely be material. See Apotex, 763 F.3d at

13 However, a statement is likely not material if the statement is not false and the scope of the statement would be understood by a reasonable examiner in light of the information provided. See Novo, 719 F.3d at Lastly, behaviors that may be viewed as egregious conduct such as such as perjury, bribery, or manufacturing evidence, should be avoided for obvious reasons and because courts can assume but-for materiality from egregious conduct. See Rohm, 722 F.2d at 1571 (involving filing a mistakenly false affidavit); see also Precision, 324 U.S. at ; see also Hazel Atlas, 322 U.S. at ; see also Keystone, 290 U.S. at 243. (2) Specific Intent. Because the inequitable conduct elements are conjunctive, courts may dismiss inequitable conduct claims without determining but-for materiality if the second element is not met. See Everlight, 2018 WL , *6. To satisfy the specific intent prong, a court must find that the single most reasonable inference able to be drawn from the evidence for the omission or misrepresentation is specific intent to deceive the Patent Office. Therasense, 649 F.3d at Thus, to deter a finding of specific intent, a patentee may argue that reasons other than intent to deceive were the cause of the omission or misrepresentation. See id. Two successfully argued examples of why intent to deceive was not the single most reasonable inference for the omission or misrepresentation include (1) that the inventors should have kept better records, or (2) there was no reason for the patentee to know that the misrepresented statement was false. See Everlight, 2018 WL , *6; see Intercontinental, 869 F.3d at Moreover, patentees should pay close attention to when prior art is given to the examiner for consideration. See TransWeb, 812 F.3d at Ideally, material prior art should be disclosed as soon as is practicable and in time for an examiner to consider it. If material prior art is identified after a notice of allowance is issued, a patentee should consider the best way to disclose it. For prior art disclosed after a Notice of Allowance, but before paying the issue fee, a Request for Continued Examination (RCE) is not required if the art can be certified, however an RCE may be necessary if the examiner determines that the reference is material. M.P.E.P (b). Alternatively, for prior art disclosed after the issue fee is paid but before issuance, an applicant may either (1) apply to the Quick Path Information Disclosure Statement (QPIDS) pilot program, or (2) file an RCE and a Petition to Withdraw. 77 Fed. Reg The QPIDS program requires submission of a Transmittal Form, IDS and IDS Fee, epetition to Withdraw from Issue and Fee, RCE and RCE Fee, and certification of the art. Id. Under QPIDS, the RCE and RCE Fee are considered conditional, and will be refunded if prosecution is not reopened. Id. The QPIDS pilot program is extended to run through September 30, Quick Path Information Disclosure Statement (QPIDS), (last visited May 17, 2018). 13

14 Additionally, an omission or misrepresentation should be corrected in writing as soon as is practicable. See id; see also Intellect Wireless, 732 F.3d at If a false statement in a declaration needs to be corrected, specifically inform the examiner of the location of the false statement(s) and expressly state the actual facts, making a showing that there is no intent to confuse the examiner. See Intellect Wireless, 732 F.3d at If there is a late payment of maintenance fees, complete and submit a petition form for unintentional delay by filling out all required information, which does not have to include the reasons for the delay. See Network Signatures, 731 F.3d at Post-Prosecution Conduct Post-prosecution conduct has been analyzed by courts to establish the specific intent prong by using the adverse inference doctrine. See Regeneron, 864 F.3d at However, to establish an adverse inference of prosecution misconduct from litigation misconduct, the party accused of inequitable conduct must be accused of both prosecution and litigation misconduct, as courts may not punish a party s post-prosecution misconduct by declaring the patent unenforceable. See id. at To ensure that litigation misconduct does not invoke the adverse inference doctrine, parties should behave equitably in court during patent litigation. See id. at 1356, 1357, For example, the patentee should comply with court instructions and disclose appropriate documents not covered by privilege. See id. Additionally, known misrepresentations or omissions made during post-prosecution proceedings should be corrected immediately. See Ohio Willow Wood, 813 F.3d at