The duty to disclose information that is material to patentability is found in 37 C.F.R. 1.56. This duty requires that each individual associated with the filing and prosecution of a patent application has a duty of candor and good faith in dealing with the U.S. Patent and Trade Mark Office (PTO) which includes the duty to disclose to the PTO all information known to that individual to be material to patentability.
While this duty has been in place for many years, it has received more attention recently due to a series of cases including Therasense v. Dickinson 953 F. 3d 1289 (Fed. Cir. 2010) that seems to be expanding the definition of what information must be brought to the attention of the examiner.
37 CFR 1.56 provides:
Information is material to patentability when is not cumulative of information already of record or being made of record in the application and (1) it is establishes by itself or in combination with other information, a prima facie case of unpatentability of a claim; or (2) it refutes, or is inconsistent with, a position the applicant takes in: (i) opposing an argument of unpatentability relied on by the office, or (ii) asserting an argument of patentability. A prima facie case of unpatentability is established when the information compels a conclusion that a claim is unpatentable under the preponderance of evidence, burden of proof standard, given each term in the claim its broadest reasonable construction consistent with the specification, and before any consideration is given to evidence which may be submitted in an attempt to establish a contrary conclusion of patentability.
37 CFR 1.56 further states that "no patent will be granted on an application in connection with which fraud on the Office was practiced or attempted or the duty of disclosure was violated through bad faith or intentional misconduct."
Since the PTO does not investigate alleged inequitable conduct it is left to the courts to make this determination. A patent obtained through inequitable conduct is unenforceable. Inequitable conduct involves affirmative misrepresentation of a material fact, or failure to disclose material information with an intent to deceive the PTO. Materiality and intent to deceive are both required to establish inequitable conduct and according to the U.S. Court of Appeals for the Federal Circuit these are balanced to determine whether there is inequitable conduct. As intent to deceive may be difficult to prove, intent may be inferred from the circumstances.
In Exergen v. Wal-Mart 575 F3d 1312 (Fed. Cir. 2009) the Federal Circuit stated that a pleading of inequitable conduct must include sufficient allegations from which a court may reasonably infer a specific individual knew of the withheld material information or of the falsity of the material representation; and withheld or misrepresented this information with specific intent to deceive the PTO.
In Golden Hour Data Systems v. EMS Charts, 91 USPQ2d 1556, (E.D. Tex. 2009) it was found that there was an inequitable conduct in failing to advise the examiner that a statement in the text of the application that certain objectives had not been achieved was incorrect when the applicant subsequently became aware of a brochure claiming that the objective had already been achieved by another party.
Failure to disclose official actions on related cases handled by other examiners who took a different view of the prior art was found to be inequitable conduct in Larson Manufacturing Company v. Aluminart Products Ltd. 90 USPQ2d 1257 (Fed. Cir. 2009).
In Therasense Inc.v. Becton Dickinson the Federal Circuit held that the failure to disclose that the applicant had taken a different view as to the significance of a prior art reference in proceedings before the European Patent Office was found to be inequitable conduct.
On April 26, 2010 the Federal Circuit agreed to hear Therasense in en banc. The order from the Federal Circuit included six questions to be briefed:
- should the materiality - intent - balancing framework for inequitable conduct be modified or replaced?
- if so, how? In particular, should the standard be tied directly to fraud or unclean hands? If so, what is the appropriate standard for fraud or unclean hands?
- what is the proper standard for materiality?
- Under what circumstances it is proper to infer intent from materiality?
- Should the balancing inquiry (balancing materiality and intent) be abandoned?
- Whether the standards for materiality and intent in other federal agency contexts or at common law shed light on the appropriate standard to be applied in the patent context?
Following Therasense, the Federal Circuit in Optium Corporation v. Emcore Corporation, 09-1265 (Fed. Cir. May 05, 2010) reiterated that inequitable conduct resides in failure to disclose material information, or submission or false material information, with an intent to mislead or deceive the examiner, and those two elements materiality and intent must proven by clear and convincing evidence. (Citation omitted) When both materiality and intent have being established the court must balance the equities and determine whether the applicant's conduct in prosecuting the patent application was egregious enough to warrant holding the entire patent enforceable.
In its decisions relating to inequitable conduct, the Federal Circuit has applied Kingsdown Medical Consultants Ltd. v. Hollister Inc. 863 F. 2d 867, 876-77 (Fed. Cir. 1988) that the "intent" element of inequitable conduct is not simply intent to take the action or omission complained of but, intent to deceive or mislead the patent examiner into granting the patent. In situations of non disclosure of information rather than affirmative misrepresentation, clear and convincing evidence must show that the applicant make the deliberate decision to withhold known material reference. Thus "intent to deceive cannot be inferred solely from the fact that information was not disclosed; there must be a factual basis for a finding of deceptive intent." (citation omitted)
Since the Federal Circuit has agreed to hear Therasense en banc it would be expected that there may be changes to the way inequitable conduct is determined. However, in this author's opinion while the Federal Circuit may offer further guidance in how inequitable conduct is determined it is unlikely to make sweeping changes in the requirements for finding inequitable conduct.
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