Monday’s decision by the Federal Circuit to vacate the split panel decision in Therasense, Inc. v. Becton Dickinson & Co., 593 F.3d 1289 (Fed. Cir. 2010) (link at end of post) and rehear the case en banc makes it impossible for me to avoid discussing inequitable conduct in this blog. The Federal Circuit intends to decide some “big picture” issues, and has requested briefing on, inter alia, “Should the materiality-intent-balancing framework for inequitable conduct by modified or replaced?” and “If so, how?” and “Should the balancing materiality and intent standard be abandoned?” These are big questions indeed, and they point up the difficulty of enforcing a duty of candor and good faith standard that depends on deciding if the accused parties acted with specific intent to defraud the system.
Establishing specific intent to withhold 102(b) prior art in order to get claims allowed has pushed patent litigation into something resembling a TV crime drama. I have read the Therasense panel opinion twice now and I keep expecting to hit a paragraph in which the majority recounts that the patent attorney broke down on the stand, crying, and confessed his sins. The opinion is painful to read on a number of levels, but particularly the sections where the panel infers specific intent from the trial court’s findings that the testimony by the patent attorney and the Director of R&D for Abbott were not credible and evidenced an intent to deceive (not just a bad call on relevance).
The facts in Therasense are at once complicated and simple. The inequitable conduct charge arose from the fact that, to obtain allowance of claims in a struggling U.S. application, the attorney and the R&D Director distinguished the prior art (their own patent) in a way that contradicted the arguments they made to get the same prior art patent allowed in Europe. (In the U.S. they were distinguishing their own patent, and in the EP they had distinguished other prior art.) They did not disclose their arguments in the EP to the U.S. Examiner who, remember, was considering a different set of claims in a different application.
The decision seems to turn on the attorney’s arguments about the interpretation of a phrase regarding the construction of a test strip: “Optionally, but preferably when being used on live blood [a term of art], a protective membrane surrounds both the enzyme and the mediator labels, permeable to water and glucose.” In the EP, the attorney argued that the membrane was optional and in the U.S., the attorney argued that the art would recognize that it was required when whole blood [a term of art] was the analyte.
Importantly (I think), the attorney put in a Rule 132 declaration by the R&D Director to this effect in the U.S.
By now you know what happened. The majority of the panel found the failure to disclose the inconsistency highly material and then went on to affirm the district court judge’s finding that deceptive intent was properly inferred from the intentional failure to bring the inconsistent argument to the attention of the PTO. Abbott might have escaped this ruling if they had not put the arguments into declaration form. My mentor often said, “A Rule 132 Declaration is a time-bomb ticking away in your file wrapper.” I know this is the Lord’s truth, and so does Abbott. The problem is, in pharma/biotech prosecution, Examiners often require such declarations on what amounts to issues of claim construction. This time bomb was set off.
I have prepared and prosecuted patent applications for most of my career. I am lucky enough (if you can call it that these days) to know that if you issue a patent that turns out to protect a commercial product, it is probably going to be litigated, and if it is litigated, someone is going to be accused of inequitable conduct, or possibly more than one person (note that recent decisions require the naming of the accused in the complaint). Anyone named is going to get deposed about their behavior and, like lions stalking a herd of gazelles, the litigators are going to home in on the weakest members of the pack. I have been deposed many times when inequitable conduct had at least been alleged, but never called upon to testify. Therasense aside, I think that patent attorneys do not make good hostile witnesses on this topic.
But less experienced players do. I indirectly witnessed the destruction of the career of a capable in-house “Patent Liaison” who prepared and filed a lengthy declaration to support enablement at the (remote) supervision of a senior attorney who was in charge of the prosecution. The senior patent attorney was not called upon to testify, but the Liaison was, and he was shredded by the defendants’ counsel at trial for numerous supposed omissions and errors. The patent ultimately survived the attack, but the Liaison did not and he took a very early retirement.
In Therasense, Judge Linn’s thoughtful dissent undoubtedly prompted his colleagues to vacate for rehearing en banc, but I don’t see how the ultimate decision is going to solve the problem. The “problem” is crystallized by Judge Linn in his dissent:
“Far from a mere blanket denial of deceptive intent, the [attorney and R&D director]’s explanation [for non-disclosure] includes specific, detailed reasons why they subjectively believed that the withheld information was immaterial during prosecution. Such an explanation will defeat a charge of inequitable conduct if it is ‘plausible.’ The question, thus, is not whether it is plausible that the information is immaterial –a question asked under the objective materiality prong—but rather, whether it is plausible that the individuals subjectively believed that the reference was immaterial at the time they withheld it—a question presented under the subjective intent prong.”
So we are back to “NYPD”-style patent lawyering, and I am sick of it. My modest proposal is to abolish the inequitable conduct defense and repeal Rule 56. This will not only save immeasurable amounts of time, emotional energy, and money but it will not harm the integrity of the U.S. patent system as it stumbles into the new century. The inequitable conduct defense and Rule 56 (or some less-draconian version of it) may have been necessary when material information could be easily destroyed or hidden in a dusty library or was hard to find unless you wanted to travel abroad. In this age of Google, PubMed, and hundreds of similar technical websites and e-contacts, those days are over. A diligent patent attorney, working with a good searcher (or even with just good instincts) can find anything today. This is not an advertisement but, using articles available online, I just found meeting abstracts that were not published in electronic form and were distributed only at a European conference about a decade ago. One of the abstracts invalidates almost all of the claims of the patent I was asked to evaluate. Of course, it was not cited to the USPTO, so my client has a good basis upon which to allege inequitable conduct and start deposing lots of people. But why is this necessary? The abstract will facially do the job without trying to play “whisper down the lane” with the co-authors inventors and attorneys, to find out what Harry told Sally who then did or didn’t tell Sue after class. Or, to quote a more authoritative figure, in this age of instant – and deep – information, “The truth will out.”