Archive for the ‘Inequitable Conduct/Rule 56’ Category

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BIO’s Modest Proposal – Eliminate Rule 56

Wednesday, December 7th, 2011

BIO recently sent Director Kappos 13 pages of comments on the PTO’s proposed revisions to 37 C.F.R. §1.56(b). (A copy of the comments is available at the end of this post.) BIO clearly is struggling to reconcile the differing views  of its members, and mostly succeeds. The comments give a good background on the development of the PTO’s duty of disclosure and the role of the judiciary in developing the inequitable conduct defense:

“Paradoxically, the development of the [IC] doctrine was driven, at least initially, by the well-intentioned belief that the judicial enforcement of applicant disclosure obligations in private actions to which the USPTO is not a party would nevertheless help the USPTO in getting its job done.”

This has obviously not occurred, and the comments note that in Therasense, the Fed. Cir. “declined to adopt the USPTO’s  definition of materiality as the judicial standard, recognizing that its prior efforts to enforce the USPTO’s materiality standards had actually contributed to the problems that led the court to take up this case in the first place.”

Despite this inherent tension, the comments go on to conclude:

“The USPTO proposes a literal importation of the judicial materiality standard into its Rule 56…There is good reason to believe, however, that the Therasense standard, in the course of judicial interpretation, will be subject to drift in the courts over time….thereby inviting creep and uncertainty in the operation of Rule 56….In short, most BIO members do not agree that administration of a judicial standard that is sure to evolve – and likely to erode – over time is the approach that will most benefit the USPTO and the applicant community.”

Responding to member input that there are few types of prior art that are not readily available to Examiners, and that the AIA pre- and post-issuance procedures will provide even more relevant information to Examiners, the comments get to the heart of the question and put a stake through it:

“The USPTO has not provided a clear explanation of why it continues to need Rule 56. If the  PTO wants only the Therasense standard ["hard" but-for materiality and specific intent to deceive], then there would seem to be no need for the rule – it is already the law. If the intention is to prevent fraud, lying, falsification, perjury and the like, federal statutes such as Section 1001  of Title 18 of the U.S. Code provide the applicable standard and the appropriate reach. The USPTO should affirm that it seeks nothing more.” 

Not just pretty words!

BIO Comments

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Powell v. Home Depot – False Petition Not “Egregious Misconduct”

Tuesday, November 15th, 2011

In Therasense, the Fed. Cir. held that inequitable conduct can be based on non-prior art misconduct, which was characterized as an exception to the “but-for” rule of materiality set out in the decision. This seemed to me to be a warning to applicants that “[t]here is no room to argue that submission of false affidavits is not material” (Rohm & Haas Co. v. Crystal Chem. Co., 722 F.2d 1556 (Fed. Cir. 1983). However, in Powell v. Home Depot, App. No. 2010-1409, -1416 (Fed. Cir. Nov. 14, 2011), the court found that a statement in a petition to make special, that was known by applicant to be false before the petition was granted, was not conduct egregious enough to find that applicant had committed inequitable conduct. In other words, some petitions/declarations are more weighty when it comes to tipping the equities in favor of the defendant.

Powell’s attorney filed a petition to make special under MPEP 708.02(I), “prospective manufacture”, averring that he was obligated to manufacture infringing saw guards for Home Depot. However, during the pendency of the petition, Home Depot switched suppliers. Powell did not update the petition. (The district court noted that he could have truthfully alleged actual infringement under 708.02(II)).

Apparently following Rohm & Haas, the district court found materiality and intent to deceive, but found no inequitable conduct upon balancing the equities. The Fed. Cir. noted that the IC standards had changed post-Therasense, and went on to find no inequitable conduct based on the lack of “but-for” materiality – a prior art standard – and insufficiently egregious misconduct on the part of Powell’s attorney. The Fed. Cir. seemed to almost be splitting the hair that the petition was true when it was filed and so the conduct “did not involve the filing of an unmistakably false affidavit” that would rise to the level of “affirmative egregious misconduct.” [Emphasis supplied]. So this decision still leaves patent attorneys to guess how egregious misconduct has to be to trigger the “atomic bomb of patent law.”

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Cordis v. BSC – Therasense at Work

Monday, October 3rd, 2011

Last week the Fed. Cir. affirmed the district court’s finding of no inequitable conduct, due to the failure of the applicant or his attorney to cite a relevant prior art reference in a parent application that yielded the two patents-in-suit. Cordis Corp. v. Boston Scientific Corp., App. No. 2010-1311, -1316 (Fed. Cir. Sept. 28, 2011). (A copy of the decision is found at the end of this post.) In the earlier proceeding the district court, in a bench trial, found that BSC had proved the threshold levels of materiality of the reference and intent regarding nondisclosure by clear and convincing evidence. The court went on to hold that applicant had not purged the fraud (my term) by merely citing the reference in the “child application” in a “normal IDS” and that both patents were unenforceable due to IC (ed. note – remember “the fruit of the poisonous tree”).

On appeal, the Fed. Cir. agreed that the reference was material but remanded for additional, more specific findings on intent to deceive, e.g., whether or not the inventor in fact read the search report or the reference. Cordis Corp. v. Boston Scientific Corp., 188 F. App’x 984, 988 (Fed. Cir 2006). The district court, did not make these findings but, rather, reconsidered the evidence of record and found that the “clear and convincing standard” had not been satisfied regarding deceptive intent. The court based its new finding on its opinion that “the inferences argued by plaintiff are supported by evidence of record and are as reasonable as those inferences argued by defendants.” [641 F. Supp. At 359; citing Scanner Techs. Corp. v. ICOS Vision Sys. Corp., 528 F.3d 1365 (Fed. Cir. 2008)].

(more…)

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Inequitable Conduct in Canada – Disarming the “Atomic Bomb”

Monday, July 25th, 2011

This is a guest post from Brian W. Gray of Norton Rose.

This week a significant decision for patent owners was released from our Canadian Federal Court of Appeal. A copy of the case is found at the end of this post. The case highlights some interesting contrasts with U.S. law.

Perhaps the most significant is the fact that the court made clear that a general duty of good faith is not part of Canadian patent law. The court noted the U.S. problems with the doctrine of inequitable conduct at paragraph 128 mentioning the “ever expanding doctrine of inequitable conduct.” At paragraph 150, the court took note of the recent CAFC decision in Therasense and that court’s description of inequitable conduct as the “atomic bomb” of patent law.

The court made the point that the requirement to respond in good faith to a requisition (examiner’s report) in section 73 (1) (a) of the Canadian Patent Act was not for the courts to decide (paragraph 150) and that the section 73 duty could not be used to invalidate an issued patent. There is another provision in our statute (section 53) that does apply to issued patents but it only relates to untrue material allegations in the petition or to omissions or additions in the specification if willfully made for the purpose of misleading.

The court also made some interesting observations about anticipation in the context of a disclosure and prior sale of a device for testing, deciding the disclosure was subject to confidentiality based on practice in the industry and that the prior sale did not make the invention “available to the public.” This of course contrasts with the U.S. “on sale” bar and also shows that in many situations the Canadian standard of “available to the public”  will produce a different result with respect to novelty than the U.S. public use and on sale standard,

The case also illustrates the rather relaxed standard of the Canadian courts concerning misnomer of inventors, where in many cases, particularly where the issue of inventorship does not affect ownership, our courts have found such errors not to be “material.” See paragraphs 114 and 129.

Weatherford-AppealReasons

therasense 2

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