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Federal Circuit Issues New Standards for Determining Inequitable Conduct

06-01-2011 [Gene Lang] [Permalink]

The long awaited en banc Federal Circuit decision issued on May 25, 2011, in the TheraSense, Inc. v. Becton, Dickinson & Co. case. The court significantly limited the classes of cases where courts may find a patent unenforceable due to inequitable conduct before the U.S. Patent and Trademark Office (USPTO). In other words, the court raised the standards for proving 1) that an alleged bad act was material to patentability (i.e., materiality) and 2) that the alleged bad act was the result of the patentee intending to deceive the USPTO (i.e., intent to deceive).

The court made it clear that “[i]intent and materiality are separate requirements.” The two requirements cannot be evaluated on a sliding scale, where a party could demonstrate a lower level of intent if the information was highly material, and intent cannot simply be inferred from materiality.

The majority adopted a new “but-for” test for materiality, abandoning the court’s many conflicting materiality standards, which included the “reasonable examiner” standard. Under the new test, an omitted reference is material only if “but for” its exclusion the claim or patent would not have been allowed. As an exception, in the event of egregious, affirmative misconduct (e.g., patent applicant planned and executed a scheme to defraud the USPTO), such misconduct and information is always material.

Additionally, the court adopted a “knowing and deliberate” standard for intent to deceive. This standard would require that there must be clear and convincing evidence of a specific intent to deceive by the applicant, in that the applicant was aware of a prior art reference, knew of its materiality and also made a deliberate decision to not disclose the reference. The court explained that when circumstantial evidence is used in making this determination, an intent to deceive must be the “most reasonable inference.” The Federal Circuit’s opinion can be read here.