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Patent Office Proposes New Materiality Rules

On July 21st,  the Patent Office published a notice of proposed rulemaking, in the wake of the Therasense decision (a copy is found at the end of this post), awkwardly entitled “Revision of the Materiality to Patentability Standard for the Duty to Disclose Information in Patent Applications” 76 Fed. Reg. 43631 (July 21, 2011). The declared intent of the rules is just that – “to revise the materiality standard as defined in Therasense, for the inequitable conduct doctrine.” The new standard is intended to reduce “the incentive to submit [IDS] statements containing marginally relevant information and [to enable] applicants to be more forthcoming and helpful to the Office.”

The text goes on to explain that in Therasense, the Court defined materiality using a “but-for-plus” standard. But just what does the “but-for-plus” standard comprise? The Court in Therasense declined to adopt Section 1.56(b) as it now stands in defining inequitable conduct. Current Rule 1.56(b) says that information is material if it is not cumulative and  (1) it 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, etc. [read McKesson – copy is found at the end of this post].The Court rejected part (1) because it gave no weight to rebuttal evidence and rejected part (2) because it “anything bearing any relation to obviousness could be found material” when unobviousness is an issue. McKesson, slip. op. at 33-34.

The proposed revision to Section 1.56(b) “would provide that information is material to patentability if (1) the Office would not allow a claim if it were aware of the information, applying the preponderance of the evidence standard and giving the claim its broadest reasonable construction; or (2) the applicant engages in affirmative egregious misconduct before the Office as to the information. As stated in Therasense, neither mere nondisclosure of information to the Office nor failure to mention information in an affidavit, declaration or other statement to the Office [meets this misconduct standard]” The text notes that, under the “but-for-plus” standard, information is not material if the claim is allowable under the examination standards of part (1) and if there was not egregious conduct under part (2). Fed. Reg. at 43631.  The text reaffirms that there is no duty to submit information that is not material and that IDS’s are not to be treated as admissions of unpatentability for any claim. A similar revision is proposed for Section 1.555. That’s it.

That’s it? So the “but-for-plus” standard is “but for” plus egregious misconduct regarding the information in question. But the Fed. Cir. discarded the simple “but for” test of Section 1.56(b)(1), summarized above. The proposed revisions should make it clear that information is not material unless a claim would not be allowable under the preponderance of evidence standard, giving the claim its broadest reasonable construction (the Therasense court endorsed these standards), in view of all of evidence made of record by both the Examiner and the applicant. My italicized phrase was specifically endorsed by the Fed. Cir. in Therasense (see slip. op. at 33), and the Office should make it clear that the old “establishes a prima-facie case of unobviousness” standard is dead.

I would also like the Office to affirm that withholding information material to a claim that is cancelled, that is not material to the claims that eventually issue, cannot provide a basis for a Rule 56 violation. This was implicitly stated in Therasense: “[The inequitable conduct doctrine] should only be applied in instances where the patentee’s misconduct resulted in the unfair benefit of receiving an unwarranted claim.”[slip op. at 28, emphasis added]. Rule 1.56(a) is ambiguous on this point. Although not affirmed – or specifically criticized – by the Therasense court, I think that the Office should reaffirm that information that is cumulative to information already considered is not material.

Even if the PTO limits itself to egregious misconduct relating to the duty to disclose material prior art, it is not equipped to examine the thought processes of the actors involved in a decision not to disclose prior art.  Judges can and must resolve such issues when they are ruling on charges of inequitable conduct, but they are sitting in equity, and are charged with determining just how bad the behavior of the chargee has been. However, Judges have the benefit of trial testimony, exhibits, and the fruits of exhaustive discovery. This is not a role that Patent Examiners are trained to assume. Will these rules require revival of the “Fraud Squad,” that  will review reports from Examiners who feel that applicants have badly “misbehaved”? Or will “egregious misconduct” rulings ultimately be left to the courts, as findings of “fraud on the Office” have been. The comments on these proposed rules, which seem far from final, should be interesting.





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