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Therasense on Remand: Inequitable Conduct Deja Vu?

In 2011, the Court of Appeals for the Federal Circuit en banc reheard the thorny issues of inequitable conduct and announced new intent and materiality standards.  Therasense, Inc v. Becton Dickinson & Co., 649 F.3d 1276 (Fed. Cir. 2011).  The majority held that a weak showing of intent can no longer be offset by a strong showing of materiality, and intent cannot be inferred solely from materiality.  The accused infringer must prove by clear and convincing  evidence that the patent applicant knew of an omitted reference, that it was “but for” material, and made a deliberate decision to withhold it.  Therefore, the test could be restated that but for the witholding of the reference, the application would have been rejected based on that reference.  The majority remanded the case to the issuing district court for new findings of fact based on the new standard.

The Federal Circuit requested that the district court “determine whether there is clear and convincing evidence demonstrating that [applicant’s patent attorney and expert] knew of the EPO briefs [that contained admissions adverse to the positions taken in prosecution by applicant], knew of their materiality, and made the conscious decision not to disclose them in order to deceive the PTO.”  The next question on remand for the district court is “whether the PTO would not have granted the patent but for [patent applicant’s] failure to disclose the EPO briefs.” 

On remand, the Northern District of California (Judge William Alsup) held the patent unenforceable (again) under the new, stricter but-for standard.  In summary, the court felt there was ample evidence in the record to support the conclusion that the applicant’s attorney and expert knew of statements made in European prosecution that contradicted positions they later took in U.S. prosecution, appreciated their materiality, and intentionally failed to cite EPO documents containing these statements in the subsequent U.S. prosecution.  On March 27, 2012, the district court on remand issued an order (Therasense on Remand — N D Calif — 3-28-12) that U.S. Patent No. 5,820,551 is unenforceable under the new but-for test set forth by the Federal Circuit.

Worth mentioning is that the facts found by the district court according to the original district court decision and this recent order are quite detailed:

  1. Applicant allegedly made statements in EPO prosecution relating to certain teachings in the specification.
  2. In later U.S. prosecution, the application was rejected in part based on prior art that was considered in view of the same certain teachings.
  3. The district court found that Applicant’s patent counsel and expert knew of the statements to the EPO, yet to overcome the rejection in the U.S., Applicant allegedly offered a sworn declaration with positions allegedly contrary to what was represented to the EPO.
  4. The district court found that Applicant allegedly knew of the materiality of the statements and intentionally omitted the EPO documents from citation in the U.S. prosecution.
  5. The district court found that but-for this omission, the U.S. patent application would have been rejected.

Very few cases will have such pinpointed findings of fact.  Consequently, despite the outcome of this remand, the impact of the new but-for test announced in Therasense still remains to be seen.

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Timothy Bianchi
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