An Update on the Law of Inequitable Conduct in Patent Prosecution
| Publication year | 2010 |
| Pages | 39 |
| Citation | Vol. 39 No. 1 Pg. 39 |
2010, January, Pg. 39. An Update on the Law of Inequitable Conduct in Patent Prosecution
January 2010
Vol. 39, No. 1 [Page 39]
Intellectual Property and Technology Law articles are sponsored by the CBA Intellectual Property and Technology Law and Policy Sections. They provide information of interest to intellectual property and technology attorneys who advise clients on protecting and exploiting various forms of intellectual property in the marketplace.
Coordinating Editors
Steven J. Merker, Denver, of Dorsey and Whitney LLP-(303) 629-3400, merker.steve@dorsey.com; William F. Vobach, Littleton, of Swanson and Bratschun, L.L.C.-(303) 268-0066, bvobach@sbiplaw.com
About the Author
William F. Vobach is a partner with Swanson and Bratschun, LLC in Littleton. He is a registered patent attorney-(303) 268-0066, bvobach@sbiplaw.com.
Attorneys who prosecute, litigate, or license patents need to consider three recent cases that have made it easier to find a patent unenforceable for inequitable conduct. A patent applicant must now cite material office actions, including notices of allowance, to a patent examiner.
The Court of Appeals for the Federal Circuit recently handed down decisions in several cases involving inequitable conduct law. These decisions will affect attorneys who prosecute patents and those involved with the licensing and litigation of patents. It is important that practitioners who work in the field of patent law be familiar with these recent cases and understand the effect the rulings have on already issued patents and pending patent applications. This article discusses three recent cases concerning the law of inequitable conduct: Dayco Products, Inc. v. Total Containment, Inc.;(fn1) McKesson Information Solutions, Inc. v. Bridge Medical, Inc.;(fn2) and Larson Manufacturing Co. v. Aluminart Prods. Ltd.(fn3)
Background of Inequitable Conduct
Attorneys, inventors, and others involved with the patent process, such as officers of an inventor's company, are under a duty to disclose material information to the U.S. Patent and Trademark Office (USPTO) between the date a patent application is filed and the date the application issues as a patent.(fn4) This duty is referred to as the "duty of disclosure" by the patent bar. What qualifies as "material information" is open-ended, and a comprehensive list of this type of information is not available. However, examples of information that should be cited to the examiner include: prior patents, published patent applications, published articles, filings made during patent litigation, and related patent applications.(fn5) When a piece of information is deemed material, it is cited to the USPTO for examiner consideration.(fn6) The examiner then makes a notation to the patent file that the information has been considered before issuing the patent.(fn7)
The penalty for failing to cite material information can be severe. For example, when one knowingly fails to cite material information with the intent to mislead or deceive an examiner, the issued patent can be deemed unenforceable by a court during patent litigation.(fn8) A court's authority to render a patent unenforceable for inequitable conduct springs from the equitable principle that "he who comes into equity must come with clean hands."(fn9) During patent litigation, it is common for defendants to assert that material information that was known to the patentee during litigation was not cited to the USPTO, and that the resulting patent should be held unenforceable due to inequitable conduct.(fn10)
The analysis used to prove inequitable conduct is a two-step process. First, it is determined whether the withheld information meets a threshold level of materiality and intent to mislead. Next, the materiality and intent are weighed in light of all the circumstances to determine whether the applicant's conduct is so culpable that the patent should be held unenforceable.(fn11)
Different standards for materiality exist. One is whether a reasonable examiner would have considered the prior art important in deciding whether to allow the patent application.(fn12) Another standard is whether the information: (1) establishes a prima facie case of unpatentability, or (2) refutes or is inconsistent with a position the applicant takes.(fn13)
The Dayco Products Case
The first case in recent years to significantly alter the law of inequitable conduct relating to patent prosecution was Dayco Products, Inc. v. Total Containment, Inc.(fn14) In Dayco, the Federal Circuit indicated for the first time that an office action(fn15) from a related patent application might be material to an examiner inspecting a separate patent application.(fn16)
Dayco concerned two families of patent applications that were being examined by different patent examiners.(fn17) The first family of applications was related to U.S. application number 993,196 ('196 family of applications or '196 application) and was being examined by Examiner Eric Nicholson.(fn18) The second family of applications, a family that resulted in the patents asserted in the Dayco litigation (patents-in-suit), was being examined by Examiner David Arola.(fn19) During prosecution of the '196 family of applications, the existence of the patents-in-suit was brought to the attention of Nicholson.(fn20) However, during prosecution of the patents-in-suit, Arola was not informed of the existence of the '196 family of applications.(fn21) The two families of applications contained substantially identical claims, and Nicholson issued rejections of those claims on three occasions. Arola was not informed of Nicholson's rejections or the reference that served as the basis for the rejections (Wilson reference).(fn22)
On summary judgment, the district court found the patents-in-suit unenforceable for inequitable conduct. The district court relied on three items that had not been cited to Arola: (1) the pendency of the '196 application before Nicholson; (2) the Wilson reference; and (3) the rejection of substantially similar claims in the '196 application by Nicholson based on the Wilson reference.(fn23)
The court of appeals for the Federal Circuit addressed each of these three issues. It found that the applications for the patents-in-suit and the '196 application contained similar claims, and Arola could have issued a double-patenting rejection if he had been notified of the existence of the '196 application.(fn24) This could have resulted in the need to file a terminal disclaimer that all patents would have to be owned by a common owner. The terminal disclaimer would have effectively limited the assignability of the patents because it would have required co-ownership of all of the patents throughout their term. Therefore, the Federal Circuit deemed that the pendency of the '196 application was "material."(fn25)
The court also ruled that the failure to cite the existence of the '196 application did not meet the threshold showing of intent to deceive.(fn26) Under Akron Polymer Container Corp. v. Exxel Container, Inc.,(fn27) intent could not be inferred because the patentee disclosed the existence of a second application to a first application's examiner, putting the USPTO on notice of the co-pendency of the applications. The fact that the applications that issued as patents-in-suit were disclosed to the examiner of the...
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