Apotex Case Overview

In the case Apotex, Inc. v. UCB, Inc., released in August 2014, the Federal Circuit affirmed a district court's finding of inequitable conduct on the part of an inventor-drafter, as the court found clear and convincing evidence demonstrating that the inventor engaged in "but-for" material misconduct and clear and convincing evidence that the inventor intended to deceive the USPTO. 

The inventor-drafter engaged in a "pattern of lack of candor" which included:

• Misrepresenting material facts about the prior art and experiments never performed in the patent application
• Misrepresenting material facts in a third-party declaration
• Purposefully omitting material facts regarding a commercialized prior art product

This combination of factual findings including dishonesty and omissions led the Federal Circuit to affirm the decision. 

Helpful Tips From Apotex

The Apotex ruling highlights the importance of verifying facts and arguments on prior art and reveals several key ways that attorneys can avoid engaging in "material misconduct" or presenting an "intent to deceive the U.S. Patent and Trademark Office" (USPTO).

Tips for Avoiding Material Misconduct:

• Carefully verify the factual correctness of arguments that clients and/or inventors present to the USPTO
• Carefully verify the full factual disclosures of cited prior art, even in the face of the client's and/or inventor's understanding of the cited prior art
• Ensure the factual accuracy of expert declarations, specifically regarding the disclosures of cited prior art
• Ensure the factual accuracy of the patent application's representations of disclosures of known prior art
• Avoid lengthy discussions of the prior art in the patent application

Tips for Avoiding Intent to Deceive the USPTO:

• Verify with the inventor or client that there is no knowledge or "strong suspicion" that the application at issue is attempting to cover subject matter disclosed or practiced in the prior art
• Ensure that the patent application and information disclosure statements are not "misleadingly incomplete" or "plainly inaccurate" regarding the prior art
• Avoid drafting experiments or methods in the past tense or implying that they have been performed if they have not
• Present arguments as "advocacy for a preferred interpretation" of prior art, but do not make factually inaccurate statements

Background of Apotex

U.S. Patent No. 6,767,556 to Pharmaceutical Compositions Comprising Moexipril Magnesium was issued on July 27, 2004, to Apotex, a Canadian pharmaceutical company. Claim one of the patent application was drawn to a process of making a solid pharmaceutical by a chemical reaction. Throughout the prosecution history, the USPTO examiner rejected the claims as obvious, and the inventor and patent attorney worked closely to present argument and an expert declaration stating that the prior art disclosed only physically "mixing" an alkaline or saccharide stabilizer and an ACE inhibitor drug, and stating that the prior art did not disclose chemically "reacting" such a stabilizer and drug.

However, at the district court level, the court found that the inventor, who was aware of and involved in all decisions regarding the prosecution of the application at issue:

• Was aware that a prior art drug was made according to the claimed process
• Concealed this knowledge from the USPTO
• Misrepresented the nature of the known prior art drug and the cited prior art through his counsel's arguments and the third-party expert declaration

The district court also found that the inventor did not disclose relevant prior art and submitted results of experiments that were never conducted. 

The district court noted that the third party's expert declaration was submitted "to add legitimacy to [the inventor's]" misrepresentations. The lower court also found that the inventor's conduct qualified as "egregious misconduct" under the standard from Therasense v. Becton, Dickenson.

The Federal Circuit did not reach the issue of whether the inventor's conduct was "egregious," because it agreed "that the misrepresentations regarding the prior art were but-for-material," and the evidence satisfied the materiality and intent prongs of the test for inequitable conduct.