Federal Circuit Ratchets Up Materiality Requirement for Inequitable Conduct

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A deeply divided (6-1-4) Federal Circuit revised the materiality prong of the inequitable conduct defense, which permits a patent infringer to argue that an entire patent (as well as related patents and patent applications) should be declared unenforceable in light of the patentee’s wrongful conduct during patent prosecution. This decision will likely please practitioners involved in patent prosecution as well as patent owners.

In a decision that will likely please practitioners involved in patent prosecution as well as patent owners, on May 25, 2011, a divided U.S. Court of Appeals for the Federal Circuit issued its ruling in the Therasense case, which the Federal Circuit took en banc to reconsider the legal standard for inequitable conduct. The doctrine of inequitable conduct allows a patent to be ruled unenforceable based on a finding of wrongdoing by the patentee if specific intent to deceive and materiality are both shown. Citing the rampant overuse and unintended consequences of the doctrine, the court imposed a new, heightened standard for materiality.

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