In March 2014, Regeneron Pharmaceuticals, Inc. sued Merus B.V. for allegedly infringing U.S. Patent No. 8,502,018 (“the ’018 Patent").  The ’018 Patent generally relates to using vectors to modify genes and chromosomal loci in eukaryotic cells.  In one example the vectors are used to target and modify specific genes in mice so that the mice develop antibodies that can be used in humans.  In its defense, Merus alleged that the ’018 Patent was unenforceable due to Regeneron’s inequitable conduct while prosecuting the ’018 Patent.  A finding of inequitable conduct renders an entire patent unenforceable, and requires a showing that (i) a reference withheld from the USPTO is “but-for” material to prosecution and (ii) that the Patentee acted with specific intent to deceive the USPTO. 

In this case, Merus alleged that Regeneron withheld four references from the U.S. Patent and Trademark Office (USPTO) that were but-for material to the patent application that issued as the ’018 Patent.  A withheld prior art reference is but-for material if the USPTO would not have allowed a claim had it been aware of the undisclosed prior art, and if the prior art is not merely cumulative of what a reasonable examiner would consider taught by the prior art already before the USPTO. 

Claim 1 of the ’018 Patent is directed to a mouse having “human unrearranged variable region gene segments” in its germline.  The Court ultimately determined that each of the four withheld references were but-for material to the prosecution of the ’018 Patent. 

With respect to specific intent to deceive the USPTO, the District Court did not conduct any fact-finding regarding any intent to deceive the USPTO.  Rather, the Court inferred the specific intent to deceive based on Regeneron’s conduct during the litigation.  In particular, the Court noted that the litigation misconduct appeared designed to obfuscate the prosecution misconduct.  According to the Court:

1. Regeneron failed to disclose a key document from an inventor relating to the discovery and development of the invention;
2. Regeneron refused to provide element-by-element infringement contentions as required by local patent rules;
3. Regeneron submitted affidavits from two patent attorneys while withholding many documents from these individuals based on attorney-client privilege; and
4. Regeneron withheld a substantial number of non-privileged documents on the basis of attorney-client privilege, including documents directly relating to the withheld prior art references. 

Thus, based on Regeneron’s “widespread litigation misconduct, including their use of sword and shield tactics to protect [the inventors’] thoughts regarding disclosure of the withheld references to the USPTO during prosecution of the ’018 Patent” the Court found Regeneron withheld the references with intent to deceive the USPTO.  See Regeneron v. Merus, Fed. Cir. 2017, No. 16-1346 at 38. 

Judge Newman dissented, arguing that specific intent to deceive cannot be inferred, and must be proved by clear and convincing evidence.  She also argued that litigation misconduct can support dismissal of a suit, but that unenforceability must be based on the law of enforceability and should not be imposed as a discovery sanction.