Patent litigation often involves the assertion of prior art anticipation and obviousness defenses.   U.S. patents are presumed valid, so a defendant seeking to overcome this presumption must persuade the fact-finder of a patent’s invalidity with clear and convincing evidence.  Corroborative evidence of invalidity—e.g., contemporaneous documents, physical specimens and witness testimony—is generally necessary to satisfy this rigorous burden of proof.

When does advocating a patent’s validity or invalidity cross the boundary line separating ethical from inequitable conduct?  A recent Federal Circuit Court of Appeals decision, Ohio Willow Wood Co. v. Alps South, LLC (the “OWW” case), offers a vivid wake-up call to patent practitioners.  The case demonstrates how patent advocates can commit inequitable conduct by adopting litigation positions before patent tribunals that seek to minimize, ignore or discredit reasonable, corroborating evidence of a patent’s invalidity.

But wait.  How can this be?  Didn’t Therasense[1] make it much harder for litigants to assert claims of inequitable conduct by requiring clear and convincing proof that the patent applicant (1) misrepresented or omitted information material to patentability, and (2) did so with specific intent to mislead or deceive the USPTO?  How does this patent prosecution standard apply to advocacy in reexamination and tribunal review proceedings?

OWW Case Facts

The basic OWW case facts are as follows.  OWW owns patents directed to cushioning liners that cover stumps of amputated limbs making use of prosthetic devices more comfortable.  The invalidity issue concerned whether a prior art gel liner (called the “Single Socket Gel Liner” or “SSGL”) was composed of a fabric that prevented gel from bleeding through from the interior of the liner to its outer surface.  If so, that prior art device effectively invalidated OWW’s U.S. Patent No. 5,830,237 (“Gel and Cushioning Devices”).

During a first ex parte reexamination of the ’237 patent, OWW’s patent attorney overcame a first prior art rejection by showing that the prior art device at issue in that proceeding (a “Shilosheath”) allowed small amounts of gel to bleed through the liner fabric.  The patentee amended the ’237 patent claims to limit them to devices where the gel coating covered only the interior of the gel liners, and did not bleed-through to the exterior of the liner fabric.

The reexamination story does not end there.  A second ex parte reexamination proceeding ensued challenging the ’237 patent’s validity based on the prior art SSGL product.  Both a 1995 advertisement for that SSGL product and deposition testimony (from a Mr. Comtesse) showed that the SSGL product had a gel liner made out of an impermeable “Coolmax” fabric.  Based on these facts, the USPTO rejected the ’237 patent claims during their second reexamination.

On OWW’s appeal to the Board of Patent Appeals and Interferences (BPAI), however, the patentee’s counsel successfully argued that the examiner had improperly relied on the uncorroborated testimony of Mr. Comtesse, a supposedly highly interested party.  OWW denied the existence of any other corroborating proof that would support Comtesse’s testimony that that SSGL device was constructed out of an impermeable fabric layer that prevented gel bleed-through.  Faced with this record, the BPAI overturned the rejection.  A second reexamination certificate was issued for the ’237 patent.

The Inequitable Conduct Defense

After the second reexamination proceeding, OWW’s previously stayed patent infringement case against Alps South did not go well.  Based on collateral estoppel and obviousness defenses, the district court summarily dismissed OWW’s patent claims—and also Alps South’s inequitable conduct defense.  That latter defense was premised on the patentee’s misleading reexamination and BPAI arguments.  OWW had asserted that Comtesse’s alleged financial interest in and inventorship of the prior art SSGL product precluded his testimony from being corroborative and that no other evidence could corroborate the alleged structure and composition of the “Comfort Zone” SSGL device featured in a 1995 advertisement.

On appeal, the Federal Circuit affirmed the dismissal of the ’237 patent claims on collateral estoppel and obviousness grounds.  However, the appellate court reversed the summary judgment dismissal of the inequitable conduct defense, remanding it for further proceedings.

How the Federal Circuit evaluates inequitable conduct in the context of reexamination and BPAI proceedings is the most fascinating aspect of this precedential opinion.  It merits close scrutiny by patent practitioners as they prepare for such proceedings.  The opinion contains a long discourse regarding the “rule of reason” analysis that should be applied in evaluating corroborative evidence of a patent’s invalidity.  Slip Op., at 19-20.

Responding to OWW’s “misplaced” arguments regarding the level of corroboration necessary in evaluating patent invalidity contentions, the Federal Circuit held that corroboration “does not require that every detail of the testimony be independently and conclusively supported by explicit disclosures in the pre-critical date documents or physical exhibits.” Id., at 24.  “Thus, evidence of corroboration can take many forms and such evidence does not become irrelevant to the credibility determination simply because a patentee questions whether it was created shortly after the critical date.”  Id., at 23.

With respect to materiality element, the Federal Circuit concluded that the patentee’s counsel had exaggerated, ignored or discredited corroborating deposition and declarant testimony in order to undermine the Comtesse testimony.  Among other things, patentee’s counsel simultaneously (a) ignored contradictory portions of the Comtesse deposition that undercut OWW’s arguments about the witness’s alleged level of financial interest in or inventorship of the prior art SSGL product, (b) failed to address or unfairly discredited three declarations submitted in the reexamination proceeding authored by prosthetists who were knowledgeable about prosthetic gel liners available before the 1995 critical priority date, and (c) argued that there were no known examples of the SSGL prior art products, even though relevant samples of those products were reviewed by Mr. Comtesse during his deposition.  Id., at 21-23.

The Federal Circuit reasoned that if OWW’s patent counsel had provided the BPAI with a more balanced view of the corroborating evidence—instead of just presenting favorable, cherry-picked snippets of proof supporting his client’s position—then the BPAI would not have reversed the examiner’s rejection of the ’237 patent claims.  “Accordingly . . . we find OWW’s misrepresentations to the BPAI tantamount to the filing of an unmistakably false affidavit.  Since we recognize such misconduct may be sufficient to satisfy the materiality prong of inequitable conduct . . . the identified misrepresentations further demonstrate the existence of genuine issues of material fact regarding materiality.”  Id., at 28-29 (emphasis added).

With respect to the specific intent to mislead the USPTO, the Federal Circuit deemed that element also satisfied by OWW’s patent counsel’s misconduct.  He sought to discredit the Comtesse testimony “by making misrepresentations and misleading statements that were directly refuted by credible evidence that OWW did not otherwise disclose.  Under the circumstances, this evidence creates a genuine issue of material fact as to whether [patent counsel’s] conduct before the PTO was undertaken for the deliberate purpose of obtaining an otherwise unwarranted patent.”  Id., at 29.  Indeed, the Federal Circuit believed that single most reasonable inference to be drawn from patentee counsel’s conduct was that he intended to hoodwink the USPTO and its patent tribunals.  Id., at 30.  Ouch!

 Candor Towards the Tribunal

The Federal Circuit obviously took severe umbrage with patentee counsel’s highly partisan, misleading arguments regarding the nature of prior art gel liner proof.  In this regard, patent practitioners must adhere to the USPTO Rules of Professional Conduct, which were recently amended in 2013.  See 37 C.F.R. Subpart D (2013).

The core duty of candor towards the patent tribunal is set forth in 37 C.F.R. § 11.303.  Among others, a practitioner must comply with these two key rules in patent proceedings:

(d) In an ex parte proceeding, a practitioner shall inform the tribunal of all material facts known to the practitioner that will enable the tribunal to make an informed decision, whether or not the facts are adverse.

 (e) In a proceeding before the Office, a practitioner shall disclose to the Office information necessary to comply with applicable duty of disclosure provisions.

(Emphasis added.)  Sub-provision (e) is a special addition to the USPTO Rules of Professional Conduct; it has no counterpart in the ABA Model Rules.  It hearkens back to a patent applicant’s duty to disclose information material to patentability set forth in 37 C.F.R. § 1.56.

While older attorneys may still be under the impression that the rules of professional conduct mandate “zealous advocacy,” you will not find those “zeal” words in the text of the USPTO professional conduct rules.  The concept of “zealousness” was removed from the ABA Model Rules of Professional Conduct upon which the revised USPTO conduct rules are based.  The rules instead direct the practitioner to act with reasonable diligence and promptness.  37 C.F.R. § 11.103 (“Diligence”).  “Zealous” advocacy is not a safe harbor for inequitable conduct under the USPTO’s professional conduct rules.

 The Bottom Line

USPTO examiners and tribunals expect a much more circumspect and balanced treatment of corroborative proof evidence than that proffered by the patentee’s counsel in the ’237 patent reexamination and BPAI proceedings.


[1] Therasense, Inc. v. Becton, Dickinson and Co., 649 F.3d 1276 (Fed. Cir. 2011).