The Federal Circuit Decides to Reconsider Inequitable Conduct

Introduction

Two decades after the Federal Circuit termed the pleading of inequitable conduct a “plague,”1 the problem of assertion of this affirmative defense has only metastasized. Today, it is pled not only in traditional situations, such as when a prior art reference has been intentionally withheld from the Patent Office, but also when prior art is actually before the Patent Office and expressly considered, but the applicants have made allegedly inconsistent arguments about it. A panel of the Federal Circuit faced one such non-traditional situation when rendering its decision in TheraSense, Inc. v. Becton, Dickinson & Co. In response to a petition for rehearing en banc, the entire Federal Circuit has decided to undertake a complete reconsideration of the doctrine of inequitable conduct. While briefing is not yet complete, many amici (both businesses and academics) have come forward to argue that the standard of proof of inequitable conduct should be raised, that the scope of the defense should be limited, or that the potential remedies for the defense should be broadened.

Existing Law on Inequitable Conduct

The doctrine of inequitable conduct arises indirectly from three Supreme Court cases involving actual “fraud on the Patent Office” – payoffs for witness silence to avoid detrimental testimony, fabrication of witness statements, and subornation of perjury.2 The Federal Circuit translated those cases, and the 1952 amendments to the Patent Act (which categorized the pleading of “unenforceability” as a defense), into the modern doctrine of inequitable conduct.3 Under this doctrine, more than just traditional fraud can render a patent unenforceable: a failure to disclose material information or a material misrepresentation can do so as well. The Patent Office then established regulations that set forth certain parameters for practitioners to comply with their duty of disclosure to the Patent Office and thereby avoid a finding of inequitable conduct.4

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