Federal Circuit Tightens Inequitable Conduct Standards: What Does This Mean for Patent Practice in the Future?


On May 25, 2011, the en banc Federal Circuit raised the bar for establishing inequitable conduct in patent infringement cases. Therasense, Inc. v. Becton, Dickinson & Co., No. 2008-1511 (Fed. Cir. May 25, 2011). We summarize the decision and then suggest how it may impact patent practice going forward.

Summary of the Therasense decision

The Federal Circuit in Therasense has adopted more stringent standards for proving inequitable conduct in an effort to reduce overuse of the doctrine in patent litigation. Chief Judge Rader, writing for a six-judge majority, tightened the standards for finding both materiality and intent to deceive. Accused infringers now must show by clear and convincing evidence both that: (1) but-for the failure to disclose, the PTO would not have allowed a claim to issue, and (2) the patentee made a deliberate decision to withhold a known material reference.

The most significant change is to the materiality standard. The Federal Circuit has rejected the “reasonable examiner” standard, instead holding “as a general matter,” that “the materiality required to establish inequitable conduct is but-for materiality.” Id. at 27. This means that information is material only “if the PTO would not have allowed a claim had it been aware of the undisclosed prior art.” Id. In making this but-for determination, courts “should apply the preponderance of the evidence standard and give claims their broadest reasonable construction.” Id. at 28.

The Court left open an exception to its general rule requiring but-for proof of materiality in cases of affirmative egregious misconduct. “When the patentee has engaged in affirmative acts of egregious misconduct, such as the filing of an unmistakably false affidavit, the misconduct is material” even without a showing of but-for materiality. Id. at 29.

The changes to the intent standard are less drastic but resolve a prior split of authority on the showing required to prove intent. The Court clarified that a finding of intent to deceive is appropriate only where clear and convincing evidence shows “that the applicant knew of the reference, knew that it was material, and made a deliberate decision to withhold it.” Id. at 24. The Court rejected the “sliding scale” approach where weaker evidence of intent may be sufficient in view of a stronger showing of materiality. Id. at 25. Instead, courts must weigh evidence of intent independent of materiality. Id.

The Court recognized that “smoking gun” evidence of intent is rare and affirmed that courts “may infer intent from circumstantial evidence.” Id. But to meet the clear and convincing standard, an inference of intent to deceive “must be ‘the single most reasonable inference able to be drawn from the evidence’” and “must be sufficient to require a finding of deceitful intent in the light of all the circumstances.” Id. at 25-26 (quoting Star Scientific Inc. v. R.J. Reynolds Tobacco Co., 537 F.3d 1357, 1366 (Fed. Cir. 2008) and Kingsdown Med. Consultants, Ltd. v. Hollister Inc., 863 F.2d 867, 873 (Fed. Cir. 1988) (en banc)).

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