The United States Patent and Trademark Office (USPTO) issued updated guidance on the duty of candor and duty to disclose in relation to submissions made to other government agencies, particularly the Food and Drug Administration (FDA). The Notice did not constitute new rule making and instead aims to clarify the obligations of patent applicants and attorneys to disclose all relevant information to the USPTO. However, in light of the Notice, patent applicants and patent owners should expect to see an increase in the number of patent examiner requests for further documents and information, and invalidity or unenforceability challenges from third parties based on a failure to disclosure or for alleged inconsistent statements made to other governmental regulatory agencies such as the FDA.

Each individual associated with the filing and prosecution of a patent application has a duty of candor and good faith in dealing with the Office, which includes a duty to disclose to the Office all information known to that individual to be material to patentability. Specifically, 37 CFR 1.56(a) and 1.555(A) state that the duty to disclose applies to “[e]ach individual associated with the filing and prosecuting of a patent application” and “[e]ach individual associated with the patent owner in a reexamination proceeding.” Fed. Reg. Vol. 87, No. 145 at 45765. Specifically, this announcement was designed to remind current or would be applicants that this duty to disclose extends to statements made to other governmental agencies, such as the FDA, in order to obtain licensing or regulatory approval. “If a party to a USPTO proceeding discovers that an earlier position taken in a submission to the USPTO or another Government agency was incorrect or inconsistent with other statements made by the party, the party must promptly correct the record.” Id. The USPTO particularly noted that “when examining a claim directed to a process of manufacturing a particular drug product that was effectively filed more than one year after FDA approval of the drug product, an examiner may appropriately require an applicant to submit to the USPTO information submitted to the FDA (e.g. in a New Drug Application or Biologics License Application) on how the drug product was manufactured.” Id. at 45766.

This announcement was made in direct response to President Biden’s July 2, 2021 Executive Order on Promoting Competition in the American Economy, which, among addressing other issues, expressed concern that “too often, patent and other laws have been misused to inhibit or delay—for years and even decades—competition from generic drugs and biosimilars, denying Americans access to lower-cost drugs.” Id. at 45764 (quoting 86 FR 36987). Following Biden’s executive order, Senators Patrick Leahy and Thom Tillis drafted a letter to Andrew Hirshfeld, then Under Secretary of Commerce for Intellectual property and Director of the USPTO, to “take steps to reduce patent applicants’ making inappropriate conflicting statements in submissions to the [USPTO] and other federal agencies,” specifically noting inconsistent, and at times conflicting, statements made to the FDA and the USPTO Id. at 45764-65.

Although, this notice “clarifies the ’duty of disclosure’ and ‘duty of reasonable’ inquiry owed to the USPTO and American public,” it should be noted that this has always been the rule. Id. at 45765. The updated guidance from the USPTO includes several examples to help clarify the duties of candor and disclosure. Belcher Pharmaceuticals, LLC v. Hospira, Inc., 11 F.4th 1345 (Fed. Cir. 2021) (failure to disclose to USPTO inconsistent statements to FDA invalidated patent claims); Bruno Independent Living Aids, Inc. v. Acorn Mobility Services, Ltd., 394 F.3d 1348 (Fed. Cir. 2005) (finding failure to disclose inconsistent was an “exceptional case” and awarding attorney fees).

What must be disclosed to the USPTO?

1. Any information that is material to patentability (including but not limited to: prior art, prior sales, prior offers for sale, positive or negative testing data, FDA submissions, third party documents).
2. Third party documents may include, for example, paragraph IV notices, patent dance documents, third party submissions to the applicant or PTO in other application/proceeding, or patent office in another country.
3. Must correct any incorrect or inconsistent positions taken in a submission to the USPTO or to another Government agency.

 “A duty of reasonable inquiry may exist based on circumstances known to the party presenting the paper to the USPTO.” See Fed. Reg. Vol. 87, No. 145 at 45766. This duty includes reviewing documents that are submitted to or received from other Government agencies, including the FDA. Bruno independent Living Aids, Inc. v. Acorn Mobility Services, Ltd., 394 F.3d 1348 (Fed. Cir. 2005) (prior art “equivalent” submitted in FDA docs was not disclosed to PTO: unenforceable and “exceptional” case with attorney’s fees). Failing to inquire “when the circumstances warrant it” could result in sanctions or other adverse action. This duty also includes inquiring about and disclosing prior offers for sale or sales. GS Cleantech Corp. v. Adkins Energy LLC, 951 F.3d 1310 (Fed. Cir. 2020) (offer for sale more than one year prior to filing, patent prosecutor withheld it from PTO, unenforecable). Other situations may include patent prosecutors consulting with litigation teams and foreign patent counsel to ensure that third party documents from such proceedings are disclosed to the USPTO.

The Notice is a valuable reminder that applicants should immediately implement reasonable procedures to maintain open lines of communication between U.S. patent prosecution counsel and personnel involved in communications with FDA (or other relevant government agency), as well as litigation and foreign patent counsel in relevant situations. Such open lines of communication will reduce risks of a failure to disclose material information. Further, such communications can reduce the risk of inconsistent statements being made to government agencies, and, in the event a seemingly inconsistent statement is made, allow the patent applicant to attempt to promptly correct the record.

Patent counsel can provide an invaluable service to companies concurrently seeking patent protection and FDA approval. Given that patent counsel is already deeply familiar with the patentability issues and trained in spotting material information, consulting with patent counsel can efficiently prevent a failure to comply with the duty of disclosure and avoid submission of inconsistent statements that violate the duty of candor. Moreover, given that drug development often involves complex partnering relationships between two or more companies, patent counsel can play an integral role in preserving privilege in such situations.