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Federal Circuit Significantly Tightens the Standard for Proving Inequitable Conduct
Posted in Litigation, Patents

As our readers likely know, an en banc panel of the Federal Circuit substantially raised the bar for proving inequitable conduct in patent cases in its recent decision in Therasense, Inc. v. Becton, Dickinson and Co., Nova Biomedical Corp. and Bayer Healthcare LLC. The court raised the bar both with respect to the intent and the materiality prongs of an inequitable conduct analysis. The court established the “knowing and deliberate” standard for proving specific intent by clear and convincing evidence, stating that for an applicant to have the specific intent necessary to commit inequitable conduct, the applicant must:  (1) know of a reference, (2) know that the reference is material, and (3) make a deliberate decision to withhold the reference. Further, the court significantly raised the bar with respect to materiality by supporting the “but-for materiality” standard. Under this standard, undisclosed prior art is “but-for material if the PTO [Patent and Trademark Office] would not have allowed a claim had it been aware of” that art. A more in-depth discussion of the Therasense decision can be found in the Nutter client alert found here.

It is anticipated that the Therasense decision, in combination with the heightened pleading standards set forth in Exergen Corp. v. Wal-Mart Stores, Inc., 575 F.3d 1312 (Fed. Cir. 2009), may lead to fewer assertions of inequitable conduct in litigation. The Therasense decision will almost certainly lead to litigants seeking more dismissals of issues related to inequitable conduct by summary judgment motions. Although it is not anticipated that the Therasense decision will significantly reduce the patent prosecutor’s burden of citing prior art references to the PTO to comply with an applicant’s duty of disclosure, prosecutors may wish to re-evaluate their current practices, particularly in view of proposed Therasense-based rule changes presented by the PTO. The PTO’s proposed rule changes would place the duty of disclosure materiality standard in-line with the “but-for materiality” standard endorsed by Therasense. Stay tuned to Nutter’s IP Bulletin for further updates once the comment-making period for on the proposed rule changes closes on September 19, 2011.

To read the full text of the Therasense opinion, click here.

To read the PTO’s proposed rule changes related to the duty of disclosure, click here.

This advisory was prepared by Nutter's Intellectual Property practice. For more information, please contact your Nutter attorney at 617-439-2000.

This update is for information purposes only and should not be construed as legal advice on any specific facts or circumstances. Under the rules of the Supreme Judicial Court of Massachusetts, this material may be considered as advertising.

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