Inequitable conduct is a defense to patent infringement to avoid liability for patent infringement. However, inequitable conduct also offers a way to introduce unfavorable facts about the patent owner, inventors, etc. to paint the plaintiff as a bad actor and not as someone that has helped society in bringing forth the invention protected by the patent. It is a defense that is frequently raised by accused infringers, but rarely successful. As such, the court’s time and resources are consumed disproportionately to the likely benefit of litigating the inequitable conduct defense. As such, in Therasense (Fed. Cir. 2011), the Federal Circuit significantly raised the standard required to win on inequitable conduct, making it even less likely that an accused infringer would win on inequitable conduct. Reading between the lines, Therasense was a message to patent litigators to bring inequitable conduct allegations only in egregious cases when it has a reasonable chance of success.
In the following case, Apotex v. UCB (Fed. Cir. 2014), the defendant successfully raised the defense of inequitable conduct. In its decision, the Federal Circuit states that there is a distinction between legitimate advocacy which is allowed, and genuine misrepresentations of material fact which are prohibited types of behavior before the Patent Office. The Federal Circuit found that the patent owner crossed the line between legitimate advocacy and genuine misrepresentations of material facts. Apotex is instructive as it provides an example of a type of conduct that is prohibited after the heightened standards of Therasense, and thus, to be avoided. (here is another example of inequitable conduct).
Under Therasense, to win on a defense of inequitable conduct, the defendant must show misconduct so material that but-for the conduct the patent would not have issued, and must also show an intent to deceive that is the most reasonable inference from the facts. If the defendant cannot show these two elements by clear and convincing evidence, then the defendant can still successfully raise the defense of inequitable conduct only if the patent owner’s conduct is exceptionally egregious.
The Federal Circuit affirmed the district court’s finding on material misconduct for several reasons. First, the inventor wrote the patent and was actively involved in the prosecution of the applicaiton. Hence, the inventor was personally responsible for the alleged misconduct. Secondly, the inventor made affirmative misrepresentations of material facts. In particular, Apotex’s internal tests showed the presence of moexipril magnesium in Univasc but the inventor repeatedly asserted that the prior art process used to manufacture Univasc did not involve a reaction that would produce moexipril magnesium. This statement was patently false. The founder also facilitated submission of an expert’s declaration to this effect which the Federal Circuit found particularly significant and inexcuseable. Thirdly, this very information was what led the examiner to allow the patent application to proceed to issuance.
On the issue of intent to deceive, when the inventor drafted the patent application he knew or at least had a strong suspicion that he was seeking patent protection for the process used to obtain an already existing and widely available drug. The founder was aware that some of the statements made in the patent application regarding the prior art were at least misleadingly incomplete, if not plainly inaccurate. He described experiments that were never conducted. The statements could not even be construed as an alternative interpretation of the prior art. In other words, the founder made statements that were factual in nature but contrary to the true information he had in his possession. Hence, the Federal Circuit affirmed the district court’s finding of an intent to deceive.
In this opinion, the Federal Circuit went out of its way to make clear that legitimate advocacy is encouraged. For example, legitimate advocacy may encompass good faith reasonable interpretations of the prior art, which disagrees with the examiner. However, in this case, the Federal Circuit stated that the founder “affirmatively and knowingly misrepresented material facts regarding the prior art.”
In prosecuting a patent application, arguments are often presented which disagree with the examiner’s position. But those statements and arguments must not be contrary to the truth. Once a detrimental fact or truth is uncovered, such fact or truth should be disclosed and not misrepresented. Otherwise, the patent at issue and your credibility may be at stake.
I invite you to contact me with your patent questions at (949) 433-0900. Please feel free to forward this article to your friends. As an Orange County Patent Attorney, I serve Orange County, Irvine, Los Angeles, San Diego and surrounding cities.