{"id":1969,"date":"2010-02-22T14:17:41","date_gmt":"2010-02-22T20:17:41","guid":{"rendered":"http:\/\/www.717madisonplace.com\/?p=1969"},"modified":"2010-02-22T14:17:41","modified_gmt":"2010-02-22T20:17:41","slug":"an-update-on-the-law-of-inequitable-conduct-in-patent-prosecution","status":"publish","type":"post","link":"https:\/\/www.717madisonplace.com\/?p=1969","title":{"rendered":"An Update on the Law of Inequitable Conduct in Patent Prosecution"},"content":{"rendered":"

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Reproduced by permission. \u00a92010 Colorado Bar Association,<\/span><\/strong> <\/span><\/p>\n

39 The Colorado Lawyer<\/em> 39 (January 2010), All rights reserved.<\/span><\/strong><\/p>\n

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An Update on the Law of Inequitable Conduct in Patent Prosecution<\/span><\/p>\n

_________________________________________________________________________________________________________<\/span><\/strong><\/p>\n

by William F. Vobach <\/span><\/p>\n

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\u00a0\u00a0\u00a0\u00a0 The Court of Appeals for the Federal Circuit recently hand\u00aded down decisions in several cases involving inequitable conduct law. These decisions will affect attorneys who prosecute patents and those involved with the licensing and litiga\u00adtion of patents. It is important that practitioners who work in the field of patent law be familiar with these recent cases and under\u00adstand the effect the rulings have on already issued patents and pending patent applications. This article discusses three recent cas\u00ades concerning the law of inequitable conduct: Dayco Products, Inc. v. Total Containment, Inc.<\/em>;1 <\/span><\/sup>McKesson Information Solutions, Inc. v. Bridge Medical, Inc.<\/em>;2 <\/span><\/sup>and Larson Manufacturing Co. v. Aluminart Prods. Ltd.<\/em>3 <\/span><\/sup><\/span><\/span><\/p>\n

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Background of Inequitable Conduct <\/span><\/strong><\/p>\n

Attorneys, inventors, and others involved with the patent process, such as officers of an inventor\u2019s company, are under a duty to disclose material information to the U.S. Patent and Trademark Office (USPTO) between the date a patent application is filed and the date the \u00a0<\/span><\/span><\/sup>application issues as a patent.4 <\/span><\/sup>This duty is referred to as the \u201cduty of disclosure\u201d by the patent bar. What qualifies as \u201cma\u00adterial information\u201d is open-ended, and a comprehensive list of this type of information is not available. However, examples of infor\u00admation that should be cited to the examiner include: prior patents, published patent applications, published articles, filings made dur\u00ading patent litigation, and related patent applications.<\/strong>5 <\/span><\/sup>When a piece of information is deemed material, it is cited to the USPTO for examiner consideration.6 <\/span><\/sup>The examiner then makes a notation to the patent file that the information has been considered before issuing the patent.7<\/span><\/sup><\/span><\/span><\/p>\n

The penalty for failing to cite material information can be se\u00advere. For example, when one knowingly fails to cite material infor\u00admation with the intent to mislead or deceive an examiner, the is\u00adsued patent can be deemed unenforceable by a court during patent litigation.8 <\/span><\/sup>A court\u2019s authority to render a patent unenforceable for inequitable conduct springs from the equitable principle that \u201che who comes into equity must come with clean hands.\u201d9 <\/span><\/sup>During patent litigation, it is common for defendants to assert that materi\u00adal information that was known to the patentee during prosecution was not cited to the USPTO, and that the resulting patent should be held unenforceable due to inequitable conduct.10 <\/span><\/sup><\/span><\/span><\/p>\n

The analysis used to prove inequitable conduct is a two-step process. First, it is determined whether the withheld information meets a threshold level of materiality and intent to mislead. Next, the materiality and intent are weighed in light of all the circum\u00adstances to determine whether the applicant\u2019s conduct is so culpable that the patent should be held unenforceable.11 <\/span><\/sup><\/span><\/span><\/p>\n

Different standards for materiality exist. One is whether a rea\u00adsonable examiner would have considered the prior art important in deciding whether to allow the patent application.12 <\/span><\/sup>Another stan\u00addard is whether the information: (1) establishes a prima facie <\/em>case of unpatentability, or (2) refutes or is inconsistent with a position the applicant takes.13 <\/span><\/sup><\/span><\/span><\/p>\n

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The Dayco Products <\/em>Case <\/span><\/strong><\/p>\n

The first case in recent years to significantly alter the law of in\u00adequitable conduct relating to patent prosecution was Dayco Prod\u00aducts, Inc. v. Total Containment, Inc.<\/em>14 <\/span><\/sup>In Dayco<\/em>, the Federal Circuit indicated for the first time that an office action15 <\/span><\/sup>from a related patent application might be material to an examiner inspecting a separate patent application.16<\/span><\/sup><\/span><\/span>\u00a0<\/span><\/span><\/sup><\/p>\n

Dayco <\/span><\/em>concerned two families of patent applications that were being examined by different patent examiners.17 <\/span><\/sup>The first family of applications was related to U.S. application number 993,196 ( \u2019196 family of applications or \u2019196 application) and was being ex\u00adamined by Examiner Eric Nicholson.18 <\/span><\/sup>The second family of ap\u00adplications, a family that resulted in the patents asserted in the Day\u00adco <\/em>litigation (patents-in-suit), was being examined by Examiner David Arola.19 <\/span><\/sup>During prosecution of the \u2019196 family of applica\u00adtions, the existence of the patents-in-suit was brought to the atten\u00adtion of Nicholson.20 <\/span><\/sup>However, during prosecution of the patents-in-suit, Arola was not informed of the existence of the \u2019196 family of applications.21 <\/span><\/sup>The two families of applications contained sub\u00adstantially identical claims, and Nicholson issued rejections of those claims on three occasions. Arola was not informed of Nicholson\u2019s rejections or the reference that served as the basis for the rejections (Wilson reference).22 <\/span><\/sup><\/span><\/span><\/p>\n

On summary judgment, the district court found the patents-in\u00ad suit unenforceable for inequitable conduct. The district court re\u00adlied on three items that had not been cited to Arola: (1) the pen\u00addency of the \u2019196 application before Nicholson; (2) the Wilson ref\u00aderence; and (3) the rejection of substantially similar claims in the\u2019196 application by Nicholson based on the Wilson reference.23 <\/span><\/sup><\/span><\/span><\/p>\n

The Court of Appeals for the Federal Circuit addressed each of these three issues. It found that the applications for the patents-in \u00adsuit and the \u2019196 application contained similar claims, and Arola could have issued a double-patenting rejection if he had been noti\u00adfied of the existence of the \u2019196 application.24 <\/span><\/sup>This could have re\u00adsulted in the need to file a terminal disclaimer. The terminal dis\u00adclaimer would have effectively limited the assignability of the patents because it would have required co-ownership of all of the patents throughout their term. Therefore, the Federal Circuit deemed that the pendency of the \u2019196 application was \u201cmaterial.\u201d25 <\/span><\/sup><\/span><\/span><\/p>\n

The court also ruled that the failure to cite the existence of the \u2019196 application did not meet the threshold showing of intent to deceive.26 <\/span><\/sup>Under Akron Polymer Container Corp. v. Exxel Container, Inc.<\/em>,27 <\/span><\/sup>intent could not be inferred because the patentee disclosed the existence of a second application to a first application\u2019s examin\u00ader, putting the USPTO on notice of the co-pendency of the appli\u00adcations. The fact that the applications that issued as patents-in-suit were disclosed to the examiner of the co-pending application\u2014but not vice versa\u2014implied a lack of intent to deceive.28 <\/span><\/sup>The court found no basis for summary judgment regarding the failure to cite the existence of the \u2019196 application to Arola, who was examining the patents-in-suit, because a threshold level of intent to deceive was not satisfied.29 <\/span><\/sup><\/span><\/span><\/p>\n

With respect to the failure to cite the Wilson reference, the Fed\u00aderal Circuit ruled that summary judgment was improper.30 <\/span><\/sup>The court held that Nicholson\u2019s reliance on the Wilson reference was informative, but not dispositive. The determination of whether Wilson met the threshold level of materiality required a detailed factual analysis of the relevance of what was disclosed by the Wil\u00adson reference relative to what was being claimed by the patents-in\u00ad suit.31 <\/span><\/sup>In addition, the intent to deceive element was not satisfied, because the attorney who withheld the Wilson reference from Arola had submitted an affidavit explaining that in good faith he concluded that the reference was not material. The court stated: <\/span><\/span><\/p>\n

[I]nequitable conduct requires not intent to withhold, but rather intent to deceive. Intent to deceive cannot be inferred simply from the decision to withhold the reference where the reasons given for the withholding are plausible.32 <\/span><\/sup><\/span><\/span><\/p>\n

Finally, the Federal Circuit addressed whether Dayco committed inequitable conduct for failure to cite an office action rejecting claims in the \u2019196 application when those claims were substantially similar to the claims in the patents-in-suit. The court noted:<\/span><\/span><\/p>\n

This court has never addressed whether the prior rejection of a substantially similar claim in a copending United States application is material under the reasonable examiner standard.33<\/sup><\/span><\/span><\/p>\n

Noting that patent disclosures can be complicated, and that exam\u00adiners with different technical backgrounds and levels of under\u00adstanding often differ in their interpretation of these documents, the court stated that a different interpretation is clearly informa\u00adtion that an examiner could consider important when examining an application.34 <\/span><\/sup>The court held that a contrary decision of anoth\u00ader examiner reviewing a substantially similar claim meets the \u201crea\u00adsonable examiner\u201d threshold of materiality test of \u201cany information that a reasonable examiner would substantially likely consider im\u00adportant in deciding whether to allow an application to issue as a patent.\u201d35 <\/span><\/sup>The court also held that this information meets the threshold level of materiality under the materiality test of 37 C.F.R. \u00a7 1.56.36<\/sup><\/span><\/span><\/p>\n

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The McKesson Information Solutions <\/em>Case<\/span><\/strong><\/strong><\/p>\n

McKesson Information Solutions, Inc. v. Bridge Medical<\/span><\/em>, Inc.37 was the second case to significantly alter the requirements for in\u00adequitable conduct for patent prosecution in recent years. In McKesson<\/em>, the Federal Circuit noted that even when the same ex\u00adaminer is examining two co-pending applications, material office actions from one application need to be cited to the other. The court indicated that even a notice of allowance in one application can be material and might need to be cited.<\/span><\/span><\/p>\n

The McKesson <\/em>case involved the prosecution of three patent ap\u00adplications relating to similar subject matter, prosecuted by the same attorney on behalf of the same client. The facts of the case are as follows:\u00a0 <\/span><\/span><\/span><\/p>\n

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1. \u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 <\/span>The first application, U.S. application 07\/205,527, was exam\u00adined by Examiner Trafton and eventually issued as U.S. patent 4,857,716.38\u00a0 <\/span><\/span><\/sup>It was the patent-in-suit.<\/span><\/span><\/p>\n

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2.\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 <\/span>The second application, U.S. application 06\/862,149, was ex\u00adamined by Examiner Lev.39 <\/span><\/sup><\/span><\/span><\/p>\n

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3.\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 <\/span>The third application, U.S. application 07\/078,195, issued as U.S. patent 4,835,372 and also was examined by Trafton.40<\/span><\/sup><\/span><\/span><\/p>\n

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4.\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 <\/span>The third application and the first application shared a com\u00admon parent application.41 <\/span><\/sup><\/span><\/span><\/p>\n

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A district court found the patent being asserted in the patent lit\u00adigation, U.S. patent 4,857,716, to be unenforceable for inequitable conduct for three reasons: (1) a reference known as the Baker ref\u00aderence that was before Lev in the 06\/862,149 application was not disclosed to Trafton in the 07\/205,527 application;42 (2) Lev\u2019s of\u00adfice actions rejecting claims in the 06\/862,149 application were not disclosed to Trafton in the 07\/205,527 application;43 and (3) the notice of allowance by Trafton of claims in U.S. application 07\/078,195 was not cited back to Trafton in U.S. application07\/205,527.44<\/span><\/span><\/p>\n

The Federal Circuit first addressed the non-disclosure of the Baker reference. The court reviewed the district court\u2019s factual findings with respect to the materiality of the reference and found that there was no clear error by the district court in finding that the Baker reference was noncumulative art.45 <\/span><\/sup>The court then reviewed the district court\u2019s finding that there had been deceptive intent by the patent attorney in not disclosing the reference. McKesson <\/em>made several arguments as to where the district court erred with respect to the intent issue. One assertion was that Baker had been cited by Lev as teaching a claim feature that was irrelevant to the applica\u00adtion being examined by Trafton. The court noted that this was un\u00adconvincing, because Lev had cited the eighteen-column Baker ref\u00aderence and the patent attorney was on notice of the entire Baker reference.46 <\/span><\/sup>Another argument was that the patent attorney learned of the Baker reference only after making assertions to Trafton that went counter to the teachings of Baker. The court noted that this fact was of no consequence. Only seventeen days had passed be\u00adtween the attorney\u2019s assertion and the citation of Baker by Lev, so the attorney knew or should have known of Baker\u2019s materiality.47 <\/span><\/sup>The court also concluded that there was no clear error by the trial court with respect to intent.48<\/span><\/sup><\/span><\/span><\/p>\n

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\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 <\/span><\/span>With regard to the prosecution of patent applications, the Fed\u00aderal Circuit stated: <\/span><\/span><\/p>\n

Yet, in spite of the advice provided to prosecuting attorneys in the 1986 version of the MPEP that \u201cinformation . . . specifically considered and discarded as not material\u201d ought to be \u201crecorded in [the] attorney\u2019s file or applicant\u2019s file, including the reason for discarding it,\u201d MPEP \u00a72004(18)(5th ed. Rev. 3, 1986), Schumann offered no such recorded reason; he was only able to give speculative testimony about the conclusions he must have drawn at the time with respect to Baker\u2019s materiality.49<\/span><\/sup><\/span><\/p>\n

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As a practice tip, when parties determine not to cite an arguably material reference to a related case, they might want to draft a memo to the prosecution file for future reference. Because files are often transferred to other law firms when companies or patent portfolios are acquired, a practitioner also might want to keep a copy of the memo when the file is transferred. The rationale for this is that if the practice of the acquiring firm is to clean a file of all notes and memos when the patent issues, the memo explaining why a reference was not cited could inadvertently be discarded.<\/span><\/span><\/p>\n

\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 <\/span><\/span>The Federal Circuit next examined whether the district court erred with respect to the failure to disclose Lev\u2019s rejections to Trafton.50 <\/span><\/sup>The court addressed the issue of how similar claims should be in two different applications for purposes of assessing the materiality of rejections.<\/span>\u00a0 <\/span><\/span>The Federal Circuit stated:<\/span><\/span><\/p>\n

Under Dayco, that standard is satisfied in the rejected-claims setting if the rejected claims are substantially similar to the claims at issue. 329 F.3d at 1368. In other words, a showing of substantial similarity is sufficient to prove materiality. It does not necessarily follow, however, that a showing of substantial simi\u00adlarity is necessary to prove materiality. Indeed, in the same way that prior art need not be substantially similar in order to be ma\u00adterial . . . rejected claims in a co-pending application also need not be substantially similar in order to be material.51 <\/span><\/sup><\/span><\/span><\/p>\n

McKesson argued that the district court judge neglected to con\u00adsider the differences in the claims being examined by the different examiners.\u00a0 <\/span>The court disagreed and concluded that there was no clear error in the district court\u2019s finding that the undisclosed rejec\u00adtions were material.52<\/span><\/sup><\/span><\/span><\/p>\n

\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 <\/span><\/span>With respect to the intent prong of the inequitable conduct test, McKesson argued that at the time the patent-in-suit was prose\u00adcuted, patent attorneys were not aware that further disclosure of rejections in co-pending applications was necessary.53<\/sup> In addition, McKesson argued that it was not until 2003, in the Dayco<\/em> decision, that the patent bar was put on notice that disclosures of rejections are necessary.54<\/sup> The Federal Circuit dismissed this argument, rely\u00ading on 37 C.F.R. \u00a7 1.56 and the Manual of Patent Examining Pro\u00adcedure.55<\/sup> The Federal Circuit concluded that there was no clear er\u00adror by the district court in finding that the patent attorney intend\u00aded to deceive the USPTO by not disclosing the two rejections by Lev to Trafton.56<\/sup><\/span><\/span><\/p>\n

\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 <\/span><\/span>Next, the court addressed the district court\u2019s factual findings with respect to the failure to disclose the notice of allowance from the third application (U.S. application 07\/078,195 that was being examined by Examiner Trafton) to Examiner Trafton for his ex\u00adamination of U.S. application 07\/205,527.Trafton was examining both applications, and the district court found that the common applicant had a duty to disclose the notice of allowance issued by Trafton in one application back to Trafton for his examination of the other application. The Federal Circuit first addressed the ma\u00adteriality of the allowance of the claims. McKesson argued that a notice of allowance was material only if there was a substantial likelihood that the examiner would have issued a double patenting<\/span> <\/span>rejection based on the allowed claims.57 <\/span><\/sup>The Federal Circuit dis\u00adagreed, noting that \u201cmaterial information is not limited to infor\u00admation that would invalidate the claims under examination.\u201d58<\/span><\/sup>The Federal Circuit noted that the notice of allowance did give rise to a conceivable double-patenting rejection.59 <\/span><\/sup>In addition, the court noted that one could not assume that Trafton would necessarily re\u00adcall his decision to grant the claims of one application when he was examining a different application.60 <\/span><\/sup>The court found that it was not error for the district court to have found the allowance of the claims to be material.61 <\/span><\/sup><\/span><\/span><\/p>\n

\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 <\/span><\/span>With respect to the intent prong, the patent attorney had testi\u00adfied at trial that he did not consider the identity of the examiner in deciding whether to disclose information about co-pending appli\u00adcations. Therefore, McKesson could not argue that the patent at\u00adtorney had not disclosed the notice of allowance because he thought Trafton already knew of its existence.62<\/sup><\/span><\/span><\/p>\n

As a final step of the inequitable conduct analysis, the material\u00adity and intent findings are weighed in light of all the circum\u00adstances to determine whether the conduct by the applicant is so culpable that the patent should be held unenforceable.63<\/sup> The dis\u00adtrict court\u2019s determination in this regard was reviewed by the Fed\u00aderal Circuit for abuse of discretion. In this instance, the Federal Circuit determined that there was no abuse of discretion in hold\u00ading the patent-in-suit unenforceable. The court declined to deter\u00admine whether any one of the three instances of non-disclosure by itself would have been sufficient for holding the patent unen\u00adforceable.64<\/sup><\/span><\/span><\/p>\n

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The Larson Manufacturing <\/em>Case<\/span><\/strong><\/p>\n

Larson Manufacturing Co. v. Aluminart Prods. Ltd.<\/span><\/em>,65<\/sup> decided in 2009, addressed whether failure to submit office actions from a re\u00adlated application constituted inequitable conduct. Larson asserted U.S. patent 6,618,998 against Aluminart in a patent infringement action.66<\/sup> The patent related to storm doors with retractable screens.67<\/sup> In response, Aluminart requested re-examination of the patent and the request was granted; the patent litigation was stayed pending the result.68<\/sup> During re-examination, a continuation appli\u00adcation of the 6,618,998 patent also was prosecuted by Larson. The same attorney conducted the prosecution of the continuation ap\u00adplication and the re-examination. Two office actions from the con\u00adtinuation application were cited to the re-examination Panel (Pan\u00adel), but a third and fourth office action were not.69<\/sup>\u00a0 <\/span>After issuance of the re-examination certificate and lifting of the stay, Aluminart as\u00adserted that Larson had committed inequitable conduct for failure to cite the remaining two office actions. Aluminart also asserted inequitable conduct for the withholding of three prior art refer\u00adences.70<\/sup> The district court agreed with Aluminart and found the 6,618,998 patent unenforceable for inequitable conduct.71<\/sup> <\/span><\/span><\/p>\n

\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 <\/span>On appeal, the Federal Circuit disagreed with the district court in regard to the un-cited prior art references, finding them to be merely cumulative and not material.72<\/sup> With respect to the un-cited office actions, the Federal Circuit found no clear error in the dis\u00adtrict court\u2019s findings that those items constituted material infor\u00admation.73<\/sup><\/span><\/span><\/p>\n

\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 <\/span>As noted above, two office actions had previously been cited to the Panel. One was cited in the request for re-examination by Aluminart, and the second was referenced in an information dis\u00adclosure statement submitted to the Panel.74<\/sup> A third and fourth of\u00adfice action in the continuation application were not cited to the examiner of the re-examination proceeding. Aluminart argued that despite the fact that the Panel did not have the third and fourth office actions before it, it was aware of the simultaneous proceedings of the continuation application because the first of\u00adfice action from the continuation was used to prompt the re-ex\u00adamination. Larson also argued that the third and fourth office ac\u00adtions did not contain examiner comments different from previous office actions and did not disclose any new references that had not already been cited to the Panel.75<\/sup> The Federal Circuit disagreed and noted that the third and fourth office actions contained an\u00adother examiner\u2019s adverse decisions about substantially similar claims and were not cumulative of the first and second office ac\u00adtions.76<\/sup> The court commented that even a withdrawn rejection might be material. The court stated:<\/span><\/span><\/p>\n

Importantly, during the time from when the Third Office Ac\u00adtion issued to the time when the Fourth Office Action withdrew the pertinent rejection\u2014more than a year\u2014there was an adverse decision by another examiner that refuted or was inconsistent with, the position that claim limitations of the \u2019998 patent were patentable over the Johnson patent. Accordingly, the Third Of\u00adfice Action was material.77<\/span><\/sup><\/span><\/span><\/p>\n

The Federal Circuit also noted that the fourth office action raised a new rejection that was not before the Panel.78<\/sup> The fourth office action from the continuation application contained an inter\u00adpretation of a prior art reference that was different than the Panel\u2019s interpretation of that reference. The Federal Circuit concluded that:<\/span><\/span><\/p>\n

the adverse decision of the examiner in the \u2019039 Continuation, based on a different explanation and interpretation of the Kemp patent and other prior art, was \u201cclearly information that an ex\u00adaminer could consider important.\u201d79 <\/span><\/sup><\/span><\/p>\n

\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 <\/span><\/span><\/sup>The court next addressed the intent prong\u2014whether Larson\u2019s attorney had intentionally tried to deceive the patent office by withholding the third and fourth office actions. The court noted that the district court had found intent based on the withholding of the undisclosed office actions and the three undisclosed prior art items. The Federal Circuit deemed the prior art items to be imma\u00adterial and noted that the district court would need to reconsider whether the withholding of only the third and fourth office actions was done with deceptive intent.80<\/sup><\/span><\/span><\/p>\n

\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 <\/span>The court went on to give some guidance to the district court on how to assess deceptive intent on remand. The court said that materiality does not presume intent and that nondisclosure, by it\u00adself, cannot satisfy the deceptive intent element. For this proposi\u00adtion, the court cited the Federal Circuit\u2019s 2008 opinion in Star Sci\u00adentific v. R.J. Reynolds Tobacco Co.<\/em>81<\/sup> The alleged infringer will need to prove, by clear and convincing evidence, a specific intent to de\u00adceive the USPTO. Deceptive intent can be inferred, but any cir\u00adcumstantial evidence will need to be clear and convincing. The in\u00adference will be the single most reasonable inference able to be drawn from the evidence to meet the clear and convincing stan\u00addard.82<\/sup> An accused infringer cannot carry its threshold burden simply by pointing to the absence of a credible good faith explana\u00adtion.83<\/sup> The court also noted that the district court on remand should take into consideration any evidence of good faith that mil\u00aditates against a finding of deceptive intent. The district court was instructed to consider the fact that Larson had notified the Panel of the simultaneous prosecution of the \u2019039 Continuation and had thus put the USPTO on notice of the co-pendency.84<\/sup> If the dis\u00adtrict court concludes on remand that the third and fourth office ac\u00adtions were intentionally withheld, it will have to balance the lev\u00adels of materiality and intent to determine whether a finding of in\u00adequitable conduct is warranted.85<\/sup><\/span><\/span><\/p>\n

\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 <\/span>The Federal Circuit remanded the case to the district court for a determination of whether the withholding of the office actions showed an intent to deceive the USPTO and, if so, whether a bal\u00adancing of the materiality and intent led to the conclusion that the patent was unenforceable for inequitable conduct.86<\/sup><\/span><\/span><\/p>\n

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Practice Pointers from <\/span><\/strong><\/p>\n

Dayco<\/span><\/em><\/strong>, McKesson<\/em>, and Larson<\/em><\/span><\/strong><\/p>\n

\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 <\/span><\/span><\/em><\/strong>As a result of the Dayco, McKesson, <\/em>and Larson <\/em>cases, patent prosecutors now will need to consider whether office actions are material and in need of citation to other patent applications. Sev\u00aderal practice pointers can be derived from these cases to assist the patent prosecutor. <\/span><\/p>\n

\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 <\/span><\/span>1. Cite the existence of related patent applications to their coun\u00adterpart examiners.<\/span><\/p>\n

\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 <\/span>2. Cite references from related cases if they are material.<\/span><\/p>\n

\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 <\/span>3. Cite office actions from related applications and re-examina\u00adtion proceedings if they are material.<\/span><\/p>\n

\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 <\/span>4. Cite Notices of Allowance or Notices of Allowability if they might be relevant to a double-patenting rejection in a differ\u00adent application.<\/span><\/p>\n

\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 <\/span>5. Do not assume that an examiner who is inspecting multiple applications owned by the same party will remember prior art or reasons for rejection from one case to the next.<\/span><\/p>\n

\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 <\/span>6. If a decision is made not to cite what later might be argued to be material information, create a memo to the file explaining the reasoning not to cite it, so as to be able to prove that there was no intent to deceive an examiner by withholding the in\u00adformation.<\/span><\/p>\n

\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 <\/span>7. Assign prosecution of related applications to the same law firm and preferably the same attorney within that firm to en\u00adsure consistent arguments and familiarity during prosecution.<\/span><\/p>\n

\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 <\/span>8. If an examiner is verbally notified of material information, fol\u00adlow it up with a written submission or a memo to the prose\u00adcution file memorializing the fact.<\/span><\/p>\n

\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 <\/span>9. Explain to support staff the importance of retaining any memoranda regarding these issues so that the memoranda are not accidentally thrown out at the conclusion of prosecution.<\/span><\/p>\n

\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 <\/span>10. Simply following a law firm\u2019s internal policy regarding citation of material information is not protection if that policy is in\u00adcorrect.87<\/span><\/sup><\/span><\/p>\n

\u00a0<\/span><\/p>\n

Conclusion<\/span><\/strong><\/p>\n

\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 <\/span><\/span><\/strong>The Federal Circuit has made it easier to find a patent unen\u00adforceable for inequitable conduct in view of the Dayco<\/em>–McKesson<\/em>–Larson <\/em>line of cases. Patent prosecutors should take note of the new requirement to cite material office actions, even to applications having a common examiner. Patent litigators and licensing attor\u00adneys also should review this line of cases to assess the impact on the strength of their positions during litigation or licensing.<\/span><\/p>\n

\u00a0<\/span><\/p>\n

Notes<\/span><\/p>\n

1. Dayco Products, Inc. v. Total Containment, Inc.<\/em>, 329 F.3d 1358 (Fed.Cir. 2003).<\/span><\/p>\n

2. McKesson Information Solutions, Inc. v. Bridge Medical, Inc.<\/em>, 487 F.3d 897 (Fed.Cir. 2007).<\/span><\/p>\n

3. Larson Manufacturing Co. v. Aluminart Prods. Ltd<\/em>., 559 F.3d 1317 (Fed.Cir. 2009).<\/span><\/p>\n

4. See <\/em>37 C.F.R. \u00a7 1.56 (duty to disclose information material to patentability).<\/span><\/p>\n

5. See <\/em>U.S. Department of Commerce, U.S. Patent and Trademark Of\u00adfice (USPTO), Manual of Patent Examining Procedure <\/em>(MPEP <\/em>),\u00a7\u00a7 09.04(a),2001.05,and 2001.06 (8th ed.,Rev.7,ThomsonWest,2008).<\/span><\/p>\n

6. Id. <\/em>at \u00a7 609.<\/span><\/p>\n

7. Id<\/em>. <\/span><\/p>\n

8. See Digital Control, Inc. v. Charles Mach. Works<\/em>, 437 F.3d 1309, 1313 (Fed.Cir. 2006).<\/span><\/p>\n

9. See Precision Instrument Mfg. Co. v. Auto. Maint. Mach. Co.<\/em>, 324 U.S. 806, 814 (1945).<\/span><\/p>\n

10. See Burlington Industries Inc. v. Dayco Corp.<\/em>, 849 F.2d 1418 (Fed.Cir. 1988). See also McKesson, supra <\/em>note 2 at 897, 926 (Judge Newman\u2019s dissent,stating:\u201cThis court returns to the \u2018plague\u2019of encouraging unwarrant\u00aded charges of inequitable conduct….\u201d).<\/span><\/p>\n

11. See Purdue Pharma L.P. v. Boehringer Ingelheim GMBH<\/em>, 237 F.3d 1359, 1366 (Fed.Cir. 2001).<\/span><\/p>\n

12. See Driscoll v. Cebalo<\/em>, 731 F.2d 878, 884 (Fed.Cir. 1982). <\/span><\/p>\n

13. See <\/em>37 C.F.R. \u00a7 1.56.<\/span><\/p>\n

14. Dayco, supra.<\/em><\/span><\/p>\n

15. The USPTO conducts its examination of a patent application by issuing \u201coffice actions, \u201dwhich are written communications addressing the patentability of proposed patent claims. An examiner might issue several office actions during the examination process for a particular application.<\/span><\/p>\n

16. Dayco, supra <\/em>note 1 at 1367 (\u201cThis court has never addressed whether the prior rejection of a substantially similar claim in a copending United States application is material under the reasonable examiner stan\u00addard.\u201d). See also McKesson, supra <\/em>note 2 at 897, 919 (\u201cThis court addressed the failure to disclose rejections in co-pending applications for the first time in Dayco<\/em>.\u201d).<\/span><\/p>\n

17. Dayco, supra <\/em>note 1 at 1361. <\/span><\/p>\n

18. Id<\/em>. <\/span><\/p>\n

19. Id<\/em>.<\/span><\/p>\n

20. Id<\/em>. <\/span><\/p>\n

21. Id<\/em>.<\/span><\/p>\n

22. Id<\/em>. at 1361-62.<\/span><\/p>\n

23. Id<\/em>. at 1364.<\/span><\/p>\n

24. Id<\/em>. at 1365.<\/span><\/p>\n

25. Id<\/em>. (\u201cA copending application may be material even though it can\u00adnot result in shorter patent term when it could affect the rights of the pat\u00adentee to assign the issued patents.\u201d).<\/span><\/p>\n

26. Id<\/em>. at 1366. <\/span><\/p>\n

27. Akron Polymer Container Corp. v. Exxel Container, Inc.<\/em>, 148 F.3d 1380 (Fed.Cir. 1998).<\/span><\/p>\n

28. Dayco, supra <\/em>note 1 at 1366.<\/span><\/p>\n

29. Id<\/em>.<\/span><\/p>\n

30. Id<\/em>. at 1367.<\/span><\/p>\n

31. Id<\/em>. <\/span><\/p>\n

32. Id<\/em>. <\/span><\/p>\n

33. Id<\/em>.<\/span><\/p>\n

34. Id<\/em>. at 1368.<\/span><\/p>\n

35. Id<\/em>.<\/span><\/p>\n

36. Id<\/em>. (\u201cWhen prosecuting claims before the Patent Office, a patent applicant is, at least implicitly, asserting that those claims are patentable. A prior rejection of a substantially similar claim refutes, or is inconsistent with the position that those claims are patentable.\u201d).<\/span><\/p>\n

37. McKesson, supra <\/em>note 2 at 897. A dissenting opinion was filed by Judge Newman.<\/span><\/p>\n

38. Id<\/em>. at 904<\/span><\/p>\n

39. Id<\/em>.<\/span><\/p>\n

40. Id<\/em>. at 906-07.<\/span><\/p>\n

41. Id<\/em>. at 907 and 902. (U.S. patent application no. 07\/205,527 was a continuation of U.S. application no. 06\/862,278, and U.S. application no.07\/078,195 was a continuation-in-part of U.S. application no. 06\/862,278).<\/span><\/p>\n

42. Id<\/em>. at 908-13.<\/span><\/p>\n

43. Id<\/em>. at 910-13.<\/span><\/p>\n

44. Id<\/em>. at 912-13.<\/span><\/p>\n

45. Id<\/em>. at 915.<\/span><\/p>\n

46. Id<\/em>. at 918.<\/span><\/p>\n

47. Id<\/em>.<\/span><\/p>\n

48. Id<\/em>.<\/span><\/p>\n

49. Id<\/em>. The court noted the full text of MPEP <\/em>\u00a7 2004(18) (5th ed. Rev. 3, 1986):<\/span><\/p>\n

Finally, if information was specifically considered and discarded as not material, this fact might be recorded in an attorney\u2019s file or applicant\u2019s file, including the reason for discarding it. If judgment might have been bad or something might have been overlooked inadvertently, a note made at the time of evaluation might be an invaluable aid in explaining hat mistake was honest and excusable. Though such records are not required, they could be helpful in recalling and explaining actions in the event of a question of \u201cfraud\u201d or \u201cinequitable conduct\u201d raised at a later time.<\/span><\/p>\n

50. McKesson, supra <\/em>note 2 at 919.<\/span><\/p>\n

51. Id<\/em>.<\/span><\/p>\n

52. Id<\/em>. at 922.<\/span><\/p>\n

53. Id<\/em>.<\/span><\/p>\n

54. Id<\/em>.<\/span><\/p>\n

55. U.S. Department of Commerce, USPTO, MPEP<\/em>, \u00a7\u00a7 2001.04 and 2001.06 (5th ed. Rev. 3, 1986); McKesson, supra <\/em>note 2 at 923. <\/span><\/p>\n

56. McKesson, supra <\/em>note 2 at 925-26. <\/span><\/p>\n

57. Id<\/em>. at 925.<\/span><\/p>\n

58. Id<\/em>.<\/span><\/p>\n

59. Id<\/em>.<\/span><\/p>\n

60. Id<\/em>.<\/span><\/p>\n

61. Id<\/em>.<\/span><\/p>\n

62. Id<\/em>. at 926. <\/span><\/p>\n

63. See Purdue, supra <\/em>note 11.<\/span><\/p>\n

64. McKesson, supra <\/em>note 2 at 926.<\/span><\/p>\n

65. Larson, supra <\/em>note 3 at 1317.<\/span><\/p>\n

66. Id<\/em>.<\/span><\/p>\n

67. Id<\/em>. at 1321.<\/span><\/p>\n

68. Id<\/em>. at 1324.<\/span><\/p>\n

69. Id<\/em>.<\/span><\/p>\n

70. Id<\/em>. at 1325.<\/span><\/p>\n

71. Id<\/em>. <\/span><\/p>\n

72. Id<\/em>. at 1333 and 1337.<\/span><\/p>\n

73. Id<\/em>. at 1339.<\/span><\/p>\n

74. Id<\/em>. at 1337.<\/span><\/p>\n

75. Id<\/em>.<\/span><\/p>\n

76. Id<\/em>. at 1338.The court stated: [A]lthough the previous office actions used the Johnson patent to reject the similar claims of the . . . Continuation, the Third Office Action ex\u00adplicitly explained, for the first time, that the Johnson patent shows \u201cthe screen is attached across its width . . . to the coupling element . . . there\u00adby indicating that such extends into the tracks.\u201d This was the first time that the examiner of the . . . Continuation conveyed such specific ex\u00adplanation about the Johnson patent.<\/span><\/p>\n

77. Id<\/em>. at 1338-39.<\/span><\/p>\n

78. Id<\/em>. at 1339 (\u201cThe Fourth Office Action articulated a new rejection of the \u2018extending into screen tracks limitation\u2019 in view of the Johnson and Kemp patents.\u201d).<\/span><\/p>\n

79. Id<\/em>.<\/span><\/p>\n

80. Id<\/em>. at 1340.<\/span><\/p>\n

81. Star Scientific v. R.J. Reynolds Tobacco Co.<\/em>, 537 F.3d 1357 (Fed.Cir. 2008).<\/span><\/p>\n

82. Larson, supra <\/em>note 3 at 1340 and 1366, citing Star Scientific, supra <\/em>note 81.<\/span><\/p>\n

83. Larson, supra <\/em>note 3 at 1341, citing M. Eagles Tools Warehouse v. Fish\u00ader Tooling Co.<\/em>, 439 F.3d 1335, 1341 (Fed.Cir. 2006) (\u201cWhen the absence of a good faith explanation is the only evidence of intent, however, that evi\u00addence alone does not constitute clear and convincing evidence warranti\u00adng an inference of intent.\u201d).<\/span><\/p>\n

84. Id<\/em>.<\/span><\/p>\n

85. Id<\/em>. (\u201cAt that point, the court must balance the substance <\/em>of those threshold levels\u2014with a higher level of materiality permitting a lower lev\u00adel of intent, and vice versa.\u201d). Emphasis in original.<\/span><\/p>\n

86. Id<\/em>. at 1320-21.<\/span><\/p>\n

87. See McKesson, supra <\/em>note 2 at 897, 911-12 (noting that \u201c[t]he court also discounted as not credible . . . [the prosecuting attorney\u2019s] testimony that his firm at the time did not have procedures in place for citing office actions in co-pending applications\u201d and \u201ceven if [the prosecuting attor\u00adney\u2019s] former firm did have such procedures in place (a matter not decided in fact), the court held that our decision in Brasseler, U.S.A. I, L.P. v. Stryk\u00ader Sales Corp.<\/em>, 267 F.3d 1370 (Fed.Cir. 2001) prevents firms from \u2018insu\u00adlat[ing] [their attorneys] against charges of inequitable conduct by insti\u00adtuting policies that prevent [the attorneys] from complying with the law.\u2019\u201d). <\/span>\u25a0<\/span><\/p>\n

\u00a0<\/span><\/p>\n

\u00a0<\/span><\/p>\n

_____________________________________________________________________________________<\/span><\/span><\/p>\n

\u00a0 <\/span>About the Author<\/span><\/p>\n

\u00a0\u00a0 \"bill-vobach-original1\"<\/a><\/span><\/p>\n

\u00a0<\/span><\/p>\n

\u00a0 <\/span>William F. Vobach is a partner with<\/span><\/p>\n

\u00a0 <\/span>Swanson and Bratschun, LLC in<\/span><\/p>\n

\u00a0 <\/span>Littleton. He is a registered patent <\/span><\/p>\n

\u00a0 <\/span>attorney-(303) 268-0066, <\/span><\/p>\n

\u00a0 <\/span>bvobach@sbiplaw.com<\/a><\/span><\/p>\n

\u00a0<\/span><\/span><\/p>\n

\n

\u00a0<\/span><\/span><\/p>\n

\u00a0<\/span><\/span><\/p>\n<\/div>\n

\u00a0<\/span><\/span><\/p>\n

\n

Intellectual Property and Technology Law articles are sponsored by the CBA Intellectual Property and Technology Law and Policy Sections.\u00a0 <\/span>They provide information of interest to intellectual property and technology attorneys who advise clients on protecting and exploring various forms of intellectual property in the marketplace.<\/span><\/span><\/p>\n<\/div>\n

\u00a0<\/span><\/span><\/p>\n

\u00a0<\/span><\/strong><\/p>\n

\u00a0<\/span><\/strong><\/p>\n

\u00a0<\/span><\/strong><\/p>\n

______________________________________________________________________________<\/span><\/strong><\/p>\n

The Colorado Lawyer\/ January 2010\/ Vol. 39, No. 1<\/span><\/span><\/strong><\/p>\n","protected":false},"excerpt":{"rendered":"

\u00a0 Reproduced by permission. \u00a92010 Colorado Bar Association, 39 The Colorado Lawyer 39 (January 2010), All rights reserved. \u00a0 An Update on the Law of Inequitable Conduct in Patent Prosecution _________________________________________________________________________________________________________ by William F. Vobach \u00a0 \u00a0 \u00a0\u00a0\u00a0\u00a0 The Court of Appeals for the Federal Circuit recently hand\u00aded down decisions in several cases involving inequitable […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[1],"tags":[],"_links":{"self":[{"href":"https:\/\/www.717madisonplace.com\/index.php?rest_route=\/wp\/v2\/posts\/1969"}],"collection":[{"href":"https:\/\/www.717madisonplace.com\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.717madisonplace.com\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.717madisonplace.com\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.717madisonplace.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=1969"}],"version-history":[{"count":10,"href":"https:\/\/www.717madisonplace.com\/index.php?rest_route=\/wp\/v2\/posts\/1969\/revisions"}],"predecessor-version":[{"id":1980,"href":"https:\/\/www.717madisonplace.com\/index.php?rest_route=\/wp\/v2\/posts\/1969\/revisions\/1980"}],"wp:attachment":[{"href":"https:\/\/www.717madisonplace.com\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=1969"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.717madisonplace.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=1969"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.717madisonplace.com\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=1969"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}