Inequitable Conduct 2009-10: The Big Story (Therasense) and Recent Vignettes<br />© 2010 Womble Carlyle Sandridge & Rice, ...
DISCLAIMER<br />Womble Carlyle presentations are intended to provide general information about significant legal developme...
Cases Addressed (in chronological order)<br />Larson Mfg. Co. of South Dakota, Inc. v. Aluminart Prods., Ltd., 559 F.3d 13...
Cases Addressed (in chronological order)<br />Taltech Ltd. v. Esquel Enter., Ltd., 604 F.3d 1324 (Fed. Cir. 2010).<br />Le...
Prelude<br />
Larson Mfg. Co. of South Dakota, Inc. v. Aluminart Prods., Ltd., 559 F.3d 1317 (Fed. Cir. 2009),on remand, No. Civ 03-4244...
Facts<br />Larson files ‘465 App.<br />Larson files ‘039 Continuation.<br />   ‘465 App. issues into ‘998 Patent.<br />   ...
Facts – cont’d<br />PTO issues Reexam Cert. for ‘998 Patent.<br />District court lifts stay of proceedings.<br />   Alumin...
CAFC Majority Opinion (cont’d)<br />    3rd & 4th OA’s were material because they:<br />   Contained adverse decisions by ...
Judge Linn’s Concurring Opinion<br />“The facts of this case suggest that the time has come for the court to review the [i...
The BIG<br />Story<br />
Therasense, Inc. v. Becton, Dickinson and Co., 593 F.3d 1289(Fed. Cir. 2010), reh’ggranted, 2010 WL 1655391 (Fed. Cir. Apr...
FACTS<br />Technology<br />Disposable (single-use) blood glucose strips, operating with electrochemical sensors of glucose...
Abbott’s Prior Art ‘382 Patent<br />Independent claims directed to sensors without a membrane.<br />  Dependent claims add...
Abbott’s EPO ‘636 Patent<br />Counterpart to the U.S. ‘382 Patent; thus, also discloses tests on buffer solutions both wit...
Medisense’s 1995 Arguments During EPO Revocation proceeding<br />The “optionally but preferably” sentence demonstrated tha...
Abbott’s ‘551 Patent<br />Claims call for absence of membrane.<br />1.	A single use disposable electrode strip for attachm...
Prosecution of Abbott’s ‘551 Patent Application<br />   Original application filed in 1984.  Six con apps. sustained <br /...
Summary<br />United States<br />Europe<br />Membrane<br />Permanent<br />(limited glucose <br />permeability)<br />D1<br /...
Therasense – District Court<br />BD filed DJ against Therasense (now known as Abbott) for noninfringement of 6,143,164 and...
Therasense – District Court<br />District court:<br />Decided on summary judgment <br />BD products do not infringe ‘164  ...
Therasense – District Court<br />Abbott argues<br />In EPO focus was on distinguishing the semipermeable membrane in the a...
Therasense – District Court<br />Basis for inequitable conduct<br /><ul><li>‘382 cited during prosecution against applicat...
Applicant argued that membrane in ‘382 spec was optional in reference to use in non-blood fluids, and one skilled in art w...
In EPO counterpart of ‘382-Applicant made statements court construed as contradicting “optional” argument made in the US</...
Therasense – The Appeal<br />Fed. Cir. - January 25, 2010 opinion<br />Affirmed, 2-1 decision on inequitable conduct<br />...
Therasense – The Appeal<br />Judge Linn’s Dissent (cont’d.)<br />“I believe that the ‘rule’ of Scanner Technologies has be...
Therasense – Petition for Reh’g En Banc<br />Abbott’s Brief<br />  IC charges skyrocketed by more than 50% this decade, sp...
Therasense – Petition for Reh’g En Banc<br />Abbott’s Brief – (cont’d.)<br />  Rule of Scanner Techs. / Star Scientific vi...
Therasense – Reh’g Granted 04/26/10<br />1. Should the materiality-intent-balancing framework for inequitable conduct be m...
Therasense – Briefing for Reh’g En Banc<br />Abbott’s Brief – filed 07/26/10<br />“The question in this case is not whethe...
Therasense – Briefing for Reh’g En Banc<br />Abbott’s Brief – filed 07/26/10<br />The court should eliminate the “sliding ...
Therasense – Briefing for Reh’g En Banc<br />Amicus Curaie Briefs<br />28 amicus briefs filed including from:<br />USPTO  ...
Therasense – Briefing for Reh’g En Banc<br />
Therasense – Briefing for Reh’g En Banc<br />Becton Dickinson’s Brief – filed 10/08/10<br />
The Vignettes<br />
Avid Identification Sys., Inc. v. Crystal Import Corp., 603 F.3d 967 (Fed. Cir.) (Prost, J.), reh’g denied, 614 F.3d 1330 ...
Avid Identification Sys., Inc. v. Crystal Import Corp., 603 F.3d 967 (Fed. Cir.) (Prost, J.), reh’g denied, 614 F.3d 1330 ...
Optium Corp. v. Emcore Corp., 603 F.3d 1313 (Fed. Cir. 2010) (Newman, J.).<br />Affirmed MSJ of no inequitable conduct.<br...
Taltech Ltd. v. Esquel Enter., Ltd., 604 F.3d 1324 (Fed. Cir. 2010) (Mayer , J.).<br />Affirmed bench trial judgment, on f...
Taltech Ltd. v. Esquel Enter., Ltd., 604 F.3d 1324 (Fed. Cir. 2010) (Mayer , J.).<br />“[T]he dissent’s belief that intent...
Leviton Mfg. Co., Inc. v. Universal Sec. Instruments, 606 F.3d 1353  (Fed. Cir. 2010) (Michel, C.J.).<br />Reversed MSJ of...
Leviton Mfg. Co., Inc. v. Universal Sec. Instruments, 606 F.3d 1353  (Fed. Cir. 2010) (Michel, C.J.).<br />Judge Prost’s d...
Advanced Magnetic Closures, Inc. v. Rome Fastener Corp., 607 F.3d 817 (Fed. Cir. 2010) (Gajarsa, J.).<br />District court ...
Advanced Magnetic Closures, Inc. v. Rome Fastener Corp., 607 F.3d 817 (Fed. Cir. 2010) (Gajarsa, J.).<br />Chief Judge Rad...
Ring Plus, Inc. v. Cingluar Wireless Corp., 614 F.3d 1354 (Fed. Cir. 2010) (Moore, J.).<br />CAFC, affirmed the finding of...
Golden Hour Data Sys., Inc. v. emsCharts, Inc., 614 F.3d 1367 (Fed. Cir. 2010) (Dyk, J.).<br />Golden Hour (acting CEO Dr....
Golden Hour Data Sys., Inc. v. emsCharts, Inc., 614 F.3d 1367 (Fed. Cir. 2010) (Dyk, J.).<br />District court: After holdi...
Golden Hour Data Sys., Inc. v. emsCharts, Inc., 614 F.3d 1367 (Fed. Cir. 2010) (Dyk, J.).<br />Judge Newman’s dissent:<br ...
Epilogue<br />
Take-Away Points<br />Despite calls by Chief Judge Rader and Judge Newman for the CAFC to stay all IC cases pending Theras...
Take-Away Points<br />3.	 Therasense stands to be an even more important IC decision than Kingsdown.  It could dramaticall...
Take-Away Points<br />Fate of materiality-intent “sliding scale” even more uncertain than other aspects of IC defense.<br ...
Take-Away Points<br />8.	Avid expanded the universe of persons who have Duty of Disclosure under 37 C.F.R. § 1.56.<br />Un...
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Inequitable Conduct 2010

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Discusses 2009-10 legal developments concerning the patent infringement defense of inequitable conduct.

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  • Slide from Christopher Jeffers.
  • Inequitable Conduct 2010

    1. 1. Inequitable Conduct 2009-10: The Big Story (Therasense) and Recent Vignettes<br />© 2010 Womble Carlyle Sandridge & Rice, PLLC<br />by: Michael A. Cicero<br />Annual Patent / IP Litigation Meeting<br />October 14-15, 2010<br />
    2. 2. DISCLAIMER<br />Womble Carlyle presentations are intended to provide general information about significant legal developments and should not be construed as legal advice regarding any specific facts and circumstances, nor should they be construed as advertisements for legal services. <br />
    3. 3. Cases Addressed (in chronological order)<br />Larson Mfg. Co. of South Dakota, Inc. v. Aluminart Prods., Ltd., 559 F.3d 1317 (Fed. Cir. 2009), on remand, No. Civ 03-4244, 2010 WL 2990648 (D.S.D. July 29, 2010).<br />Therasense, Inc. v. Becton, Dickinson and Co., 593 F.3d 1289(Fed. Cir. 2010), reh’ggranted, 2010 WL 1655391 (Fed. Cir. Apr. 26, 2010).<br />Avid Identification Sys., Inc. v. Crystal Import Corp., 603 F.3d 967 (Fed. Cir.),reh’g denied, 614 F.3d 1330 (Fed. Cir. 2010).<br />Optium Corp. v. Emcore Corp., 603 F.3d 1313 (Fed. Cir. 2010).<br />
    4. 4. Cases Addressed (in chronological order)<br />Taltech Ltd. v. Esquel Enter., Ltd., 604 F.3d 1324 (Fed. Cir. 2010).<br />Leviton Mfg. Co., Inc. v. Universal Sec. Instruments, 606 F.3d 1353 (Fed. Cir. 2010).<br />Advanced Magnetic Closures, Inc. v. Rome Fastener Corp., 607 F.3d 817 (Fed. Cir. 2010).<br />Ring Plus, Inc. v. Cingluar Wireless Corp., 614 F.3d 1354 (Fed. Cir. 2010).<br />Golden Hour Data Sys., Inc. v. emsCharts, Inc., 614 F.3d 1367 (Fed. Cir. 2010).<br />
    5. 5. Prelude<br />
    6. 6. Larson Mfg. Co. of South Dakota, Inc. v. Aluminart Prods., Ltd., 559 F.3d 1317 (Fed. Cir. 2009),on remand, No. Civ 03-4244, 2010 WL 2990648 (D.S.D. July 29, 2010).<br />
    7. 7. Facts<br />Larson files ‘465 App.<br />Larson files ‘039 Continuation.<br /> ‘465 App. issues into ‘998 Patent.<br /> Larson sues Aluminart on ‘998 Patent; lawsuit stayed pending reexam filed by Aluminart. <br /> PTO simultaneously conducts reexam of ‘998 Patent and prosecution of ‘039 Continuation.<br /> Larson fails to disclose to the Reexam Panel the following items from the prosecution of the ‘039 Continuation:<br /> A 3rd OA;<br /> A 4th OA; and<br /> DE ‘478 patent cited in 4th OA. <br />
    8. 8. Facts – cont’d<br />PTO issues Reexam Cert. for ‘998 Patent.<br />District court lifts stay of proceedings.<br /> Aluminart amends pleadings to include claim of inequitable conduct stemming from Larson’s nondisclosure of five items, including 3rd & 4th OA’s, and DE ‘478, to Reexamination Panel.<br />District Court: ‘998 Patent unenforceable. Finding of deceptive intent grounded upon nondisclosure of all 5 items.<br />CAFC Majority Opinion<br />DE ‘478 not material because it was merely cumulative over prior art already before the Reexamination Panel.<br />Two other items at issue also not material.<br />
    9. 9. CAFC Majority Opinion (cont’d)<br /> 3rd & 4th OA’s were material because they:<br /> Contained adverse decisions by another examiner concerning substantially similar claims; and<br /> Are not cumulative to 1st & 2nd OA’s.<br /> CAFC remands on the intent issue because district court based intent finding on all 5 items, 3 of which now held not material.<br /> CAFC gives guidance on intent issue, citing Star Scientific (Fed. Cir. 2008).<br />
    10. 10. Judge Linn’s Concurring Opinion<br />“The facts of this case suggest that the time has come for the court to review the [intent] issue en banc.”<br />Larson had submitted 135 references in original prosecution and 210 references in reexam proceeding, including Aluminart’s original inequitable conduct allegations in the litigation.<br /> Discusses divergence in CAFC precedent on intent.<br />Remand in District Court (07/29/10)<br /> 3rd OA was highly material; 4th OA diminished materiality.<br />Infers intent to deceive, but balancing equities results in a decision of no IC. Prior judgment vacated.<br />
    11. 11.
    12. 12. The BIG<br />Story<br />
    13. 13. Therasense, Inc. v. Becton, Dickinson and Co., 593 F.3d 1289(Fed. Cir. 2010), reh’ggranted, 2010 WL 1655391 (Fed. Cir. Apr. 26, 2010)<br />
    14. 14. FACTS<br />Technology<br />Disposable (single-use) blood glucose strips, operating with electrochemical sensors of glucose meters used by diabetics at home to detect the level of glucose in a blood sample, which can be:<br />Live blood – can only be tested in vivo (inside the body).<br />Whole blood (all constituent parts) – can exist both in vivo or in vitro (outside the body), but tested only in vitro.<br />Protective membrane used with prior art sensors to:<br /> Control flow of glucose to the sensor electrode; and<br /> Prevent “fouling” – sticking of red blood cells to electrode.<br />
    15. 15. Abbott’s Prior Art ‘382 Patent<br />Independent claims directed to sensors without a membrane.<br /> Dependent claims add feature of membrane.<br /> Specification:<br /> Discloses tests on buffer solutions both with and without<br /> membranes.<br /> “Optionally, but preferably when being used on live blood, a<br /> protective membrane surrounds both the enzyme and the<br /> mediator layers, permeable to water and glucose molecules.”<br />
    16. 16. Abbott’s EPO ‘636 Patent<br />Counterpart to the U.S. ‘382 Patent; thus, also discloses tests on buffer solutions both with and without membranes.<br />Revoked in a 1993 EPO opposition proceeding based on German<br /> prior art reference (“D1”).<br /> Revocation decision appealed in 1994 by Medisense (Abbott’s <br /> predecessor-in-interest).<br /> ‘636 Patent eventually reissued by EPO.<br />
    17. 17. Medisense’s 1995 Arguments During EPO Revocation proceeding<br />The “optionally but preferably” sentence demonstrated that the invention did not need a membrane (“merely optional”), whereas D1 required one.<br />“It is submitted that this disclosure is unequivocally clear. The protective membrane is optional, however, it is preferred when used onlive blood in order to prevent the larger constituents of the blood . . . from interfering with the electrode sensor.”<br />Dr. Gordon Sanghera = technical employee at Medisense. Helped to develop EPO arguments and attended EPO oral argument. Disclosed EPO submissions to Lawrence Pope (Abbott in-house atty).<br />
    18. 18. Abbott’s ‘551 Patent<br />Claims call for absence of membrane.<br />1. A single use disposable electrode strip for attachment to the signal readout circuitry of a sensor to detect a current representative of the concentration of a compound in a drop of blood comprising:<br /> * * *<br />wherein said active electrode is configured to be exposed to said whole blood sample without an intervening membrane or other whole blood filtering member . . . .<br />
    19. 19. Prosecution of Abbott’s ‘551 Patent Application<br /> Original application filed in 1984. Six con apps. sustained <br /> repeated rejections, including citations to the ‘382 Patent.<br /> Following 1996 purchase of Medisense by Abbott, Dr. Sanghera<br /> worked with Mr. Pope to “brainstorm” patentability arguments.<br /> New claims drafted, which recited sensors lacking a membrane.<br /> Examiner Interview – Pope argues ‘382 Patent teaches that <br /> electrodes for whole bloodrequire a membrane. Dr. Sanghera <br /> signs Declaration asserting above argument / interpretation of the<br /> ‘382 Patent. Pope bases arguments on Decl.<br /> EPO submissions not disclosed to the PTO.<br />
    20. 20. Summary<br />United States<br />Europe<br />Membrane<br />Permanent<br />(limited glucose <br />permeability)<br />D1<br />(prior art to ‘382 (EU))<br />Argument: <br />membrane optional <br />with blood<br />‘382 patent<br />(prior art to ‘551)<br />‘382 counterpart (EU)<br />Removable<br />Argument: <br />membrane mandatory<br />with blood<br />‘551 patent<br />(patent-in-suit)<br />No membrane<br />
    21. 21. Therasense – District Court<br />BD filed DJ against Therasense (now known as Abbott) for noninfringement of 6,143,164 and 6,592,745<br />Abbott counterclaims for infringement of ‘164, ‘745, and 5,820,551.<br />
    22. 22. Therasense – District Court<br />District court:<br />Decided on summary judgment <br />BD products do not infringe ‘164 or ‘745<br />Most claims in ‘745 anticipated<br />Trial on ‘551<br />Claims 1-4 obvious over 4,545,382 (prior art Abbott patent) and ‘410<br />Unenforceable due to inequitable conduct<br />
    23. 23. Therasense – District Court<br />Abbott argues<br />In EPO focus was on distinguishing the semipermeable membrane in the art from the claimed protective, permeable membrane.<br />Both the EPO and the PTO representations were merely argument, any inconsistency between the two could not be material.<br />
    24. 24. Therasense – District Court<br />Basis for inequitable conduct<br /><ul><li>‘382 cited during prosecution against application leading to ‘551 patent
    25. 25. Applicant argued that membrane in ‘382 spec was optional in reference to use in non-blood fluids, and one skilled in art would recognize that membrane is required for blood
    26. 26. In EPO counterpart of ‘382-Applicant made statements court construed as contradicting “optional” argument made in the US</li></li></ul><li>Therasense – District Court<br />District court finds intent in:<br />Statements made to the PTO were absolutely critical in overcoming the examiner's earlier rejections; <br />PTO statements contradicted the representations made to the EPO; <br />Applicant knew of the EPO statements and consciously withheld them from the PTO; <br />Applicant did not provide a credible explanation for failing to submit the EPO documents to the PTO; and <br />Applicant’s explanations for withholding the EPO documents were so incredible that they suggested intent to deceive.<br />
    27. 27. Therasense – The Appeal<br />Fed. Cir. - January 25, 2010 opinion<br />Affirmed, 2-1 decision on inequitable conduct<br />Judge Linn’s Dissent<br />“Whenever evidence proffered to show either materiality or intent is susceptible of multiple reasonable inferences, a district court clearly errs in overlooking one inference in favor of another equally reasonable inference.” Therasense, 593 F.3d at 1312 (quoting Scanner Techs. Corp. v. ICOS Vision Sys. Corp., 528 F.3d 1365 (Fed.Cir.2008)).<br />Abbott EPO submissions “susceptible of multiple reasonable inferences and, depending on the inference drawn, may or may not be material.” Id. at 1313.<br />
    28. 28. Therasense – The Appeal<br />Judge Linn’s Dissent (cont’d.)<br />“I believe that the ‘rule’ of Scanner Technologies has been breached in this case.”<br />Abbott’s EPO submissions can be interpreted to mean that a protective membrane is used “preferably” on blood and “optionally” on fluids other than blood, such as the interstitial fluid recited in claim 1 of the EPO ‘636 Patent.<br />“In my view, [Abbott’s] good faith explanations are entirely consistent with the alternative reasonable interpretation of the EPO submissions that renders them immaterial.” Focus is on what was subjectively believed.<br />
    29. 29. Therasense – Petition for Reh’g En Banc<br />Abbott’s Brief<br /> IC charges skyrocketed by more than 50% this decade, spawning<br /> legislative calls for reform as well as increased academic criticism.<br /> Cites the same divergence in IC jurisprudence that Judge Linn<br /> exposed in his Larson concurrence. “The confusion has further <br /> encouraged inequitable conduct charges and spurred calls for the <br /> issue to be addressed en banc.”<br /> “The majority diverges from numerous cases holding that intent <br /> cannot be ‘boot-strapped’ from materiality.”<br />
    30. 30. Therasense – Petition for Reh’g En Banc<br />Abbott’s Brief – (cont’d.)<br /> Rule of Scanner Techs. / Star Scientific violated.<br /> Majority undermines rule re arguments interpreting prior art.<br />Amicus Curiae Brief (9 IP law professors)<br /> “[T]he district court used the ‘should have known’ test, but the <br /> panel majority cites neither line of cases in affirming the <br /> inequitable conduct ruling.”<br />En banc review needed on materiality test; lack of uniformity on<br /> which standard applies to patents prosecuted after 1992.<br />
    31. 31. Therasense – Reh’g Granted 04/26/10<br />1. Should the materiality-intent-balancing framework for inequitable conduct be modified or replaced?<br />2. If so, how? In particular, should the standard be tied directly to fraud or unclean hands? If so, what is the appropriate standard for fraud or unclean hands?<br />3. What is the proper standard for materiality? What role should the United States Patent and Trademark Office's rules play in defining materiality? Should a finding of materiality require that but for the alleged misconduct, one or more claims would not have issued? <br />4. Under what circumstances is it proper to infer intent from materiality? <br />5. Should the balancing inquiry (balancing materiality and intent) be abandoned? <br />6. Whether the standards for materiality and intent in other federal agency contexts or at common law shed light on the appropriate standards to be applied in the patent context.<br />Oral Argument scheduled for 11/09/10<br />
    32. 32. Therasense – Briefing for Reh’g En Banc<br />Abbott’s Brief – filed 07/26/10<br />“The question in this case is not whether to reform the doctrine of inequitable conduct, but whether to restore it . . . .”<br />Per 1930’s and 1940’s Supreme Court cases, a patent should only be rendered unenforceable when it was procured by fraud. This entails “but-for causation” – but for the deceptive act, the patent would not have issued. This should be the new materiality standard.<br />The court should re-invigorate Kingsdown by reaffirming its subjective “specific intent” standard and rejecting the objective “should have known” standard.<br />
    33. 33. Therasense – Briefing for Reh’g En Banc<br />Abbott’s Brief – filed 07/26/10<br />The court should eliminate the “sliding scale” balancing test because in practice, it has resulted in findings of IC based on materiality but on insufficient evidence of intent.<br />“These two requirements [materiality and intent] should not, and logically cannot, be conflated so that one substitutes for the other, even in part.” Abbott thereby states that evidence of materiality is irrelevant to the intent inquiry.<br />
    34. 34. Therasense – Briefing for Reh’g En Banc<br />Amicus Curaie Briefs<br />28 amicus briefs filed including from:<br />USPTO BIO AIPLA<br />IPO ABA Eisai Co., Ltd.<br />IPO: Like Abbott, supports:<br />“But-for” materiality standard;<br />Kingsdown “specific intent” standard; and<br />Refusal to infer intent from high materiality alone;<br /> . . . . BUT would keep balancing inquiry as part of court’s inherent equitable discretion.<br />
    35. 35. Therasense – Briefing for Reh’g En Banc<br />
    36. 36. Therasense – Briefing for Reh’g En Banc<br />Becton Dickinson’s Brief – filed 10/08/10<br />
    37. 37. The Vignettes<br />
    38. 38. Avid Identification Sys., Inc. v. Crystal Import Corp., 603 F.3d 967 (Fed. Cir.) (Prost, J.), reh’g denied, 614 F.3d 1330 (Fed. Cir. 2010).<br />In deciding whether individual is “substantively involved in the preparation or prosecution of the application,” as used in 37 C.F.R. § 1.56(c)(3), the court can consider number of factors, such as individual’s position within the company, role in developing or marketing the idea, contact with inventors or prosecutors, and representations to the PTO.<br />Linn’s dissent: Quoted term means “persons who are both (1) engaged in the preparation or prosecution of an application, and (2) sufficiently apprised of the technical details or legal merits of the application as to be able to assess the materiality of any information they may know or discover . . . .”<br />
    39. 39. Avid Identification Sys., Inc. v. Crystal Import Corp., 603 F.3d 967 (Fed. Cir.) (Prost, J.), reh’g denied, 614 F.3d 1330 (Fed. Cir. 2010).<br />Avid moved for reh’g, and to join in the en banc review of Therasense or, in the alternative, to stay the mandate of the Avid panel decision pending the disposition of Therasense. The CAFC denied all requested relief.<br />Judge Newman, dissenting from denial of stay:<br />“As applied to Avid, it is grievously unjust to eradicate this patent on grounds that may soon be changed by the en banc court.”<br />If Therasense adopts “but-for” standard of materiality, it may affect the Avid panel decision.<br />
    40. 40. Optium Corp. v. Emcore Corp., 603 F.3d 1313 (Fed. Cir. 2010) (Newman, J.).<br />Affirmed MSJ of no inequitable conduct.<br />“Despite some divergence, the great weight of Federal Circuit authority has followed Kingsdown . . . .”<br />“[C]onsistent precedent has rejected the notion that the materiality of a reference alone can suffice to prove deceptive intent.”<br />Ferring did not establish a new rule for ‘inferring’ intent from the mere nondisclosure of information.”<br />Prost, J. (concurring): Concerned that majority implies that a high level of materiality is irrelevant to intent. Same evidence of materiality can be probative of both prongs.<br />
    41. 41. Taltech Ltd. v. Esquel Enter., Ltd., 604 F.3d 1324 (Fed. Cir. 2010) (Mayer , J.).<br />Affirmed bench trial judgment, on first 2 grounds, of inequitable conduct to support conclusion of “exceptional case” and atty. fees.<br />District court found inequitable conduct on 3 grounds:<br />Inventor (Wong) did not disclose raincoat seam that included heat-fusible adhesive tape.<br />Wong misrepresented a seam previously sold by Taltech.<br />Litigation misconduct.<br />“In essence, the dissent says that section 1.56(b) requires the misrepresentation to be tied to the reasons claims are allowed. There is no such requirement.”<br />
    42. 42. Taltech Ltd. v. Esquel Enter., Ltd., 604 F.3d 1324 (Fed. Cir. 2010) (Mayer , J.).<br />“[T]he dissent’s belief that intent requires facts wholly distinct from those establishing materiality is incorrect.”<br />Judge Gajarsa’s dissent:<br />Majority “improperly inferred intent to deceive from the materiality of the non-disclosed reference and several statements Wong made to the PTO.”<br />Had majority properly interpreted references, it would have found the nondisclosed reference cumulative over a disclosed reference.<br />District court followed Praxair line of cases in its intent analysis.<br />
    43. 43. Leviton Mfg. Co., Inc. v. Universal Sec. Instruments, 606 F.3d 1353 (Fed. Cir. 2010) (Michel, C.J.).<br />Reversed MSJ of inequitable conduct; CAFC found that fact issue had been established as to intent.<br />Yet the CAFC affirms conclusions of materiality:<br />Failure to disclose co-pending application that contained nearly-identical claims was material, even though that application had a later priority date than the application in question, because that application had completely different inventors named and it was therefore material to the issue of inventorship & double patenting re the patent-in-suit.<br />Failure to disclose 12 lawsuits filed before application for patent-in-suit was material, where they had allegations of invalidity and unenforceability as to parent patents. <br />
    44. 44. Leviton Mfg. Co., Inc. v. Universal Sec. Instruments, 606 F.3d 1353 (Fed. Cir. 2010) (Michel, C.J.).<br />Judge Prost’s dissent: MSJ of inequitable conduct should have been affirmed. Majority did not adequately assess the plausibility of patent counsel’s explanations as to why the co-pending application and related litigations were not disclosed. The purported justification for that withholding was “incredulous.”<br />
    45. 45. Advanced Magnetic Closures, Inc. v. Rome Fastener Corp., 607 F.3d 817 (Fed. Cir. 2010) (Gajarsa, J.).<br />District court found inequitable conduct and assessed following award of attorneys’ fees, plus interest, under 35 U.S.C. § 285 and 28 U.S.C. § 1927:<br />$1,509,976.16 against plaintiff (AMC)<br />$1,000,164.76 against law firm of litigation counsel; and<br />$ 454,197.36 against litigation counsel personally.<br />CAFC affirms award against AMC but reverses the § 1927 award against law firm and litigation counsel.<br />“We have held that when named inventors deliberately conceal a true inventor’s involvement, the applicants have committed inequitable conduct and the patent is unenforceable even as to <br /> an innocent co-inventor.”<br />
    46. 46. Advanced Magnetic Closures, Inc. v. Rome Fastener Corp., 607 F.3d 817 (Fed. Cir. 2010) (Gajarsa, J.).<br />Chief Judge Rader’s concurrence: <br />“I write separately to express my view that, absent extreme facts such as those found in the present case, this court should refrain from resolving inequitable conduct cases until it addresses the issue en banc. . . . In Therasense this court has been asked to address the transformation of inequitable conduct from the rare exceptional cases of egregious fraud that result in the grant of a patent that would not otherwise issue into a rather automatic assertion in every infringement case. The exception has become the rule. Generally, I would hold inequitable conduct cases until after this court reexamines whether to put the doctrine back into the exception category.”<br />
    47. 47. Ring Plus, Inc. v. Cingluar Wireless Corp., 614 F.3d 1354 (Fed. Cir. 2010) (Moore, J.).<br />CAFC, affirmed the finding of material misrepresentations, concerning 2 prior art references, in:<br />Background of Invention – incorrect statement that the references did not teach software for operating tel. system.<br />Amendment B – incorrect statement that the references did not teach system that only generates a sound presentation when the recipient line is not busy.<br />“Although an attorney is free to argue vigorously in favor of patentability without being subject to allegations of inequitable conduct, ‘the law prohibits genuine misrepresentations of fact.’”<br />However, CAFC reversed on finding of intent, and thus also on overall finding of unenforceability, because prior art ambiguous.<br />
    48. 48. Golden Hour Data Sys., Inc. v. emsCharts, Inc., 614 F.3d 1367 (Fed. Cir. 2010) (Dyk, J.).<br />Golden Hour (acting CEO Dr. Kevin Hutton), brought suit on its ‘073 Patent for “Integrated Emergency Medical Transportation Database System,” dealing with information management system for emergency medical transport.<br />Timeline:<br />03/02/98 – App. for ‘073 Patent filed.<br />Late March 1998 – Hutton receives undated brochure that described Golden Hour’s “AeroMed” system.<br />Before 08/04/98 – Hutton gives brochure to patent counsel.<br />08/04/98 – Patent counsel files IDS that is identical with front cover of brochure. Neither brochure itself, nor billing system info described therein, was disclosed to PTO.<br />
    49. 49. Golden Hour Data Sys., Inc. v. emsCharts, Inc., 614 F.3d 1367 (Fed. Cir. 2010) (Dyk, J.).<br />District court: After holding bench trial on IC issue, finds ‘073 Patent unenforceable stemming from counsel’s nondisclosure of the AeroMed brochure and information contained therein.<br />CAFC: Affirms finding that nondisclosed items were “highly material,” but reverses and remands on issue of intent. <br />There was no finding that either Hutton or senior patent agent (Fuller) had in fact even read the brochure. <br />“Fuller never testified definitively that he did not read the brochure in full,” yet testified that he didn’t disclose the brochure to the PTO because it was undated.<br />Remanded b/c district court must make “detailed findings.”<br />
    50. 50. Golden Hour Data Sys., Inc. v. emsCharts, Inc., 614 F.3d 1367 (Fed. Cir. 2010) (Dyk, J.).<br />Judge Newman’s dissent:<br />“[I]f deceptive intent was not established at the trial of this issue, by the party with the burden to do so, it is inappropriate for this court to remand for another shot at it.”<br />“In view of the majority’s ruling that deceptive intent was not established in the district court, and the jury’s verdict of validity despite the brochure, the charge of inequitable conduct should be laid to rest.”<br />At a minimum, “[i]t is sufficiently likely that the reasoning applied in this case could be affected, that this appeal should be held pending completion of the [Therasense] en banc proceedings.”<br />
    51. 51. Epilogue<br />
    52. 52. Take-Away Points<br />Despite calls by Chief Judge Rader and Judge Newman for the CAFC to stay all IC cases pending Therasense decision, the CAFC has continued to decide IC cases, most recently Golden Hour, decided on August 9, 2010. Therefore, even while Therasense is pending, we need to monitor the CAFC for any other important decisions that may issue.<br />2. Legislative developments as to IC must also be monitored. Senate Bill S. 515, introduced earlier this year, proposes creation of “supplemental examination” process that could allow post-issuance cures of defects and eliminate IC defenses based upon info considered in the supplemental examination process.<br />
    53. 53. Take-Away Points<br />3. Therasense stands to be an even more important IC decision than Kingsdown. It could dramatically change the manner in which IC defenses are considered. At a minimum, the CAFC appears to have become sensitive to the “plague” of IC claims, and it would be reasonable to predict that at least some scaling back of the scope of IC defenses will result.<br />4. Therasense briefs reviewed (Abbott and amici curiae to date) uniformly reject the notion of inferring intent from materiality alone. IPO and ABA, like Abbott, additionally call for implementation of “but for” materiality standard, though USPTO disagrees.<br />
    54. 54. Take-Away Points<br />Fate of materiality-intent “sliding scale” even more uncertain than other aspects of IC defense.<br />6. Until Therasense decision issues, either of the divergent lines of precedent can be used, depending on what side of the case you’re on, concerning the issue of whether to draw an inference of intent from high materiality. <br />However, chances of success on appeal will depend very heavily on composition of CAFC panel. SCORECARD FROM DISCUSSED CASES:<br />Leaning Pro-IC: Dyk (??), Mayer, Prost<br />Leaning Anti-IC: Rader, Linn, Newman, Gajarsa, Schall<br />
    55. 55. Take-Away Points<br />8. Avid expanded the universe of persons who have Duty of Disclosure under 37 C.F.R. § 1.56.<br />Under the recent decisions, the following items of information continue to be regarded as “material”:<br />Information regarding inventorship & double patenting, even info that post-dates app. filing date (Leviton – watch those <br /> co-pending applications).<br />Litigation, including that involving parent patents.<br />Brochures that may describe embodiment of invention.<br />Sales demonstrations of precursor products (Avid at 973).<br />Office actions in copending apps (Larson).<br />Arguments in foreign counterpart apps (Therasense panel).<br />Prosecution characterizations of prior art (Ring Plus).<br />
    56. 56. THE END<br />

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