Supreme Court Looks More Closely at Reviewing Therasense

By Dennis Crouch

Sony Computer v. 1st Media LLC, Docket No 12-1086 (on petition for writ of certiorari 2013)

In a recent order, the Supreme Court has asked the Solicitor General to file a brief in this expressing the views of the United States in this pending inequitable conduct case. (CVSG). The case is essentially a challenge of the Federal Circuit’s en banc decision in Therasense that strongly cabined-in the doctrine of inequitable conduct. In this case, the Federal Circuit rejected a district court holding of inequitable conduct in a failure-to-submit case. According to the lower court, three references used to reject the equivalent foreign cases were never submitted for consideration by the US examiners. Nevada district court Judge Mahan found that both the patent attorney and the listed inventor were at fault for failing to submit the references and consequently held the patent unenforceable due to inequitable conduct.

On appeal, the Federal Circuit reversed – making clear (again) that in a failure-to-disclose situation, the defendant must prove that individuals with a Rule 56 duty “made a deliberate decision to withhold” the references. Further, that deliberate decision element must be proven with clear and convincing evidence and that proof of intent cannot be inferred merely from the fact that the individuals had knowledge of the references and their materiality. The Federal Circuit wrote:

A court can no longer infer intent to deceive from non-disclosure of a reference solely because that reference was known and material. Moreover, a patentee need not offer any good faith explanation for his conduct unless and until an accused infringer has met his burden to prove an intent to deceive by clear and convincing evidence. . . . Moreover, it is not enough to argue carelessness, lack of attention, poor docketing or cross-referencing, or anything else that might be considered negligent or even grossly negligent. To sustain a charge of inequitable conduct, clear and convincing evidence must show that the applicant made a deliberate decision to withhold a known material reference. Whatever one might conclude about Lewis’s and Sawyer’s conduct and interactions relating to the Bush reference, and the nature of Sawyer’s practice at the relevant time, the record does not support the inference that Lewis and Sawyer deliberately chose to withhold Bush.

Because one element of the inequitable conduct charge is missing, the court concluded that the charge cannot be proven. Of course, “carelessness, lack of attention, [or] poor docketing” will still lead to malpractice claims.

In the petition for writ of certiorari, the accused infringer asks the following question:

Did the Court of Appeals for the Federal Circuit err in restricting district courts’ equitable discretion in evaluating patent unenforceability, contrary to this Court’s precedent in Keystone Driller, Hazel-Atlas, and Precision Instrument, by applying a rigid test that (a) forecloses district courts from considering the entire circumstantial record; and (b) precludes district courts from granting equitable remedies where a patent applicant has violated the PTO’s duty of candor.

In Therasense, the Federal Circuit added some flexibility to its analysis in cases involving sufficiently egregious misconduct. Sony responds that the limited carve-out “is flawed because it creates a rigid threshold [of an egregious affirmative act of misconduct] as a prerequisite to the equitable discretion called for by this Court’s precedent. The flexibility embodied in this Court’s precedent should apply in all cases, not just those involving affirmative egregious misconduct.”

Supreme Court has a history of hearing fraud cases and this CVSG adds to the likelihood that it will hear this case.

59 thoughts on “Supreme Court Looks More Closely at Reviewing Therasense

  1. Not likely that I am going to simply take your word for it 6.

    Don’t be bashful – it’s not like you haven’t been way wrong before.

  2. “Now go back and figure out why 103 was added.”

    Since there is absolutely no ignorance or confusion about why 103 was added on my side why don’t you just go ahead and fill me in about whatever warped version of reality you are currently making reference to? Just for lols.

  3. Quite misses the point – but thanks for confirming that you are clueless 6.

    Now go back and figure out why 103 was added.

  4. “Actually they have not done this.”

    The supremes held shortly after the passage of the 1952 act in I forget which case that the congress indicated that they did not intend to change the substance of the act even whilst changing the wording a bit. And they cited bits of the congressional record. The congress has yet to state otherwise 50 years on.

  5. Any bar for IC so low that all infringement defendants will routinely allege it (without regard to merit, just to “take a shot”) is grossly unfair.

    IC had become every bit the “plague” it was called, and Therasense was the only thing that finally let honest inventors and their attorneys have some protection for their reputations. I know it saved me some sleepless nights, and I don’t want to go back. IC was originally intended for affirmative misdeeds – not mere omissions, which were never traditionally deemed any kind of fraud.

    The EPO manages just fine without IC. Now that we here have their equivalent of “opposition” (i.e., PGR), why do we need it either? Besides, I’m already fully incentivized to include all relevant art that I know about by wanting the patent to be as strong as possible.

  6. They’re probably not aware of the strict ethical guidelines about not sending a lawyer a letter he’d rather not see.

    They’re also probably unaware of the automatic spam filters that those letters will trigger.

  7. I think a lot of lawyers will be surprised to learn that hiring a law firm to send letters on your behalf so that you can remain confidential is “fraudulent.”

    They’re probably not aware of the strict ethical guidelines about not sending a lawyer a letter he’d rather not see. Especially when that letter would trigger ethical guidelines applying to the recipient.

  8. How exactly does a letter that says “here is a reference X that might be relevant to your client’s patent application Y” lure you into NOT submitting that art? And why exactly is it that your clients don’t want the PTO to see the best art available, regardless of which law firm it came from?

  9. Or better yet: the initiating conversation, which featured an attorney fraudulently attempting to use the letterhead of a different lawfirm …

    I think a lot of lawyers will be surprised to learn that hiring a law firm to send letters on your behalf so that you can remain confidential is “fraudulent.” Unless, of course, Humpty Dumpty is using the word “fraudulent” to mean something completely different than “fraudulent.”

  10. LOL – spam checker…?

    Yeah, that’s what I thought.

    Or better yet: the initiating conversation, which featured an attorney fraudulently attempting to use the letterhead of a different lawfirm to try to trick you into seeing art and luring you to NOT submit that art.

    Funny, how the real slimy behavior is OK with you…

  11. What I would have done is…< ?i>”

    Careful Ned – not sure that satisfies your duty of candor.

  12. Does “accusing others of that which you do” fall into one of the symptoms?

    (see the post at 1:28 PM)

  13. You prosecute claims to allowance without knowing of a material reference.

    How about: your attorney prosecutes claims to allowance without knowing of a material reference. Your attorney is sent a registered letter by a third party that encloses a material reference and explains the materiality to the claims. But the mailroom staff has been instructed by the attorney to open those letters and throw them away without informing the attorney of the letter or its contents. And that’s what happens. Your attorney pays the issue fee.

    Inequitable conduct?

  14. People with Asperger syndrome often display behavior, interests, and activities that are restricted and repetitive and are sometimes abnormally intense or focused. They may stick to inflexible routines, move in stereotyped and repetitive ways

    This sounds like a typical patent prosecutor, probably for a good reason.

  15. A 20-year-old patent is your best argument as to why the system is broken??

    Not at all. Just another example that showed up on my computer screen because the patentee refuses to dry up and blow away.

    necromanced the reasons for allowance

    That would be the Federal Circuit who did the “necromancing”. But the claim is right in front of you. How did that claim get allowed? Is there something about transmitting selected “song information” from a computer that is especially difficult relative to some other type of information like, say, available real estate or Johnny’s favorite restaurants? Because, uh, everything in that claim is old and obvious. Yes, even as of 20 years ago, moments after the first computer was invented and years before the first computer-to-computer cable was even conceived.

  16. Give me an example please.

    You file claims you believe are patentable over the prior art. Is it misleading to not file any of that prior art?

    You file claims you believe are not patentable over the prior art. That, my friend is the problem. Not the failure to disclose the prior art.

    You prosecute claims to allowance without knowing of a material reference. Have you mislead anyone?

    You pay the issue fee having just learned of a reference that may render the claims invalid. Have you mislead anyone in the PTO? You may have to answer to your client because you may have just paid the issue fee on an invalid patent. What I would have done is file a continuation and disclosed the reference there.

  17. Instead they said exactly the opposite.

    Actually they have not done this.

    Did you get a different ‘new’ 101 on your world?

  18. Your tar dation is boundless, truly anon. Like I said, if they didn’t want the judicial exceptions, then all they had to do was say so. Instead they said exactly the opposite.

  19. IC, IMHO, is affirmative conduct intended to mislead.

    One cannot, without more, mislead by failure to disclose something. One can mislead by making statements that one knows that are false.

    Here Sawyer was given the Bush reference, marked Y, in an international search 10 days before he paid the issue fee. He said nothing to the PTO to mislead. Whether the patent is invalid over Bush is an independent issue. If it is invalid, it is invalid. But Sawyer never lied to the PTO. No unclean hands.

  20. Not surprising (and at least should not be surprising given the previous comments made on the subject.

    To now feign shock is a bit, well, credulous.

  21. with such Exceptions, and under such Regulations as the Congress shall make”

    Ned, you often play the role of resident historian, what was the enabling legislation as such for the creation of the CAFC? What was the mandate handed to the CAFC by that same Congress?

  22. From the Constitution:

    “In all Cases affecting Ambassadors, other public Ministers and Consuls, and those in which a State shall be Party, the supreme Court shall have original Jurisdiction. In all the other Cases before mentioned, the supreme Court shall have appellate Jurisdiction, both as to Law and Fact, with such Exceptions, and under such Regulations as the Congress shall make. ”

    “Exceptions”

    Cite the statute.

  23. The standard set in Therasense makes no sense. The SG and SCOTUS should bring the standard back down.

    But really, for me, I think there’s a serious issue when the system rewards a negligent/reckless party, at the expense of a third party. What sense could that possibly make?

    What’s more, I get that inequitable conduct is essentially a “fraud” case, but when you think about it, inequitable conduct is unlike most any other fraud case. The accused infringer — not a party/participant in the underlying “transaction” — is left holding the evidentiary bag. The “defrauded” party (arguably the PTO) has no role in the litigation. And the accused “fraud” is in essence shielded by evidentiary burdens, presumption of validity, and a chance for a subsequent infringement win (is there another type of fraud case where the accused has a chance of winning MORE from the other side as a result of not proving a fraud?), etc.

    So very, very, very weird.

  24. Hopefully the SG will recommend taking this one. The standard applied here is at odds with what the PTO advocated for in Therasense. /media/docs/2010/08/ts.enbanc.uspto.pdf

    It could be that this case has vehicle issues or that the PTO has accepted Therasense and moved on, but then again maybe not.

  25. CAFC, created by Congress to provide clarity to a patent landscape rent asunder by judicial activism (implicitly giving that judicial body the ‘final‘ say on patent matters).

    The Supreme Court, addicted by the abdication of Congress in 1793 to define what ‘invention’ means, chucks aside the revocation of authority by Congress in 1952, (removing ‘invention’ from the playing field, instead opting for obviousness ) will not pull their fingers from the patent pie and incessantly dabble in patent matters that clearly do not impinge on true constitutional issues (the only valid domain for the Supremes when it comes to patents).

    Who to blame for this mess is, well, obvious. Nice job Supremes – you have usurped the power from and literally neutered the court expressly created by Congress to address laws whose power to write is one of the few things expressly delineated by the constitution.

    My only question: who can hold the nine black robes accountable for their unconstitutional actions?

  26. Surprising to the PTO (way below their projected usage), and perhaps also surprising that so many patent owners apparently feel all the prep and prosection of all the patents they have acquired is beyond criticism or attack in licensing negotiatios or litigation?

  27. I think that is overly optimistic. SCOTUS has a tendency to raise more questions and increase uncertainty for me than providing me with firm footing. Take Bilski, for example. CAFC tried to make M-o-T the bright line test, and SCOTUS rebuffed them.

  28. Just curious, what else is ‘implicitly’ there?

    ‘Implicit’ carries with it a lot of wax to make that nose bend and twist and reshape in the image if the black robes.

    No wonder our founding fathers put the constitutional power with the judiciary.

    No wait.

    They didn’t.

  29. If that is what they wanted all they had to do was not be explicit that such was not what they wanted.

    A double negative – just to be clear – LOL.

    The irony 6. Yummy.

  30. “(in other words – the extra legal law writing of judges after Congress revoked the common law ability to define invention).”

    While explicitly noting that they were not changing 101 in substance with their 1952 act? Wonder why they were so explicit about that?

    I know about the “invention” history, but it isn’t exactly synonymous with the history of 101.

    “seriously? – 134 pages and 6 other opinions of basically nothing and a two paragraph decision tied to case explicit facts is the best we can get from an en banc panel?”

    Well come on bro, there are 5 humble judges willing to straightforwardly apply the law and there are 5 who think they’re the be all end all pillars of the economy and think that they should feel free to toss the law to the wind and prop up extra-legal activity based on an untenable reading of the statute. And some of them do it simply not to rock the boat that they themselves turned on its head a few years ago, having rocked it ridiculously. I mean seriously? The shear gall, and arrogance of their actions in light of the instruction from the USSC is literally likely to make an objective outside observer sick.

    “Congress wanted a wide open system”

    If that is what they wanted all they had to do was not be explicit that such was not what they wanted.

    I think I may have asked you before anon, but would it make you happy if the congress went ahead and put in the 101 statute “except that no patent shall issue for a law of nature, natural phenomena, or abstract idea or any effective preempting thereof” or something to that effect? Would you be a happy man if they did that? Just for them to have made it explicit right in the statute and all, would that make you happy?

  31. 6,

    As I posted, the CAFC is trying to learn from the Supremes, so I did you a favor and paraphrased you for an earlier decision:

    I just realized tonight that the one thing that strikes me most about Prometheus is that Breyer et al. have a monumental sense of importance, not even of their beloved system, but OF THEIR OWN PROCLAMATIONS. As if the entire economy rests squarely on their shoulders and they could destroy the whole thing by simply following the law.

    LOL – consider how they did this with the judicial exceptions to hold out their fingers-in-the-pie weren’t going to be stopped by any proper reading of the law without the implicit insertions (in other words – the extra legal law writing of judges after Congress revoked the common law ability to define invention).

    That’s why 101 is so screwed up (seriously? – 134 pages and 6 other opinions of basically nothing and a two paragraph decision tied to case explicit facts is the best we can get from an en banc panel?) Congress wanted a wide open system (in a direct slam to the rampant anti-patent Supreme Court that had infested the system for the decades prior – and the activist justices were too drunk with the power to let go. Like using anything else but the sledgehammer of 101 would be far too difficult for the Justices to sculpt their likeness in the wax nose of patent law.

  32. In case you are new here, MM appears to suffer from Aspergers. link to en.wikipedia.org

    He’s done similar things for years and years with dozens and dozens of patents … apparently in the (mistaken) belief that anybody cares. Read enough of his posts and you’ll see the same repetitive comments over and over and over again.

    Some characteristics of Aspergers:
    People with Asperger syndrome often display behavior, interests, and activities that are restricted and repetitive and are sometimes abnormally intense or focused. They may stick to inflexible routines, move in stereotyped and repetitive ways, or preoccupy themselves with parts of objects

    Speech may convey a sense of incoherence; the conversational style often includes monologues about topics that bore the listener, fails to provide context for comments, or fails to suppress internal thoughts

    Individuals with AS experience difficulties in basic elements of social interaction

  33. “Second, under the inequitable conduct defense,
    equitable discretion will not trigger until a proponent
    establishes “materiality” of withheld information,
    where “intent to deceive” was the reason the actors
    withheld it from the USPTO. Therasense, Inc. v.
    Becton, Dickinson & Co., 649 F.3d 1276, 1290 (Fed.
    Cir. 2011); Astrazeneca Pharm. LP v. Teva Pharm.
    USA, Inc., 583 F.3d 766, 770 (Fed. Cir. 2009). The
    Petition does not challenge this underlying legal
    standard, nor suggest any replacement standard.”

    Well if they’re not even challenging that then yeah, idk if this is the proper case to take to the Supremes. However, I think they may have from the exerpt above, because (2) seems to be implying that if you break the PTO’s code then materiality is not required.

    “The Petition recharacterizes this holding as one
    that “prohibits consideration of important evidence
    until after a district court navigates through a rigid,
    step-by-step analytical framework.””

    That is kind of true… the framework of having to show materiality, that would seem to be a rigid formula. But if the equitable powers aren’t triggered until you show materiality then idk. This case seems to get into some currently murky boundaries. I wish I had the whole petitioner’s brief.

    “Petitioners themselves wrote
    those findings and conclusions, which the district
    court adopted verbatim. App. 7a-8a. Petitioners
    should not be heard to defend the equitable
    discretion of a district court that surrendered all of
    that discretion to the petitioning party itself.”

    That is kind of odd. That’s a situation like what recently happened in CLS bank where judge Lourie was all up ins plagerizin’ on my PO posts. Although, I think I may have given them explicit permission in that thread to do so :( Meh, it is ok :)

  34. Well they’ve been asking for it for idk, what? 20 years? They could easily fix up the patent system all nice and tidy, but OOOOOOO NOES! It might to back to being the legal backwater it was at the start of their careers and nobody would give a flying rats ars e about it (nor them) anymore.

    I just realized tonight that the one thing that strikes me most about CLS Bank is that Rader et al. have a monumental sense of importance, not even of their beloved system, but OF THEIR OWN PROCLAMATIONS. As if the entire economy rests squarely on their shoulders and they could destroy the whole thing by simply following the law.

  35. I don’t know about the hyperbolic ‘constitutional,’ but I am sure that Tafas speaks to this point well.

    You know, that vacatur thing.

  36. I have always thought the most interesting question is the interplay of Rule 56 with court made equitable doctrine of unclean hands. The question is, can the USPTO, by changing Rule 56, effectively dictate the substantive law?

    In 1992, the PTO, reacting to the very low standard that had resulted from its prior definition, amended rule 56 to raise the bar. The courts ignored the rule change, and continued to apply the very low bar of the first rule.

    I personally believe that PTO cannot create substantive law (at least without some narrowly defined delegation by Congress). It can demand that information be disclosed, but it cannot tell the courts that failure to do so will result in the patent being unenforceable. This would give rules the status of statutes, and that, IMHO, is not constitutional.

  37. Are you insane?

    A 20-year-old patent is your best argument as to why the system is broken??

    You may as well rage against that puck who stuck gum in your hair in grade school.

    Also: Are you insane? Seriously, you actually posted a 20-yo claim, cleaned it up, necromanced the reasons for allowance…all just so you could map that to the current system.

    Next your gonna tell us that the system is broken because of all the Jim Crow laws we have.

    L
    O
    L

  38. doubt if it would survive today’s more rigorous examination process.

    Why do you believe that examination of these sorts of claims is “more rigorous” today than 20 years ago?

    As far as I can tell, claims reciting ancient “receiving”, “storing” and/or “selecting” “means” or steps are routinely issued every week because the claims recite bogus “limitations” about the content of the information being handled (be it “copyrighted content” or “credit card scores” or “real estate availability” or “unwatched video content” etc).

  39. the patent issued in 1995 (almost 20 years ago) — I doubt if it would survive today’s more rigorous examination process.

  40. The answer to the two-part question is already out there:
    a) considering the entire circumstantial record is not foreclosed. What you might do with the consideration, well that’s a different question.
    b) the PTO does not have authority to write substantive law, let alone dictate to a court how to rule. That was hashed out pretty good in the Therasense opinion – maybe a more precise question is needed…

  41. Claim 1 from the patent at issue (5,464,846):

    1. An interactive device comprising:

    means for storing data;

    means for selecting data from the storing means;

    means for transmitting the selected data down a network;

    and means responsive to the selecting means for receiving the data from the storing means by a recipient; the receiving means also receiving information concerning the cost of retrieving the data from the storing means and including means for limiting the number of times that data is retrieved based on the encoding of the selected data on the receiving means.

    Okay, I cleaned it up a little. The actual claim recites “a song” or “songs” instead of “data”.

    A patent system that allows such dreck to be issued and asserted is a broken system. Check it out:

    On September 14, 1994, the examiner rejected all claims
    of the ’946 Application as anticipated or obvious in view of
    five prior art references. To overcome the rejections,
    Sawyer argued on February 21, 1995, that the claimed
    entertainment system included a multimedia call process-
    ing system
    , an element not found in the cited references.

    Complete and total nonsense.

  42. Perhaps the surprisingly insignificant usage of the AIA “Supplimental Examination” post-grant system for patent owners to ex parte eliminate IC challenges will now suddenly increase?

  43. Yeah I think they should go ahead and review it just to set everyone straight on the matter. I’m not opposed to the standard in Thera, it just seems rather odd, considering the route basis for the whole of IC was “fraud on the office” not “fraud leading to invalidation of the patent on the office” or whatever standard is involved in this case.

  44. If only negligence were required, I wonder what percentage of issued patents would be unenforceable due to inequitable conduct?

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