The Downstream Effect of Owning an Invalid or Unenforceable Patent

I was reading some random things this morning and read about this case, In re Skelaxin (Metaxalone) Litigation.  I’d never much pondered the deeper downstream legal consequences to the owner of seeking to enforce an invalid/unenforceable (and, I suppose, non-infringed) patent (beyond 285, and the potential for Walker Process type claims), but this case illustrates some of the enormous ripple effects.

What I have thought about is the fact that the OED routinely opens investigations when a court finds that a patent is unenforceable.  (Some of the comments below about the OED’s jurisdiction relate to that issue.)  One thing that lawyers have told me is that often they’re deposed in a case where they prosecuted a patent, and then (if things go badly) the next thing they hear is that an order has been entered finding they acted with an intent to deceive and knowing of material information.

It has always struck me that a district court’s findings on those issues should not have any weight in the PTO because of the serious due process issues, and because normal rules of collateral estoppel shouldn’t permit it — the lawyer was not a party to the infringement suit, and he also wasn’t in privity with a party to it.

I only raise this because I’ve seen several times where this has happened, but the lawyer’s lawyer at the OED seemingly doesn’t raise this up.  Granted, the original finding of inequitable conduct will likely hurt the lawyer’s career, but OED disbarment will have even more.

About David

Professor of Law, Mercer University School of Law. Formerly Of Counsel, Taylor English Duma, LLP and in 2012-13, judicial clerk to Chief Judge Rader.

8 thoughts on “The Downstream Effect of Owning an Invalid or Unenforceable Patent

  1. 6

    You gotta’ be kiddin’ me. Really. David posts this topic and lo an behold the Feds again consider Therasense, and arguably get it wrong. link to

    Here, the patentee committed IE, and the lower court awarded fees for an exceptional case. Rader/Newman affirmed the district court denial of fees for the “successful” en banc appeal, and fees for obtaining fees.

    The Dyk dissent observes that the district court order is not consistent with Supreme Court case law. There is no exception for a “successful” appeal.

    It looks like this case will be final soon. What do you think the PTO will do with/to the named practitioner?

  2. 5

    Once there was a big time lecturer who was actually named in a published opinion as having committed IE. I had a long conversation with him at one of his events, and he was complaining bitterly that the finding of the court had all but ruined him. He has sought to intervene in the case, and on appeal, to defend himself, but to no avail.

    Because he was frozen out and could not defend himself at all, I think at a minimum the court should have kept his name confidential as best as possible. Further, if an OED investigation is ordered, the PTO should have to prove its case against the attorney, rather than just rely on the findings of the court.

  3. 3

    The original finding of inequitable conduct will likely hurt the lawyer’s career? Do we have evidence for that? I think inequitable conduct, even when caught, leaves the perpetrator largely unscathed, especially for large firm lawyers (cases with findings of inequitable conduct against small firm or solo patent attorneys don’t come to mind, which might indicate some confirmation bias on my part).

  4. 2

    Good point re drawing them in, but even if he did, the lawyer’s interests and client’s interests may differ (e.g., lawyer wants to argue that the claims are narrow so that some thing he didn’t disclose is not material, but client needs broader coverage to snag infringers). It is a mess… and it’s further a mess because of the different claim constructions applied in prosecution and litigation…

    1. 2.1

      Yes – good point there about the (at least potential) conflict.

      I am aware that some times conflicts can be waived (or the client right to privacy negated) when matters impinge on criminal activities. Would the action against the prosecuting attorney be of the kind that would allow the prosecuting attorney to act even in a way that would compromise the client’s best interests?

  5. 1

    Technically, I would say that infringement does not remain a possibility, as the act that would be infringement can no longer be considered prohibited.

    Downstream effects that ripple back to events prior to the determination of invalidity/unenforceability can (and should) vary and should be tied to the specific acts. Acts of fraud, for example, should be open to discipline.

    I agree with you that any determination without the ability of the person to be involved and to defend himself presents a prima facie case of due process violation. It also raises the question in the first instance as to how a judge can decide the matter without drawing the affected parties into his court and giving them a chance to defend their actions. That defense may in fact nullify (or at least mitigate to an effective degree) the very case before the judge. One might even consider that justice in the primary case cannot be adequately obtained absent the presence of such a concerned party. Yes, this does draw the specter of increasing litigation costs with more parties, more discovery, more evidence on what may turn out to be merely a tangential matter, but is that any different than any other matter to be vetted in litigation?

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