The Breadth of the Duty of Candor in IPR

This column is about shows that because of the wording of regulations imposing the duty of candor in IPR, parties — parties — in an IPR owe an extremely broad duty of candor.  This ain’t your grandpa’s Rule 56.

Here’s the regulation, 37 C.F.R. 42.11:  “Parties and individuals involved in the proceeding have a duty of candor and good faith to the [USPTO] during the course of a proceeding.”

There’s a lot of unpacking to do when that rule is applied, but one key different between 42.11 and 1.56 is who is covered by the obligation.  Under 1.56 it is, of course, those persons substantively involved in prosecution.  Now look at 42.11:  parties.  And persons “involved.”  Obviously, “persons involved” is broader than persons substantively involved, but parties means, one would think, the party and everyone in it.  That is an extraordinarily broad scope.

By the way if you compare 42.11 to the narrower “inconsistent information must be disclosed” obligation in IPR in 42.51, it applies to a different set of people and does not include parties, so one would think these words were deliberately chosen and have different meaning.

Finally, there are proposed amendments in the works which, I heard when I was at the USPTO a couple weeks ago, are coming “soon.”  There’s more about that here, and I don’t know if it will narrow the scope of who is covered, if anything, the proposed amendment to 42.10 adding a certification by the lawyer may make it clear that a lawyer has a duty to investigate everything known to a “party” to an IPR.

A PTO official said to me after my talk that trying to think about IPR with an overlay of prosecution will do nothing but harm. He’s right.


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.

9 thoughts on “The Breadth of the Duty of Candor in IPR

  1. 2

    David, if the patent is revoked based on party fraud, what is the remedy of the patent owner?

  2. 1

    Not sure I am following the writing precisely, so lay me ask if this is one of the take-always:

    During normal prosecution, the duty is there for the “party” (singular) wanting to obtain the patent.

    During post-grant review, that duty is also on the other parties (possible singular or plural, depending on who is seeking to place the granted patent back in review – the point being that those not associated with the duty (on the patent holder’s side) now have a duty (that as perhaps entities not typically familiar with the patent process, may be unfamiliar with what such a duty entails).

    Perhaps since I am on the side familiar with the duty (and know to act accordingly), this then is a “trap for the unwary” for those not familiar with that duty….

    Or do you mean something else? Something perhaps along the line that a new and somehow different duty is now present?

    I can see a little bit of that as regards the scope of “who within the client’s organization” perhaps. Those with different functional groups (contrast those associated with innovation and product development with those associated with licensing, contracts, and business development) may now involve deeper “vetting.”

      1. 1.1.1

        Nope – that does not help (the reference to “parties” is slightly ambiguous, and hence, my question).

    1. 1.2

      The way I interpreted this is that Rule 1.56 refers to “persons” while Rule 42.11 refers to “parties” as well as individuals. Thus, under Rule 56, only the individual inventors, the attorneys, and any other individual persons who are substantively involved with the prosecution are charged with the duty of candor – but not the whole entity that owns the application.

      IPR proceedings are between “parties” – i.e., the owner of the patent (usually a corporation) and the entity (usually another corporation) petitioning for IPR. So under 42.11, it’s not just “persons” involved with the case that are charged with a duty of candor, it’s the entire “party” – i.e., the entire corporation. This could mean that other technology folks within the company, other in-house counsel not involved with the IPR, and the like could be deemed subject to the duty of candor regarding statements made by the people directly involved with the IPR.

      1. 1.2.1

        Thanks Pilgrim,

        I was aiming for something a little different.

        Perhaps not the best example (but then again, perhaps an excellent example): Kyle Bass.

        In the normal course of events, the duty is pretty much one-sided. Here in the new “era” of post grant review (not exactly new, but you get the gist….), we have another party involved – the party wanting to bring the patent back into the Office.

        Is the full force and weight (whatever that means) of “duty” enforced (and enforceable) on that party? By whom? To what effect if that duty is not met?


          The words in 1.56 are very narrow — persons substantively involved — and case law makes it clear that it does not cover parties as such — folks at Exxon who aren’t involved, not even those who are involved but not substantively involved. “Parties” is much broader than “persons involved.”

          I don’t think they intended this, but…

      2. 1.2.2

        That’s the way I read it, Pilgrim. I think that’s the only way you can read it in pari materia with the discovery rule and also rule 56. The PTO knew how to and did in related rules distinguish between “persons involved,” “parties,” and “persons substantively involved.”

Comments are closed.