I teach civil procedure, patent law, and ethics, and so this opinion granting a motion to modify a scheduling order, and to allow an amended pleading, to plead inequitable conduct jumped out at me because someone successfully navigated the pleading issues created by a combination of case law and the amended rules limiting discovery to claims or defenses plead.
The problem that lawyers face is this: the combination of Exergen and Therasense require (generally) pleading that a person substantively involved in prosecution knew of but-for material information, knew the information was material, but withheld it with an intent to deceive (or engaged in “affirmative egregious misconduct) and — according to Exergen (which I think was wrongly decided, in an article I wrote before it was decided, and available here) — do so under the rigorous pleading standards of Rule 9(b). Before pleading fraud with particularity, the lawyer of course has to have a Rule 11 basis to make the allegations.
Therein comes the limitation on discovery in the 2015 amendments to the rules of civil procedure: even with good cause, there can be no discovery into issues that are not relevant to a claim or defense. So, how do you get discovery needed to plead inequitable conduct when you can’t plead it without discovery (usually)?
I know some courts have dealt with this problem by local rule or order, allowing discovery into knowledge of prior art, for example, even when it ordinarily isn’t relevant to validity that an inventor knew, or didn’t know, of particularly prior art (derivation being an obvious exception). Even, however, if you can get the discovery, you then face the problem that, ordinarily, the cut-off to amend pleadings in most scheduling orders occurs long before fact discovery closes.
So, now you know why I found this case, Marical Inc. v. Cooke Aquaculture Inc. (D. Maine, July 31 2017) interesting. On the last day of fact discovery, the accused infringer took the 30(b)(6) deposition of the inventor, who testified (basically) that he knew information that was but-for material but wasn’t disclosed to the USPTO during prosecution. The patentee opposed the motion to amend the accused infringer’s pleading to assert inequitable conduct, arguing (a) there was no good cause to modify the cut-off date for amending pleadings, long past and (b) even if there were, the amendment was futile because it could not meet the Exergen/Therasense standard.
The magistrate held there was good cause (it said that the accused infringes was justified in waiting to assert inequitable conduct until after it deposed the inventor), and that the amendment was not futile because it met the Exergen/Therasense standard.
There’s a lot here to think on. One is to make sure that, if you have a local rule or case management order, that you follow it to make sure you plead inequitable conduct timely. Another is, if there is no such order or rule, to be diligent and to perhaps put the other side on notice, early and before depositions, that you’re going to seek information relating to inequitable conduct even though you haven’t pled it, because you can’t plead it until you have discovery.