Patentee Must Disclose Affiliations of Declarants

Ferring v. Barr Labs. (Fed. Cir. 2006).

By Grantland Drutchas

Ferring is a rather interesting CAFC decision on inequitable conduct. The CAFC affirmed summary judgment of inequitable conduct based solely on the applicant’s failure to disclose that individuals who submitted declarations in support of the patentability of the claims had affiliations with the assignee of the application.

One of the declarants was an employee of the assignee, one was a paid consultant; but the third was simply a researcher (presumably a clinician) whose employer had assisted with some clinical studies for the assignee and received some funding for those clinical studies from the assignee. The CAFC found the failure to disclose each of these relationships was material.

The appellate panel also held that an inference of intent can be found when the patentee fails to show a “credible explanation” for the patentee’s deception of the PTO. Importantly, the Court found that the patent holder has the burden to prove the credible explanation. Simply arguing plausible or possible explanations for the deception is not enough to rebut an inference of intent to deceive.

Grant Drutchas, a founding partner of MBHB, has nearly 20 years of experience in the practice of intellectual property law, with a particular emphasis on litigation, licensing, and client counseling.

One thought on “Patentee Must Disclose Affiliations of Declarants

  1. 1

    The court’s discussion about the “standard of review” in this case was the thing that caught my attention.

    While it was a painful experience for me, many years ago a district court granted a preliminary injunction against one of my clients for trademark infringement and ordered the client to immediately discontinue use of the trademark. We appealed to the 9th Circuit. On the day of oral argument, one of the three judges on the panel (a distinguished judge, by the way) told me that, if it had been his decision to make at the district court level, he would not have granted the preliminary injunction. However, he stated that the standard of review (also, “abuse of discretion,” in that instance) dictated that he had to defer to the district court’s decision, even though he disagreed with it. And, he voted to affirm the preliminary injunction as part of the majority in a two-to-one decision that involved a very strong dissent in my favor, much like Judge Newman’s dissent in the Ferring case. While it was unfortunate for me, on that day, I also learned what a good appellate judge on a good appellate court is supposed to do…and I’ve always paid close attention to the CAFC’s discussion of standard of review since then, which in some older cases, in particular, includes no discussion about it at all.

    While I only have limited actual experience with Judge Mayer, if one pays attention to what he writes, which is sometimes in dissent, it seems reasonably clear that he is of the view that appellate courts need to show deference to the trial court, particularly in areas that involve fact findings – which is, of course, a lesser standard of review (“clear error”) than the one involved in the Ferring case (“abuse of discretion”). Bear in mind that Judge Mayer wrote in the Markman case, “the trial is the main event,” and was clearly against a blanket de novo review of claim construction issues (a lower standard of review than “clear error”). As I recall, he was eventually voted down.

    When you see the Ferris majority put at least some emphasis on the standard of review, which was an elevated one here, and given that Judge Mayer is one of the two judges in the majority, one can see how it is possible the case was decided the way it was – even if Judge Newman’s articulation of the facts was absolutely accurate. She may not have liked it, but the district court had the discretion to make the call, in this instance. The word “discretion” means giving the lower court an elevated level of deference. And there may have been other things present in the record at the district court level, and in the record brought to the CAFC, that were simply not mentioned by either the majority or by Judge Newman in her dissent. One really never knows for sure, but published decisions at the appellate level do not always give a clear picture as to what truly provided the motivation for the district court’s decision. Anyhow, I would not read this case as one that is necessarily announcing something new about the “law of declarations.”

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