Guest post by Christian Mammen. Mammen is a Resident Scholar at UC Hastings. He also maintains an IP litigation and strategy practice. (He was also my boss when I was a summer associate at the Heller Ehrman law firm.)
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On March 8, 2010, I submitted an amicus brief (click here for a copy) on behalf of a group of nine law professors (Professors Cotter, Dolak, Gallagher, Ghosh, Hricik, Risch, Sarnoff, Takenaka and myself) in support of en banc review of inequitable conduct in Therasense, Inc. et al. v. Becton, Dickinson & Co. et al. The panel decision in Therasense affirmed the District Court’s finding of inequitable conduct. The inequitable conduct finding related to a failure to disclose to the USPTO statements that had been made to the European Patent Office. The majority decision drew a lengthy dissent from Judge Linn.
The law professors’ amicus brief argues that en banc review is appropriate because of the ongoing inconsistency in Federal Circuit precedents concerning inequitable conduct. In particular, the brief focuses on two specific issues: (1) the legal standard for intent and (2) the proper test of materiality.
Legal Standard for Intent: First, the applicable legal standard for the intent element continues to be uncertain. Although some expected that the 2008 Star Scientific decision (Star Scientific , Inc. v. R.J. Reynolds Tobacco Co., 537 F.3d 1357 (Fed. Cir. 2008)) would prompt a widespread adoption of its single-most-reasonable-inference test for proving intent via circumstantial evidence, that has not been the case. In Therasense, the majority deferred to the District Court’s five findings on the intent issue, without addressing their legal sufficiency. Two of the five findings pertained solely to the materiality of the nondisclosed information; however, Star Scientific holds that “materiality does not presume intent.” One finding of the five was merely that the individuals knew the information and did not disclose it; again, this is not the standard for intent under Star Scientific. And the last two findings were that the individuals’ testimony should be rejected as not credible; these findings failed to address the single-most-reasonable-inference test set forth in Star Scientific.
In addition, the majority decision (and the underlying District Court opinion) implicate the “should have known” test for intent that has often appeared in the Federal Circuit’s precedents. The law professors’ amicus brief argued that there should be an en banc rehearing because there is a conflict between the Kingsdown-Star Scientific line of cases, on the one hand, which disfavor the “gross negligence” test—and by implication the associated “should have known” test—and the Brasseler-Ferring line of cases, on the other hand, which endorse the “should have known” test.
Objective Materiality: Second, since the 2006 Digital Control ruling (Digital Control v. Charles Mach. Works, 437 F.3d 1309 (Fed. Cir. 2006)), it had appeared that the Federal Circuit would steadfastly apply the older “reasonable examiner” test for materiality, rather than the newer and more objective test adopted by the PTO in the 1992 revision to 37 CFR 1.56 (“Rule 56”). However, in Therasense, the majority applied the 1992 version of Rule 56 as the test for materiality. This arguably creates a split in precedent that provides a basis for en banc reconsideration of the proper test for materiality.
Will this be the case in which the Federal Circuit takes inequitable conduct en banc? It is difficult to predict. Over the past five years, the Federal Circuit has declined en banc petitions in a number of prominent and controversial inequitable conduct cases. It can, however, be confidently asserted that, in the twenty-two years since the Federal Circuit convened en banc in Kingsdown Med. Consultants, Ltd. v. Hollister Inc., 863 F.2d 867 (Fed. Cir. 1988), the Federal Circuit has accumulated an impressive tally of inconsistent and contradictory panel decisions that cry out for en banc review.