Changing the Law of Inequitable Conduct: Abbot Briefs its Case

TheraSense, Inc. (Abbott Labs.) v. Becton, Dickinson and Co. (Fed. Cir. 2010)(En Banc Rehearing)

In TheraSense v. BD, an en banc Federal Circuit is reconsidering the doctrinal structure that it has created to handle allegations of inequitable conduct. Abbott (the patent holder) has filed its opening merits brief arguing that the current law of inequitable conduct over-extends its proper bounds.  In an eloquent opening statement, Abbott writes:

The question in this case is not whether to reform the doctrine of inequitable conduct, but whether to restore it—to its origins in Supreme Court precedent; to the confines Congress intended in the 1952 Patent Act; to the standards this Court articulated en banc in Kingsdown Medical Consultants v. Hollister, Inc., 863 F.2d 867 (Fed. Cir. 1988); and to the standards that govern in other areas of law. This Court has expanded the inequitable conduct doctrine well beyond those boundaries, and the result has been an “ongoing pandemic” of inequitable conduct charges. Taltech Ltd. v. Esquel Enters. Ltd., 604 F.3d 1324, 1335 (Fed. Cir. 2010) (Gajarsa, J., dissenting). The expansion has rendered valuable patents unenforceable based on minor omissions far afield from the doctrine’s purposes. And it has converted the federal courts into roving commissions to enforce standards of conduct before the PTO without regard to whether the alleged infractions had any impact. . . .

Supreme Court precedent and the legal principles embodied in the Patent Act reserve those extreme consequences for the most egregious circumstances—cases where a party “obtained its patent by fraud.” Walker Process Equip., Inc. v. Food Mach. & Chem. Corp., 382 U.S. 172, 175, 176 (1965). As this Court has recognized, the Supreme Court has held patents unenforceable “only in cases of ‘fraud on the Patent Office.’” Star Scientific, 537 F.3d at 1365-66 (quoting Hazel–Atlas Glass Co. v. Hartford-Empire Co., 322 U.S. 238, 250-51 (1944)); see Larson Mfg. Co. of S.D., Inc. v. Aluminart Prods. Ltd., 559 F.3d 1317, 1343 (Fed. Cir. 2009) (Linn, J., concurring). A party seeking to invalidate a trademark or copyright based on misconduct before the agency must prove it was the product of fraud. The standard should be no less stringent here.

Briefs Filed Thus Far:

142 thoughts on “Changing the Law of Inequitable Conduct: Abbot Briefs its Case

  1. 141

    IANAE – you are my hero – but you be deead wrong when it comes to guns, gun rights and the big C.

    Don’t get me wrong – I’ll still fight for your right to believe that guns are not necessary, heck Ida even shot someone if that be needed – just be respecting my rights too.

  2. 140

    IANAE, well the intention of the South was to keep the black man separate and deny them full equality. Part of their means for implementing this was the KKK who would come in the night to the uppity black’s home. They could not do this if they had guns. Guns were denied the black folk, who were then denied rights. This went on for a very long time. The Supremes acted with the very intention of keeping guns out of the hands of the black folks as was made clear in the case to follow in a few years where that was its holding: blacks had no right to keep and bear arms.

    In modern society, there are areas of America ruled by violence. Gangs operate with impunity. Now, you might say packing a gun would make no difference to the mugger or a burgler, but I suggest you are wrong.

  3. 138

    Ned: “Doesn’t your argument really call into question file wrapper estoppel?”

    Doesn’t call it into question, exactly. There’s nothing wrong with holding the patentee to the statements he made to obtain the patent in the first place. File wrapper estoppel might be a bit aggressive these days, but the concept is sound.

    Ned: “But I still think it a large stretch to hold a valid patent unenforceable for not disclosing a reference that might have been used to reject the claims.”

    But surely you agree that as long as file wrapper estoppel is good law, there is an advantage to be gained by having your claims allowed with fewer rejections and fewer arguments in response.

    Even without file wrapper estoppel, fewer rejections still means you get your patent sooner. But that’s not quite as striking an advantage as getting a broader claim.

  4. 137

    Ned: “But there is something else there reveals just why the Supremes in the 1870s did not want to give blacks full civil rights.”

    It’s the slavery thing, right? Black people needed their right to own guns protected, which the Constitution already said they had, because nobody was protecting their rights to free speech, peaceable assembly, life, liberty, property, due process, and all those other good things the Constitution already said they had? Isn’t that reasoning just a little bit backward?

    I highly doubt a crazed racist white mob in the 1870s that was probably armed (the opinion mentions “militias”) would have thought twice about doing horrible things to a lone unsuspecting black guy if the guy had a gun. Heck, if a black guy in 1870 shot someone in self-defense that’d be one more excuse to pass out torches and pitchforks.

    Guns are not the answer to any of the problems people insist are the reason they need guns. Guns won’t keep you safe from the government. Guns won’t keep you safe from angry mobs. What keeps you safe from the government is all the other stuff in the Constitution, and if you’re not enjoying any of those rights you shouldn’t expect to have an easy time getting a gun permit either.

  5. 136

    IANAE, your argument really is about BRI and how it is used to help define claim clearly. But I still think it a large stretch to hold a valid patent unenforceable for not disclosing a reference that might have been used to reject the claims.

  6. 135

    IANAE–Doesn’t your argument really call into question file wrapper estoppel? I know SCOTUS breathed new life into it fairly recently (Justice Thomas wrote the opinion, maybe it was Festo?), but maybe that opinion should be revisited.

  7. 134

    IANAE, read the entire opinion. It is of fundamental importance far beyond the issue of gun control. It bears on the “privileges and immunities” clause of the 14th Amendment and how it should automatically incorporate the whole of the Bill of Rights and make them applicable to the states because that was the major purpose of the amendment: overturn Dred Scott give blacks civil rights: the same privileges and immunities enjoyed by all citizens of the US, but most importantly, those enumerated in the Bill of Right. The Supremes in the Slaughter House case had severely limited the clause so that the Bill of Rights was not incorporated. It took a very long time to undo that decision using the “Due Process” clause instead.

    Justice Thomas’s opinion now appears to be mainstream on this issue. But there is something else there reveals just why the Supremes in the 1870s did not want to give blacks full civil rights. Thomas’s opinion is very powerful on this point. Read it.

    From Wikipedia,

    Criticism

    Harvard law professor Laurence Tribe writes that “the Slaughter-House Cases incorrectly gutted the Privileges or Immunities Clause.” Similarly, Yale law professor Akhil Amar has written “Virtually no serious modern scholar—left, right, and center—thinks that Slaughter-House is a plausible reading of the Fourteenth Amendment.”[13]

  8. 133

    Ned: “unfairly reject a claim”

    Not every rejection that the applicant eventually overcomes is unfair. Remember, it has to be a reasonable examiner. A reasonable examiner would not make an unfair rejection, but might well make a perfectly fair rejection that is later equally fairly withdrawn in response to the applicant’s arguments.

    Having those arguments on the record can limit the scope of the claims, even if the claims are identical in wording. Not having those arguments on the record results in the patentee gaining advantage.

  9. 132

    IANAE,

    Unclean hands does not punish, but prevents one from gaining an advantage. You do not disagree.

    But you still contend that a VALID patent should be held unenforceable for failure to disclose a reference that might have been used to unfairly reject a claim so that the applicant would have had to clarify his claim language on the record.

    This goes too far by any measure. It is almost like saying that my land deed is unenforceable if I paid the original subdivider to survey my land faster because he was taking far too long. The deed and survey are valid, but I gained an unfair advantage because I bribed the surveyor to do his job properly? If he was doing his job properly, the bribe would not have been necessary.

    But you say, the examiner could have unfairly rejected the claims over a reference forcing me to clarify my claims. The operative assumption here is that the claims are both patentable and valid over the reference and that the rejection was improper.

    What a joke.

    Sacre Bleu!

  10. 131

    Ned: “IANAE, have you read Thomas’ concurring opinion in McDonald?”

    I haven’t. What part of it do you have in mind?

    Ned: “The brief includes this very important passage:

    One expected result of the objective “but for” standard in litigation [..] would properly limit the inequitable conduct defense to those circumstances where the applicant has actually “gained an [unfair] advantage” […]”

    Getting an invalid claim allowed is not the only form of unfair advantage to be gained by withholding a reference. As I have pointed out more than once, keeping the file wrapper clean is an advantage we pursue far more often and far more diligently than getting invalid claims allowed, and one that materially affects the patentee’s rights. It’s naive to think that we shouldn’t concern ourselves with the conduct of applicants in prosecuting patents that happen to not be invalid.

  11. 130

    The IPO has filed its brief. link to ipo.org

    It advocates a “but for” standard for materiality and and “intent” standard that requires proof of intent to receive an “invalid” patent. [Note the major departure from Avid, where the court ruled the intent was to receive a patent — which could include an intent to receive a valid patent.]

    The brief includes this very important passage:

      One expected result of the objective “but for” standard in litigation is that inequitable conduct most commonly will be bifurcated and tried only after the judge or jury finds a claim of the asserted patent to be invalid. If the invalidity
      finding is based on the same facts as the equitable conduct charges, then objective “but for” materiality is likely established and the court can proceed on the issue of deceptive intent. This would properly limit the inequitable conduct defense to those circumstances where the applicant has actually “gained an [unfair]
      advantage”, to use the Supreme Court’s phrase in Keystone Driller, 290 U.S. at 245.

    Indeed!

    The corollary should be that if the patent is held valid over non disclosed art there logically can be no finding of IC for intentionally failing to disclose it.

    It would also stop speculation as to materiality. How does one KNOW that a patent would not have issued BUT FOR the non disclosure of art? Until the claims are held invalid over the art, we can only guess. If we choose to “guess,” rather than “know,” we are back into the quagmire of the current plague.

  12. 128

    “Ha! I have a better record Malcolm. I have received a Notice of Allowance within 5 weeks of an invention disclosure hitting my desk.”

    How’d it even get through OIPE in 5 weeks?

  13. 127

    KB Ha! I have a better record Malcolm. I have received a Notice of Allowance within 5 weeks of an invention disclosure hitting my desk.

    That’s a tough one to beat, Ken. Wow!

  14. 126

    6: “The thing that keeps America out of things like that is our mind-set.”

    True. But that’s also what keeps guns within easy reach of everybody. There’s a mind-set that predisposes people to gun ownership and violence, and it’s completely possible to be free, patriotic, and safe without it.

    6: “The only way to change the peons in the military’s mindset into one that would allow for the suppression of the people is to introduce a grave external or internal threat TO THE PEOPLE.”

    I bet you could easily convince government peons to suppress people in certain localized places, like airports, if you introduced just such a grave threat. But you might still have to take away their guns in those places.

  15. 125

    “If the US government wanted to oppress the people by force, they’d be doing it already. ”

    Thing is though, I doubt they could do it, if not only because the simple-minded peons of the military can even understand that it would be the wrong thing to do. The thing that keeps America out of things like that is our mind-set. Not laws or other bs. Well, a smattering of what is realistically possible also factors in.

    The only way to change the peons in the military’s mindset into one that would allow for the suppression of the people is to introduce a grave external or internal threat TO THE PEOPLE. Like they did in Germany.

    Or at least, so it has been said by people who study these things.

  16. 124

    “I cannot think of a more clean cut example of anti-american elitism. That is why the Federal Government keeps our troops occupied in those conflicts in Afghanistan and Iraq. That last think that Wall Street wants is a bunch of highly trained individuals skilled in death and destruction back here in the states watching the bankers take their families’ homes away. That is a recipe for regime change.”

    Pretty sure I brought up similar just the other day. But those highly skilled individuals are nothing without great leadership.

  17. 123

    Kenneth–

    You just reminded me of a suggestion I read in a law school article that the PTO consider going to a patent registration system (akin, I guess, to copyright) and leaving validity to be determined later, presumably during litigation for infringement. Doubt it would ever happen–talk about disharmony with ROW. Probably also ignores other purposes of patents, such as ostensibly giving fair notice to the public about what is claimed, and by inference, what is not claimed, hence still public domain.

  18. 122

    Ha! I have a better record Malcolm. I have received a Notice of Allowance within 5 weeks of an invention disclosure hitting my desk. The examiner recongized the application as being drafted by me, took it out of sequence, because he said he knew I was a straight shooter (his words) and allowed it. I never try to hide anything from an Examiner, because it behooves me to have the Examiner know the best art out there.

  19. 121

    “In short I was placed in a position of having to perform my own examination and prosecution

    I’ve done that. In return, I got a granted patent five months after I filed the application.

    Posted by: Malcolm Mooney | Jul 30, 2010 at 12:10 PM”

    LOL Now if it were only worthy of the presumption of validity….

  20. 120

    Ned: “jury nullification”

    Jury nullification apparently isn’t what you think it is. It’s when the jury ignores the law to achieve the result it wants, pretty much in the same way that bothers you about the “rough justice” of courts.

    Ned: “the black homeowner,”

    Does that make me a racist now if I think gun rights are silly?

    Clearly, if someone is repeatedly besieged by armed home invaders who inexplicably have easy access to guns, the problem is that there are not enough guns involved. If we make sure everybody has a gun, everybody will be safe from gun violence.

    I don’t find it comforting at all that “when law and order breaks down” the Second Amendment gives one the right to be the most powerful vigilante. Normal people would complain about the police, or move, but crazy people get it in their heads that they’ll magically be safe from gangs of still-younger and still-better-armed other crazy people as long as they can shoot back.

    Also, while I admire your appeal to sympathy for this particular homeowner, I note that the Supreme Court’s decision spends almost no time (I hesitate to say “no time at all” only because the decision is so long and I haven’t pored over every word) on the specifics of the case. Even McDonald’s lawyer didn’t mention the facts in his argument. If he didn’t think sympathy for his client should sway this case that apparently rests on an arcane point of pure constitutional law, I’m not going to question him on that point.

  21. 119

    In short I was placed in a position of having to perform my own examination and prosecution

    I’ve done that. In return, I got a granted patent five months after I filed the application.

  22. 118

    IANAE, what about the use of guns in a city like Chicago where the black homeowner, McDonald, was under siege, repeatedly having his home invaded with no police protection. He asked for a gun and was denied it. Thus the suit.

    I can only home you read Thomas’s concurrence in McDonald to see the value of guns when law and order breaks down.

  23. 117

    Speaking of judicial arrogance and jury nullification, even some on the Fed. Cir. itself are concluding that this is a problem:

    In yesterdays Becton v. Tyco descision, the dissent ended exactly that accusation in a case where the jury verdict of infringement was overturned on JMOL.

  24. 116

    Ned–
    I graduated law school in 2008. In my 1L civil procedure class, we read both cases, although at the time I didn’t understand their full import. And they were in a widely used casebook, the title of which escapes me at the moment (it was published by Thompson/West and was in something like its 9th edition), which we used in that class.

  25. 115

    smashmouth, thanks.

    On Beacon Theaters and Dairy Queen, with the requirement of materiality not directly linked to invalidity, I am not surprised no one thought of it.

    Perhaps these two cases are no longer discussed in law school as well, as the template appear to be that juries are bad, especially in patent law. I have heard that my entire career. Having seen enough rough justice in my time from courts, I have come to appreciate the value of juries.

  26. 114

    Ned: “IANAE, square that with (previous statement).”

    There’s the dripping sarcasm, for one thing, and also the fact that every time we see video from the region everybody seems to be holding an AK.

    And also the more general point that private gun ownership isn’t generally much of a deterrent against a government that routinely attacks foreign countries that have defensive bunkers and standing armies, based primarily on a desire to kill/imprison the locals and award no-bid contracts for rebuilding the country. That’s more or less what the gun-owners stateside are supposedly protecting themselves from, isn’t it?

  27. 113

    What? Or at least if everybody there had an AK-47. The US government wouldn’t have stood a chance.

    IANAE, square that with And having a gun for self-defense against the government would be a very meaningful right indeed, if the government didn’t have way bigger guns, including armored guns on wheels and tracks, and flying guns, that the government won’t let you have.

  28. 112

    BTW, having looked at the Jan. 25 panel opinion again, I think Judge Linn was right. This looks like a textbook case of a court conflating materiality and intent to deceive.

  29. 111

    Remember “weapons of mass destruction” allegedly in Iraq?

    Yeah, what a fiasco.

    At least if they actually had weapons of mass destruction, they could have defended themselves against the oppressive might of the US government. Just like they did in 1990.

    Or at least if everybody there had an AK-47. The US government wouldn’t have stood a chance.

  30. 110

    “If the US government wanted to oppress the people by force, they’d be doing it already. A concealed handgun wouldn’t even slow them down, no matter how well-regulated your militia is.”

    I think it’s in the government’s interest to use fraud as well as force. If you can get people voluntarily to go along it’s a lot easier. Just think of the IRS and its Orwellian phrase “voluntary compliance.”

    Anyway, we’ll just have to agree to disagree on this. As to judge/jury, I can’t quote the research, but I think it’s well known that decisions tend to be different in character when unanimity of a group is required. Even federal appellate courts require 2 out 3 judges. In any case, to me the right to jury trial has more to do with my belief in populism and distrust of elites. I may not be able to prove my opinion, but I think we have seen a lot of evidence just in the last 10 years that should make us all distrust the elites who rule the U.S. Remember “weapons of mass destruction” allegedly in Iraq? the PATRIOT Act? TARP?

  31. 109

    the right to self-defense against armed criminals (including especially the government) is the most fundamental right of all.

    And having a gun for self-defense against the government would be a very meaningful right indeed, if the government didn’t have way bigger guns, including armored guns on wheels and tracks, and flying guns, that the government won’t let you have.

    Sure, when Americans had muskets and the British army had muskets, a well-regulated militia could keep King George out of your face. But that era is long gone.

    If the US government wanted to oppress the people by force, they’d be doing it already. A concealed handgun wouldn’t even slow them down, no matter how well-regulated your militia is.

  32. 108

    IANAE said, “Have you ever tried to get a jury trial for patent infringement in, say, Canada?

    Jury trials are like guns. We only think we’re supposed to have them because it says in the Constitution that we’re allowed to. The original compelling basis for that fundamental-at-the-time right has long ago passed into obsolescence.”

    This is wrong on so many levels I don’t know where to begin. I’ll just say this–the right to self-defense against armed criminals (including especially the government) is the most fundamental right of all. If you and your ilk succeed in abolishing it, we serfs will suffer the fate of Ukrainians during the state-imposed famine of the Soviet era.

  33. 107

    I remember Malcolm chortling that we should be pleased with this result because it furthered “judicial economy.”

    Well, did it? Did the outcome of the case depend on any disputed claim construction issues? It certainly didn’t depend on validity, since the patent was unenforceable in any event. Why bother with meaningless formality, when you have enough information to dispose of a case?

    I suppose it would further judicial economy if we abolished jury trials altogether, but to me that’s not adequate justification.

    Have you ever tried to get a jury trial for patent infringement in, say, Canada?

    Jury trials are like guns. We only think we’re supposed to have them because it says in the Constitution that we’re allowed to. The original compelling basis for that fundamental-at-the-time right has long ago passed into obsolescence.

    How many judges do you really need to decide whether a fact is more likely than not? For that matter, how many judges do you need to change a light bulb?

  34. 106

    Ned said in part, “It appears the task at hand for the Therasense court lies open and clear: Overrule JP Stevens.”

    That is not a ridiculous hope, because JP Stevens already is suspect in some respects–especially where it states that gross negligence is sufficient to prove IC:

    “Proof of deliberate scheming is not needed; gross negligence is sufficient. Hycor, 740 F.2d at 1540, 222 USPQ at 561. Gross negligence is present when the actor, judged as a reasonable person in his position, should have known of the materiality of a withheld reference.”

    JP Stevens, Paragraph 26. Notice also that what the opinion states is gross negligence really is simple ordinary negligence. Permitting conflation of materiality and intent, combined with (old) Rule 56, guarantees this result, despite subsequent opinions, e.g., Kingsdown, where the Federal Circuit purports to abolish this lax standard..

    I think it’s also interesting, to say the least, that by redefining fraud as “inequitable conduct,” the courts have seriously diminished the 7th Amendment, as you have pointed out in another post. Common law fraud was triable to a jury; “inequitable conduct” purports to be equitable, thus triable only by the court. It surprises me that nobody has litigated this under the authority of Beacon Theaters v. Westover, 359 U.S. 500 (1959), and Dairy Queen v. Wood, 369 U.S. 469 (1962).

    Links:link to supreme.justia.com
    link to supreme.justia.com

    I seem to recall a case filed roughly two years ago where a U.S. District Court Judge, I think it was Mariana Pfaelzer from California, held a bench trial on IC, ruled against the patentee, and disposed of the case, without ever bothering with claim construction, let alone validity. On appeal, one of the Federal Circuit judges complained about this, but nothing became of it, and so far as I recall, nobody specifically mentioned the Seventh Amendment or Beacon Theaters. I remember Malcolm chortling that we should be pleased with this result because it furthered “judicial economy.” I suppose it would further judicial economy if we abolished jury trials altogether, but to me that’s not adequate justification.

  35. 105

    So long as the Federal Circuit keeps excusing Federal Agents from having to act reasonably with the public, as happened in the McKesson case, there will never be an accountability. Without accountability, the system will continue to be disfunctional. Dayco Products is not a much better opinion either. However, that McKesson decision is a catastrophe.

  36. 102

    making the Examiner actually do their difficult job in the first place.”

    Fixed.

    The Tea leaves have been there for the reading since Kappos first came in and said:

    Quality don’t equal Rejection

  37. 101

    making the [ ] Examiner actually do their difficult job in the first place.”

    fixed.

    The tea leaves were there with Kappos’s first directives to the examiners. I be too lazy to get the actual quote, but it went something like this:

    Quality does not equal rejection

  38. 100

    OK here it goes. Professor Hricik’s position will win the day and he will be quoted in the court’s majority opinion. This means that the USPTO will have to start humpin it when it comes to searching and examination, making the job of the Examiner much more difficult. I would suspect that this will justify a fee increase or, alternatively, allowing the USPTO to keep more of the money it takes it . . . wait a minute that has already happened. Tea leaves gentlmen, read the tea leaves.

  39. 99

    6 just look at this malfeasance. The Federal Government conspired with Goldman Sachs to give my money and the money of my children and my children’s children to foreigners. link to weaselzippers.us

    I cannot think of a more clean cut example of anti-american elitism. That is why the Federal Government keeps our troops occupied in those conflicts in Afghanistan and Iraq. That last think that Wall Street wants is a bunch of highly trained individuals skilled in death and destruction back here in the states watching the bankers take their families’ homes away. That is a recipe for regime change.

  40. 98

    Not cry 6. I demand a government that is responsible and responsive to its bosses, the citizens of the United States.

  41. 97

    Smash, the ABA brief was better; but the killer brief is that of professor Hricik. While JP Stevens, link to ftp.resource.org,

    did some analysis of the origins of Sections 288 and 287(1), it was cursory at best.

    BTW, here is link to the Report of the House Judiciary Committee concerning the 1952 Act. link to google.com

    It briefly discusses 253 and 288 as companions, not 288 and 282(1).

    Returning to JP Stevens, a glaring weakness in the case was its categorization of the prior cases into two classes: 1) those that were “fraud” and those that were 2) “inequitable conduct.” In the case of “fraud,” the court said the claims were “invalid.” In the case of “IC,” they were unenforceable. Thus, was born IC which could hold a patent unenforceable where there was no fraud.

    Of course, this is nonsense. To be invalid, a claim must not meet the requirements of “patentability” set by the statute in Part II, or 112 or 251. See, Section 282(2) and (3). Fraud has nothing to do Section 282(2) or (3).

    It appears the task at hand for the Therasense court lies open and clear: Overrule JP Stevens.

  42. 96

    Forgot to say, without having recently read the case, not sure whether Therasense falls under this rule. To put it another way, unlike Malcolm, IANAE, and 6, I actually thought Abbott’s brief was pretty persuasive, notwithstanding its sloppy quote of that copyright case. (Aside–appellant’s briefs do things like this all the time–it does hurt their credibility and could tip the scales in a close case. But I don’t think it’s Rule 11 sanctionable.) But I’m not sure of the facts, so I’ll read it again tonight. In any case, I agree with the argument that IC should be restored to its roots of “fraud on the Patent Office,” regardless of whether Abbott should win or lose in this case.

  43. 95

    “Mooney your assertion is based upon a flawed presupposition that is is the failure to provide material art that is the reason bad patents are issued.”

    I think MM is well aware that such a presumption is incomplete as that reason is only one of many.

    ” In short I was placed in a position of having to perform my own examination and prosecution”

    Cry for me a little bit. Go ahead, cry for me a little.

  44. 94

    Malcolm–I guess to me it’s better to protect the innocents you rightly mention (without sneer quotes b/c they really are innocent) through invalidity.

  45. 93

    You are forgetting to include in your calculation the “innocents” who are accused of infringing patents that should never have been granted. You know, companies like Therasense.

    Mooney your assertion is based upon a flawed presupposition that is is the failure to provide material art that is the reason bad patents are issued. I have had countless situations in my career in which the best reference cited by an Examiner was never applied to the claims. I find myself having to quickly dismiss the reference asserted to be the anticipating reference only to argue agaisnt some other reference identified in the Office action and never applied. In short I was placed in a position of having to perform my own examination and prosecution. All the Examiner did was to search the art.

  46. 92

    making it easier to prove IC probably means fewer patentees who “really” deserve punishment will escape, but at the cost that more “innocents” also will be penalized.

    You are forgetting to include in your calculation the “innocents” who are accused of infringing patents that should never have been granted. You know, companies like Therasense.

    Between the currently high bar for finding IC and the Federal Circuit’s disciplined enforcement of that high bar, the number of “innocent” patent owners who are “unfairly” denied enforceability due to an erroneous IC filing is miniscule compared to the number of patents that are granted in spite of a lack of Rule 56 compliance by the applicants. Can I prove it? No. But I’m 100% sure of it.

  47. 91

    Just to bring this discussion a little closer to reality, I think you have to recognize there is a trade-off between how broad the applicant’s duty of disclosure is, and how much stuff she/he will puke up to the examiner. With a greater duty, on average, applicants are more likely to disclose more wheat and more chaff.

    I (and some others, but obviously not all reading this) think the uncertainties attending IC and the relatively lax standard of bad intent required currently also affects this trade-off, and tends to induce at least some applicants to “over-disclose/defensively disclose.” And (with apologies if I mischaracterize your position) those in favor of the current IC rules probably are looking at a different trade-off–making it easier to prove IC probably means fewer patentees who “really” deserve punishment will escape, but at the cost that more “innocents” also will be penalized.

  48. 90

    Anyone who believes that they are doing this has a very small imagination.

    And, more importantly, will inevitably get dragged into court by a litigator who is paid to have a bigger imagination.

    Filing every possible reference to protect yourself from inequitable conduct charges is akin to curling up under your desk to protect yourself from a direct nuclear attack. It doesn’t prevent or mitigate the attack. All it does is make you feel better during the period of time when you’d have been safe anyway no matter what you did.

  49. 89

    Malcolm–I’m probably guilty of a little hyperbole, but thanks for the reasoned reply.

  50. 88

    Dear Smashmouth,

    Nobody files “every conceivable reference”. Anyone who tries to do this will fail. Anyone who believes that they are doing this has a very small imagination.

    The best strategy for avoiding IC is to provide the USPTO with all the non-cumulative information that you are aware of and which is material to the validity of the claims. I don’t find this terribly difficult, frankly. Nor do I lay awake nights worrying about some alleged infringer raising an IC defense of a patent I prosecuted. If I found myself doing so, I would find a new career or at least cut down on the coffee.

  51. 87

    What’s the tricky part? Is it that obviousness under section 103 is too confusing for a mere patent attorney to figure out

    The tricky part is figuring out the mythical “reasonable Examiner”.

  52. 86

    “Nope, but it is my habit to explode the lazy “file every conceivable reference or else” mythology every time it’s raised.

    Posted by: Malcolm Mooney | Jul 29, 2010 at 03:19 PM” (emphasis added).

    Why do you always have to impugn the motives of people you disagree with? Maybe sometimes people are just uncomfortable with uncertainty and want to cover their a–es. Doesn’t mean necessarily they’re lazy (or wicked or dishonest).

  53. 84

    “re inequitable conduct and inventorship. this is a bit off the post, but close enough. if inventorship errors, that were known but not corrected, were discovered during an infringement litigation; what COA would defense bring? 35 USC 256 or inequitable conduct = statutorily invalid or judicially unenforceable?

    Posted by: para4 | Jul 29, 2010 at 02:49 PM”

    This one is easy:

    Both

  54. 83

    if inventorship errors, that were known but not corrected, were discovered during an infringement litigation; what COA would defense bring? 35 USC 256 or inequitable conduct = statutorily invalid or judicially unenforceable?

    Depends.

  55. 82

    Ken Brooks MacKesson is a glaring example of why 1.56 never works. There you had a prosecutor state his reason for not providing art. He made an argument, which seemed good to me, and the court disagreed with it.

    ROTFLMAO

  56. 81

    TJ wrote, “‘Only the ‘knowing failure to advise the Copyright Office of facts’ that would have ‘occasioned a rejection of the application constitutes reason for holding the registration invalid'”…. [but] “The real quote is: “…facts which might have occasioned …”

    Given the placement of the internal quotations and snippet, does anyone think there isn’t a pretty clear inference of deliberateness here?

    So how does the sanction ball get rolling on something like this? Does BD have to complain about it, or does the CAFC go for a sua sponte smackdown?

  57. 80

    smashmouth Malcolm–I guess it’s just in your nature always to have a smart-a– remark about anything.

    Nope, but it is my habit to explode the lazy “file every conceivable reference or else” mythology every time it’s raised.

  58. 79

    IANAE–“They [materiality and intent] can never be truly independent elements, because the deception can only be by keeping material information from the examiner.”

    But the same problem comes up in common law fraud, and courts seem to do a better job of separating the two in that context.

  59. 77

    IANAE wrote, “What’s the tricky part? [of figuring out what is “actually relevant” and must be disclosed] Is it that obviousness under section 103 is too confusing…?”

    Um, do you prosecute patent applications? And if so, have one of your grants been litigated?

  60. 76

    what COA would defense bring?

    Trick question. Defense is not limited to a single defense or counterclaim.

  61. 75

    Materiality and intent to deceive the PTO are supposed to be independent elements,

    They can never be truly independent elements, because the deception can only be by keeping material information from the examiner.

    If you know a reference is material and you make a decision not to disclose it, that suggests intent to deceive, because that can be the only result of your conduct.

    If you make a decision not to disclose a reference with intent to deceive, that suggests materiality, because that can be the only motive for your conduct.

    When your defense is that you were not fraudulent but “merely negligent”, you should expect that once in a while the court will decide that you couldn’t possibly have innocently been that negligent. That seems to be what happened in McKesson.

  62. 74

    re inequitable conduct and inventorship. this is a bit off the post, but close enough. if inventorship errors, that were known but not corrected, were discovered during an infringement litigation; what COA would defense bring? 35 USC 256 or inequitable conduct = statutorily invalid or judicially unenforceable?

  63. 73

    Mr. Brooks–I think we agree in substance on this. I just don’t like the terminology “accidental fraud.” It’s really a form of negligence we’re talking about.

    Malcolm–I guess it’s just in your nature always to have a smart-a– remark about anything. I still think it’s unrealistic to expect patent attorneys not to be a little paranoid about IC so long as the Federal Circuit permits unenforceability under the current regime, which presumes intent just on the basis of materiality, no matter what they say elsewhere. Materiality and intent to deceive the PTO are supposed to be independent elements, not factors.

  64. 72

    Ping asks, “And Moody’s is related to patents…how? Malcolm, are you feeling…”

    Why, that’s as easy as 6°OfKevinBacon.

    Moody shares many letters and rhymes with Mooney.

    Mooney posts a lot on a blog related to patents, despite not relating to patents himself.

    See?

    Hey, it’s even easier than 6°OfKevinBacon, seeing as we only have about 4° of separation.

  65. 71

    Smashmouth football. most of the new IC cases are accidental fraud. MacKesson is a glaring example of why 1.56 never works. There you had a prosecutor state his reason for not providing art. He made an argument, which seemed good to me, and the court disagreed with it. Basically the court said we don’t believe your rationale for not disclosing a reference, i.e., he was negligent in his reasoning for the reference not being material, e.g., accidental fraud. So in MacKesson you are faced with either there is strict liability for not disclosing a reference or negligently failing to provide a reference and you have commited fraud. In other words, fraud no longer requires any intent. Here is the beauty of MacKesson, had the court not found equitable fraud (mind you this is not legal fraud) then 1.56 would have been meaningless. So what MacKesson really makes clear is that being negligent in prosecution can result in an invalid patent even if all the requirements of Title 35 United States Code has been satisfied.
    Rule 1.56 does not work. MacKesson makes that very, very clear. Just analyze the case and ponder the implications of the case had no inequitable conduct been found.

  66. 70

    KB Other cultures and/or countries do not have these requirements.

    The Balinese Patent Office figured this stuff out back in the 1920s.

  67. 69

    smashmouth a patent attorney who didn’t flood the examiner with every conceivable reference could set himself up for legal malpractice.

    I can conceive of more references than smashmouth could submit in an IDS. Could someone please file the malpractice suit today? Thanks.

  68. 68

    but that’s not the test for materiality under IC jurisprudence is it?

    How should I know? I simply take every patent number, phone number, and other seven-digit number I’ve ever seen and jumble them all together into a big list.

    It’s the examiner’s job to figure out which ones are important, amirite?

  69. 67

    IANAE: What’s the tricky part? Is it that obviousness under section 103 is too confusing for a mere patent attorney to figure out

    No, section 103 is not confusing, but that’s not the test for materiality under IC jurisprudence is it?

  70. 66

    Kenneth C. Brooks said in part, “As a result, it is much more likely that fraud (intentional as well as accidental) . . .”

    This genuinely confuses me. What is “accidental” fraud? Fraud requires scienter. In fact, part of the problem with IC as it currently exists is precisely because blending materiality and intent leads in practice to a relaxation of the scienter requirement.

  71. 65

    Has anyone considered the disparate impact on U.S. inventive institutions compared with their foreign counterparts? Specifically, U.S. companies are required to maintain certain data for purposes of eDiscovery and Sarbanes Oxley, tax purposes and the like. Other cultures and/or countries do not have these requirements. As a result, it is much more likely that fraud (intentional as well as accidental) may perpetrated by applicants in the aforementioned cultures. It would seem to me if one really wanted to game the system you would have an inventor in Madagascar or some other remote region of the planet file a patent application and then sell it to a mainstream company for enforcement in an industrial nation.

    For example, say a large non-U.S. international petroleum company has a subsidiary in Somalia and a small domestic company develops a multi-billion dollar drill head. Well the non-U.S. international petroleum company could manipulate facts to its benefit within the Somalia, e.g., say to show earlier priority, and wipe out the U.S. company’s claim to be the first to invent.

    I am not saying the multi-billion dollar companies manipulate facts and political processes to get beneficial business arrangements, say strong arming a government o release terrorists to get drilling rights, but I am saying that the international aspects of the Duty of Disclosure must be entertained so that U.S. institutions are not disadvantaged with respect to the non-U.S. institutions.

  72. 64

    it sounds so easy when you say it like that.

    What’s the tricky part? Is it that obviousness under section 103 is too confusing for a mere patent attorney to figure out, or is it that your client doesn’t want to pay you to be aware of the prior art to his own patent and your billables will come up short as a result?

  73. 63

    IANAE: you can get down to the pragmatic business of disclosing the art that is actually relevant and getting your client a well-examined and enforceable patent

    Just disclose what’s “actually relevant” – it sounds so easy when you say it like that.

  74. 62

    Perhaps not, but what of intentionally withholding a reference so you don’t have to make statements about it in the file history, when you are well aware that statements in the file history can limit the scope of even unamended claims? Hypothetically, you would have gotten a patent identical in wording but narrower in real scope. Does that not cause the issuance of a patent that would not otherwise have issued?

    First of all IANAE the duty of disclosure does not require providing a reference. The duty of disclosure requires providing information. If a reference could be found by an examiner with reasonable diligence, why should not the knowledge of the information of that reference be imputed on the Examiner? If one thinks about it, it differs only to degree of what occurs when an IDS is filed. Does an examiner actually read all the information contained in the references cited in an IDS? Whether the references are, in fact, read and considered by the Examiner, the Examiner is not only imputed with the knowledge contained therein but that all of the information contained therein had been considered.

    By not filing a reference that could be discovered with resonable diligence by an examiner (which by the way is what is paid for by the applicant) the knowledge should be imputed upon the Examiner; however, we still miss that crucial presumption of validity in view of the reference being considered, because the reference has not been provided in an IDS.

    Were this the way things are done, the public would be much better protected, because it would be less likely that IDS would be filed with an extraordinary number of references each of which would be deemed to have been considered by the Examiner. Rather, the validity of patents would be upheld and without an inordiante number of references being filed that would deemed considered by the Examiner.

  75. 61

    It matters what a slick-talking litigator can do to persuade a U.S. District Court judge who is probably predisposed to look favorably at IC as a way to get rid of the case.

    Yes, but that slick-talking litigator isn’t going away no matter how you conduct your patent prosecution. You can be the most diligent possible person, and meticulously follow the most specific and unambiguous possible rule, and he’ll still go after you in the exact same way and cost your client exactly the same amount in litigation expenses, because his job is to win at all costs and he’s kind of a sociopath.

    Once you realize that fear of the slick-talking litigator is not actually protecting you or your client from anything, you can get down to the pragmatic business of disclosing the art that is actually relevant and getting your client a well-examined and enforceable patent.

  76. 60

    “That’s just empty fearmongering, and would be even emptier if the reasonable examiners over at the PTO got together and collectively said that they don’t want to be flooded with irrelevant art.”

    That misses the point. As far as IC goes, it doesn’t matter what the examiners think. It matters what a slick-talking litigator can do to persuade a U.S. District Court judge who is probably predisposed to look favorably at IC as a way to get rid of the case. Who cares about Dairy Queen v. Wood or Beacon Theaters v. Westover?

    The reasonable examiner is an abstraction just like the reasonable man of torts law or the PHOSITA. And invariably the entity determining what is “reasonable” gets to see a bigger, more panoramic view than the patent prosecutor, and with 20-20 hindsight.

  77. 59

    Given the current vagaries of Federal Circuit IC jurisprudence, a patent attorney who didn’t flood the examiner with every conceivable reference could set himself up for legal malpractice.

    That’s just empty fearmongering, and would be even emptier if the reasonable examiners over at the PTO got together and collectively said that they don’t want to be flooded with irrelevant art.

  78. 58

    Given that PTO operations are directly impacted by the standard of materiality, I would think it wise for the Federal Circuit to ask the government to file a brief.

  79. 57

    “The law doesn’t require the flood of cumulative or barely-relevant references, but merely scares practitioners into doing it, and legally there is no consequence for withholding such references, so the PTO is still free to act in that regard.

    The PTO is not helpless here, and the law does not require what applicants are currently doing.

    Posted by: IANAE | Jul 29, 2010 at 11:41 AM”

    This is pretty disingenuous. Given the current vagaries of Federal Circuit IC jurisprudence, a patent attorney who didn’t flood the examiner with every conceivable reference could set himself up for legal malpractice.

  80. 56

    He has actually written a book on statutory construction.

    Well, good for him. I hope he’s enjoying his royalties, but that doesn’t mean other people can no longer reasonably disagree with him. After all, we disagree with Supreme Court justices all the time, and they disagree with each other all the time, and their writings are de facto far more authoritative.

    Prof. Hricik notes that they have essentially carved into stone the original rule 56 standard of materiality — thereby preventing the patent office from regulating its requirements for disclosure.

    The PTO can still enforce its own rules at the examiner level, and isn’t supposed to be able to regulate what is ultimately legally required of applicants. And presumably it could still pass some new rule, for example that the applicant has to state with particularity what makes the reference material or any IDS over 30 references (or multiple IDSes over a short period of time) will get bounced. The law doesn’t require the flood of cumulative or barely-relevant references, but merely scares practitioners into doing it, and legally there is no consequence for withholding such references, so the PTO is still free to act in that regard.

    The PTO is not helpless here, and the law does not require what applicants are currently doing.

  81. 55

    ping And Moody’s is related to patents…how?

    Not related to patents per se, ping. But certainly related to punishing bad actors using equitable decision-making and remedies. Something that certain individuals in the patent universe are quite hostile towards, for selfish resaons.

  82. 54

    Ned I’d like to see his take on Abbott’s argument on the merits.

    I’ll look it over this weekend if I have time. Given Abbott’s history in this case, I’m guessing it’s the usual collection of misrepresentations. You know, sort of like that case cite TJ pointed out upthread.

  83. 53

    IANAE, Did you check the good professor’s resume?
    link to law.mercer.edu

    He has actually written a book on statutory construction.

    On Rule 56. Even if the Federal Circuit is not bound by the amendment to rule 56 1992, Prof. Hricik notes that they have essentially carved into stone the original rule 56 standard of materiality — thereby preventing the patent office from regulating its requirements for disclosure. For example, anecdotal evidence by the virtually all parties suggests that the reaction to the Federal Circuit standard of materiality is to disclose any and all references that may be related to the subject matter the patent regardless of whether they are cumulative of other references, unnecessarily flooding the examiner with a deluge of barely relevant references that they then have to wade through in order to find the one reference may be the most relevant. Everyone suggests that the result has degraded the quality examination — exactly the opposite of what was intended.

    What this suggests is that even if the Federal Circuit is not bound by a change in the rule, it should follow that change because not to do so would significantly interfere with the ability of the patent office to regulate its own affairs in an area where Congress has granted it rulemaking authority and special expertise.

  84. 52

    There may be, but your IDS should be limited by several factors:

    If it’s really as straightforward as this then maybe my concerns were misplaced. If only the courts could be so clear.

    It’s a delicate balance.

    Agreed. And reasonable minds may disagree on where the it lies :)

  85. 51

    there may be countless other possible combinations no?

    There may be, but your IDS should be limited by several factors:

    1) You are not required to search or disclose art you are not aware of.
    2) You are not required to disclose cumulative art, which cuts out most of the “secondary” references that only teach what’s missing from the closest primary reference.
    3) The number of “primary” references that come within one or two limitations of anticipating your claim should be relatively few in number, or at worst mutually cumulative if your invention is, for example, an improved handlebar on a general bicycle.

    the scope of references you can potentially be on the hook for seems onerously large.

    Right. That’s exactly the problem we don’t want to start having. IDSes will start being onerously large. We also don’t want to ruin the best health care system in the world by giving people access to health care. It’s a delicate balance.

  86. 50

    One or two such references are probably enough to cite, with the rest of the art class being cumulative.

    Sorry to harp on this point but that would be a missing feature for a particular combination, there may be countless other possible combinations no?

    It just seems to me that if you can get caught by a reference that is not even invalidating, then the scope of references you can potentially be on the hook for seems onerously large.

  87. 49

    it seems the scope of references that might be cited (particularly for obviousness) can be pretty darn broad…

    It can, if you also consider the secondary reference that is only cited for the one missing feature in the primary reference that actually is your invention. You know, the one that as soon as you come up with an argument against motivation to combine the examiner immediately has another nearly-identical reference ready to go.

    One or two such references are probably enough to cite, with the rest of the art class being cumulative.

  88. 48

    IANAE: But if the reference is close enough that you’d have to argue your way around it if the examiner knew about it, that starts to look material to me.

    I like the “close enough” standard better, though in my admittedly limited experience it seems the scope of references that might be cited (particularly for obviousness) can be pretty darn broad… I’m not sure how much the “close enough” standard narrows the field…

  89. 47

    I feel that a number of the IC decisions would have been reversed if the CAFC were allowed to look at the issue without deference to the trial court.

    One thing we definitely do not need is broader do-over jurisdiction at the Federal Circuit.

    If the Circuit is going to review everything de novo, let’s just give it jurisdiction to hear the trials. At least then it will come up with more reasonable findings of fact, and we won’t waste all this time waiting for appeals.

  90. 46

    Another fix: change the standard of review. It apprears from a number of the panel decisions that they were unwilling to find that the trial court was incorrect due to the level of review afforded. I may be reading too much into some of the decisions, but I feel that a number of the IC decisions would have been reversed if the CAFC were allowed to look at the issue without deference to the trial court.

    Of course, changing the stds of review for the IC issues is about as likely to happen as MM or 6 are to admit they are incorrect at least some of the time…

  91. 45

    name: if the standard for materiality is any reference that could affect claim construction,

    That would be a pretty silly standard, wouldn’t it?

    Prior art is prior art, and insofar as the reference itself affects claim construction you won’t escape it by withholding the reference. Besides which, the examiner takes a broadest reasonable interpretation anyway, so unless the reference supports your argument for a narrower construction it’s not material to anything on that basis.

    But if the reference is close enough that you’d have to argue your way around it if the examiner knew about it, that starts to look material to me. That’s something like a reasonable examiner standard, and the non-disclosure keeps the file wrapper clean – which we all know is as relevant to claim scope as an amendment, since we all live in fear of file wrapper estoppel almost as much as we live in fear of inequitable conduct.

  92. 44

    Ned: he who is not a patent examiner anymore …

    Has never been a patent examiner, you mean.

    Ned: Prof. Hricik provides a convincing case of statutory construction that Section 288 and 282(1) have to read together.

    I would be both surprised and amused to read a convincing case for that construction. Particularly since 282(1) lacks the wording “or any claim in suit” so conspicuously present in 282(2) and (3), which implies that the 282(1) defenses apply to the patent as a whole. And since 288 makes no mention of unenforceability at all but refers only to the invalidity of individual claims.

    Inequitable conduct doesn’t apply to individual claims, does it? Maybe it should, but it doesn’t. An IDS pertains to the patent as a whole, and a reference was either disclosed or not for the patent as a whole. As I said upthread, I’m okay with preserving some claims if the undisclosed art is not material to those claims, but I can see no reasonable statutory construction that precludes any other approach.

    One could just as easily read 288 to mean “whenever a claim is invalid, but there is no inequitable conduct (which would render the remaining claims unenforceable), an action may be maintained…”

    I’m also not buying Prof. Hricik’s argument that Congress would have had to “create” inequitable conduct. Besides the fact that Congress could theoretically legislate it away at any moment by actually passing a clear and explicit amendment for a change, such broad terms as “unenforceable” are just begging to be at the mercy of judicial construction.

    I do agree with Prof. Hricik that the amendment to Rule 56 should not have changed anything, and that terms like “materiality” need a clear and sensible interpretation. Let’s start by presuming that no reasonable examiner would want to see a thousand prior art references, because in aggregate they would not help him examine the application. What would help the examiner would be some filtering by the applicant and an IDS of more reasonable size. Hricik also has some good ideas about how to assess materiality of a particular undisclosed reference, but we should also bear in mind that in most non-Avid cases the applicant will not readily admit his intent to deceive.

    7: No lawyer would have your “the ends justify the means” attitude.

    Virtually every lawyer has that attitude, when the ends favor his client. But I see what you mean, we should be able to count on obvious patents being found obvious.

  93. 43

    IANAE: Perhaps not, but what of intentionally withholding a reference so you don’t have to make statements about it in the file history, when you are well aware that statements in the file history can limit the scope of even unamended claims? Hypothetically, you would have gotten a patent identical in wording but narrower in real scope. Does that not cause the issuance of a patent that would not otherwise have issued?

    Wow, if the standard for materiality is any reference that could affect claim construction, I’d need to submit a truckload of references for each application…

  94. 41

    ping, Malcolm and I had a good exchange on the facts of this case awhile back. I’d like to see his take on Abbott’s argument on the merits. To me, it presented the case in an entirely new light. I’m not sure what to make of it now, but I would be interested to see what Malcolm thinks.

  95. 39

    And Moody’s is related to patents…how?

    Malcolm, are you feeling threatened by the number of posts by IANAE and good ‘ol Ned? I am concerned for you. You haven’t seemed the same since Bilski came out.

    Ned,

    Not that I don’t trust your reading of somebody else’s opinion (I don’t but that’s no t the point), do you have a link to the Hricik construction?

  96. 38

    “And then there are all the other worthless, obvious patents that have been rendered unenforceable. Like the patent at issue in this case.”

    This is why I don’t believe you’re actually a lawyer. No lawyer would have your “the ends justify the means” attitude. If a patent is obvious, it should be held invalid as obvious (and should never have been granted in the first place). Not tanked under ridiculous IC charges.

  97. 37

    In other news

    link to mcclatchydc.com

    WASHINGTON — The chief executive of Moody’s Investors Service sold almost $3 million in company stock this year, and $7.1 million last year, both times right before his company’s stock price fell from its peak levels, a McClatchy analysis has found.

    In one case, CEO Ray McDaniel sold 100,000 shares of Moody’s stock on the same day that the Securities and Exchange Commission notified Moody’s that it was under investigation. The notice followed months of federal inquiries into Moody’s business practices.

    …experts question McDaniel’s sales because he had key information about the company’s finances that ordinary investors didn’t have, because his stock sales’ timing is curious, and because Moody’s won’t disclose when he set the terms of his plan’s prearranged stock sales, or whether he changed those terms.

    Insider trading can be illegal, but it isn’t defined in any statute or regulation, and the courts determine on a case-by-case basis whether it occurred.

    Oh noes! It’s another “roving commission”! This sort of thing just gives the giant investment company CEO profession a bad name.

  98. 36

    INANE-AE, er, he who is not a patent examiner anymore …

    Law you say? Prof. Hricik provides a convincing case of statutory construction that Section 288 and 282(1) have to read together. What it tells us is that Congress specifically legislated the that “other claims” can be held unenforceable ONLY if a claim is held invalid and if that invalid claim were obtained by deceit. Conversely, if an invalid claim is obtained by deceit, all other claims cannot be enforced. The intent of Congress is made clear in view of the prior statute which 288 replaced. That statute specified that if any claim, valid or not, were obtained by deceit, all claims were unenforceable. That statute was deliberately narrowed in enacting Section 288.

    The good profession traced the error of Fed. Cir. to one case: JP Stevens; and to one line:

    “[The} earliest precedent for that rule in this Court, the J.P. Stevens panel reasoned that
    inequitable conduct was an “unclean hands” type defense that “fits best in the ‘unenforceability’ phrase of” Section 282(1). Without engaging in the careful statutory analysis demanded today, the panel in a single sentence eliminated the requirement – added by Congress when it
    amended Section 288 and factually present in the pre-1952 Supreme Court cases – that only deceit that causes issuance of an invalid claim can cause automatic unenforceability of all other claims. Further, it reached its conclusion that deceit requires automatic unenforceability even when all claims are valid even though every one of the lower court decisions the J.P. Stevens panel relied upon each found that deceit had caused issuance of an invalid claim.”

  99. 35

    “Of course, all this will be moot in two years when the Supreme Court decides there’s no bright line test and a sliding scale analysis seems fair to them and Rule 56 is a useful clue to materiality and they’ll leave it to the Federal Circuit to hash out such inconvenient details as what “material” really means.”

    IANAE,

    How true, how true.

  100. 34

    rule 56 is not the law.

    Exactly. So enough already with the briefs and blog posts arguing that current rule 56 somehow prevents the courts from using old rule 56 as the standard for inequitable conduct.

    If the courts think the old rule 56 is a pretty good codification of what they consider inequitable, they can apply that standard all they like, and it doesn’t matter whether or not that standard was ever in the statute or the rules or the MPEP or the Magna Carta.

  101. 33

    Ned: I do dispute whether the president intended to obtain an invalid patent.

    I dispute whether that’s the test.

    An intention not to disclose information you think might be important to the decision-maker is tantamount to an intention to deceive, particularly when you’re also aware of an obligation to disclose information that might be important to the decision-maker.

    Ned: The intention must be to obtain something that one did not have a right to obtain by law.

    Again, equity is in the business of denying people with unclean hands the enforcement of their otherwise valid legal rights. Always has been.

  102. 32

    Ping, rule 56 is not the law. As I said in an above post, Kappos could get out ahead on this issue by simply banning IDSs or requiring that the examining core not review them. He has the authority to do that (through rule making). This would all but force the Feds to come to their senses and get real.

  103. 31

    Malcolm, litigation is wild and wholly. I assume the courts expect litigators to all but lie. But when they do lie, and demonstrably so, the courts really need to do something. Today, they just live with it.

  104. 29

    Malcolm, I noted the intentional misrepresentation in my opening post. But the test is two parts: 1) intentional misrepresentation; and 2) of a material fact or its corollary on non disclosure. While I do not dispute Avid’s intention not to disclose, I do dispute whether the president intended to obtain an invalid patent. No where in the case does the court go that one step further.

    As noted in the briefs in this case, the Feds. now conflate intention not to disclose with an intention to deceive. The intention must be to obtain something that one did not have a right to obtain by law.

    Now, if the claims initially filed were invalid over the non disclosed prior art, and the president knew of them and that they were invalid, then I suggest that Avid would have violated Section 115 and that there was, in fact, fraud attempted on the PTO. That should be enough.

    But none of that is of record in this case. All we know is that the non disclosed prior art was submitted to the jury and they held the claims non invalid. In other words, reference was not material to the issued claims.

  105. 28

    Re: intentional misrepresentation by litigators, which I see all the time: If I were a judge, I would give the advocate one warning; then sanction them on a second occurrence; and then dismiss their case on a third.

    I’m sure there were no such shenanigans during the trial or the original appeal. This has to be an aberration. Right?

  106. 27

    The fact that the Feds have not stayed its mandate in that case, over the dissent of Newman, reinforces the injustice meted out to Avid by the Feds. Shame on them.

    Just in case anyone reading this has forgotten, Avid is the case where the CEO of the company admitted that he intended to deceive the PTO by withholding information. This fact was not disputed on appeal.

    Why Ned continues to weep over this company’s lost patent rights is left to your imagination.

  107. 26

    Re: intentional misrepresentation by litigators, which I see all the time: If I were a judge, I would give the advocate one warning; then sanction them on a second occurrence; and then dismiss their case on a third.

    Here, if I were the Feds., I would merely strike the brief and let them prevail, if they can, at oral argument.

  108. 25

    “But this is just “zealous advocacy.” These litigators are highly respected. They would never *intentionally* misquote an important case in their brief.”

    People intentionally, it seems, misquote Zurko all the time. I’m sure some of the respectable people do it too. The respectable ones stfu once you point it out to them tho.

  109. 24

    Intrigued and amused by the word “irony”, I went to the Brief and found, featuring strongly, the words “specific intent to deceive”. LOL. My thanks to the Abbott legal team, to Dennis, TJ and MM.

  110. 23

    The fact that the Feds have not stayed its mandate in that case, over the dissent of Newman, reinforces the injustice meted out to Avid by the Feds.

    Or, if you want to feel better about it, it reinforces our confidence that whatever test for inequitable conduct the Federal Circuit ultimately settles on, they will never stand for the sort of conduct evidenced by the facts of Avid.

  111. 22

    The ABA brief clarifies the “but for” test to one where the issued claim is invalid.

    “By limiting the defense to where it is objectively shown that one or more claims would not have been granted in the absence of the applicant’s misrepresentation or omissions the
    reformed standard insures that inequitable conduct will only be found where the PTO’s reliance on such has resulted in actual harm though the issuance of an otherwise invalid claim.”

    The “but for” standard, IMHO, has to very clear that if a claim is held valid over a reference, there can be no finding of inequitable conduct.

    Clearly, then, the standard advocated by the ABA would require the reversal of Avid. The fact that the Feds have not stayed its mandate in that case, over the dissent of Newman, reinforces the injustice meted out to Avid by the Feds. Shame on them.

  112. 21

    Besides, how can you possibly prove it?

    Well, the case was highly material… And they were clearly aware of it… And they clearly made a deliberate decision to phrase the brief as they did… And they clearly intended to convince the court to adopt a standard consistent with the misquote but inconsistent with the law…

    Huh. It’s page 21 of their brief all over again.

  113. 20

    The full quote from the brief:

    “Only the knowing failure to advise the Copyright Office of facts” that would have
    “occasioned a rejection of the application constitutes reason for holding the
    registration invalid.” Eckes, 736 F.2d at 861-62 (quotation marks omitted). The
    same standard should apply here.

    LOLOOLOLOLOLOL

    Dennis, if you are going to praise Abbott’s brief, then you need to highlight what I consider a sanctionable misquote.

    But this is just “zealous advocacy.” These litigators are highly respected. They would never *intentionally* misquote an important case in their brief.

    Besides, how can you possibly prove it? Oh, the irony …

  114. 19

    Thanks TJ – Great Catch. The Eckes quote comes from Nimmer on Copyright, which still reads that: “If the claimant wilfully misstates or fails to state a fact that, if known, might have caused the Copyright Office to reject the application, then the registration may be ruled invalid.”

  115. 18

    Dennis, if you are going to praise Abbott’s brief, then you need to highlight what I consider a sanctionable misquote. On page 12 of its brief, Abbott, quoting a Second Circuit case, says: “‘Only the ‘knowing failure to advise the Copyright Office of facts’ that would have ‘occasioned a rejection of the application constitutes reason for holding the registration invalid'”.

    The real quote is: “Only the “knowing failure to advise the Copyright Office of facts which might have occasioned a rejection of the application constitute[s] reason for holding the registration invalid”. Eckes v. Card Prices Update, 736 F.2d 859, 861 (2d Cir. 1984).

    The difference between “would” and “might” is the difference between whether “but for” causation is required. The real quote hurts Abbott’s “but for” theory of the case.

  116. 17

    Paul Cole: Has anyone considered: (stuff)

    Those are all very important concerns. I think most of them could be addressed by discouraging the disclosure of references not known to be material or known to be cumulative (particularly once the IDS exceeds a certain size), some deference to the applicant’s reasonable judgment in that regard, and subjecting non-patent prior art (e.g. on-sale events, journal articles that are not easily searched) to greater scrutiny.

    This business of “here is the entire art class, in IDS form” has got to stop. It’s not helping anyone.

  117. 16

    Has anyone considered:

    (a) the cost to inventors of the disclosure obligation, either per application or to inventors as a community?

    (b) the cost to the USPTO of the disclosure obligation either in an individual case or as a global element in the USPTO budget?

    (c) the extent to which the disclosed material is helpful to examiners and used by them?

    (d) the ability of examiners to digest the disclosed material within a time frame that is reasonable within the USPTO work credit system?

    (e) the percentage of cases where a patent application is rejected over prior art cited in an IDS but which an examiner would not have been expected to find in a proper search?

    Viewed from this side of the Pond there is much in Abbott’s brief that would be helpful if adopted.

  118. 15

    With the duty of disclosure test itself being all over the map in litigation – new Rule 56, old Rule 56, or whatever else a court or panel felt like using.

    Right. That’s the problem. We need a clear rule about what the applicant must disclose, what the applicant should not disclose, and what level of intent is appropriate for imposing the remedy. If the ensuing definiteness gets more inequitable conduct charges bounced on summary judgment, so much the better.

    I don’t think softening the remedy is going to fix the problem. The remedy seems perfectly appropriate for facts that justify it. If you don’t play by the rules for obtaining your patent, you don’t obtain the patent.

    Of course, all this will be moot in two years when the Supreme Court decides there’s no bright line test and a sliding scale analysis seems fair to them and Rule 56 is a useful clue to materiality and they’ll leave it to the Federal Circuit to hash out such inconvenient details as what “material” really means. But it’s a fun discussion for the time being, isn’t it?

  119. 14

    “Undisclosed .. art that the applicant PRESUMPTIVELY knew was material.”

    That is precisely the problem with several of the panel decisons on IC that triggered this en banc review. Namely, ignoring the prior establshed requirement that the art was both actually material to claim allowance AND INTENTIONALLY witheld, by simply PRESUMING that intent solely from presumed materiality [no but-for requirement] as to ANY claim. With the duty of disclosure test itself being all over the map in litigation – new Rule 56, old Rule 56, or whatever else a court or panel felt like using.

  120. 13

    The Verizon Amicus Brief makes a good point that such a drastically draconian REMEDY is not necessarily required even if IC is found.

    Maybe it is, though. Undisclosed art is undisclosed throughout the application and its family, is it not? And we’re talking about art that the applicant presumptively knew was material. Should we allow the applicant to shield his patent from inequitable conduct by the fiction of filing more claims or splitting them into separate applications?

    If an undisclosed reference happens not to be material to one or more claims in the application, I would be prepared to let those claims stand. That’s no more draconian a remedy than 103 art invalidating every claim it renders obvious.

  121. 12

    Re “It makes no sense at all when the fraud is a culpable omission such as non-disclosure, because unenforceability becomes a case of invalidity-plus-fraud, which is a pointless defense to have when invalidity alone achieves the same result.”

    Not quite, as at present with inequitable conduct ALL claims in the patent become unenforcable, even claims already validly distinguishing over the uncited art or amended to do so by reissue or reexamination.
    The Verizon Amicus Brief makes a good point that such a drastically draconian REMEDY is not necessarily required even if IC is found.

  122. 11

    The problems of clarification of what the claims are claiming and what the prior art actually discloses are not the stuff of fraud.

    Perhaps not, but what of intentionally withholding a reference so you don’t have to make statements about it in the file history, when you are well aware that statements in the file history can limit the scope of even unamended claims? Hypothetically, you would have gotten a patent identical in wording but narrower in real scope. Does that not cause the issuance of a patent that would not otherwise have issued?

  123. 10

    “Ned: What if the issued claims are valid over the withheld reference, but the examiner’s rejection in view of the reference might have led the applicant to make statements in the file history that would have affected the construction of the issued claims?

    Even though the claims might not have been amended to overcome the reference, its disclosure would have affected the scope of the patent, and the applicant clearly would have had something to gain by not disclosing it.

    Posted by: IANAE | Jul 28, 2010 at 01:10 PM”

    Now come on IANAE. The problems of clarification of what the claims are claiming and what the prior art actually discloses are not the stuff of fraud. The applicant’s duty is not to file claims he knows are invalid, or make factual representations that are false and which cause the issuance of a patent that would not otherwise have issued.

  124. 9

    “Ned: What if the original claims would have been rejected over the intentionally withheld reference, but for other reasons, the claims were amended in such a way that the withheld reference was no longer sufficient to reject the amended (and issued) claims?

    Posted by: A plurality of thresholding units | Jul 28, 2010 at 01:05 PM”

    There may be a problem with Section 115 here. The applicant has a duty on filing, and a continuing duty, not to assert any claim he KNOWS to be invalid over the art.

    Note, the violation is of a statute and not of any duty of disclosure. The statutory duty is not to submit claims that one knows are invalid. If a patent attorney does this, he should be disciplined. If the applicant does this, perhaps equity should intervene and find the patent unenforceable.

  125. 8

    Ned: The argued “but for” standard is still not clear.

    The but-for standard makes sense in the cases cited in the brief, where the fraud on the patent office is the disclosure of false or misleading information, and that disclosure overcomes a rejection.

    It makes no sense at all when the fraud is a culpable omission such as non-disclosure, because unenforceability becomes a case of invalidity-plus-fraud, which is a pointless defense to have when invalidity alone achieves the same result.

    The entire point of equity is to prevent the enforcement of a valid legal right when that right produces an unjust result. Even if the bank has good legal title to your house (if that is still the case in your jurisdiction), equity will not allow the bank to exercise beneficial ownership and kick you out until you default on your mortgage. That is the correct result whether or not the court finds any defect in the bank’s legal title (and it generally can’t). The same principles should apply to a valid and duly granted patent, if that patent was obtained through conduct the court deems inequitable.

  126. 7

    Ned: What if the issued claims are valid over the withheld reference, but the examiner’s rejection in view of the reference might have led the applicant to make statements in the file history that would have affected the construction of the issued claims?

    Even though the claims might not have been amended to overcome the reference, its disclosure would have affected the scope of the patent, and the applicant clearly would have had something to gain by not disclosing it.

  127. 6

    Ned: What if the original claims would have been rejected over the intentionally withheld reference, but for other reasons, the claims were amended in such a way that the withheld reference was no longer sufficient to reject the amended (and issued) claims?

  128. 4

    The expansion has rendered valuable patents unenforceable based on minor omissions far afield from the doctrine’s purposes.

    And then there are all the other worthless, obvious patents that have been rendered unenforceable. Like the patent at issue in this case.

  129. 3

    If I were Kappos, I would do everything in my power to put a stop to the plague. I would pass a rule forbidding all IDSs or anything equivalent. Period.
    Only then could “fraud” on the PTO be properly confined to is purpose.

  130. 2

    The argued “but for” standard is still not clear. Take Avid. A jury holds the patent valid over a non disclosed reference. The infringer proves that Avid intentionally withheld the reference for the purpose of obtaining a patent. Since the patent is valid, cannot we presume it was patentable over the reference?

    But for?

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