By Kevin E. Noonan --
Last week, the Supreme Court denied certiorari to Regeneron Pharmaceuticals in its appeal of the Federal Circuit's decision in Regeneron Pharmaceuticals v. Merus that affirmed the District Court's decision that the claims of Regeneron's patent-in-suit were unenforceable due to inequitable conduct in the patent's procurement. In so doing the Court passed up the opportunity to consider whether the split panel's decision was consistent with the Federal Circuit's own inequitable conduct jurisprudence, most recently handed down en banc in Therasense, Inc. v. Becton, Dickinson and Co., 649 F.3d 1276 (Fed. Cir. 2011) (en banc). The Court also deigned not to consider for the first time in over 70 years a doctrine stemming directly from a trio of its own decisions (specifically, Hazel-Atlas Glass Co. v. Hartford-Empire Co., 322 U.S. 238, 250-51 (1944); Precision Instrument Mfg. Co. v. Auto. Maint. Mach. Co., 324 U.S. 806, 814 (1945); and Keystone Driller Co. v. General Excavator Co., 290 U.S. 240 (1933)). Under the circumstances it is prudent for patent practitioners (prosecutors as well as litigators) to consider the lessons of the Federal Circuit's Regeneron decision.
To recap, the case arose over Regeneron's infringement suit against Merus involving U.S. Patent No. 8,502,018, which is directed to transgenic mice expressing human variable domain immunoglobulin (Ig) genes. Claim 1 is representative:
A genetically modified mouse, comprising in its germline human unrearranged variable region gene segments inserted at an endogenous mouse immunoglobulin locus.
As explained in the Federal Circuit's opinion, the types of antibody molecules that can be produced in mice using modern immunological and molecular biological techniques ranges from completely murine to completely human, and also include chimeric antibodies (encoded by human constant region genes and mouse variable domain genes) and "reverse" chimeric antibodies (encoded by human variable region genes and mouse constant region genes). These possibilities are illustrated in the brief by a diagram (where green portions of the antibodies are encoded by mouse genes and yellow portions are encoded by human genes):
Relevant to the issues before the Court was construction of the proper scope and meaning of the term "comprising in its germline human unrearranged variable region gene segments." Regeneron argued that this term was limited to inserting only human unrearranged variable regions genes, and thus only reverse chimeric antibodies encoded in the recombinant mouse genome; Regeneron argued its construction was supported by the plain meaning of the term and the '018 patent specification. Merus, on the other hand, argued that the word "comprising" in the claim made the proper construction broader than just insertion of human unrearranged variable region gene segments, but also encompassed humanized, fully human, and reverse chimeric antibody embodiments. The District Court adopted Merus' construction, and the Federal Circuit agreed.
This leads to the first lesson from the case: with regard to the "but-for" materiality prong of the Therasense test, the issue arises whether the standard of claim construction used by the Examiner, broadest reasonable interpretation or BRI, is sufficient to prevent the district court from applying its own claim construction, consistent with Phillips v. AWH Corp., 415 F.3d 1303 (Fed. Cir. 2005) (en banc), to arrive at a different conclusion. Here, whether the withheld references were "but-for" material depended on whether the interpretation of the phrase "comprising [human variable chain immunoglobulin genes]" was at least as broad before the U.S. Patent and Trademark Office as it was before the District Court. (It is an unstated assumption that it should be, because the possibility that an applicant can amend the claims under the BRI test should make this the broadest construction.) If, as Regeneron contended, the claim language precluded embodiments wherein all or part of the human constant region genes were included, then the materiality of the undisclosed references may not have been as apparent to Regeneron or the Examiner as it was to the District Court and a majority of the Federal Circuit panel. This raises a serious issue of whether a district court must (or at least should) be bound by evidence of the context of prosecution to determine whether the Examiner would have considered an uncited reference to satisfy the but-for materiality test (which reasonably should be the standard for whether an applicant or applicant's counsel withheld material references during prosecution). Under the Federal Circuit's Regeneron opinion the answer is no; this suggests that a patent prosecutor has two options for prudent practice: either make explicit (even if only by repeating any claim construction assertions made by the Examiner) what the claims terms mean (contemporary practice avoids anything so potentially limiting) or expanding the scope of disclosure beyond either the applicant's or the Examiner's understanding to preclude any interpretation from being broader that the one before the Examiner.
Turning to the references, it was undisputed that during prosecution of the '018 patent, four references were known to Regeneron and its counsel that were not cited to the U.S. Patent and Trademark Office. These references are:
1. Marianne Brüggemann & Michael S. Neuberger, "Strategies for Expressing Human Antibody Repertoires in Transgenic Mice," 17(8) Review Immunology Today 391 (1996) ("Brüggemann");
2. Shinsuke Taki et al., "Targeted Insertion of a Variable Region Gene into the Immunoglobulin Heavy Chain Locus," 262 Science 1268 (1993) ("Taki");
3. Yong–Rui Zou et al, "Cre-lox P-mediated Gene Replacement: A Mouse Strain Producing Humanized Antibodies," 4(12) Current Biology 1099 (1994) ("Zou"); and
4. WIPO Patent Publication No. WO 91/00906 entitled "Chimeric and Transgenic Animals Capable of Producing Human Antibodies," credited to Clive Wood et al. ("Wood").
These references were cited by a third party during prosecution of a related application after Regeneron received a Notice of Allowance for the '018 patent. Regeneron did not submit these references to the Office in the application that was granted as the '018 patent but did cite these references in all other pending related applications.
This leads to the second lesson: cite everything, particularly references that are genuinely unknown to anyone under a Rule 56 duty, and when that art becomes known before allowed patent claims are permitted to issue. Any such reference will need to be cited, as Regeneron did, in all further related applications, and compliance with the duty of candor in those cases can be used (as it was here) as evidence supporting the materiality of the references. (These actions can also be used to support an inference of an intent to deceive; the District Court's application of an adverse inference, infra, prevented its decision from being an issue on appeal.)
The District Court made the following findings of fact regarding the uncited references:
• Brüggemann was a review article that suggested replacing mouse Ig genes with human Ig genes in the mouse Ig locus. This specific "swapping" of the mouse and human genes would be an improvement over random integration (this was an argument Regeneron had made in support of its own invention). Regeneron's basis for distinguishing this reference was that it does not teach reverse chimeric antibodies, but the District Court's claim construction vitiated whatever force that argument may have had (or the significance of that argument on the materiality of the reference).
• The Wood reference (according to the District Court) also disclosed Ig locus targeting, based on expert testimony. The materiality of this reference was also based on its teaching that the constant region can be exogenous or endogenous, and thus encompasses insertion into the mouse Ig locus.
• The Taki reference disclosed insertion of variable region genes from one mouse into another mouse, but the District Court found the relevant consideration to be targeting exogenous Ig genes into an endogenous mouse Ig locus, not the mouse-human distinction. However, neither the District Court nor the Federal Circuit addressed the distinction with the '018 patent claims that Taki discloses introduction of rearranged variable region genes and the '018 patent claims introduction of unrearranged human variable region genes.
• The Zou reference disclosed modifying mouse constant region not variable region genes; but here again, the District Court found the salient disclosure was targeting exogenous Ig genes into the mouse Ig locus.
Although neither the District Court nor the Federal Circuit found these references, alone or in combination, satisfied the requirements in the statute for invalidating the '018 patent claims (a fact noted in Judge Newman's dissent), the District Court found that these references were "but for" material and this satisfied the first prong of the Therasense test for finding inequitable conduct.
The District Court also found that these references were not cumulative over the cited prior art, in particular U.S. Patent No. 6,114,598 to Kucherlapati, and a reference to Lonberg that had been overcome during prosecution of the '018 patent. Regeneron argued that the Brüggemann reference was cumulative over Kucherlapati; the Wood reference was cumulative over Lonberg; and the Taki reference was cumulative over the combination of Kucherlapati and Lonberg. Specifically, Regeneron argued that Kucherlapati taught substitution of an exogenous ("xenogeneic") locus at an endogenous target locus in the mouse genome, and that Lonberg taught a "knockout plus transgene" model, where the human antibody-encoding sequences are randomly inserted and the endogenous mouse Ig genes are disabled. The District Court distinguished the Kucherlapati reference from the Brüggemann reference by finding that Kucherlapati taught wholesale replacement of exogenous Ig for the endogenous mouse Ig locus, and that such a replacement included mouse regulatory sequences whose removal could interfere with normal B-cell development and antibody production. With regard to the Lonberg reference, the District Court found that the Wood reference taught targeted insertion (as recited in the '018 patent claims) while Lonberg taught insertion at random sites in the mouse genome. And the District Court found that the combination of Kucherlapati and Lonberg was not cumulative to the Taki reference because Taki taught targeted insertion and neither Kucherlapati nor Lonberg have these teachings.
This is the third lesson: there is no way to apprehend the decisions a district court judge may make regarding whether uncited references are cumulative. A Defendant's expert will likely be the vehicle for introducing such evidence, which is directed to questions of fact, and the District Court will be entitled to deference regarding not only the ultimate decision but also the credibility of contending expert witnesses. Thus, the only prudent course is to consider all references not to be cumulative unless they are different versions of the same reference (for example, a PCT/WIPO published application and its counterpart EPO publication of the same application).
With regard to the second prong of the Therasense test, intent to deceive, the Federal Circuit found (and the Supreme Court will not disturb) the District Court's drawing of an adverse inference based on the litigation misconduct catalogued by the District Court in its opinion was not an abuse of discretion. The panel majority's decision was supported by Regeneron's failure to "meaningfully dispute[d] any of the factual findings underlying the district court's decision," which included improperly withholding and citing on privilege logs documents clearly not privileged (such as experimental data); withholding as privileged information where the privilege had been waived; and withholding evidence of patent prosecution counsels' reasoning and state of mind relevant to whether counsel had an intent to deceive. The latter included, inter alia, the following cited in the Court's opinion:
• "I firmly believed—and still believe today— that Brüggemann, Taki, Zou and Wood were not material to patentability because they were substantially different from the mice claimed in the '176 application . . . and were cumulative of other information before the Patent Examiner."
• Counsel's description of his understanding of what a materiality analysis for inequitable conduct involves: "Regardless of whether I satisfied the minimum requirements of being an ordinary skilled artisan, I felt comfortable evaluating the art from that perspective during the prosecution of the '176 application. When I did have questions, however, I did not hesitate to reach out to those with more experience and knowledge."
• "I routinely made Regeneron inventors aware of the foregoing obligations when providing them with invention declarations."
• With regard to Brüggemann and Zou, "I was generally familiar with the subject matter of those two references . . . [a]t no time did I consider these references to be material to patentability to the claims pending in the '176."
• "Because of this experience [prosecuting the '176 application as well as the '287 Patent], I was readily familiar with both prior art that was before the Examiner in the '176 application and the pending claims of the '176 application."
• "I viewed the analysis [relating to the Withheld References] as straightforward."
• "I concluded that [the Withheld References], alone or combined with other prior art of which I was aware, were cumulative of information already before the Examiner. Furthermore, it was my view that the skilled artisan would not have viewed them as teaching the reverse chimeric inventions that the Examiner had allowed in the '176 application."
The tragedy for the patent prosecutors in this case is that this evidence, not considered by the District Court, is the kind of evidence those prosecutors had a firm basis for believing they would be able to present at trial, and that it provided powerful, exculpatory evidence regarding their subjective intent at the time they made the decision not to submit the references. Thus, the fourth lesson: a patent prosecutor cannot have any reasonable basis for believing that they will have an absolute right, protected by due process, to present the evidence of their actual intent as a defense to an inequitable conduct charge. The extent to which the purported litigation misconduct deserved the sanction of an adverse inference is not the issue; what is important it that whether a patent prosecutor is exposed to an inequitable conduct determination can be, under the precedent established in this case, totally devoid of any deceptive intent on their part, no matter what evidence the prosecutor may have that would excuse a failure to disclose material prior art.
The Supreme Court's decision leaves a "split" between this decision and the pre-Therasense case, Aptix Corp. v. Quickturn Design Systems, Inc., 269 F.3d 1369 (Fed. Cir. 2001), cited by Judge Newman in her dissent. In that case, according to Judge Newman, "[e]ssentially, we held that courts may not punish a party's postprosecution misconduct by declaring the patent unenforceable" and cited multiple cases applying the principle that litigation misconduct can bar a litigant but does not render a patent unenforceable. Yet that is what happened here, and thus any comfort Therasense may have given the patent bar regarding the need for evidence, inferential or otherwise, of a patent prosecutor's intent to deceive is greatly diminished by this decision.
Finally, because intent to deceive is personal (insofar as it applies only to those individuals who have a Rule 56 duty to disclose), it seems inequitable to draw such an inference against the attorneys who prosecuted the '018 patent based on the conduct (bad or just misunderstood) of litigation counsel who did not have a Rule 56 duty of candor and were not involved in prosecuting the '018 patent to allowance. Inequitable conduct based on a practitioner's intent to deceive is a serious allegation having deleterious consequences to a patent prosecutor's reputation and can also have as negative repercussions an ethics inquiry by the PTO's disciplinary officials. Accordingly, it is not unreasonable for patent prosecutors to be placed in such jeopardy solely due to their own mis- or malfeasance rather than to be at the whim of conduct by litigation counsel taken for strategic reasons at trial (as the District Court's decision and Federal Circuit opinion alleged here) that are found to be subject to sanction. The decision also perhaps raises questions of whether improperly rendering a patent unenforceable for inequitable conduct by a misapplication of the Therasense standard may amount to a 14th Amendment violation for taking property rights without due process. These issues were not enough for the Court to consider them worthy of its review, and thus remain.