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« Court Report | Main | Roche Acquires Ventana Medical Systems »

January 21, 2008


This is not so bad, it injects some common sense into the system which currently necessitates huge IDS disclosures in many biotech cases.

If 1.56 is not going to be dropped, this goes some way to recitfying the situation where ANY busy prosecutor could likely be found to have committed inequitable conduct.


Although intent to deceive the USPTO may be inferred, it may not be done so based solely WHAT DOES THE TERM SOLELY MODIFY on the gross negligence WHAT IS GROSS NEGLIGENCE IN THIS CONTEXT -- AGAIN OLDER CASE LAW SHOWS THIS STANDARD TO BE VERY SUBJECTIVE of the patent owner or its representative THIS DOESN'T MATCH THE LANGUAGE OF RULE 56, or on the materiality of the information misrepresented or not disclosed AGAIN WHAT DOES SOLELY MODIFY.

The party asserting the defense or claim shall comply with the pleading requirements set forth under Federal Rules of Civil Procedure 9(b).

If the court finds inequitable conduct, the court has discretion to (1) hold the entire patent unenforceable, (2) hold 1 or more claims unenforceable, or (3) hold that patentee is not entitled an injunction. WHAT DOES IT TAKE TO GET 1, 2, OR 3 AND WHAT IS AN ABUSE OF THIS DISCRETION SO AS TO BE ABLE TO APPEAL -- THERE ARE NO STANDARDS

I favor this attempt to reduce "automatic" charges of inequitable conduct, but only if the "willful infringement" charges are equally reduced.

One reason every patent case has inequitable conduct charged is that every case has willful infringement charged.

Totally knocking out a patent on a technicality is the defendant's best challange to every infringement being subject to treble damages.

It's all a litigation dance and should be stopped from both sides.

The best provision would be to ban IE as a defense entirely. Admittedly, having the IE standard codified is better than the current situation. But no matter what you do with the language on IE in the statutory provision, it will be abused, especially if the district courts and the Federal Circuit aren't vigilant to give the patentee attorneys fees for unfounded and frivilous IE allegations; so far, the district courts and the Federal Circuit show no willingness to do this. All the Federal Circuit's talk about IE being a "plague" is meaningless unless the Federal Circuit puts some teeth into removing the "plague" by taking money from the pockets of those who make such ill-founded IE allegations (i.e., the Federal Circuit needs to "walk the talk").

It's not clear that the proposed statute necessarily addresses the moralistic turn that the Federal Circuit has taken in recent years. See, e.g., Ferring v. Barr Labs; Cargill.

Moreover, the statute does not clarify whether the "reasonable examiner" is a subjective or an objective standard. In Cargill, for example, the Court applied a subjective reasonable examiner standard. Even though the withheld information was not objectively material to patentability, the Court held that it was material in that case because that particular Examiner would have found it to be material (because the Examiner mistakenly believed that such information would have been related to patentability). So, is the requirement based on what's objectively patentable, or is it based on what an individual Examiner believes is objectively patentable?

Also, the law should more carefully clarify that materiality should have no bearing on whether one had intent to deceive. One either has deceptive intent or not. The degree of materiality ought to have nothing to do with it.

Lastly, I object to inequitable conduct because I see it as an artifact from the Standard Oil era of moralistic judicial intervention into the marketplace. Antitrust law is much more robust today because it has largely dispensed with inquiries into parties' intent. Patent law ought to grow up and do the same.

Besides, if a patent is valid, why should the market care whether the one who procured it possessed a pure heart throughout the prosecution process? When I get change, I don't demand that every bill that I receive have been used only for the most noble of purposes.

Dear Anon:

Even if Rule 56 were dropped, it would not eliminate the duty of candor - the Supreme Court has determined, much as it has for obviousness, that there is a Constitutional requirement that cannot be abrogated by Congress, and indeed underlies and supercedes Congressional authority to exercise its power to grant patents. What Rule 56 does is reign in allegations of what constitutes "fraud" on the Patent Office - if an applicant submits art in accordance with PTO rules, it is very hard to allege inequitable conduct (but not impossible, trust me).

I think the IDS size issue would be better addressed by considering inequitable conduct liability in a manner similar to what the Fed Cir has does for willfulness - use a recklessness standard, or require evidence of some sort of intentional concealment. That would preclude some of the rampant second guessing the fear of which fuels the massive IDS submissions.

Thanks for the comment.

Dear Patent Attorney:

You grasp the essential conundrum (and hypocracy) of the attempt to codify inequitable conduct (at least as Congress is attempting it). Although cosmetically taking the reins out of the CAFC's hands, eventually the courts will need to interpret what the statute means. And while the CAFC has been willing to consider legislative history in its decisions, the Supreme Court has recently been using a "plain meaning" approach (which doesn't get us anywhere except a "totality of the circumstances" test)("I can't define inequitable conduct, but I know it when I see it.")

Thanks for the comment.

Dear Alan:

Seagate may get us where you'd like to be WRT willfulness, since it should be much tougher to prove recklessness to establish willfulness. And if willfulness gets to be harder to prove, the "Jackpot" aspect of patent litigation (from a patentee (or troll) prespective) is reduced. So on that side of the ledger things may be moving in what it seems you think would be the "right" direction.

I am much less sanguine about reducing inequitable conduct, no matter what Congress does.

Thanks for the comment.

Dear EG:

Since inequitable conduct is unlikely to disappear (see my comment earlier in this thread), the question is what can courts do to reduce the amount of "frivilous" or unfounded allegations of inequitable conduct. Judge Nichols point in his "plague" comment was that reputable lawyers were reduced to accusing other reputable lawyers of disreputable behavior, and besides the civility issue I think it probably rare for counsel to take the risk of committing inequitable conduct intentionally on behalf of a particular client or patent application.

The pleadings provisions probably won't be enough to appreciably change the frequency with which inequitable conduct is plead. Perhaps sanctioning defendants (finding a special case and granting attorneys' fees, etc.) if inequitable conduct is alleged without sufficient evidence (and liberally permitting defendants to amend their Answer to include the inequitable conduct defense once discovery produces such evidence) would have the desired effect.

Thanks for the comment.

Dear Bob:

Welcome to the world of Supreme Court patent jurisprudence. Starting from the principle that "monopolies" are not to be tolerated, the Court has determined that the patent clause of the Constitution should be read very narrowly, to circumscribe Congressional power to grant patents. Read KSR and almost any pre-1980 obviousness case to get the real flavor of the Court's animus against patents.

In the same way, inequitable conduct is an issue for the Court because, in order to have the Federal government grant the patent right to an individual in the face of the general proscription against "monopolies," an applicant must have "clean hands" in the equity sense of the term. Thus, there is little chance that we will not always have this requirement for "pureheartedness" in patent law.

Since we are "stuck" with inequitable conduct as a precept of patent law, the point becomes how to Constitutionally balance the determination of "how pure" the applicant must be with the imperfect world in which mistakes happen. This is why affirmative misrepresentation of a material fact has always been enough to find inequitable conduct; in cases like the recent Oxycontin case where there was an affirmative misrepresentation that was not inequitable conduct, it was about something with such low materiality (and with a "good faith" explanation of why the misrepresentation was made) that it approached de minimis IC.

But these situations will be rare. The real issue is how to reduce or preclude the amount of unfounded allegations used as a litigation tactic. That one is tougher, and not really address by the proposed new statutory section.

Thanks for the comment.

Dear Kevin,

"The pleadings provisions probably won't be enough to appreciably change the frequency with which inequitable conduct is plead. Perhaps sanctioning defendants (finding a special case and granting attorneys' fees, etc.) if inequitable conduct is alleged without sufficient evidence (and liberally permitting defendants to amend their Answer to include the inequitable conduct defense once discovery produces such evidence) would have the desired effect."

Would you be willing to have these same sanctions for willfulness pleadings? I agree that Seagate may reduce the number of awards, but I'm not sure it will stop the charges without some teeth. And as long as it can be plead without fear and the discovery $$$ are running, the push for settlement to avoid litigation costs remains.

Dear Alan:

Seagate being simply the announcement of a change in the standard of proof, I expect willfulness will continue to be plead with great frequency. Maybe we need to add some teeth to provisions covering willfulness as well as IC.

The one place where the pleadings requirement might do some good would be if it were interpreted as necessitating ID of relevant, undisclosed, material prior art - I think that's what Congress had in mind, albeit not stated sufficiently or explicitly enough. If you cannot plead IC unless you have identified a reference, at least there will be a bull's-eye for everyone to focus on. Since finding uncited art only requires 1) inspection of the face/file history of the patent and 2) search of the art at the time the application was filed, the increased burden comes down to finding material, uncited art - which should be the sine qua non of the defense in the first place.

Thanks for the comment.

"Even if Rule 56 were dropped, it would not eliminate the duty of candor - the Supreme Court has determined, much as it has for obviousness, that there is a Constitutional requirement that cannot be abrogated by Congress, and indeed underlies and supercedes Congressional authority to exercise its power to grant patents."


Thanks for your reply to my comment. I realize getting IE squelched entirely is an uphill battle, but it's one worth fighting. Also, where's the precedential basis for a "Constitutional requirement" for the "duty of candor and good faith"? I don't see it from Precision Instruments. And for SCOTUS to say such a requirement comes out of the Patent Clause is absolute rhetorical nonsense. The only limitation expressed in the Clause is how long the rights exist (for limited times). In my opinion, for SCOTUS to exalt the "duty" and IE to a Constitutional requirement is disingenuous, not supported at all by the Patent Clause or the history surrounding it's creation, and improperly invades an area reserved to Congress. If SCOTUS can't get that through its judicial head, we've got real trouble ahead and not only in the patent area. Witness the Kelo decision on eminent domain that most of the country (including Ohio) has revolted against and for good reason.

Dear EG:

I agree that the Court in the patent area is in a position legally (but not morally) equivalent to Plessy v. Ferguson - trapped in their precedent on everything from IC to obviousness, all stemming from precedent that the patent "monopoly" should be stingently granted. At its extemes, it would require a Constitutional amendment to overcome it (don't hold your breath). The best we can hope for is reasonable application of the rule.

Thanks for the comment.


Thanks for your reply. I'll guess we'll have to "agree to disagree." I don't see the need for a Constitutional amendment here. The ability of Congress to extinguish IE, as well as have no other tests for patentability (other than 35 USC 101, 102 and 103), has never been truly tested for Constitutional muster before SCOTUS. All that I've seen in Graham to the effect that the Patent Clause is limitation on Congress as to the standard for granting patents is so much rhetorical nonsense (the support provided for this proposition is laughable), and certainly dicta. Frankly, if Congress would agree to do this legislatively, then let SCOTUS speak clearly (rather than mumbling as they so often do in the patent area) what, exactly, is Congress' reach, as well as SCOTUS' reach, on the Patent Clause. Otherwise, all we will do is wonder at "what might be done" instead of doing it, and seeing if SCOTUS will recognize that the standard for granting patents is not theirs when Congress says otherwise.

Dr. Noonan,

I hear what you're saying. But in antitrust law, we no longer consider monopolies to be "bad" per se. We don't even consider the general intent to create a monopoly to be "bad." Instead, antitrust plaintiffs who allege a Sherman Section 2 violation must do more than show the existence of a monopoly or the intent to create one.

Therefore, there is no reason why the Federal Circuit should continue to be beholden to the outdated 1940s notion that monopolies are always bad. If the inequitable conduct doctrine indeed hinges on the notion of the "evil" of monopolies, then the Supreme Court's antitrust precedent should not allow the this doctrine to stand (at least not in its current moralistic form).

Moreover, I think Twombly should suggest that defendants who plead inequitable conduct should almost have to fact-plead instead of notice-plead. If Congress wants to rein in charges of inequitable conduct pleadings, a statutory fact-pleading requirement would be a good place to start. Of course, dumping the whole doctrine as the primary means of enforcing Rule 56 would be a better place to start.

Dear Bob:

I think fact pleading is the intent of proposed Sec. 298(d), since Rule 9(b) of the Fed. R. Civ. Pro. require certain defenses to be plead "with particularity," i.e. facts, while other aspects like intent can be generally plead.

The point is that I think the CAFC IS stuck with a 1940's notion of monopolies, because in the patent area that's where the Supreme Court continues to be. Read the oral argument in Quanta, or the decisions in Merck, Medimmune, AT&T, or KSR to get an idea where the Court is coming from. (Even more scary, read the opinion of the 3 justices who dissented from dismissing the Labcorp case.) As the Supreme Court has shown over the past year or so, the CAFC ignores their narrow interpretations of patent law at its peril.

Thanks for the comment.

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