Federal Circuit Issues New Inequitable Conduct Requirements

By Ben Hodges

In a 6-1-4 decision, the en banc Federal Circuit issued new requirements for proving inequitable conduct in Therasense, Inc v. Becton, Dickinson and Co. In the split decision, the Federal Circuit toughened both the standards for proving materiality and intent. It also eliminated the sliding scale between materiality and intent that existed before. The Federal Circuit took these steps after determining that lower standards caused overuse of the doctrine of inequitable conduct and put an undue strain on courts and the PTO.

To prove materiality, accused infringers now must satisfy a “but-for” test. This means that but for the deception, the PTO would not have allowed the claim. This must be proved by the preponderance of the evidence. The Court did allow for exception to proving “but-for” materiality for any cases involving affirmative egregious misconduct. One example of such conduct is filing “an unmistakably false affidavit.”

To prove intent to deceive the PTO, evidence of a “deliberate decision” to deceive must be present. The burden of proof for this requires clear and convincing evidence. Circumstantial evidence may be enough to satisfy this burden, but when using circumstantial evidence the intent to deceive must be the most reasonable inference. The absence of a good faith explanation for withholding a reference alone is not enough to support a finding of intent to deceive.

The Court also ordered the elimination of the sliding scale which previously allowed strong evidence of either intent or materiality to compensate for weak evidence of the other. Finally, the Court also found that even after intent and materiality are proven a patent should only be ruled unenforceable if the misconduct resulted in the unfair benefit of the patentee receiving an unwarranted claim.

The dissent, written by Judge Bryson, focused primarily on the new standards for materiality. The dissent pointed out that the standard for materiality adopted by the majority is different than the standard for materiality at the PTO. The PTO standard for materiality states that information is material if it establishes an issue of unpatentability or refutes or is inconsistent with a position the applicant takes before the PTO in regards to patentability. The standard adopted by the majority had been previously considered and rejected by the PTO in the 1992 revisions to Rule 56.