On Therasense Remand, District Court Finds Inequitable Conduct and Holds Patent Unenforceable

Practical Law Legal Update 8-518-7404 (Approx. 4 pages)

On Therasense Remand, District Court Finds Inequitable Conduct and Holds Patent Unenforceable

by PLC Intellectual Property & Technology

Key Litigated Issues

In Therasense, Inc. v. Becton, Dickinson & Co., the key issue before the US District Court for the Northern District of California was whether the plaintiff's patent attorney and Research and Development (R&D) Director committed inequitable conduct under the US Court of Appeal for the Federal Circuit's newly established standard.

Background

This case is on remand from Therasense v. Becton, Dickinson & Co. (649 F.3d 1276 (Fed. Cir. 2011) (en banc)). Following a 2008 patent infringement trial between Abbott Laboratories and several defendants, the district court held that the patent at issue was unenforceable due to Abbott's representative's inequitable conduct during the prosecution of the application for the patent because Abbott's patent attorney:

Failed to disclose to the USPTO previous briefs Abbott submitted to the European Patent Office (EPO) concerning a prior art counterpart patent owned by Abbott.
Knew of the briefs.
Submitted to the USPTO representations by Abbott's R&D Director that were inconsistent with positions Abbott took in the EPO briefs.

This decision is significant because it illustrates that although the Federal Circuit's new inequitable conduct standard is higher than the previous standard, it does not completely foreclose the possibility of a defendant successfully using this defense in patent infringement cases.

On appeal, the Federal Circuit, sitting en banc, established a new standard for inequitable conduct in patent cases. This new standard requires separate proof of two elements:

Intent to deceive the USPTO. The accused infringer must show that the applicant or its counsel:
- knew of the prior art reference;
- knew that it was material; and
- made a deliberate decision to withhold the information.
Materiality of the withheld information. The test for materiality is a "but-for" test, meaning if the USPTO had been aware of the undisclosed prior art it would not have allowed the claim.

The Federal Circuit remanded the case and instructed the district court to determine whether there was inequitable conduct under the new standard.

Outcome

In its March 27, 2012 decision, the district court applied the Federal Circuit's new inequitable conduct standard and found that the patent at issue was unenforceable due to inequitable conduct by Abbott's patent attorney and R&D Director. The district court held that, based on the evidence:

The patent attorney's failure to disclose to the USPTO the EPO briefs was but-for material and lead to the allowance of the patent because:
- the briefs to the EPO were highly material and inconsistent with the main statements Abbott's representatives made to the USPTO regarding the prior art patent;
- the EPO briefs centered on the USPTO's precise issue concerning patentability; and
- the USPTO examiner would not have allowed the patent had the EPO briefs been submitted.
Abbott's attorney and R&D Director knew that if they had included the EPO briefs along with their USPTO submissions, the USPTO examiner would have rejected the patent claims.
Abbott's attorney and R&D Director intended to deceive the USPTO when they withheld the EPO briefs.

Practical Implications

Although the Federal Circuit's new inequitable conduct standard is higher than the previous standard, it does not completely foreclose the possibility of a defendant successfully using this defense in patent infringement cases.

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