Federal Circuit Tightens Standards for Inequitable Conduct

In Therasense Inc. v. Becton Dickinson and Co., Civ. Case 2008-1511, 2008-1512, 2008-1513, 2008-1514, 2008-1595 (Fed. Cir. May 25, 2011) (en banc), Therasense (now known as Abbot) was sued by Becton in the District of Massachusetts seeking a declaratory judgment for non-infringement of U.S. Patent 6,143,164 and 6,592,745. Abbot countersued Becton and joined Nova Biomedical Corp., Becton’s supplier for infringement of U.S. Patents 164,745, and 5,820,551. Abbot also sued Bayer Healthcare LLC for infringement of the ‘551 and ‘745 patents. The case was transferred and consolidated in the Northern District of California.

Abbot’s patent ‘551 was found to be unenforceable by the District Court, because Abbot failed to disclose to the United States Patent and Trademark Office (USPTO) a brief filed with the European Patent Office (EPO) regarding an earlier patent, U.S. Patent 4,545,382’s counterpart, in that office. Patent ‘551 was issued based on differentiation from patent ‘382. Continue reading Federal Circuit Tightens Standards for Inequitable Conduct

Federal Circuit Finds Inequitable Conduct Could Be Based Upon Failure to Disclose Later-Filed Related Applications

In Leviton Manufacturing Company, Inc., v. Universal Security Instruments, Inc., and USI Electric, Inc., 2010 U.S. App. LEXIS 10917 (Fed. Cir. 2010), appellant Leviton Manufacturing Company Inc. (Leviton) appeals a decision which gave attorney’s fees and costs to Shanghai Meihao Electric Inc. (Meihao) based on inequitable conduct and vexatious litigation.  This article only concerns the inequitable conduct part of the case.

Leviton filed patent No. 690,776 (Germain) on October 22, 2003.  Six months later, Leviton filed patent No. 827,093, now issued as 6,864,766 (766).  Both the 766 and the Germain have many nearly identical claims.

During the prosecution of 766, Leviton did not disclose the Germain application or the fact that certain claims had been copied from Germain into the 766 patent.  The PTO then issued a double patent rejection for substantively identical claims.  In a suit between Meihao and Leviton, judge found that Leviton had committed inequitable conduct, and awarded over a million dollars in fees in summary judgment.

Here, the Court of Appeals reviewed the district court’s decision to grant summary judgment for inequitable conduct.  Summary judgment may only be granted where there are no genuine issues of material fact. Anderson v. Liberty Lobby, Inc., 447 U.S. 242, 248 (1986).  Prevailing on inequitable conduct requires two perquisites: the infringer must have made an affirmative misrepresentation of material fact, failed to disclose material information or submitted false material information; and there was intent to deceive the PTO. Cargill, Inc. v. Canbra Foods, Ltd., 476 F.3d 1359, 1363.

The first issue that the Court of Appeals debated was whether Leviton’s failure to disclose the Germain application was material.  Information is considered material if there is a substantial likelihood that a reasonable examiner would consider it important in deciding whether to allow the application to issue as a patent. PerSeptive Biosystems, Inc. v. Pharmacia Biotech, Inc., 225 F.3d 1315, 1312 (Fed. Circ. 2000).  Information concealed from the PTO may be material even though it would not invalidate the patent. Larson Mfg. Co. v. Aluminart Prods. Ltd., 559 F.3d 1317, 1327.  However, a withheld otherwise material reference is not material if it is merely cumulative to, or less relevant than, information already considered by the examiner. Larson, 559 F.3d at 1327.

The Germain application was material to inventorship.  The court suspected that the copying of certain claims from the Germain application with one set of named inventors into the 766 patent application with another set of inventors suggested that the named inventors may not have, in fact invented the claimed subject matter.  Even if the examiner might have ultimately concluded that 776 was valid, the nearly identical claims raise substantial inventorship question.  Furthermore, the copying of claims is material to the issue of double patenting because the court would want to consider both applications.

The court noted that even though German application is not material to the written description requirement, a reasonable examiner would want to consider the Germain application with respect to inventorship and double patenting.

Nilssen v. Osram Sylvania Inc., 504 F.3d 1223,  1224 (Fed. Circ. 2007) held that the existence of earlier related litigation itself was material information.  Furthermore, the MPEP 2006c requires at a minimum, “for the application to make aware the existence and the nature of any allegations relating to validity and/or fraud or inequitable conduct relating to the original patent.” MPEP 2006c.  Leviton did not disclose the existence of cases relating to the parent patents of the 766 patent.  The Court found that this was another example of another failure of material disclosure.

The second issue was whether there was an intent to deceive by Leviton.  Generally, “because direct evidence of deceptive intent is so rarely available, such intent can be inferred from indirect and circumstantial evidence.” Cargill, Inc. v. Canbra Foods, Ltd., 476 F.3d 1359, 1364 (Fed. Circ. 2007).  During the deposition, one of the inventors of the 766 patent stated that he did not disclose the Germain application because “the Germain is not a prior art reference to the 766 application… the Germain was not prior art to the 766; therefore, the Germain application didn’t come into the picture at all,” The Court of Appeals stated that this failure to disclose was material, however, the court can not be in full agreement that this explanation was unreasonable as a matter of law.  The inference that the district court made of fraud, was not the only reasonable conclusion.

Thus, even though there are material issues omitted from the patent application, the issue of fraud doesn’t withstand the standard for summary judgment.  Thus, the district court’s holding of summary judgment for inequitable conduct is remanded for a bench trial.

Significance for Patent Applicants and Owners

Leviton Manufacturing is yet another in a recent trend of inequitable conduct cases in which the Federal Circuit is increasingly broadening the types of activities that can lead to rendering patents unenforceable.  In the instant case, the intent to deceive prong of the inequitable conduct test was not satisfied due to the inventor understanding that the related application is not considered prior art under 35 U.S.C. §102.  However, as noted by the Federal Circuit, materiality reaches other forms of invalidity, including inventorship and double patenting under 35 U.S.C. §101.  Thus, had the inventor’s deposition gone differently, the intent prong could easily have been met and the patent rendered unenforceable.  Therefore, applicants need to be aware of a continuing need to disclose related applications, even where those applications are not technically prior art under 35 U.S.C. §101.

Federal Circuit Finds Inequitable Conduct Where Statements in Prosecution Provide Evidence That Prior Art Devices Were Highly Material

In Praxair, Inc. v. ATMI, Inc., 543 F.3d 1306 (Fed. Cir. 2008), Praxair brought suit against ATMI, alleging infringement of three Praxair owned patents: U.S. Patent No’s:  6,045,115 (the ‘115 patent); 6,007,609 (the ‘609 patent); and 5,937,895 (the ‘895 patent).  All three patents involve pressurized storage containers, used in the semiconductor industry, limiting the rapid discharge of hazardous gasses.  The ‘115 and ‘609 patents focus on capillary flow restrictors, while the ‘895 patent concerns a release valve.  Both Praxair and ATMI produce pressurized gas cylinders used to store the hazardous gasses used in the semiconductor industry.

Praxair filed suit on December 22, 2003 in the U.S. District Court for the District of Delaware, asserting that several claims of each of the above-noted patents are infringed by ATMI.  ATMI responded by asserting an affirmative defense of invalidity of the Praxair patents and asserted counterclaims for a declaratory judgment of noninfringement and invalidity with regards to the ‘115, ‘609 and ‘895 patents.

Additionally, ATMI filed an amended answer adding the affirmative defense of unenforceability due to inequitable conduct as per the three Praxair patents.  For the inequitable conduct affirmative defense argument, ATMI alleged that applicants for the above three patents withheld information from the United States Patent and Trademark Office (USPTO).  The purportedly withheld references were U.S. Patent No. 5,409,526 (the Zheng patent) and information on restricted flow orifices (RFOs) as existing devices in the prior art.

The District Court, in a bench trial, first analyzed whether such information was material to Praxair’s patents.  As per the ‘115 and ‘609 patents, the District Court determined that the Zheng patent and the RFOs were material to the ‘115 and ‘609 patents.  The District Court also ruled that the attorney who prosecuted the ‘115 and ‘609 patents, John Tolomei, had knowledge of the Zheng patent and the RFOs, but credited Tolomei’s claim that he had a good faith basis for not disclosing the Zheng patent.  Thus, there was no intent to deceive the USPTO as per not disclosing the Zheng patent.

However, as per the RFOs, the District Court found that Tolomei knew about the RFOs, which were widely used in the art prior to the application for the ‘115 and the ‘609 patent.  In particular, the District Court relied upon four statements, made by the patent applicants in the prosecution of the  ‘115 and ‘609 patents, that the District Court believed could not have been made had the material prior art been in front of the USPTO.  Additionally, with a lack of testimony explaining why there was a failure to disclose the prior art, the District Court found that “the level of materiality of the RFO art is sufficiently high so at to support an ultimate finding of inequitable conduct.”  Additionally, the court stated that conclusory statement effectively stating that the applicant had no intention to deceive the USPTO did not merit consideration.

On appeal, the Federal Circuit reiterated the standard set forth in 37 C.F.R. §1.56(a) in regards to the duty of disclosure as follows: “Each individual associated with the filing and prosecution of a patent application has a duty of candor and good faith in dealing with the [PTO], which includes a duty to disclose to the [PTO] all information known to that individual to be material to patentability…”  Furthermore, the Federal Circuit found that a breach of the above duty can be shown by:

“clear and convincing evidence that the applicant (1) made an affirmative misrepresentation of material fact, failed to disclose material information, or submitted false material information, and (2) intended to deceive the [PTO].”  Cargill, Inc. v. Canbra Foods, Ltd., 476 F.3d 1359, 1363 (Fed. Cir. 2007).

The Federal Circuit noted that showings of materiality and intent are distinct and thus, showing materiality itself does not result in showing of intent.  However, intent to deceive can be inferred when “(1) highly material information is withheld; (2) the applicant knew of the information [and]…knew or should have known of the materiality of the information; and (3) the applicant has not provided a credible explanation for the withholding,” citing Ferring B.V. v. Barr Labs, Inc., 437 F.3d 1181, 1191 (Fed. Cir. 2006).


With respect to the ‘115 patent, the Federal Circuit affirmed the District Court’s finding that RFOs are material such that the first prong of the test was satisfied.  Specifically, the Federal Circuit dismissed Praxair’s counterargument that RFOs were cumulative because other references in front of the examiner disclosed devices similar to RFOs.  In dismissing the argument, the Federal Circuit acknowledged that when information is considered to be cumulative, it specifically is not material.

However, because Praxair failed to raise the cumulative argument before the District Court, the Federal Circuit held that the argument is waived on appeal.

Intent to Deceive Inferred Based Upon Statements in Prosecution History

With respect to intent to deceive and the ‘115 patent, the Federal Circuit, citing Pfizer, Inc. v. Teva Pharms USA, Inc., 518 F.3d 1353, 1367, stated that where evidence of intent is not available and the prior art is highly material, intent can be inferred from three findings:

(1) that the art was highly material;

(2) that applicants knew of RFO art and knew or should have known of its materiality; and

(3) that patentee failed to produce a credible good faith explanation of why there was a failure to disclose information to the PTO.

The District Court found the RFOs to be highly material not based upon the RFOs themselves.  Instead, the District Court found the high degree of materiality based upon four statements made during prosecution of the ‘115 patent.  The Federal Circuit sustained this ruling because Praxair offered no coherent argument as to why the RFOs were not highly material in the context of the statements made in the ‘115 prosecution.  Thus, for purposes of inferring intent, the RFOs were highly material.

With regards to the knowledge element for inferring intent, the District Court found that Tolomei, the prosecuting attorney, and LeFebre, an inventor, knew of the RFO art that was not disclosed to the USPTO.  This finding was based upon testimony that Tolomei and LeFebre provided during the bench trial.  Praxair doesn’t dispute the testimony, but argues that testimony provided by a Praxair employee, Furhop, was relied upon improperly by the District Court in proving Tolomei’s and LeFebre’s knowledge.  However, the Federal Circuit noted that the District Court recognized that there was no allegation of inequitable conduct on the part of a Praxair employee, and as such only used Furhop’s testimony to show widespread commercial use of RFOs.  As such, the Federal Circuit sustained the District Court’s findings of knowledge for purpose of inferring intent, stating that “there is no question that Tolomei and LeFebre “knew of information” withheld from the USPTO.

The Federal Circuit sustained the District Court decision that no good faith explanation was proffered by those who knew of the information withheld from the USPTO for the failure to disclose known material information.  Furthermore, the Federal Circuit stated that conclusory statements, such as Tolomei’s claim that he never intentionally misled the USPTO, garner no weight as per an explanation. Tolomei additionally testified that unspecified references before the USPTO were cumulative of the RFO art.  The Federal Circuit stated that such testimony fails to provide a good faith explanation for three reasons:

(1) the testimony does not suggest that Tolomei believed that disclosure of the RFO would have been cumulative at the time of the ‘115 prosecution;

(2) Tolomei did not say that cumulativeness was the reason he did not disclose the RFO art to the PTO; and

(3) Tolomei failed to identify a particular reference making the RFOs cumulative.

As such, the Federal Circuit stated that:

“Hindsight construction of reasons why a reference might have been withheld cannot suffice as a credible explanation of why, at the time, the reference was not submitted to the USPTO.”

Therefore, for the three reasons discussed above, the Federal Circuit found that the District Court properly inferred intent to deceive the USPTO on the part of the applicants in failing to disclose the RFO art to the USPTO.  As such, the Federal Circuit affirmed the District Court’s ruling that the failure to disclose the existence of RFO prior art devices rendered the ‘115 patent unenforceable due to inequitable conduct.

In discussing the ‘609 patent, the Federal Circuit found that the District Court was correct to find the existence of RFO devices in the prior art to be material to the ‘609 patent, but the District Court was incorrect in inferring an intent to deceive on the part of the applicants.  The Federal Circuit noted that statements, on the part of the applicants, used to show the materiality of RFOs, were made with respect to the prosecution of the ‘115 patent and were not made in the prosecution of the ‘609 patent.  In fact, the statements made in the ‘115 prosecution were made at a time when the ‘609 patent had a notice of allowability for all claims to be issued.  For this reason, the Federal Circuit reversed the District Court’s finding of inequitable conduct as per the ‘609 patent.  However, the Federal Circuit remanded for reconsideration of the issue of infringement of the ‘609 patent in view of revised findings of claim interpretation.

As per the remaining ‘895 patent, the District Court found to be invalid for indefiniteness.  The Federal Circuit reversed the District Court’s finding that a specific term in the ‘895 patent, “port body,” is indefinite.  Specifically, the Federal Circuit found that a port body was disclosed in a Summary of the Invention, and is also depicted in a drawing.  Thus, the Federal Circuit found that, while the specification “may not be a model of clarity, the specification adequately explains that the port body is a housing that sealingly engages the outlet of the cylinder and defines the fluid discharge path” for purposes of 35 U.S.C. §112.  Issues regarding the ‘895 patent were thus remanded to the District Court.

Significance to Patent Applicants

Praxair is of interest to the extent that the evidence of intent was not based upon anything in the prior art itself, but was instead inferred from arguments which the Federal Circuit believed made the prior art highly material.  Moreover, the Federal Circuit required the patent attorney who made the statement to provide a credible explanation as to why information was not submitted in light of the arguments, and would not accept that the information was cumulative since such explanation was not in the context of the time during which the arguments were made.   Significantly, the patent owner failed to argue that the unsubmitted information was cumulative in the context of the extent of materiality, which likely would have affected the outcome.  In either case, Praxair reminds applicants to be brief in their arguments since statements made during prosecution can be used not only to limit the scope of a claimed invention, but can also establish the materiality of prior art for purposes of inferring intent and finding inequitable conduct.

Federal Circuit Finds Information Discovered After the Filing of an Application Must Be Material to Form Grounds of Inequitable Conduct

In Research Corporation Technologies, Inc. v. Microsoft Corporation, 536 F.3d 1247, 87 USPQ2d 1519 (Fed. Cir. 2008), Research Corporation Technologies, Inc. (“RCT”) appealed the Federal Circuit for the District Court for the District of Arizona’s holding of RCT’s patents unenforceable due to inequitable conduct and its grant of summary judgment of invalidity and noninfringement in favor of Microsoft Corporation (“Microsoft”). The Federal Circuit reversed, vacated, and remanded the case to the District Court with instructions to reassign the case.


Halftoning technology is used in computers and printers. A halftone is an image that simulates a continuous tone image, but is actually an arrangement of individual dots. The particular spacing between the dots gives the viewer the illusion of a continuous picture consisting of varying shades of gray in the image. One method of halftoning is thresholding, which uses a grid-like array, or mask, to carry the threshold to initiate pixels for a particular pattern. Due to the difficulty and poor quality of the thresholding method of halftoning, two of RCT’s scientists, Dr. Kevin J. Parker and Dr. Theophano Mista, invented and applied for patents for a Blue Noise Mask that was quick, used very little computer memory, and produced high quality halftone images. These resulted in U.S. Patent Nos. 5,111,310 (‘310); 5,341,228 (‘228); 5,477,305 (‘305); 5,543,941 (‘941); 5,708,518 (‘518); and 5,726,772 (‘772).

Specifically, in 1987, Dr. Robert Ulichney published a book about digital halftoning techniques, but he had only the capability to generate blue noise halftone using the complex mathematical process of error diffusion. Recognizing the drawbacks of Dr. Ulichney’s method, Dr. Parker and Dr. Mista filed patent applications which resulted in the ‘310, ‘228, ‘305, ‘941, ‘518, and ‘772 patents.  However, after filing the patent applications and as part of her continuing thesis work, Dr. Mista tested the strictness of Dr. Ulichney’s equation by testing it with different scaling factors (“K factors”).  She concluded that the equation could indeed be broadened. Drs. Mista, Parker, and Ulichney then jointly published an article summarizing the test results.

On December 21, 2001, RCT filed suit against Microsoft for infringement of six patents related to digital halftoning. After a Markman hearing, RCT moved for partial summary judgment that certain Microsoft products contained infringing halftoning masks. Microsoft filed a motion for partial summary judgment that RCT’s claims were invalid for anticipation under 35 U.S.C. § 102(b) and lack of written description under 35 U.S.C. § 112 ¶1. The trial court granted RCT’s infringement motion, appointed a special master to consider the additional summary judgment motions, then transferred the case to a different trial judge. At this time, the parties filed additional summary judgment motions. The new district judge reversed the prior judge’s grant of RCT’s summary judgment motion for infringement and also granted Microsoft’s summary judgment motions for noninfringement and on invalidity. This judge additionally granted all of Microsoft’s motions in limine and set a jury trial to commence August 8, 2005. However, upon Microsoft’s request, the new judge cancelled the scheduled jury trial and ordered a trial on inequitable conduct instead. During trial, RCT was barred from presenting expert testimony on materiality, and its case was limited to testimony from the inventors about candor and good faith. On November 23, 2005, the trial court ruled from the bench that the RCT patents were unenforceable due to inequitable conduct. After RCT appealed, Microsoft filed motions with the District Court seeking attorney fees, amplification of the court’s finding, and an extension of the effective date for appeal pending a decision on the first two motions. The trial judge granted the motions on the deadline and attorney fees but did not amplify its findings of fact or conclusions of law on any topic.

On appeal, the Federal Circuit found that, to find a patent unenforceable for inequitable conduct, there must be clear and convincing evidence both that the applicant (1) made an affirmative misrepresentation of material fact, failed to disclose material information, or submitted false material information, and (2) intended to deceive the patent office. Cargill, Inc. v. Canbra Foods, Ltd., 476 F.3d 1359, 1363 (Fed. Cir. 2007). The trial court found inequitable conduct because the inventors did not disclose the scientist’s post-filing K factor tests to the USPTO.

Post-Filing Publication Not Evidence of Materiality since No Obligation to Report

However, the Federal Circuit found that, even assuming arguendo that there was an intent to deceive, because the work occurred after the scientists had filed the patent application, these K factor experiments were not material to their inventive activity. The Federal Circuit determined that under the circumstances of this case, the inventors had no obligation to report their later tests to the USPTO. For one, these post-filing K factor experiments were basic scientific research, not a verification of the patented technology. Also, the patents did not even mention the K factor, so the K factor research was not necessary to practice the patented invention. Lastly, the inventors published the K factor tests to the scientific community, and publication is an act inconsistent with intent to conceal data from the USPTO.

In support of its argument that the experimental results were material, Microsoft argued that the patents discussed production of pleasing images (or at least not annoying), and the joint publication related explicitly to “visually pleasing” images.  Further, Microsoft argued that the joint publication and the fact that Dr. Mista’s K factor experiments disclosed some limitations of the patented technology. However, the Federal Circuit found that Microsoft’s contention, with which the trial court agreed, that the inventors had an obligation to submit the post-filing tests to the USPTO was incorrect. The K factor experiments were not material to the patented technology, which did not refer to or rely upon K factors at all. The Federal Circuit found that the trial court completely ignored the materiality prong and, thus, clearly erred in finding that the inequitable conduct test was satisfied.

Post-Filing Publication Conflicts with Intent Requirement Since Not Hidden

In addition to missing the materiality prong, the District Court’s intent analysis was clearly erroneous. The trial court, for example, focused improperly on comments that Dr. Parker made at trial regarding the purposes of the patent system since the inventor’s motives in applying for a patent are “generally irrelevant to a proper determination of inequitable conduct.”  Moreover, the Federal Circuit found that the inclusion of the experimental results in the joint publication was “an act inconsistent with an intent to conceal data from the USPTO.”  As such, the Federal Circuit also reversed the District Court’s finding of an intent to deceive for purposes of inequitable conduct.

Email Exchange Deliberately Not Discussing Details of Yet to be Filed Invention Not Evidence of Lack of Possession under 35 U.S.C. § 112

The District Court also erred in relying on an email exchange a few days after filing as evidence that Dr. Parker was not in possession of the invention at the time of filing for purposes of 35 U.S.C. § 112. The Federal Circuit found that an email from one scientist to another in a competitive field that does not disclose the actual status of research and is hardly dispositive proof that the inventor was not in possession of the invention at the time of filing. Moreover, the Federal Circuit noted that Dr. Parker explicitly stated he did not send the emails earlier since the research was confidential and was not to be revealed to a third party until after the patent applications were filed.  Thus, the emails did not establish that the inventors did not have the invention for purposes of 35 U.S.C. § 112.

Because the trial court erred in ignoring the materiality prong and in misapplying the intent prong of the inequitable conduct test, the Federal Circuit reversed those findings and conclusions. Further, since the Federal Circuit vacated the trial court’s determination of unenforceability due to inequitable conduct for multiple errors, it also vacated the exceptionality finding and the grant of attorney fees. As the record showed many potential issues of fact that would prevent entry of summary judgment, the Federal Circuit also remanded both matters for a proper determination on the merits.

Trial Court Ordered Not To Reconsider Case since Statements Evidence Bias

Finally, the Federal Circuit decided that the expressed convictions of the trial court may not be easily and objectively reconsidered on remand.  As such, the Federal Circuit found that the case met the “unusual circumstances” required by the Ninth Circuit’s test for request to transfer to a different judge. Accordingly, the Federal Circuit remanded to the Chief Judge of the District Court for the District of Arizona to determine the reassignment of the case for a proper determination of validity and infringement on the merits.

Significance to Patent Applicants

RCT represents a divergence from the Federal Circuit’s recent trend to ignore, for purposes of inequitable conduct, any need for intent in determining fraud on the patent office.  Instead, as noted by the dissent in Aventis Pharma S.A.v. Amphastar Pharmaceuticals, Inc., 525 F3d 1334, 87 USPQ2d 1110 (Fed. Cir. 2008) discussed previously in the Stein McEwen, LLP Newsletter (Vol. 4, Iss. 2)(June 2008), ignoring the requirement for intent and focusing on non-duplicative art for purposes of finding inequitable conduct encourages frivolous inequitable conduct charges.  Instead, the Federal Circuit in RCT reminds that there must be evidence of intent and materiality, and not mere speculation.  Moreover, given the importance of publication to many researchers in the academic community, the Federal Circuit’s finding, that post filing publication activity does not, without more, evidence an intent to deceive and does not show materiality, should encourage researchers to continue publication of their ongoing work on inventions for which patent protection is sought.   A contrary ruling would have had a significant chilling activity on post-filing research publications since all such publications would inevitably be used for purposes of rending the prior-filed patent unenforceable.  By requiring additional evidence beyond evidence of post filing research, the Federal Circuit helped to reduce the number of frivolous inequitable conduct defenses that would otherwise affect the academic community.

Federal Circuit Finds Inequitable Conduct For Misleading Declaration Facts

In Aventis Pharma S.A.v. Amphastar Pharmaceuticals, Inc., No. 2007-1280 (Fed. Cir. May 14, 2008), Aventis Pharma S.A. and Aventis Pharmaceuticals, Inc. (collectively, “Aventis”) appealed the District Court for the Central District of California’s finding of inequitable conduct and holding of unenforceability of Aventis’ Patent No. RE 38,743 (the ‘743 patent) and Patent No. 5,389,618 (the ‘618 patent). The Federal Circuit affirmed.


The ‘734 patent and ‘618 patent are directed to the composition of low molecular weight heparins (“LMWHs”). These LMWHs comprise the drug Lovenox® (marketed as Clexane® in Europe), which helps to prevent blood clotting, while minimizing the chance of hemorrhage, especially in high-risk surgery.

In the first office action, the patent examiner rejected the claims under 35 U.S.C. §§ 102(b)/103 over several references, including European Patent 40,144 (EP ‘144), stating that each of the prior art references teaches sulfated heparinic admixtures within the molecular weight (MW) range of the claims and is considered to be inherently the same as the claimed admixtures. The examiner noted the fact that the PTO does not have testing facilities, so it is the responsibility of the Applicant to convincingly demonstrate that the claimed product provides an unexpected or unobvious property, different from prior art products.

Aventis then offered an example to the specification, supporting its assertion that the claimed LMWHs exhibit a significantly longer half-life than formulations prepared in accordance with EP ‘144, and because it is well established that compounds are inseparable from their properties, the evidence of a difference in a property (here, half-life), serves as evidence of a difference in structure. Nonetheless, the examiner issued a second office action maintaining the rejection citing the same reasons from the first office action. She reiterated that any properties would be inherent in the prior art compounds because they have the same structure as the claimed compounds.

Aventis amended its claim and submitted a declaration from Dr. Uzan, who distinguished the claimed formulations from the formulations in EP ‘144. Upon the third office action, the examiner withdrew several 102/103 rejections over other prior art references but continued to reject the claims over EP ‘144 for the reasons already in the record. Aventis argued in its response that EP ‘144 does not suggest compounds containing polysaccharides of the claimed MW in the claimed proportions and that the examiner improperly relied on inherency to reject the claimed compounds over EP ‘144. Aventis also averred that the claimed compounds had been shown to differ from the compounds of EP ‘144 in both structure and property based on Dr. Uzan’s declarations about the difference in half-lives. At this point, the ‘618 patent was allowed.

Amphastar Pharmaceuticals, Inc. (“Amphastar”) and Teva Pharmaceuticals USA, Inc. (“Teva”) each filed an Abbreviated New Drug Application with the FDA to obtain approval to generic market versions of Lovenox®, and in so doing, challenged Aventis’ ‘743 and ‘618 patents. Aventis sued Amphastar and Teva in the District Court for the Central District of California for infringement of the ‘618 patent. Amphastar filed a motion for summary judgment on its affirmative defense and counterclaim that the ‘618 patent is unenforceable due to inequitable conduct.

First, the District Court found that the Aventis’ representation of the improved half-life of the patented compound as compared to the EP ‘144 compound was material to patentability as the examiner ultimately allowed the ‘618 application after the final representation that the difference in mean half-life was statistically significant. Second, the court found a strong inference of intent to deceive because it found no credible explanation for comparing half-lives at different doses, and comparisons at the same dose showed little difference in half-life. Upon weighing the evidence of materiality and intent, the District Court granted summary judgment against Aventis and held the ‘618 patent unenforceable.

On appeal, Aventis argued that the District Court erred in finding materiality because if the dose information were material to patentability, the examiner would have requested it because: (1) she was presented with half-life data that enable her to compare various doses, (2) Dr. Uzan informed the examiner that the half-life comparison was done at different doses, (3) those of skill in the art frequently compare half-lives at different doses, and (4) half-life is independent of dose. Aventis Pharma S.A. v. Amphastar Pharms., Inc., 176 Fed. Appx. 117, 120 (Fed. Cir. 2006). To support its first two reasons, Aventis relied on the statement in the Dr. Uzan’s declaration that “[t]his represents an increase in 250% in the half life and is very significant because it enables the same effect to be achieved with lower dosages”; Dr. Uzan’s testimony that he believed this to mean “that the comparison is a comparison between two doses of which one is lower that the other, id. at 120-21; Dr. Uzan’s submission of the half-life data for the claimed compound at 60 mg as well as 40 mg, id. at 123. The court did not accept Aventis’ reasons and concluded that the withholding of the EP ‘144 dosage information prevented the examiner from considering information important to patentability and constituted a failure to disclose material information. Id. at 122. However, this court also reversed the grant of summary judgment of unenforceability of the ‘618 patent and ‘743 patent and remanded to the District Court for determination of whether there was intent to deceive. Id. at 12. It noted, in particular, that the reasonableness of the comparison at different doses is relevant to determining whether there was an intent to deceive in withholding the dosage of the EP ‘144 composition. Id. at 122-23.

Following remand, the District Court held a bench trial on the issue of intent. The court again considered the explanations offered by Aventis for Dr. Uzan’s failure to disclose the dose of the EP ‘144 composition in its half-life comparisons and was not persuaded that he presented the half-life comparisons to show only a difference in property and not also a difference in composition. Aventis Pharma S.A. v. Amphastar Pharms., Inc., 475 F. Supp. 2d 970, 975 (C.D. Cal. 2007). The court determined that but for Dr. Uzan’s intentional omissions, the probability was high that the ‘618 patent would not have issued, and it held the ‘618 patent and the ‘743 patent unenforceable due to inequitable conduct. Id. at 994.

Its second time on appeal, Aventis offered a new justification, alleging that Dr. Uzan’s half-life comparisons were intended to show a difference in properties in response to the obviousness rejection under 35 U.S.C. § 103, not to demonstrate a compositional difference to address the anticipation rejection under 35 U.S.C. § 102, as the District Court concluded. Aventis bases this on the premise that while a half-life comparison must be done using equivalent doses to establish a compositional difference, a half-life comparison may be done using different doses if the purpose is to establish a difference in property. In fact, Aventis argues, that it is more appropriate to use the “clinically relevant dose” of each compound to demonstrate a difference in property.


With respect to materiality, Aventis contends that the District Court made two clearly erroneous findings of fact: (1) that the central question relating to patentability was compositional differences, and (2) that the purpose of Dr. Uzan’s half-life comparisons was to show compositional differences. Aventis contended that anticipation was the only rejection of record, even though there was an obviousness rejection present throughout prosecution and that the District Court erred in concluding that the “issue of obviousness necessarily folds into, and is subsumed, by inherency.” Aventis III, 475 F. Supp. 2d at 982 n.10. Although the District Court incorrectly suggested in a footnote that obviousness is subsumed by inherency, the Federal Circuit sees this merely as recognition by the court that the notion of inherency was part and parcel of the examiner’s rejections. Id. at 979. Furthermore, several statements in the opinion clearly indicate that the court was aware of the obviousness rejection. Id. at 980. The Federal Circuit does not find clear error in the District Court’s ultimate decision, recognizing the court’s understanding that the PTO did not have the facilities to test the products and that Aventis did not provide evidence of a difference in property to show a compositional difference. Second, the Federal Circuit does not agree with Aventis that the District Court clearly erred in its determination that the half-life comparisons were, at least in part, intended to show compositional differences because Dr. Uzan’s example and all of the evidence directed at the EP ‘144 reference appears without distinction between the § 102 and § 103 aspects of the rejection. Therefore, the District Court properly found that the half-life comparisons were intended to address both the anticipation and obviousness rejections, and the failure to disclose the dosage information evidenced intent to deceive.

Aventis further urges that the examiner clearly withdrew the § 102 rejection based on the MW distribution data, and the half-life data in the second Uzan declaration was intended only to overcome the § 103 rejection. Therefore, it avers that the anticipation rejection was not still pending at the time of the third office action. The Federal Circuit notes, however, that although the court may have erred in concluding that the anticipation rejection was still pending in the third office action, that conclusion was not critical to the court’s ultimate determination that there was intent to deceive, based on evidence prior to the third office action. Therefore, the District Court did not clearly err in determining that the half-life comparisons were, in part, intended to show compositional differences to address the anticipation rejection under 35 U.S.C. § 102 and, thus, rejecting Aventis’ argument that they were intended only to show differences in property, such that dosage was immaterial.

Aventis then argued that the District Court clearly erred in excluding evidence that comparison of half-lives at different doses was the standard practice in the LMWH field. The Federal Circuit finds no abuse of discretion by the court’s exclusion of the evidence because evidence of industry practice of clinically-relevant doses would only be pertinent if there was a finding that the half-life comparisons were used to address obviousness and not anticipation because Aventis has conceded that half-life comparisons must be at the same dose to show compositional differences. Further, the court noted that neither the claims nor the specification were limited to prevention of deep venous thrombosis in high-risk surgical patients and that the patented composition could be used at several different doses for several different indications.


The District Court heard Dr. Uzan’s testimony that he did not have deceptive intent and considered this along with all the other relevant evidence, yet the court determined that it did not outweigh the cumulative evidence evincing an intent to deceive. Therefore, it maintained that the District Court did not err in concluding that the other evidence outweighed Dr. Uzan’s testimony.

Lastly, the Federal Circuit upheld the District Court’s finding that Dr. Uzan failed to disclose the dosage information because in the least, the information was provided in a very misleading way. Dr. Uzan’s failure to disclose the information was also not found purely due to inadvertence. Unlike any of the inadvertent omissions made in prosecution, there is sufficient evidence of concealment to warrant a determination that the dose information was intentionally withheld.


Judge Rader dissented because he did not find that the record showed clear and convincing evidence of intent to deceive the PTO. Specifically, Judge Radar pointed out that the inequitable conduct claim is used too frequently and improperly. Even if Dr. Uzan was negligent, this does not show culpable intent to deceive based on Kingsdown Med. Consultants, Ltd. V. Hollister, Inc., 863 F.2d 867, 876 (Fed. Cir. 1988) (en banc). Rader also pointed out that Dr. Uzan, a world-class scientist, would not likely risk his reputation and tarnish his career for a single example in the prosecution of a patent for an invention in which he was not even involved. Also, Dr. Uzan’s candor in revealing the error himself and correcting it before it resulted in an issued patent was inconsistent with deceptive intent.

Significance to Patent Applicants

Aventis represents a continuation of the Federal Circuit’s recent trend to ignore, for purposes of inequitable conduct, any need for intent in determining fraud on the patent office.  Instead, as noted by the dissent, the Federal Circuit focuses almost exclusively on materiality, thereby encouraging frivolous inequitable conduct charges.  Aventis also provides a cautionary note about the need for declarations to be as precise as possible since any error in the declaration could result in a charge of inequitable conduct.  Specifically, the Federal Circuit is holding that declarations are inevitably material to the Examiner such that, even without intent to deceive, any error in the declaration amounts effectively to inequitable conduct by the patentee.  As such, Aventis serves as notice to inventors to carefully review a declaration presenting facts to an Examiner to ensure that the facts in the declaration are both technically accurate and not misleading as to the outstanding rejections for which the facts are being presented.


Federal Circuit Find Inequitable Conduct For Failure to Submit Notes

In Monsanto Company v. Bayer Bioscience N.V., 85 USPQ2d 1582 (Fed. Cir. 2008), Bayer owns four patents related to Bacillus thuringiensis (BT) toxins, which are proteins produced by strains of the BT bacteria.  BT toxins are harmless to humans and most animals, but are toxic to certain crop-destroying insects.  In 1986, Plant Genetic Systems (a predecessor to Bayer) succeeded in obtaining insect-resistant plants that expressed a truncated form of a BT toxin, resulting in the four Bayer patents.  Specifically, U.S. Patent No. 5,545,565 (one of the four Bayer patents) claims artificial genes comprising: a truncated BT toxin gene encoding a BT toxin of a specific amino acid sequence; and the regulatory region of a gene naturally expressed in plant cells, which enables the gene to be transcribed in plants.

Monsanto, the alleged infringer, developed a genetically modified corn product that expressed a BT toxin with the same amino acid sequence claimed in the Bayer patents.  Accordingly, in December 2000, Monsanto filed a declaratory judgment action seeking a declaration that its product does not infringe the four Bayer patents: U.S. Patent Nos. 5,545,565; 5,767,372; 6,107,546; and 5,254,799.  Bayer counterclaimed alleging infringement.  After the District Court initially granted summary judgment to Monsanto, the Federal Circuit vacated the District Court’s initial findings of unenforceability and invalidity judgments in Monsanto Co. v. Bayer BioScience N.V., 363 F.3d 1235 (Fed. Cir. 2004)On remand, Bayer dropped its infringement claims to three of the four patents, and proceeded to trial on only U.S. Patent No. 5,545,565 (hereinafter “the ‘565 patent”).

Subsequently, the District Court held a four-day bench trial on the issue of Bayer’s inequitable conduct before the United States Patent and Trademark Office (PTO) in prosecuting the ‘565 patent.  The District Court found materiality and intent for acts relating to prosecution of the ‘565 patent due to Bayer’s failure to submit notes that contradicted its grounds for obviousness over an applied piece of art, thus rendering the ‘565 patent unenforceable due to inequitable conduct.  The Federal Circuit then reviewed the District Court’s holdings of inequitable conduct.

As its standard for review, the Federal Circuit first determined whether the District Court found “by clear and convincing evidence that a patent applicant breached its duty of candor and good faith to the United States Patent and Trademark Office by failing to disclose material information, or submitting false material information, with an intent to deceive the PTO.”  Bruno Indep. Living Aids, Inc. v. Acorn Mobility Servs. Ltd., 394 F.3d 1348, 1351 (Fed. Cir. 2005); Kingsdown Med. Consultants, Ltd. V. Hollister, Inc., 863 F.2d 867, 872 (Fed. Cir. 1988).  Furthermore, once the requisite materiality and intent is established, the District Court “must balance the equities to determine whether the patentee has committed inequitable conduct that warrants holding the patent unenforceable.”  Monsanto Co. v. Bayer BioScience N.V., 363 F.3d 1235, 1239 (Fed. Cir. 2004).

During prosecution of the ‘565 patent, Bayer disclosed as prior art an abstract by Dr. Wayne Barnes that had been prepared in 1985 for a scientific conference, during which Barnes presented his findings with a poster.  The Barnes abstract revealed that “the second half of the [BT] toxin is dispensable for the expression of an active insecticide,” but did not provide a complete description of the poster.  After the Examiner rejected all of the ‘565 claims using the Barnes abstract, Bayer argued that the Barnes abstract fails to identify which BT toxic gene should be utilized, and that the abstract fails to show that the fusion gene would work in plants.

Although Bayer disclosed the Barnes abstract, Bayer withheld notes taken by Dr. Celestina Mariani, a Bayer employee, regarding the poster.  The notes reveal in greater detail what was described on the poster and which was not included in the abstract, and specifically describe that Barnes had truncated a BT toxin gene at or near a specific enzyme site, that Barnes had created a chimeric gene which encoded a fusion of this truncated BT toxin and an NPT-II protein, and that Barnes demonstrated that the expressed protein was toxic to insects when applied to plants.  Furthermore, the notes were widely distributed among Bayer’s BT group.  Dr. Wouter Meulemanns, of Bayer’s intellectual property department, admitted that he saw the notes, but stated that Dr. Mariani was unable to remember anything about the presentation or the poster during a conversation on the notes.  In contrast, the District Court found that Dr. Mariani’s deposition demonstrated that she remembered a great deal about the notes and the poster.

The Federal Circuit affirmed the District Court’s holding of inequitable conduct based upon a conflict between the notes and the arguments presented to the Examiner during prosecution.  Specifically, the Federal Circuit determined that the arguments Bayer made in response to the Examiner’s rejection are not reconcilable with the notes.  Therefore, the notes are material under 37 C.F.R. 1.56(2)(i).  Furthermore, the Federal Circuit held that the intent to deceive the PTO can be inferred from the absence of a credible reason for withholding the material information.  As such, while cautioning that internal documents need not always be disclosed, the Federal Circuit affirmed the District Court’s finding of inequitable conduct by failing to disclose the notes during prosecution due to their high materiality in contradicting their arguments for patentability.

Further, while only the ‘565 patent was at issue on appeal, the District Court had found the remaining patents unenforceable since the inequitable conduct infected the remaining patents previously asserted.  Bayer had argued that the District Court lacked jurisdiction over these remaining patents.  In rejecting this argument, the Federal Circuit relied upon Nilssen v. Osram Sylvania, Inc., 504 F.3d 1223 (Fed. Cir. 2007) in allowing the District Court to retain jurisdiction over related cases for purposes of inequitable conduct.  The Federal Circuit also noted that, unlike Nilssen, the District Court originally had jurisdiction over these patents when the case was originally filed under 35 U.S.C. §285.  As such, the Federal Circuit affirmed the District Court’s finding that the remaining three patents were also unenforceable since the District Court retained jurisdiction over these three patents for purposes of inequitable conduct.

Significance to Patent Applicants

Monsanto represents an extension of the McKesson Information Solutions v. Bridge Medical, Inc., 487 F3d 897, 82 USPQ2d 1865 (Fed. Cir. 2007) and demonstrates the importance of ensuring that attorney arguments in office actions are not contradicted by information known to the applicant.  In McKesson, this contrary information was known to the patent attorney due to his handling of a related case and his failure to account for known prior art while responding to an office action.  See, generally, Federal Circuit Finds Inequitable Conduct For Not Disclosing Material Prior Art In Related Application, pp. 10-13, Stein McEwen Newsletter, Volume 3, Issue 2 (June 2007).  In contrast, in Monsanto, the failure was on the part of the inventors to not bring to the attention of the prosecuting attorney information widely available and known to the inventors during prosecution.  As such, Monsanto serves as notice to inventors to carefully review an attorney’s arguments to ensure that the arguments are both technically accurate and not contrary to information known to the inventor.

Federal Circuit Finds Inequitable Conduct on Multiple Grounds

Decision Highlights Multiple Potential Grounds for Finding Inequitable Conduct Due To Falsely Claiming Priority, For Failing To Report Litigation In Related Cases, And For Failing To Submit Relevant Prior Art

In Nilssen, et al. v. Osram Sylvania, Inc., et al., 504 F.3d 1223; 84 USPQ2d 1811 (Fed. Cir. 2007), Ole K. Nilssen and the Geo Foundation, Ltd. (collectively, “appellants”) appealed from the judgment of the United States District Court for the Northern District of Illinois in favor of Osram Sylvania, Inc. and Osram Sylvania Products, Inc. (collectively, “Osram”) holding fifteen patents issued to Nilssen unenforceable for inequitable conduct.  The fifteen patents include U.S. Patents 4,857,806 (“the ‘806 patent”); 5,164,637 (“the ‘637 patent”); 5,233,270 (“the ‘270 patent”); 5,343,123 (“the ‘123 patent”); 5,402,043 (“the ‘043 patent”); 5,416,386 (“the ‘386 patent”); 5,432,409 (“the ‘409 patent”); 5,479,074 (“the ‘074 patent”); 5,481,160 (“the ‘160 patent”); 5,510,680 (“the ‘680 patent”); 5,510,681 (“the ‘681 patent”); 4,677,345 (“the ‘345 patent”); 5,047,690 (“the ‘690 patent”); 5,189,342 (“the ‘342 patent”); and 5,341,067 (“the ‘067 patent”).  The fifteen patents are collectively referred to as the Nilssen patents.  Some of the fifteen patents relate to compact fluorescent light bulbs, and others relate to ballasts for gas discharge lamps such as fluorescent light bulbs.  Continue reading Federal Circuit Finds Inequitable Conduct on Multiple Grounds