After the Federal Circuit’s 2011 decision in Therasense Inc. v. Becton, Dickinson and Co., many practitioners thought that holding patents unenforceable based upon inequitable conduct before the Patent Office was all but dead. However, in view of the Federal Circuit’s recent decision in Aventis Pharma S.A. v. Hospira, inequitable conduct may be stronger than many thought. Aventis is the Federal Circuit’s first post-Therasense decision upholding an inequitable conduct finding. The decision benefits all retailers by returning teeth to the inequitable conduct standard that many that had been removed. It will be particularly valuable against trolls that continue to prosecute applications while asserting related patents, a failure to disclose references shared during licensing or litigation could meet the standard.
Generally, inequitable conduct occurs when a patent applicant intentionally and materially misleads the patent office. Therasense raised the standard of proof for inequitable conduct by eliminating the previous “sliding-scale” approach when analyzing the intent and materiality prongs. Post-Therasense, inequitable conduct requires a “but for” materiality standard (unless there was affirmative egregious conduct) and a showing of specific intent to deceive. More specifically, the accused infringer must demonstrate that the Patent Office “would not have allowed a claim had it been aware of the undisclosed prior art” and that “the applicant knew of the reference, knew that it was material, and made a deliberate decision to withhold it.”
One of the issues in Aventis Pharma S.A. v. Hospira was whether one of the named inventor’s failure to disclose certain references to the Patent Office during the prosecution of two patents-in-suit amounted to inequitable conduct. While the district court’s finding of inequitable conduct was pre-Therasense, the Federal Circuit determined that the district court nevertheless found the required distinct intent and materiality findings and therefore affirmed that the patents were invalid due to inequitable conduct.
The patents generally cover the ability to mix Aventis’ chemotherapy drug with other ingredients to form a perfusion that can be injected intravenously without causing certain undesirable symptoms. During prosecution of the patents, one of the named inventors failed to disclose two references to the patent office. During litigation, the district court used these undisclosed references to render some of the claims invalid as obvious. The Federal Circuit determined that this finding alone satisfied the materiality prong because of the heightened evidence standard for a finding of invalidity over “but-for” materiality (clear and convincing versus preponderance of evidence). The Federal Circuit specifically noted that even if a withheld reference was not an invalidating one, the reference may still be material if it would have prevented patent issuance during prosecution when the claims are read with their broadest reasonable construction.
The Court then addressed the inventor’s specific intent to deceive the patent office and stated that this prong is satisfied when it can be found that the intent to deceive the patent office is “the single most reasonable inference that could be drawn” from the decision to withhold the reference. During trial, the inventor testified that one of the references was not cited because it explained failed experiments. However, the district court determined that the inventor lacked credibility after reviewing other testimony and evidence that demonstrated the inventor’s understanding of the relevance of the reference. The district court concluded that a similar combination of testimony and evidence demonstrated that the inventor lacked credibility with respect to withholding the other reference. In view of the evidence and deference to the district court’s credibility determinations, the Federal Circuit affirmed that the inventor withheld the references with a specific intent to deceive the patent office.
Being the first appellate case post Therasense to confirm a finding of inequitable conduct, Aventis Pharma S.A. v. Hospira provides some clarity and teeth to the inequitable conduct law. This should be particularly helpful for retailers when defending against patent trolls. For example, may patent trolls (e.g. SFA and Helferich) are continuing to prosecute patent applications through continuations or even reexams while concurrently “monetizing” their patents. The failure of the troll to cite “but-for” references brought to its attention during litigation or licensing efforts may later be used by defendants to invalidate the troll’s patents.