On May 25, 2011, the Federal Circuit in Therasense, Inc. v. Becton, Dickinson and Co., Case No. 2008-1511, issued a en banc decision that "tightens the standards for finding both intent and materiality" needed to support a finding of inequitable conduct. Inequitable conduct is a defense to patent infringement based on the applicant's failure to disclose material prior art to the U.S. Patent Office during the process of obtaining a patent. In Therasense, the Federal Circuit abandoned its previous "sliding scale" approach whereby a greater showing of materiality meant a lesser showing of intent was sufficient to prove inequitable conduct (and vice versa). To prove inequitable conduct under Therasense's tightened standard, it is now mandatory that "the accused infringer … prove by clear and convincing evidence that the patentee acted with specific intent to deceive the PTO."
In Therasense, the Federal Circuit analyzed the evolution of the inequitable conduct defense from the doctrine of unclean hands set forth in the Supreme Court's precedent of Keystone Driller Co. v. General Excavator Co., 290 U.S. 240 (1933), Hazel-Atlas Glass Co. v. Hartford-Empire Co., 322 U.S. 238 (1944), and Precision Instruments Mfg. Co. v. Auto. Maint. Mach. Co., 324 U.S. 806 (1945). The Federal Circuit noted that Keystone, Hazel-Atlas, and Precision each involved "particularly egregious misconduct" by the patentee or applicant to deceive the Patent Office or courts, including perjury, the manufacture of false evidence, and the suppression of evidence. Relying on Keystone, Hazel-Atlas, and Precision, and recognizing intent and materiality are separate requirements for inequitable conduct, the Federal Circuit renounced the previous "sliding scale" approach. District courts, for example, can no longer infer intent solely from materiality. Instead, a court must weigh the evidence of intent to deceive the Patent Office independently of its analysis of the materiality of the prior art. Thus, to prove inequitable conduct, an alleged infringer must now show by clear and convincing evidence that the applicant "made a deliberate decision to withhold a known material reference," meaning the alleged infringer must show that the applicant knew of the reference, knew it was material, and made a deliberate decision to withhold from the Patent Office. Therasense, however, recognizes that direct evidence of intent is rare and allows courts to infer intent from indirect and circumstantial evidence. Even so, to meet the clear and convincing standard, a specific intent to deceive must be the single most reasonable inference able to be drawn from the evidence. Thus, where there are multiple reasonable inferences that may be drawn, a court cannot find that the patentee or applicant had an intent to deceive.
As to materiality, Therasense requires "but-for" materiality to establish inequitable conduct. Prior art is but-for material if the Patent Office would not have allowed a patent claim if it had been aware of the undisclosed prior art. Furthermore, the Federal Circuit declined to adopt the Patent Office's definition of materiality in Rule 56, finding that it improperly sets "a low bar for materiality." Therasense still recognizes the exception to "but-for materiality" in cases of affirmative egregious misconduct – e.g., when the patentee has engaged in affirmative acts of egregious misconduct, such as the filing of an unmistakably false affidavit.