Pfizer filed a patent infringement action against Teva Pharmaceuticals ("Teva") over a patent that claims the use of certain chemical compounds claimed as a method to treat erectile dysfunction. During the case, Teva filed a motion to amend its answer and counterclaims to alleged a defense and counterclaim for inequitable conduct. The district court granted the motion, but noted that it was a close case.

Several months later, Teva moved to amend its answer and counterclaim to change its allegations supporting the inequitable conduct claim. The district court denied the requested amendment on the ground of prejudice and futility because the amendment was late and would prejudice Pfizer and the individuals named in the proposed amendment and because the amendment failed to make any plausible showing of but-for materiality.

The district court subsequently dismissed the remaining claim for inequitable conduct from the first amended complaint and found that there was "utterly no evidence" as to either element of specific intent or but-for materiality under Therasense, Inc. v. Becton, Dickinson & Co., 649 F.3d 1276, 2011 WL 2028255 (Fed. Cir. May 25, 2011). Pfizer then filed a motion for attorneys fees relating to the inequitable conduct defense, asserting that Teva's conduct in pursuing the inequitable conduct defense after Therasense was "objectively baseless" justifying a sanction award.

After reviewing the Therasense decision, the district court determined that Teva's claim was objectively baseless because it could not have believed that its claim would succeed. The district court determined that the allegations by Teva did not come close to approaching the but-for materiality standard required by Therasense. The district court also found that Teva's allegations that Pfizer was willfully blind to certain prior art could not satisfy the but-for materiality standard under Therasense.

Turning to the intent element of Therasense, the district court noted that no sliding scale could be used between materiality and intent. The district court noted that Teva provided no evidence of specific intent and once again rejected that "willful blindness" could provide evidence of a specific intent to deceive.

As a result, the district court determined that Teva's continued pursuit of its inequitable conduct defense and claim after the Federal Circuit's decision in Therasense was objectively baseless and awarded sanctions in favor of Pfizer in the amount of $378,285.

Pfizer Inc. v. Teva Pharmaceuticals USA, Inc., Case No. 2:10cv128 (E.D. Va. Oct. 17, 2011)