“Three things cannot hide for long: the Moon, the Sun, and the Truth.”1 The Patent Trial and Appeal Board (“PTAB”) relies on the truth coming to light to resolve disputes in post-grant proceedings in a “just, speedy, and inexpensive manner.”2 Beyond a mere requirement to tell the truth, parties involved in a Patent and Trademark Office (“PTO”) proceeding have a duty of candor and good faith.3 This “duty of candor and good faith to the Office as honesty before the Office is essential to the integrity of the proceedings.”4 Although the duty of candor may appear to be a simple concept, some practitioners have failed to appreciate the all-encompassing nature of this ethical duty. While the PTAB has not written many opinions specifically addressing ethical issues in post-grant proceedings, guidance has been provided regarding a party’s duty of candor in three seemingly routine aspects in a post-grant proceeding: (1) filings; (2) discovery; and (3) notifications. In turn, the party’s duty of candor allows the PTAB to assume the truthfulness of the party’s representations for these routine procedures.
This duty of candor applies to any arguments or evidence submitted by a party during a post-grant proceeding and continues to exist (even to former arguments and evidence) as the proceeding progresses.5 Although the PTAB has not addressed the standard for a party’s duty of candor, the Board of Patent Appeals and Interference (“BPAI”) decision in Bayer Cropscience S.A. v. Syngenta Ltd. suggests that the PTAB will likely presume parties have acted in good faith.6 In an interference proceeding, one of the parties requested that the opposing party produce unredacted versions of produced documents.7 The BPAI recognized that underlying this request was an unstated premise that Bayer breached their duty of candor by redacting relevant information.8 Rather than determine whether the redactions to the produced documents were appropriate, the BPAI emphasized that the PTO must be able to rely on attorneys to act in an “honest and forthright manner in their dealings with the PTO” during discovery.9 The BPAI, accordingly, did not require production of the unredacted documents based on the presumption that the parties in making arguments and submitting evidence acted in accordance with the duty of candor.10 Similar to the BPAI’s presumption that parties have acted in good faith, the PTAB is likely to presume that parties are acting in good faith when submitting arguments and evidence.
The PTAB may also presume that a party’s former arguments or filings remain accurate during the entirety of the proceeding. The PTAB recognizes that practitioners are under a continuing duty of candor to update any changes in their pre-existing arguments and filings. In Innolux Corp. v. Semiconductor Energy Lab. Co., the PTAB relied on this continuing duty in denying a patentee’s motion for additional discovery regarding the real party in interest.11The patentee argued for additional discovery to determine whether the petitioner was the sole real party-in-interest representing the petitioner.12Because the petitioner made several representations that it was the only real party in interest, the PTAB determined that the patentee had not met its burden to show additional discovery was necessary.13
The PTAB further requires that practioners exhibit a duty of good faith by following proper procedure in each of its filings with the court. In CBS Interactive Inc. v. Helferich Patent Licensing, the patentee requested a rehearing of an order expunging filed non-compliant papers.14 The patentee essentially argued that it acted “in good faith” when it “mistakenly” filed papers that did not follow proper procedure.15 Rejecting the motion, the Board noted that the patentee had previously filed three other papers that were in violation of the rules.16 Given the totality of the circumstances, the Board was not convinced that the patentee acted “in good faith” when submitting the non-compliant papers.17
In responding to discovery requests, a party must serve all relevant information–including information inconsistent with a party’s position advanced at the proceeding.18 The producing party, however, is not required to specify the relevance of the inconsistent information.19 This requirement extends to inventors, corporate officers, and even persons involved in the preparation or filing of relevant, responsive information.20
Underlying these responsive productions is an expectation that the parties are exercising their duty of candor in complying with discovery obligations. This expectation allows the PTAB to assume a party’s responsive production includes all relevant information. For example, in Corning Inc. v. DSM IP Assets, the petitioner filed a motion requesting that the patentee produce the following additional discovery: (1) documents related to testing and (2) results from testing performed on products that the petition asserted as prior art.21 22In response, the patentee contended that it previously produced any responsive information under these two categories. Because the patentee confirmed that no other relevant information existed, the PTAB denied the petitioner’s request for additional discovery.
The regulations governing post-grant proceedings require that parties identify any other judicial or administrative matter that would either affect or be affected by the PTAB proceeding.23 In the common scenario that a party files an inter partes review (“IPR”) during the pendency of a district court litigation over the asserted patents, the party must notify the PTAB about this concurrent district court litigation.24
According to the district court in Virginia Innovation Sciences, Inc. v. Samsung Elecs. Co., a party’s duty of candor also extends to notifying the district court of a related post-grant proceeding. In this case, neither the plaintiff nor defendant notified the district court of an IPR petition that defendants submitted after filing a summary judgment motion seeking invalidity of the asserted patents.25 While the IPR petition was pending, the district court issued a ruling on the patent’s validity without knowledge that the exact same issues were before the PTAB.26The district court eventually became apprised of the IPR proceeding when the plaintiffs filed a motion for reconsideration on the ruling based on the PTAB’s analysis of the asserted patents in the IPR proceeding.27 The district court denied the motion for reconsideration and focused on a party’s duty of candor.28 The court emphasized that a party’s duty of candor also encompasses a duty to advise a district court of any development that may affect a litigation’s outcome.29 According to the court, the parties must be truthful on matters material to their disposition for the court to properly dispense justice.30 “Even the slightest accommodation of deceit or lack of candor in any material respect quickly erodes the validity of the [judicial] process.”31 Here, both parties failed to comply with this general duty of candor because the IPR proceeding was clearly a “development which may conceivably affect the outcome of the litigation.”32
Although seemingly simple, a party’s representation during a PTAB proceeding is intertwined with a strong duty of candor. This duty of candor allows the PTAB to appropriately assume that a party’s representation is truthful. Even the most routine procedures–such as filings, discovery, and notifications–stand firmly on this interplay. Unlike the Sun and the Moon which can hide behind the PTAB’s courtroom walls, the party’s strong ethical duty of candor must come to light during the proceedings inside the courtroom walls. To do otherwise would detract from the post-grant proceeding’s primary virtue: to determine a patent’s validity in a just, speedy, and inexpensive manner.