As the summer winds down, vacations recede in the rear-view mirrors, and the “school” year begins, two recent cases offer a refresher course in the dire consequences awaiting  inventors who misrepresent prior art during patent examination proceedings, and for patent litigators who misreport the nature of potential witness testimony in federal district court trials.  The facts and outcomes of these two cases are extreme,  but noteworthy as cautionary tales.

The Apotex v. UCB Federal Circuit Case

On August 14, 2014, the Federal Circuit issued a precedential decision in a long running case regarding Apotex’s U.S. Patent No. 6,767,556.  It is entitled “Pharmaceutical Compositions Comprising Moexipril Magnesium” and was invented by Apotex’s founder, Dr. Bernard Sherman.  Apotex is the largest producer of generic pharmaceutical products in Canada.

The Federal Circuit affirmed the district court’s ruling that the ’556 patent is unenforceable due to the inequitable conduct of its inventor.

The case facts are egregious.  The ’556 patent is generally directed to a process for manufacturing moexipril tablets used to treat hypertension.  Apotex sued rival drug manufacturers contending that their moexipril tablets (Univasc and Uniretic)—available in the 1990s—were manufactured through the process covered by Apotex’s ’556 patent that issued in 2004.  To obtain this patent right to sue competitors, Dr. Sherman misrepresented prior art in a USPTO patent examination proceeding and proved to be a non-credible, dissembling witness when called to the stand in federal court.

The Federal Circuit’s decision does not mince words: “the district observed that Dr. Sherman abused the patent system by targeting a competitor’s existing and widely available product and seeking to obtain a patent on it through lies and deception for the purpose of suing that competitor.”

The Apotex case displays the type of inventor misconduct most calculated to raise the ire of district court and appellate judges.  Although Therasense, Inc. v. Becton, Dickinson and Co., 946 F.3d 1276 (Fed. Cir. 2011) raised the evidentiary bar for inequitable conduct findings and conclusions, recent Federal Court jurisprudence also emphasizes that appellate court judges will not disturb witness credibility findings that support inequitable conduct rulings.  In the Apotex decision, the Federal Circuit recites the principle that this court “may not reassess, and indeed is incapable of reassessing, witness credibility and motive issues on review.”  The center of gravity of inequitable conduct findings and conclusions now resides in federal district courts—and not in a formerly more interventionist Federal Circuit upon appeal.

Because the ’556 patent inventor’s prior art misrepresentations reached the level of “but-for” materiality, the Federal Circuit did not have to reach the issue of whether Dr. Sherman’s conduct rose to the “level of egregious conduct such that materiality could have been presumed” under Therasense.  Deceptive intent was also found and upheld on appeal.  Among other things, Sherman had “directed his counsel to bolster [his] misrepresentations by procuring and submitting the declaration of an expert who was deliberately shielded from the truth.”  Sherman also had to admit that he never performed the experiments described in the ’556 patent, and yet the specification examples are all written in the past tense.  “We agree with the district court that deceptive intent is the single most reasonable inference that can be drawn from the evidence.” 

The Tesco v. Weatherford District Court Decision

Tesco v Weatherford is a recent federal district court decision that focuses on the misrepresentations and misconduct of trial counsel in a patent infringement lawsuit.  The case involves two patents that describe a tool used on a drilling rig.  The patents concern a case drilling system with a link tilt.

Four days into trial, the co-inventor of the patent surprised everyone in the courtroom when he testified that a marketing brochure prepared by plaintiff  Tesco displayed his invention.  Its August 2002 preparation date placed it well before a November 2002 on-sale bar critical date.  Over a weekend trial recess, Tesco’s counsel scrambled to repair this gaping hole in his client’s patent infringement claim.  The following Monday, counsel informed the court that they had gotten to the bottom of the brochure’s preparation by interviewing the person who did the renderings in the brochure.  Counsel represented to the court that the witness had stated that the rendering is not the invention, that “in fact, there is no doubt it’s not [the] invention.”

Trial counsel would come to rue those unequivocal representations.  When the alleged author of the renderings testified at his post-trial deposition, he stated he had no involvement with the brochure.  The court decision set forth the deposition testimony verbatim at some length.  Tesco’s counsel argued that his deposition could be construed as supporting his courtroom statements, but the court rejected the technical distinctions proffered as unpersuasive.  Counsel’s misrepresentations occurred at a “critical inflection point” at the trial.  Had the court known the truth, it may well have entered a judgment for the defendants forthwith.  The court determined that a sanction of attorneys’ fees alone would not suffice.  “Just as with witnesses testifying truthfully under oath, the proper of administration of justice depends upon counsel being completely forthright with the Court.”

As a result of this litigation misconduct, the court dismissed Tesco’s patent claims with prejudice, and signaled that it would entertain a motion for attorneys’ fees based on the ruling.  Since the ruling has only recently been issued, it may well be the subject of an appeal.

These two cases should give every patent practitioners pause for reflection.  We all want to secure the best possible results for clients.  When prosecuting a patent application, or battling over patent rights at trial, it can be easier than we think for zealous advocates to slip into the lyrical adage of Paul Simon’s song The Boxer, “still, a man hears what he wants to hear and disregards the rest.”  That natural human tendency to concentrate on what supports a claim as opposed to what detracts from it–unless checked–can have profoundly deleterious impacts down the line when a full evidentiary record is evaluated.