In Regeneron Pharmaceuticals, Inc. v. Merus N.V., No. 2016-1346 (Fed. Cir. July 27, 2017), the Federal Circuit affirmed the district court’s decision that the claims of U.S. Patent No. 8,502,018 were unenforceable due to Regeneron’s inequitable conduct during prosecution.

The parties agreed that there were four references known to Regeneron during prosecution that were not cited to the Patent and Trademark Office (PTO). Regeneron, however, argued that these references were neither material nor were withheld with specific intent to deceive the PTO.

After a bench trial, the Southern District of New York determined that these references were material. In addition, the court drew an adverse inference of specific intent to deceive based on Regeneron’s “widespread” discovery misconduct during the litigation. The Federal Circuit upheld the finding of “but-for” materiality for all four references based on the broadest reasonable interpretation of the claims and, based on the specific facts of the case, upheld the adverse inference against Regeneron based on Second Circuit precedent. The Court further noted that Regeneron was accused of engaging in inequitable conduct during prosecution in addition to the post-prosecution litigation misconduct that obfuscated its earlier prosecution misconduct.

Judge Newman dissented. She stated that the inequitable conduct inquiry must only consider conduct before the Examiner and should not be based on any adverse inference, particularly from post-prosecution misconduct. She also questioned the finding of materiality, contending that the references concern motivations to combine but do not rise to the level of but-for materiality.