Therasense, Inc. v. Becton, Dickinson and Co., No. 2008-1511 (Fed. Cir. Apr. 26, 2010)

Over twenty years ago, the Federal Circuit described inequitable conduct as “an absolute plague” to both the courts and patentees. Burlington Indus., Inc. v. Dayco Corp., 849 F.2d 1418, 1422 (Fed. Cir. 1988). Judge Linn’s dissent in the vacated January 25, 2010 opinion highlighted the perceived inconsistencies on the standard of materiality underlying an inequitable conduct determination: “[o]ur circuit already entertains five different standards for materiality. I do not think that we need a sixth.” Therasense, Inc. v. Becton, Dickinson and Co., No. 2008-1511, slip op at 15 (Fed. Cir. Jan. 25, 2010) (citing Digital Control, Inc. v. Charles Mach. Works, 427 F.3d 1309, 1315-16 (Fed. Cir. 2006)).

Responding to uncertainty in the standards of inequitable conduct, the Federal Circuit granted the patent holder Abbott’s (Therasense, Inc. is now Abbott Diabetes Care, Inc.) request for a rehearing en banc of the Court’s inequitable conduct affirmance. The order instructs the parties to brief the following key questions related to inequitable conduct:

  1. Should the materiality-intent-balancing framework for inequitable conduct be modified or replaced?
  2. If so, how? In particular, should the standard be tied directly to fraud or unclean hands? See Precision Instrument Mfg. Co. v. Auto. Maint. Mach. Co., 324 U.S. 806 (1945); Hazel-Atlas Glass Co. v. Hartford-Empire Co., 322 U.S. 238 (1944), overruled on other grounds by Standard Oil Co. v. United States, 429 U.S. 17 (1976); Keystone Driller Co. v. Gen. Excavator Co., 290 U.S. 240 (1933). If so, what is the appropriate standard for fraud or unclean hands?
  3. What is the proper standard for materiality? What role should the United States Patent and Trademark Office’s (USPTO) rules play in defining materiality? Should a finding of materiality require that but for the alleged misconduct, one or more claims would not have issued?
  4. Under what circumstances is it proper to infer intent from materiality? See Kingsdown Med. Consultants, Ltd. v. Hollister Inc., 863 F.2d 867 (Fed. Cir. 1988) (en banc).
  5. Should the balancing inquiry (balancing materiality and intent) be abandoned?
  6. Whether the standards for materiality and intent in other federal agency contexts or at common law shed light on the appropriate standards to be applied in the patent context.

The Federal Circuit will entertain briefs of amici curiae, which may be filed without leave of court. Additionally, the court invited the USPTO to file an amicus brief.

The breadth and scope of the questions posed by the Federal Circuit suggests that fundamental changes to the doctrine of inequitable conduct may be forthcoming. The potential changes may significantly impact both patent prosecution practices and litigation strategies.