The Federal Circuit en banc hears oral argument regarding the standard for inequitable conduct—“but for” standard versus “all information material to patentability.”

Therasense, Inc. v. Becton, Dickinson & Co., No. 2008-1511 (Fed. Cir. Nov. 9, 2010).

On Tuesday, November 9, 2010, the Federal Circuit sat en banc and heard oral arguments in Therasense, Inc. v. Becton, Dickinson & Co. The Federal Circuit’s forth-coming decision in Therasense is expected to provide clarification on the standard to be applied for inequitable conduct in patent cases.

The oral arguments focused on the appropriate legal standard for intent and the form of materiality that must be present for finding that a patent is unenforceable due to inequitable conduct. Under current law, courts use a materiality-intent-balancing inquiry for inequitable conduct (where a high showing of either materiality or intent may balance a low showing of the other factor), and employ an assortment of tests under this material-intent-balancing framework.

The patentee argued that the court should adopt a stringent “but for” standard for inequitable conduct, which would require clear causation between the patentee’s fraudulent behavior and the PTO’s decision to grant the patent. Under a proposed “but for” standard, inequitable conduct would be consistent with the law for common law fraud, and determinations of inequitable conduct would be reserved only for “egregious” cases. The PTO, instead of the courts, would be charged with policing cases of fraud and misrepresentation during patent prosecution that do not affect the PTO’s final decision to issue a patent.

The alleged infringer and the PTO argued against the “but for” test and in favor of a rule that is coextensive with the PTO’s Rule 56, which requires applicants to disclose “all information material to patentability.” The “all information material” test would encourage candor and avoid patent gamesmanship caused by the “but for” test. Additionally, under the “but for” test, an applicant could make material misrepresentations and still avoid inequitable conduct by amending the claims to avoid a clear connection between the misrepresentation and the claims of the issued patent.

An audio file of the oral argument can be found here.