McKesson Information Solutions, Inc. v. Bridge Medical, Inc. (Fed. Cir. 2007)
The Court of Appeals for the Federal Circuit affirmed a district court holding that a patent was unenforceable due to inequitable conduct. The Court held that McKesson failed to prove that the district court was clearly erroneous in fi nding inequitable conduct on behalf of the prosecuting attorney. The Court found three nondisclosures that were material to the prosecution of the patent, and the district court’s conclusion that the nondisclosures did not result from mistakes or negligence supported its fi nding of inequitable conduct.
McKesson Information Solutions sued Bridge Medical in district court, alleging patent infringement of U.S. Patent No. 4,857,716 (the ‘716 patent). Bridge counterclaimed, asserting that the patent was unenforceable due to inequitable conduct of the prosecuting attorney. The district court held that the patent was unenforceable because the prosecuting attorney intentionally withheld three pieces of material information from the Patent Offi ce. The material information included: (1) a prior art patent that had been brought to the attorney’s attention by the examiner of a co-pending application, (2) rejection of claims in the same co-pending application, and (3) allowance of another co-pending application.
During prosecution of the ‘716 patent application, the prosecuting attorney simultaneously prosecuted two related applications: (U.S. Patent Application No. 06/862,149 (the ‘149 application) and U.S. Patent Application No. 07/078,195 (the ‘195 application). The prosecuting attorney failed to disclose a prior art reference (Baker) to the examiner of the ‘716 patent application, which was brought to his attention by the examiner of the ‘149 application.
The Baker reference described limitations that the prosecuting attorney used to differentiate the claims of the ‘716 patent from the prior art which was therefore a material reference. In addition, the prosecuting attorney canceled claims in the ‘149 application including those same limitations due to the Baker reference. The Court stated that, by canceling the claims when confronted with the Baker reference, the prosecuting attorney should have recognized that the Baker reference would also present a signifi cant obstacle to the patentability of the ‘716 patent, and was thus a material reference. By not disclosing the material reference (i.e., the Baker reference) to the examiner of the ‘716 patent, the district court inferred an intent to deceive. The district court held that the overwhelming circumstantial evidence, coupled with the lack of any credible explanation for not disclosing the Baker reference, supported the fi nding of inequitable conduct. The Court upheld the district court’s fi nding, stating that the inference of intent to deceive was not clearly erroneous.
The prosecuting attorney also failed to disclose rejections of claims in the ‘149 application. The rejected claims in the ‘149 application included a combination of features that the prosecuting attorney argued were novel while prosecuting the ‘716 patent. The Court noted that a contrary decision of another examiner reviewing a substantially similar claim was material and should have been disclosed. The Court stated that, in rejecting claims of co-pending applications, a showing of substantial similarity is suffi cient to prove materiality, but that the claims need not be substantially similar in order to be material. The Court upheld the district court’s fi nding of materiality, stating that the fi nding was not clearly erroneous.
In addition, the prosecuting attorney failed to disclose an allowance of claims in the ‘195 application. Notably, the allowance of claims in the ‘195 application was made by the same examiner reviewing the ‘716 patent application. The Court stated that the appropriate test for materiality is whether a reasonable examiner would have considered the information important, not whether the information would conclusively decide the issue of patentability. The Court stated that the allowance gave rise to a conceivable double patenting rejection, and therefore should have been disclosed. Although the same examiner reviewed both applications, the Court stated that prosecuting attorneys should not assume that an examiner remembers every detail of every application. The Court upheld the district court’s fi nding of materiality, stating that the fi nding was not clearly erroneous.
In dissent, Judge Newman stated that it is not clear and convincing evidence of deceptive intent that the prosecuting attorney did not inform the examiner of the examiner’s grant of a related case a few months earlier, which the prosecuting attorney had disclosed to the examiner as being related. Judge Newman also stated that it is not clear and convincing evidence of deceptive intent that the prosecuting attorney did not cite a reference that the prosecuting attorney had cited in the same related case, and that had been explicitly discussed with the same examiner in the related case. Judge Newman stated that, to avoid inequity resulting from litigation driven distortion of the complex procedures of patent prosecution, precedent fi rmly requires that the intent element of inequitable conduct must be established by clear and convincing evidence, which was not met in this case.