A Federal Circuit decision has made it more difficult for patent infringers to escape liability. When legal action is taken to enforce patent rights, the infringer often strikes back by trying to neutralize the patent itself by getting a court to declare that the patent is “unenforceable”. Now it is more difficult for infringers to do this because evidence of a patent owner’s fraud is harder to obtain.
If a patent is obtained unfairly, such as by failing to cite to the Patent Office an important reference, or submitting a false declaration, the patent can be held unenforceable due to inequitable conduct. Allegations of inequitable conduct are common as a defense against a charge of patent infringement.
It has long been the law that an alleged infringer must show by clear and convincing evidence that what the patentee did wrong both was “material” and that the patent owner withheld this “material” evidence with the specific intent to deceive the Patent Office.
The Federal Circuit has tightened up the standard for proving inequitable conduct, to the delight of patent owners.
In Therasense v. Becton, Dickinson the Court adopted a “but for” test for materiality. Inequitable conduct requires that at least one claim would not have issued if the Patent Office knew of the reference or the true facts. The one exception is if the patentee engaged in affirmative acts of egregious misconduct.
How will this play out? Will there be fewer charges of inequitable conduct? Will patent applicants submit fewer references to the Patent Office? Only time will tell. In the cases that Jeff Sheldon of our office was an expert for the alleged infringer re inequitable conduct, the “but for” test was satisfied. So there would not have been a change there. The change in law is most likely to make a difference in charges of inequitable conduct for such mistakes as paying small entity fees instead of large entity fees, and other similar missteps.
This may not be the end of the saga. We understand that a petition to the Supreme Court to hear the matter has or will be filed.
