Therasense, Inc. v. Becton, Dickinson and Co.
99 U.S.P.Q. 2d (BNA) 1065, 649 F.3d 1276, 2011 U.S. App. LEXIS 10590 (2011)
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Rule of Law:
To prove inequitable conduct, an accused infringer must show by clear and convincing evidence that the patent applicant acted with a specific intent to deceive the U.S. Patent and Trademark Office (PTO) and withheld or misrepresented information that was but-for material to the patent's issuance. The sole exception to the but-for materiality standard is for affirmative acts of egregious misconduct.
Facts:
- In 1984, Abbott filed a patent application for a disposable blood glucose test strip that claimed to function on whole blood without a protective membrane.
- The U.S. Patent and Trademark Office (PTO) repeatedly rejected the application as obvious in light of a prior Abbott patent ('382 patent).
- During prosecution of the European counterpart to the '382 patent, Abbott had argued to the European Patent Office (EPO) in 1994 and 1995 that the '382 patent's language meant a protective membrane was 'unequivocally clear' to be optional.
- In 1997, to overcome the PTO's rejection of the U.S. application, Abbott's attorney, Lawrence Pope, and its R&D Director, Dr. Gordon Sanghera, submitted arguments and a sworn declaration to the PTO.
- In these submissions, Pope and Sanghera asserted the opposite of their European position: that one skilled in the art would not have understood the '382 patent to teach that a protective membrane was optional for whole blood, calling the language 'mere patent phraseology'.
- Abbott did not disclose its prior, contradictory arguments made to the EPO during its prosecution before the PTO.
Procedural Posture:
- Becton sued Abbott in the U.S. District Court for the District of Massachusetts, seeking a declaratory judgment of noninfringement.
- Abbott countersued Becton in the U.S. District Court for the Northern District of California for patent infringement, and the cases were consolidated there.
- After a bench trial, the district court (court of first instance) found Abbott's '551 patent unenforceable due to inequitable conduct.
- Abbott (appellant) appealed the judgment to the U.S. Court of Appeals for the Federal Circuit.
- A three-judge panel of the Federal Circuit affirmed the district court’s judgment of unenforceability.
- The Federal Circuit then granted Abbott’s petition for rehearing en banc, vacating the panel's decision.
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Issue:
Does a patent applicant commit inequitable conduct by failing to disclose information to the U.S. Patent and Trademark Office (PTO) if the information is not but-for material to patentability and there is no clear evidence of a specific intent to deceive?
Opinions:
Majority - Rader, C.J.
No, such conduct does not constitute inequitable conduct under the newly heightened standard. This court holds that to successfully assert the defense of inequitable conduct, an accused infringer must prove two separate requirements by clear and convincing evidence: (1) that the patent applicant misrepresented or omitted information that was but-for material to the issuance of the patent, and (2) that the applicant did so with the specific intent to deceive the PTO. The court found that prior standards, including the 'sliding scale' approach and the broader PTO Rule 56 materiality standard, led to overuse of the defense, which it termed a 'plague' on patent litigation. The new but-for materiality standard requires showing that the PTO would not have allowed the patent claim had it been aware of the undisclosed information. The intent to deceive must be the 'single most reasonable inference' from the evidence and cannot be inferred from materiality alone; gross negligence is insufficient. The only exception to the but-for materiality requirement is for cases of 'affirmative egregious misconduct,' such as filing a falsified affidavit.
Concurring-in-part-and-dissenting-in-part - O'Malley, J.
No, the lower court's finding must be vacated, but the majority's new test for materiality is too rigid. This opinion concurs with raising the intent standard and eliminating the sliding scale. However, it dissents from the creation of a rigid 'but-for' materiality test, arguing that equity is inherently flexible and must be able to address various forms of egregious misconduct that might not meet a strict but-for standard. The majority’s test wrongly cabins the court's equitable power. A more flexible standard should deem conduct material if it meets the but-for test, involves a false representation, or is so offensive that it undermines the integrity of the PTO process. Furthermore, the remedy should be flexible, allowing courts to render only certain claims unenforceable rather than the entire patent.
Dissenting - Bryson, J.
Yes, Abbott's conduct should be found to be inequitable. The majority's new 'but-for' materiality standard is a radical departure from precedent that effectively abolishes the doctrine for non-disclosure cases and creates a perverse incentive for applicants to conceal information. The proper standard for materiality should remain tethered to the PTO's Rule 56, which correctly defines as material any information inconsistent with a position taken by the applicant. This standard ensures applicants have an incentive to be candid with the PTO, which is in the best position to determine what information it needs. Under the proper Rule 56 standard, Abbott's failure to disclose its contradictory statements to the EPO was clearly material, and the district court’s finding of inequitable conduct should have been affirmed.
Analysis:
This landmark en banc decision significantly raised the bar for proving inequitable conduct, a defense that had become nearly boilerplate in patent infringement litigation. By requiring both 'but-for' materiality and a specific intent to deceive as the 'single most reasonable inference,' the court intended to curb what it saw as a 'plague' of litigation abuse. The decision makes the defense much more difficult to prove, likely reducing its frequency and impact on litigation strategy. The court's explicit rejection of the PTO's own Rule 56 as the guiding standard for materiality also represents a significant assertion of judicial authority over a doctrine with profound effects on PTO practice.
