Wednesday, July 6, 2011

Parsing Therasense v. Becton

When it comes to undisclosed prior art, the Federal Circuit’s new standard outlined in THERASENSE, INC. V. BECTON, DICKINSON AND CO. for inequitable conduct, which was and intended to diminish the importance of inequitable conduct as a defense, is logically flawed. The standard for intent is, taken on its face, not possible to establish. To show the required intent, a defendant must convince a district court to “make a specific finding [that the inventors] knew that withheld information was material and [that] they made a deliberate decision to withhold it.” (See AMERICAN CALCAR, INC. V. AMERICAN HONDA MOTOR CO., INC. at p. 27.) This seems like a pretty rigorous standard to meet by clear and convincing evidence, but it is at some level impossible. It must be shown that an inventor knew—at the time he decided not to disclose a prior art reference—that the prior art reference was material. But the Federal Circuit also redefined “material,” which now must be (usually) “but-for” materiality: “prior art is but-for material if the PTO would not have allowed a claim had it been aware of the undisclosed prior art.” (Therasense, p. 27; see also pp. 27-28 (“[I]n assessing the materiality of a withheld reference, the court must determine whether the PTO would have allowed the claim if it had been aware of the undisclosed reference. In making this patentability determination, the court should apply the preponderance of the evidence standard and give claims their broadest reasonable construction.”).) Accordingly, a defendant must show that during prosecution an inventor knew of a prior art reference, knew that disclosing it would result in claims not being allowed, and made a deliberate decision to withhold it.

The problem, of course, is that one cannot know what the PTO is going to do with any particular piece of prior art ahead of time. Inventors and practitioners may have opinions about how they think the PTO will respond to a particular prior art reference, but they can never know. What the Federal Circuit likely meant, and how this standard will probably be applied in practice, is that to meet the intent standard it must be shown that an inventor believed (subjectively, one would presume) that a prior art reference would have resulted in claims not being allowed had the examiner known of it and deliberately decided to withhold it for that reason. Since this standard relies on the subjective view of the person(s) accused of inequitable conduct, it will be exceedingly difficult to establish.