Patent Misuse and Inequitable ConductPatent Misuse
Patent misuse is another type of equitable defense to patent infringement that is much less common than laches or equitable estoppel. Basically, patent misuse is a judicially created defense, which means that it is based upon a body of law that was developed by the courts over time, as opposed to having been created by statute. SeePrinco Corp. v. ITC, 2010 U.S. App. LEXIS 18101 (Fed. Cir. August 30, 2010). As a consequence of this fact, the Court of Appeals for the Federal Circuit generally limits the application of this defense to certain narrowly defined circumstances.
Three of the classic examples of acts that give rise to a claim of patent misuse are: (1) requiring the purchase of unpatented goods for use with the patented apparatus or process; (2) prohibiting production or sale of competing goods; and (3) conditioning the grant of a license under one patent on the acceptance of another and different license. Accordingly, patent owners should be careful to avoid engaging in such acts.
Another defense to patent infringement is inequitable conduct. A showing of inequitable conduct requires clear and convincing proof of: (1) prior art or information that is material; (2) knowledge chargeable to the applicant of that prior art or information and of its materiality; and (3) failure of the applicant to disclose the art or information resulting from an intent to mislead the United States Patent and Trademark Office (“USPTO”).FMC Corp. v. The Manitowoc Company, Inc., 835 F.2d 1411, 1415 (Fed. Cir. 1987).
The acts that give rise to a successful inequitable-conduct defense must be intentional. The acts cannot arise from mere negligence. An inequitable-conduct defense is very powerful because it will render the entire patent unenforceable. Such a defense will also render any continuations of the patent at issue unenforceable as well.
Also, a finding of inequitable conduct may be the basis for declaring a case to be an exceptional case so that an accused infringer may be able to obtain an award of attorney’s fees if it establishes that inequitable conduct has occurred. For this reason, inequitable conduct is a very common defense to a claim for patent infringement.
A patent owner can rebut a claim of inequitable conduct by showing that the prior art or information is not material (e.g., it is less pertinent than or merely cumulative with prior art or information cited to or by the USPTO). A patent owner can also defeat a claim of inequitable conduct by showing that the applicant did not know of that art or information during the prosecution of the patent application at issue. The duty to inform the USPTO of material prior art or information ends after the patent is issued by the USPTO. As a result, a patent owner cannot be accused of inequitable conduct if it learns about the existence of a material prior art reference or other material information at a later date.
Similarly, a patent owner can defeat an inequitable-conduct defense if the patent owner can show that it did not know that the prior art or information was material. Also, a patent owner can also avoid a charge of inequitable conduct by establishing that it did not have an intent to mislead the USPTO.
Certain forms of inequitable conduct can be the basis for a fraudulent procurement of a patent defense, which is a more powerful (and rare) defense to patent infringement. This defense requires a heightened showing of intent on the part of the applicant, however, as well as a showing of other elements.