A Federal Circuit decision entitled Therasense, Inc. v. Becton, Dickinson & Co., 649 F.3d 1276 (Fed. Cir. 2011) (en banc) resulted in one of the most significant developments in U.S. patent law since 2010. The decision concerned the inequitable conduct affirmative defense in patent litigation.
Inequitable conduct is one of the most powerful defenses in patent law. A successful assertion of the defense of inequitable conduct will render all of the claims of a patent unenforceable, as well as all of the claims of any “children” of that patent. A finding of inequitable conduct can also be the basis of an award of attorney’s fees.
Due to the power of the affirmative defense, it was a common practice of accused infringers to assert the inequitable conduct defense even when the supporting evidence was thin. The Therasense court recognized this practice and noted that the habitual assertion of the inequitable conduct defense had become a “plague” in patent litigation.
Fortunately for patent owners, it was not easy to establish that a patentee committed inequitable conduct prior to the issuance of the Therasense decision. The Therasense test made it more difficult to do so by articulating a new, more rigorous test for inequitable conduct. As a result, it is even more difficult for an accused infringer to establish that inequitable conduct has occurred.
The Therasense test for inequitable conduct requires clear and convincing evidence of materiality, knowledge of materiality and a deliberate decision to deceive. Id. at 1290. Except in cases of egregious misconduct, the materiality must reach the level of “but-for” materiality, meaning that “the [United States Patent and Trademark Office (“USPTO”)] would not have allowed a claim had it been aware of the undisclosed prior art”. Id. at 1291-92.
The “deliberate decision to mislead” requires a showing of “specific intent” and “that deceptive intent was the single most reasonable inference to be drawn from the evidence.” Ohio Willow Wood Co. v. Alps S., LLC, 813 F.3d 1350, 1357 (Fed. Cir. 2016) (citations omitted).
The “materiality” prong of the test requires a showing that “the patentee withheld or misrepresented information that, in the absence of the withholding or misrepresentation, would have prevented a patent claim from issuing.” Id. It is a but-for requirement in that an accused infringer must show that the patent would not issue but-for the material misrepresentation.
The existence of a “specific intent” to deceive or to mislead “may be inferred from indirect and circumstantial evidence”. Id. at 1358. However, the “deceptive intent must be the single most reasonable inference drawn from the evidence”. Id.