Archive for May, 2011

How Will the PTO Respond to Therasense?

May 31, 2011

Last week, the Federal Circuit issued its decision in Therasense v. Becton, Dickinson.  The case did not exactly come out the way the PTO wanted.

In its amicus brief in the case, the PTO argued, quite sensibly, that the main cause of the problems dealing with inequitable conduct was that the Federal Circuit simply didn’t follow its own law.  Although the court had quite forcefully stated in its seminal 1988 Kingsdown opinion that inequitable conduct required proof of specific intent to deceive the PTO, over time “specific intent” had come to mean something akin to negligence.

Regarding the materiality prong of the test, the PTO argued that its own Rule 56 standard for materiality is the correct one.  In its current iteration, the Rule 56 standard is as follows:

(b) Under this section, information is material to patentability when it is not cumulative to information already of record or being made of record in the application, and

(1) It establishes, by itself or in combination with other information, a prima facie case of unpatentability of a claim; or

(2) It refutes, or is inconsistent with, a position the applicant takes in:

(i) Opposing an argument of unpatentability relied on by the Office, or

(ii) Asserting an argument of patentability.

A prima facie case of unpatentability is established when the information compels a conclusion that a claim is unpatentable under the preponderance of evidence, burden-of-proof standard, giving each term in the claim its broadest reasonable construction consistent with the specification, and before any consideration is given to evidence which may be submitted in an attempt to establish a contrary conclusion of patentability.

The Federal Circuit, however, held that it was exactly this standard for materiality that led to the problems with inequitable conduct.  Ruling that it is not bound by PTO rules, the court chose a much stricter “but-for” materiality standard.

What will the PTO do?

The Therasense case dealt with the patent infringement defense of inequitable conduct, while PTO Rule 56 deals with the duty of disclosure to the PTO by patent applicants.  While these two issues are inextricably linked, with the defense flowing from how applicants undertake their duty of disclosure, they are two separate issues.  The PTO has indicated that it is studying the decision and will issue guidance to applicants soon.  It is possible that the PTO could simply keep the Rule 56 standard for applicant disclosures and permit the Federal Circuit to use a different standard for violations of the duty.  This could lead to a confusing hodge-podge of standards.

The stick (some would argue the in terrorem pressure) that forces applicants to follow the PTO’s duty of disclosure is the remedy for inequitable conduct, the holding of a patent or patent family to be unenforceable, plus possible attorneys’ fees and the like.  By making it much more difficult to obtain such a remedy, the PTO’s rule would seem to be less burdensome and fearful.  The PTO could still sanction attorneys for failure to comply with Rule 56, but the Office readily admits that it does not have the resources to adjudicate and enforce these issues.

Then, there’s the issue of whether the decision is indeed final.  Perhaps the case will be appealed to the Supreme Court.  It seems unlikely that the Court would agree to hear the case, but in any event, even that decision would not be made until early fall or later.  If the Court does hear the case, it could be another year before a decision.

With these issues in mind, the question remains:  what will the PTO do?


Federal Circuit Tightens Inequitable Conduct Standards

May 26, 2011

Yesterday, the Federal Circuit released its long-awaited decision in Therasense, Inc. v. Becton, Dickinson & Co.  The facts of the case were discussed in a previous post.  Briefly, the district court held a patent unenforceable for inequitable conduct because the patent applicant did not disclose to the PTO certain statements made in prosecution to the European Patent Office that may be contradictory to statements made to the PTO.  A divided Federal Circuit panel affirmed over a dissent by Judge Linn.

The Federal Circuit agreed to hear the case en banc to reconsider its inequitable conduct jurisprudence.  The case was decided by the 11 active members of the court.

Majority Opinion

The opinion of the court was written by Chief Judge Rader and joined completely by 5 other judges.  Judge O’Malley also joined the opinion regarding the standard for intent.

Intent.  On the issue of intent, the court held that to prove inequitable conduct, “the accused infringer must prove that the patentee acted with the specific intent to deceive the PTO.”

In other words, . . . the applicant knew of the reference, knew that it was material, and made a deliberate decision to withhold it.

The Federal Circuit has purported to use this intent standard for years, but has been permitting it to slide to gross negligence or even simple negligence (“should have known”) in recent years.  The court has now made clear that to prevail the accused infringer must prove a deliberate or specific intent to deceive the PTO.

The court also abolished its sliding scale treatment of intent and materiality.  Instead, the court held that “[i]ntent and materiality are separate requirements.”

[A] district court may not infer intent solely from materiality.  Instead, the court must weigh the evidence of intent to deceive independent of its analysis of materiality.

The court did hold that, because direct evidence of intent is rare, a court may infer intent from direct or indirect circumstantial evidence.  If multiple inferences can be drawn from the evidence, however, the court may not infer the specific intent to deceive.

[T]he evidence “must be sufficient to require a finding of deceitful intent in the light of all the circumstances.” . . . [W]hen there are multiple reasonable inferences that may be drawn, intent to deceive cannot be found.

The burden of proof does not lie with the patent holder.  The simple absence of a good faith explanation for withholding a material reference does not, by itself, prove intent to deceive.  The patent owner is not required to provide such an explanation.

Materiality.  Where the court had its biggest differences in opinion, and made the biggest change to the law, is regarding the materiality prong of inequitable conduct.

[T]he materiality required to establish inequitable conduct is but-for materiality.  When an applicant fails to disclose prior art to the PTO, that prior art is but-for material if the PTO would not have allowed a claim had it been aware of the undisclosed art.

The majority opinion next provided guidance on how to conduct the new “but-for” test.

[T]he court must determine whether the PTO would have allowed the claim if it had been aware of the undisclosed reference.  In making this determination, the court should apply the preponderance of the evidence standard and give claims their broadest reasonable construction.

This sounds like the court needs to conduct two separate assessments of the claims compared to the prior art.  On the validity assessment, the court must construe the claims under Markman in light of the specification and prosecution history and see if the prior art invalidates the claims by clear and convincing evidence.  On the inequitable conduct assessment, the court must give the claims their broadest reasonable construction and determine whether the prior art invalidates the claims by a preponderance of the evidence.  As much as the bright line rule is appreciated, this sounds like a lot more work for district courts.

The court went on to note that inequitable conduct should not be applied unless the patentee’s misconduct resulted in the unfair benefit of receiving an unwarranted claim.

The court did suggest one exception to its “but-for” test, probably in response to the concurring or dissenting opinions.  The exception is characterized as “cases of affirmative egregious misconduct.”  The example given is the submission of an unmistakably false affidavit.  In such cases, the misconduct is material regardless of the but-for standard.  The exception does not apply to omissions, but only to affirmative actions of misconduct.

The majority of the court specifically rejected the PTO’s materiality standard in PTO Rule 56.  The court held that it is not bound by PTO rules, the PTO standard changes too frequently, and the PTO standard has been what led to inequitable conduct abuse in the first place which required the present fix by the court.

Judge O’Malley’s Opinion

Judge O’Malley, the only member of the court to previously serve as a district court trial judge, filed a concurring opinion. 

She argued that inequitable conduct is an equitable doctrine and isn’t amenable to bright line rules.  Courts need flexibility to determine equitable remedies depending on the circumstances of the case.  She doesn’t believe that either the “but-for” test or the PTO’s Rule 56 standard provide the courts with such flexibility.

Judge O’Malley would find conduct to be material if:  (1) but for the conduct, the patent would not have issued; (2) the conduct constitutes a false or misleading representation of fact (false on its face or if so determined based on omitted information); or (3) the court finds that the behavior is so offensive that the integrity of the PTO process as to that application is wholly undermined.

The second prong of her test would seem to be no better than the current situation.  Litigation would ensue over whether the factual representation was false or misleading.  She seemed to disregard the policy considerations of too many allegations of inequitable conduct and the dumping of references on the PTO.  These considerations underlied the majority’s opinion.

Dissenting Opinion

Judge Bryson, joined by Judges Gajarsa, Dyk, and Prost, filed a dissenting opinion.

The dissent appears to agree with the other members of the court that the requisite intent should be a specific intent to deceive the PTO and there should be no sliding scale with materiality.  The dissent clearly disagrees with the majority, however, on the standard for materiality.

The dissent advocates following the PTO’s guidance as propounded in its Rule 56.  After all, we are talking about conduct before the agency.  The court should defer to its expertise in this matter.

The majority opinion goes too far as the “but-for” materiality standard will effectively demolish the inequitable conduct defense and permit lying to or withholding information from the PTO during prosecution. 

Other, simpler remedies to alleviate the glut of inequitable conduct allegations are available to the court.  These would include requiring that it be pled with specificity and not as part of a fishing expedition; sanctions to those alleging it without factual or legal basis under Rule 11; and because it is an equitable doctrine, the court could simply not impose a penalty even if the requisite intent and materiality are found.  The PTO argued in its brief that if the courts strictly adhere to the “clear and convincing” evidentiary standard, the problem of dumping references on the PTO could be alleviated.

The PTO does not have the ability to make inequitable conduct determinations on its own.  The majority’s new materiality standard will effectively abolish inequitable conduct.


This case represents a significant change to patent law and will affect both litigation and prosecution.  Accused infringers must now have evidence of misconduct and cannot simply use inequitable conduct as a litigation tactic.

The majority holds that a patent should only be held unenforceable due to inequitable conduct when the misstatement or omission is particularly egregious, while the dissent is more protective of the public and wants to hold applicants to a stricter standard.

Does this mean that attorneys and applicants will now be lying and withholding information from the PTO in most cases?  There will certainly be applicants and attorneys who do so.  In general, the rest of the world does not have a duty of disclosure or an inequitable conduct defense.  This could simply be another way to attempt to harmonize.

The lesson to take away from the opinion of the court is that as long as applicants disclose to the PTO all references that they know to be material, they should be shielded from inequitable conduct allegations.  This does not mean that material information can be deliberately withheld.

Campaign Against America Invents Act Intensifies

May 23, 2011

Some might say that they are a bit late to the game considering that the Patent Reform bill pending in Congress passed the Senate 95-5 in March and by a similar huge majority passed the House Judiciary Committee in April, but opposition to the America Invents Act is intensifying

Specifically, the issues of the virtual elimination of the current one year grace period and the change from a first-to-invent to a first-to-file regime are being attacked.  Clyde Prestowitz, founder and President of the Economic Strategy Institute argued against the bill last week on his Foreign Policy blog.  He argued that the reason that America leads the world in innovation by large margins is because of our inventor-friendly system of granting patents to the first true inventor, instead of whoever wins the race to the PTO. 

He noted that the bill is being pushed by large, multi-national corporations who will benefit most from the change in the law.  He also argued that foreign inventors will be at an advantage over US inventors under the bill’s provisions.  He urges President Obama to pressure Congress to kill the bill or to veto it if it passes.

Several other media outlets have picked up on this position and question whether Congress is trying to kill American innovation through the America Invents Act.

PTO Expands Pre-Office Action Interview Program

May 17, 2011

The PTO has expanded the program where it grants examiner interviews to applicants prior to the first Office Action.  Normally, an interview prior to a first Office Action is within the examiner’s discretion.  This pilot program, set to run for one year, makes such interview mandatory when requested by the applicant.


If an applicant desires such an interview, he must file a request electronically.  When the application comes up for examination, the examiner will conduct a prior art search and submit to the applicant a Pre-Interview Communication identifying rejections or objections.  The applicant is then given one month (extendable by one additional month) to decide to (1) cancel the interview request, (2) respond to the Pre-Interview Communication as if it were the first Office Action, or (3) schedule the interview.  The interview must take place within 2 months of the mailing date of the Pre-Interview Communication.  If the interview is scheduled, the applicant must file a proposed amendment or remarks.  These amendments and remarks will not be entered in the record, but will be used for discussion during the interview.

If the applicant decides not to have the interview or if agreement is not reached on all claims during the interview, the examiner will issue a First Action Interview Office Action which will provide a one month period for reply (extendable by one additional month).

To qualify for the program, the application must contain, or be amended to contain, no more than 3 independent claims, 20 total claims, and no multiple dependent claims.  The claims must be directed to a single invention or the applicant must make election of one invention without traverse.  The request must be filed at least one day prior to the date the first Office Action is entered into PAIR.  The application will not be advanced out of turn and no fee is required to participate in the program.

Patently-O reports that under the PTO’s prior Pre-Office Action Interview pilot program about 1/3 of applications were allowed on the first Office Action (compared to about 11% of applications outside the program). 

Early oral communication with the examiner can only be helpful in assisting the examiner’s understanding of the invention, the prior art, and the claimed features that make the invention patentable.  Too often, the first Office Action exposes the examiner’s misunderstanding of these issues.  The first reply is used to correct these misapprehensions and the real negotiation over the patentability of the claims does not begin until the second, usually final, Office Action.  Thus, this is another reason for the high number of RCEs.  

There seems to be little downside to this program, other than the shortened reply periods for responding to PTO communications.  This is another step in the right direction for the Kappos regime.  Now, if we can just get the Administration to fix the problems with the Patent Reform bill . . .

Details of the pilot program are available here.

Patent Prosecution Highway

May 11, 2011

The United States PTO has entered into an agreement with 15 other patent offices called the Patent Prosecution Highway.  This program is intended to permit the sharing of information and resources between patent offices in various countries in an effort to accelerate patent examination, and presumably increase patent quality, by reducing redundancies in the examination process.

Under this program, the applicant files a patent application in one country, usually the country where the inventor or assignee is located, and then files additional applications in other countries claiming priority to the first-filed application.  Once a patent claim is found to be allowable by the patent office where the application was first filed, the applicant may request that other patent offices fast track examination of the application.  Usually this means that the application will be taken up out of turn and moved near the front of the examination line.  This is a type of work-sharing program intended to reduce redundancy in examination.

The PTO originally required a petition fee for this program; as an incentive for more applicants to use the procedure, the fee was eliminated last year.

The PTO has also instituted pilot programs for trilateral accelerated examination with several countries.  This program permits applicants who receive a positive written opinion or international preliminary examination report issued by the USPTO or the other pilot program country stating that at least one claim meets the requirements of novelty, inventive step, and industrial applicability, to have the opportunity to accelerate examination of the application in the USPTO or the other pilot program country.  These pilot programs are scheduled to run for the next year or two but should be renewed.

The US has PPH agreements with the following countries:

United Kingdom

The PTO has PCT pilot programs with the following countries (expiration date):

Australia (April 13, 2012)
Austria (September 30, 2011)
EPO (January 28, 2012)
Finland (January 23, 2013)
Japan (January 28, 2012)
Korea (May 31, 2012)
Russia (September 30, 2011)
Spain (September 30, 2011)

For applicants that plan to file or have filed in any of these countries, the ability to accelerate examination in later-filed offices can be a significant advantage and should be seriously considered.

Patent Applications to Create Defensive Prior Art

May 5, 2011

I sometimes hear from inventors and companies that have come up with a new product and are worried that their competitors may get a patent on the product later.  Perhaps one of their competitors has done this in the past.  They believe that they came up with a product first and then their competitor filed a patent application covering the same product.  At a minimum, they have to respond to the competitor’s accusations of infringement by trying to prove an earlier invention date, etc.  At worst, they had to defend an expensive infringement suit.  Plus, the competitor used the patent for marketing purposes and hurt my client’s image in the field, perhaps with the accusation of infringement.

The first thing I tell such clients is that they should be scrupulously documenting their inventive activities.  The second thing is to file a patent application as soon as possible.  At least until the America Invents Act becomes law, the US system remains a first to invent system.  If the client can prove it was the first inventor, it should be able to get patent protection (assuming the invention is patentable) and not be subject to a competitor’s charge of patent infringement.

Sometimes the client is not really interested in patent protection, but just wants to be certain that a competitor can’t get a patent that would block the client from marketing its own product.  In that case, the client may want to make the invention public as soon as possible in order to create prior art that would preclude a competitor from later getting a patent on the same product. 

One option is to publish the invention in a journal or other printed publication.  In some scientific fields, this is a good option.  The publication process can be slow, however.  Another option is to publish information about the invention on the Internet.  This has the advantage of being almost instantaneous.  Due to the dynamic nature of the Internet, dating publications on the web can be tricky. 

A Better Option

For each of these options, especially Internet publication, the client may be waiving all rights to patent protection by making such publication, and almost definitely is giving up foreign patent rights.  Even if the client is absolutely certain that it is not interested in patent protection, I still advise another option–filing a patent application.  This option has the advantage of preserving patent rights, including foreign rights, in case the client has a change of mind, and creates a date certain for the information contained in the application.  Thus, the filing date of the application can be used against the competitor who tries to claim rights in the invention.

Furthermore, unless the applicant specifically requests otherwise, patent applications are published thereby creating prior art against the competitor’s attempts to patent the same or an obvious variation of the invention.  In the US, patent applications are published 18 months after their earliest priority date and are prior art as of their filing date.  For example, a patent application that is filed today would be published around November 5, 2012, but would be prior art as of May 5, 2011.  Thus, even if the competitor files prior to the application becoming public on November 5, 2012, if it is after today’s date, the published application is still prior art.  And applicants can request earlier publication if they want the invention to be made public sooner than 18 months from filing.

Sometimes the client originally says that it does not care about patent protection and merely seeks to protect itself defensively.  A year later, while the patent application is pending but has not yet been examined, the product is highly successful and the client wishes it had applied for a patent.  Without the pending application, patent rights would be be lost after the one year grace period, or in the case of foreign rights sooner.  Because the defensive patent application was filed, however, the application will be examined and the invention may still gain patent protection.

If the client truly decides that it does not desire a patent, a published patent application can simply be abandoned to avoid further expense.  This can be done either expressly, by filing a notice with the PTO, or by simply not responding to an Office Action.


A patent application can be a good vehicle for defensive purposes due to the publication of patent applications at the PTO.  Published applications become prior art as of their filing dates.  And filing a patent application near the beginning of the process preserves patent rights if the inventor changes his mind regarding whether such rights are desired.