Academic journal article Marquette Intellectual Property Law Review

Rethinking Patent Fraud Enforcement in a Reform Era

Academic journal article Marquette Intellectual Property Law Review

Rethinking Patent Fraud Enforcement in a Reform Era

Article excerpt

INTRODUCTION

I. A COMPROMISED STANDARD: THE CURRENT DOCTRINE OF
   INEQUITABLE CONDUCT
     A. Compromised Implementation: Institutional Conflict in
        the Assessment of Inequitable Conduct
     B. Compromised Authority of the Public Interest
II. RETHINKING THE PATENT FRAUD COMPROMISE
CONCLUSION

"As a political matter, piecemeal legislation to address inequitable conduct is not realistic. A call for simply relieving patent attorneys and applicants from the consequences of 'fraud' and 'inequitable conduct' will hardly evoke sympathetic attention from busy legislators and committee staffs." (1)

INTRODUCTION

A key element of our patent system is the desire to prevent a patentee from benefiting from potentially fraudulent behavior during the patent application process. Policing patent fraud prevents a patentee from obtaining a significant monopoly, either through active malfeasance or passive complicity, by disclosing incorrect or inaccurate information to the United States Patent and Trademark Office ("USPTO"). Beyond this equitable basis, the existence of legal mechanisms that prevent patent fraud serves to uphold the fundamental basis of the "patent bargain," which rests on the full and accurate disclosure of all relevant information relating to the invention. (2) Thus, the existence of policing mechanisms for fraud--in any form--is absolutely vital to uphold the transparency of any patent system.

A significant challenge exists, then, where, as in the United States, the policing mechanisms for fraud are deeply compromised by a jurisprudential standard that has created confusion for the patent community. We speak, of course, of the Court of Appeals for the Federal Circuit's ("Federal Circuit") recent re-examination of the materiality standard for the doctrine of inequitable conduct in cases such as eSpeed, Inc. v. BrokerTec USA, L.L.C., (3) McKesson Information Solutions, Inc. v. Bridge Medical, Inc., (4) Nilssen v. Osram Sylvania, Inc., (5) and Pfizer, Inc. v. Teva Pharmaceuticals USA, Inc. (6) The difficulty of policing fraud mechanisms arises from one particular jurisprudential choice: the Federal Circuit's failure to adopt the current materiality standard outlined in Rule 1.56(b). (7) This current standard replaced the earlier "reasonable examiner" standard, originally promulgated by USPTO in 1977. (8) While the Federal Circuit has affirmed findings of materiality based upon the 1992 Rule 1.56 standard, (9) it has declined to specifically address whether the 1992 Rule 1.56 standard replaced the 1977 "reasonable examiner" standard. Indeed, the Federal Circuit began to suggest that the sole standard should be the "reasonable examiner" standard. (10) These varying approaches have created a jurisprudential jumble that fails to offer significant certainty in assessing what standard will be applied to assess materiality during prosecution and enforcement of an issued patent.

The Federal Circuit's jurisprudential choice has proven once again to be controversial prompting new scholarly solutions (11) and new legislative proposals. (12) The controversy is organizing itself along familiar lines as everyone offers different ways of revising the materiality standard. One more stab at revising the materiality standard, at this point, may simply not work. In fact, instead of revising the materiality standard and the broader doctrine of inequitable conduct--of which the materiality standard is a key element--it might be time to revisit the implicit bargain represented by the entire doctrine of inequitable conduct.

This implicit bargain consists of three key assumptions. First, the doctrine of inequitable conduct itself rests in equity rather than an articulated statutory standard. (13) Second, the doctrine of inequitable conduct presumes only a competitor (and not other interested third parties or the government) can effectively police the patent fraud. (14) Third, the doctrine of inequitable conduct asserts the best way for a competitor to raise the issue of patent fraud is as a defense (and not through an independent private right of action). …

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