Academic journal article Santa Clara Computer & High Technology Law Journal

IDS Practice after Therasense and the AIA: Decoupling the Link between Information Disclosure and Inequitable Conduct

Academic journal article Santa Clara Computer & High Technology Law Journal

IDS Practice after Therasense and the AIA: Decoupling the Link between Information Disclosure and Inequitable Conduct

Article excerpt

TABLE OF CONTENTS  I. Introduction II. Inequitable Conduct and the Duty of Disclosure: Recent     Developments     A. The Law of Inequitable Conduct        1. Inequitable Conduct Doctrine before Therasense        2. Inequitable Conduct Doctrine under Therasense           a. Materiality Standard under Therasense           b. Intent to Deceive Standard under Therasense     B. Post-Therasense Changes to Rule 56     C. Supplemental Examination III. The Impact of Inequitable Conduct Reform on Information      Disclosure      A. Therasense Will Not Stifle Information Flow to the         Patent Office         1. Incentives within the Patent System to Comply with the Duty            of Disclosure            a. Bolstering against Post-Issuance Challenges at the Patent               Office            b. Stronger Presumption of Validity over Prior Art               Considered by the Patent Office         2. The "Egregious Misconduct" Loophole in Therasense         3. Economic Incentives to Continue with PreTherasense IDS            Practices      B. Supplemental Examination Will Not Jeopardize the Duty of         Disclosure         1. Risk of Ex Parte Reexamination         2. The Fraud Provision in Supplemental Examination         3. Cost Associated with Supplemental Examination      C. Suggestions to the Patent Office for Deterring OverDisclosure IV. Conclusion 


The Code of Federal Regulations, at 37 C.F.R. [section] 1.56 (also known as Rule 56), establishes a duty of candor and good faith in dealing with the United States Patent and Trademark Office (hereinafter "Patent Office"). (1) This requires patent applicants and practitioners to disclose to the Patent Office all information known to be material to patentability (popularly known as the "duty of disclosure"). The duty of disclosure attaches to every individual who is involved with the preparation, filing and/or prosecution of the patent application. (2)

Rule 56 is intended to improve the quality of examination and the validity of patents, (3) but its influence is not limited to patent applications and the examination process. Rule 56 has long guided the determination of the materiality prong of the inequitable conduct defense, (4) which has had far-reaching effects in patent litigation. A finding of inequitable conduct can render an entire patent family unenforceable. (5) Chief Judge Rader, writing for the majority in Therasense, Inc. v. Becton, Dickinson & Co., (6) famously called the doctrine of inequitable conduct the "atomic bomb" of patent law. (7) Allegations of inequitable conduct form "a dark cloud over the [litigated] patent's validity." (8) It increases overall litigation costs, discourages settlements, portrays the patentee as a "bad actor," and can destroy the reputation of patent prosecutors. (9)

Due to the potential windfalls and lack of disincentives for alleging inequitable conduct, defendants in patent infringement suits routinely use this defense as a part of their litigation strategy. (10) The United States Court of Appeals for the Federal Circuit ("Federal Circuit") has long recognized this problem. Judge Nichols in Burlington Industries, Inc. v. Dayco Corp. (11) calls it an "absolute plague" upon the patent litigation system. (12)

The proliferation of inequitable conduct charges has led patent applicants and practitioners to err on the side of over-disclosure in their Information Disclosure Statement (IDS) practices, (13) which some argue reduces the quality of patent examination. (14) The Therasense Court expressed concern that the specter of inequitable conduct allegations has caused many patent applicants and practitioners to overflow the Patent Office with a "deluge of prior art references, most of which have marginal value," in order to avoid inequitable conduct allegations. (15) The Court further noted that over-disclosure puts unnecessary strain on the Patent Office's limited examining resources, increases backlog, and ultimately hurts the quality of patents issued by the Office. …

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