Measuring the Plague of Inequitable Conduct

In Therasense, the en banc Federal Circuit is poised to consider fundamental questions of the law of inequitable conduct.  Some members of the court have called the doctrine’s current state a “scourge” and a “plague” on the patent system because inequitable conduct is alleged in so many patent cases. 

I searched LexisNexis for federal district court and appellate decisions that mention the term “inequitable conduct” and used those results to create the time-series charts below. As the charts demonstrate, the number of decisions discussing inequitable conduct has continued to dramatically rise even after the Federal Circuit’s 1988 Kingsdown decision.

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In his recent article, Professor Mammen analyzed the prevalence inequitable conduct by looking at federal court complaints (inter alia).  [Read Mammen’s article] I compiled his data into the following chart that shows the dramatic rise in the percentage of patent lawsuits where inequitable conduct is pled (typically in the answer as a defense to charges of patent infringement.)  Mammen article suggests that the chart below is a conservative calculation (because pleadings are difficult to find and search) and that the actual frequency of inequitable conduct allegations may reach to 60% of patent lawsuits.

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87 thoughts on “Measuring the Plague of Inequitable Conduct

  1. 87

    EG:

    Did you know that Mr. Justice Brennan cited the Augean Stable fable in a footnote to the 1970’s patent case of Sakraida v. Ag Pro as follows:

    [ Footnote 1 ] Among the labors of Hercules is the following:

    “Heracles now set out to perform his fifth Labour, and this time his task was to cleanse the stables of Augeas in a single day. Augeas was a rich king of Elis, who had three thousand cattle. At night the cattle always stood in a great court surrounded with walls, close to the king’s palace, and as it was quite ten years since the servants had cleaned it out, there was enough refuse in the court to build up a high mountain. Heracles went to Augeas and asked if he would give him the tenth part of his flocks if he thoroughly cleansed his stables in a single day. The king looked upon this as such an absolutely impossible feat that he would not have minded promising his kingdom as a reward for it, so he laughed and said, `Set to work, we shall not quarrel about the wages,’ and he further promised distinctly to give Heracles what he asked, and this he did in the presence of Phyleus, his eldest son, who happened to be there. The next morning Heracles set to work, but even his strong arms would have failed to accomplish the task if they had not been aided by his mother-wit. He compelled a mighty torrent to work for him, but you would hardly guess how he did it. First he opened great gates on two opposite sides of the court, and then he went to the stream, and when he had blocked up its regular course with great stones, he conducted it to the court that required to be cleansed, so that the water streamed in at one end and streamed out at the other, carrying away all the dirt with it. Before evening the stream had done its work and was restored to its usual course.” C. Witt, Classic Mythology 119-120 (1883).

    No need for an encyclopedia.

  2. 85

    One can’t expect an examiner to know all or see all. Allow the public to participate before allowance as they do at the EPO.

    The public is already allowed to participate before Allowance. See, e.g., Rule 1.99.

  3. 84

    Dear ping, the “rub” ie the “essence” or, alternatively, the catch/snag/problem/inconvenience/difficulty/fly in the ointment might be self-evident to you; it isn’t to me. I have no idea why preponderance = rub. Even with the ordinary civil law “preponderance” standard of proof, your precious presumption of validity is undisturbed.

    As you don’t do answers, I must hope that another reader will enlighten me.

    Also, I don’t like the tone of your “ah”. What’s wrong with “ay”?

  4. 83

    with the result hanging on the preponderance of evidence?

    Ah, there’s the rub, eh Maxie?

  5. 82

    SG, a clarification. Don’t be fooled by the misleading name “opposition”. Opposition in the EPO is like what the UK Act of 1949 called “Belated Opposition”. It is post-issue.

    In the EPO the public can participate before allowance, Article 115 EPC (peer to patent), but in doing so they don’t become a party to the proceedings. Conversely, the opposition process in the EPO is full-blown inter partes disputed adversarial proceedings, but can’t be initiated till after the patent issues.

    Pre-issue opposition used to be the norm in patents in Europe. Doesn’t work though (ask the Brits and the Germans). Canny competitors oppose, then infringe. Applicant can’t get the app to issue until the oppn has run its course; sometimes that takes the full term of the patent. Meanwhile, the Applicant can’t assert till he’s got the patent to issue.

    With oppn post-issue though, Applicant can ask the EPO for expedited handling and get the app through to issue in very short order. Infringement proceedings can commence the day the patent issues. As it happens, American corporations are usually the ones who issue proceedings the day their European patent issues. The infringer might then oppose, but will it do him any good?

    SG thanks for the point about evidence in pharma apps. I have been arguing for years on these pages that a PTO Examiner, working alone, has no chance to question such data. But how about a competitor, with laboratories as big as those of Applicant, and with counsel as aggressive as that of Patentee, ranged against him in EPO opposition, with the result hanging on the preponderance of evidence? Bring it on, I say.

  6. 81

    “Someone mentioned opposition — that process works awfully well in TM and in EPO patent prosecution. Wonder why the patent side of USPTO missed the boat. Much better to encourage the public to engage in the process after the examiner’s review but before allowance. Go to an opposition/cancellation paradigm like TM.”

    Couldn’t agree more!!!

    Personally I find that there is an increasing number of misrepresentations by pharmaceutical companies particularly when trying to demonstrate and inventive step for their combination of drugs over similar combinations in the prior art.

    And they all mostly play they same game; use non-equivalent dosages which misleads the examiner who doesn’t pick up on it.

    One can’t expect an examiner to know all or see all. Allow the public to participate before allowance as they do at the EPO.

  7. 80

    What is cheating about a good faith belief in the validity of the claims over the art as a basis for non disclosure?

  8. 79

    IANAE, you are against cheating, but you are unwilling to clearly define the rules.

    I’m unwilling to define them so clearly that people can deliberately skirt the edges.

    Nobody is even remotely suggesting that we penalize people who “make a wrong guess”. That’s never been the standard. Nor has “I think these claims are valid, so I have nothing to disclose”.

    The current standard is something along the lines that you have to disclose anything that would tend to suggest prima facie invalidity of a claim, or anything a reasonable examiner would want to see, or the closest prior art in any event. That’s a perfectly workable test, as long as the courts allow honest applicants to make reasonable decisions without penalty.

  9. 77

    IANAE, you are against cheating, but you are unwilling to clearly define the rules.

    In terms of morality, I suggest that a person who is unwilling to clearly define rules is more immoral than a person who has no clear idea what the rules are but makes a wrong guess.

  10. 76

    Did Ned really just say that raising an inequitable conduct defense is “terrorism”?

    [rubs eyes]
    Posted by: Malcolm Mooney | Jun 03, 2010 at 06:27 PM

    With no objective standard for materiality of a reference, every non disclosure is fodder for charge of inequitable conduct. So yes, terror causes the disclosure of every reference.

  11. 74

    What I wanted to know was why it is so important to the deliberations of the courts when looking at infringement and validity issues in patent disputes.

    It’s mostly important before the PTO, but the court happens to be where the remedy is applied.

    I want to see not only more honesty in patent practice, but also more complete examination. If we’re going to have an administrative procedure for granting the right to sue people and shut down their company, I’d like for the administrative body to do as close as possible to a fair and complete job before granting that right. Better patents produce less uncertain litigation, which is good news for defendants who don’t always have the choice not to litigate.

    I suspect that ping is thinking along similar lines. (That’s not a question ping. Feel no compunction to reply. Please.)

    I see all kinds of problems with that last statement of yours.

  12. 73

    Many years ago, when I first entered this field, I was asked by a partner to research inventorship misjoinder. I looked for CAFC cases on the subject, and was astounded at the volume of hits — inventorship misjoinder (with an accompanying accusation of IC) was a catch-all way for a defendant to attack a patent.

    Short of punishing parties for bringing a false charge (i.e., making IC akin to slander), I don’t think we’re going to be easily rid of this.

  13. 72

    Well, IANAE, I have to say thanks for that answer at 4.37pm yesterday but I’m sorry I find it so disappointing. My fault entirely. I grasped all that morality stuff already of course. What I wanted to know was why it is so important to the deliberations of the courts when looking at infringement and validity issues in patent disputes. Before we adjudicate, must we perform a binary sort of all litigants into “deserving” and “undeserving” classes according to their moral compass, and then devise the relief given by the court in dependence on that perception? What dreadful consequence will follow if we decline to do that?

    I suspect that ping is thinking along similar lines. (That’s not a question ping. Feel no compunction to reply. Please.)

  14. 70

    Soon we’re going to just have to watch out for terrorists infiltrating the courts and raising all kinds of IC defenses on behalf of defendants. On the plus side, at least we can abolish the Dept of Homeland (Tyrany and) Security.

  15. 69

    Did Ned really just say that raising an inequitable conduct defense is “terrorism”?

    [rubs eyes]

  16. 68

    Like those criminals who give no thought at all to the deterrent of a potential jail term.

    Not sure how these are really any different than criminals who give thought to the deterrent (but still are criminals)…

  17. 66

    1. Why’s that then?

    The people who cheat when there’s nothing at stake are fundamentally dishonest. They’re the ones you don’t want practicing law at all. They undermine the reliability of the entire system. Like those criminals who give no thought at all to the deterrent of a potential jail term.

    The people who cheat for profit are fundamentally greedy. They are simply working to incentives, and you can manage their behavior to some extent by managing their incentives. They’re also more predictable, so easier to cope with when they are encountered.

    2. Who’s “you”

    “You” is “one”. I contemplated changing all my pronouns from second person to third, but sometimes I get lazy about that. I’m too colloquial for my own good.

  18. 65

    At 10.38 this morning IANAE wrote ” The people who cheat when there’s nothing at stake are really the ones you need to watch out for.”

    Two questions:

    1. Why’s that then? (What dreadful thing will happen if I don’t bother to do that) and

    2. Who’s “you” (Do you mean Rader CJ, for example) and why does he need to concern himself so specially (what dreadful thing will happen if he doesn’t)?

  19. 63

    Nanu nanu, your litany of nightmares (all of which relate to negligence and not to willful misconduct) are exactly why “inequitable conduct” is the wrong solution. Every litigator worth his salt could take any one of that litany and turn what amounts to a molehill into a mountain. It would drive up and does drive up litigation costs to an exorbitant degree, and it’s terrorism in fact helps to also drive up prosecution costs to the exorbitant degree just to avoid a charge of inequitable conduct. All the while we lose sight of the forest while focusing on the trees. The issue is whether the patent contains valid claims and whether those valid claims are infringed.

    Now there are reasons for broad and narrower claims in a patent. They are there to protect the patent owner against unknown prior art. The fact that there are broader claims in the patent than the prior art would allow is not a defect in the patent system. Rather, it is designed into the patent system because we know that examinations are not perfect and will never be perfect.

    While re-examination has its flaws, it does exist to re-examine potentially invalid claims asserted by the patent owner. Accused infringers will certainly research the prior art and bring it to the attention of the patent office. If a substantial new question of patentability is raised, the claims will be re-examined. The public is largely protected against the flawed examinations. We really do not need a doctrine of inequitable conduct directed to nondisclosure of material prior art where that material prior art was published to protect the public.

    Furthermore, the very existence of re-examination and the very real loss of past damages if the claim is amended, operates to independently provide a strong incentive against any willful nondisclosure of invalidating prior art. No one in their right mind would willfully fail to disclose invalidating prior art in some deluded expectation that they could become rich by successfully enforcing invalid claims. That is complete nonsense.

    A far more serious issue in my opinion is the issue of lack of clarity in claims: the use of vague terms, the use of functional language at the point of novelty, the use of weasel words like “substantially,” all contribute mightily to the issues discussed in cases such as O’Reilly v. Morse, Westinghouse vs. Boyden Power Brake and Halliburton. We really need to pay closer attention to section 112, paragraph 2, and we really need to reverse cases like In re Donaldson which seemingly authorized means plus function claims where the most crucial element is expressed in functional terms and which is not authorized in my view by section 112, paragraph 6.

  20. 62

    Seven, I see your point — to some degree. A and B are shown together in the new reference. But they still need to be combined with press C. Now consider that the original prosecution may have already included the issue of the combination of A and B with C, regardless of whether A and B are disclosed in the same reference. In this regard, a single reference showing both combined does not raise a substantial new question of patentability.

  21. 61

    ping,

    You do understand that the examiners in the CRU do only reexams and do not examine regular applications? So they aren’t working on “the backlog” in any case.

    Anyway, its not really about “trust[ing] the examination.” We are talking about references the original examiner never saw. Or are you saying we should just blindly trust that the original examiner did a perfect search and must have seen all the relevant references even if they aren’t on an 892? If so, why do we need applicants to submit IDSs?

  22. 60

    and a lot of patents have issued that would not have issued in their current form had the disclosure requirements been satisfied.

    cite please.

  23. 59

    But in all seriousness, the inequitable conduct problem is real. Whether you’re talking about bonehead stupidity, gross negligence occasioned by ridiculously low per-application budgets, patent agents that don’t explain the disclosure requirements to inventors, apathy, or outright fraud, a lot of patent owners are simply not disclosing what they should during prosecution of their patents, and a lot of patents have issued that would not have issued in their current form had the disclosure requirements been satisfied. Large companies file patent applications covering products that other divisions of the same company put out years ago. Small companies that fail to disclose early commercial public demos and later frivolously try to chalk them up to “experimental use.” Or inventors who come up with something potentially novel and original, but the patent agent broadens the claims during prosecution to cover something the inventor never thought he invented, for which ample prior art existed that the inventor knew about. Patent agents failing to disclose prior at they find out about during prosecution of related or foreign applications.

    You can argue whether this is “fraud” or not, but you can’t blame defendants for trying to exploit these flaws when the patent owner comes to the court accusing the defendant of “willful” patent infringement. The fact of the matter is that the people who prosecute patent applications are often too far removed from the enforcement of the later-issued patent. The prosecutors’ incentive and that of the inventor is often simply to get the patent issued. Attempts by the prosecutor to be more careful and diligent during prosecution in terms of disclosure requirements are often seen as obstructionist or unnecessarily adding to the cost. Inequitable conduct and the moral cloud it casts over the prosecutor and the inventor is really the only way to police the natural incentives tipping in favor of non-disclosure and sloppiness.

  24. 58

    it would be better policy to keep the standard relatively low for granting reexamination

    Like they have nothing better to do. Oh wait, – they do, they still have this thing called a backlog.

    The better part of “policy” is to examine and trust the examination. You got issues with the examination? Be more vocal about examination quality. Do it right the first time.

  25. 57

    Max: I’m curious. Which is badder: cheating to obtain a patent that is valid despite the cheating, or cheating to obtain a patent, the very issue of which intimidates an entire industry, all the while knowing that your tool of intimidation is a fraud on the public.

    I consider them about the same. In this context, validity is no more than an ex post justification of the bad conduct. If you don’t think the art is invalidating, all the more reason not to conceal it and to put your arguments over it (if necessary) in the file wrapper. Having a clean file wrapper changes the scope of the patent too, which could still mean you’re not getting the patent you’re entitled to.

    I’m actually more concerned about people who cheat to obtain valid patents. At least with a person who cheats for personal gain, you know where you stand. The people who cheat when there’s nothing at stake are really the ones you need to watch out for.

  26. 56

    7,

    Neither would my clients, nor would I ever recommend such a course. But not everyone thinks or practices the same way, especially when the stakes are high.

    My point is in response to Ned, where he suggests that reexam is a cure-all that will inevitably discourage withholding references. IMHO, that is not necessarily the case given the USPTO’s rather dramatic tack towards not granting reexams based on a strict technical definition of what is “non-cumulative.”

    While reexam may once have been a relatively sure bet for settling questions of validity based on new references in the USPTO outside of litigation, that is simply not the case nowadays. I have seen an analysis of “bounce rates” showing that in the 3rd quarter of ’09, 60% of ex-parte reexam requests were refused, 44% for 4th Q ’09 and 44% for the 1st Q of 2010. IDK, but those seem very high compared to statistics I have seen for years past, and contrast strongly with the whining I have heard for years from the plaintiff’s bar that 95% of reexams are granted.

    BTW, as a practitioner considering whether to file a reexam request, you won’t even necessarily know anymore that the PTO has rejected an assertion that a particular reference raises a SNQ, because the entire file wrapper of requests where processing has been “terminated” due to a finding that the request does not facially demonstrate a “new teaching” are now non-public and are not available on PAIR. If you doubt this, take a look at PAIR for a few recent inter-partes reexam requests. So much for promoting “quiet title” in patents.

    If we want to have a policy that encourages people to have references considered so as to remove possible questions of validity and IC, then it seems to me all this is a counter-productive move on the part of the USPTO. In my view, it would be better policy to keep the standard relatively low for granting reexamination and then simply confirm claims where the references are not that good.

  27. 55

    “Ned,

    That is one fact pattern – here is another that is more germane to my point:

    The claim is for a widget comprising:
    Element A;
    Element B; and
    Element C.

    In original prosecution, the claim is rejected over Ref 1 teaching element A, in view of Ref 2 teaching element B, and in further view of Ref 3 teaching element C. The claim is allowed without comment by the examiner after the applicant argues that a PHOSITA would not have combined all three Refs. 1, 2, and 3. Later, Ref. 4 turns up that teaches both element A and B, and reexam is requested based on the combination of Ref 4 with Ref 3. Under the “new, non-cumulative technological teaching” standard, there is no substantial new question of patentability because Ref 4 is considered cumulative: elements A and B were already “taught” by references in original prosecution. There is no new “technological” teaching.

    Remember that the standard for a “substantial new question of patentability” (SNQ) upon which reexam can be ordered (whether there is a “substantial likelihood that a reasonable examiner would have considered the reference important in deciding whether the claim is patentable”) very closely parallels the “reasonable examiner” standard for materiality in inequitable conduct. As close as these standards are, if a new reference is considered “cumulative” such that it does not raise a SNQ, then it seems it is also likely “cumulative” such that it is not material, and therefore raises no issue of inequitable conduct if intentionally withheld.

    Now getting back to the fact pattern, if the applicant is shall we say, less than scrupulous, might there not be a temptation to withhold Ref 4, knowing that a reexam request based on Ref 4 will likely not be granted if someone happens to find it, and citing it may hose the allowance of the claim?”

    Are you Mooney, who lives in a world where everyone is a liar and a cheater? Not a one of my clients would ever order or suggest that I withhold Ref 4, or not cite it.

    My clients want patents that are actually valid. This means not having the axe of IC looming over their head in litigation.

  28. 54

    Lionel, I’m all in favour of using the file history to deal with a Declarant who assured the PTO that, when the spec says “grey” it means “white” while, in court, the witness evidence adduced is that “grey” means “black”.

    But people (engineers)do read issued patents and understand “grey” if “grey” is what is written. If you tell them that they have got it wrong and that “grey” actually means “white” because that is what it says in the file history, one invites ridicule, especially when it later turns out that “grey” meant “black” after all.

    These days, I really do not think that lawyers can risk any more ridicule from the voters.

  29. 53

    I agree with eliminating the disclosure requirement. That seems to be the basis for IC in a number of cases and disclosure is not a requirement in any of the other important patent states.

    However, I do believe the file wrapper should be available for litigation. Whether it’s efficient or not, I believe it would be unjust to allow a patentee to argue opposite positions in the patent office and court.

  30. 52

    IANAE writes:

    “Cheating to obtain a patent that happens to be valid is still a bad thing. Any rule that fails to take that into account is asking for trouble.”

    I’m curious. Which is badder: cheating to obtain a patent that is valid despite the cheating, or cheating to obtain a patent, the very issue of which intimidates an entire industry, all the while knowing that your tool of intimidation is a fraud on the public.

    IANAE, with the case of the patent that’s valid anyway, how bad is “bad”? Bad enough to justify gumming up the wheels of justice, when the Rules you want are tailor-made to go after every person who might have “cheated” just a little but still has a perfectly valid patent? Is that a mischief that must be stamped out at any price? Seriously?

    But me, I’m not bothered, merely curious. Not my jurisdiction. So, yes please, I do “ask for trouble”. If “trouble” is not what I see already, I’m curious to see what real “trouble” looks like.

  31. 51

    Ned,

    That is one fact pattern – here is another that is more germane to my point:

    The claim is for a widget comprising:
    Element A;
    Element B; and
    Element C.

    In original prosecution, the claim is rejected over Ref 1 teaching element A, in view of Ref 2 teaching element B, and in further view of Ref 3 teaching element C. The claim is allowed without comment by the examiner after the applicant argues that a PHOSITA would not have combined all three Refs. 1, 2, and 3. Later, Ref. 4 turns up that teaches both element A and B, and reexam is requested based on the combination of Ref 4 with Ref 3. Under the “new, non-cumulative technological teaching” standard, there is no substantial new question of patentability because Ref 4 is considered cumulative: elements A and B were already “taught” by references in original prosecution. There is no new “technological” teaching.

    Remember that the standard for a “substantial new question of patentability” (SNQ) upon which reexam can be ordered (whether there is a “substantial likelihood that a reasonable examiner would have considered the reference important in deciding whether the claim is patentable”) very closely parallels the “reasonable examiner” standard for materiality in inequitable conduct. As close as these standards are, if a new reference is considered “cumulative” such that it does not raise a SNQ, then it seems it is also likely “cumulative” such that it is not material, and therefore raises no issue of inequitable conduct if intentionally withheld.

    Now getting back to the fact pattern, if the applicant is shall we say, less than scrupulous, might there not be a temptation to withhold Ref 4, knowing that a reexam request based on Ref 4 will likely not be granted if someone happens to find it, and citing it may hose the allowance of the claim?

  32. 49

    Could be the examiner actually applies the word “substantial?” — Ned Heller | Jun 02, 2010 at 04:41 PM

    LOL. Not in their vocabulary, that one.

    Someone mentioned opposition — that process works awfully well in TM and in EPO patent prosecution. Wonder why the patent side of USPTO missed the boat. Much better to encourage the public to engage in the process after the examiner’s review but before allowance. Go to an opposition/cancellation paradigm like TM.

    The TM side has always been better organized and thought out. And the examiners are a pleasure to deal with.

    Once FTF becomes reality, opposition proceedings could include whatever that procedure is that’s going to replace interference.

  33. 48

    Malcolm, not at all. This kind of behavior is exactly what has to be deterred. It is a form of misrepresentation.

  34. 47

    Publius, I am not sure I follow you, but let’s see.

    So, I file a request over art not disclosed. I state it is not cumulative because it shows feature A in combination with B, whereas the art before the examine showed feature A in combination with C, but B is closer than C.

    Is this the fact pattern?

    And they still say the reference is cumulative?

    Perhaps, C is not all that much different than B. Could be the examiner actually applies the word “substantial?”

  35. 46

    Now, that is fraud on the PTO in my opinion.

    Mine, too. And why is that you want such behavior to go unpunished?

  36. 45

    This requirement is being extensively used by the office these days to bounce reexam requests based on an assertion that newly cited references are cumulative of references that were applied in original prosecution. The way this is being interpreted, if the original examiner said the claim limitation was somehow “taught” in some reference in original prosecution, then any new reference teaching that limitation is cumulative, even if it adds additional teachings or information relative to the limitation.

    Not sure why this is a problem. In fact, it may help to keep applicants from abusing the re-exam process, e.g., applicants who file re-exams for purposes other than addressing prior art issues.

  37. 44

    IANAE, no, not randomly. If you enforce a patent, the prior art will be found.

    Remember that case a about ten years ago, Yamasaki or something like that, where the inventor filed a translation of page one of a foreign reference and the critical disclosure was on page 2? That kind of sharp practice will be found out.

    I was involved in another case with similar facts. The examiner got hold of and cited page 1 of a reference. Page 2 was not cited. It had the critical disclosure. Since we could not depose the examiner, we were left to speculate on just how he got only page 1. I am willing to bet that someone on the inventor’s prosecution team gave it to him in some way it could not be traced. The whole affair was very mysterious, but the attempt was to clear. They wanted the examiner to cite the reference without indicating that he had only page 1. Now, that is fraud on the PTO in my opinion.

  38. 43

    It seems to me it is becoming increasingly possible to “cheat” by not disclosing invalidating prior art, given the patent office’s recent tack on what is required to put a patent into reexamination. Check out the “new, non-cumulative technological teaching” requirement inserted in MPEP 2616 in the July 2008 edition. This requirement is being extensively used by the office these days to bounce reexam requests based on an assertion that newly cited references are cumulative of references that were applied in original prosecution. The way this is being interpreted, if the original examiner said the claim limitation was somehow “taught” in some reference in original prosecution, then any new reference teaching that limitation is cumulative, even if it adds additional teachings or information relative to the limitation.

  39. 42

    IANAE, the supreme court cases all involved intentional misrepresentation of facts or willful non disclosure of invalidating prior art that was of the public use variety that is otherwise hard to discover.

    Okay. That’s to be expected. You’re more likely to cheat if you’re less likely to get caught.

    What does that have to do with anything?

    Given reexaminations, it is impossible to “cheat” by not disclosing invalidating, published art. The public will find it and use it to club you over the head with it regardless.

    Do you find that happens a lot? People randomly requesting re-exam of your clients’ applications based on art they found in the parking lot? It must happen to you all the time, since you don’t think you ever have to file an IDS for claims you’ve drafted.

  40. 41

    IANAE, the supreme court cases all involved intentional misrepresentation of facts or willful non disclosure of invalidating prior art that was of the public use variety that is otherwise hard to discover. Given reexaminations, it is impossible to “cheat” by not disclosing invalidating, published art. The public will find it and use it to club you over the head with it regardless. Your client will lose past damages and you will lose your client.

  41. 40

    THAT, my friend, is objective.

    And pointless.

    Cheating to obtain a patent that happens to be valid is still a bad thing. Any rule that fails to take that into account is asking for trouble.

    What you propose, in contrast, is akin to penalizing as willful infringement conduct which is objectively reasonable.

    My proposal that acting reasonably should be the test for not-inequitable-conduct is akin to penalizing objectively reasonable conduct?

  42. 39

    IANAE, “there never will be an objective test.”

    What about “the patent must first be held invalid over the non disclosed reference?”

    THAT, my friend, is objective.

    What you propose, in contrast, is akin to penalizing as willful infringement conduct which is objectively reasonable.

  43. 38

    IANAE, because a “reasonable examiner” standard is not objective.

    It’s objective enough for the court in every other area of law. Besides which, it’s probably the closest test to the actual boundary between honest prosecution and devious conduct.

    The current Rule 56 is no more objective, unless you twist it into a validity test, which makes it completely useless and redundant. Instead of using the words “reasonable examiner” it says the art has to be usable for what a reasonable examiner would do with it. Also, it’s not actually the test for inequitable conduct.

    There will never be a 100% objective test, because it’s a highly fact-specific question, and we don’t want people skirting the bright line boundary of the law. We’re looking for a mix of easy to determine and catching the guys who do bad things.

  44. 37

    IANAE, because a “reasonable examiner” standard is not objective.

    The bar and the PTO reached a conclusion twenty years ago that we needed an objective standard. That is why the PTO amended Rule 56 to make it objective.

    But the Feds have yet to adopt it.

  45. 35

    “”reasonable examiner” standard, which is anything but objective.”

    Sure it is, it’s based on an object, me. Don’t be jealous just because I got a whole standard named after me.

  46. 34

    Dennis, it would be interesting to count the number of references listed in patents vs. time. I am willing to bet in the days before Rule 56, 1977 and earlier, far fewer references were cited and that the number of references cited continues to grow.

    It might also be interesting to compare and contrast the number of references listed in US patents vs. the number listed the EPO or the PCT.

    I have always thought that the reason one did not need a duty of disclosure outside the US is the presence of oppositions. In the US, we now have reexaminations, but these are limited to publications.

    So I would make this proposal, similar to Babel Boy, but slightly different: Given the presence of reexaminations in the US, there be no duty of disclosure with respect to any reference that can be cited in a reexamination.

  47. 33

    The law is full of reasonable person standards. There’s nothing wrong with them. Besides, most cases of actual inequitable conduct involve withholding art because it’s the sort of thing the examiner would have wanted to see. We’re all really good at deciding what art we wish the examiner wouldn’t find out about, and that’s pretty much the reasonable examiner standard.

    Explain to me again why “disclose to the examiner whatever you have that the examiner probably wants to know about” is such an awful standard for a professional to adhere to, and why your current practice doesn’t substantially meet that standard.

  48. 32

    IANAE, au contraire, mon ami, you say on the one hand you support an objective standard, and on the other reject tying that standard to patentability or validity. What you are left with is the so-called “reasonable examiner” standard, which is anything but objective.

  49. 31

    Mooney confuses “sleazy” and “prudent”

    No, I’m talking about sleazy. You know, just not following the rules, taking advantage of the fact that a judge is unlikely to issue sanctions, failing to put stuff in expert reports, slipping new arguments into briefs, etc. You know, the thing that your typical sleazy litigator does all the time.

    Cue up the whiners. “That never happens.” “That’s really rare.” Those of us who have litigated in the past or who work with litigators now know better. Sleaze is routine at some firms because they know they can get away with it some of the time, and when they do it increases their chances of winning.

    As noted above, it’s a game. And if the refs aren’t doing their job, it’s an ugly game.

  50. 30

    I hear very few complaints that too many patents are getting issued

    Let 6 introduce you to his groklaw pals.

  51. 29

    Do you have any knowledge of patent litigation in England. I suspect BB does, and knows that it works much better without the PTO file wrapper. You might be surprised how well it works.

    Do you guys still wear wigs?

  52. 28

    Has anyone considered that IC may simply be happening more often now?

    Also, has anyone noticed that the numbers of patents out there has sky-rocketed? A good number of those are from “non-legacy” corps or individuals who may not grasp the system quite as well as the big boys and might lead to IC, or at least sloppy prosecution leading to a charge of IC.

    “Why is it surprising or undesirable that the assertion of this defense should rise at the same time as the business of patent litigation began to boom?”

    That’s basically what I’m saying.

    It all seems rather reasonable to me.

  53. 27

    Babel Boy: 2. Seal the record on the patent prosecution proceedings and make them off-limits to litigation.

    Michael Scott (David Brent, I guess, for you Brits): Truth be told, I think I thrive under a lack of accountability.

  54. 26

    Mooney confuses “sleazy” and “prudent”

    No big surprise here. He has clearly been waaaaay too close to “sleazy” for waaaaaay too long.

  55. 25

    2. Seal the record on the patent prosecution proceedings and make them off-limits to litigation.

    Good luck with that. The prosecution record is used for far more than IC during litigation, and can play a key role in claim construction.

    As to the topic at hand, IC will be mentioned in several decisions for every case where it is pled whether it is the subject of the decision or not, and it will be pled in every case where the defendant wishes to take discovery of plaintiff’s behavior before the patent office. Without an IC allegation/counterclaim, there’s no good way to discover most IC behavior. Even with IC pled, plaintiffs can often hide IC behind privilege. On the off chance IC is discovered without being pled, a defendant will likely not be able to amend its answer to include an IC defense/counterclaim.

    The prevalence of IC in pleadings has everything to do with pleading and discovery rules and little/nothing to do with how common IC is.

  56. 24

    I’m surprised it made you laugh MM. Do you have any knowledge of patent litigation in England. I suspect BB does, and knows that it works much better without the PTO file wrapper. You might be surprised how well it works. Cue Paul Cole.

  57. 23

    BB 2. Seal the record on the patent prosecution proceedings and make them off-limits to litigation.

    LOL.

  58. 22

    Paul The second is for the courts to materially raise the threshold and standards of pleading needed to triger inequitable conduct so that it becomes an unprofitable defence to plead in ordinary cases.

    I disagree. The standard is already so high that, at least in some Federal Circuit judges minds, it is impossible to meet absent discovery of an express admission of an intent to deceive. That standard is too high.

    If judges, including those on the Federal Circuit, believe that litigators are asserting the defense frivolously then the tool for addressing this problem is already in their hands: Rule 11 sanctions.

    I strongly suspect, however, that the “plague” of objectively frivolous inequitable conduct pleading is a drop in the bucket compared to the “plague” of objectively frivolous infringement pleading. But judges seem loathe to sanction litigators for sleazy behavior, although they sure do love to complain about them.

  59. 21

    You want to end this “scourage?”

    Simple two step solution.
    1. Eliminate the duty to disclose art.
    2. Seal the record on the patent prosecution proceedings and make them off-limits to litigation.

    If the infringement defendant wants to know what art the patentee had at the time of filing — use interrogatories and depositions. Such discovery should only be relevant to determine the state of the art at the time of filing, not IC. If plaintiff lies in response to discovery requests, then the FedRCivP has a number of remedies just short of detesticulation. [Bet that one doesn’t fall into the maw of Dennis’ filter.]

    The issue for litigation should not be what the patentee’s lawyer did or didn’t do during the application prosecution, and not what was known or not known to the applicant at the time of filing. The issue should be the actual state of the art at the time of filing.

    The US has to get away from this whole ex parte schtick that imposes these mind-numbingly “Augean” (thank you) disclosure burdens on applicants and their attorneys, forcing them to do the examiners’ job.

    My prior proposal is vastly superior to what we are now doing — allow the applicant to disclose whatever art he wishes to disclose, and the patent is examined and presumed valid only as to that art.

    Instead of making disclosure an onus, you make it an opportunity, and the strength of the patent is a function of the comprehensiveness of disclosure.

  60. 20

    Why is it surprising or undesirable that the assertion of this defense should rise at the same time as the business of patent litigation began to boom?

  61. 19

    Where is the materiality?

    Same place it is now.

    I don’t have the patience to re-explain to you the difference between “relevant” and “invalidating”. I was simply putting you forward as an example of a practitioner who thinks careful claim drafting is somehow a substitute for disclosure, and it doesn’t matter how you deal with the PTO as long as you obtain a valid claim.

  62. 18

    IANAE, wrote

    “I fully support the standards for inequitable conduct being tailored to be as objective as possible.”

    We finally agree.

    But, you then reveal that you do not fully understand what you just said:

    “And it should continue to exist, at least as long as people think they have no IDS obligations at all so long as they draft what they think are allowable claims.”

    So, in your view, you still can have intent to deceive while filing claims you believe to be fully patentable over non disclosed art and which are, in fact, using the objective standard, both patentable and valid over that art?

    Where is the materiality?

  63. 17

    Whether or not IC actually occurs or could be proven if it did, I’m sure that prudent litigators raise this issue at the outset to prevent procedural preclusion of this issue down the road. The answers as noted above, is to intervene with a category of action for IC that can be brought in a case if it is later actually discovered.

  64. 16

    Thanks Paul. You report that IC in English patent actions was “to little real benefit” and for me, not a seasoned UK litigator, that’s enlightening.

    If I read you right, abolition of IC has not hindered the English patents judges, in their task of dispensing justice. Interesting.

  65. 14

    Max Drei:

    We used to have an equivalent to inequitable conduct in England where amendment of a partially valid patent was discretionary depending upon patentee conduct. The complication added much to the complexity and expense of litigation, to little real benefit. It has now been dispensed with and there is an autoomatic right to amend, as in the US.

    I have not heard that outcomes in the UK are any less just than those in the US.

  66. 13

    Wow. Good ending from IANAE. Chimes with English IC.

    The teeth to IC in England engage (or used to) when a patent owner was found (in discovery phase) to have known about (but not told his adversary about) art which was prejudicial to validity. In such circumstances, the court would decline the equitable discretion to let the patent owner make a life-saving amendment to the patent to overcome the effect of the prior art.

    That always seemed to me to be good sense.

  67. 12

    Paul: So what would I do if I were a US litigator? Answer: much the same as US litigators are already doing, and for precisely the same reasons as in a European opposition. For better or worse inequitable conduct is a ground of objection to a US patent. A litigator acting for a defendant in US proceedings is under an obligation to his or her client to investigate that ground in the same way as any other, and if he or she finds that there is a arguable case to present, then to do so as fully and forcefully as possible. To suggest otherwise is simply to ask litigators to refrain from carrying out their professional duties to their clients.

    Exactly. When you sue someone and ask the court to shut down their business, you should expect them to defend themselves in any way they can.

    How often is invalidity pleaded? How often does it succeed? I hear very few complaints that too many patents are getting issued, or that invalidity is a “plague” that should only be pleaded in the clearest of cases.

    I fully support the standards for inequitable conduct being tailored to be as objective as possible, and to catch actual shenanigans while letting honest applicants and agents do their jobs. However, as long as it exists as a defense at all, it will be pleaded in pretty much every case because it exists as a defense and if it succeeds you win the entire case. And it should continue to exist, at least as long as people think they have no IDS obligations at all so long as they draft what they think are allowable claims.

  68. 11

    Paul, with IC available also in England, why then is it not invariably pleaded? Or is it pleaded but then not pursued? Is that because discovery is circumscribed?

  69. 10

    Paul, Hercules Hoffmann has a track record in the little English branch of the Augean stables. Is he still available for the main task, I wonder. Perhaps he can be prevailed upon at least to write an Amicus Brief, the pen being mightier, as it were, than the garden fork (and even perhaps mighty enough to release a tidal wave of reform)?

  70. 9

    “The situation can change in three ways.”

    Paul,

    Unfortunately, the third way (legislative action) is the only one that can “kill” this beast, and I’m not holding my breath that our Congress (once called by Mark Twain the “Insane Asylum for the Helpless”) will do anything on IC other than make it worse.

  71. 8

    “The way I see it, the judges created this steaming great Augean obstacle to the efficient administration of patent justice.”

    MaxDri,

    I had to look up the phrase “Augean” and boy does it fit the current situation with IC: link to en.wikipedia.org

  72. 7

    We in Europe should consider our own behaviour as a reality check before we start complaining about what happens in the US.

    One of the most common forms of inter partes proceeding over here is opposition before the EPO. There is a (thankfully relatively small) set of grounds on which objection can be made – not a patentable invention, not novel, lacking in inventive step, not enabled, etc. Once an opposition statement has been filed, it is not possible to add further grounds later in the procedure. So standard practice is to consider each and every ground of opposition, and endeavour if at all possible to make out a case on each available ground, even if the case on some of the grounds appears weak. It is difficult to know at the outset how proceedings will develop, and a ground of objection that appears weak initially may strengthen as the opposition proceeds e.g. as a result of incautious statements by the opposing party.

    So what would I do if I were a US litigator? Answer: much the same as US litigators are already doing, and for precisely the same reasons as in a European opposition. For better or worse inequitable conduct is a ground of objection to a US patent. A litigator acting for a defendant in US proceedings is under an obligation to his or her client to investigate that ground in the same way as any other, and if he or she finds that there is a arguable case to present, then to do so as fully and forcefully as possible. To suggest otherwise is simply to ask litigators to refrain from carrying out their professional duties to their clients.

    The situation can change in three ways. One if for prosecuting attorneys to exercise increased care in the cases that they handle. However, Cardinal Richlieu said: “Give me five lines written by the most honourable of men and I will find an excuse in them to hang him”. Given that patent specifications are longer than five lines and there is much complexity in the prosecution process, the opportunities for fault finding are vastly greater than for the brief document postulated by the Cardinal and it is not reasistic to suppose that increased attorney care can materially reduce the problem. The second is for the courts to materially raise the threshold and standards of pleading needed to triger inequitable conduct so that it becomes an unprofitable defence to plead in ordinary cases. The Federal Circuit is currently considering inequitable condict, and it is possible, but not certain, that there will be improvements along these lines. The third is legislative action.

    However, unless the situation changes, inequitable conduct allegations are likely to remain at their current level or to increase in future until the defence is raised in substantially all cases. Nobody with an acquaintance with human nature, the duty of litigators and the theory of games could presume otherwise.

  73. 6

    A few categories must be defined to assist in establishing the efficacy of the IC doctrine. First and foremost would be a determination of where actual infringement was found but the defense of IC precluded recovery. An additional analysis of that set of data would also be beneficial by determining whether the invalidating acts would actually further a finding of unpatentablity of the infringed claims pursuant to 35 USC 102 and 103. Then from the original set of data it would be beneficial to know which judges had the requisite academic background to qualify to represent individuals before the USPTO. With this data it will be possible to determine whether IC is used as a a proper judicial tool of adjudicating patent cases.

  74. 5

    Sorry for the double posting. I thought the first one had gone down the drain, so tried again.

  75. 4

    When I started, years ago, you had “Fraud on the Patent Office”. Wow, I thought. That must be rare. Then you changed to “Inequitable Conduct” and I wondered whether there would ever be a case in which that assertion would not be possible.

    Like clarity. Was there ever a claim that issued that was 100% “clear”. EPO Examiners must object whenever a claim lacks clarity, but that objection is simply not available, once the claim issues. Imagine how many times clarity would otherwise be put in issue.

    So, are cheats prospering all over the world because there is no IC? Are they extinct in the USA because of IC? Are claims clearer inside the USA than outside?

    The way I see it, the judges created this steaming great Augean obstacle to the efficient administration of patent justice, so it is their present day successors who have the burden and responsibility to roll up their sleeves and shovel it away.

  76. 3

    Dennis,

    The statistics here fail to control for a few things. First and foremost, I don’t think you are adjusting for the increased number of patent lawsuits. Second, the Mammen percentage increase (which does adjust for the number of suits) does not support his conclusion. A high number of allegations of inequitable conduct either indicates (a) too many allegations of inequitable conduct or (b) too many actual instances of inequitable conduct. We don’t know whether there are more inequitable conduct allegations because there are more instances of inequitable conduct.

  77. 2

    I remember when I started in this game, in the early 1970’s something called “Fraud on the Patent Office”. That must be a rare event, I thought. Then we had “Inequitable Conduct” and I thought “Will there ever be a case when that assertion can’t be made?”.

    Like clarity. When was a claim ever so clear that it is impossible for a lawyer to dispute its clarity. Perhaps that is why, under the European Patent Convention, EPO Examiners are required to raise clarity objections, but petitioners for revocation of issued claims have no access to this ground of attack.

    Is it the case that, while all over the world cheats are prospering, inside the USA IC has stamped out cheating.

    It’s not for Congress to clean out the Augean Stables is it? The judges created this steaming great obstacle to the efficient administration of justice. Their successors should set to, and shovel it out of the way.

  78. 1

    Dennis,

    Thanks for the very interesting statistics. I would have expected a higher percentage of cases where “inequitable conduct” is alleged. But even the 40-60% suggested by Mammen’s article is an alarming percentage.

    What would also be interesting is how often (what percentage) of cases is the alleged “inequitable conduct” actually proven. If the percentage of proven allegations of “inequitable conduct” is fairly small (which is what I suspect it is), then allegations of “inequitable conduct” are truly a “plague” and would suggest courts need to be more willing to impose getkeep this “plague” under control. Or else Congress needs to intervene.

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