Inequitable Conduct Standard Clarified

Yesterday, the Federal Circuit clarified the standard for proving inequitable conduct in patent infringement cases in its Therasense, Inc. decision. Similar to how it addressed the burden of proof for fraud on the USPTO in the trademark context, the Court adopted a heightened standard for proving inequitable conduct. Here are several points to consider:
  • it was a split decision so the Supreme Court may ultimately decide the issue;
  • the Court noted that inequitable conduct allegations are a “common litigation tactic” and as such, adopted a more stringent approach in an apparent attempt to discourage this practice;
  • the Court clarified the two requisite elements for proving inequitable conduct: materiality and intent;
  • with regard to materiality, the Court rejected the USPTO’s broader view of materiality under its Rules as well as the previously used sliding scale approach in favor of a “but for” test–┬áthe USPTO would not have allowed a claim of the patent-at-issue had it been aware of the undisclosed prior art;
  • the Court provided a carve out to the “but for” rule for “affirmative egregious misconduct” (which should be a ripe area for future litigation);
  • with regard to intent, it must be shown that “the applicant knew of the reference, knew that it was material, and made a deliberate decision to withhold it[;]”
  • it is not enough to show that the applicant “should have known” about the materiality of the reference;
  • inferring intent will become difficult as “the evidence ‘must be sufficient to require a finding of deceitful intent in light of all the circumstances'” and when there are multiple reasonable inferences, intent cannot be found; and
  • absence of a good faith explanation for withholding a material reference will not, in and of itself, be sufficient to prove an intent to deceive.
Read the full decision.