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Project on: “Impact of Inequitable Conduct in the American patent law”
Submitted as per the requirement of the course curriculum of “Intellectual Property Right”

Submitted to: Prof.Dr.T Ramakrishna
Course Teacher

Submitted by: Piyush Rajput
I.D. No. 578 1st Trimester LL.M. (Business Law) Batch: 2013 – 2014

Piyush Rajput I.D No. 578 Page 1

At the same time I take this opportunity to Thank Miss Aswathy Asok for her guidance I also express my regards to the Library staff for cooperating with me and made available the books for this research paper. PIYUSH RAJPUT I.D No. Bangalore. National Law School of India University.D. It is due to his patient guidance that I have been able to complete the task. 578. sound advice and affectionate attitude during the course of my studies. I have no hesitation in saying that he moulded a raw clay into whatever I am through his incessant efforts and keen interest shown throughout my academic pursuit. LL. 578 Page 2 .INEQUITABLE CONDUCT ACKNOWLEDGEMENT With Profound Gratitude and sense of indebtedness I place on record my sincerest thanks to Prof T. for his invaluable guidance. Ist TRIMESTER (BUSINESS LAW) Piyush Rajput I. No. Ramakrishna.M.


To study the American Patent law system. the examination of Rule 56 of the United States patent law. The non observance of the duty leads to Inequitable Conduct. The author also wishes to examine the impact of Inequitable Conduct on the American patent law system. i. The Project shall make a brief study of the law and the impact that it has upon the inventor and all person connected therewith and above all the “Public Interest” as a whole. By the present topic.INEQUITABLE CONDUCT RESEARCH METHODOLOGY AIM AND OBJECTIVEThe Aim of the topic is to study the law of Inequitable Conduct. The scope of the present research extends to the analysis of the impact of the Inequitable Conduct only on the American patent law system. The research shall be limited to the extent of the duty that is owed by the inventor towards the patent office.S Patent System” RESEARCH QUESTION1. 2. but the present research shall be dealing with and focuses on only the “Inequitable Conduct” in context with American patent system. The patent system completely relies on the applicant “ A Duty of Candor”. SCOPE AND LIMITATIONThe field of patent prosecution is wide. What is the Patent Examiner Perspective in reaching the conclusion of the Inequitable Conduct keeping in mind the test laid down and the pre-requisite essential for the claim of the Inequitable Conduct? Piyush Rajput I. 3. the breach of the duty and the consequence of the same and finally as the topic suggests “the Impact of the abovementioned on the U.D No. the Researcher seeks to analyse the essentials that person must fulfil in order to get his invention patented in respect of the “Duty of Disclosure”. 578 Page 4 .e. The objective of the research are as follows1.

What changes are made out after the “THERASENSE CASE” and the concept of materiality modify? 3. RESEARCH METHODOLOGYThe researcher in project has relied on “Doctrinal Method” of research.D No. leads to the Inequitable Conduct provided it balances it self in equilibrium of the test laid out. 578 Page 5 . has been adopted by the researcher for the particular paper. Piyush Rajput I. What modification shall be necessary for removing the Plague of Inequitable Conduct ? HYPOTHESISAny failure to disclose a fact that is material to the subject matter of the patent.INEQUITABLE CONDUCT 2. This method was considered apt as it is a theory based topic MODE OF CITATIONA uniform system of citation as per the NLS guide compiled with uniform legal citation.

Simon Rifkind. On the contrary it promulgates the standard of conduct that needs to be adopted by the attorneys and there respective agents before the patent office 2. but the search are not at all times conclusive because of the tremendous work load. Ultimately the public is the real beneficiary of what is patented and can receive the fruits of the same only when inventor has dealt honestly with the patent office.R ( Rule 56).5. 578 Page 6 .1 WHAT IS INEQUITABLE CONDUCT? The law requires that he who comes to equity must come with clean hands. Co. 128 U. Neither the congress nor the commissioner of the patent and the trademarks mentions “Inequitable Conduct”1.6(1996) purports to set out Standard for doing business with the PTO Aventis Pharma S. The Romance Discoverable in Patent Cases. Thus the deliberate failure to not to disclose the material fact is what forms the basis of “ Inequitable Conduct”. 525F... 1. Rule 56 lays a “Duty of Candor and good faith” that needs to be observed by someone who seeks for patent before the patent office that includes the attorney or the agent as well4.INEQUITABLE CONDUCT IMPACT OF “INEQUITABLE CONDUCT” OF PATENT VALIDITY STUDY OF UNITED STATES PATENT LAW.1. 37 C. 4. On the other hand the inventors “duty of candor” requires him to disclose those facts that might Impact on his patent rights. 1349 (FED.It is an act of breach of standards in the transaction of business with the patent office. This basically deals with the duty that the inventor owes towards the patent officer.R 1. The principle of Inequitable Conduct is based on the same theory. CIR. It requires that the infringer with the intent of getting the patent did not disclose all the information that is material and submitted false information. 2008) Patent agents are licensed to prosecute patents before the PTO. United States v. The courts are basically guided by the rules framed but ultimately they are governed by the federal circuit and supreme court precedents.3D. Inc. B/ell Tel. 3.A v.370 (1888).. _________________________________________________________________________ 1. Though the examiners in there examination in the patent search for the prior art. It is sometimes been termed as “Atomic Bomb”3 . That ultimately led to the PTO to promulgate 37 C.S 315. 1334. see also Hon.F. The patent right is actually given to exclude the others from practicing the invention that is claims. What the law requires is not that the applicant should know every detailed specification of the patent.F. 2. Amphastar Pharm. They must have passed the bar exam given by the PTO Piyush Rajput I.D No.

INEQUITABLE CONDUCT The rule becomes important because if it is proved that the act of “ Inequitable Conduct” is done that might render the complete patent invalid.S 806 (1945) ( Finding unclean hands where the Patentee had suppressed Evidence of Perjury at the PTO and attempted to enforce the Perjury Tainted ) . 815 (1945). Precision Instrument Mfg.” Piyush Rajput I. Hartford Empire Co. 318. Hazel Atlas Glass Co v. Co.C. Co . Consolidated Patent Act of 1870. Since the patent act of 1790.7 S1 STAT. Keystone Driller Co v . Co .2 HISTORICAL BACKGROUND. The consolidated patent act of 1870 made it quite broader and was applicable to the patent already issued by means of deception9. the standard for Inequitable Conduct was gross negligence The federal court was created in the year of 1982 to deal with the issues pertaining to the patent11 1.v. In the year 1836. The duty remains intact even in the case of pending claims until it is withdrawn. 357S STAT. It was in the year of 1945 that the supreme court realized that the public interest is damaged due to the patent obtained through fraud10.3 POLICY BEHIND INEQUITABLE CONDUCT. Act of February 21. Auto Motive Mark. Co.. . CH. The patent act of 1793 extended the same period of one year to three year7. There are various policy considerations behind the approach to Inequitable Conduct.323(1793).P. S 10 1 STAT. ________________________________________________________________ 5 Precision Instrument Mfg. 109-112 (1770). It evolved from the three Supreme Court decisions that supplemented the “unclean hand” maxim5. 290 U. 578 Page 7 ..1770. Patent Act of 1836. 324 U. The unpatentibilty of a invention is made out when there is sufficient evidence for the same coupled with the burden of proof standard and by giving broader construction to the inventions specification. 1793. the congress removed the same cause of action8. CH. 1. 6 7 8 9 10 11 Act of April 10.A and Court of Claims as “Presumptively Controlling Standard. There is rather no duty to disclose that fact which is not material to the patent.. In the 70s and 80s. CH. 11. Gen Excavator Co. Considered Decision of C.S 240 (1933). CH/23016 STAT 198-209. 324 U. 117 (1836). 322 US 238 (1944) . Auto Motive Mark.v. the legislature has recognized the Inequitable Conduct6. It provided for a private action when the patent was obtained improperly within one year from the date of issuance.D No. The present doctrine is judicially created..S 806.

1 To Prevent FraudIt is based on the principle that ” The far reaching social and economic consequences of the patent give the public a strong incentive to ensure the patents some from “ backgrounds free from fraud” 12 . 1. A study in 2003 of National Academy of Sciences held that the rate of assertion of the doctrine is excessive. Aventis Pharma S. Murphy.3 Reduction of litigation and the prosecution cost.3.3D 1334. 525 F.3.2 To Ensure Quality Patents- The full disclosure to the PTO is necessary that the examiner has all essential information during the course of examination and could therefore enhance the quality of the invention. Piyush Rajput I.  1.  1. To deter people from committing such act it provides for penalty that includes that the complete patent is held unenforceable. Inequitable Conduct: A Flawed Doctrine Worth Saving.3.INEQUITABLE CONDUCT  1. Moreover high cost to comply with the requirements of disclosure preclude the inventors from protecting there inventions and the ideas14. 1349-50.D No. 578 Page 8 .4 ESSENTIALS OF THE INEQUITABLE CONDUCT- In order to establish that there has been an breach to the Duty of Candor the courts looks into the essentials that are 12 13 14 There must be an Intent to Deceive _____________________________________________________________________ Nicole M. Lisa Dolak..A v. the attorney and the applicants do not disclose all the information13. So naturally the inventor should not be allowed to obtain the patent by fraud itself. Amphastar Pharmaceuticals Inc. But due to the fear of violating the Inequitable Conduct. Doctrine of Reform.

2D 1418. 1. 1988). Though some courts have lowered intent material and some have rather inferred bad faith principle. Co.876 (FED. It requires that the omission were intentional. The federal circuit has allowed the indirect and circumstantial evidence because the direct evidence is rarely available. The case law of the federal court have varied and have been sometimes inconsistent.4. In. makes an inference to mislead by intent.16 it was stated by the federal court that the fact which a person got to know.INEQUITABLE CONDUCT  The Information that is suppressed must be material. Kingsdown intent is based on the ground of (a).D No.CIR. v Dayco Corp. Kings down Medical Consultants Ltd v. 1421 (FED. 578 Page 9 . 1988).2D 867. CIR. 863 F. Star Scientific 849 F.4. Hollister. But the court have been asserting that “Materiality does not include Intent”15. “But it might have been test” ________________________________________________________________ 15 16 17 Larson Mfg. Burlington Industries Inc. 559 F 3d at 1340.1 INTENT TO DECEIVEThe Intent of deception is necessary so as to prove a fraud claim. Piyush Rajput I.gross negligence and (b) acts indicating an intent to deceive 1. On the contrary the nondisclosure also doesn‟t satisfy the element of intent as it is dictated by the good faith. Of South Dakota. On the contrary in.17 it was held that if a conduct amounts to “Gross Negligence” it shall not conclude the intent itself.2 MATERIALITY The circuit court have arrived at three different standards to reach to the materiality    The Subjective “but for test” The Objective “but for” test. Both the cases advocated different aspect. The Kingsdown was widely accepted up till the Therasense case.

If the information is not Important as considered by the examiner the information in not material. Information work includes “All information material to the patent”. the patent would be granted irrespective of the misrepresentation made. First promulgated in 1949. it straight away said to strike of the application where the fraud is committed. he shall be guilty of fraud. Admiral Corp.INEQUITABLE CONDUCT Under the subjective but for test.20 The present rule is substantiated by PTO‟S Rule 56.56(b). 716-17(10TH CIR. Consequently. 849. The test for reasonable examiner continued.5 IMPACT OF INEQUITABLE CONDUCTA patent obtained through such conduct is completely unenforceable. 856 (D.DEL. preliminary examination searches. workers or the third party. 296 F. Zenith Radio. 267 SUPP. it includes sales. The courts are not obliged to take in to consideration the effect of misrepresentation19. v. Under the but it might have been test.R 1. Corp. SUPP AT 471. the court found that the misstatement were not material to the fact. 578 Page 10 . if the applicant was aware of the prior art and a ordinary man of prudence could also say that the invention was not original. 1961). It not only extends to the claims but to the complete patent itself. ___________________________________________________________________________ 18 19 20 21 Waterman Big Pen Corp v.. Kasey. A person might get aware from various sources like the trade shows. Anchor Hocking glass Corp. an Attorney shall put his clients business in complete Jeopardy21. derived knowledge and the prior publication user.P V. W. The materiality word is defined in 37 C. The rule in plain words simply meant what the examiner would think in a particular case that comes before him. 253 F.1967). In Glass works v. The extent or reach of Associated conduct on Associated Patents” Piyush Rajput I. The Courts said that the plaintiff should conduct the experiments more Kevin R. Endo pharmaceuticals. Up to the federal circuit 2006 decision on Purdue Pharma L. the courts seeks as if the misstatement shall have may effect on the examiner.F. Inventorship conflicts. apart from publication and prior art. from the foreign application. 1. The reason is that the person alleging the fraud must also prove that the representation is rather material18. It is also called the rule of disclosure . Information is “Material” when the examiner would consider as to allow the application or not to allow. “Infectious Unenforceability. because of no finding of Inequitable Conduct.A Sheaffer Pen Co.D No. Under the objective but for test.2D 708.

24 25 26 See. Adkins.6 SHIFT IN THE STANDARD ! ( THE THERASENSE CASE) Therasense issue involved a patent for the blood glucose strip for diabetes (“The‟551 patent”). CHISUM. Practically most of the disputes do not reach the trial court as the parties go for a stellement23.INEQUITABLE CONDUCT In some cases the Inequitable Conduct may affect the other patent in suit22.D No. this conduct may result in disciplinary actions against the attorney enrolled at the PTO24 . It was discovered that the patentee has already declared the “Optionally. but preferably “ for the protective membrane. Adkins26. In some cases the court may go beyond declaring a patent unenforceable and award Rule 11 sanctions against the party. A protective membrane was required to cover the strip as a part of prior art. Cir.2d 1053 (Fed. 395 U. In the year 1996. _______________________________________________________________________ 22 23 Casey Note 24. Even after the reminder the patentee kept on filing claims for a strip that did not require membrane.S. 653. sued Therasense 1. During the „551 prosecution. The court held that a person who holds a invalid patent makes the license also unenforceable against the licensee as well. In Lear v. Apart from the above sated. but Preferably” notion to the European patent office and the same was suppressed to the American Patent office. The same was stated in Jaskiewicz v.03 822 F. It‟s now a matter to be debated as to a licensee can bring the patent owner to books for the misrepresentation of the patent. In the meanwhile the prior art describing the test strips patent no ( “The „382 patent”) which consequently belonged to the patentee himself required for “optionally. Dickinson and co. 1987) Lear Inc. Later on Becton. 578 Page 11 .671-74 (1969) Piyush Rajput I.7 INEQUITABLE DOCTRINE AFTER “THE THERASENSE CASE” The federal court held that “ On the withholding of the material information. v. supra note 3019. Mossinghoff25 but the action shall be the same as the disciplinary action before the bar and accordingly it will occur after a long duration. it has resulted in loss of attorney client. and approximately 85% of civil cases from the district forum. Other consequences are the liability in the antitrust suit. see. Judicial Business of the United States Courts 1996 Report of the Director 165. but preferably. absence of good faith does not proves intent to deceive”. 95% of the Civil cases filed before the trial court were withdrawn. The examiner asked for the affidavit so as to prove that a ordinary man of prudence would understand “Optionally.‟ 1. Reportedly.

Even the courts are perplexed due to the lack of uniform precedent .Cir.D No. What is meant is that information is but for material if the examiner would not have allowed the patent if he was aware of the Information . A range of possible outcomes should be made once the matter is before the court.g. There should be post issuance cure.C 257(C). 48 F. The basic problem attorneys face is that they are to work on their own instinct as to what information to provide. the problem is the licensee issue.3d 1172. Mostly it involves multiple patents and at last yields to renegotiation of contracts. 1. The federal court often reverses its order and the order of the district court also29. e. As discussed before.8 PROBLEM WITH THE CURRENT LAWThe doctrine defies the principle of “Audi alteram partem”. is the judgment of the attorney28. Invalid patent yields to invalid Licensee.9 CURE FOR “PLAGUE” A member of (AIPLA)31 suggests the complete elimination of the doctrine because it has resulted in crippling the patent litigation and has become a form of liability .S. After the judgment the patent owner may cure Inequitable Conduct post issuance27. 1977). Moreover the PTO proposed for the revision of the Rule 56 which adopted for the “But for materiality test”. What is material. 1995) . the applicants over burden the information because of the harsh penalties and to curb the same they should only provide information that is material. at 85-87. Mollins PLC v Texton .. It ex parte proceeding. It requires a complete change in law. One cure is to give a statement of relevancy. supra note 7. see Goldman . The biggest of all is the non -availability of cure even where there was no intent to deceive in cases where reference is discovered during the prosecution30.3d 956 (Fed. Possible cure is a third party intervention (arbitration) that might reduce the burden on the courts. see. American Intellectual Property Law Association Piyush Rajput I. _______________________________________________________________________ 27 28 29 30 31 U. 1. 1182 (Fed. see Magnivision Inc. Cir. Bonneau co.INEQUITABLE CONDUCT As far as the materiality is concerned the court held that the conduct may be found on the intent alone and the materiality is the “But for materiality”. 115F.(e) Examples of the these Judgment are set in the Patricia Brantley‟s article on Ethical issue facing patent attorney. 578 Page 12 .

D No. The court has significantly revaluated the same in the Therasense case by raising the standard of both the intent and materiality. Every law has certain shortcomings but definitely it is to curb the malpractices. And ultimately the Public Interest will be served Piyush Rajput I. It has also provided a guideline for the attorneys and the agents. The complete research focused on the what the thing are in the actual scenario. It was surely a cure for the “Plague”. 578 Page 13 .INEQUITABLE CONDUCT CONCLUSION “Duty of Candor” is surely a feature that requires a full disclosure and that is in the interest of the public. The shortcomings can be cured by the ideas reflected in the research itself. With the great power of invalidating the patent on the grounds of Inequitable Conduct the examiners need to be cautioned. The implementation of the but for test is remarkable together with the abolishment of the should have known test and the sliding scale step.

. Co. 525f. The theory of the maxim “he who comes into equity must come with clean hands” was propounded in this case. 2008) It was a case where the plaintiff “Aventis” had the patent and the reissue patent in relation to the low molecular weight heparins which was marketed in U. Amphastar Pharma. This case related to infringement of the patents and the breach of the contract. 1349 (fed.D No. 324 U. 3d. 1334.S 315. Inc. In this case it was promulgated the standard of conduct that needs to be adopted by the attorneys and there respective agents before the patent office  Precision Mfg. brought suit against the defendant bell tel co. to set aside patents on the ground that they were obtained by fraud and it was held that the public is the real beneficiary of what is patented and can receive the fruits of the same only when inventor has dealt honestly with the patent office  Aventis Pharma S. 815 (1945). In context that the doors of the courts closes where the person hands are tainted with the “Inequitable Conduct” Piyush Rajput I.A v.C for the prior art references.370 (1888) In the present case-. UNITED STATES CODE TITLE 35 – PATENTS  CASE LAWS  United States v Bell Tel.S. V.S 806. 128 U. Cir.the United States are plaintiffs. The patent examiner rejected it under section 35 U.INEQUITABLE CONDUCT ANNOTED BIBLOIGRAPHY PRIMARY SOURCES  STATUE 578 Page 14 . Co.S. Automotive Maintenance Mark.

It involved misconduct by filing of a patent application in the name of Pierre Baronnet.  Kings down Medical Consultants Ltd v.The court found that the misstatement were not material to the fact. V. relating to various features of a remote-control system for television receivers and relating to certain television circuits. The PTO charged that submission of a patent Piyush Rajput I.2d 1418.D No. Patent prosecution took many years and included amendments prior art etc. Corning glass works also charged unenforceability by reason of fraud on the Patent Office and included a declaratory judgment counterclaim. Cir. Hollister). at 471 Corning Glass Works sued. The trial court found that all the Zenith patents were valid. 1421 (fed. Zenith Radio Corporation. Mossinghoff 822 F. If the facts were fully disclosed then it would have come under prior art. 578 Page 15 . Anchor Hocking Glass Corp253 f.F.2d 708. defendant denied the infringement charge on the ground that the claims were not patentable over the prior art. . Zenith Radio. In answer. invention itself. Under 37 C. 1961). Corp.. it was stated by the federal court that the fact which a person got to know. 1988 This case relates to the Inequitable Conduct of the attorney who applied for it.2d 867. 1987) Appellant had committed misconduct before the PTO. makes an inference to mislead by intent. Cir. Sec. 296 f. Thereafter Hollister alleged that Kingsdown obtained the patent by “ Inequitable Conduct” and the concept of the negligence in the Patent Prosecution was evolved  Glass Works v.Cir. The patent was issued even after error was made in the petition. On the counterclaim the court ruled that Zenith had not infringed the Admiral patent  Jaskiewicz v.2d 1053 (Fed. Anchor Hocking Glass Corporation. 1988). 716-17(10th Cir. Admiral asserted infringement of covering a spindle used in automatic record changers. v Dayco Corp 849 f. sued Admiral Corporation. 863 F. the Kingsdown attorney finally filed a new set of claims. Supp.57 (Rule 57) it is requires for the signing of oath in person recognising the specification.R.INEQUITABLE CONDUCT  Burlington Industries Inc.876 (Fed.  Admiral Corp. 1. for the infringement of product and process claims of its Stoked patent.

Therasense issue involved a patent for the blood glucose strip for diabetes (“The‟551 patent”).3d 1172. Piyush Rajput I.  Therasense v Becton & Dickinson and Co. It was held that failure to cite material information was Inequitable Conduct.S.E Mcfadyen and Katrina M. 649 F. sued Therasense  Mollins PLC. A protective membrane was required to cover the strip as a part of prior art. Dickinson and co. SECONDARY SOURCES  ARTICLES  Rebecca C. 653. It was discovered that the patentee has already declared the “Optionally. It‟s now a matter to be debated as to a licensee can bring the patent owner to books for the misrepresentation of the patent. 2011) (en banc). 578 Page 16 .. Sec.  Lear. December .INEQUITABLE CONDUCT application as declaration of the inventor was improper under both Rule 57 and 35 U.Are We Bound For Change? Intellectual Property Today 3. but Preferably” notion to the European patent office and the same was suppressed to the American Patent office. Inc.D No. 1995) . Quicker. During the „551 prosecution. 111. 1182 (Fed. Prior was later on cited in the re-examination. v Adkins 395 U. Rule 56 After The Therasense.671-74 (1969 The court held that a person who holds a invalid patent makes the license also unenforceable against the licensee as well.S. Cir.3d 1276 (Fed. v Bexton.(2011). Prior art reference was later on submitted but only after the patent issued as one among many. Even after the reminder the patentee kept on filing claims for a strip that did not require membrane. Later on Becton. In this case the prior art reference was not cited.C.Cir. Disclosure among various other documents does not amounts to Inequitable Conduct. 48 F.

349.  Janice M. Kasper.D No.J 349.& Ent.  Priscilla G Taylor. (April. 735. 62 American Bar Association Journal. The University of Akron School of Law March 8. (2011)   Angie M. Evolution Of Inequitable Conduct Defense In Patent Litigation. (Article presented at 12th annual Richard C. 2010. Curing The Inequitable Conduct Plague In Patent. Goldman. L. IP Law 360. Inequitable Conduct. Bringing Equity Back To The Inequitable Conduct Doctrine.L & Tech 37.J 20 Hastings Comm. It leads to step by step procedures at every stage of Interference Process  Martin J. Akron Intellectual Property 95. 7 Harvard J. 1976). Sughrue symposium on Intellectual Property law and policy. Specifically Fighting The Inequitable Conduct. It specifically the case laws and various aspects of patent prosecution. (1993-1994).) . 578 Page 17 . 1. §2.) 5. Managing The Inequitable Conduct By Legislation And Regulation. 431 ( 3rd Edn. It specifically deals with the various aspects and requirements for the Inequitable Conduct Piyush Rajput I. (2012)  Von Tersch and Glenn E.  Robert J. Ethics in United States Patent Practice.  Bullwinkel and Allan.(2011) David J. Adelman et al. 27 Berkley Tech.INEQUITABLE CONDUCT  Alan J. Patent Law. 421. Cases and material on patent . Henry. 48 Houston Law Review. 465. Hankins and Juliana Tanase. (1997). Patent Interference Practice handbook. L.91 to §2-100 (2002). Muller.. (2011). BOOKS REFERRED  Jerome Rosenstock.

 Donald s Chisum‟s.    www.D No.heinonline. 578 Page 18 . Piyush Rajput I.03 [4][b][v]. §11. “Chisum on Patents” Lexisnexis.03[4] to § 11. applicants agents and the representative it also contains the instruction for the examiners as well from pg2000-1 to 2000-12. (7th Edn.  WEBSITES..INEQUITABLE CONDUCT  Manual of Patent Examining Procedures. This deals with the procedural aspects specially for the attorneys. 4.