Proving and Avoiding Inequitable Conduct and Unclean Hands in Patent Prosecution and Litigation

Description

Some thought the 2011 en banc Therasense Federal Circuit decision sounded a death knell to the defense of inequitable conduct, but that was not the case. The defense is alive and continues to have broad applications, as seen in GS CleanTech Corp. v. Adkins Energy L.L.C. (Fed. Cir. 2020) and Belcher Pharms. L.L.C. v. Hospira Inc. (D. Del. 2020) and other recent cases.

The inequitable conduct defense traces its origins, at least indirectly, to a triad of "unclean hands" Supreme Court cases (Keystone Driller Co. v. General Excavator Co. (1933), Hazel-Atlas Glass Co. v. Hartford-Empire Co. (1944), and Precision Instrument Mfg. Co. v. Automotive Maint. Mach. Co. (1945)). These cases invoked the equitable doctrines of "unclean hands" and "equitable estoppel" to deny patent owners relief for infringement when the patents were obtained through fraud or bad faith. Several decades later, inequitable conduct cases share the stage with cases that resurrect the relatively ancient precedent to hold patents unenforceable for unclean hands (Gilead Scis. Inc. v. Merck & Co. Inc. (Fed. Cir. 2018)).

Supplemental examination provides a powerful tool for cleansing misconduct from a patent post facto. However, the statute's "fraud" exception may limit such cleansing effects of supplemental examination. In particular, in one interpretation, if during a supplemental examination proceeding, the Director learns that a material fraud had been committed on the USPTO during patent prosecution, then, theoretically, the matter will be referred to the Attorney General for disciplinary proceedings against the patent attorney. The patent owner may also theoretically face criminal and antitrust claims under Section 257(f). We are unaware that any of this theory has ever been put into practice.

The webinar will address what, if any, will be the role of Supplemental Examination in cleaning up or purging Merck-type unclean hands, as well as purging more narrowly defined inequitable conduct. While the duty of disclosure ends with the issuance of the patent, it revives if a prosecution is reopened. That means the duty of disclosure applies in post-grant proceedings such as ex parte reexamination, reissue applications, AIA inter partes review, Supplemental Examination, and AIA post-grant review. Defendants in litigation have requested amending counterclaims to add inequitable conduct based on an IPR proceeding. See, e.g., Jaguar v. Bentley, No. 2:18-cv-320. The rules relating to AIA post-grant proceedings expressly invoke a duty of candor and good faith and authorize the PTAB to apply sanctions against a party who does not meet that duty. To date, no such sanctions have been applied.

Listen as our authoritative panel of patent attorneys examines post-Therasense judicial decisions regarding inequitable conduct and unclean hands. The panel will offer examples of arguments that have worked to avoid a finding of inequitable conduct and unclean hands and those that have not. The panel will outline practical suggestions to patent owners to avert inequitable conduct and/or unclean hands in patent prosecution/PTAB proceedings/Supplemental Examination and litigation.