A federal court in California last week handed down a ruling that’s likely to have far-reaching effects on U.S. patent law when it found that an Abbott (NYSE:ABT) subsidiary obtained a patent under false pretenses, handing a win to defendant Becton, Dickinson & Co. (NYSE:BDX).
The case centered around the doctrine of inequitable conduct, in which evidence concealed by a patent applicant from the U.S. Patent & Trademark Office can invalidate the patent in question.
In Therasense v. Becton Dickinson, the U.S. Court of Appeals for the Federal Circuit raised the bar of proof for inequitable conduct defenses, sending the case back to a lower court for reconsideration. It involves the intellectual property behind blood glucose test strips; Abbott subsidiary Therasense sued BD and the other defendants in a series of suits that were consolidated in the U.S. District Court for Northern California.
That court found one of the Abbott patents unenforceable due to inequitable conduct; Abbott appealed to the Federal Circuit, which upheld the lower court’s ruling and remanded the case for reconsideration under its new IC rules.
Last week, the California court again found that an Abbott attorney and its IP application research director committed inequitable conduct when they landed a patent from the USPTO by concealing identical claims contained in an earlier patent.
Before Therasense, a sliding scale was used to prove inequitable conduct, according to David Dykeman, a shareholder and patent attorney at Greenberg Traurig LLP. The scale applied to whether the alleged conduct would have had a material effect on how the USPTO reviewed the patent in question – that is, whether a "reasonable examiner" would have rejected the patent if the hidden information had been available. A finding of inequitable conduct also depended on proving that the patent applicant intended to deceive the USPTO.
"The case raised the standard for proving inequitable conduct," Dykeman told us in an interview last year. "The inequitable conduct defense will be harder to prove, as the accuser must prove both intent and materiality by ‘clear and convincing’ evidence."
Defendants alleging inequitable conduct now have to prove that the patent holder deliberately pulled the wool over the patent reviewer’s eyes. Intent can still be inferred from indirect or circumstantial evidence, but only if it’s "the single most reasonable inference able to be drawn from the evidence." And, to prove materiality, defendants would have to meet a "but-for" standard – or demonstrate that, but for the hidden material, the patent office would have rejected the application.
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