Friday, 3 June 2011

The Atomic Bomb of US patent law - Therasense v. Becton Dickinson

In the decision Therasense v. Becton Dickinson discussed in the previous post, the US fedearal circuit has strongly raised the bar for inequitable conduct in the US litigation.

The previous practice was, indeed, completely incomprehensible for poeple with an education in the continental-european law tradition. The popularity of inequitable conduct defense used in about 70% of the litigation procedures in the US has strongly impaired the reputation of the entire US jurisdiction because in particular for patentees from abroad, the incalculable risk of finding the patent unenforcible strongly disfavors the choice of the US jurisdiction for litigation.

I think that many European patent practitioners have sighed a breath of relief when reading the harsh words, the Federal Circuit has found for this phenomenon. Here are some memorable citations from the majority opinion, which in turn appears to cite various amicus curiae briefs:

Moreover, inequitable conduct charges cast a dark cloud over the patent’s validity and paint the patentee as a bad actor. Because the doctrine focuses on the moral turpitude of the patentee with ruin-ous consequences for the reputation of his patent attor-ney, it discourages settlement and deflects attention from the merits of validity and infringement issues

Inequitable conduct disputes also “increas[e] the complexity, duration and cost of patent infringement litigation that is already notorious for its complexity and high cost.” Brief and Appendix of the American Bar Ass’n as Amicus Curiae

Perhaps most importantly, the remedy for inequitable conduct is the “atomic bomb” of patent law. Aventis Pharma S.A. v. Amphastar Pharm., Inc., 525 F.3d 1334, 1349 (Fed. Cir. 2008). Unlike validity defenses, which are claim specific, see 35 U.S.C. § 288, inequitable conduct regarding any single claim renders the entire patent unenforceable.

UMoreover, the taint of a finding of inequitable conduct can spread from a single patent to render unenforceable other related patents and applications in the same technology family. See, e.g., Consol. Aluminum Corp. v. Foseco Int’l Ltd., 910 F.2d 804, 808-12 (Fed. Cir. 1990). Thus, a finding of inequitable conduct may endanger a substantial portion of a com-pany’s patent portfolio.

Inequitable conduct “has been overplayed, is appearing in nearly every patent suit, and is cluttering up the patent system.” Kimberly-Clark Corp. v. Johnson & Johnson, 745 F.2d 1437, 1454 (Fed. Cir. 1984). “[T]he habit of charging inequitable conduct in almost every major patent case has become an absolute plague. Reputable lawyers seem to feel compelled to make the charge against other reputable lawyers on the slenderest grounds, to represent their client’s interests adequately, perhaps.”

With inequitable conduct casting the shadow of a hangman’s noose, it is unsurprising that patent prosecutors regularly bury PTO examiners with a deluge of prior art references, most of which have marginal value.

We are all well aware that a well-operating patent system is essential for a county's economy. The Federal Circuit has really done a good job by re-introducing common sense into the inequitable conduct doctrine.

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