Earlier this week, the Federal Circuit affirmed a district court’s judgment that a patent was unenforceable due to inequitable conduct. Intellect Wireless, Inc. v. HTC Corp.
After the Federal Circuit’s opinion in Therasense, it is widely thought to be much more difficult to prove inequitable conduct than under the court’s prior standard that seemed to be a moving target. In this case, the court made clear that filing a declaration with clearly false statements will still result in an inequitable conduct holding.
In Intellect Wireless, during prosecution of the application that resulted in the patent at issue in the case, the inventor filed a declaration under 37 C.F.R. § 1.131 to ante-date or swear behind a reference. This means that the inventor sought to remove a piece of prior art by demonstrating an earlier invention date (something that can no longer be done under the AIA’s first-to-file system).
In the declaration, the inventor averred that “the claimed invention was actually reduced to practice and was demonstrated at a meeting . . . in July of 1993.” In reality, the invention was never actually reduced to practice, i.e., was never actually constructed or made. The court held that, absent curing the unmistakably false declaration, this alone establishes materiality under the test for inequitable conduct.
To cure a false declaration, the applicant is required to expressly advise the PTO of the misrepresentation and specifically point of the error. The applicant must point out to the PTO what the correct facts actually are. This requirement requires the applicant to be quite unequivocal in the correction.
In this case, the court found that the applicant, despite filing additional “corrective” declarations, did not meet this standard. The corrective declaration further obfuscated the truth by continuing to refer to prototypes and product brochures, when no such prototypes or products shown in the brochures existed. There were still references to bringing the product to commercialization and to actual reduction to practice.
Furthermore, the court found that the applicant had a specific intent to device the PTO. The submission of a declaration that included clearly fabricated examples showed the applicant’s intent to deceive the PTO. This intent was further demonstrated by a pattern of misleading the PTO with false declarations in related patent applications that referred to prototypes that did not exist or that clearly could not perform the claimed functions.
Inequitable conduct is clearly not dead as a defense. This particular set of facts was particularly egregious. It continues to demonstrate that candor with the PTO is required under the duty of disclosure.