US Patent Office Proposes Adopting Therasense Standard

Earlier today the United States Patent and Trademark Office published a Federal Register Notice proposing amendments to Rule 56 and Rule 555, and requesting public comment.  Titled Revision of the Materiality to Patentability Standard for the Duty to Disclose Information in Patent Applications, the Notice pertains to the recent Federal Circuit decision in Therasense v. Becton and the USPTO intention to adopt the standard for materiality required to establish inequitable conduct as defined in Therasense. 

In view of Therasense, the Patent Office is proposing to revise the materiality standard for the duty to disclose information to the Office in patent applications and reexamination proceedings.  It is the belief of the Patent Office that the Therasense standard will reduce the frequency with which applicants and practitioners are being charged with inequitable conduct, thereby reducing the incentive for applicants to submit marginally relevant information to the Office.  Thus, the Therasense standard should curtail the practice of filing Information Disclosure Statements that refer to boxes full of prior art that is of marginal significance, allowing patent examiners to focus on that prior art that is most relevant.  The USPTO adopting the Therasense standard could, as a result, lead to improved patent quality and even a streamlining of prosecution in at least some cases.

The Therasense decision concerns the standards for inequitable conduct, including the materiality and intent prongs.  In a nutshell, inequitable conduct is found when there has been abusive activity in obtaining a patent; when found any patent obtained is rendered unenforceable.  The Therasense decision significantly altered both the materiality and intent prongs of the inequitable conduct analysis, which has lead the Patent Office to seek a change in the duty of candor owed to the USPTO by those substantively involved in a patent application.  The USPTO seems poised to adopt the Therasense standard, thereby modifying Rule 56 and Rule 555 so that there is but one single standard.

Chief Judge Rader, who delivered the opinion of the Federal Circuit in Therasense, explained that when determining whether inequitable conduct has been committed the materiality prong is a “but-for” test. He also breathed real life into the intent requirement, saying: “Proving that the applicant knew of a reference, should have known of its materiality, and decided not to submit it to the PTO does not prove specific intent to deceive.” Importantly, the Federal Circuit declined to adopt the USPTO version of the duty of candor outlined in Rule 56, instead opting for a more patentee friendly standard that says that only that prior art that would lead to a good rejection is material and needs to be disclosed.

With respect to materiality Chief Judge Rader explained:

This court holds that, as a general matter, the materiality required to establish inequitable conduct is but-for materiality. When an applicant fails to disclose prior art to the PTO, that prior art is but-for material if the PTO would not have allowed a claim had it been aware of the undisclosed prior art. Hence, in assessing the materiality of a withheld reference, the court must determine whether the PTO would have allowed the claim if it had been aware of the undisclosed reference. In making this patentability determination, the court should apply the preponderance of the evidence standard and give claims their broadest reasonable construction.

The Federal Circuit did, however, recognize that in particularly egregious situations where there is a carefully coordinated scheme to defraud but-for materiality is not necessary. Rader explained:

Although but-for materiality generally must be proved to satisfy the materiality prong of inequitable conduct, this court recognizes an exception in cases of affirmative egregious misconduct. This exception to the general rule requiring but-for proof incorporates elements of the early unclean hands cases before the Supreme Court, which dealt with deliberately planned and carefully executed schemes to defraud the PTO and the courts. When the patentee has engaged in affirmative acts of egregious misconduct, such as the filing of an unmistakably false affidavit, the misconduct is material.

(citations and quotations omitted).

The caveat for particularly egregious situations has lead some to characterize the Therasense standard for materiality as a “but-for-plus” standard.  The standard is “but for” materiality except in egregious cases of affirmative misconduct, which is where the “plus” comes into play.

As pro-patentee as the ruling in Therasense was, the decision did leave the USPTO in a difficult position.  Rule 56 was still on the books, which meant that the duty of candor demanded by the Patent Office was different than the duty the Federal Circuit explained applicants and representatives owed the Patent Office in order to avoid inequitable conduct.  As a result, the day after the Federal Circuit decision in Therasense the USPTO announced that it would be carefully studying the important en banc decision in Therasense to assess how it may impact agency practices and procedures.

The Patent Office is now taking that first step toward reconciling USPTO rules with the Federal Circuit decision in Therasense.  The USPTO proposal would do the following:

• Relative to 37 C.F.R s 1.56(b).  The proposed to be amended would provide that information is material to patentability if it is material under the standard set forth in Therasense, and that information is material to patentability under Therasense if:  (1) the Office would not allow a claim if it were aware of the information, applying the preponderance of the evidence standard and giving the claim its broadest reasonable construction; or (2) the applicant engages in affirmative egregious misconduct before the Office as to the information.
• Relative to 37 C.F.R. s 1.555(b). The proposed to be amended would provide that information is material to patentability if it is material under the standard set forth in Therasense, and that information is material to patentability under Therasense if:  (1) the Office would not find a claim patentable if it were aware of the information, applying the preponderance of the evidence standard and giving the claim its broadest reasonable construction; or (2) the patent owner engages in affirmative egregious misconduct before the Office as to the information.

Under the proposed amendments to the rules the Patent Office makes clear in the notice that mere nondisclosure of information to the Office nor failure to mention information in an affidavit, declaration, or other statement to the Office constitutes affirmative egregious misconduct.

The Notice further explains that the Patent Office recognizes the tension inherent in a disclosure standard based on unpatentability.  The concern here is that given the definition of materiality some might presume that since we only need to disclose prior art that would form the basis of a good rejection some might believe that submitting any prior art could be deemed an admission that one or more claims as submitted are unapatentable.  To alleviate those potential concerns the Notice makes clear that: “While applicants should avoid drafting claims that are unpatentable in the face of the prior art they disclose, the Office will not regard information disclosures as admissions of unpatentability for any claims in the application.” (emphasis added)

Indeed, there has long been a requirement that patent attorneys and applicants only seek claims that they believe they are entitled to receive. Now that the standard for materiality has changed and the intent prong means actual intent to deceive, it would be possible for applicants to simply not submit any prior art as long as they truthfully believe that the prior art that they know about could not be used to form the basis of a valid rejection. Perhaps taking this into consideration the PTO Notice explains:

The Office… appreciates and expects that patent applicants are inclined to be forthcoming and submit information beyond that required by proposed Rule 56, in an effort to assist examiners in performing their duties. The Office wishes to facilitate and encourage such efforts by applicants.

Additionally, the Office is considering further actions that may provide an incentive for applicants to assist the Office by explaining/clarifying the relationship of prior art to the claimed invention.  While this form of information would not implicate the standard of materiality as that term has been defined in Therasense, and therefore would not be required under the proposed changes to Rule 56, the Office believes it is worthwhile to explore ways to encourage applicants to submit information beyond what is required under the Therasense materiality standard and which would be helpful and useful in advancing examination.

All in all the PTO Notice looks to be good news for patent practitioners and applicants.  The PTO seems ready to adopt the Therasense standard and to preemptively admit that any prior art that is submitted will carry no admission relating to unpatentability.  The thought that the USPTO may consider ways to incentivize the submission of prior art seems hardly shocking given all of the various pilot programs ushered in by Director Kappos.  While I could speculate on what those might look like, I will hold off for the moment because it would be pure speculation.  I do anticipate that in keeping with the Kappos theme, prior to any efforts to provide incentive to disclose prior art there will be some kind of Round-table discussions or list of questions sent out to elicit comment from stakeholders.