MCKESSON: MOVING THE THRESHOLD ON
INEQUITABLE CONDUCT
SUMMARY
A recent decision by the Federal Circuit holding a patent unenforceable
has moved the threshold on inequitable conduct when considering what information
is “material to patentability” of a pending application. The case extended the
definition of “information material to patentability” to include prior art,
office actions, and notices of allowance developed during the prosecution of
applications, which are related not only by claims of priority, but also
commonality of subject matter.
FULL ARTICLE
November 2007
Background
In the recent McKesson Info. Solutions, Inc. v. Bridge
Medical Inc.1 case, the Federal Circuit extended the definition
of “information material to patentability” to include information developed
during the prosecution of related applications. Importantly, the McKesson
case extends the definition of “related” applications to include not only
applications related by claims of priority, but also applications related due to
commonality of subject matter.
The United States Code of Federal Regulations (the “CFR”)
imposes a “Duty of Disclosure, Candor and Good Faith” on the inventor and his or
her representatives in the preparation or prosecution of patent applications.
The CFR observes: “A patent by its very nature is affected with a public
interest. The public interest is best served, and the most effective patent
examination occurs when, at the time an application is being examined, the
Office is aware of and evaluates the teachings of all information material to
patentability.”2
The McKesson case concerned the prosecution of four
patent applications by the patentee’s attorney, Attorney Schumann. The four
patent applications include:
(1) U.S. Patent Application No. 06/862,278 (the
‘278 Application);
(2) U.S. Patent Application No. 07/205,527 (the
‘527 Application);
(3) U.S. Patent Application No. 06/862,149 (the
‘149 Application); and
(4) U.S. Patent Application No. 07/078,195 (the
‘195 Application).
The ‘527 Application and the ‘195 Application claim priority
of the ‘278 Application. The ‘149 Application disclosed and claimed similar
subject matter as the ‘527, 195 and ‘278 Applications, but did not claim
priority of any of these other Applications.
The three related applications (i.e., the ‘278, ‘527, and ‘195
Applications) were all before the same examiner, Examiner Trafton. However, the
‘149 Application was before a different examiner, Examiner Lev.
The ‘278 Application was abandoned in favor of the ‘527
Application. The ‘527 Application issued as U.S. Patent No. 4,857,716 (the ‘716
Patent), which was the patent at issue in the McKesson case. The ‘195
Application issued as U.S. Patent No. 4,835,372 (the ‘372 Patent). The ‘149
Application issued as U.S. Patent No. 4,850,009 (the ‘009 Patent).
Holding
The District Court found, and the Federal Circuit affirmed,
inequitable conduct arising from the failure of Attorney Schumann to disclose
three items of information deemed material to patentability of the ‘716 Patent.
(i) Art cited by examiner in the ‘149 Application was material to the ‘716
Patent
The Court held that prior art cited by Examiner Lev during
examination of the ‘149 Application was material to the patentability of the
‘716 Patent. Specifically, Examiner Lev cited a particular reference, the Baker
patent, in a rejection of the claims of the ‘149 Application. The Court found
that the Baker patent meets the “reasonable examiner” materiality standard and
should have been disclosed to Examiner Trafton during prosecution of the
application resulting in the ‘716 Patent.
Further, the Court also held that the intent to deceive
Examiner Trafton was inferable, because Attorney Schumann was informed of
the materiality of the Baker patent by the PTO itself when Examiner Lev rejected
claims in the ‘149 Patent having the same type of “communication” that Attorney
Schumann had used to differentiate the claims of the ‘716 Patent from other
prior art.
(ii) Rejection issued in the ‘149 Application was material to the ‘716
Patent
The Court held that the examiner’s rejection of the claims in
the ‘149 Application was also material to the patentability of the ‘716 Patent.
Thus, not only was the underlying Baker patent held to be material, but the
Court also held that the rejection itself to be material.
The Court reasoned that the rejection itself “would be of
additional importance to Examiner Trafton because it contradicts...” Attorney
Schumann’s earlier argument for patentability in the ‘716 Patent.
It should be noted that the patent holder McKesson argued that
Schumann effectively disclosed Examiner Lev’s rejections by disclosing the
existence of the ‘149 Application to Examiner Trafton. However, the Court found
that there is a duty of disclosure beyond mere citation of the existence of the
co-pending applications. Thus, disclosure of the existence of the ‘149
Application was deemed insufficient to discharge Schumann’s duty of disclosure.
Rather, citation of the actual rejection was deemed by the Court to be
necessary.
(iii) The allowance of the related ‘372 patent was material to the ‘716
patent
The Court held that a notice of allowance in a co-pending
application is material if the allowed claims could conceivably have
given rise to a double patenting rejection. As such, the Court held that the
notice of allowance in the ‘372 Patent was material to the ‘716 Patent.
Importantly, the ‘372 and ‘716 Patents were both before the
same examiner, Examiner Trafton. In essence, Attorney Schumann failed to
notify Examiner Trafton that he (Trafton) had allowed the continuation-in-part
application prior to issuance of the original application and this oversight was
sufficient to trigger unenforceability for inequitable conduct.
Conclusions
The holdings in McKesson highlight the importance of
tracking the prosecution in related applications. Again, these “related”
applications include not only applications related by priority, but also
applications related by commonality of subject matter.
The purpose of this tracking is to ensure compliance to the
duty of disclosure by cross citation of: (1) art cited in the related
applications; and (2) all office communications (office actions, notices of
allowance, etc) in the related applications. The cross citations are necessary
even though the same examiner may be handling the related application.
In fact, the cross citations are necessary to remind the examiner of actions
taken by that same examiner in the related application. Merely making the
examiner aware of the relationships between applications is no longer
sufficient.
In sum, “prior
art” cited in a related application is material to patentability of a pending
application when the core features of the “prior art” are similar to
the subject matter of pending application. Further, “rejections” in a
related application are material to patentability of a pending application when
the rejected claims in the related application are substantially similar
to claims of pending application. Finally, “allowances” in a related
application are material to patentability of a pending application when the
allowed claims in the related application could conceivably have given rise
to double patenting rejection.
Courts have held that a
finding of “fraud,” “inequitable conduct,” or violation of a duty of disclosure
with respect to any claim in an application or patent, renders all the claims
thereof unpatentable or invalid.3
The McKesson court’s
findings -- that it is necessary to
cross cite prior art and office
communications from related applications in order to meet the Duty of Disclosure
-- therefore raises the bar on
the standards that must be applied in the prosecution of patent applications.
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© 2007 Ohlandt Greeley Ruggiero & Perle, LLP
This article
has been prepared as general information and is not intended as legal advice
with respect to any specific matter, nor is it intended as an invitation to an
attorney-client relationship. While every effort has been made to ensure the
accuracy of the information contained herein, Ohlandt Greeley Ruggiero & Perle,
LLP does not guarantee such accuracy. This material may be considered attorney
advertising under the rules of professional conduct of some states.
3 See
Chromalloy American Corp. v. Alloy Surfaces Co., 339 F. Supp. 859,
173 USPQ 295 (D.Del. 1972) and Strong v. General Electric Co., 305 F.
Supp. 1084, 162 USPQ 141 (N.D. Ga. 1969), aff'd, 434 F.2d 1042, 168
USPQ 8 (5th Cir. 1970), cert. denied, 403 U.S. 906 (1971).
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