How a "Plague" of Inequitable Conduct Charges Curiously Became a "Scourge" and Why We Should Guard Against the Use of Pejorative Patent Terminology
Infectious disease terminology serves as the reigning metaphor in Federal Circuit cases decrying the rampant assertion of inequitable conduct defenses in patent litigation. The Federal Circuit’s first use of the word plague in this context can be traced back to Burlington Indus., Inc. v. Dayco Corp., 849 F.2d 1418, 1422 (Fed. Cir.1988), when the court stated that “the habit of charging inequitable conduct in almost every major patent case has become an absolute plague.” (Emphasis added.)
“Inequitable conduct” charges at one time were more commonly labeled as “fraud on the Patent Office” claims. Because the latter label was deemed “pejorative,” it was dropped. But as the Dayco panel observed, “the change of name does make the thing itself smell any sweeter.” Id., at 1422.
Judge Pauline Newman is a frequent dissenter in Federal Circuit cases affirming the unenforceability of a patent based on an inventor’s or patent attorney’s alleged inequitable conduct. She describes the seeming proliferation of inequitable conduct defenses in patent litigation as follows:
"Inequitable conduct” in patent practice means misconduct by the patent applicant in dealings with the patent examiner, whereby the applicant or its attorney is found to have engaged in practices intended to deceive or mislead the examiner into granting the patent. It is a serious charge, and the effect is that an otherwise valid and invariably valuable patent is rendered unenforceable, for the charge arises only as a defense to patent infringement.
As this litigation-driven issue evolved, the law came to demand a perfection that few could attain in the complexities of patent practice. The result was not simply the elimination of fraudulently obtained patents, when such situations existed. The consequences were disproportionally pernicious, for they went far beyond punishing improper practice. The defense was grossly misused, and with inequitable conduct charged in almost every case in litigation, judges came to believe that every inventor and every patent attorney wallowed in sharp practice.
Ferring B.V. v. Barr Laboratories, Inc. 437 F.3d 1181, 1195 (Fed. Cir. 2006)(dissenting opinion).
The Federal Circuit’s en banc decision in Kingsdown Medical Consultants, Ltd. v. Hollister, Inc., 863 F.2d 867 (Fed.Cir. 1988) was intended to curb the patent litigator’s seemingly ravenous appetite for willy-nilly assertions of inequitable conduct. That case held that the intent element of inequitable conduct must be established by clear and convincing evidence of deceptive intent. Gross negligence is not supposed to suffice and “does not of itself justify an inference of an intent to deceive.” Id., at 872.
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