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May 15, 2008


Aventis owns 5,389,618 / RE 38,743, claiming a blood clotting drug. Amphastar and Teva filed FDA ANDAs, prompting suit by Aventis. Amphastar shot back with an affirmative defense of inequitable conduct - Aventis failed to disclose that relied-upon studies, done by a non-inventor, Dr. Uzan, had used different dosages, thus muddying the results.

Aventis v. Amphastar Pharmaceuticals and Teva Pharmaceuticals (CAFC 2007-1280)

Judges Prost and Moore formed a majority. Ruling penned by Prost.

Specifically, Amphastar averred that Dr. Uzan engaged in inequitable conduct by failing to disclose that the half-life studies comparing the patented compound to the EP '144 compound were at different doses. Id. at 941, 944.

The district court determined that the representation by Aventis that the patented compound had an improved half-life as compared to the EP '144 compound was material to patentability because Aventis referred to the improved half-life at least four times during prosecution and the examiner ultimately allowed the '618 patent application after the final representation that the difference in mean half-life was statistically significant. Id. at 950-51. The court found a strong inference of intent to deceive because it could find no credible explanation for comparing half-lives at different doses and because comparisons at the same dose showed little difference in half-life. Id. at 951-52. After weighing the evidence of materiality and intent, the court found weighty uncontroverted evidence establishing inequitable conduct. Id. at 952. It, therefore, granted summary judgment against Aventis and held the '618 patent unenforceable.

On first appeal, the CAFC found the withheld information "important to patentability and constituted a failure to disclose material information," but stopped at resolving intent to deceive, remanding for the district court to determine. Which it did.

Following remand, the district court held a bench trial limited to the issue of intent. Aventis Pharma S.A. v. Amphastar Pharms., Inc., 475 F. Supp. 2d 970, 975 (C.D. Cal. 2007) ("Aventis III").

Based on the totality of the facts and circumstances, the court determined that but for Dr. Uzan's intentional omissions, the probability was high that the '618 patent would not have issued. Id. at 994. Accordingly, the court held the '618 patent and the '743 patent unenforceable due to inequitable conduct. Id.

On second appeal, Aventis had dreamt up a new excuse, as well as polishing its previously presented turds of rationalization.

The CAFC warmed up the crowd for the down-for-the-count denouement by playing the case law anthem of "intent to deceive." The lyrics: "the more it has stink about it, the less you have to think about it."

"To satisfy the intent to deceive element of inequitable conduct, 'the involved conduct, viewed in light of all the evidence, including evidence indicative of good faith, must indicate sufficient culpability to require a finding of intent to deceive.'" Impax Labs., Inc. v. Aventis Pharms. Inc., 468 F.3d 1366, 1374-75 (Fed. Cir. 2006) (quoting Kingsdown, 863 F.2d at 876). Given that direct evidence is often unavailable, intent is generally inferred from surrounding facts and circumstances. Id. at 1375. The district court, upon finding materiality and intent, shall "balance the equities to determine whether the patentee has committed inequitable conduct that warrants holding the patent unenforceable." Id. (quoting Monsanto Co. v. Bayer Bioscience N.V., 363 F.3d 1235, 1239 (Fed. Cir. 2004)). "The more material the omission or misrepresentation, the less intent that must be shown to elicit a finding of inequitable conduct." Id.

The majority trawled through the details and affirmed the patents as unenforceable.

Judge Rader dissented.

Without doubt, candor and truthful cooperation are essential to an ex parte examination system. With burgeoning application rates, the USPTO must rely on applicant submissions to narrow the prior art search. And, of course, those submissions must be reliable. The threat of inequitable conduct, with its "atomic bomb" remedy of unenforceability, ensures that candor and truthfulness.

Although designed to facilitate USPTO examination, inequitable conduct has taken on a new life as a litigation tactic. The allegation of inequitable conduct opens new avenues of discovery; impugns the integrity of patentee, its counsel, and the patent itself; excludes the prosecuting attorney from trial participation (other than as a witness); and even offers the trial court a way to dispose of a case without the rigors of claim construction and other complex patent doctrines. This court has even observed a number of cases, such as this one, that arrive on appeal solely on the basis of inequitable conduct where the trial court has apparently elected to try this issue in advance of the issues of infringement and validity. See, e.g., Frazier v. Roessel Cine Photo Tech, Inc., 417 F.3d 1230 (Fed. Cir. 2005); Semiconductor Energy Lab. Co. v. Samsung Elecs. Co., 204 F.3d 1368 (Fed. Cir. 2000).

This phenomenon is not new or unprecedented. At an earlier time, the Federal Circuit also observed that inequitable conduct as a litigation strategy had become a "plague." Burlington Indus. v. Dayco Corp., 849 F.2d 1418, 1422 (Fed. Cir. 1988). In response, this court took a case to reduce abuse of inequitable conduct. Kingsdown Med. Consultants, Ltd. v. Hollister, Inc., 863 F.2d 867, 876 (Fed. Cir. 1988) (en banc). In Kingsdown, this court clearly conveyed that the inequitable conduct was not a remedy for every mistake, blunder, or fault in the patent procurement process.

More recently, however, the judicial process has too often emphasized materiality almost to the exclusion of any analysis of the lofty intent requirement for inequitable conduct.

The inadvertence in this case presents another difficulty for a finding of intent to deceive. The omissions and prosecution errors were committed by two individuals, Dr. Uzan and Mr. Schulman, Aventis' prosecuting attorney. Collective actions call into question any showing of intent for inequitable conduct. 37 C.F.R. ยง 1.56 refers to the duty of candor and good faith possessed by "[e]ach individual associated with the filing and prosecution of a patent application." (emphasis added). Mr. Schulman did not know that the doses of the Debrie LMWH and the Mardiguian LMWH were different. Dr. Uzan admitted that he inadvertently neglected to add that information to the graphs. The dosage information was not on the original Foquet chart submitted to the Aventis patent department and Dr. Uzan neglected to add it. Mr. Schulman had no way of knowing that the comparison was at two different doses and therefore the impropriety of using that data to demonstrate compositional difference. Mr. Schulman's arguments also carry the markings of a good faith mistake.

Most important, Dr. Uzan himself revealed the error. This candor is inconsistent with deceptive intent. He submitted all of the underlying data to the patent office with his second declaration on June 9, 1994.

The line for inequitable conduct is a line in sand. A patent grant is a serious exclusivity. It is reasonable to make it incumbent for inventors and prosecutors to submit reliable data. It is reasonable that examiners rely upon submitted data. It is reasonable that a patent grant is incumbent upon the integrity of the process. The loss of patent grant for loss of integrity in the process is reasonable. Patents should not withstand in the face of serious omissions and prosecution errors. A shrug of the shoulders that "mistakes were made" is lame, turning patents into an infantile game of what can be gotten away with. In this case, the patent was begrudgingly granted based solely upon the reliability of data that proved unreliable.

Rader had no truck with the degree of materiality, only that the mistake appears inadvertent. Rader would not hold the patent holder responsible for prosecution actions, for ensuring the integrity of the data presented. Rader is wrong.

"The more material the omission or misrepresentation, the less intent that must be shown to elicit a finding of inequitable conduct." Sounds just about right.

Posted by Patent Hawk at May 15, 2008 12:30 PM | Inequitable Conduct


What stunk here was the panel's decision, not Aventis' behavior. Read Judge Rader's dissent.

Posted by: Federally Circuitous at May 15, 2008 11:17 PM