The U.S. Patent Office is modifying its approach to oaths/declarations. Starting on June 1, 2008, oaths/declarations must acknowledge “a duty to disclose information material to patentability as defined in Rule 1.56.”

This serves as yet another example of the importance of understanding Rule 56, advising applicants/clients of their duty, and how to satisfy this duty. I discussed a process of doing just that in two earlier posts here and here.

The U.S. Patent Office’s Notice explaining the reasons for this change can be found in the Patent section of the U.S. Patent Office’s “News and Notices” page, which can be found here.

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© 2008, Michael E. Kondoudis

The Law Office of Michael E. Kondoudis
DC Patent Attorney
www.mekiplaw.com

In McKesson Information Solutions, Inc., v. Bridge Medical, Inc., No. 06-1517 (Fed. Cir. 2007), the Federal Circuit affirmed a dismissal of an infringement suit after finding that the patent in suit was unenforceable due to inequitable conduct. In doing so, the Federal Circuit reaffirmed that a patent may be rendered unenforceable for inequitable conduct if an applicant, with intent to mislead or deceive the examiner, fails to disclose material information or submits materially false information during prosecution.

At issue in McKesson was whether the failure to cite information from one of two similar applications in the other during their pendency constituted inequitable conduct. The information at issue included: a prior-art patent; office actions; and the allowance of the first case.

The McKesson decision is a fact intensive one that does not necessarily break new legal ground. Nonetheless, the decision is significant; not for its general guidance about determining whether a decision to withhold information constitutes inequitable conduct, but for its illustration of the complexities that may arise in the context of “associated” applications, that is, unrelated applications directed to similar technology.

The following are some practice suggestions to promote compliance with the duty of candor in both the narrow context of a particular application and in the broader context of associated applications.

Suggestions For Patent Practitioners

1. Read the McKesson Decision and Rule 56; Understand the Duty of Candor and the Affirmative Defense of Inequitable Conduct

37 CFR 1.56 (“Rule 56”) imposes a duty of candor and good faith in dealing with the United States Patent and Trademark Office (USPTO). This duty generally requires, during the pendency of an application, that each individual associated with the filing and prosecution of that application disclose to the USPTO all known information that is “material to patentability.”

“Inequitable conduct” is an affirmative defense to patent infringement that requires: (1) an affirmative misrepresentation of material fact, a failure to disclose material information, a submission of false information, and/or an attempt to “bury” material information; and (2) an intent to deceive. Materiality may be judged by the “reasonable examiner” standard. An intent to deceive is necessary; an intent to withhold material information is not sufficient. And, the burden of establishing inequitable conduct requires that the asserting party prove a threshold level of materiality and intent by clear and convincing evidence.

2. Educate Clients About the Duty of Candor and Periodically Remind Clients of the Duty

Consider notifying your clients about the “duty of candor” at least at the time of filing and perhaps at other specified stages of prosecution. Whether this notice is via a separate letter or a portion of a reporting letter, it would appear prudent to consider including:

a. a copy of Rule 56 along with a plain English explanation of the rule;

b. examples of potentially material information and possible sources of such information such as co-pending applications directed to similar subject matter, related applications, communications from foreign patent offices regarding associated applications, abstracts, offers for sale, brochures, litigation, and instances of public use; and

c. a reminder that the duty continues until issuance.

3. Establish and Implement a Procedure to Identify “Associated” Applications and to Ensure That “Associated” Applications are “Cross-Pollinated”

A prerequisite to complying with the duty of candor in the context of “associated” applications is to identify these applications. One way to increase the likelihood that applications directed to similar subject matter will be identified is to have a formal policy in place that effects a centralized “association review” of applications, sets a threshold or articulates criteria to evaluate just how similar in subject matter applications must be to render them “associated,” and specifies a procedure to follow when “associated” applications are identified. Some specific components to consider including in this procedure may include:

a. immediately notifying the client of the apparent association of applications so that the client may take internal steps to facilitate compliance with the duty of candor (see number 2 below).

b. drafting memoranda for each of the “associated” applications that identifies the associations. In paperless offices, the memo can be titled “MEMO OF ASSOCIATION” so that it is noticeable when one looks at a file directory. With physical files, a paper memorandum identifying the associations may suffice. Alternatively, on physical files, it may be prudent to consider writing an indicia such as “APPLICATION ASSOCIATED WITH FILE NUMBER XXXX.XXXX” on the cover of the file itself.

c. citing “associated” applications and the information of record therein to the USPTO as early as possible in prosecution.

d. when appropriate, “cross-pollinating” the “associated” applications. Once “associated” applications are identified, information from each application may need to be made of record in each of the other “associated” applications. And, after this initial cross-pollination is completed, it may more easily maintained if a record is made of what has been cited in/from “associated” applications and when.

e. Adding appropriate indicia to your docketing system. Some docketing systems, such as the Intellectual Property Case Tracking System by FlexTrac Systems, Inc., include a related cases tracking feature that may be suitable for tracking “associated” applications.

These steps may be implemented in any number of ways. For example, when two applications are determined to be associated, they may be clearly marked as such on their file covers. Concurrently, the docketing system could be updated to indicate the association. Then a standard letter may be sent to the client explaining the reasons for categorizing the applications as “associated,” the significance of this determination, and how the applications will be prosecuted by the attorney. Next, an information disclosure statement (IDS) could be filed in each “associated” application identifying the other as a co-pending application. In conjunction with the preparation of these IDSs, the information in each “associated” application could be reviewed to determine whether it would be appropriate to make that information of record in the other “associated” application. Thereafter, every time an Office Action is received in one of the “associated” applications, the other “associated” application may be reviewed to determine whether an IDS is appropriate in that application.

Suggestions For Clients

1. Review Advice from Your Attorney about the Duty of Candor and Follow that Advice

(see number 1 above) Make sure that you fully understand the duty of candor. If you are not sure, ask your attorney.

2. Implement Procedures for Ensuring That “Associated” Applications are Appropriately “Cross-Pollinated”

(see number 3 above). This is of particular importance when corresponding foreign applications are being concurrently prosecuted. Information from such corresponding applications may need to be cited in a corresponding U.S. application and those applications that have been determined to be “associated.” In these situations, the necessity of client input is self-evident.

3. Work with your Outside Counsel to Ensure the Duty of Candor is Met

a. Consider directing applications relating to similar technologies to the same office. Along these same lines, consider specifically requesting that applications directed to similar subject matter be handled by the same attorney or team.

b. Consider specifically advising your outside counsel when applications may be sufficiently similar as to warrant an “association review.” (see number 3 above).

c. Never avoid advising your attorney about potentially unfavorable art simply because it may be unfavorable.

Conclusion

The McKesson decision emphasizes the importance of compliance with the duty of candor in the context of unrelated applications directed to similar subject matter. By implementing a thoughtful procedure including components like those outlined above, compliance may be promoted in the broader context of unrelated applications directed to similar subject matter.

On a final note, the authors recognize that treating unrelated applications directed to similar subject matter as “associated” may entail some potential complications in litigation. And, these complexities should certainly be considered when setting the threshold or articulating evaluation criteria used to determine whether applications are sufficiently similar so as to be treated as “associated.” Nonetheless, by carefully and selectively categorizing applications as “associated,” these potential complications, which are the cost of complying with the duty of candor, can be minimized.

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© 2007, Michael E. Kondoudis

The Law Office of Michael E. Kondoudis
DC Patent Attorney
www.mekiplaw.com

I have received several inquiries for the memorandum referenced in the first form paragraph of my earlier post on this subject. The following is the basic text I start with when drafting the memorandum for a new client.

2006 Memorandum Re: The Duty of Disclosure and Materiality

Every applicant for a U.S. patent has a duty of candor and good faith in dealing with the United States Patent and Trademark Office (USPTO). This duty generally requires, during the pendency of an application, that certain individuals disclose to the USPTO all known information that is “material to patentability.” A failure to satisfy this duty of candor can have severe consequences, including the unenforceability of any patent that issues from the application. Therefore, it is important to be aware of who must comply with this duty of candor and what makes information “material.”

Section 1.56 of Title 37 of the Code of Federal Regulations (known as “Rule 56″) provides, among other things, that any individual who is associated with the filing or prosecution of a patent application must comply with this duty. In essence, this means that everyone involved in the procurement of a patent has a duty to disclose information material to the patentability of a claimed invention. This means that Rule 56 applies to, but is not limited to, named inventors, their attorney(s) or agent(s) involved in the preparation or prosecution of the application, any assignee(s), and anyone else who is substantively involved in the preparation of the application and who is associated with the inventor or any assignee. It is importation to appreciate that the application of Rule 56 is limited only those individuals who are involved in the patenting process. A copy of Rule 56 is attached for your review and future reference.

There is no “bright line test” for determining what information is “material.” Most courts, however, follow a relatively expansive test in which information is deemed material if it is arguably relevant to the issue of patentability of any claim. Rule 56 defines information as “material” when:

(1) it is not cumulative to information already of record in the application; and

(2) either (i) establishes a prima facie case of unpatentability of any claim, by itself or in combination with other information, or (ii) refutes, or is inconsistent with, a position that the applicant has taken relating to the patentability of any claim.

Information is generally considered cumulative when it is merely repetitive or is less relevant than information already of record in the application. A prima facie case of unpatentability exists when the information compels a conclusion that a claim is unpatentable based on a preponderance of evidence, when each term in the claim is given its broadest reasonable construction consistent with the specification, and before any patentablity argument.

Non-limiting examples of potentially material information include U.S. or foreign patents or published patent applications, communications from foreign patent offices in related applications, scientific and other journal articles, brochures, and web sites.

As a “rule of thumb,” we generally recommend erring on the side of caution and disclosing to the USPTO any information that may arguably be relevant to the issue of patentability, so long as it is not overly cumulative.

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© 2007, Michael E. Kondoudis

The Law Office of Michael E. Kondoudis
DC Patent Attorney
www.mekiplaw.com

This post is a slight departure from previous posts on this blog in that it focuses on communications between prosecutors and clients rather than communications between prosecutors and the U.S. Patent and Trademark Office.

The duty of candor that every applicant and patent practitioner owes to the U.S. Patent and Trademark Office (USPTO) has been of increased attention since the Federal Circuit issued its opinion in McKesson Information Solutions, Inc. v. Bridge Medical, Inc., 06-1517 (2007). For now, I will leave the debate about the practical effects of that decision to others. Instead, this post focuses on ways a practitioner can advise and remind a client of this important duty.

A Review of the Duty of Candor (Rule 56)

The filing of a patent application in the USPTO imposes an obligation on all persons involved with the prosecution of that application to satisfy a duty of candor. This duty of candor is articulated by Section 1.56 of Title 37 of the Code of Federal Regulations (commonly referred to as Rule 56) and requires that all information “material to patentability”  must be cited to the USPTO. Information is “material to patentability” when (1) it is not cumulative to information already of record in the application, and (2) either: establishes, by itself or in combination with other information, a prima facie case of unpatentability of a claim; or refutes, or is inconsistent with, a position the applicant has taken in (i) opposing an argument of unpatentability relied on by the Office, or (ii) asserting an argument of patentability.

A failure to satisfy this duty can have severe consequences, including the unenforceability of any patent that issues from the application. I submit, therefore, that it is only prudent to expressly advise clients of this continuing duty, and to do so at multiple stages of prosecution. The following are examples of the different form paragraphs I find useful.

1. Upon Filing Of An Application

Please be advised that every applicant for a U.S. patent has a duty of candor and good faith in dealing with the United States Patent and Trademark Office. This duty extends to all persons involved with the filing and prosecution of an application and requires, during the pendency of the application, the submission of all known information that is material to the patentability of any claim. Accordingly, if you are presently aware of any information that may be material, please let us know so that we may submit that information in an Information Disclosure Statement (IDS). Also, if you become aware of any information that may be material, please let us know as soon as practicable after it is discovered so that we may submit that information in an IDS. A copy of the rule setting forth this duty, along with a memorandum about the duty of disclosure, are enclosed for your convenience and future reference. If you have any questions about this duty, please let us know so that we may answer them for you.

2. After A First Or Non-Final Office Action Has Issued

We remind you that information material to patentability must be cited to the U.S. Patent and Trademark Office. Since an Office Action has been issued in this application, any information cited at this time will be considered as a matter of right only if accompanied by either (i) a government fee or (ii) a statement that the information was first cited in any foreign counterpart, or first discovered, within the last three months. Accordingly, if you are or become aware of any information material to patentability that has not yet been cited, please inform us as soon as possible.

3. After A Final Office Action Has Issued

We remind you that information material to patentability must be cited to the U.S. Patent and Trademark Office. Since a final Office Action has been issued in this application, any information cited at this time will be considered as a matter of right only if accompanied by both (i) a government fee and (ii) a statement that the information was first cited in any foreign counterpart, or first discovered, within the last three months. Accordingly, if you are or become aware of any information material to patentability that has not yet been cited, please inform us as soon as possible.

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© 2007, Michael E. Kondoudis

The Law Office of Michael E. Kondoudis
DC Patent Attorney
www.mekiplaw.com