• Emil J. Ali

Allegations of Inequitable Conduct, and the Ramifications at OED

Updated: Aug 1


Patent practitioners often call me frantically wondering whether the fact that a patent application they prosecuted years ago, which is now being litigated by new counsel, should cause them concern since the alleged infringer raised inequitable conduct during prosecution as a defense at the time of the litigation. The answer, unfortunately, is complicated.


As we dive in, it is important to understand what inequitable conduct is, and why it matters. Briefly, inequitable conduct is generally defined as the breach of the duty of candor and good faith under 37 CFR § 1.56 during the prosecution of a patent application. See generally, MPEP Chapter 2000. The USPTO does not generally investigate allegations under the duty of candor, and will not reject applications based upon the same. See e.g., MPEP Section 2010 (“It is the courts and not the Office that are in the best position to fashion an equitable remedy to fit the precise facts in those cases where inequitable conduct is established.”). However, litigants and their counsel use inequitable conduct allegations to help bolster potentially weak claims. While often those allegations may be meritless, oftentimes such allegations may lead to investigations by OED or state bars regarding counsel’s duties under 37 CFR §§ 1.56, 11.303, and other rules. This, of course, is beyond the potential harm to the client and the registered patent that could be invalidated.



In 2011, the Federal Circuit changed the landscape for patent practitioners in Therasense Inc. v. Becton Dickinson and Co., 649 F.3d 1276, 1288 (Fed. Cir. 2011) where they outlined that the inequitable conduct defense would only be applicable in (1) occasions when the acts are directly related to the patent, and (2) when it can be proved that the party engaged in deceitful conduct—referred to by patent practitioners as materiality and intent. In later cases, many of the allegations of inequitable conduct failed because the defendants raising the issue failed to plead the allegations and identify the intent. See, e.g., Senju Pharm. Co. v. Apotex Inc., 921 F. Supp.2d 297 (D. Del. 2013).


However, more recently, the Federal Circuit upheld an allegation of inequitable conduct against a patent holder, as well as their counsel. See GS CleanTech Corp. v. Adkins Energy LLC, Case Nos. 2016-2231, 2017-1838 (Fed. Cir. 2020). The opinion of the court appears to be straightforward--GS CleanTech Corp. had an on-sale bar issue, and withheld information material to patentability (successful testing in 2003 vs 2004), and that both the inventors and counsel made false statements in a declaration. To make matters worse, the court held that the “failure to correct the false declaration in the ’484 patent prosecution was ‘strong evidence of intentional deceit[.]’” Id. Interestingly, while courts are often easily excited by allegations of misrepresentation by inventors and applicants, it is rare to see the zealousness of the late District Judge Larry J. McKinney as to the prosecution attorneys at Cantor Colburn, LLP where he stated (in the underlying District Court Opinion) that “[i]t appears to the Court that the lawyers ignored the red flags waiving [sic] before them.” Strikingly, the court appears to have “thrown counsel under the bus” by implying that they should have known, rather than citing some evidence of actual (mis)conduct.


Beyond the unfortunate circumstances of the present case, it is important to understand long-term consequences for such allegations. As we discussed above, Therasense changed the landscape and left many allegations of inequitable conduct as just that—mere allegations. However, once a court (after appeals exhaustion) find inequitable conduct, the Office of Enrollment and Discipline will often attempt to take action—this may come even sooner if the Office of Enrollment and Discipline receives information about the pendency of such an allegation. While such findings by a court do not always rise to the level of a violation of any ethics rules, they can cause concerns with the USPTO’s Office of Enrollment and Discipline, whose attorneys may attempt to impute violations of 37 CFR §§ 1.56, 11.101, 11.303, and 11.804, among others.


Practitioners should therefore be mindful that it is best to engage ethics counsel during litigation to ensure all representations in the patent litigation are not only correct, but also to represent the interests of prosecution counsel as clearly the interests of counsel and the patentee may not be aligned, especially if the patentee were to allege that they relied on advice of counsel to comply with the duty of disclosure.


Of course, once the matter reaches the Office of Enrollment and Discipline, it is important to balance your duties of confidentiality and privilege to your client, your duty to cooperate with the USPTO, as well as the need to protect your own law license—especially when the Federal Circuit’s quotes: “‘they chose advocacy over candor.’” In a time when burnout and stress afflict lawyers, it is truly said to see such attorneys have their names impugned. Unfortunately, the Federal Circuit appears to be sending a warning to practitioners--doubt your clients, because the courts doubt you.


For additional information, please contact McCabe & Ali, LLP at 877-OED-4097.

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