In Dayco Prods., Inc. v. Total Containment, Inc. (Fed. Cir. May 23, 2003), the Federal Circuit ruled failure during patent prosecution to disclose a prior art rejection of a substantially similar claim in a copending patent application met the requirement for materiality in a determination whether to hold the patent unenforceable for inequitable conduct.

A patent owner asserted a first family of patents, but not a second family of patents, against an accused infringer.  The first and second families of patents:

• were pending at the same time but assigned to different patent examiners in the U.S. Patent and Trademark Office (“PTO”);
• disclosed substantially similar technologies directed to flexible hoses and coupling assemblies for use in underground gas containment systems;
• had claims that were in some respects substantially identical; and
• were prosecuted by the same attorney on behalf of the inventor and the patent owner.

The prosecution history of the first family of patents lacked any evidence that the first examiner was made aware of the second family of patents.  The second family of patents included specific references in the detailed descriptions to members of the first family of patents, which made the second examiner aware of the first family of patents.  A point of dispute was whether the conduct before the PTO was inequitable in conjunction with, and therefore rendered unenforceable, the first family of patents.

Inequitable conduct in the prosecution of a patent application requires evidence of affirmative misrepresentation of a material fact, failure to disclose material information, or submission of false material information, coupled with an intent to deceive.  The inequitable conduct analysis first determines whether the withheld information meets threshold levels of materiality and intent to mislead, and second weighs the materiality and intent in light of all the circumstances to determine whether the inventor’s conduct is so culpable that the patent should be held unenforceable.

The preexisting “reasonable examiner” standard for materiality in an inequitable conduct determination requires showing a substantial likelihood that a reasonable examiner would have considered the information important in deciding whether to allow the application to issue as a patent.  A new standard under the PTO’s amendment to 37 C.F.R. § 1.56 (1992) (“Rule 56″) more narrowly defined the materiality showing to require that the information establish either a prima facie case of unpatentability or refute or be inconsistent with a position taken by the inventor.  Concluding its decision would be the same under either standard, the court left for another day a final disposition of the issue of the proper standard for materiality.

Failure to Disclose the Fact of Copendency

One potential result of the failure to disclose the second family of patents during prosecution of the first family of patents was elimination of an opportunity for the first examiner to issue a rejection under the judicially created doctrine of obviousness-type double patenting.  The doctrine prohibits an inventor from obtaining two patents with claims that are not patentably distinct.  Overcoming this type of rejection requires a terminal disclaimer with a provision that any patent granted shall be enforceable only for and during such period that the patent is commonly owned with the application or patent which was the basis for the rejection.  The patent owner did file a terminal disclaimer internal to the first family of patents during prosecution that prevented an unallowable length of patent term, but did not address common ownership between the first and second families of patents.  The court concluded the rights of the patentee to assign the first family of patents could still have been affected by the existence of the second family of patents in view of the issue of common ownership, and therefore ruled materiality was satisfied.  Notwithstanding this showing of materiality, the record provided no threshold showing of an intent to deceive so the showing for patent unenforceability was incomplete.

Failure to Disclose the Rejection of Substantially Similar Claims

There also existed rejections of claims in the second family of patents that were substantially similar in content and scope to claims contemporaneously pending in the first family of patents.  The court held that the adverse decision of the second examiner in reviewing a substantially similar claim met the threshold test of materiality for any information that a reasonable examiner would substantially likely consider important in deciding whether to allow the first family of patents to issue.

Patent disclosures are often very complicated, and different examiners with different technical backgrounds and levels of understanding may often differ when interpreting such documents.  Although examiners are not bound to follow other examiners’ interpretations, knowledge of a potentially different interpretation is clearly information that an examiner could consider important when examining an application.

The court also held that the information met the threshold level of materiality under the new Rule 56 by refuting, or being inconsistent with, a position the inventor had taken in asserting an argument of patentability of the claims in the first family of patents.

When prosecuting claims before the Patent Office, a patent applicant is, at least implicitly, asserting that those claims are patentable.  A prior rejection of a substantially similar claim refutes, or is inconsistent with[,] the position that those claims are patentable.  An adverse decision by another examiner, therefore, meets the materiality standard under the amended Rule 56.

With the materiality threshold satisfied, the court remanded the case to the district court for a trial on the issue of an intent to deceive in the first family of patents because of the failure to disclose the second examiner’s adverse decision.

Recommendations:

To ensure prospective enforceability of your patents:

• Disclose to the patent examiner an adverse decision on a claim in one of your patent applications that is substantially similar to a claim in another of your patent applications.
• In addition to other cross-references you may make, include cross-references between your copending patent applications that include substantially similar claims.
• In addition to other citations you may make, cite your issued patents in an Information Disclosure Statement (“IDS”) for your pending patent applications that include substantially similar claims.

May 27, 2003

Text Copyright © 2003 Bob Brill et al.

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