1. Whether the named inventors of a patent(s) engage in inequitable conduct by intentionally presenting falsehoods and misinformation and neglecting to disclose additional authors of the patented invention.
2. Whether intentional falsehoods, misinformation, and omissions on the subject of inventorship are "material" as a matter of law, and thus form the basis for a district court to render otherwise valid patents unenforceable.
3. Whether the district court abused its discretion in finding that the actions of the named inventors constituted inequitable conduct.
1. Yes. Intentional misrepresentation and failure to disclose additional authors constitutes inequitable conduct.
2. Yes. A party's intentional falsehoods, misinformation, and omissions on the subject of inventorship are "material" and may form the basis for rendering a patent(s) unenforceable.
3. No. Sufficient factual findings demonstrate that the district court did not abuse its discretion in finding that the actions of the named inventors constituted inequitable conduct.
PerSeptive Biosystems, Inc. ("PerSeptive") is the assignee of U.S. Pat. Nos. 5,019,270 ("the '270 patent"), 5,228,989 ("the '989 patent"), and 5,384,042 ("the '042 patent"), directed to methods of separation of biological materials through high-speed, "perfusive" chromatography. All three patents derived from a single patent application and name the same three inventors.
PerSeptive filed suit against Pharmacia Biotech., Inc. ("Pharmacia") in the U.S. District Court for the District of Massachusetts, alleging infringement of all three patents. In its defense, Pharmacia alleged that all three patents were invalid for failure to list all the inventors. Pharmacia further alleged that all three patents were unenforceable due to inequitable conduct by the named inventors during prosecution of the patents.
The district court found that there was clear evidence that none of the patents named all of the true inventors, yet the court declined to hold the patents invalid. The court denied PerSeptive's motion under 35 U.S.C. § 256 to correct inventorship after finding that the named inventors repeatedly made false statements and misrepresentations to the PTO concerning the inventorship and timing of the innovation. See PerSeptive Biosys., Inc., v. Pharmacia Biotech. Inc., No. 93-12237, slip op. at 126 (D. Mass. 1997).
Following the subsequent contrary holding in Stark v. Advanced Magnetics, Inc., 119 F.3d 1551, 43 USPQ2d (BNA) 1321 (Fed. Cir. 1997), however, the district court vacated its denial of PerSeptive's motion to correct inventorship. See PerSeptive Biosys., Inc., v. Pharmacia Biotech. Inc., No. 93-12237, slip op. at 1 (D. Mass. 1998). Stark held that 35 U.S.C. § 256 empowers correction of inventorship without inquire into the intent of the originally-named inventors. Thus, without hearing evidence relating to the intent of the originally-named inventors, the court "reexamined the legal effect of its factual findings that [Pharmacia had] proven by clear and convincing evidence that the named inventors made a series of misrepresentations to the [PTO]." Id. slip op. at 4.
Upon review of its factual findings, the district court held that the three named inventors committed inequitable conduct during the prosecution of the application that subsequently generated the three patents at issue. Consequently, the court ruled that "the patents were unenforceable," and entered judgment under Fed. R. Civ. Proc. 54(b). See PerSeptive Biosys., Inc., v. Pharmacia Biotech. Inc., No. 93-12237, slip op. at 1 (D. Mass. 1998) (Order). PerSeptive appealed the judgment of the district court.
Under an abuse of discretion standard of review, the Federal Circuit found that the district court correctly held that the named inventors of the three patents intended to deceive the PTO during the prosecution of the application by making material misrepresentations regarding inventorship of the patents. The Court reasoned that the named inventors' conduct constituted inequitable conduct under the two-step analysis: accordingly, the named inventors' conduct (1) met the threshold level of materiality, and (2) the evidence established a threshold level of intent to deceive the PTO. See Baxter Int'l., Inc. v. McGaw, Inc., 149 F.3d 1321, 1327, 47 USPQ2d (BNA) 1225, 1228-29 (Fed. Cir. 1998).
The Federal Circuit further concluded that the district court's finding of intent to deceive was not clear error. The Court reasoned that PerSeptive's conduct was sufficient ground for the district court to render PerSeptive's patents unenforceable. Similarly, the omissions, falsehoods, and misrepresentations made during the applications' prosecution were considerably material to the examiner's decision to allow the patent claims. The Federal Circuit cited A.B. Dick Co. v. Burroughs Corp., 798 F.2d 1392, 1397, 230 USPQ(BNA) 849, 853 (Fed. Cir. 1986), noting that "the test for materiality is not whether there is anticipation or obviousness, but rather, what a 'reasonable examiner would consider... important in deciding whether to allow the application to issue as a patent.'"
Thus, finding no clear evidence of error in the district court's factual findings, the Federal Circuit affirmed the district court's judgment of invalidity and unenforceability of PerSeptive's three patents.
In an extensive dissent, Judge Newman asserted that PerSeptive had not committed inequitable conduct for failure to list all the correct inventors. Judge Newman asserted that "inventorship" arises from conception of the invention, and that the unnamed inventors did not aid in conceiving the invention, only in its reduction to practice. Further, Judge Newman failed to find any misrepresentations or falsehoods in PerSeptive's communications with the PTO that necessitated invalidation of PerSeptive's patents.
Prepared by the liibulletin-patent Editorial Board.