1. 1 1 AIPLA Firm Logo American Intellectual Property Law Association Post Therasense Decisions and Practical Tips Post Therasense Decisions and Practical Tips DONALD STUDEBAKER AIPLA IP PRACTICE IN JAPAN COMMITTEE SPRING MEETING TOKYO AND OSAKA JAPAN APRIL 2013

2. 2 2 AIPLA Firm Logo Table of Contents  Summary of the Therasense Decision (May 2011)  UPDATE: District Court Decision (N.D. Cal. March 2012)  Post Therasense Decisions  Powel v. Home Depot (Fed Cir: Nov. 2011)  Aventis Pharma v. Hospira (Fed Cir: April 2012)  1 st Media v. Electronic Arts (Fed Cir: Sep. 2012)  Parker Vision v. Qualcomm (M.D. Fla., Jan. 2013)  Summary  Practical Tips 2

3. 3 3 AIPLA Firm Logo Therasense v. Becton (Fed. Cir. May 2011) SUMMARY OF THE THERASENSE DECISION  To prevail on the defense of Inequitable Conduct (IC), the accused infringer must prove that the applicant misrepresented or omitted material information with the specific intent to deceive the USPTO.  The accused infringer must prove both elements “intent and materiality” by clear and convincing evidence. 3

4. 4 4 AIPLA Firm Logo Therasense v. Becton (Fed. Cir. May 2011) Summary of the Therasense decision: (cont’d)  EXCEPTION:  The court held that in cases involving Affirmative Egregious Misconduct, “but for materiality” need NOT be proven.  Example of Affirmative Egregious Misconduct – the submission of an unmistakably false affidavit. 4

5. 5 5 AIPLA Firm Logo Therasense v. Becton (N.D. Cal. March 2012) Summary of the Therasense District Court decision  The district court found by clear and convincing evidence that the lawyer and expert had actual knowledge of the withheld EPO briefs,  That the lawyer and expert had actual knowledge of the materiality of the briefs, and  That they made a deliberate decision to withhold the evidence.  The district court found that these three elements together were sufficient by themselves to establish a threshold case of specific intent to defraud.  The district court went on to find that based on the overall evidence "intent to deceive is the single most reasonable inference." 5

6. 6 6 AIPLA Firm Logo Post Therasense Decisions Powell v. Home Depot (Fed. Cir. Nov. 2011) * Aventis Pharma v. Hospira (Fed. Cir. April 2012) ** 1 st Media v. Electronic Arts (Fed. Cir. Sep. 2012) * Parker Vision v. Qualcomm (M.D. Fla., Jan. 2013) * * No finding of Inequitable conduct ** Finding of Inequitable conduct 6

7. 7 7 AIPLA Firm Logo Post Therasense Decisions Powell v. Home Depot (Fed. Cir. Nov. 2011) Background: Powell sued Home Depot for willful patent infringement of U.S. Patent No. 7,044,039, directed to a safety guard for a radial arm saw. While prosecuting his patent, Powell filed a Petition to Make Special in accordance with MPEP §708.02, seeking expedited review on the grounds that he was obligated to manufacture and supply, to Home Depot, devices as claimed in his application. "Mr. Powell believed that -- based on his ongoing negotiations and long-term business relationship with Home Depot -- he was obligated to supply it with saw guards for radial arm saws located in each Home Depot store." 7

8. 8 8 AIPLA Firm Logo Post Therasense Decisions Powell v. Home Depot (Fed. Cir. Nov. 2011) Background cont.: Ultimately the Patent Office granted Powell's Petition to Make Special and his patent application received expedited review. The negotiations with Home Depot had failed and Powell did not inform the USPTO that he no longer qualified for the Special status under the prospective manufacture exception. 8

9. 9 9 AIPLA Firm Logo Post Therasense Decisions Powell v. Home Depot (Fed. Cir. Nov. 2011) District Court:  The district court determine that Mr. Powell, with intent to deceive, failed to inform the Patent Office that he was no longer obligated to manufacture products for Home Depot.  The court also determined that this intentional omission was material to the USPTO examination procedure.  However, the district court concluded that Home Depot failed to establish, by clear and convincing evidence, that Powell's patent was unenforceable based in part on the balance of equities.  Specifically, while the district court (before Therasense en banc decision) held that the failure to inform the USPTO was done with the intent to deceive the USPTO, the intentionally non-informing information was not material to the patentability of the claim. 9

10. 10 AIPLA Firm Logo Post Therasense Decisions Powell v. Home Depot (Fed. Cir. Nov. 2011) Federal Circuit  During the pendency of Home Depot's appeal, the CAFC decided Therasence.  The Federal Circuit, affirmed the district court decision, and held that Powell’s failure to inform the USPTO “that the condition which supports a Petition to Make Special no longer exist” does not constitute inequitable conduct, because Powell’s conduct (improper omission) fails the but-for materiality standard of Therasense.  The court further noted that this improper omission is not the type of act which rises to the level of “affirmative egregious misconduct” and therefore is not an exception to the standard. 10

11. 11 AIPLA Firm Logo Post Therasense Decisions Aventis Pharma v. Hospira (Fed. Cir. April 2012) Background:  The two patents-in-suit, U.S. Patent Nos. 5,750,561 and 5,714,512, relate to an Aventis chemotherapy cancer drug, which is administered in an aqueous solution called a “perfusion”.  The prior art surfactant used to form the solution triggered allergic reactions, including anaphylactic shock, in patients.  To overcome the problem, the patented formulation uses a different surfactant and limits the amount of ethanol in the solution, as compared to prior art formulation. 11

12. 12 AIPLA Firm Logo Post Therasense Decisions Aventis Pharma v. Hospira (Fed. Cir. April 2012) District Court:  In their pre-Therasense decision, the district court made separate and distinct findings on intent and materiality.  The district court found that the inventors had cited a prior art reference which identified the problem they sought to solve, but did not cite two other references which revealed the solution to the problem.  Consequently, the court found that the withheld references were material to patentability of the claimed invention and that the inventor intentionally withheld them in order to deceive the USPTO. 12

13. 13 AIPLA Firm Logo Post Therasense Decisions Aventis Pharma v. Hospira (Fed. Cir. April 2012) Federal Circuit:  Affirming the Pre-Therasense judgment of inequitable conduct, the court held that the references were but-for-material because the district court properly found that the claims were invalid over the references, and  The court held that the inventor’s withheld the references with the specific intent to deceive the USPTO and rejected the inventor’s contentions that there was more than one inference that could be drawn from his conduct and found that the inventor’s testimony, explaining why he withheld the prior art, was not credible. 13

14. 14 AIPLA Firm Logo Post Therasense Decisions Aventis Pharma v. Hospira (Fed. Cir. April 2012) Federal Circuit (continued)  Regarding inequitable conduct, the Court initially noted that “although the district court did not have the benefit of our Therasense opinion..., the court nevertheless found that the withheld references were but-for material to patentability and made distinct intent and materiality findings”  The Federal Circuit concluded that “the court’s inequitable conduct determination withstands even the more rigorous standard adopted in Therasense.” 14

15. 15 AIPLA Firm Logo Post Therasense Decisions Aventis Pharma v. Hospira (Fed. Cir. April 2012) Federal Circuit (continued)  Specifically, the Federal Circuit concluded that in view of a totality of the inventor’s testimony, which included his testimony that his prior experiments (recorded in the withheld reference) was one of the main factors that shaped his thinking in choosing a surfactant for the claimed invention, the district court was justified in finding the inventor’s explanation non-credible, especially because the inventor disclosed to the USPTO other prior art that shows the problem to be solved without disclosing those indicating a possible solution.  This case marks the first time that the appellate court has upheld an inequitable conduct finding since raising the standard of proof in Therasense. 15

16. 16 AIPLA Firm Logo Post Therasense Decisions 1 st Media v. Electronic Arts (Fed. Cir. Sep. 2012) Background:  Dr. Scott Lewis was the inventor of US Patent No. 5,464,946 and Joseph Sawyer acted as Lewis' attorney during prosecution. Sawyer filed an application for the '946 Patent on November 13, 1992. The Examiner initially rejected all claims in the application as anticipated or obvious in view of certain prior art references. After Sawyer amended the application, the Examiner issued a Notice of Allowance.  While the '946 Patent was pending, Sawyer also prosecuted other related patent applications for Lewis. 16

17. 17 AIPLA Firm Logo Post Therasense Decisions 1 st Media v. Electronic Arts (Fed. Cir. Sep. 2012) Background :  The applications included:  International Patent Application No. PCT/US93/10930, which was identical to the '946 Patent application;  US Patent Application No. 07/975,824, which became US Patent No. 5,325,423 ('423 Patent); and  US Patent Application No. 08/265,391, which became US Patent No. 5,564,001 ('001 Patent). 17

18. 18 AIPLA Firm Logo Post Therasense Decisions 1 st Media v. Electronic Arts (Fed. Cir. Sep. 2012) Background:  After receiving the Notice of Allowance, but before payment of the issue fee, Sawyer received:  A Supplemental International Search Report for the PCT Application from the European Patent Office with a “Y” reference (particularly relevant if combined with another reference); and  Office Actions for the related US Applications with two additional references (allegedly disclosing features similar to those of the patent at issue).  None of the 3 references were submitted to the USPTO for consideration in connection with the ‘946 Patent. 18

19. 19 AIPLA Firm Logo Post Therasense Decisions 1 st Media v. Electronic Arts (Fed. Cir. Sep. 2012) District Court:  The district court found that their (Sawyer and Lewis) explanations for non-disclosure, that they did not recognize the materiality of any of the references and the failure to disclose these references was due to an oversight, were not credible and that it was appropriate to infer that they intended to deceive the USPTO.  The district court, before the Therasense decision, concluded that Sawyer and Lewis had committed inequitable conduct and held that the patent was unenforceable given such inequitable conduct. 19

20. 20 AIPLA Firm Logo Post Therasense Decisions 1 st Media v. Electronic Arts (Fed. Cir. Sep. 2012) Federal Circuit  The court reviews a district court’s determination of inequitable conduct under a two-tiered standard:  The court reviews the underlying factual determinations of materiality and intent for clear error; and  The court reviews the ultimate decision as to inequitable conduct for an abuse of discretion. 20

21. 21 AIPLA Firm Logo Post Therasense Decisions 1 st Media v. Electronic Arts (Fed. Cir. Sep. 2012) Federal Circuit (continued)  The court found that ultimately, for all of the references, the evidence supports only that Lewis & Sawyer:  (1) knew of the references,  (2) may have known they were material, and  (3) did not inform the USPTO of the references.  That is not enough to support a finding of inequitable conduct! 21

22. 22 AIPLA Firm Logo Post Therasense Decisions 1 st Media v. Electronic Arts (Fed. Cir. Sep. 2012) Federal Circuit (continued)  The court noted that in order to show that the patentee acted with the specific intent to deceive the USPTO, a defendant must prove “that the applicant knew of the reference, knew that it was material, and made a deliberate decision to withhold it.”  A failure to prove any one of these elements precludes a finding of inequitable conduct. 22

23. 23 AIPLA Firm Logo Post Therasense Decisions 1 st Media v. Electronic Arts (Fed. Cir. Sep. 2012) Federal Circuit (Continued)  The defendant failed to prove that the applicant (1) knew of the reference, (2) knew it was material, and (3) made a deliberate decision to withhold it.  In this case, the last element (3) is missing.  The court did not decide whether any of the references were but-for material, because court concluded that the defendant failed to prove that Sawyer and Lewis made a deliberate decision to withhold any of the references from the USPTO. 23

24. 24 AIPLA Firm Logo Post Therasense Decisions 1 st Media v. Electronic Arts (Fed. Cir. Sep. 2012) Federal Circuit (Continued)  The panel distinguished Aventis v. Hospira, (Fed. Cir. 2012) noting an “affirmative conduct by the applicants showing not only specific awareness of materiality [but-for materiality had been established at trial], but careful and selective manipulation of where, when and how much of the most material information to disclose….” was present.  The court went on to state that “Evidence of such selective disclosure is not present here.” 24

25. 25 AIPLA Firm Logo Post Therasense Decisions Parker Vision v. Qualcomm (M.D. Fla., Jan. 2013) Background  ParkerVision brought suit against Qualcomm for infringement of U.S. Patent 6,061,551 and five related patents and Qualcomm counterclaimed that the ‘551 patent is unenforceable for inequitable conduct.  Qualcomm alleged that the inventor and the prosecuting patent attorney “buried” the PTO with references. The ‘551 patent lists over 580 cited references; 340 US patents, 36 foreign patent documents, over 150 literature references, and 55 press releases. 25

26. 26 AIPLA Firm Logo Post Therasense Decisions Parker Vision v. Qualcomm (M.D. Fla., Jan. 2013) District Court  The court looked to the Therasense decision to dispose of the question of intent to deceive.  The court noted that “With inequitable conduct casting the shadow of a hangman’s noose, it is unsurprising that patent prosecutors regularly bury PTO examiners with a deluge of references, most of which have marginal value.”  Qualcomm’s assertions that Parker Vision provided voluminous references to the USPTO in order to “distract” the examiner was not, the single most reasonable inference to be drawn from the record. 26

27. 27 AIPLA Firm Logo Post Therasense Decisions Parker Vision v. Qualcomm (M.D. Fla., Jan. 2013) District Court  The court noted, “taking into account the practice of bringing inequitable conduct charges against a patentee for under-disclosing references, an equally if not more reasonable inference is that ParkerVision aimed to insulate itself from such claims by over-disclosing references.”  Accordingly, there may be little risk in over-disclosing references to the USPTO. * Remember, this District Court decision may be subject to appeal. * 27

28. 28 AIPLA Firm Logo Post Therasense Decisions SUMMARY  Therasense decision significantly raised the bar of proving inequitable conduct by a defendant.  1 st Media clarified just how high the bar has been raised.  The defense of unenforceability based on Inequitable Conduct is still very much alive as seen from the Aventis decision.  If you need to think about whether or not to submit the information for more than a minute, you probably should submit it. 28

29. 29 AIPLA Firm Logo Post Therasense Decisions PRACTICAL TIPS  Do not relax your existing IDS submission rules in view of Therasense and 1 st Media, because a defense, based on inequitable conduct, is still often asserted during litigation. While the plaintiff may ultimately prevail at trial or on appeal, dealing with the inequitable conduct related defense at the trial court level and at the appellate court level will be burdensome (time and cost).  Create a set of rules for the submission of information to the USPTO and routinely follow these rules.  Particularly, since a “deliberate intent to deceive” the USPTO is very difficult for the accused infringer to prove, as noted from 1 st Media, creating IDS submission rules and following the rules as routine practice virtually eliminates the “intent to deceive” factor. 29

30. 30 AIPLA Firm Logo Post Therasense Decisions PRACTICAL TIPS  It is best to remain diligent in efforts to comply with existing rules to reduce possible issues that may likely be the subject of an inequitable conduct defense.  Supplemental Examination provides the patent holder the ability to correct errors and cure IDS related problems, especially non- submission of the relevant references cited during the examination.  A thorough review of any patents to be asserted should be conducted and the submission of a Request for Supplemental Examination should be considered to cure as many problems as possible before asserting the patent. 30

31. 31 AIPLA Firm Logo Thank You For Your Attention DON STUDEBAKER STUDEBAKER BRACKETT PC 12700 SUNRISE VALLEY DRIVE SUITE 102 RESTON, VIRGINIA 20191 Don.studebaker@sbpatentlaw.com * SEE ADDITIONAL ATTACHMENTS * 31

32. 32 AIPLA Firm Logo Post Therasense Decisions PRACTICAL TIPS FOR IDS SUBMISSION 32

33. 33 AIPLA Firm Logo Post Therasense Decisions Rule 1.97 (e) the Certification Statement  (1) That each item of information contained in the information disclosure statement was first cited in any communication from a foreign patent office in a counterpart foreign application not more than three months prior to the filing of the information disclosure statement; or  (2) That no item of information contained in the information disclosure statement was cited in a communication from a foreign patent office in a counterpart foreign application, and, to the knowledge of the person signing the certification after making reasonable inquiry, no item of information contained in the information disclosure statement was known to any individual designated in §1.56(c) more than three months prior to the filing of the information disclosure statement. 33

34. 34 AIPLA Firm Logo Post Therasense Decisions SAMPLE IDS SUMISSION ROUTINE During 1 st STAGE:  Before mailing of a First Official Action or within three months of initial filing:  Without in-depth review of the information to be submitted,  No Certification Statement or fee necessary.  Follow the submission routine described below with respect to translations. 34

35. 35 AIPLA Firm Logo Post Therasense Decisions SAMPLE IDS SUMISSION ROUTINE During 2 nd STAGE:  After mailing of a First Official Action and before mailing of a Final Official Action or Notice of Allowance:  Without in-depth review of the information to be submitted,  Submit along with Certification Statement or fee if certification is not possible.  Follow the submission routine described below. 35

36. 36 AIPLA Firm Logo Post Therasense Decisions SAMPLE IDS SUMISSION ROUTINE During 3 rd STAGE:  After mailing of a Final Official Action or Notice of Allowance and during time period between mailing of the Notice of Allowance and Payment of Issue Fee:  Review the information and determine if the information is “material to patentability” under Rule1.56(b).  May submit IDS only with Certification Statement and payment of fee.  If Certification Statement can not be made filing of an RCE may be necessary to have the references fully considered.  Follow the procedures described below. 36

37. 37 AIPLA Firm Logo Post Therasense Decisions SAMPLE IDS SUMISSION ROUTINE During 4 th STAGE:  During a time period between payment of I/F and issuance of US Patent:  Review the information and determine if the information is “material to patentability (‘non-cumulative’ and/or ‘more relevant’ than those already submitted)” under Rule 1.56(b).  If the information is found “material”, then consult with client and obtain their approval for the ids submission; client must be informed that it will be necessary to request withdrawal from issuance and the filing of an RCE may be necessary.  Follow the procedures described below. 37

38. 38 AIPLA Firm Logo Post Therasense Decisions SAMPLE IDS SUMISSION ROUTINE During 4 th STAGE: QPIDS PILOT PROGRAM  The Quick Path Information Disclosure Statement (QPIDS) pilot program is part of the USPTO's on-going efforts towards compact prosecution and pendency reduction. Extended to September 30, 2013.  The QPIDS pilot program eliminates the requirement for processing of a request for continued examination (RCE) with an information disclosure statement (IDS) filed after payment of the issue fee in order for the IDS to be considered by the Examiner.  Where the Examiner determines that no item of information in the IDS necessitates reopening prosecution, the USPTO will issue a corrected notice of allowability.  See http://www.uspto.gov/patents/init_events/qpids.jsp 38

39. 39 AIPLA Firm Logo Post Therasense Decisions SAMPLE IDS SUMISSION ROUTINE Office Action received from counterpart Patent Office(s):  In the case where the OA is written in English (EPO’s Search Report) ：  Simply submit a copy of the English language document as an IDS.  In the case where the OA is NOT in English (such as JPO’s OA) ：  Ideally an English translation including all the substantive grounds of rejection should be submitted.  Oftentimes a full translation is too costly, particularly a translation of Chinese Office Action (costing $600 or more). In this case, an English translation of at least the portions that indicate which claims are rejected, under what provisions and by which references, should be submitted. 39

40. 40 AIPLA Firm Logo Post Therasense Decisions SAMPLE IDS SUMISSION ROUTINE TRANSLATION EXAMPLE  Claims 1 and 2 are ejected under (Chinese patent law section XX) as being anticipated by Ref A. Claims 3-5 are rejected under (Chinese patent law section YY) as being unpatentable over Ref A in view of Ref B. (see MPEP 609.04(a) III)  Submit copy of both the original non-English language Office Action together with the translation (whole or partial translation) as an IDS. 40

41. 41 AIPLA Firm Logo Post Therasense Decisions SAMPLE IDS SUMISSION ROUTINE CITED REFERENCES from counterpart Patent Office(s): When the Cited Reference is in the English Language:  If the reference is US Patent or Patent Publication, then only an identification of the US Patent or Patent Publication needs to be submitted as an IDS (however, in order to avoid the error, a copy of its cover page is preferably submitted also).  If the reference is in English language, but none-US Patent or Patent Publication, then a copy of entire reference must be submitted as an IDS. 41

42. 42 AIPLA Firm Logo Post Therasense Decisions SAMPLE IDS SUMISSION ROUTINE CITED REFERENCES from counterpart Patent Office(s): continued. When the Cited Reference is in a Non- English Language: Patent Publication  First, try to locate an English language counterpart, such as a US Publication, EPO Publication or GB Patent Publication. If such English counterpart exits, submit the Non-English reference with the English counterpart.  If no English counterpart is available, try to obtain an English abstract through esp@cenet (EPO), if available, then submit the English Abstract together with the copy of Non-English reference. 42

43. 43 AIPLA Firm Logo Post Therasense Decisions SAMPLE IDS SUMISSION ROUTINE CITED REFERENCES from counterpart Patent Office(s): continued. When the Cited Reference is in a Non- English Language: Patent Publication: cont.  If no English language Abstract is available, then translate the portion of the reference corresponding to its Abstract or Claim 1 and submit human English translation of the Abstract together with the copy of Non- English reference. 43

44. 44 AIPLA Firm Logo Post Therasense Decisions SAMPLE IDS SUMISSION ROUTINE CITED REFERENCES from counterpart Patent Office(s): continued. When the Cited Reference is in a Non- English Language: Other Non-Patent Literature:  Review and locate the relevant portion in the non-patent article, translate the portions in English and submit the partial English translation of the relevant portions of the non-patent article together with the copy of original article.  NOTE: Beneficial to submit the information to the USPTO within 30 days from the date that the information was known to the person in charge of the application in order not lose any period of Patent Term Adjustment. 44

45. 45 AIPLA Firm Logo Post Therasense Decisions MPEP §609.04 III. CONCISE EXPLANATION OF RELEVANCEFOR NON-ENGLISH LANGUAGE INFORMATION  Each information disclosure statement must further include a concise explanation of the relevance, as it is presently understood by the individual designated in 37CFR 1.56(c) most knowledgeable about the content of the information listed that is not in the English language. The concise explanation may be either separate from the specification or part of the specification. If the concise explanation is part of the specification, the IDS listing should include the page(s) or line(s) numbers where the concise explanation is located in the specification. 45

46. 46 AIPLA Firm Logo Post Therasense Decisions MPEP §609.04 III. CONCISE EXPLANATION OF RELEVANCEFOR NON-ENGLISH LANGUAGE INFORMATION: continued  Submission of an English language abstract of a reference may fulfill the requirement for a concise explanation. Where the information listed is not in the English language, but was cited in a search report or other action by a foreign patent office in a counterpart foreign application, the requirement for a concise explanation of relevance can be satisfied by submitting an English-language version of the search report or action which indicates the degree of relevance found by the foreign office. This may be an explanation of which portion of the reference is particularly relevant, to which claims it applies, or merely an “X”, “Y”, or “A” indication on a search report. The requirement for a concise explanation of non-English language information would not be satisfied by a statement that a reference was cited in the prosecution of a United States application which is not relied on under 35 U.S.C. 120. 46