The Medical Technology Blog

Guest contributor, Louise Campbell, takes a look at a recent patent dispute involving two of the biggest names in diabetes and explains why a legal ruling could have implications on challenging patents in the US.

On 25th May 2011, the US Court of Appeals for the Federal Circuit handed down their judgment from Therasense v Becton Dickinson, radically changing the way inequitable conduct (unfair or inappropriate conduct) is to be treated as a legal defence in a patent dispute, imposing much higher standards and essentially limiting a doctrine that some of the residing majority described as an “absolute plague”. A claim of inequitable conduct, if successful has harsh consequences and can result in the patent being unenforceable. When considering the gravity of this consequence, it may be suggested that a high standard of proof is necessary, which may have further adverse effects on quality and cost of US patents.

About the case:

The case largely revolved around two patents for Abbott’s disposable blood glucose test strip with an electrochemical sensor. The initial patent No. 4,545,382 (the ‘382 patent) for a sensor consisting of an electrode with an enzyme bound to its external surface included the following sentence, and the cause of the claim: “Optionally but preferably when being used on live blood, a protective membrane surrounds both the enzyme and the mediator layers, permeable to water and glucose levels.” It was later contended that someone skilled in the art would have known it was necessary to employ the protective membrane when used in whole blood and that the “Optionally but preferably” language was ‘patent phraseology’ and should not be considered a technical disclosure. However, it was this disclosure that prevented the issuing of a second patent (No. 5,820,551 – the ‘551 patent) for an extended period of time.

In securing a European equivalent to its ‘382 patent from the European Patent Office (EPO), Abbott, which bought TheraSense in 2004, overcame a German reference requiring the use of a diffusion-limiting membrane by stating that theirs was a protective rather than diffusion-limiting membrane and that the protective membrane was optional. However, following this, they did not submit this to the US PTO when applying for the ‘551 patent and this was the centre of the challenge. Becton Dickinson unsuccessfully sued Abbott in 2004 seeking a non-infringement judgment on two other patents that Abbott held. Abbott countersued and also sued Bayer, Roche, and one of its suppliers, Nova Biomedical, for infringement of the two other patents as well as the ‘551 patent. Roche settled on the eve of the trial but the other parties held out and were successful in the District Court after successfully highlighting Abbott’s failure to disclose EPO argument as inequitable conduct. The panel of Federal Circuit judges, however, departed from this, in a shake-up of the way inequitable conduct is to be viewed in patent cases.

Becton Dickinson has until 23rd August to file an appeal. Even if they do file for an appeal, this is unlikely to be considered until the Supreme Court’s next conference in late September.

Prior to the case:

Under the previous standard, in order to invalidate a patent, the party alleging inequitable conduct had to show “clear and convincing evidence” that the application misrepresented material fact, failed to disclose material information, or submitted false material information and intended to deceive the US PTO. Prior Federal Circuit case law had created and allowed the use of at least five different standards of materiality, creating inconsistency and uncertainty which indicates why a panel hearing was granted in this case. Furthermore, intent to deceive could be evidenced by negligence or gross negligence.

The changes:

With a minor exception, the ruling in the case introduces a two-part test to establish inequitable conduct in the US. Litigants must now persuade the Court that there is “specific intent to deceive and that the deception was material”. These are two separate elements; the majority forbade inferring intent solely from a high showing of materiality and vice versa. These ‘parts’ have been tightened and a higher standard of proof required from that described above. Consequently, specific intent to deceive cannot lightly be inferred merely because information was not disclosed, even if it is important to patentability.  Intent to deceive must be “the single most reasonable inference able to be drawn from the evidence.”

Furthermore, the patentee need not offer a good faith explanation unless the accused infringer first proves a threshold level of intent to deceive. Proof of negligence or gross negligence is no longer sufficient. In the case of nondisclosure, the evidence must show that the applicant “knew of the reference, knew that it was material, and made a deliberate decision to withhold it.” Materiality is to be decided on a “but-for” basis, meaning that the patent would not have been issued if the information had been known to the examiner. This change was arguably prompted by the fact that the prior tests were so easily satisfied.  – “but-for” is a test widely used across many jurisdictions and is notoriously hard to prove.

Impact of the ruling:

The dissenting judges argued that the ruling comes “close to abolishing” the inequitable conduct doctrine. They wished to maintain the US PTO rule 56 or “duty of candor” (duty to disclose material facts). Judge Kathleen O’Malley agreed that intent to deceive  should drive inequitable conduct cases but dissented from the “but-for” materiality standard arguing that the district courts should have more say in shaping inequitable conduct cases. Her judgment provides a critical analysis of this system. In consequence, the US PTO is to issue guidance in the near future regarding the materials that are required under their duty of disclosure. A US PTO press release on May 26th said this about the decision “The Court’s decision resolves uncertainties in many aspects of how district courts must apply the inequitable conduct doctrine. It also directly affects applicant behaviour in front of the US PTO and, in particular, their disclosure of information relevant to the patentability of their inventions.”


As US patent law is one of the most expensive areas to litigate, for companies, this is a winning situation, inequitable conduct is harder to challenge and it could theoretically mean less litigation and lower legal fees. However, these new standards are now open to interpretation so it will be interesting to see how these doctrines will be shaped by the district courts.
This case is one of the reasons why fewer inequitable conduct suits are expected to be filed in future.  The America Invents Acts bill passed the Senate on 8th March and the House of Representatives on 22nd June and creates a new supplemental examination procedure. The new procedure allows patent owners to return to the patent office to cite previously undisclosed prior art or correct errors and omissions made during the original prosecution, thereby allowing companies to remedy acts or omissions that could be used as the basis for an inequitable conduct claim. However, the downside of this is that it may reduce opportunities for well-founded inequitable conduct claims. The Therasense v Becton Dickinson dispute has clarified the expectations for attorneys and applicants and provided them with more effective tools to address difficult situations.

Espicom Business Intelligence

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