Recently there has been a lot of debate within the intellectual property industry about reforming the inequitable conduct defense. This debate has now moved from social circles on Capitol Hill to the courtroom. With a keen knowledge of the significant legal and policy implications of this debate, the Federal Circuit has set out to address the issue of equitable conduct en banc in Therasense, Inc. v. Becton, Dickinson & Co., 2008-1511 (Fed. Cir. 2010). In Therasense, a district court found that statements made by a patentee to the United States Patent and Trademark Office (âPTOâ) about prior art were materially inconsistent with statements made to the European Patent Office (âEPOâ). The Federal Circuit Court affirmed the district court's decision in January 2010. However, Therasense has since petitioned the Federal Circuit for a rehearing en banc and, in April 2010, the Court granted their request to be heard before a full sitting of its judges on the issue of inequitable conduct.

The inequitable conduct defense has long served as a deterrent to fraud in the registration of patents. Parties seeking to register a patent have a duty to act with candor and in good faith when disclosing information to the USPTO that will be used to judge the patentability of their inventions. Otherwise, if a court finds that inequitable conduct has occurred, the patent may be declared unenforceable even in cases where it is valid and has been infringed.

Many businesses with components that rely on intellectual property do not like the inequitable conduct doctrine. These businesses dislike the defense for three primary reasons. Firstly, some believe the defense has been raised far too often by parties infringing on their patents. According to the ABA, the incidence of inequitable conduct appeals doubled between 2004 â 2008, but courts found inequitable conduct to have occurred in less than 25% of those cases [1]. Secondly, some consider the penalty of declaring a patent unenforceable to be too severe and drastic. In other words, the penalty is greatly disproportionate to the offense alleged. And thirdly, some argue that the defense has had an adverse effect on the process of patent prosecution. The defense has encouraged patent prosecutors to disregard considerations of relevance when disclosing known prior art and communications with U.S. and international patent offices in applications. As a result, instead of having the most relevant and accurate information, the PTO is flooded with boxes of papers which can overwhelm the patent examiner and increase the difficulty of finding the most relevant prior art or information [2]. Also, Ironically such attempts to disclose volumes of information to the patent examiner, may increase the likelihood that a party in litigation can find contradictory statements to assert in an inequitable conduct defense.

To solve the problems associated with the inequitable conduct defense, some scholars have suggested the drastic solution of entirely abolishing the defense. For example, the National Research Council of the National Academies has stated that â[i]n view of its cost and limited deterrent value the committee recommends the elimination of the inequitable conduct doctrine or changes in its implementation" [3]. At a minimum, it is clear that reform to the equitable conduct doctrine beckons. Businesses with intellectual property components will have less of an incentive to flood the PTO with irrelevant disclosures about prior arts and communications with patent offices if courts stopped inferring evidence of deceptive intent from materiality alone. Instead, courts could look to bad faith actions on the part of patent owners and apply the doctrine only to patent owners deemed to have committed fraud on the PTO. Adding the requirement of fraud would also reduce the incidence of alleged infringers asserting the inequitable conduct defense because this would reduce the likelihood of them succeeding on the merits in the courtroom. The requirement would also reduce the likelihood that a patent owner will be subjected to the severe penalty of having their patent declared unenforceable by a court.

[1] Brief and Appendix of the American Bar Association As Amicus Curiae, Therasense, Inc. v. Becton, Dickinson & Co., available at http://www.abanet.org/media/nosearch/therasense_v_becton_amicus.pdf (last visited Sept. 1, 2010).

[2] Brief of Amicus Curiae the American Intellectual Property Law Association in Support of Neither Party, Therasense, Inc. v. Becton Dickinson & Co., available at http://www.aipla.org/Content/ContentGroups/Issues_and_Advocacy/Amicus_Br... (last visited Sept. 1, 2010).

[3] Stephen A. Merrill et al. eds., National Research Council of the National Academies, A Patent System for the 21st Century 123, available at http://www.nap.edu/catalog/10976.html (last visited Sept. 1, 2010).